The Five Dumbest Things on Wall Street This Week

1. Al's Economic Innovation

Al Greenspan still thinks there's a 50/50 chance the U.S. could avoid recession, but there's only a 10% chance of that.

The former Fed chief told The Wall Street Journal this week that if the economy isn't already in recession, it probably will be soon, noting that the odds are "not overwhelming but they are marginally in that direction."

Lucky for him, there appears to be about a 100% chance that the Maestro will benefit nicely from the economic mess that he helped orchestrate. During his tenure, Greenspan kept interest rates at record lows for years to juice the housing market, while ignoring the credit bubble that was developing as a result.

Paulson & Co., a New York-based hedge fund run by billionaire investor John Paulson, announced this week that it's hiring Greenspan, whose frequent public commentaries still move the market, as a member of its "advisory board." The high-profile hiring comes after Paulson entered the annals of Wall Street lore, pocketing huge profits on the housing market's implosion by making timely, contrarian bets on a market meltdown.

Now, along with his iconic new hire, Paulson has turned to charity. The Journal reported that in October, he gave $15 million to the Center for Responsible Lending to fund legal assistance for families facing foreclosure and to support new bankruptcy laws.

"While we never made a subprime loan and are not predatory lenders, we think a lot of homeowners have been victimized," Paulson said.

Greenspan, who has long been a housing market guru, was warned about rampant chicanery in the home lending business by the late Fed governor Ed Gramlich as early as 2001, according to The New York Times, but he declined to take action. Instead, he adopted the Bush Administration's lingo, referring to exotic subprime loan products designed to hoodwink unsophisticated, low-income borrowers as a form of "financial innovation." Now, the self-proclaimed conservative is calling for a government bailout for borrowers.

All this brings to mind the words of Hank Rearden, the hero in "Atlas Shrugged," the great novel authored by Greenspan's muse, Ayn Rand.

"I work for nothing but my own profit -- which I make by selling a product they need to men who are willing and able to buy it," said Rearden, adding later, "I am proud of every penny that I have earned in this manner."

Dumb-O-Meter Score: 95. With Greenspan's new job, Ayn Rand may be experiencing an "Age of Turbulence" in her grave.