Someone we all know is in serious denial. Must be the blood-on-your-hands effect. This recent public purging must be to help him sleep at night.
Meanwhile, his reckless actions and words and general incompetence led to the coming financial destruction of millions of families. History will not be kind...
The great boom in US house prices that abruptly petered out in recent months was caused by increased global integration, not loose monetary policy, Alan Greenspan, the former chairman of the Federal Reserve, has claimed.
"I don't think that the boom came from a 1 per cent Fed funds rate or from the Fed's easing. It came from the collapse of the Berlin Wall," Mr Greenspan told a private audience in Canada on Friday.
October 10, 2006
FLASH: Greenspan claims housing bubble was due to Berlin Wall tumbling, not 1% interest rates. And in a related development, I just puked
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Way to go Greenspan. It's pretty pathetic he is now resorting to using the old Otter defense from Animal House:
"Ladies and gentlemen, I'll be brief. The issue here is not whether we broke a few rules, or took a few liberties with our female party guests - we did.
But you can't hold a whole fraternity responsible for the behavior of a few, sick twisted individuals. For if you do, then shouldn't we blame the whole fraternity system? And if the whole fraternity system is guilty, then isn't this an indictment of our educational institutions in general? I put it to you, Greg - isn't this an indictment of our entire American society? Well, you can do whatever you want to us, but we're not going to sit here and listen to you badmouth the United States of America. Gentlemen!"
BBBLLLLLAAAAAACCCCCHHHHHKKKKK BLLLUUURRRGGGAHHHAACCCCHHHHKKK!!!!
(someone hold her hair)
BLLLAAAHHHHHCCCCHHHHHHH BBBBLLLLLAAAAAHHHHHHHHHHH!!!
Maybe he's smoking pot these days? He's saying some whack stuff man. If he has the munchies, you know what's going on there
Greenspan is good comedy.
I have to agree with the "blood-on-your-hands effect" comment.
Meh, he's just upset that he and his fellow jew communist henchmen can no longer look at that great symbol of jew communist domination of the oppressed German people. I would'nt be surprised if large groups of jews used to visit that wall on yom kippur to celebrate the mass slaughter of Germans in the Dresden fire bombings.
I read that on Marketwatch, and almost puked into my beer also! He must have Senile Dementia by this point. . .or maybe he had it when he was still Fed Head. Funny how everyone is CYA right now. . .that scares me more than that idiot in North Korea. . .if they are in the CYA mode, then all hell is going to break loose.
here comes lunch, again.
BBBLLLLLAAAAAACCCCCHHHHHKKKKK BLLLUUURRRGGGAHHHAACCCCHHHHKKK!!!!
(someone hold her hair)
BLLLAAAHHHHHCCCCHHHHHHH BBBBLLLLLAAAAAHHHHHHHHHHH
----------------
Are they feeding you Glue for lunch or what.
Is it me or is Greenspan looking more and more like the scarecrow from the wizard of oz.
ummm, the more I read, the more I see the many reasons for the housing bubble and Greenspan isn't all to blame.
The "I'm facing foreclosure guy" really opened my eyes about doing "side transactions."
The "if you give me cash back, I'll give you a ridiculous amount for your house" kid. How much he stashed away is unknown.
Thus, I'd say Greenspan was right if people weren't committing these criminal acts and the interest rate reductions only helped families with affordability.
Additionally, there was that "London piece" whiched noted that 1/2 the real-estate in London was owned by someone in the middle east, they have lots of cash and need a place to put it?
Maybe the "berlin wall" comment was referring to the wage/price gap-- i.e. for a while, the two were seperate but now, after the wall fell, wages and prices live together...
Think about how many people contribute to their 401K through automatic payroll deductions. These are your everyday Joe's. No idea what type of risk they are taking.
++++++++++++++++++
You are so right. When the Dow Jones finally tanks (in tandem with the housing bubble bursting), a large number of the middle class are gonna get reamed....
He was part of Ayn Rand's "collective" at one point. I'm sure she's rolling around in her grave just over his antics.
This guy *has* to know that the lowering of interest rates to that level had to cause some sort of bubble. Either he's a liar or criminally incompetent. It would have been better to have a recession after the Tech Stock Bubble and 9/11 than have a huge housing bubble. The government always screws things up. Better to have financial panics than fiat currency inflation, etc.
You are so right. When the Dow Jones finally tanks (in tandem with the housing bubble bursting), a large number of the middle class are gonna get reamed....
Well they could always count on Social Security..
sorry just being a wise ass :).
It amazes me just how out of touch with reality some people really are. No matter how anyone feels about the Doom and Gloom effect these are Grave times for sure.
Greenspan... What cab I say.
Crap is crap.
Yet, they continue sleep walking through the day, going through the motions. There's still beer in the fridge and good shows on the talmudvision afterall.
hebrew house lender said...
Yet, they continue sleep walking through the day, going through the motions. There's still beer in the fridge and good shows on the talmudvision afterall.
---------------
Please if you would point me to those good shows on the talmudvision nothing but shit on my 800 channels.
Thank christ for Nickelodeon, other wise my kids would have nothing to watch..spongebob rules :)
-------------
Yet, they continue sleep walking through the day.
----
I call that Human Zombification. :)
"I call that Human Zombification. :)"
http://www.dedbob.com/
GrandInquisitor 8:03:28 said,
“20 years ago an applicant for a loan had to walk into a bank and sit down across from a banker and ask for a loan. Today, the loan is given no questions asked over the internet.”
-------------------------
Heck, just 9 years ago the bank not only performed a verification of income to ensure it met the criteria for the loan amount, required a minimum of 3% down, and mandated that we have 3 month’s worth of house payments in a reserve account, but they also required us to watch a video explaining the specifics of the loan.
This tactic served the purpose of weeding out individuals who had no idea about what they were doing, instilled a feeling of responsibility in the buyer, and likely prevented a lot of heartbreak due to foreclosure.
Sometime between then and now, the banks figured out how to minimize their being damaged from making bad loans, so they disposed of the above-mentioned requirements in order to rake in more money.
-Mammoth
..."And in a related development, I just puked"
Ahh, Keith.
Sometimes you make me so cross.
Then, you make it all better, by saying barmy stuff like that and making me cry with laughter. Good work fella.
While on the subject - how does something that happened 17 years ago, on another continent - directly affect housing prices?
I thought that the interest rates that the Fed controls do not directly control mortgage rates. Is that correct?
come to San Diego. LOL, what is this "middle class" you talk about?
http://tinyurl.com/qusya
Where is this article? I would like to see it before I judge. You know - he said, she said.
I'll agree Greenspan allowed low Fed funds rates for too long. But..... did he force Casey and hundred of thousand other morons to overextend their personal credit? NO. Greed is what will bring down the system. You greedy bastards that didn't have an exit plan. The Focked borrowers better not complain to me. I don't want to hear about their pain!
Actually, I will help those close to me. But, it really does piss me off when I've told others about the "big picture" and they agree and then do nothing different. The similar comments of "oh well, I just be like everyone else in the poor farm". Get a grip! There's still time to sell all of your useless crap and get out of debt! Do you really need a $300,000 weekend boat!!!
http://www.the- rude-awakening. com/RAissues/ 2006/march/ 01006.html
The Rude Awakening
Wall Street, New York
Monday, October 10, 2006
Behold! The Housing Bust!
By Mike "Mish" Shedlock
The New York Times is reporting, "Home Prices Drop After
11-Year Ascent":
"The median price in August fell to $225,000, down 1.7%
from August 2005. That was the first time since April 1995
that the national median price was lower than the same
month a year before."
On that news, I thought it was time to update my comparison
of the U.S. housing bubble to that of Japan's in the '80s
and '90s. The current picture looks like this:
Re anon 9:38:05 PM
“Do you really need a $300,000 weekend boat!!!”
Papa always said, if it flys, floats, or f*cks, it’s cheaper to rent it than it is to buy it...
We're not in Kansas anymore. The old economic rules do not apply because central banks can create infinte money and credit. Robert Rubin and Alan Greenspan are the architects of this system and damned if it doesn't seem to be working rather well.
Standards of living around the world are being leveled, some higher, some lower, as their globalization schemes snare more and more economies into the web controled by central banks. These guys believe they are smart enough to gradually improve collective wealth for the entire world economy. You fools tied to those dusy Austrian economic textbooks just don't get it.
NAFTA and GAT, great for mexico and other third wold nations, very bad for America.
Yeah, third worlders are rising up while self loathing whites don't mind the pillaging of their economies.
I echo that. I am publishing on my site www.1stMillionAt33.com tomorrow: "Greenspan speaks again, or did he f*rt?"
This G. guy is truly unbelievable.
Greenspan... u know his type... what else do you expect him to do except screw America and make his own kind rich!!!
""The median price in August fell to $225,000, down 1.7%
from August 2005."
ARE YOU A RETARD?
DOWN 1.7% AND YOU JUMP UP & DOWN LIKE A MONKEY IN HEAT!
HEY... IT'S UP 100% SINCE 2000.
HE
IS
A
F--K--G
J----Y
Gumby puking - nice!
"HEY... IT'S UP 100% SINCE 2000"
And that's why it's going to fall 50% by 2010
Your average American:
"Who is Alan Greenspan?"
Greenspan is a Jew, I will admit to this.
But the bottom line is he has always been right.
Let's give him the benifit of the doubt.
Either he has a brain tumour or he has dementia.
"When the Dow Jones finally tanks"
I'm not sure that it will. As they say, "the US has a policy of inflationary management."
So, the DOW, which is around 12,000, if adjusted for inflation, is not anywhere near the high it was in 2000.
As always, those that save will have money and those that don't won't.
Being a good saver is your best get against inflation. Some would say you also need to invest in inflation index assets like houses too...
OK, IM NOT SURE IF I CAN SAY THIS ANY LOUDER!!!
---IF THE BUBBLE WAS DUE TO THE BERLIN WALL TUBMLING, WHY ISN'T THERE A HOUSING BUBBLE IN GERMANY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
AM I JUST BEING TOO SIMPLISTIC OR JUST TOO RATIONAL?
Greenspan started talking nonsense when he said that all the new bond issues (all the new national debt of the U.S. after Clinton) weren't a big deal when compared to the overall size of the debt markets.
That was the point at which it became obvious he was a pawn of the Republican administration.
Bush and his cronies have been laughing for so long. They have totally financially raped the U.S. at the expense of the American public, while enriching themselves beyond measure. They should be proud.
Look at the overall market. Nasdaq, Dow, S&P, taken together.
Nasdaq has nowhere near recovered. S&P hasn't recovered. Dow has recovered but not on an inflation adjusted basis.
Yet of course everybody looks at the Dow and says the 'stock market' has recovered ...
idiots.
I don't mean to get all politically correct on anyone since one of the great things about this site is that people are free to express their outrage in the extreme manner that they feel it. But, seriously, Hebrew House Lender, this anti-semitism stuff just makes you sound like a wack-job. It also really adversely impacts the respect anyone can have for this blog.
I'm making this posting partly in the hopes that Hebrew House Lender will look in the mirror and see what he looks like. But I'm also posting so that someone new to HP doesn't think we're all a bunch of pathetic racist zionist conspiracy theory wing-nuts.
Wrong, Mr 'Span. It was the defeat of Hitler combined with the failure of the Ford Edsel that gave rise to the housing bubble. (sounds more credible than your Berlin wall theory, doesn't it?)
Really, it was the invention of the automatic nail gun that led to the housing boom.
Maybe the housing bubble in MOSCOW has a bit to do with the end of the USSR. But Australia? UK?
Robert Rubin is smarter than Alan Greenspan. Don't lump him in.
Read what Rubin's saying today.
Well Mr Math, I look in the mirror each morning as I'm sure everyone here does. What I see would surprise you I'm sure.
As far as "conspiracy theorys" go, do you think the events of the past several years have just been pure coincidence?
And about that "anti-semitism" stuff, well... I know it makes me sound like a whack job to most folks, but, try for a second if you will, to open your mind completely, and look into who dictates our foriegn policy, who wrote the immigration reform act, who owns the federal reserve, who can destroy any polititions career with just a few words. They all have one thing in common, I'll give you one guess as to what that thing is.
I'm NOT someone who just mindlessly "hates"..... Please don't be someone who just mindlessly follows the jews off the proverbial cliff.
And anon above 10/11 1:03 am,
Consider this if you will..... Maybe Greenspan is not a pawn of the republican party, but the republican party (and democratic for that matter) is a pawn of the federal reserve? Who loans who the money after all? Also, keep in mind that the federal reserve is not federal at all, ie. not part of the United States.
Is this serious?!!!!!
Is this a joke?!!!
Is this turd SMI (seriously mentally ill)?!
NEW JERSEY-
Kara HOME's BANKRUPTCY/failure worries banks !!!
Kara's failure worries banks
http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXkyOCZmZ2JlbDdmN3ZxZWVFRXl5NzAwMzMzMiZ5cmlyeTdmNzE3Zjd2cWVlRUV5eTI=
Tuesday, October 10, 2006
By RICHARD NEWMAN
STAFF WRITER
Kara Homes' bankruptcy filing could hurt a number of banks and make lenders more cautious about lending to builders as the real estate market slumps.
The Chapter 11 filing last week by the East Brunswick-based home builder shows a surprising number of lenders facing large amounts of potential losses, analyst Albert Savastano wrote in a research report Monday.
Kara owes about $108 million to eight different banks, according to Savastano, of Janney Montgomery Scott. According to Savastano, the filing indicates the loans are unsecured. But he suspects some banks may argue otherwise.
The largest bank creditors include National City Corp., North Fork Bank, TD Banknorth, Magyar Bank and The Yardville National Bank. Banks could not be reached Monday, a federal banking holiday, to comment.
It is uncertain how much, if any, of the debt will be repaid. And even if the loans are secured by real estate, the bankruptcy "could impact [bank] earnings in the short term," Savastano said in a phone interview.
Kara has had a hard time selling homes recently, even at discounts, and banks that foreclose on its properties would likely face the same market pressures.
The bankruptcy filling represents "a potential crack in the armor of New Jersey real estate," Collyn B. Gilbert of Ryan Beck & Co. wrote Monday in a report to investors. "We believe this event will have an impact on the New Jersey banking landscape."
The largest bank creditor is Cleveland-based National City Corp. with a $48.2 million claim.
Long Island-based North Fork Bank, a significant player in the New Jersey commercial lending market, is owed $21.3 million and Maine-based TD Banknorth, which has regional headquarters in Mahwah, is owed $15.9 million.
The Yardville National Bank is owed $7.8 million, Magyar Bank in New Brunswick is owed $7.6 million and Bank of America is owed $6.3 million.
Valley National of Wayne is owed $682,000 and Investors Savings Bank in Short Hills is owed $71,000.
The builder also owes millions to subcontractors and suppliers and is in debt to employees.
Kara, which builds high-end housing throughout most of New Jersey, was the fastest-growing builder in the country in 2002, according to Builder magazine. In the Oct. 5 Chapter 11 filing, it listed debts of nearly $300 million and assets of about $350 million. Kara has not commented on the reasons for the filing but industry observers say the company may have been caught off guard by a slowdown in sales.
A decline in new home sales is a growing cause for concern for those in the building trades -- and for banks that finance new-home construction in New Jersey.
For the smaller banks like Yardville and Magyar, earnings could take a big hit if they lose large portions of the loan amounts.
And though developers have, in recent years, been doing a very good job paying back loans, industry observers are wondering if that may soon change.
Savastano took a critical view of banks making large unsecured loans to Kara, an aggressive young company which has never been through a downturn in the business cycle.
"It is an indication of the competitiveness of the marketplace and the pressure to grow loan portfolios," he wrote, adding that lenders will be more conservative with builders and may soon be adding cash to loan loss reserves.
* * *
Banks with loans to Kara Homes
• National City Corp.: $48.2M
• North Fork Bank: $21.3M
• TD Banknorth: $15.9M
• The Yardville National Bank: $7.8M
• Magyar Bank: $7.6M
• Bank of America: $6.3M
• Valley National Bank: $682,000
• Investors Savings Bank: $71,000
Source: Janney Montgomery Scott
Man are those Jersey banks going to be in trouble. I hope none are holding "capo"s" cash. You'll be seeing some builders floating in the river!
Greenspan and his "private banks" create greenbacks out of thin air. Only cost to them is paper and dye. Also a few employees to "hit" the send button for electronic transfers. What's not to like about this. The masses don't know and could care less.
My gut reaction was "what a crock!" But this wouldn't be the first time it was necessary to decode Greenspan utterances. It's so tangential, it must mean...something. What is that gangster flick where everyone in the room starts talking nonsense as a way of flushing out the young newbie? Perhaps the meaning of the crazy talk is simply a warning signal - he could have attributed it to the invention of the nail gun or anything else obviously wrong. The message would be the same: "crash ahead".
Also, there is a grain of truth in what everyone says (except house lender, who should be banished from the site) - as pointed out above, the wall falling means the opening up of the global marketplace. Hence, the bubble was international in scope. Well, that's about the most charitable interpretation I can come up with - not saying much.
A must see.
50 minute video on oil and the economy.
http://tinyurl.com/hkjrc
I'm an idiot!
Someone please explain the correlation between the wall and the bubble to me please!
Makes no sense!
Hey H-Pukers! Take a look at this one:
http://tinyurl.com/l44yy
Interest rates are going to crash.
HPers 0, Greenspan 1, LOL!
It's definitely larger than republican/democrat. And he has just proven who he is truly loyal to: the international bankers.
For a long time I had considered the possibility that Greenspan had a good side, but with this comment it is blatantly apparent that his actions have always been purposeful and directed.
He has joined forces with the international bankers and we are beginning the final battle for global assets.
Wake up people. The constitution is dying and we're about to be enslaved. Sounds melodramatic, but true.
http://www.infowars.com/
http://www.prisonplanet.com/
and look into who dictates our foriegn policy, who wrote the immigration reform act, who owns the federal reserve, who can destroy any polititions career with just a few words. They all have one thing in common, I'll give you one guess as to what that thing is.
They're Republican, and named "Dick" or "Karl".
"Also, keep in mind that the federal reserve is not federal at all, ie. not part of the United States."
It is not part of the US in the sense (and only in the sense) that its employees are not part of the Civil Service with a GS grade, and officially under an Executive department.
Just as almost all workers at Los Alamos National Laboratory are actually employees of the University of California/Bechtel consortium and not Federal employees of the DOE.
On the other hand the US certainly defines the mission and direction of LANL and not the University of California.
And similarly, the US Congress defines the mission and approves/rejects the executive management of the Federal Reserve.
And most importnatly, the Federal Reserve gives all its operating profit to the U.S. Treasury. In the private sector owning the profits is equal to ownership, of course.
So the USA controls the choice of management, mission and legally oowns all of the profits of the Federal Reserve.
Despite what conspiracy nuts think the Federal Reserve is, in every way which really counts, an instrument of the USA. It is separated a bit for good reason to insulate it from immediate partisan political pressure. This is a good idea.
KB Homes only has $400 million left on their Line of Credit!!!
Our calculations show they will burn through that in about 3 months. However, given they are in default on their earnings statement they will not be able to borrow anymore.
They could be in bankruptcy by the 1st of the year.
http://www.sec.gov/Archives/edgar/data/7...
ht
Liquidity and Capital Resources.
We fund our business activities with cash flows generated from our operations
and from debt financing, including through the issuance of publicly-traded notes
and by entering into credit agreements to borrow funds from banks and other
financial institutions. Currently, our primary credit agreement is a $1.5
billion unsecured revolving credit facility (the “$1.5 Billion Credit
Facility”), which allows us, from time to time and subject to certain conditions
precedent, to draw funds as needed to support our business. As of October 10,
2006, we had $600.0 million of outstanding borrowings under our $1.5 Billion
Credit Facility and $487.0 million of outstanding letters of credit, leaving us
with $413.0 million of available capacity.
The delayed filing of our Third Quarter 10-Q may impair our ability to
raise external financing to support our business. The delayed filing of the
Third Quarter 10-Q will cause us to not be current in our filings required under
the Exchange Act which will prevent us from using a Form S-3 registration
statement for the public offering of new debt or equity securities until we have
filed the Third Quarter 10-Q and have been current in our filings of all other
required Exchange Act reports for a period of 12 months.
In addition, the delayed filing of the Third Quarter 10-Q and the
unavailability of third quarter financial statements may result in a default
under the indentures governing our senior and senior subordinated notes and our
credit agreements. As a result of such
delay or unavailability, we may be unable to obtain additional borrowings under
our $1.5 Billion Credit Facility. If uncured, such delay or unavailability could
also result in acceleration of repayment of our currently outstanding
indebtedness. We do not know if any indenture trustee, administrative agent of
any of credit agreements or creditor will assert that the delayed filing of our
Third Quarter 10-Q or the unavailability of our third quarter financial
statements constitutes a default in the performance of these agreements.
However, because our indentures and credit agreements contain cross-default and
cross-acceleration provisions, if any indenture trustee, administrative agent,
creditor or group of creditors were to be successful in claiming we had
defaulted and we did not cure such default within the grace period available, we
would be required to seek a waiver or amendment, to refinance all or part of our
existing debt and/or to pay fees or penalties, which, individually or in
combination, may have a materially adverse effect on our liquidity.
Historically, we have generated greater cash flows from our business
operations in our fiscal fourth quarter relative to other quarters because we
make a proportionately greater number of unit deliveries in that period. We
currently anticipate that our 2006 fourth quarter will be consistent with our
historical experience and, in conjunction with a planned reduction in investment
in land inventory in the fourth quarter relative to the prior periods of the
year, we believe, subject to the foregoing, that we will have sufficient
resources to meet our current business needs.
I'll loan KB Homes $1,000,000 for 7%
who is with me?
"Hey H-Pukers! Take a look at this one:
http://tinyurl.com/l44yy
Interest rates are going to crash.
HPers 0, Greenspan 1, LOL! "
Wrong, dumbshit! It says no such thing at all. In fact, I doubt that you understand the technical language used on the web page. Learn the implications of what something says before you post your moronic conclusions and make an ass of yourself, dumbshit!
Boo-hoo!
We were missing that old fraudster, Alan Greenspan. What had become of
him, we were wondering. The wisest, wiliest, most powerful human being
on
the planet seemed to have gone dark after he left his post at the Fed.
We
thought we'd never hear from him again.
But yesterday, the man surfaced...like a beluga whale in Canada.
Speaking
to a private, audience he said that the house price bubble - and
incipient
bust - were not his fault.
"I don't think that the boom came from a 1 per cent Fed funds rate or
from
the Fed's easing. It came from the collapse of the Berlin Wall," Mr.
Greenspan told his listeners.
The Financial Times reports:
"The former Fed chairman said the collapse of Communism in Eastern
Europe
and the shift towards more market-based economies in China and other
parts
of the developing world brought 'billions of cheap labourers onto the
scene.'"
"This," he said, "brought disinflation and lowered inflation risk
premiums
and long-term interest rates, creating a decline in real interest rates
and equity-risk premiums." In consequence, "the real market value of
assets increased faster than GDP".
There is undoubtedly some truth to what Greenspan says. But this is one
of
those occasions for which the word 'disingenuous' must have been
invented.
Yes, global integration probably has reduced inflation expectations,
thus
permitting lower interest rates and higher asset values. But without
the
active aiding and abetting of the Fed, which set the Fed Funds rate
under
2% - i.e., below inflation - for 35 months, the boom in housing prices
would probably never have turned into a bubble. And millions of
Americans
would still be solvent today. Globalization may have lowered inflation
rates...permitting lower interest rates. But globalization didn't bring
with it lending rates below the rate of inflation. Those negative
lending
rates were not imposed by Mr. Market, but by Mr. Market Manager
Greenspan.
A negative lending rate is a marvel. It allows a speculator to borrow,
knowing that he can repay less than he was lent. Negative lending is to
the financial world what a negative-calorie dessert would be to Sara
Lee
or a negative-year prison sentence would be to a bank robber. You can
imagine, dear reader, what mischief they would cause.
Even at low real rates of interest, a borrower has to be careful. But
what
kind of care is needed when you are guaranteed to make a profit, merely
by
borrowing?
The actual effect of the Fed's sub 2% rate is now history...well, a
history that is still being written, one painful page at a time. That
it
brought about a huge bubble in housing prices is beyond question. It
also
helped sustain the whole U.S. economy...and, by extension, the economy
of
the whole world. Goldman Sachs calculates that since 2002, American
homeowners have been able to "take out" enough money from their houses
to
add 2.5% a year to real GDP growth - which was most of it.
And now, it appears that the bubble is deflating. The Fed is no longer
giving away money. And the housing market is no longer bestowing big
gains
on homeowners. The granite countertop business is slowing down...along
with the rest of the housing-manufacturing complex.
If Mr. Greenspan were right, investors could expect high asset prices
for
a long time. Global trade, after all, is not likely to disappear any
time
soon. Why should house prices go down then? Or stock prices, for that
matter?
But now, even the Maestro concedes house prices are going down. Only,
he
says, it is because houses have become unaffordable. And he guesses
that
the worst of the housing slump is already behind us.
And who knows? He could be right. But an investor has to play the odds.
What are the odds of making serious gains in stocks at today's record
prices? What are the odds of making serious gains in houses? What are
the
odds that Mr. Greenspan knows better?
We wait to find out.
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