Greenspan looking to make some green in new position

Posted Jan 15th 2008 10:22AM by Zack Miller
Filed under: Management, S and P 500, DJIA, Housing, Federal Reserve

The Wall Street Journal is reporting today that Alan Greenspan, whom some believe had fueled the housing bubble, has joined Paulson & Co., a hedge fund with almost $30 billion under management.

The former Federal Reserve Board chairman has created an advisory firm, Greenspan Associates, and will be consulting with various firms in different industries.

Fed after 18 years as chairman, Greenspan left in January 2006. The Journal article quotes some (unnamed) Greenspan's critics claiming that he "helped fuel the housing bubble by keeping interest rates at 1% from 2003 to 2004, and then raising them too slowly."

Whether or not you view Greenspan as the cause of the problem, its symptom, or its savior, this is good news for Paulson, a firm which saw one of its credit hedge funds rise by about 590% thanks to bets that the housing market would weaken and that mortgages given to borrowers with sketchy credit would drop in value.

Good luck in your new job, Alan.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Tags: economy, greenspan, hedge funds, HedgeFunds, inthenews, paulson, subprime