September 14, 2008
Listening to Alan Greenspan this morning I felt an impending doom look on the man’s face as he went on to predict the economy has still a way to go to hit rock bottom, which indicates there are more bailouts on the horizon.
Appearing on ABC with George on ABC This Week he weighed in on the upcoming failure next in line which is Lehman Brothers who’s stock price crashed all week. Bloomberg reported the rising speculation when Lehman announced on September 10th a 3.9 billion dollar loss the biggest in its history of 158 years on real estate loans and mortgages.
The main catalyst for the failing market is the slow housing market which may stabilize by next year when all foreclosures bottom out. Greenspan added that this was the worst economic situation he has ever seen in his life and it is yet to be resolved leading to a continual disdainful economic force in the future.
Greenspan when asked if more larger financial institutions are following the same road downhill such as Washington Mutual, American International Group and Merrill Lynch
He indicated that they would be also upcoming failures that we should not rescue all of them and it would depend on how they were liquidated. Of course this leads to foreign investor takeovers of our financial institutions which signals to the world a weakened United States and continuing economic stagnation.
When Stephanopoulos asked Greenspan about the car industry needing and not receiving government bailouts, he replied that the bail outs of financial institutions are the corner rock of the country and when they fail it sets off a recessional effect leading to bankruptcy.
In the discussion following Greenspan indicated that the country could not afford the tax cuts proposed by John McCain without an equal reduction in spending such as the cost of the wars in Iraq and Afghanistan.
He replied, “I am not in favor of financing tax cuts with borrowed money” “I have always tied tax cuts to spending”.
In summary the bubble will burst very soon where our borrowing money to pay the expenses of the two wars will come drastically to a major halt leading to the breakdown of the financial institutions and our economy.
Tags: bank failures, foreclosures, housing market, Alan Greenspan Negative on John McCain’s tax cuts, McCain 2008, election, Lehman Brothers, Lehman Brothers collapse,
Merrill Lynch, Washington Mutual, American International Group, economic future, George Stephanopoulos, ABC, ABC This Week, John McCain’s Tax Cuts, Obama, Presidential election.
