As if investors don’t know it yet, former Fed chief Alan ‘Bubbles’ Greenspan has declared the current economic crisis to be really, really bad.

“The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War,” Greenspan opines in yesterday’s Financial Times.

The good news is that the end is in sight, according to the former Fed boss. “It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities.”

We’re not really sure why Alan Greenspan’s opinion matters at this stage, but we agree with Bill Bonner when that “more lending from the Fed cannot actually improve the real economy.”

In fact, it makes it worse – propping up failing companies, increasing speculation, misallocating resources, and adding to debts that will have to be paid, one way or another, by somebody or another, eventually. A better question is – how much damage will the feds do to the real economy?

“But,” Greenspan warned, “we cannot hope to anticipate the specifics of future crises with any degree of confidence.”

What Alan Greenspan doesn’t seem to grasp is that “more lending from the Fed cannot actually improve the real economy.”

“In fact, it makes it worse,” says Bill Bonner in The Daily Reckoning, “propping up failing companies, increasing speculation, misallocating resources, and adding to debts that will have to be paid, one way or another, by somebody or another, eventually.”

“The market is due for a bounce,” says Rick Pendergraft.

“I am not talking about a one-day 400-point bounce. I am talking about a bear-market rally that lasts for a week or two. The overall trend is still to the downside, but with the massive amount of pessimism, the oversold conditions we are seeing on almost all stocks, and the Fed getting ready to cut rates yet again, the atmosphere is ripe for a rally”