"Bubbles" Greenspan

i can't count the number of times in the past few weeks that i've seen that moniker ("bubbles") applied to alan greenspan... it may have something to do with the fact that the "ancient oracle at delphi" persona has been crumbling and he is being revealed for what he is - just another partisan hack... unfortunately, with the power he wields over the economy, he's a damn scarey partisan hack... i've been posting repeatedly (here, here, here, and here) about the housing bubble and what may happen if it bursts... greenspan has been shrugging it off but, unlike the halcyon days of old, not everybody's buying it...

Alan Greenspan keeps saying that it's unclear why home mortgage rates have remained so low. After all, the Federal Reserve chairman has been doing all the things people in his position normally do to push rates up - warning about "bubbles" in the housing market, assuring the business community that the economy is basically strong and tripling the Fed's overnight lending rate, to 3 percent.

Perhaps we can help solve the mystery.

Persistently low mortgage rates are symptomatic of an economy that is not doing as well as Mr. Greenspan suggests. Mortgage rates are linked to Treasury bond yields, which are unusually low. And depressed bond yields are generally the market's way of saying that the economic outlook is worrisome.

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