From Mr A. Edward Gottesman.

Sir, Alan Greenspan, a sponsor of two of the most wrenching financial crises since the second world war, continues to talk in Delphic phrases about “negative correlations between tradeable assets” and “an elaborate macroeconomic model” (“We will never have a perfect model of risk”, March 17). But he gives the game away when he notes that, after a 60 per cent fall in new housing starts since early 2006, supply has only recently fallen below demand for single-family homes in the US. Surely, any classical economist could have recognised an unsustainable asset boom when supply exceeded demand by 250 per cent and prices continued to rise. Was that not a clear sign that money was far too cheap?