The Orange County Register reminds us that today is the fifth anniversary of Alan Greenspan's now-infamous assessment of the housing market:
Although a "bubble" in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels. ...
Although we certainly cannot rule out home price declines, especially in some local markets, these declines, were they to occur, likely would not have substantial macroeconomic implications.
Greenspan recently testified that regulators have "had a woeful record of chronic failure" at forecasting economic crises. But his testimony from before the crash seemed to lack this spirit of humble uncertainty.
William Dudley, the president of the New York Fed, recently told us that regulators can and should do more to spot bubbles, in an effort to keep them from growing quite so big and causing quite so much damage when they pop.
Speaking of popping bubbles: Applications for mortgages fell again last week, the Mortgage Bankers Association said today, hitting their lowest level in more than a decade.