Greenspan calls economy a "dull face" we say If socialism is the new “N” word than it looks like , “RECESSION” has become the new “F” word.

According to Bloomberg -- Former FED Chief Alan Greenspan said, “ he sees the U.S. economy slowing next year as the surge in stocks comes to an end.”“The odds are we flatten out,” Greenspan said today in a Bloomberg television interview, referring to the equity market. “That flattening out will put some sort of dull face on 2010.”
Hummmm “dull face” that’s what they are calling it ? Lets see according to the Commerce Department GDP, which measures the total goods and services output within U.S. borders, fell at a 0.7 percent annual rate instead of the 1.0 percent decline reported last month. This is the fourth straight quarter of decline in real GDP. While the Institute for Supply Management said its business barometer fell to 46.1 in September from 50.0 in August; indicating a further contraction.( A reading above 50 indicates expansion.) ADP Employer Services showed private employers cut 254,000 jobs in September, more than the 210,000 layoffs financial markets had been expecting.

So Mr Greenspan it seems like a little more than a “dull face” what ever that is ,but I have one question ; If socialism is the new “N” word than it looks like , “RECESSION” has become the new “F” word.

Odds are unless there are major changes in policy by the US Government and the Obama administration we are looking at a prolonged period of stagnation for the forcible future.

Greenspan Sells Out and we go limit down....

No wonder the market continues its sell off even the former FED Chair Allen Greenspan has raised the white or should i say red flag and joined the communist socialist big government party. Oh how the mighty have fallen once a clear voice now humbled by this huge financial crisis. Sometimes I wonder why these guys hold on when it’s clearly time to retire and manage in moment of weakness to decimate an entire lifetime of work.

Given the preponderance of 70’s generation types who operate under the philosophy that governments know better than markets and people its no wonder the market continues to fall and chaos reigns. The Elliot wave suggest this is the final leg of the 5th wave down

The current misconception being propagated is that hands off lazy fair left us with this mess, and big government is here to save us. Unfortunately in the world of Sarbanes Oxley it very hard to argue that there is not enough financial regulation, if the truth be told regulation it seems was applied unevenly with generous dispensations given to political friends and patrons.

Contrary to the current view that the government didn’t do enough in the 1930’s the reality is that it did plenty just not the right thing .In the 1930’s Government activism virtually created and prolonged the great depression, then like now the market was wrung by scandal creating a movement for greater regulation. This led to a very activist government ever searching for more revenue too feed their schemes. Interest rates and Taxes were raised, and world trade was halted with the passage of Smoot Hartley. There were efforts to over regulate everything and with price fixing of commodities were used guarantying shortages.

The positives yes they do exist are more than you think, inflation remains benign, the FED has stated buying commercial paper from qualified companies reinvigorating that market and perhaps saving consumer money markets,banks are beginning to merge clearing out the dead wood, the FED is buying up bad debt, interest rates are declining ,the dollar is strengthening and municipals bonds are firming up and once again looking to be the haven of widows and orphans.

ITs the FED folks ...

reason for the selloff is yesterdays FED-speak and the failure of the FED to follow through and stem the tide of inflation !

The cost of money is about to go up in the US

As the FED warns of imminent attempts to put the brakes on inflation, market watchers continue to speculate on the repercussions.
The main question on everyone’s mind is weather the dollar will keep falling or will a slow rise in US interest rates and perhaps a decline in EU rates push the dollar higher? My bet is that the dollar is moving higher in the short run but to what extent that is going to effect energy, commodity, precious metals, and Ag I am unsure. I would look for the G-10 to make some kind of a joint strong dollar pronouncement, given how much the weaker dollar has damaged EU exports.