In an interview with the Financial Times Alan Greenspan said the United States has a housing bubble. He said that, at a minimum, there would be large single-digit percentage point declines in US house prices and that he would not be surprised if the fall was in double digits. Greenspan also claims that he had warned about the housing bubble when he made a comment that some housing markets were experiencing "froth." Greenspan's outright acknowledgement that the U.S. is experiencing a housing bubble is huge news. His failure to do anything serious to confront a bubble that he had recognized at the time also deserves media attention.
--Dean Baker
