US equity markets stumbled notably as former Fed Chair Alan Greenspan told Bloomberg TV that “we have a stock market bubble.”

Greenspan stuck to his usual discussion topics of low productivity and fiscal doomsday inevitability…

“Productivity has been dead in the water for the past 10 years…

I’ve never believed in the Phillips Curve…

Adding that “we’ve got to confront the budget deficit,” concluding “we’re dealing with a fiscally unstable long-term outlook.”

Something we have heard before (in 2016) when Greenspan warned

“Entitlements are crowding out savings, and hence capital investment. Capital investment is the critical issue in productivity growth, and productivity growth in turn is the crucial issue in economic growth. We’re running to a state of disaster unless we turn this around.“

“This should be the central issue of the presidential debate. Unless and until we can rein in entitlements, which have been rising at a nine percent annual rate in the United States and comparable levels throughout the world, we are going to find that productivity is going to maintain a very low rate of increase”

Greenspan also doesn’t really view recession as the biggest problem right now, he is concerned (rightfully so) about the longer term problem of low economic growth and soaring entitlement growth.

“I don’t think that’s our problem. Our problem is not recession which is a short-term economic problem, I think youhave a very profound long-term problem of economic growth at the time when in the Western world there is a very large migration from being a worker to being a recipient of social benefits“

But when Greenspan said the following…

“There are two bubbles. We have a stock market bubble and a bond market bubble. At the end of the day, the bond bubble will be the big issue.“

Stocks began to stumble…

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