“We are finally beginning to see the seeds of a bottoming [in the housing industry. The U.S. is] at the edge of a major liquidation [in the stock of unsold properties, which may help to stabilize prices].
—Alan Greenspan, May 12 2009
“I don’t know, but I think the worst of this may well be over.”
—Alan Greenspan, October 2006
Why does the public — and the Press — constantly seek out reassurances from the same people who misled them time and again in the past?
That was the question on my mind as I pondered yet another declaration from Alan Greenspan that the Housing Market has bottomed. That he has consistently made similar such statements before is cause for doubting him here. That these prior bottom calls were as far back as 2006 is cause for ridicule.
Few people have been worse than Greenspan in analyzing the Housing market. In fact, the only person / group I can think of with a consistently worse track record than Greenspan’s of analyzing the housing market was the group he spun his foolishness to yesterday: The National Association of Realtors.
Indeed, consider this golden oldie from David Lereah, the NAR’s chief economist, circa December 2005:
Home sales are coming down from the mountain peak, but they will level out at a high plateau, a plateau that is higher than previous peaks in the housing cycle.
That 2005 declaration, made 5 months after Hosuign prices had topped out, was typical of the reality denial we saw from the NAR over the entire housing cycle. They continuously got it wrong, spinning all data, good or bad, in a shamelessly self-promotional manner.
That this group of blind flacks paid Greenspan $100,000 plus to spin them lies is somewhere between ironic and pathetic. At least it wasn’t taxpayer monies . . .
NOTE: These older Greenspan/Lereah quotes were were pulled from Chapter 21, The Virtues of Foreclosure, Bailout Nation.
Pending Home Sales Index, NAR Housing Market “Bottoms” (January 2008)
Greenspan Sees ‘Seeds of a Bottoming’ in U.S. Housing
Vivien Lou Chen and Dawn Kopecki
Bloomberg, May 12 2009
Greenspan: Housing Market Worst May Be Over
Reuters, October 9, 2006,
Economist.com, August 14, 2008
Historically Strong Home Sales Expected in 2006
NAR Publication, Business Wire, December 12, 2005
See also Balloons Not Bubbles