Filed under: Bad news, Economic data, Housing

Overnight in London, Alan Greenspan made another stop on his book tour and was good enough to tell Reuters that the US housing market had much further to fall “All that I conclude is that the process of inventory adjustment has just started and we have a long 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 more about it may sell Mr. Greenspan’s book, but it is hardly good for morale.

Of course, if the old man is right, and he often has been. a prolonged and deepening housing crisis would almost certainly drive consumer spending down sharply and damage industries from automotive to retail. This, in turn, would almost certainly cause a recession which could last 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.

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This entry was posted on Monday, October 1st, 2007 at 10:14 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.