Overnight in London, Alan Greenspan made another stop on his book tour and was good ample to tell Reuters that the US housing market had much further to fall “All that I conclude is that the process of stock adjustment has just started and we have a faraway way to go before residential housing and mortgage markets stabilize in the U.S.” In other words, let the bank take your house and move to New Zealand.

Greenspan may not be helping the US economy, and he may want to keep a lower profile.

Housing stocks and financial services operations with exposure to US mortgages are already well aware of the dangers that the current housing downturn presents. Saying increasingly about it

may sell Mr. Greenspan’s book, but it is hardly good for morale.

Of course, whether the old man is right, and he often has been. a prolonged and deepening housing crisis would nearly certainly drive consumer spending down sharply and damage industries from automotive to retail. that, in turn, would nearly certainly cause a recession which could final for all of 2008.

If there is no one else to blame, we can always point a finger at Greenspan. His book sales should help him weather the recession.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Original post by Douglas McIntyre

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