No wonder buyers are paralyzed.

Former Fed Chief Alan Greenspan, who can't seem to leave the stage without a hook around his neck, says U.S. prices will go down further because of the "enormous overhang on the real estate market." He told a European magazine that the central bank tried and failed to slow the "excesses of the real estate sector" by a series of interest rate increases begun in 2004.

Funny, he didn't say anything about needing to slow the housing market then. In fact, it was in February 2004 that Greenspan was quoted as saying that some are paying too much for financing with fixed rate loans. "Recent research within the Federal Reserve suggests that many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade, though this would not have been the case, of course, had interest rates trended sharply upward," said Greenspan.

Those words would haunt him. By July, 2004, the Fed called housing "torrid, as it began a series of interest rate increases. At the time, Greenspan said housing was on solid ground. In October, 2004, he said the housing market bubble bursting was "most unlikely." Greenspan made "froth" a household word in May, 2005, in reference to specific areas of rabid speculation and high price increases that subsequently ground to a halt.

Many blame Greenspan for the burst in housing speculation using adjustable rate mortgage products. It was in 2004 and 2005 that the National Association of Realtors noted that one-third of home purchases were made by non-occupying buyers. Foreclosure analysts note that it is mostly non-owner-occupied homes that are clogging the housing drain.

However, Greenspan remembers it all differently. "We were hoping to bring the speculative excesses in the real estate sector under control. We failed. We tried it again in 2005. Failure," he said. "Nobody could do anything about it, neither us nor the European Central Bank. We were powerless."

Greenspan won't leave the stage because he's a consultant with a new book to sell, and making news means he's still current and worth the speaking and consultation fees he commands. The world pays attention to him as if he is still in charge of the Fed.

Successor Ben Bernanke has his hands full. Not only did Greenspan leave him with a precarious economy to balance, but Greenspan seems intent on circumventing Bernanke's desperate attempts to maintain balance by contradicting most of Bernanke's moves.

In March, 2007, Greenspan rocked world markets with the comment that there was a one in three chance of recession in the U.S. Now, he's revising history and blaming the excesses of the real estate sector for a likely unavoidable recession.

As Bernanke desperately tries to calm rocking investment and housing markets by announcing a 50-basis-point short-term interest rate cut to lower borrowing costs for consumers, Greenspan is making the rounds promoting his new book, The Age of Turbulence: Adventures in a New World. with the proclamation that housing prices are only down about three percent and are "clearly moving lower."

The main differences between the two chiefs is flexibility. When Greenspan oversaw a Fed rate cut to below one percent, the lowest in four decades, there was no danger of inflation. Bernanke doesn't have the same ability to cut rates to the bone, and may not want to even if he had the discretion.

In the hotseat of a congressional hearing on September 20, Bernanke testified, "We took the action to try to get out ahead of the situation and try to forestall potential effects of tighter credit conditions on the broader economy."

If it were a preemptive move, it certainly feels like a reactionary move. "Recent developments in financial markets have increased the uncertainty surrounding the economic outlook," Bernanke stated.

He promised lawmakers, "We will continue to pay very close attention to the inflation rate. It is an important part of our mandate and I agree with you that an economy cannot grow in a healthy, stable way when inflation is out of control, and we will certainly make sure that doesn't happen."

When Greenspan was in the same seat in 2001, the economy was already in recession.