Greenspan: Rising Stock Markets Are Key to Recovery

Alan GreenspanFormer Federal Reserve Chairman Alan Greenspan told CNBC Friday that rising stock values have played a critical role in the economic recovery. The stock market got a boost from the Fed policy to boost liquidity, which drove interest rates down and pushed investors toward riskier investments like stocks.

Equities have risen more than 80% from the lows set during the financial crisis, noted Greenspan, benefiting investors and helping fuel the recovery.

"I think we are underestimating and continuing to underestimate how important asset prices, very specifically equity prices, are not only to shareholders but the economy as a whole," he said.

Greenspan said he worries about the continued drop in housing prices, but he believes the industry would significantly recover if prices stabilize.

As for the European debt crisis, Greenspan is more concerned about countries not within the European Union. He pointed out that while not all EU members have managed to maintain EU restrictions regarding debt and deficit levels, at least they work toward a "common interest."

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It's very interesting to see that Goldman Sach's is now turning bullish after the market is up about 50 to 80%. My husband and I have been bullish on the stock market since the Dow hit 6850; and we do not regret it one bit. It just goes to show that the little guys can still play in the big boys arena and do handsomely. As for our current stance, we are awaiting the passage of tax cuts for everyone in America to continue, prior to exiting our low yielding CD's. We harbor no envy for the very well to do, because they are the job creators. In fact we applaud them, because they are the risk takers and are all well deserved. Going back to Goldman, their release of their new predictions is very encouraging to us. Because we are trying to send our only daughter to a very good private school for college, we feel 2011 will be a 10 or 15% year for us in the market; and that will put us over the top in our efforts to afford this education. Nothing can beat our free Press, our Democracy, our Property rights, and our ability to fund risk in America. Those virtues, continue to make us the country everyone in the world envies. Success in America is still very much attainable to the average person who studies, works hard, believes in a higher power, and develops a faith in the future, and is truthful. In fact, it's almost guaranteed for such persons. America: the land of the free and the home of the brave---yes'sir'ee, we still have much going for us. I think my daughter will still be living in a great country, when she sees her grandchildren growing up, if we just stick to our knitting. We remain Bullish on America. Yours truly , Janet and Bob Whelove Jr.

December 04 2010 at 3:10 PM Report abuse rate up rate down Reply

This is one of THE CHIEF ARCHITECTS OF the collapse of the US economy and that mumbling idiot stil has a nerve to make coments on the economy.THE MAESTRO SHOULD BE IN THE JAIL TOGETHER WITH POLSON, GAITNER, RUBIM, SUMMERS,FULD,"MOURICE" GREENBURG AND OTHERS.I can't believe that GREENSPAN STIL HAS ANYBODY LISTENING.GOD HELP USA.

December 03 2010 at 5:55 PM Report abuse rate up rate down Reply

Bankers are so full of sh1t. The games up... we all know what ponzi scheme you guys have been running all these years. Greenspan and Bernenki are nothing but snake oil peddlers.

December 03 2010 at 3:20 PM Report abuse rate up rate down Reply

If you think second hand cigarettes is bad, boy, do I have firewood smoke for you! Hoo boy!

December 03 2010 at 2:28 PM Report abuse rate up rate down Reply

Our economy cant be fixed very good as long as most workers still drive alone everywhere!! Neither can we as long as homeowners still burn firewood and make everyone sick and go to hospitals driving up health insurance premiums! Same old beat over and over again. We m ust restructure our lifestyles to improve our quality of life or we will be going downthe tubes!!

December 03 2010 at 2:27 PM Report abuse rate up rate down Reply

Everyone is buying fossil fuel stocks in expectations of ever higher fuel prices... This is not what we want for the middle class workers.. They are commuting alone to work and back home!! Investors simply knew that most workers will still drive alone stubbornly!!@

December 03 2010 at 2:25 PM Report abuse rate up rate down Reply

We are not working for Big Oil, GAS N' Coal! No way, dude!

December 03 2010 at 2:23 PM Report abuse rate up rate down Reply

Rising stock prices is good for certain companies but definitely not for fossil fuel stocks, forget it, beat it!!

December 03 2010 at 2:22 PM Report abuse rate up rate down Reply

Alan Greenspan is talking WAY TOO GENERALLY !!!!~

December 03 2010 at 2:22 PM Report abuse rate up rate down Reply

Alan Greenspan is talking WAY TOO GENERALLY !!!!~

December 03 2010 at 2:22 PM Report abuse rate up rate down Reply