Greenspan pontificates

Greenspan was quite bearish on housing in the WSJ yesterday. Let's take a look at the maestro pontifications on housing before he was employed by in consulting gigs with bond house PIMCO and Deutsche Bank:

October 6, 2006
I suspect that we are coming to the end of this downtrend, as applications for new mortgages, the most important series, have flattened out. I don't know, but I think the worst of this may well be over."
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTs_EsiSlywc

April 8, 2008
Former Federal Reserve Chairman Alan Greenspan said the drop in U.S. home prices will probably end ``well before'' early next year as the number of houses on the market diminishes, aiding an economic rebound.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aK6fhJY95tPg&

Now Greenspan is bearish on housing, and now we should listen to him?

Home prices in the U.S. are likely to start to stabilize or touch bottom sometime in the first half of 2009," he said in an interview. Tracing a jagged curve with his finger on a tabletop to underscore the difficulty in pinpointing the precise trough, he cautioned that even at a bottom, "prices could continue to drift lower through 2009 and beyond."

Why are we supposed to listen to Greenspan now? It's because the spreadsheets and charts now tell him!

His desk, couch, coffee table and conference table are strewn print-outs of spreadsheets and multicolored charts of housing starts, foreclosures and population trends siphoned from government and trade association sources.
http://online.wsj.com/article/SB121865515167837815.html

Didn't Greenspan have these spreadsheets before in his well-windowed, oval-shaped office?

And didn't Greenspan tout the "teaser rate" before rates were increased 17 times?

While borrowers can refinance fixed-rate mortgages, Greenspan said homeowners were paying as much as 0.5 to 1.2 percentage points for that right and the protection against a potential rate rise, which could increase annual after-tax payments by several thousand dollars.

He said a Fed study suggested many homeowners could have saved tens of thousands of dollars in the last decade if they had ARMs. Those savings would not have been realized, however, had interest rates shot up.

"American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage," Greenspan said.
http://www.usatoday.com/money/economy/fed/2004-02-23-greenspan-debt_x.htm

He couldn't see the top, he couldn't see the bottom, and he suggested the wrong product at the absolutely worst time.

If you want to buy a house now, housing has bottomed in pricing. Today you can make the best deal on a house amongst all the pervasive fear and uncertainity that now exists in the market.

When housing bottoms in government statistics, it will be as useful as when we hear that the recession started or ended. The time to buy is now.

Greenspan's call?

It's as good as his previous ones.

Just plain wrong.