I'm stunned. Speechless. These are the type of guys we have running the joint? Wow. The guy must be on the bottle, or corrupt. He would've said more, but he was running late to his flat earth society meeting.
Have at it HP'ers - I'd pontificate more, but seriously, I'm speechless.
The U.S. housing market should remain strong in 2006, and there is no national real-estate bubble that's about to burst, St. Louis Fed President William Poole said Wednesday. "My hunch ... is that housing activity will stabilize and remain at a high level this year," Poole told the Regional Chamber and Growth Association in St. Louis.
"Indeed, given that bubbles always burst -- if there is no burst there was no bubble -- clear advance evidence of a bubble can never exist," Pool said. "If the evidence was clear, then everyone would know about the bubble and forthcoming burst, but then the buying that created the bubble would never occur in the first place.
"So if you have an academic interest in house prices, I recommend that you wait a few years. If you have a direct financial interest, I can't help much -- you're on your own," he said. Poole said he did expect "some slowing in the growth of average home price nationally".
But Poole dismissed fears of a nationwide housing bubble.
He said research from the St. Louis Fed suggested that U.S. house prices "are not particularly unreasonable" based on fundamentals. "The conventional view, which I subscribe to, is that a housing-price bubble does not exist"
"It is hard to imagine ... the outlook could be more stable and healthier than it is right now," Poole said.
March 11, 2006
The Fed's William Poole: Housing to stay strong - there is no bubble
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He's just trying to make sure he's got a shot at the "Irving Fischer Award" for Y2006.
In St. Louis, there really is no bubble. Virtually infinite land to sprawl into. You can still get a decent place for $150K.
Now his comments on the argument that the market is perfect so a bubble can't exist because a bubble pop would be priced in... that's just bogus. Throughout history we've watched this happen... tulip bulbs, dotcoms, Japan...
The key is the word "National". He is right - there is no National Bubble. Greenspan used the same trick - wake up and pay attention.
No, The trick is 2006. It will take at least 2 more years to flush out all the weak cash.
Plus...
All these guys live in a crystal bubble. they are insulated from society. He has no idea how to pay a phone bill0 or even clean up after himself.
"The Fed's William Poole: Housing to stay strong - there is no bubble"
One of the primary ways the FED tries to manage the economy is through
"expectation management". If that requires a little deceptive advertising, so be it.......
It should be clear to everyone by now that working at the top Federal level requires persons with great "deceptive skills".
How many, so called, "leaders" can you identify that practice honesty?
At the FED, Greenspan, Bernanke and obviously, Poole are full of BS.
Geithner seems to have a bit of a conscience, though. I would listen to what he says to get a clearer picture of what the FED really thinks.
BTW, dishonesty, lying and deception are the breeding grounds for corruption. Is the US system doomed to repeat the recent USSR breakdown?
I agree with Groucho. The FED's job is too circumvent a panic when it appears nearly inevitable. They will spin as much as possible to prevent instability and to minimize self-reinforcing bad psychology. Mr. Poole has a job to do. He's just doing his best.
Bubble only if rates get above 8%. People have been yelling bubble since 00. So alot of people have lost out. If you go to vegas and play roulette waiting for 10 red or blacks in a row so you can start betting against the eleventh in a row, you missed the 10 in a row run. Bust was going to happen in 00 than o1,o2,o3,o4,o5,o6, now it has not so everyone is saying resets in o7,o8,o9 thats when it will happen, right. Buy now. Maybe not in maimi, phoenix but Socal,utah ,texas ,oregon ,washington, idaho. Rates 8% thats the key. Not 6.5 or 7.
Yes William Poole is a fool. So are those individuals who take interest only loans to flip real estate. So are those who take the house ATM any buy, buy, what ever comes into their foolish heads. So is Mr. Lay and the Enron scoundrels. Plenty of fools in this world.
There is an eternal principle: As you sow so shall ye reap". It is established before the foundations of this earth.
So indeed we read this blog then hopefully we will not be fools also. So. Be. It 41cadillac
I disagree with anonymous above. 6.5% *IS* the key. That's when "home appreciation" firmly marched in front of inflation, (around 1999 in CA) at about 10% or more a year... When I started hearing co-workers brag about selling for a profit after 2 years of owning.
Even that was unsupportable on a long term basis, let alone tha absurd 2004-2005 blowoff. (Something so extreme I think I may not live long enough, to see it happen again.)
I do understand that 6.5 is still relatively lax by historical norms. But people have not seen those rates for a long time. It will feel like very tight money. They are not prepared for normalcy!
I agree though, that 8% will be a heartstopper, if that happens.
there's so many arguments, and now, with the data streaming in (price declines, exploding inventory, foreclosures, etc) the one and only piece of reality that I wish Mr. Poole either saw, or if he saw it and didn't understand it, understood it, was simply:
rents have become seriously detached from ownership costs. Thus rents must skyrocket, or ownership costs must plummet.
Seriouly, I'm in awe of these quotes today. Bob Toll, sure. NAR, sure. Bushie, sure. But our chief economists? Good god people. When did I leave planet earth and enter la la land?
We're doomed folks. Duck and cover.
Who ya gonna believe, me(Poole) or your lying eyes?
and how does a guy who looks like this end up running the show? Doesn't the beard color usually match in some way shape or form the hair color?
I'm scared.
Maybe the FED will come clean some day and be like well yeah we created the bubble and we know some will be burned but would you rather have had the 2nd great depression beginning in 2001? Just think, instead of that misery we've had 5 years of bubblicious memories!
When you gots no manufacturing base you gots to get the ole' wealth effect goin' up in there otherwise the 'merican consumer stops livin' large and da world economy catches a nasty case od da bird flu...
This is a joke, right? Riiight??...
What? it's not joke??! Tell me you're just kidding and he was just liquored up at tht time
Personally I can't imagine livin' in da 30's and not being able to score a 40 oz. (prohistution)...hope they don't take dat from us 2 as we navigate our very own K-Winta!
FOSHIZZLE ANONYMOUS!
I'm tired of bein' the only brotha in here that's contributin'...Guess I'll bounce over to Ditech to begin my withdrawl so dat I can go get me a already rusting 2006 Ford Expedition...
St. George experiencing a bubble is no surprise. It is nothing but a haven for disinfatuated retirees, east-side Mormons, and others trying to escape the Las Vegas bubble, and creating their own bubble.
In the LVRJ, I read a quote (in a positive tone; no doubt from a realtor) stating that pretty soon first time homebuyers and low incomers would have to start commuting to Vegas from Mesquite, St. George, or Bullhead City. "This is inevitable as our economy continues to evolve."
As soon as Vegas pops, it will take these outlying communities with it.
Okay I be back! Ford Expedition has alread depreciated by 75% (ouch)...but itz okay cause Ditech called again and mi casa has appreciated another 50K so I'm about to buy me some 25K rims and a 10K custome stereo...I just love this new economy!
Whoever you are anonomous, your keeping this blog fun.
Well thank you...I likes to think dat I putz the 'G' in GDP.
Some peeps like to complain thats they ain't got a real pay raise in 5 years and eveybody knows a high school dropout mortgage guy who be fronting a mercedez benz, a lovely McMansion, and a Shorty wit huge silicone thingy's. Life ain't fair. To dat I say son, pick yourself up, cash yo government check and go to Walmart. It'll make you feel good and the low, low prices come correct. I hear they openin' a bank up in the Walmart...now I can get money out of my casa and purchase my made in china shizzle I'll at the same place...life b good in dat new economy!
I am sick and tired of having blowhard’s run our country. This moron claims that the economy is just fine, “It is hard to imagine ... the outlook could be more stable and healthier than it is right now”.
I he kidding me? Is he patronizing me? Does he think I’m stupid?
"we're doomed folks, duck an cover" Good lord Keith, get a grip. Socialist hype-machine!
Wow! A graduate of the Ken Lay school of accounting. Maybe he is looking to do post graduate work in the Don Rumsfeld School of Defense Strateegery.
Ladies and gentlemen, I would like to introduce the new Fed chairman his name is Ben Dover. I have the utmost faith in Ben as a man who will profligate pretty pieces of paper with pictures of our historic forebears on the front and some of our nicer DC area buildings on the back. I sure hope Ben don't get tired printing all that money I'm gonna need to run the guvmint... Sheesh!!! I have come to the conclusion that never has such an ill-equipped generation been heading for such troubled times. Twenty somethings with no money getting multi-million dollar signature loans and they don't even read the terms. They have to have everything just so in their new houses but they don't want to get their hands dirty. They get home equity loans and buy their new Mercedes on credit. Credit cards are used to pay bills. This is going to get real ugly real fast. We are going to see a lot of pain in the coming decades and I don't envy them. This "civilization" won't be able to keep the lights on and the pipes unfrozen in another decade but by golly they have their ipods, designer jeans, and Starbucks coffee. Oh man, is this gonna get bad.
Nah Mike G I ain't going out like dat.
Y'all not thinkin' outside da box!
Before the man repo's my house and throws a boot on my SUV, I is going to escape.
That's right, I put myself up for auction on the chinese and indian ebay thingy's...price is room & board, 3 squares...no KY included.
See brother, you gots to flow wit the new economy--not fight it.
Dis new economy is giving me gas, fttt!!! Sorry. The government's own GDP stats are like limericks written on a toilet wall, jus don' make no sense. I read somewhere that over half (and I'm guessing all) of the GDP "growth" that they cite is debt driven. Yeah, that's a real positive indicator, an illusionary economy with one hell of a hangover in the morning too! I assume you are being funny with the inane rhetoric. It's just that the economic oppression, greed, and stupidity is coming to a head these days exacerbating my piles to enormous proportions. This current carbuncle of fiat currency is about to blow and I need to put on my protective suit to avoid the widespread contamination. Haven't you noticed how people are scrambling around, trying to figure out how to protect their assets/asses? I mean come on, allow me a little disgruntlement in times of future twoubles.
He looks like he got hit repeatedly with an ugly stick. Who is that, Steve Forbes after extensive plastic surgery gone horribly wrong? Where do they find these clowns? I bet he couldn't find his own behind if he looked for it with both hands for a week. Uh, I got these glasses because math gives me a headache...
I'm talkin about draper utah, or bainbridge island wa , maui hi, or pasadena ca, austin tx, ashland or. all still going up. as for st george utah people are talking there money from cali etc and buying in the places no quality job needed when there putting alot down. jaime fox said on the oscars the other night " if you aint got it, go get it". winers never prosper, just get old and blame somebody.
You can bag on his appearence all you want...you all probably just jealous cause he is going to be Knighted before you all.
Anon
put down your bong and get a life.
U can marry the guy and get Knighted as well.LOL
Poole and his gang created the BUBBLE but they went to the Hitler school at Harvard for Propaganda where they learned the BIG LIE THEORY!
Tell a BIG enough lie and people will believe you.
Bernanke and Fed Governors have determined to Ignore the Bubble that Greenspan created. I wonder if they deny the Holocaust too! Another obvious fact.
I really believe that they firmly know that housing is in a precarious state where it could really sink the whole damn economy if the "bubble" were were acknowledged. They really really want that "soft landing" otherwise they would have Hell to pay from the masses of people who would lose all their equity from a housing debacle let alone a hideous bad recession.
But I think their "talk" will not work. When you study the matter FROM COAST TO COAST, the RE market is crumbling..... and rapidly too.
Soft landing? Can we say "hit the wall"!
The guy is a victim of botched lobotomy. I think that his beard maches nicely the color of his shirt...
would you rather be on the westside of the 15. I know plenty of people in salt lake, draper making good money. let me explain why 450-650 is not that pricey. Many buying in draper came from other states like cali, nv. one couple i know made a profit of 350,000 in cali purchased in draper a 4,000sq ft for 350,000 8 months ago put 250,000 down 30year fixed 5.75% on 100,000. how good does the job have to be. Lots of the stories like this. another friend (lawyer) from cali 30 minutes from carmel ca sold his house for 750,000. He made in 2 years 300,000. Was tired of his job purchased in sugarhouse small bungalow for around 200,000 paid cash. subs as teacher and skis,hikes and is loving utah. I sold in socal 04 and have been renting in maui,hi in the summer i will be moving to utah myself. i have rentals in the salt lake area and a great condo in draper i will probably move into. I purchased that condo in 04 for 120,000 have very little payment. last month the same unit sold for 180,000. utah has a huge population under 20 that will need homes.
they won't buy 450,000 homes but starter such as condos or small homes from 100,000 to 250,000 i think so. what happened to prices in socal has alot to do with people moving in with money from other countries and states pushing the prices up. That will happen in utah and other less expensive places. But utah will have growth along with people moving from the outside. It has moved prices higher in nv,or,wa,hi,az. Now most of the place are to expensive so cali people are looking at texas,utah,idaho to name a few. I know lots of people in cali who are doing this. i know people renting in cali and are purchasing homes out of state waiting for the kids to move out then will move. Not retiring but want to let their kids finish at the schools there attending. The prices are so inflated in socal people are cashing in 500,000 to 1,000,000 and looking elsewhere. a guy i worked with moved to socal on his wifes job transfer from texas in 03 and just sold a dump condo for 375,000 profit and are moving back to texas, paid cash for a home in texas. says he going to quit work at the company we were employed at for 20 years pull his profit sharing 300,000 minus 42% tax hit and buy a couple rentals. he not super rich but do better than most.
I've come across this "strong on fundamentals" argument elsewehere. It always ignores the fact that the fundamentals were thrown out the window over the past 5 years, and that a major correction has to take place. Sure, in the next 10-20 years, housing values will go up -- but not before 1-5 years of hell.
didn't Alan Greenspan said the same thing about the dot com bubble
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