How's your piggy bank? That piggy's a little lean according to crystal ball-owning, former Reserve Chair, Alan Greenspan. He made an appearance on This Week with George Stephanopoulos yesterday, and forgot to bring his sunshine and puppies. He said that the current economic climate is “by far” the worst one he has ever seen. And if that wasn’t worrying enough, he added: “There’s no question that this is not resolved and it still has a way to go.”
This view does contradict an earlier statement when asked what the chances of a recession would be, the then starry-eyed optimist answered, “... I think it is less than 50 percent.” He has since changed that opinion noting on his latest appearance “...let’s recognize that this is a once-in-a-half-century, probably once-in-a-century type of event.” Probably most worrisome about that comment is that Mr. Greenspan was alive during the Great Depression. Oh.
To see Greenspan's predictions for the future, read more.
As for specifics regarding the banking industry, the Former Reserve Chair also believes that the future will see more financial institutions fail, although could not comment on the latest victim, Lehman Brothers. Overall he did seem that the situation did mirror a natural selection process when remarking on the fate of some institutions over others: “...indeed we shouldn’t try to protect every single institution. The ordinary course of financial change has winners and losers.” Let's keep our fingers crossed for more winners.