The combination of saving the economy from the effects of the stock market bubble and 9/11 created the storm that is now the credit crunch and housing bubble. It does not take a rocket scientist to figure that out, but in reading interviews that Alan Greenspan is giving while promoting his book, The Age Of Turbulance, it seems that this is the tact the former head of the Federal Reserve is taking.

What scares me is that the markets spent years living and dying on Greenspan’s every word. Now that his is no longer the Fed chief and is focused on selling his book, will people recognize that he does not have the same careful methodology in what he says. To me it is the exact opposite.

Where in the past it was to Greenspan’s benefit to be circumspect, selling books is all about headlines. So making broad pronouncements are the tools of the trade and saying that housing will fall apart or that Iraq is about oil will fulfill his needs and not the general good of the public.

This is the madness of the publishing world, it takes a man like Greenspan who spent his career measuring phrases and turns him into a bombastic fool just to make the bestsellers list.

In 2004 we tried to raise mortgage rates by moving the 10-year Treasury note up and we failed,” Greenspan told CNBC, adding that the Fed failed again in 2005 and would have failed had it tried in 2002.
“We had no control, that I could see, which would have made any difference in the extent of the bubble that was emerging,” he said. “And we concluded, as we did with respect to the stock market bubble in the 1990s, that … as I pointed out previously, every time we tried to tighten … we weren’t trying to knock the stock market down. We were reacting to inflationary pressures. via CNBC

Related posts:

1. Greenspan – Housing Bubble Not My Fault!
2. Poor Treasury Sales May Indicate Mortgage Rates Going Up
3. Housing Starts Down 54.2 Percent For April, 2009
4. Real Estate Market 2001 – 2008 – We Goofed
5. Half Of Housing Grant Money Goes Towards Foreclosure Purchases