February 29, 2008

Bernanke and the Fed come clean - there was a housing bubble, there is a housing crash, they f*cked up regulating mortgages, and it's gonna get worse


Well, I'm glad they got step that out of the way. Only took 'em a few years. The Big Lie is over (for most). So let's move on.

Maybe Norman, Swann, Todd, Retsinas, Lereah, Yun, Atkins, Paulson, Bush, Appleton-Young and the millions of other housing cheerleaders, liars, con-men and swindlers will come clean too.

Hey, one can hope...

Here's Ben "There is no housing bubble" Bernanke yesterday in front of Congress:

Many of the challenges now facing our economy stem from the continuing contraction of the U.S. housing market.

In 2006, after a multiyear boom in residential construction and house prices, the housing market reversed course. Housing starts and sales of new homes are now less than half of their respective peaks, and house prices have flattened or declined in most areas.

Changes in the availability of mortgage credit amplified the swings in the housing market. During the housing sector''s expansion phase, increasingly lax lending standards, particularly in the subprime market, raised the effective demand for housing, pushing up prices and stimulating construction activity.

As the housing market began to turn down, however, the slump in subprime mortgage originations, together with a more general tightening of credit conditions, has served to increase the severity of the downturn. Weaker house prices in turn have contributed to the deterioration in the performance of mortgage-related securities and reduced the availability of mortgage credit.

The housing market is expected to continue to weigh on economic activity in coming quarters. Homebuilders, still faced with abnormally high inventories of unsold homes, are likely to cut the pace of their building activity further, which will subtract from overall growth and reduce employment in residential construction and closely related industries.

10 comments:

eric in vegas said...

Goldman must be short all the banks because Paulson doesn't want a government bailout.

http://tinyurl.com/2wdoww

gadfly said...

Move over Baghdad Bob. Make way for our very own Baghdad Ben, the spinmeister extraordinaire: "The infidels say the US is facing stagflation. They will not succeed because we have cut them down with lower interest rates. Inflation has been beheaded, and it's running away like a coward. We have won a great victory."

eric in vegas said...

"The infidels say the US is facing stagflation. They will not succeed because we have cut them down with lower interest rates. Inflation has been beheaded, and it's running away like a coward. We have won a great victory."

-----------------------

*Purchases a gallon of milk for $10*

Madison Guy said...

After the Bubble: Is this the shape of the future -- the affordable home of the 21st Century?

parisienne said...

Look what Restinas is NOW saying about all that home buying during the bubble:

“I think I could make a case that some borrowers were ‘renting’ (with risk), rather than owning,” Nicolas P. Retsinas, director of the Joint Center for Housing Studies at Harvard University, said in an e-mail message.

via NYT's Facing Default, Some Walk Out on New Homes:

http://tinyurl.com/2ku6zr

Anonymous said...

"Is this the shape of the future -- the affordable home of the 21st Century?"

Nah, dude. Homes made from chinese shipping containers are the next wave of the future. It is my understanding that there are thousands of them sitting on long beach docks. Buy a couple for a few thousand a pop, weld them together and cut out a few holes and you have yourself a pretty damn good, cool looking home for about 50K - and, it is probably better built than anything thrown up by the illegal mexican horde - hat tip to you Honica.

striker said...

This is the home of the future.

http://www.sonnyradio.com/
redneckmansion.htm

Anonymous said...

grandma pkk here--

This morning on money.cnn.com on their little videos on left side home page, there was an article titles
Fed understates inflation and in it the guest, John Williams, of shadowstats.com said we were going to go into a deep recession this year which would turn into a depression next year....And you know what: it's not there now. He of course also commented on the removal of m3 as a stat, etc...

Anonymous said...

grandma again. For a while I couldn't find link, they'd moved it and had a slightly different caption
http://money.cnn.com/video/#/video/news/2008/02/28/news.hunter.shadowstats.Feb28.cnnmoney

Depression comments near end

Anonymous said...

Hey, it's only paper money. The conservative Libertarians in Washington D.C. have an answer to the problem.

1. Tax cuts for the rich.

2. Borrow & Spend.

3. War and military spending.