Home Price Warning Sends Stock Market Reeling
Posted by Dylan on July 31, 2008Former Federal Reserve Chairman Alan Greenspan helped send the stock market reeling in the last half-hour of trading today, after he warned in a CNBC interview that the U.S. was living through a “once-in-a-century” crisis tied to the housing market’s plunge.
He said falling home prices were “nowhere near the bottom,” and he supported the idea of nationalizing mortgage giants Fannie Mae and Freddie Mac, saying they were a “major accident waiting to happen.”
Note, though, that this is the same Fed chairman who on June 13 said that “the worst is over in the financial crisis or will be very soon.” Hopefully no one took that as a sign to buy bank stocks in mid-June.