At the Bankers and Business Leaders Luncheon, Federal Reserve Bank of Kansas City, Oklahoma City Branch, Oklahoma
To be candid, however, the behavior of the housing market and the response of spending are among the great uncertainties about the economic outlook.
[WE AT THE FED HAVE NO FLIPPING IDEA WHAT WE'RE DOING IN GENERAL, ON RATES, OR IN REGARDS TO HOUSING]
I have sketched a benign scenario of gradual adjustment that lines up very nicely with the Federal Reserve's assessment that overall growth should slow to a sustainable pace.
[THE MAGIC EIGHT BALL I USED AT THE POOL EARLIER TODAY SAID "OUTLOOK GOOD"]
But our ability to predict asset prices is very limited, especially when the trajectory of those prices is shifting, as that of house prices appears to be doing right now.
[WITH HOUSING PRICES COLLAPSING LIKE CHER'S FACE, WE HAVE NO IDEA HOW OUT OF CONTROL THIS MELTDOWN WILL GET. BUT WE'VE ALL SOLD OUR HOUSES AT THE FED AND RENT, SO WE'LL BE OK, THANK YOU]
Moreover, we have particular difficulty in assessing how consumers will respond to changes in their perceptions of future capital gains and actual home prices.
[I ASKED A GUY AT THE BAR LAST NIGHT ABOUT CAP GAINS. HE DIDN'T SPEAK ENGLIGH THOUGH]
The housing market and its effects on spending will be among the areas that Tom and I and our colleagues on the FOMC will be monitoring most closely as we try to discern the emerging pattern of economic activity and inflation
[WITH HOUSING MELTING DOWN, AND GM GOING BANKRUPT, MY BUDDY TOM AND I ARE GOING TO PUT DOWN THE XBOX AND WEED AND TRY TO FIGURE OUT IF SUPPLY AND DEMAND HAVE ANY RELATION TO PRICES]
April 13, 2006
HousingPanic deciphers today's speech by Fed Governor Donald L. Kohn
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To be candid, however, the behavior of the housing market and the response of spending are among the great uncertainties about the economic outlook.
[WE AT THE FED CONCUR THAT NOTHING IS MORE UNPREDICTABLE THAN THE FUTURE.]
I have sketched a benign scenario of gradual adjustment that lines up very nicely with the Federal Reserve's assessment that overall growth should slow to a sustainable pace.
[I HAVE MADE A 'WAG' (WILD ASS GUESS) BECAUSE I NEED TO PROVE THAT I SHOULD BE PAID FOR WHAT I DO AND THAT THE FED HAS SOME USEFULNESS IN THE ECONOMY.]
But our ability to predict asset prices is very limited, especially when the trajectory of those prices is shifting, as that of house prices appears to be doing right now.
[AGAIN, THE FUTURE IS EXTREMELY HARD TO PREDICT, BECAUSE BY ITS VERY NATURE, IT IS THE FUTURE, BUT IF WE USE WORDS LIKE TRAJECTORY, IT WILL SOUND LIKE WE KNOW WHAT WE'RE TALKING ABOUT, AND HOPEFULLY NO ONE WILL NOTICE THAT THE ONLY THING WE CAN DO FOR THIS COUNTRY IS SCREW IT UP WITH OUR FIAT MONEY.]
Moreover, we have particular difficulty in assessing how consumers will respond to changes in their perceptions of future capital gains and actual home prices.
[AGAIN, THE FUTURE IS HARD THING TO PREDICT, BUT HOPEFULLY THE GENERAL PUBLIC WILL NOT NOTICE THAT ALL WE HAVE DONE FOR 93 YEARS IS SCREW UP THE ECONOMY, AND THEY WILL CONTINUE TO BELIEVE THAT THEY NEED US.]
The housing market and its effects on spending will be among the areas that Tom and I and our colleagues on the FOMC will be monitoring most closely as we try to discern the emerging pattern of economic activity and inflation
[WE'LL HAVE TO WATCH FROM OUR IVORY TOWERS THE AFTERMATH OF YEARS OF EASY CREDIT AND RAMPANT M3 GROWTH. NO WE'RE NOT GOING TO TELL YOU WHAT M3 IS ANYMORE, BECAUSE WE'RE TOO EMBARRASSED BY IT.]
The guys at the Fed are very smart. The problem is that they are under pressure from Washington and New York to do and say certain things that help in the short term but hurt in the long term. I'm not excusing their actions, but just trying to explain them. Believe me, these are not stupid or clueless people.
The problem is that they are under pressure from Washington and New York
I disagree. The problem is that the Fed exists.
Wait.
You forgot the PUNCH LINE. Check
out the Reuters story.
LITTLE ROCK, Ark, April 13 (Reuters) - U.S. Federal Reserve Governor Mark Olson said on Thursday it was possible there were conditions in place that would make it appropriate for the Fed to go beyond neutral monetary policy.
"We had a very wide band around neutral 18 months ago. We are within the band we identified at that time. But remember that we also said at our last meeting that some additional tightening may be necessary," Olson told reporters following a speech at the University of Arkansas in Little Rock.
[ALAN WAS SMOKING CRACK AND JIBBERING LIKE A SENILE OLD MAN EVERY DAY UNTIL HIS RETIREMENT BUT BECAUSE HE WAS THE BOSS WE COULDNT TELL HIM HE WAS BEING AN IDIOT. SO WE NOW SAY THAT THERE WAS A 'WIDE BAND' AROUND NEUTRAL BUT REALLY WE WERE WAY UNDER WHAT ALL OF US WHO STILL HAD A BRAIN THOUGHT WE SHOULD BE. SO WE GOT THE MOTHER OF ALL HOUSING BUBBLES BECAUSE ALAN WANTED TO GIVE A BIG WET BJ TO RELECT BUSH. THANKS FOR NOTHING, ALAN.]
Asked if the Fed was now at neutral monetary policy, Olson said: "You can't identify that precisely."
Asked whether conditions were in place that would make it appropriate for policy-makers to raise interest rates beyond a level considered neutral, Olson said: "Theoretically, yes."
[FLIPPERS: YOU'RE SO FUCKED.]
The Fed is run by PhD economists who know their textbooks and theories very well but have very limited knowledge of how the economy and financial system actually work. Same with the Fed staff. As a group they are largely clueless I am sure. How can Kohn say that the housing market and consumer spending responses are uncertainties when the average person on the street knows after 15 rate hikes there are clear signs the housing market is softening and that this will negatively affect spending because consumers have used housing as an ATM for the last 5 years. If he really believes this, and I think he does, we are in serious trouble; and I believe we are! UFB!
He must have given a preview of this speech to Wall Street last night. This "luncheon speech" would have ended at let's say 1:30 Oklahoma City time which would be 2:30 New York time, but the homebuilder stocks gapped down and went down hard from the very instant the stock market opened.
Of course, all this RE crash talk has nothing to to do with the strong values available in the Boulder area. And I am quite sure that situation will extend far into the future due to our strong local economy and great scenery. I can convincingly demonstrate the superior investment portential of our real estate.
And the realtors@ of Boulder pride themselves on giving professional guidance when purchasing a quality home or condo.
Why? Because you deserve it- that's why.
Bankruptcy attorney advertisement 2009:
"Think about the children. Honey, we can do this."
We've got Alcoholic Keith and Bizarro Ozman. Nice.
Don't you just love anonymous comments?
The Fed clueless?? What about Jim Crammer who recently said "commodities are dead" and his friend Kudlow who said "There's no Housing Bubble". What a bunch of mindless idiots. Notice they are still giving people their brilliant advice on CNBC.
Tom
What’s the easiest way for the Federal Reserve to solve the account deficit, the federal debt and the housing bubble?
Can you say “inflate” it away!
Let me tell you something folks, Helicopter Ben didn’t inherit that name for no reason. Just look at what’s happening to gold prices.
First, Donald Kohn is the Fed Reserve president of St. Louis.
Second, he knows just like the rest of us what is going on. If the Fed were to comment on this impending housing collapse it would be akin to yelling fire in a movie theatre. The best thing is to ask people to leave because the projector is broke and thus they won't be in a rush.
There was an article in today's WSJ about the fed being careful to gauge the impact of the asset bubble collapse on the economy. They did a piss poor job in 2000 and do not want to repeat that mistake.
LOL. That was the funniest thread. THe Fed really have no clue and you depicted tehm so hilariously.
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