Fleckenstein is to blame for the housing bubble

The end of the Superbubble

That sound you hear is the popping of a financial bubble in housing, the economy and the market. And you can trace it all to Alan Greenspan's Federal Reserve.

By Bill Fleckenstein

Reading the papers, it's quite clear that the enormity of the problems facing Americans (and the world, for that matter) has emerged to the fore. Consequently, I decided a quick recap of our troubles might be useful.

There is a budding realization that the housing bubble's collapse will be more difficult than the masses and Wall Street had believed. You could see this last week as the market moved back toward the lowest levels since the collapse began last fall.
It's now obvious that this is a problem not only for the consumer but for the financial system itself, which is in dire straits as it tries to deleverage, thereby compounding the problem.
In addition, it has become common to see stories about runaway inflation somewhere around the globe, with riots and protests against high food prices being a binding theme.

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To place blame on Alan Greenspan for the housing bubble is as absurd as placing blame on you. It is the Feds job to keep the U.S economy running and that is exactly what he did. With the Dot Com meltdown at the turn of century, the economy was stalling and access to money was tightening. Mr. Greenspan did exactly what the Fed chairmen should have done. He lowered the interest to encourage the banks to lend money and in turn rejuvenate the economy. "It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low," Greenspan explains. Was he aware of greedy banks and lenders making loans to people who should not have qualified in the first place? I think he must have known something, given the fact of the increased number of first time homebuyers qualify for loans. At this time the economy was strong and everybody was happy. If he would have started raising rates back then, then critics would have said he raised the rates to high and too fast and put the working class out of reach for owning a home. There are so many factors and people to blame for the housing meltdown that it is very unfair to place blame on Alan Greenspan, who up to recently was considered one of the best Federal Reserve chiefs of all times.

It’s a new day, new deal, new opportunity

Mike Sebeniecher, Texo Properties (TexoNC.com)