Alan and Ben had a little chat, and decided to put the final nail in the housing bubble coffin today..
They decided to use words like "soft landing" and "no danger of total collapse" - but we all know they have to say things like that. Imagine Ben saying "The US housing market is going to collapse, and there will be no soft landing". Oh, man, that would be rich! But he just can't...
He did say that "prices are not rising as quickly"... hmmm, note to Ben, the US Median Price has dropped the past two quarters. Maybe you didn't see that?
Here's Ben - Alan is right below...
Confirming what home buyers suspected and real estate sales figures have indicated for months, Federal Reserve Chairman Ben S. Bernanke said yesterday that the U.S. housing market was showing clear signs of cooling off.
Bernanke said the slowdown is "moderate" and "orderly" and pointed to the overall strength of the economy.
"We're seeing slowing in sales, slowing in starts. There also seem to be signs that prices are not rising as quickly as they have been for the past few years," Bernanke said in response to questions after a speech in Chicago, Bloomberg News reported.
May 19, 2006
FLASH: Coordinated Fed attack on housing: Bernanke sees cooling housing market
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9 comments:
of the 70% of the US that own housing, what % do you think even know who bernanke or greenspan are?
meanwhile, these two have total control of their financial future
They were late in the Reality of housing market !!!
Housing bloggers got it early here !!!
Rising prices in Gold, oil, gasoline, trade deficits, Rise of Yuan... inflationary pressures to the FED to raise rates ..imho !!!
LMAO at the shacks in the picture.
http://www.washingtonpost.com/wp-dyn/content/article/2006/05/18/AR2006051802196.html
Looks like a slum already.
what is really amazing to me is that my home market, a midwest market that was considered one where home prices did not appreciate much (maybe 3-5% per year) is ABSOLUTELY DEAD. No inventory is moving, and it is rising very rapidly. Prices are starting to drop.
This could very well be a nationwide issue.
To anon in Midwest:
I have been saying all along, all homes, weather in the midwest or the super bubble coasts, will be heading back to their 2001 price levels, unless we over shoot and go to 1997.
My friends,
This is not going to be an isolated problem. Thanks to our wonderful government and those brilliant flippers, this entire country is in for a world of hurt!! Hang on and prepare for a very wild ride.
P.S.-if the goverment starts to bail people and companies out, I will be pissed!!!
Why are they so damn late?
The RIGHT thing to do would have been to crack down on exotic "junk" loans.
Get medieval on the banking standards and capital resources. Tell the banks to beef up reserves. They will howl, but that's what they get for having the "benefit" of selling stuff to fannie and freddie.
Now the Fed will add more pain to an existing slowdown after the huge inflation.
The same story happened with the dot com bubble.
The right thing then, during the last phase of the manic hyperspeculation would have been to increase the margin requirements on stocks quite significantly. That would have definitely worked---without killing the economy with rates.
People would start to look more seriously at their investments and capital would go to good ideas, not bad ones.
If banks and mortgage companies insisted on 20% down full doc mortgages to get a low rate, we'd never have a hyperbubble far beyond historical standards.
Both these grave mistakes were Alan Greenspan's. Bernanke is innocent; he may not have been so stupid---or more likely---politically motivated.
By the way, it's not fair to completely blame government.
The real source of the problem is pure private-sector greed: flipper greed, investor greed, and most of all MORTGAGE BANKER GREED.
Why? BANKERS WERE MORTGAGE FLIPPERS.
They knew they didn't have to keep the loans for a long time, unlike the old days when they actually had to consider whether they'd get their money bank.
No, today it's bling-bling banking: grab the client with sleazy teaser rates, pad in huge fees, flip the mortgage to fannie freddie or the less savory junk MBS funds, and go home with a $20k paycheck every month.
Regulators and Fed were at fault for not stopping this, but they were not the instigators.
PS: in real life, Mister Potters, not George Baileys, run the world.
I think the Fed cares more about bailing out bankers than it does ordinary people.
They didn't say 'no' to the banks because the banks were making great money in the bubble.
When the banks finally get what's due them: i.e. housing crash, foreclosure and one hopes repeal of the bad bankuptcy/slavery law, they will complain that it isn't their fault.
It's going to be
* "unforseen global economic forces"
* "whaaaa whaaa, please Uncle Ben, can we have a few trillion of helicopter bucks?"
* "If you don't give us free money, we'll hold the economy hostage"
once again, rich get (and stay rich) and the rest of us get the shaft.
I think the Fed cares more about bailing out bankers than it does ordinary people.
They didn't say 'no' to the banks because the banks were making great money in the bubble.
When the banks finally get what's due them: i.e. housing crash, foreclosure and one hopes repeal of the bad bankuptcy/slavery law, they will complain that it isn't their fault.
It's going to be
* "unforseen global economic forces"
* "whaaaa whaaa, please Uncle Ben, can we have a few trillion of helicopter bucks?"
* "If you don't give us free money, we'll hold the economy hostage"
once again, rich get (and stay rich) and the rest of us get the shaft.
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