Greenspan's Bubble Research

Greenspan appears to be so concerned about the potential economic impact of the housing bubble that he published a research report titled Estimates of Home Mortgage Originations, Repayments, and Debt On One-to-Four-Family Residences about the most nefarious result of the bubble, equity extraction. This is significant because the paper (a collaboration with James Kennedy) marks only the 2nd time in his career as Fed Chairmen Greenspan has published any of his research (the 1st was in 1997 and was on the Auto Industry). Most economists have felt that equity extraction has been driving consumer spending in America, which is driving about 70% of GDP. Now Greenspan has provided the research that proves it. Of course, the Fed has no one to blame but themselves for this Equity Extraction bubble, as the graph shows (and we all know intuitively) that Equity Extraction is inversely correlated with the Fed Funds rate. It is scary to think what may happen to the economy if the Equity Extraction does slow.