Greenspan is indeed stating what’s obvious to Piggingtonians. But it’s not yet universally accepted wisdom. What’s significant is that he remains an important leader of established political/economic views, and he is now reversing his previously position downplaying the likelihood of bigger future price drops.
As an example, consider that Freddie Mac’s 25% drop in value this week was triggered by recalculating the value of their 3rd party MBSs, assuming a mere 5% decline in future home prices. Greenspan’s comment makes that 5% seem untenably optimistic, even when looking through the rose-tinted glasses used by the politicians and their regulators when they try to justify pretending that the problems are anything except excessive home prices.
