Did the Drudge Report Help Tank the Stock Market?
Here’s a headline sure to spook any investor or economist: “Greenspan warns of likely U.S. recession.” That was the headline right near the top of the widely surfed Drudge Report yesterday afternoon and this morning, referring to a speech that former Federal Reserve Chairman Alan Greenspan made the other day via satellite to a business conference in Hong Kong. Many market watchers are blaming those comments– along with a weak durable goods report and the plunge in the Chinese stock market – for today’s stock market sell-off. But despite the inflammatory Drudge headline – which, in all fairness, linked to an Associated Press story with that same title – the Maestro was hardly so definitive as Drudge made him out to be. Here is what Greenspan said, according to AP: When you get this far away from a recession invariably forces build up for the next recession, and indeed we are beginning to see that sign. For example in the U.S., profit margins … have begun to stabilize, which is an earl
