Look Who's Hopeful

Finally, a voice of optimism on such a day of gloom and doom in the markets.

Oh, wait. It's only Alan Greenspan. The former Federal Reserve chairman now sees a recovery starting to take hold in the housing market in the first half of next year.

When it comes to the housing slump and the bursting of the credit bubble, Greenspan appears high on many lists of possible culprits. Under Greenspan, the Fed kept interest rates low, fueling speculation and risk in the housing market and on Wall Street.

He has shown no remorse during the crisis and has been quick to publicly defend his policies. In an interview with the Wall Street Journal in April, he acknowledged that he was wrong about a housing bubble, yet argued that bubbles were unavoidable in a dynamic economy.

Now he is back to being an oracle.

In an article written for Emerging Markets magazine, Greenspan says that "more conclusive signs of pending home price stability are likely to become visible in the first half of 2009," according to Reuters. And that will steady the credit markets.

But Greenspan is also cautious: "How much overall deleveraging is going to be required to induce global investors to again become committed holders, at modest interest rates, of the liabilities of the world's financial intermediaries?"

To be fair, Greenspan was among the earliest to warn last year that the U.S. economy was heading toward a recession. Has he now regained his touch?