What did Greenspan really say?

Sometimes nuance can be a very big deal - as in describing what former Fed chief Alan Greenspan said about the possibility of a recession later this year. You'll recall that Greenspan's comments during a conference in Asia on Monday were cited as one of the factors behind Tuesday's 416-point market tumble. As reported by AP, Greenspan said that the economy has been expanding since 2001 and that there are signs the current economic cycle is coming to an end. "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," Greenspan said. But in looking over a transcript of what Greenspan really said, it seems as if headlining the story "Greenspan says recession is a possibility by the end of the year" is not offering the full picture. His comments were really more musings than any specific forecast. Greenspan was asked what he thought about George Soros's prediction that the U.S. will have a hard landing and a recession in 2007.

Well, when you've been through a cycle of expansion as we have since, really 2001, the recovery is, as what people like to say, long at the tooth, and that when you get this far away from a recession, invariably, forces build up for the next recession. And indeed we are beginning to see signs of, for example in the United States, profit margins, after extraordinary upward-side moves, have begun to stabilize. Which is an early sign that we are in the later stages of a cycle. But I think, having said that, the probabilities of forecasting a recession are probably more in the area of a third than they are more than a half. And while yes, it is possible that we could get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed they are projecting forward into 2008 at a reasonably good level with some slowdown. Is George Soros correct? I frankly don't know. I do know that it is very precarious to try to forecast that far in the future. And I mean six months, eight months in the future is a very long forecast. So I'm not concerned as he apparently is, but I can't obviously rule out the possibility.

Is that the same thing as saying flat-out that a recession is possible later this year?