Greenspan’s Subprime Comment Fizzles as Lenders Climb

Greenspan’s Subprime Comment Fizzles as Lenders Climb (Update2)
By Michael Patterson

March 16 (Bloomberg) — Alan Greenspan, whose comments on recession helped send stock prices reeling two weeks ago, predicted the subprime-mortgage debacle in the U.S. will worsen.

Shares of subprime lenders rose.

The former Federal Reserve chairman’s influence on stock prices was thrown into question — at least for one day — as the Standard & Poor’s 500 Index rallied after Bear Stearns Cos.’ earnings report assuaged concerns that loan delinquencies will drag down profits at financial companies.

“It’s definitely true that his influence is waning,” said Hayes Miller, who helps oversee $38 billion at Baring Asset Management Inc. in Boston. “He might be over-playing his position in the world, even as an ex Fed chief.”

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