Greenspan Sends Up A 'Yellow Flag'

The Arizona Republic reports that Federal Reserve Chairman Alan Greenspan on Friday cautioned Americans against thinking the value of their home and other investments will only go higher, saying "history has not dealt kindly" with such optimism. Greenspan said that people shouldn't count on paper wealth, which can evaporate if economic conditions deteriorate rapidly. Low interest rates have powered the booming housing market, and Greenspan has warned of "froth" and "Speculative fever" in some local housing markets. "Greenspan is giving individuals ample warning that they need to take into account," Allen Sinia, chief economist at Decision Economics, said. "He's throwing out a yellow flag of caution." More...