Uncle Al Warns.......

Mr. Greenspan, speaking by satellite hookup to a business
conference in Hong Kong, warned the US economy could surprise
and slip into a downturn in late 2007. My guess is that
Greenspan is reminding Fed chair Bernanke and the rest of
the FOMC not to fall asleep at the switch as the year moves
along. As recently posted, the time honored indicators of
Fed policy are currently pointing toward ease. These
indicators -- the ISM mfg. survey, production and the operating
rate and the balance of supply and demand for credit were
mainstays for the Greenspan Fed. As I have pointed out a few
times, The Fed would prefer not to have to ease until later this year
if then, as they continue to weigh the viability of the soft
landing of the economy. Greenspan did note that the housing decline
has not yet had substantial spillover effects on the economy. His
concern is with manufacturing. See further.