The “Irrational Exuberance” speech 2.0

From the Washington Times:

Federal Reserve Chairman Alan Greenspan yesterday gave his clearest warning yet that housing bubbles pose dangers in some areas and are being fed by unusually low interest rasand risky lending practices that are raising the level of concern at the central bank.

In light of the “unsustainable level” of prices in some local markets, Mr. Greenspan suggested in remarks to the Joint Economic Committee that the Fed and other bank regulators soon may move to curb questionable mortgage loans by national banks.

If history is an accurate guide, you’ve got three more years to ride the cash-out wave before selling out and watching home prices crash. I find Mr. Greenspan’s comments particularly amusing, as only a year ago, he was asserting that it is impossible to identify an investment bubble while it is happening.

The lesson, as always, is that any relation between government and neo-government statements and the objectively verifiable truth is mere happenstance.