Friday, August 26, 2005

Greenspan Legacy at Risk

The LA Times has a story by reporter Bill Sing today that looks at what would happen to the legacy of Federal Reserve Chairman Alan Greenspan if a housing bubble indeed exists (and pops). Here's an excerpt:
Many experts say the nation's real estate market draws disturbing similarities to stocks in the late 1990s — a market driven to unsustainable price levels by what Greenspan famously called "irrational exuberance." They fear a similar ending: a sharp fall in prices that could bite the net worth of many Americans and trigger a recession.

And some experts say Greenspan deserves at least some of the blame for fostering housing market conditions that the Fed chairman himself has called "frothy." The Fed, they say, hasn't done enough to damp real estate speculation, while maintaining cheap credit for too long.

Find the full story at this link.

— The Boy in the Big Housing Bubble