Will Bernanke and the Fed try to stop the housing crash?
Can they?
July 26, 2007
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39 comments:
Bernanke's fed is worried about inflation first.
Housing crash == less inflation if it feeds into lower rents.
Will help offset exploding peak oil prices.
So, no they won't do anything.
He has no choice. PPT duty is in his terms of employment contract.
Just wait until HItlery comes into power. She like all Democrats will fix all your problems. In Mass, the new Demo governor just announced he will pay $5K for anyone who is being foreclosed on for moving expenses and 1st month rent. No joke. How do you all feel now about the great Democrats? How do you feel about having saved all these years only for your tax dollars to be used like that?
I'm hoping my state goes socialist too. Then I buy a no doc, i/o armed $800K home, live in in 6 months for free, get foreclosed on and get a $5000 bonus for all my troubles.
Keep voting D morons, you deserve what you get.
what housing crash? median price was up YOY nationally
No. They have bigger fish to fry.
No - they have moved on to other things.
anon at July 26, 2007 11:17 AM
You are a moron because you are a member of a political party in this country. How does it feel to be a brainwashed lemming?
That scumbag Mozilo spelled it out yesterday. The fed will lower interest rates rather than face the housing correction needed. Mozilo will then be able to cash out even more options as countrywide gets back to pushing subprime toxic waste.
12:05, is that today's dailykos directive? you and everyone of you socialist brethren need to be gassed
Since Bush went and beat the hornets nest with a big stick, he is only obsessed with keeping them from running after him. He doesn't have a clue what's going on in this country, except for the occasional photo op the 'oops, better take a picture of him with two horribbly mamed vets' white house propoganda machine forces him into pretending to look like he cares.
As for Bernanke, just look at the guys face,he's just some powerless patsy govenment pawn.
Next election, dems, republicans, hardly matters...they are all bought and paid for my corporations.
yes they will try to stop it, they already are. They are holding interest rates steady when they should be raising them to combat inflation. They are watching the dollar drop to record lows and not batting an eye.
Bob
"Keep voting D morons, you deserve what you get. "
You get the bad screw-ups voting R and you get the bad fix-ups when you vote D.
America, no matter who you vote vote you're screwed! Wake up!
Can't... And won't...
Although they've been holding off the ca ca storm as long as they can, the dam is about to break wide open...
I think they were trying to hold off so when hillary gets into office she'd have a nice steaming surprise...
I know the guy in the pic is Greenspan, was referring to other pics of Bernanke...just looking like, 'don't ask me'....
No, they cannot stop the crash but they WILL try. The FED WILL drop interest once the threat of recession is real. There is no way the FED will escape pressure from the Bush administration to save this economy in the face of an election and a disastrous war. If the economy tanks, the Republicans are guaranteed to lose in 2008.
You have to be short the dollar now and long gold. However, if the market does tank, I believe gold will fall initially as all assets classes falter simultaneously. But then there will be a flight to quality with Gold, commodities and short term treasuries leading the way.
There is still a lot of money out there and people will be looking for places to "preserve" their wealth. Holding money in "safe" money market accounts will not work when the dollar plunges and inflation skyrockets.
I would love to hear other possible scenarios because no one can really predict with full confidence what will happen to this completely dysfunctional global macroeconomy
I don't think the fed will lower rates to save the housing bubble. Their primary concern is keeping inflation in check. Also, high housing costs are bad for the economy because people have less money to spend on other junk when 70% of their after-tax income is going to pay for their mortgage.
Besides, high housing costs only really help the middle class whose largest asset is their house. The rich invest their money elsewhere and lower housing costs just mean bigger summer homes to them.
Because the fed's mission is to look after the interests of the rich, interest rates will go up, not down.
Look at M3 for your answer - it's going parabolic. The Fed is opening the money spigots again and you HPers will just have to try again later.
Just wait until HItlery comes into power. She like all Democrats will fix all your problems. In Mass, the new Demo governor just announced he will pay $5K for anyone who is being foreclosed on for moving expenses and 1st month rent. No joke. How do you all feel now about the great Democrats? How do you feel about having saved all these years only for your tax dollars to be used like that?
I'm hoping my state goes socialist too. Then I buy a no doc, i/o armed $800K home, live in in 6 months for free, get foreclosed on and get a $5000 bonus for all my troubles.
Keep voting D morons, you deserve what you get.
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Oh I know the Republican party has saved the country and we are all equal..STFU! You sound like a moron.
Let me highlight the Republican Administration & our Congress achievements over the last 7 years:
................
................
........
........
.....
..
.
Sorry to keep you waiting I can not think of any at this point in time.
Bernake has no choice but to get offensive and start calling out every congressman and senator on the finance committes about spending. He's got to change the nature of the job of Fed Chairman to that of a bully pulpit and start calling guys out for such unpatriotic and gutless spending.
I own my condo outright and have absolutely no interest in seeing housing prices collapse, but if Bernake lowers rates to save this market, history will let Greenspan off the hook and it will all be on him.
The Anti Christ gave the same meddle to the CIA guy for such a great job of protecting USA from 9-11.
GOP/Bush economic melt down now underway.
Thanks GOP.
I think the Fed will watch financial institutions very closely for signs of an LTCM-style meltdown as all of these bogus housing instruments (CDOs, MBSs) are finally marked to market. If the Fed spies such an event on the horizon they'll do everything possible to prevent panic selling in financial markets. We could easily see the Fed ease interest rates all the way back down to the 1-2% range again.
Of course, that would completely trash the dollar as an investment and that's a problem for a country that requires huge infusions of foreign cash to pay for things like the wars in Iraq & Afghanistan, oil imports, Congressional pork, spendy defense projects, etc.
The ideal solution (from the Fed's perspective) to the current housing crunch would be a long, slow recession that allows the country's financial institutions to clean up their books in an orderly fashion. The worst scenario is panic selling of assets, because the selling can simply spiral out of control in a negative feedback loop that overshoots to the point that significant numbers of financial entities fail.
I'm hoping my state goes socialist too. Then I buy a no doc, i/o armed $800K home, live in in 6 months for free, get foreclosed on and get a $5000 bonus for all my troubles.
Stop trying to fight it!!!!
A theory I wuld like to have pondered is this one. The current PTB are mostly elitist Republican in nature. Bush, Greenspan, Murdoch, Ben Bernake, all the CEOs and CFOs and all the insessant corporate board members are all buddy buddy. They are trying to hold it all together until Hillary / Obama steps into the trap in Jan '09. Then the balloon will be let go. It will be funny to the PTB to watch Hillary / Obama desperately running and jumping after the balloon trying to catch it.
I'll feel bad for Hillary in '09. That's when the PTB will let go of the balloon. We will all suffer.
Kinda like holding the ocean tide back with a broom!
Ben is pumping M3 at furious rate to try to save housing/credit/stocks. See shadawstats. The US$ is paying the price. Ben will try to inflate out and *may* lower rates, but the subsequent trashing of the dollar will force him back to 5.25% (or higher) and in the end force some sort of end to the printing, and when that happens, the biggest recession since the 70's will be here.
(CNBC story; 12:15 pm EST 7/26/07
Stocks Drop Sharply Amid Credit Risk, Housing Slump Concerns
Stocks dropped sharply as disappointing news in the housing industry added to investor uneasiness about the mortgage and corporate lending markets. "We don't know how bad this will be," said David Kotok, chief investment officer at Cumberland Advisors. "We do know that it's bad and it's accelerating to the downside."
GOP Greedy old party
Hillary won't be Pres. The only GOOD thing about it if she were, hopefully her top adviser would be her husband. Bill Clinton is the only guy I know anywhere close to smart enough to getting us out of this mess. If anyone hates his past sexual indescretions, look at what you got when you voted in the opposite.
"Bill Clinton is the only guy I know anywhere close to smart enough to getting us out of this mess."
Oh man are you delusional. The only smart economic decision WJC ever made was to put Robert Rubin in charge of Treasury. It took him four years to figure out that Wall Street yanked his chain, not the other way around. So don't give us this revisionist horsesh-t that Bubba was some kind of prodigy.
Rubin and Greenspan cut a deal with China and Japan where they agreed to take our IOUs, and in return we agreed to import as much of their crap as they could load on the boats. With Clinton's approval, they sold out our manufacturing base and saddled us with a huge and growing trade imbalance.
Some legacy.
Bush & Greenspan turned U.S. finances over to Freddy Krueger & Jason. No one should be surprised at the bloodshed now unfolding.
With Clinton's approval, they sold out our manufacturing base and saddled us with a huge and growing trade imbalance.
-----------------
And if my memory serves me correct Clinton also sold Nuke secrets to china also, so I will agree there is no Night In Shining Armor there either folks.
Will Bernanke and the Fed try to stop the housing crash?
-----------------------------------
Hahaha! As if the FED still matters.
China and Saudi Arabia et al will be deciding what our interest rates will be, and how hard or soft our housing crash will be.
Too funny! :)
And if my memory serves me correct Clinton also sold Nuke secrets to china also, so I will agree there is no Night In Shining Armor there either folks.
July 26, 2007 6:18 PM
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You mean Knight? Vote democrat much?
Bob said:
yes they will try to stop it, they already are. They are holding interest rates steady when they should be raising them to combat inflation. They are watching the dollar drop to record lows and not batting an eye.
Bob you are 100% right on the money..sorry about the pun
aynon Ranon
A realtor just said on the news that maybe banks would come out ahead by helping to keep people from foreclosing, since it costs them a lot to foreclose and they end up with unwanted inventory. Maybe this will be a new bail-out trend, maybe a good one.
This picture will live in infamy!
"A realtor just said..."
Or could that be wishful thinking? Pretty big of those nice banks.
They cannot stop it. They have other things to worry about. Here's an excellent article (Jim Willie is cuttingly brilliant).
http://tinyurl.com/2p9gku
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