GREENSPAN: NOT BAD.

BARTIROMO: WAS THAT BECAUSE THE STORES WERE SELLING THINGS AND GETTING RID OF THE INVENTORY OR COMPANIES WEREN'T BUYING ANYTHING AND FILLING UP THE INVENTORY?

GREENSPAN: NO, I THINK IF YOU LOOK AT THE DATA ON A MONTH-BY-MONTH BASIS YOU BEGIN TO SEE THAT THE INVENTORY SALES RATIOS HAVE BEEN COMING DOWN, OF COURSE, FOR YEARS BECAUSE OF TECHNOLOGY.THE JUST IN TIME PROCESS. AND IT'S STILL GOING ON EXCEPTIONALLY CLEARLY. AND WHEN YOU LOOK AT THE DATA, FOR EXAMPLE, FROM THE PURCHASINGMANAGERS, WHICH HAVE A VERY INTERESTING STATISTIC, WHICH IS HOW DO THEY VIEW THE INVENTORY POSITION OF THEIR COMPANY FORWARD OF THEIR PLANS? IN OTHER WORDS, WHAT IS THEIR CUSTOMER'S POSITION? AND THAT'S BEEN MOVING UP OR DOWN, BUT IT'S NEVER GOTTEN TO THE POINT WHERE WE SENSE THERE'S A GLUT OUT THERE.SO INVENTORY CONTROLS ARE QUITE GOOD. AND AT THIS STAGE I THINK THEY ARE THE MAJOR REASON WHY IN THE VERY SHORT TERM WHILE WE'RE FENDING OFF RECESSIONARY PRESSURES BUT THERE'S NO GETTINGAROUND IT, YOU LOOK AT THE INITIAL CLAIMS TODAY, YOU LOOK AT NUMBERS OF FIGURES, AND MOST IMPORTANTLY THE REST OF THE WORLD GROWTH RATE IS SLOWING DOWN, AND WE DEPEND VERY CRITICALLY ON THAT, AND THAT'S WHY I AM MORE INCLINED TOWARD THE RECESSION SIDE THAN NOT FOR THE U.S.

MCCULLEY: ONE OF THE THINGS IN THE SECOND QUARTER WAS THE INVENTOR DRAW ON THE MOTOR VEHICLE SIDE, AND AS WE KNOW AS THAT QUARTER PROGRESSED SALES CAME DOWN AND THEY LEFT THE QUARTER A WHOLE LOT LOWER THAN THEY ENTERED THE QUARTER, AND IT DOESN'T LOOK LIKE SALES ARE COMING BACK.SO EVEN THOUGH YOU GOT A BIG DRAW ON INVENTORIES IN THE SECOND QUARTER THERE'S NO REASON BASED ON FORWARD SALES OF AUTOMOBILES TO GET ENTHUSIASTIC. PARTICULARLY SINCE YOU'VE SEEN THE CREDIT CRUNCH MOVE INTO THE LEASING MARKET IN AUTOMOBILES.I'M NOT OPTIMISTIC ON AUTOMOBILES. I ASSUME YOU'RE NOT EITHER?

GREENSPAN: WE'RE GOING TO KNOW WHAT THE FIGURES WERE FOR JULY VERY SHORTLY. THE EARLY DISCUSSIONS ON IT, IT WILL BE ROUGHLY UNCHANGED.

BARTIROMO: AND WE KNOW WHAT MAY AND JUNEDID, AND IT WAS OBVIOUSLY VERY TROUBLING AND A REAL SHIFT.WE'RE GOING TO SLIP IN A SHORT BREAK, ACTUALLY.WE WILL CONTINUE OUR CONVERSATION IN A MOMENT.MUCH MORE WITH FORMER FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN AND PAUL McCULLEY, GETTING THEIR TAKE ON THE CURRENT ECONOMIC CLIMATE AND THE FINANCIAL SYSTEM.

CARUSO-CABRERA: LET'S GET OVER TO MARIA, WHO'S IN WASHINGTON WITH ALAN GREENSPAN.

BARTIROMO: THANKS VERY MUCH, MICHELLE.I AM WITH FORMER FEDERAL RESERVECHAIRMAN ALAN GREENSPAN ALONG WITH PAUL McCULLEY, MANAGING DIRECTOR AT PIMCO, ALSO PORTFOLIO MANAGER AT PIMCO.LET'S GET BACK TO THE STORY OF THE BROAD ECONOMY. TWO ISSUES GOING ON, THE SLOW ECONOMY AS WELL AS THE FINANCIAL SECTOR. AND THE FINANCIAL SYSTEM IN GENERAL, WHICH CERTAINLY IS I WOULD SAY THE MOST IMPORTANT DISCUSSION OF OUR TIME, RIGHT? LET ME GET YOUR TAKE ON WHAT'S GOING ON RIGHT NOW WITH REGARD TO FANNIE AND FREDDIE. WE HAD HANK PAULSON ON THIS PROGRAM LAST WEEK AS HE WAS IN THE MIDST OF ASKING CONGRESS TO PASS HIS LEGISLATION.LISTEN TO WHAT HE HAD TO SAY.

Tools:

PrintEmail

Next Post

Previous PostBack to Main Page