"If the 'Bubble' Bursts, Legacy of Greenspan May Deflate," reads a headline in today's LA Times.

"Many experts say the nation's real estate market draws disturbing similarities to stocks in the late 1990s - a market driven to unsustainable price levels by what Greenspan famously called 'irrational exuberance,' the article continues. "They fear a similar ending: a sharp fall in prices that could bite the net worth of many Americans and trigger a recession."

It's as though the light bulbs are switching on above these "experts'" heads all over the country - on the opposite coast, we read this from the NY Times:

"For now, all the talk about bubbles may be just talk. In the late 1990's stock market, those who warned that prices were too high were discredited by the final huge rise in 1999 and early 2000. Only after most bears were silenced did they become right."

Slowly but surely, people are starting to see things without the rose-colored glasses that are standard-issue with every credit card application and interest-only loan handed out in our bubble economy. The NY Times article frets over what will happen when housing prices fall and these "financial innovations" made by the mortgage-lending industry will not be there to cushion the blow.

"But [these] mortgages are designed to allow monthly payments to rise rapidly. Rising interest rates, or the end of five-year teaser periods, can cause such increases, which would leave some homeowners unable to meet the payments. They expect to refinance, but that is impossible if the house is not worth the amount owed. The result could be forced sales into a weak market."

The end is near, dear reader. We can feel it. We can almost smell it.

But, as promised, we'll hold our "I told you so's" until then.

*** The Greenspan Housing Rhetoric has risen from "frothy" in May, to a "particular concern" in July, and now, at a Fed symposium in Jackson Hole, Wyoming, the Fed chairman calls the housing boom an "imbalance" - the worst label yet.

In his speech to central bankers and economists, he said that high home prices are consistent with low risk premiums demanded by investors, which have kept interest rates low.

Such increases in asset values "are too often viewed by market participants as structural and permanent," he said, adding that lenders could quickly turn cautious and the "newly abundant liquidity" could "readily disappear."

"History has not dealt kindly with the aftermath of protracted periods of low risk premiums," Greenspan said.

According to Sherry Cooper, chief economist for BMO Nesbitt Burns, "Greenspan is saying, 'Watch out! Think again and reduce risk in the management of your money, business, career, and balance sheets."

After these cautionary comments, the dollar fell...but what really affected the U.S. currency are continued concerns over high oil prices and the downturn in U.S. durable goods orders.

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.