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Monday, October 1, 2007

Fate of World Economy Lies with U.S. Housing: Greenspan




October 1 2007 CNBC.com
The fate of the world economy hinges on what happens to house prices in America and that may not be a good thing, former Federal Reserve chairman Alan Greenspan said on Monday. Speaking at the Reuters headquarters in London, the former Fed chair delivered a gloomy prognosis on the state of the global economy -- U.S. house prices are likely to fall further and they could drag the rest of the world with them. "A weakened U.S. economy, especially weakened consumer markets, still has the capacity to impact on our trading partners," Greenspan said. "To date the financial and economic spill-over is most visible in Europe... But only marginally so in developing Asia." He added that Japan had taken a hit in the form of sales of its equities as sub-prime investors needed to raise cash.

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