ALAN GREENSPAN: The bull market is over and investors should 'run for cover

Former Federal Reserve Chairman Alan Greenspan said in an interview with CNN that stock-market investors should "run for cover" amid the recent volatility.He also said that a notable rise in interest rates has proven to be the "key factor which is bringing the stock market down," and that the pressure would likely continue.When asked if he believes if stocks are still in a bull market, he said, "Not really, no."Former Federal Reserve Chairman Alan Greenspan said in a television interview Tuesday that he believes investors ought to "run for cover" amid the recent volatility.When asked about whether the stock market is still in the midst of a bull run, Greenspan told CNN anchor Julia Chatterley, "Not really, no, it's beginning to fumble. You can see it by the reaction in recent days."He added: "It would be very surprising to see it sort of stabilize here and take off again. But it's happened in the past. However, at the end of that run, run for cover."A brutal start to December has US markets on track for their worst final month of the year since 1931. The last three months have been particularly painful for investors, with the S&P 500, which touched a 14-month low on Monday, down nearly 12% over that time. The primary driver behind the sell-off was the notable rise in long-term interest rates, he said.Greenspan, who served as Fed chairman from August 1987 until January 2006, made his comments one day before the central bank was widely expected to announce an interest rate hike for the fourth time this year, and ninth since the financial crisis, added that pressure from interest rates on stocks would persist.He said he's observed a "pronounced" rise in real long-term interest rates, the "key factor which is bringing the stock market down."He added: "In fact, it accounts for all of the weakness recently, and I think it's going to continue to account for it, because we're in a period now where I think long-term rates are going to rise."More broadly, Greenspan sees the US economy moving toward a so-called "stagflation" environment in which there is both price inflation and a weakening economic backdrop.To be sure, critics have viewed the former Fed chairman as having missed factors that contributed to the financial crisis. He wrote in a 2010 paper that he'd been "lulled into a sense of complacency."Now read:A reliable, little-talked about stock-market indicator is rolling over and its a 'warning' for sign for investors Investors just poured a record amount into bonds as 'extreme bearishness' sends them fleeing from stocksJoin the conversation about this storyNOW WATCH: The equity chief at $6.3 trillion BlackRock weighs in on the trade war, a possible recession, and offers her best investing advice for a tricky 2019 landscape
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