Below is an excerpt from Greenspan's comments on the current credit crisis:

WASHINGTON -- Former Federal Reserve Chairman Alan Greenspan told Congress in prepared testimony Thursday that the current global financial crisis is a "once in a century credit tsunami" that policymakers did not anticipate.

Greenspan was the chairman of the Federal Reserve for 18 1/2 years. In testimony prepared for the House Government Oversight and Reform Committee, he voiced shock over the present turn of events and called conditions deplorable.

He said that he and others who believed lending institutions would do a good job of protecting their shareholders are in a "state of shocked disbelief." And Greenspan also blamed the problems on heavy demand for securities backed by subprime mortgages by investors who did not worry that the boom in home prices might come to a crashing halt.

"Given the financial damage to date, I cannot see how we can avoid a significant rise in layoffs and unemployment," Greenspan said. "Fearful American households are attempting to adjust, as best they can, to a rapid contraction in credit availability, threats to retirement funds and increased job insecurity."

He said that a necessary condition for the crisis to end will be a stabilization in home prices but he said that was not likely to occur for "many months in the future."

When home prices finally stabilize, Greenspan added, then "the market freeze should begin to measurably thaw and frightened investors will take tentative steps towards reengagement with risk."

Greenspan said until that occurs the government is correct to move forward aggressively with efforts to support the financial sector. He called the $700 billion rescue package passed by Congress on Oct. 10 "adequate to serve the need" and said that its impact was already being felt in markets.

The bad news is past the tipping point.  When the good news does return, i.e., foreclosure inventory begins declining, and the end is in sight, the psychological change in buyers and sellers will be quick, in a return to "buy now" and rising values in Phoenix will once again become the "new normal".  Until then, the current "new normal" is fear, declining values and a great environment to "Buffet-ize" and Monetize... i.e., Buy.

Next issue- 401k-Swap 4-Plex Cash Flow 10 year Retirement Plan

Andrew Schmidt- Nations Home Funding- BK0905991