Mortgage crisis "a corrosive force"

US in 'once-in-a-century' financial crisis : Greenspan


The United States is mired in a "once-in-a century" financial crisis which is now more than likely to spark a recession, former Federal Reserve chief Alan Greenspan said Sunday.

The talismanic ex-central banker said that the crisis was the worst he had seen in his career, still had a long way to go and would continue to effect home prices in the United States.

"First of all, let's recognize that this is a once-in-a-half-century, probably once-in-a-century type of event," Greenspan said on ABC's "This Week."

Asked whether the crisis, which has seen the US government step in to bail out mortgage giants Freddie Mac and Fannie Mae, was the worst of his career, Greenspan replied "Oh, by far."

"There's no question that this is in the process of outstripping anything I've seen, and it still is not resolved and it still has a way to go," Greenspan said.

"And indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes.

"That will induce a series of events around the globe which will stabilize the system."

Greenspan was also asked whether the United States had a greater-than 50 percent chance of escaping a recession.

"No, I think it's less than 50 percent.

"I can't believe we could have a once-in-a-century type of financial crisis without a significant impact on the real economy globally, and I think that indeed is what is in the process of occurring."

The former Federal Reserve chairman also predicted that the financial crisis would see the failure of more major financial institutions, even as embattled Wall Street investment giant Lehman Brothers scrambled to find a buyer.

"In and of itself that does not need to be a problem.

Comments: When Greenspan speaks, he speaks authoritatively! It's been interesting following news on Lehman Brothers this weekend. It may be gone by tomorrow.


  1. Does anyone else connote religious implications with this, or is it just me? Briefly, some people believe in things called "end times" and think that we are headed for a world government and tough times. Some have speculated that one way to help unite the world is to have a financial crisis that the world can respond to together. Some possible scenarios are a more cohesive, globally interconnected economy and even things such as an Amero (similar to the Euro) for North America. Other religious people think tough economic times are God's judgement on nations. Think of people like Tim Lahaye and you'll get the gist. But many Christians who agree with Tim Lahaye in the foundations of the faith also think he is a complete nutcase because he believes in wild, outlandish things such as "the rapture," "end times," "the millennium," etc.

    Of course we all know that every generation has people who say "the sky is falling" and overreact to everything. But some people who are rational and not given to wild conspiracy theory are beginning to wonder if there is something going on in the world today that could have some type of connection to some of the previously stated religious beliefs.
    What do you think?

  2. Hey anonymous, welcome back!

    I never know which anonymous it is!

    About "the end times". I believe that all of history since the resurrection of Christ could really be called "the end times" (Hebrews 9:26, "He then would have had to suffer often since the foundation of the world; but now, once at the end of the ages, He has appeared to put away sin by the sacrifice of Himself."


    Hebrews 1:2, "has in these last days spoken to us by His Son, whom He has appointed heir of all things, through whom also He made the worlds;"

    My hypothesis is that these years since the earthly ministry of Christ are all the "last days" or "end times". Let me run with this for a while.

    If then (2000 years ago) were "last days" .... well certainly one could call these days (today) the last of the last days. Or another way, if the countdown to Christ's return (think of a rocket countdown timer) commenced THEN, well today would be 2000 years on.

    About these scenarios that you mentioned. Of course they are all connected somehow. If God is sovereign (and He is) and He is active (involved in the affairs of men) (AND He is!), well then of course something is playing out.

    I liken to a play. Say in this analogy we are in the audience waiting for the curtain to rise. Months before a director and many stage hands were planning for opening night. Stage hands crafted sets and acquired furniture, etc. All has been put in place before the raising of the curtain.

    God is the Ultimate, Sovereign Stage Director. While most men are ignorant of Christ's soon return, true Christians know that it will soon happen.

    All of these events (along with all others) are preparing for THAT Day when Christ will come.

    What to do? Be saved through faith in Christ! Live holy! Watch and pray. And don't worry!

  3. It's interesting that Greenspan is hailing this as an event of the century, in a century that looking back must include the Great Depression.

    So much for the Fed's promise that they'd never cause another Great Depression, if this turns out that way.

    And end times? My reading of the prophets suggests that things are going to get a lot rougher before anyone can call it "tribulation."

  4. BB - Exactly. "It's interesting that Greenspan is hailing this as an event of the century, in a century that looking back must include the Great Depression."

    That is not a lighthearted comment to make! That's why I made the comment I did. If he's including the Great Depression in that statment, that is a major comment to put out there. (At first, for "century" I thought he maybe was referring to this, the 21st century, but I think he actually meant the last 100 years, unfortunately)

    I sometimes check out a site where JP is linked with and I am puzzled by some of the beliefs there. It's as if anyone who thinks prophecy is relevant and interesting and still to be totally fulfilled is some kind of "crazy cousin" that we tolerate, but don't really like to associate with much. By the way, I personally don't think things like the rapture and what's commonly referred to as "end times" (although JP has a great definition) are wild, outlandish beliefs. I guess I'm just surprised how some people with whom I agree about the fundamentals of the faith are so almost snide and mocking of those who are interested in prophecy. Although, I can see where they are coming from; there have been and probably will continue to be a lot of weird nutcases out there. But some have gone to the extreme and thrown the baby out with the bathwater, in my opinion. Oh well, just because Christians disagree on certain things doesn't make either side bad people, as long as they disagree in a kind spirit.

    Anyway, back to the topic at hand. I think we all survived 1987 with no problems. I don't even remember anything about it, economically speaking. In other words, it certainly wasn't the end of the world or the next Great Depression or anything remotely close to it. And maybe what we're experiencing now will end up being the same thing or just a minor inconvenience at the most....But, for some reason I do wonder if this is more than just nothing or a minor blip on the financial radar. I hope it's minor, but these kinds of statements by guys like Greenspan do cause one to think. And yes, I realize that probably EVERY year since about 1934 some guy comes out with a book about how this is surely the next big one. So of course I realize this is nothing new. But like I said, things lately do make one wonder.

    Thanks, JP. I've been busy.

  5. Dear Anonymous,

    You mentioned 1987. I remember Black Monday (October 19, 1987) very well. Believe it or not I was in the middle of my 11 week hospital stay after breaking my neck (Labor Day '87).

    Back then I had NO STOCK (and no money!).


Any anonymous comments with links will be rejected. Please do not comment off-topic