Don't be confused by the rhetoric you read and see in the media. We are definitely in a deflationary spiral. Who says so? And what data are you looking at?

Let's read a few quotes from leading traders and analysts:

• Nobel laureate Joseph Stiglitz said: "Deflation is definitely a threat right now."
• Charles Evans, Federal Reserve bank president says: "Disinflationary winds are blowing with gale force effect."

Now that Iraq is an independent country, the oil ministry has started putting its oil fields up for bid to foreign investors, as reported in The Wall Street Journal (subscription required).

Bidding started this week and is not going well according to oil executives. The reason is that Iraq is cutting its payout to the bone. Only one consortium, led by BP (NYSE: BP) and including China National Petroleum Company, ended up staying in the bidding and making a deal. All other oil executives walked away from the bidding.

This post is part of a feature in which he wonder whatever happened to some notorious financial felons. See all 17.

I thought we'd have heard more about Charles Keating over the last few weeks of the 2008 presidential election, but much to my surprise the Obama campaign refrained from mentioning him. Keating was once the chairman of the Lincoln Savings and Loan Association, the infamous bank at the center of the S&L scandal of the 1980s; that scandal featured none other than John McCain, one of the "Keating Five" group of disgraced senators and more recently the Republican Party's nominee for president. But McCain's connection to Keating didn't seem to play a role in the 2008 election, and McCain lost the race for reasons other than being connected to one of the great financial crooks in recent memory.

To be fair, Keating was not a big fan of John McCain. He reportedly called him a "wimp" behind his back, accusing him of lacking the courage to fight the regulators who sought to reign in Keating's bank. McCain, along with John Glenn, were cleared by the Senate Ethics Committee of impropriety in their relationship with Keating, though they were publicly criticized for exercising "poor judgment." McCain later said that trying to help Keating was "the worst mistake of my life," though he didn't seem too upset about riding around the Caribbean on Keating's private jet.

Enough already -- leave something in the tank for next time!

When the Federal Reserve Board meets on Wednesday they should leave interest rates where they stand. The lack of liquidity in the market place is not coming from high interest rates. It is coming from a de-leveraging of the economy.

The Federal Discount Rate currently is 1.75% and was 2.25% less than a month ago. Alan Greenspan was too quick to lower the rates before and too slow to raise them when he should have. Ben Bernanke was too slow to lower them this time around and I do not want him to be too hasty to lower them further now when he should take a breath.

We're all rooting for you, Ben (what choice do we have?), so deal with the cash sitting on the Treasury's desk now and get back to this interest rate issue next month. Let the European banks lower their rates. That will strengthen the dollar and might help to stabilize oil prices, which have been dropping rapidly. Lower oil prices will put billions of dollars back into consumer hands and the overall economy. Lower oil prices will do more good than lower interest rates.

We need stability! We need predictability! Part of the reason we got into this mess was cheap credit and poor foresight on the part of the government, investors, and lenders.

One of my relatives works in construction. Bags of material needed to make concrete have lately been piling up at his job site because no one is mixing the stuff. That's yet another sign of the slowing economy and the impact it's having on people. Today's expected dramatic selloff in the stock market is another.

Investors used to gasp when they saw a triple-digit decline in the Dow Jones industrial Average. Now, as one of my friends recently noted, it's "another day at the office." It's not that people like huge declines; they have grown accustomed to living in a constant state of dread.

Today is no exception. Trading, which was limited in the pre-market, is going to be awful. Call it "Frantic Friday" or "Freaky Friday." Fear is ruling the day again. Investors are not acting rational. Blah, Blah, Blah. You have heard it all before. The only questions is why the world appears to be coming to an end today.

My colleague Peter Cohan points out that markets in Asia and Europe have been tanking. Even Canada, which largely avoided the subprime crisis, is guaranteeing up to C$218 billion in bank debt to match the bailouts offered by other countries. Remember, Canada's banks were recently recognized as being the most stable in the world. This underscores the nervousness of investors.

Congressional investigators repeatedly, verbally pummeled former U.S. Federal Reserve Chairman Alan Greenspan Thursday, for what lawmakers charged was a lack of oversight for a mortgage and housing market run amok - - a lapse they believe encouraged a subprime financing boom and collapse that led to the global financial crisis.

Greenspan, looking subdued but characteristically composed as he testified before the House Committee on Oversight and Government Reform, conceded that a flaw in his free-market ideology contributed to a "once-in-a-century credit tsunami," Bloomberg News reported Thursday.

Greenspan: mortgage risk was miss-priced

The flaw, Greenspan said, was the failure by banks and mortgage lenders to properly price risky mortgage assets, including subprime / Alt-A mortgages, The Washington Post reported Thursday. Further, Greenspan said he saw "no choice" but to force the financial firms that package mortgage loans to "retain a meaningful part of the securities they issue" - - thus mandating that if the loans go bad, they will lose money, as well.

Further, Greenspan said he was "partially" wrong in his opposition in recent years to the regulation of derivatives, Bloomberg News reported Thursday - - in stark contrast to his May 2005 speech opposing derivatives regulation.

Economist David H. Wang told BloggingStocks Thursday that the failure to regulate and review lending practices by banks and mortgage lenders was a bipartisan failure.

"Both political parties are responsible because neither Democrats nor Republicans, not just Republicans, cared about the quality of mortgages banks approved during the housing boom," Wang said. "It was like grade inflation in college where the professor gives 'C' grades to students whose work only deserves a 'D.' No one cared about the quality of the loans as long as they were sold and no longer on their balance sheet. In the future, loan originators must retain partial equity in the loan to make them accountable for mortgage defaults."

Are we fanning the flames or informing the public? Perhaps we are doing both, but I think that sometimes we make matters worse by writing about a dire situation or making it sound more dire than it is just to grab some attention.

In my view, it's fine to have a headline that reads "ABC Bank downgraded by Doui, Cheatum & Howh," yet it may be too provocative to use something like "ABC Bank looks like toast after downgrade, would you risk it?"

Many of our readers have commented lately that we are doing the latter. When we post something edgy, are we promoting debate or just scaring folks?

Its one thing to post "Investors are concerned" and still another to write "Investors can't to the door fast enough."

It seems to me that anyone in a position of leadership or the public eye should be a voice of reason. We should try to write objectively and not sensationalize things.

Unfortunately, the media is often guided by the old adage -- Dog bites man is not a story, man bites dog is.

Alan Greenspan loves talking to the press, perhaps more than he liked being the Federal Reserve chief. He recently did a long essay for the FT, and made similar comments about the financial system and housing to The Wall Street Journal. In his chat with the Journal, the old man said "Home prices in the U.S. are likely to start to stabilize or touch bottom sometime in the first half of 2009."

Greenspan's comments may help sell books, but there is little evidence that he is right.

Foreclosures are accelerating now, and with mortgage resets, it appears that prime mortgages are joining sub-prime mortgages as a source of defaults. Banks, which have taken hundreds of billions of dollars from the Fed, are not using that money to make new loans; they are using it to improve their own reserves against more mortgage-backed securities losses. Lending money for home loans comes with the risk that the value of those homes will keep dropping. Because of this more people find the price they can get for their houses is less than the balance of their mortgages.

In most recessions, unemployment trails the economic slowdown. Meaning that if this recession looks like the one in the early 1980s, unemployment could hit 8% or 9% of the work-force by the end of the year.

Under all of these circumstances, it would be almost impossible for the drop in home prices to be arrested within the next nine months.

Talking to the press may help Greenspan sell books whether what he says makes sense or not.

Douglas A. McIntyre is an editor at 247wallst.com.

Alan Greenspan has become like the fictional character "Zelig." Every time the business community turns around, there he is. The opinions of the former Fed chairman have taken on the characteristics of a broken record.

Greenspan wrote an essay for the FT in which he said, "The insolvency crisis will come to an end only as home prices in the US begin to stabilise and clarify the level of equity in homes, the ultimate collateral support for much of the financial world's mortgage-backed securities." That statement has been obvious for several months. It adds no insight to the debate of how the credit crisis might end and repeats the same premise the he gave on CNBC a few days ago.

In his written comments, Greenspan also said there would be more bank failures.

The old man is now risking his legacy as an economist and long-time Fed chief by becoming a media star whose only attraction is that he is famous. What he has to say about the economy adds little or nothing to the debate.

To save what he has of his reputation, he should spend more time at home and less time making hackneyed pronouncements.

Douglas A. McIntyre is an editor at 247 Wall St.com.

It was about 9 years ago that then-Federal Reserve chairman Alan Greenspan warned investors of "irrational exuberance." Then at issue was the run up of hi-tech stocks. The question is if we are experiencing a similar "irrational exuberance" with regard to the surge in crude oil prices.

I know the arguments that there is too much demand for the available supply, that oil is a finite resource and the world is running out of crude, and that very few new sources of crude have come online in decades. My question is, didn't the market know this 6 months ago? All of the sudden oil traders woke up one morning and realized that we had all these problems?

What I don't understand is that you can't have it both ways. You can't claim that the world has entered a sustained slow growth era, and yet continue to claim that strong demand is what is causing the surging price. If we do still see very strong demand than maybe the global economy isn't as bad as most think.

I am no technical analyst, but the way crude has been trading sure has the makings of a bubble ready to pop. It's one thing to slowly and steadily increase in price, like we have seen for the last 5-6 years. It's quite another to see it move straight up in a vertical line, like we have seen of late.

Investors beware. This sure seems like another example of "irrational exuberance."

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 6/29/08.

Former U.S. Federal Reserve Chairman Alan Greenspan believes financial market turmoil that disrupted the bond market and created liquidity concerns may extend into 2009, Bloomberg News reported Tuesday.

However, Greenspan said the Fed's efforts in March to revive credit have reduced instability. "Things do at this particular stage look a little bit better," Greenspan told Bloomberg News via a conference call, but added that financial doldrums are likely to linger a "good number of months or into next year."

Further, when asked if the U.S. economy was in a recession, Greenspan said, "We are on the brink," Reuters reported Tuesday.

Greenspan's remarks occur one day before the now Ben Bernanke-led Fed announces it interest rate decision, on Wednesday at 2:15 p.m. EDT. The Fed is widely expected to keep interest rates the same, while in its accompanying statement also striking a balance between concern over rising inflation and a pronounced economic stall.

Ever wonder why conventional wisdom is so conventional? It's because it's the same people repeating it over and over.

The reason why this happens is mostly laziness. Reporters and TV producers call on the same people to render their opinions because they are the ones who return calls and show up when they are needed. I have done it myself so I know the drill well. Yes, Woody Allen's claim that 80% of success is showing up continues to be proven right. These people can be summed up in several categories: wisemen -- they almost always are male -- whose every utterance is treated as if it was etched in stone tablets by the almighty, and insta-pundits -- who are able to give quotes on every topic imaginable. Finally, there are the personal finance gurus whose message is that by helping me make money, I can help you save money.

Below are my choices for the most overexposed business pundits and media personalities. They are in no particular order.

Wisemen: Alan Greenspan -- Don't you miss the days when no one understood what the former Fed Chairman was talking about? Now, his message is pretty clear: buy my book and the subprime mortgage crisis was not my fault. Honorable mentions: former General Electric Co. (NYSE: GE) Chief Executive Jack Welch, billionaire George Soros, and oilman Boone Pickens.

Alan Greenspan gives an interview about every two weeks, and headlines appear saying what he thinks the odds are of a recession in the US. His most recent opinion, as he makes his book tours and speaking engagements, is that America is facing a downturn, but it will not be as bad as it could have been.

According to the FT, The former chairman of the Federal Reserve said: "I still believe there is a greater than 50 per cent probability of recession." He believes that housing holds the key to how bad things will get.

Greenspan joins Warren Buffett and George Soros as the famous financiers who enjoying visiting regularly with the press about the economy. None of them need the exposure to make money, so being in the paper must just make them feel important.

At least Greenspan's view of how things are going is not as dark as those of his peers.

Douglas A. McIntyre is an editor at 247wallst.com.

Alan Greenspan now says that the U.S. could face a mild recession. Mild? He may be blinded by all the millions of dollars he is earning on his new book. Reuters quotes him as saying, "When home prices stabilize that would mark the end of the credit crisis." Greenspan seems to think housing prices could stabilize before 2009.

He has obviously not bought or sold a home recently. Data from the real estate industry show that prices are still dropping in most cities and states. The housing downturn may be prolonged by the fact that each foreclosure tends to drive down the value of homes near the house being auctioned by the bank. No wonder, since these properties often go for cents on a dollar.

Many industry experts expect that as more subprime ARMs reset this summer default rates will actually go higher. Although the Administration and Congress have talked about a comprehensive national plan to help homeowners, the only legislation is too narrow to stanch most problems for people who cannot make house payments.

Perhaps the largest issue of all is that most homeowners cannot get refinancing or new mortgages. Banks are taking in cheap money from the Fed, but are using it to improve balance sheets instead of passing it on to consumers in the form of lower interest rates.

Greenspan may be rich, but he is also crazy.

Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 newsletter.