Paulson & Co., the hedge fund firm that made about $12 billion going short on subprime, has made an exclusive deal with former U.S. Federal Reserve Chairman Alan Greenspan to act as an adviser, according to press reports.

The irony of Greenspan’s choice wasn’t lost on the press since many believe that it was Greenspan’s Fed policies that bolstered the housing boom which eventually led to looser mortgage lending standards. The rest, as they say, is history.

History may not be what Paulson wants from Greenspan. Rather, they may be hoping that he can put his prognostication skills to work, particularly as the U.S. heads into what may be a rocky financial period, or even a recession.

Greenspan has already made his firm views known on the subject, telling The Wall Street Journal, in true Greenspan-speak, that the chances of a recession are "not overwhelming but they are marginally in that direction."