Former Federal Reserve Chairman Alan Greenspan, who described the technology rally in the mid-1990s as "an unreasonable exaggeration," presents a new warning to market participants.
In an interview with CNN, Greenspan said that the current market situation is unlikely to stabilize to start fresh rallies to new peaks. "It will be quite surprising to watch a short squeeze and then go up," Greenspan said. Markets could still make a turn, "but at the end of this turn, run, run and hide."
Greenspan said the bullish market is over, highlighting how stocks have gone "out of the box" over the past few days. Yesterday they made you a short rally and on Monday they did not even have that chance. The downward movement has been alive since October. Worries about increasing trade tensions and slowing down the global economy are severely burdensome.
According to Greenspan, the American economy is entering a period of stagflation. An economy that is characterized by high inflation and high unemployment, such as was the last in 1970. "How long will it take or how big it will be, is it early to say."
Source: CNBC
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