REMEMBER when Alan Greenspan was hard to understand? The gnomic — and gnome-like — former Federal Reserve chairman used to be a master of obscurity. Here are some words from his mid-1990s glory years — If you haven’t had breakfast yet, I suggest you skim read this.

“And I think where the confusion arises is the fact that you cannot view monetary policy as a sort of simple issue, if the most probable outcome is coming out of this soft patch into moderate growth with low inflation, which I think is the most probable outcome, that is not the same statement as saying that you therefore, in the process of implementing monetary policy or formulating it, I should say, completely disregard what the upsides and downsides of a potential outcome may be.”

Horrific. Well he’s obscure no more. Now that Alan is a paid pundit and not Master of the Financial Universe, he’s saying what he means. Whether he should or not is another matter.

Last week Greenspan was on CNBC and was clear in his views that we were heading in the wrong direction. The housing slump was “nowhere near the bottom”, the economy was “right on the brink” of a recession and the mortgage giants Fannie Mae and Freddie Mac were “a major accident waiting to happen”.

To be fair Greenspan was still showing signs of his talent for smudging the outlines of his arguments. “I think the data at this stage in the United States are not . . . suggesting recession,” Greenspan said. But he added: “We’re right on the brink and I would be more surprised if we didn’t [have a recession] than if we did, given the financial state.”

Greenspan said companies were controlling inventories effectively and that “at this stage, I think they are the major reason why in the very short term we’re fending off inflationary pressures”. But he noted that with jobless claims rising and growth overseas slowing, it would be hard for the US to avoid recession.

Who will history blame for this mess? My money is on Greenspan getting his own chapter. The housing bubble and the overheated credit markets were financed by Greenspan’s easy monetary policy and unwillingness to regulate.This is not the first time that Greenspan has opined on a mess that he created, or that he’s told us, too late, something we already know.

Having done so much to encourage the millennial dotcom/tech fiasco he tried, way too late, to slow that bubble’s impending pop by dismissing it as “irrational exuberance”. When the markets imploded, he sucked up all the hot air and blew it into the housing market with rock bottom interest rates and a pat on the back for the free market excesses that led to the sub-prime disaster.

Ex-presidents, and prime ministers, usually get a second career out of the lecture circuit and autobiographies. But no one pays much attention. The gnome still has a devoted audience.

Greenspan’s words came on top of more gloomy economic figures and helped push the stock markets down again. Now he has dropped the veils of obscurity, it’s easy to see why he spooked the market. The real mystery is why anyone is listening.

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