Former Federal Reserve chairman Alan Greenspan managed to get the attention of market participants and investors alike on Thursday afternoon, suggesting that the economy was still skirting a recession and that housing had much further to fall before a bottom will form. His remarks actually helped fuel a sell-off in stocks that has largely continued into Friday's session, according to various published reports. The iconic economist, both lauded or loathed by various market participants, suggested that a recession was "inevitable" in an interview airing on CNBC yesterday afternoon -- although he said he didn't yet believe the U.S. economy was in a recessionary state. The economy is holding up better than he expected despite strong financial headwinds, he said. The housing slump, however, is another issue -- at least in the former chairman's mind. He characterized the current correction as a "once-in-a-century phenomenon," and said we're "nowhere near" forming a bottom to the current issues in the sector. He also said that a nationalization of both Fannie Mae (FNM) and Freddie Mac (FRE) may be inevitable, and suggested that both mortgage finance giants were "accidents waiting to happen." "I think the ultimate solution is a nationalization of both Fannie and Freddie and I hope a restructuring in that nationalization," he said, according to a story on CNBC's website. "And then split them up into five or ten separate entities and sell them back into the market." The full television interview is available here. Disclosure: The author was long FRE when this story was published; other indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.