Greenspan's Shadow

U.S. stocks just suffered from their worst week in four years. I listened to three economists on BBC talk about whether the global economy will correct or crash. Ben Bernanke, who one of the economists said is way too much of a proponent of printing money, sought to allay investors' fears earlier this week, yet he's still in the shadow of his predecessor, Mr. Greenspan, who said that "there is the possibility, but not the probability of the U.S. moving into recession". This followed his comments made to an audience on 2/26 to the effect that there was a risk of recession due to the slowing growth of profit margins, which is said to have contributed to the big selloff the equity markets witnessed this week. Bernanke assured that the central bank still expects the economy to pick up this year. Journalists perhaps prefer the sometimes inscrutable sometimes elucidating statements of Greenspan to Bernanke's relatively straightforward statements. Markets still hang on Greenspan's every word and go to great lengths to interpret his comments, even now that he's no longer in power but rather on the global speaking circuit. He encapsulated broad financial trends by coining catchy phrases such as "frothiness" (re: the real estate market) and "irrational exuberance" (re: the stock market boom that ended in 2000).

Greenspan's forthcoming book, which he's been writing since retiring in Jan. o6, is entitled "The Age of Turbulence".

There was a big announcement in the real estate marketing world this week: Realogy, the bohemoth that owns the Coldwell Banker, Century 21 and ERA brands, is partnering with Google and Trulia, to provide searchable, mappable listings.

The blogosphere is a sometimes trifling, puerile realm, but this can be worth a few cheap laughs: Fortune interviewed David Lereah, the NAR's chief economist (and some say its cheerleader/spinmeister), who shared that a blogger almost made his mother cry, simply for taking Lereah to task for his rosiness towards the housing market. The blog, DavidLeareahWatch, has the following subtitle: David Lereah is the Chief Economist and Senior VP of the National Association of Realtors (NAR). Mr. Lereah regularly makes statements regarding the housing bubble. The media regulary turns to him for real estate quotes. He is very influential. Mr. Lereah tells half truths and manipulates facts and figures. He cannot be trusted as he is a paid shill. Lereah said that the 26-year-old blogger has it out for him because he couldn't afford to buy a townhome. Salon's Andrew Leonard in his How The World Works column, puts it all into perspective: "the basic thrust is that Jackson believes David Lereah spins the numbers to make them look as good as possible for his employer, the National Association of Realtors. Not exactly a shocker, but still, I guess, a little hurtful."

Maybe NAHB members are drinking the Kool Aid too, as their confidence, according to the Wells Fargo/NAHB index continues to climb out of a September trough, when the index bottomed out at 30. Existing home sales jumped to their highest level in seven months and were up 3% from a year earlier for Janaury, but Business Week cautions that real estate's not out of the woods yet, citing the latest and most threatening culprit -- subprime mortgages.