US recession this year a strong possibility, says Greenspan

FORMER Federal Reserve chairman Alan Greenspan says there’s a one-third probability of a US recession this year and that the current expansion won’t have the staying power of its decade-long predecessor.

"We are in the sixth year of a recovery; imbalances can emerge as a result,” Mr Greenspan, 81, said in an interview yesterday at his office in downtown Washington.

“Ten-year recoveries have been part of a much broader global phenomenon. The historically normal business cycle is much shorter and is likely to be this time.” Mr Greenspan’s outlook contrasts with the prediction of his successor, Ben S. Bernanke, who told Congress last week that the economy may strengthen this year. Mr Bernanke’s upbeat assessment helped steady stock markets on February. 28 after a plunge the day before that some traders attribute partly to Mr Greenspan’s musing that a recession couldn’t be ruled out.