Jim Cramer's Mad Money Review

Alan Greenspan said the odds of a recession have grown since earlier this year, even though "the economy is not doing badly at this stage."
In an interview with The Associated Press on Monday, the former Federal Reserve chairman put the odds of a recession at greater than one in three. "But best I can judge, it is less than 50 percent," he said.
Greenspan's one-in-three prediction earlier this year rocked Wall Street, which has been suffering through a period of turbulence. A deepening housing slump and a spreading credit crunch have raised fears on Wall Street, on Capitol Hill and on Main Street about the country's economic health.
Many analysts are counting on the Federal Reserve to lower interest rates on Tuesday to provide some relief.
On other issues, Greenspan said the United States must look at ways to reduce gasoline use both as a matter of national security and to protect the environment.
Greenspan said he favors a tax on gasoline to help curb demand. But recognizing that this could be an "undue burden" on poor people, he suggested a rebate of some sort. There is a national gas tax of 18.4 cents a gallon.
Source: AP

Labels: Alan Greenspan, Economy, Gasoline, Oil, Recession, Tax, Wall Street

Oil prices rose Monday as a winter storm plowed across the United States, spurring expectations of strong demand for heating oil.
The storm dumped as much as 2 feet of snow in the Midwest, grounding hundreds of airline flights and closing major highways. The National Weather Service said New York and northern New Jersey might get up to 6 inches of snow.
"Oil prices have been driven by the weather as what is perhaps the last winter storm of the year passes through the U.S. Midwest toward the East Coast, driving strong demand in heating oil," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
Light, sweet crude for April delivery rose 39 cents to $61.53 a barrel in electronic trading on the New York Mercantile Exchange at midday in Europe. Friday's closing price of $61.14 was the highest since Dec. 22.
April Brent crude on London's ICE Futures exchange rose 50 cents to $61.38 a barrel.
Heating oil prices gained 0.78 cent to $1.7583 a gallon while natural gas futures rose 10.5 cents to $7.860 per 1,000 cubic feet.
Oil prices also were supported by U.S. inventory figures released last Thursday that showed a larger-than-expected decline in distillates, which include heating oil and diesel, as well as a drawdown in gasoline inventories.
Shokri Ghanem, the head of Libya's oil industry, said Monday that he sees U.S. oil prices remaining close to $60 a barrel for the rest of 2007.
"The price will hover around $60 per barrel, maybe moving up or down slightly, for the rest of the year," Dow Jones Newswires quoted him as saying from his office in Tripoli.
Market participants reacted slightly to news that Iranian President Mahmoud Ahmadinejad said Sunday his country's disputed nuclear program was irreversible. Iran, OPEC's No. 2 supplier, also said it successfully tested a rocket that went into space.
"The market has largely factored in the geopolitical threat posed by Iran, therefore you don't see a sharp rise in prices," Shum said.
Senior diplomats from the five permanent U.N. Security Council nations and Germany were meeting Monday in London to start work on a new resolution to try to pressure Iran to suspend its uranium enrichment program, which can lead to the production of nuclear weapons.

Labels: Economy, Oil, Oil Prices, USO

The U.S. economy is poised to expand at a moderate rate and "uncomfortably high" core inflation should ease, but price risks are tilted mostly to the upside, Federal Reserve Chairman Ben Bernanke said on Tuesday. "Over the next year or so, the economy appears likely to expand at a moderate rate, close to or modestly below the economy's long-run sustainable pace," he said at a luncheon sponsored by the National Italian American Foundation. "Core inflation is expected to slow gradually from its recent level," Bernanke said. Still, he added, "the risks to the (inflation) forecast seem primarily to the upside." "Given the current level of inflation, a failure of inflation to moderate as expected would be especially troublesome," Bernanke said. U.S. Treasury debt prices fell and stocks trimmed gains as financial markets took the speech as a sign the Fed is not close to cutting interest rates as it remains focused on ensuring inflation pressures abate. "There is no daylight within his statement to indicate any hint of a rate cut," said Tony Crescenzi, chief bond market strategist at Miller, Tabak & Co in New York. "It seems the Fed is taking no chances with respect to the gains it has made in fighting inflation and is making tough talk in the face of a decline of inflation expectations and slower growth." The U.S. central bank chief warned that "substantial uncertainties" surround the outlooks for growth and inflation. "Whether any further policy action against inflation will be required depends on the incoming data and in particular on how these data affect the (Fed's policy-setting Federal Open Market Committee's) medium-term forecasts of both inflation and output growth," Bernanke said. The effects of the housing market slowdown are likely to persist into next year but there is little evidence that weakness in housing markets is spilling over into consumer spending or broad measures of employment, he said.
Source: Reuters.com

Labels: Ben Bernanke, Economy, inflation