Posted on 10/28/2006 11:09:36 AM PDT by wagglebee
WASHINGTON (Reuters) - Former Federal Reserve Chairman Alan Greenspan said on Thursday the U.S. economy was pulling away from the shoals of a sharp housing-sector downturn and that the outlook for growth was "reasonably good."
"Most of the negatives in housing are probably behind us," Greenspan said at a conference sponsored by the Commercial Finance Association "The fourth quarter should be reasonably good, certainly better than the third quarter."
The government reports on third-quarter economic growth on Friday. After shooting ahead at a 5.6 percent annual clip at the start of the year, the economy advanced only 2.6 percent in the second quarter as home building took a dive.
Economists polled by Reuters expect the government report on third-quarter gross domestic product to show growth slowing further to a 2.2 percent pace.
However, many analysts think growth may revive in the current quarter as lower energy prices buoy consumers.
"There are early signs of stabilization," Greenspan said of the U.S. housing market, although he added: "It's not over."
"The evidence is that we're beginning to see a flattening in statistics for sales of new homes," he continued. "The rate of construction is well below the rate of purchases."
Greenspan, who retired from the Fed in January after more than 18 years at its helm, said the U.S. was "beginning to dig into the inventories of unsold new homes."
Can't help but wonder if Greenie himself has one of them there "non-traditional" mortgages?
FYI Ping.
I wonder how this will affect someone whose tenuous grasp on credibility is based on an imminent burst of a "housing bubble," or someone who uses the interest-free credit card offers that stuff his mailbox to fund an empire built on trading gold on margin?
What would possibly make you think that?
It should be noted there are still some housing markets in the U.S. which have not exhibited declining sales thus far. For example, the property sales in the greater Houston market have reached a new year-over-year record for 32 consecutive months now.
It's funny how the left decided that Greenspan was incompetent on January 20, 2001.
But I thought that I was supposed to put my house on the market for what I paid for it five years ago, ignore the equity, give up the tax benefits and rent an apartment (even though the rent would be almost as much as my mortgage payment)./sarcasm off
And buy gold. Gold! GOLD!!!
That's where I get confused. Since I won't have anymore equity, do I cash in my 401K and IRAs and take the tax hit or take cash advances on credit cards to buy gold>
Use the free cash-advance credit cards to trade gold on margin, and be sure to always buy at the bottom and always sell at the top.
Then you just can't lose!
So, I should get about a dozen or so credit cards, max them out and then get some more cards and take cash advances on them to make the minimum payments on the cards I maxed out to buy gold?
Definitely!
Because, remember: you're going to be buying at the bottom every time, and you're always going to be careful to sell at the very top. With technical analysis, you can't lose!
Margin fees be damned! Commissions, carrying-costs, be damned!
Remember, as long as the price of gold does not drop below the green line, it will not drop below the green line. Making bank with gold is EASY!
And remember how easy it was to make money on silver in the late 70s until the Hunt brothers screwed everything up by missing their margin call. I'm thinking of pouring all of my money into tulip bulbs, after almost four hundred years, that market is bound to make a huge comeback.
Exactly. I saw a scribbled chart just the other day that made me want to buy gold (and pay $18 an ounce on trading costs) and a cute cartoon that proved even the angels are pulling for gold.
WOW! And to think I almost sold everything to buy gold :)
ROTFLMAO
**snort**
Was that your first encounter?
Can you decide whether to laugh or cry, or what is your take?
It was my first encouter with that particular gold bug. I have encountered them before. Yes, bubbles sometimes happen, and I spotted the real estate one in 1989, and the stock one in 2000, and made some modest corrections. I am a buy and hold kind of guy, and don't like recognizing gains, and paying taxes, and don't like giving away my Prop 13 thingy, so I don't react as much as perhaps I should. I am content hitting singles, year in and year out. I am a Roberto Clemente kind of guy.
Oh no it isn't. I just read an AP story this morning that said the 2.2 growth rate clearly showed (cue sad violins) WE'RE HEADED FOR A DEPRESSION!!! Quick, pack up the family and head for the border, we're all going to dieeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee!!! (smirk) Actually the story fairly brimmed with excitement about the possibility of a recession. Not one mention of the stock market, unemployment rate, or the overall growth rate for the year. One mediocre quarter is all it took for these jerks to notice the economy. All the previous great economic news was completely ignored.
ROTFLMSOPIMP
Me? I'm going for the South Sea investment; after all, it's been almost as many 100s of years since THAT bubble nearly brought down the Bank Of England and the King of England. *giggle*
Trading tulips on margin using funds from free credit card offers that stuff my mail box . . . that's got to be the Holy Grail!
So long, of course, as I always buy at the very bottom and sell at the very top.
That's easy! Just follow the angels and their magnets.
Well in the early 17th century tulip bulbs were selling for in excess of 5000 Guilders EACH. So, just check the Dutch exchange rates and ANY price under that is a good deal. Of course you will need a place to store all of the tulip bulbs, but with the real estate collapse, you should be able to rent a warehouse for next to nothing.
I'm pretty sure that sugar made a good run in the mid 19th century.
We can't do that today; we have to use money. :-)
So did cotton and spices.
I have one client who pays me in a combination of cash and homemade wine.
And it's good stuff!
From the apropos of nothing department...
Yeah, but I get a dozen or so free credit card offers every week, so there's no need to worry about that.
Worse still, we have to use fiat money! [CUE SCREAMS, SCARY CRESCENDO OF MUSIC]
Thank God banks stuff our mail boxes with wads of free credit card offers, which can be converted into **gasp** fiat money! [CUE BLOOD-CURDLING SCREAM, BANG AND THUD SOUND FX]
Rising housing prices would seem to indicate an extremely powerful economy. You need jobs to support the high mortgages, even as rates increase. I note that housing prices have not collapsed, as the pundits predicted.
Nope, the housing market has collapsed. You should probably get in the soup line now if you want to eat tomorrow./sarcasm off
I'll bet someone like Greenspan doesn't pay sucker money, ie. interest on loans. Few of us can avoid it though.
How is a mortgage "sucker money"?
Paying interest is sucker money. I know it's hard to avoid it in a mortgage, and you currently get a tax deduction, but paying interest to borrow money is foolish if at all avoidable. Paying close to double a houses worth is sucker money.
Where was it I read just this week about a "recovering economy" as though an economy is never completely recovered, much like alcoholics claim they never recover. How much more "recovered" can it get with the DOW at its highest level ever and 4.6% unemployment?
What a deal! :-)
Goodness me, now HOW could I have forgotten about that? LOL
LOL, LOL, LOL
Nice retired German/Italian couple. He makes it in their basement. I was amazed what he was able to do with typically-too-sweet Pennsylvania grapes.
He evidently knows what he's doing. More power to him!
You fail to consider the opportunity cost involved. Why pay off a 5% fixed mortgage (4% after tax benefits) with money that is currently earning 10%? Why give up the the liquidity of having the cash available in an emergency?
A person who could avoid a mortgage would likely not have liquidity diffiiculties. You raise excellent points though, and I don't disagree that is logical for the vast majority of us,
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