Greenspan has Spoken 📉

A recession is in the wings, according to ex-chair extraordinaire Alan Greenspan.

Author

The Butterknife Team
January 04, 2023

In today's issue: 

  • Alan Greenspan has spoken, and he has bad news.

  • Consumer confidence, however, is back.

  • Kevin Oakley is predicting a bad start to the year for builders.

  • Rates down slightly (and they might just have further to fall.)

🔖 In case you missed it: According to Fannie Mae, one-third of homeowners don't "shop around" for their mortgage. 

Greenspan has Spoken 📉

butterknife here, with some good news — we finally get to find out what Alan Greenspan thinks about this whole thing.

Greenspan (here's his bio if you want to dig in further) was Fed chair from 1987 to 2006, and presided over the dot-com bubble and the lead up to the sub-prime mortgage crisis, so he definitely knows a thing or two about recesssions. 

In a Q&A published yesterday, Greenspan was quizzed about the possibility of a recession and the liklelihood of declining inflation. You can read the whole thing here, but in a nutshell, Greenspan believes that, at the very least, a mild recession is in the cards, and a Fed pivot is unlikely, at least until the unemployment situation worsens substantially.

Make of that what you will, but it's clear that Greenspan knows what he's talking about when it comes to economic downturns. 

As a final note, the interviewer used the word "Twitterverse" in one of his questions, and I'd bet that's the first time Greenspan has heard that word.

❓Did you know: Greenspan attended Juilliard, and played jazz saxophone and clarinet.

Consumer Confidence Just Won't Quit

Let's face it — things aren't quite as dire as they were a few months ago. For proof, look no further than the numbers at the gas pump.

AAA has today's national average at $3.26, down from $5.01 just six short months ago.

All this adds up to an increase in consumer confidence, marking an eight-week high in the index as reported by the Conference Board. Don't get too excited, though -- despite the rise, it's still hovering around an area associated with a recession. 

🤡 Fun Fact: Michael Bidwill, owner of the Arizona Cardinals, has sold his AZ home for $5.3 million, less than two months after it was listed, according to the WSJ.

🐦Thread of the Week 

Kevin Oakley, an analyst who sorts through mountains of data RE: homebuilders (specifically interest in new builds as measured through website visits) thinks builders are going to have a particularly bad time in the spring:

👀All Eyes on Rates + JOLTS!

Rates edged slightly lower at market close yesterday, with the 30-year fixed averagin 6.45%, down from 6.5% the day before, according to Mortgage News Daily's survey.

JOLTS data also hit the market today, with a rise in job openings compared to the previous month, according to the BLS report.

Wait! Before you Go...

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Until tomorrow,

the butterknife team.