Recently Alan Greenspan said
"What we have going for us is that the tinder for a double dip is not readily available,”, Then he mentioned if housing prices drop from here, “all bets are off.”
Seems rising rates of foreclosures and subsequent short sales are threatening to put more downward pressure on house prices....thus threatening to really make it difficult for this "statistical recovery" not to "statistically double dip" (while i continue to believe we are in a deep balance sheet recession/depression and will be for some time).
My first impression is that since JP made this announcement this does two things to kick the can down the road further and enhance the legitimacy of the weak recovery.
1. Relieves main driver of house price declines
2. Allows people to stay in house longer...Paying nothing and continue to stimulate the economy
however someone more knowledgeable then me could tell me how much if any of this could effect the delicate financial system...I.e. bank losses .....derivative markets....etc
Disclosure: no positions