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Showing posts from August 8, 2007

Blaming Greenspan

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Business Times - 09 Aug 2007

Critics rap Greenspan for housing mess

They blame former Fed chief's rate policies for creating a false boom in sub-prime loans

AS the US housing market weakens and interest rates on adjustable mortgage rates rise and more and more borrowers are falling behind, the consensus among economists is that a sector that was once considered vulnerable is now on the verge of suffering a collapse in many regions in the country.

Some analysts warn that the real estate in certain expensive bubble areas could drop by as much as 40 or 50 per cent. Daily newspapers as well as television news shows are covering the widespread defaults on sub-prime mortgages and the sad personal stories involving home foreclosures.

It's still possible that the real estate bubble will not burst completely (in Manhattan you'll be lucky to get a studio apartment for US$500,000), but Americans, led by their lawmakers and pundits, are already looking for someone to blame.

On one leve…