Greenspan bullish on stocks yet warns over house slump
ALAN Greenspan, previously head of the US Federal Reserve, said yesterday that equities remain good value, yet warned that the housing slump is weighing on America’s recovery.
“Stocks are very cheap,” Greenspan said, “There is no place for earnings to grow except into stock prices.”
But Greenspan warned that the US housing sector is “going nowhere” adding that a lack of investment in buildings is knocking “three to four per cent” off GDP.
The ex Fed chairman also told Bloomberg that “central banks are moving into fiscal policy because they’re being politically forced to do so”, which he called an “undesirable trend”.