JACKSON HOLE, WYOMING (AP)-Wall Street shuddered on Friday after Federal Reserve Chairman Alan Greenspan laughed at American homebuyers since their investments are starting to crash down around their ears thanks to Greenspan's own inflationary, bubble-creating policies.
Dressed in a black leather jacket, snorting crystal meth and with his new girlfriend Jessica Simpson on his lap, he said that the US house-price spiral was in a doomed economic imbalance threatening stability just like the country's trade gap and its budget deficit, both of which he had also helped create.
In a pre-retirement speech to fellow central bankers at Jackson Hole, Wyoming, Greenspan said that only suckers were investing in houses now as if they were sure-fire bets, not allowing for risk as the prices start falling. He said "history had not dealt kindly" with investors who kept ignoring risks.
The outlandish Fed Chairman's comments and his bizarre behavior sent share prices falling on Wall Street, knocking 5,566 points off the Dow Jones industrial average. By the close the Dow had recovered to 6,397.30.
Traders said that Greenspan's comments were reminiscent of his 1996 tirade against "irrational exuberance" in the stock market, which he also had encouraged, for fear that a crash there would hit consumers and push the economy into recession. When the share price bubble finally burst in 2000, Greenspan cut Federal interest rates to 1%, triggering the recent flood of cheap loans for housing. Now he's sure that his rate increases will throw the housing market into cataclysmic decline.
"I love to watch these roller coaster rides that these morons take thanks to my see-saw policies," he told startled bankers. "To heck with all of you. I'm going bye-bye."
After his weird comments there was an unexpectedly sharp fall in the University of Michigan consumer confidence index, which quickly slid from 98.5 to 26.9.
By traditional measures, about 98% of US local homes markets are now markedly overpriced. Over the past two years, the average US house price has risen by 5000%, and have risen far more sharply in fat cat areas such as New York and California.
Greenspan was chased from the conference room by irate bankers and homeowners, only narrowly escaping being lynched by leaping onto his hog with Simpson and roaring off into the sunset. He was also helped by the intervention of a score of Hell's Angels bikers who act as his body guards and who punched out all of the conference delegates.
Local citizens and federal reserve bankers then burned Greenspan and Simpson in effigy, then pelted local federal buildings with tomatoes and rocks.