Greenspan says whether there is a recession or not could depend on the stock market

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Market sentiment was lifted after Hong Kong leader Carrie Lam said she will withdraw an extradition bill that sparked mass protests.

Former Federal Reserve Chairman Alan Greenspan said the stock market will determine whether the U.S. is headed for a recession.Squawk on the Street

on Wednesday. "We underestimate the wealth effect on the economy and this type of volatile stock market moves, it has an impact which I don't think we fully understand nor measure correctly." Wealth effect suggests people spend more when the value of their assets rise. "I think it's important to recognize that if we get a major stock market adjustment, we are going to feel it in the economy which has very short leg," Greenspan said.

Greenspan, 93, said the U.S.-China trade war is a "major global issue" and it's "eroding" the global economy. The tit-for-tat tariff threats roiled the stock market in August with the

 

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As long as the market stops going up, the investors don’t get big fat returns, they stop spending more than their income increases, or start holding back to pay off debt, the only remaining bright spots consumer spending going dark. Everything starts falling apart from there

His legacy is the mortgage meltdown... putting lipstick on a pig🤪👎

Can someone tell that old cadaver that the stock market is not the economy?

Sell a little bit too early rather than a little bit too late!

Mr Bad Penny holds court.

rugged_c1

A recession could happen ONLY if the markets drop 20% or more causing small business closures and massive layoffs.

Gee thats a brilliant deduction 🙄. Sorry, this clown put this country into the worst financial crisis since 1929. Just retire.

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