Someone send Alan Greenspan a clue, STAT!

Back by popular demand, it's the Alan Greenspan show. The former Fed Chairman -- whose general approach to monetary policy was to inflate one bubble, pop it, then use a new one to mop up the mess -- pontificated on the housing market in a recent speech. He said "the worst may well be over."

Phew, I was worried for a minute. Now, if it was someone with zero credibility saying this -- like perhaps someone who talked up the benefit of Adjustable Rate Mortgages in February 2004 ... at one of the worst times in modern financial history to use an ARM ... I'd be much more concerned. Oh wait, that WAS Greenspan.

OR if it was someone who didn't recognize we had a bubble in the first place, then I'd be worried. Oh wait, Greenspan denied the bubble for ages, then claimed that all we had was a few isolated areas of froth ... like Florida, California, Massachusetts, D.C., Arizona, Oregon, Virginia, Idaho, Montana (am I forgetting anybody here?), etc., etc.

OR if it was someone who truly didn't understand the REASONS behind the boom (like, oh I don't know, ridiculously easy money ... Frankenstein Financing ... negative real interest rates), then I'd be REALLY worried. Oh wait, Greenspan further elaborated in his speech that the housing bubble did NOT stem from sharp interest rate cuts by the Fed. Instead, the fall of the Berlin Wall and communism caused cheap labor to flood the West, prompting disinflation, falling bond yields, and rising house values.

Folks, you just can't make this stuff up.