Some economists say that Greenspan's methods of signaling Fed rate increases -- making them fairly predictable -- have had the unwanted effect of encouraging housing speculation.
"There is not enough uncertainty about Fed rate hikes.... That causes people to take on too much risk," says Zandi of Economy.com.
Speculators are further encouraged by the Fed's stance that it won't target asset bubbles, Zandi says. "The view that policymakers have nothing to say about asset markets is counterproductive." Fed officials "need to have the courage of their convictions and weigh in."
Greenspan early last year praised the advantages of adjustable-rate mortgages. The riskiest versions of adjustable-rate mortgages are now widely cited for aggravating a possible bubble by helping people overextend themselves to buy homes they otherwise couldn't afford.
In any event, the dilemma of the housing market will soon be inherited by Greenspan's successor. Greenspan became Fed chairman in August 1987 -- two months before the 1987 stock market crash.
