February 10, 2008

Does it concern you that the Chairman of the Federal Reserve, Ben Bernanke, didn't think the housing boom would go bust?

I still can't believe this testimony from 2005, when then-candidate Bernanke had these words of wisdom for the monkeys in Congress who voted for him:

"House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas."

Man, you'd have thunk a trained economist would have seen this one a mile away. The fraud, the CDO's, the SIV's, the corruption, the rampant speculation, the inventory, the corrupted commission-fueled REIC, the bought-and-paid-for Congress, and most importantly, the absolute lack of oversight or regulation by the Fed itself.

Maybe he didn't want to rain on Greenspan's Medal of Freedom parade. Maybe he was telling the monkeys in Congress what they wanted to hear, versus the truth. And maybe we should send him a copy of "Manias, Panics and Crashes".

I bet he sees the housing bubble now, and what really caused it (hint - it wasn't strong economic fundamentals). And I bet he wishes he never took the job.


Malcolm said...

Forget economic theory, historical statistics, and all of the other various terms.

ANYTHING that goes up 25% in two years should be a warning sign.

Anonymous said...

  Greenspan and Bernanke are either incompetent, dishonest or both. If millions of people could see the housing bubble and its consequences coming, then God help us that the last two heads of the Federal Reserve either didn't see it or lied about it.

  In a democracy, elected officials (and those whom they appoint) gradually degenerate to the intellectual level of the masses who elect them.

  It should not, therefore, be a shock that America's elected officials have become less competent and moral over time.

  The Founding Fathers were aware of this problem and limited participation by the masses but these limitations were lost over time.

  Since Joe Six Pack can vote, he will bring the system down to his level. For proof of this, look at the front runners in this year's election. It's staggering to think that one of these people will be the next President.

  The only candidate who is intelligent, truthful, moral and understands the Constitution is Ron Paul. Sadly, he has no chance.

  As long as Americans elect morons like the Bushes and moral ciphers like the Clintons, they will continue to appoint stupid/corrupt losers like Greenspan, Bernanke, Michael 'You're doin' a heckuva job, Brownie' Brown, etc., etc.

  Since there is no chance of increasing the IQ of the average voter and no chance of denying him the right to vote, one must conclude that America is doomed to failure.

  It's similar to being a steerage passenger on the Titanic and telling the Captain to slow down because there might be an iceberg. Even though you can see the problem, you're powerless to prevent it.

  Sadly, the end may be the same!

Harsh Realty said...

"and factors that limit the expansion of housing supply in some areas.": Bernanke-speak for "They're not making any more land." haha

SeattleMoose said...

Yes it concerns me that our financial system, and hence everything else, is controlled by unelected and unaccountable global bankers who routinely perjure themselves knowing full well that they run the world and can do/say anything they d@mn well please.

Anonymous said...

Good Topic--
This very question has driven me to the brink of madness lately. It is insane to think our country's policy is being driven by someone who is nothing but a puppet for a corrupt administration, and not someone who will level with the American people, or even seems to grasp what is happening!

When your average 4th grader could get online and do 15 minutes worth of Economic research 2 years ago, and KNOW UNEQUIVOCALY that prices were only driven that high due to horrible toxic loans and a complete lack of regulation, HOW CAN THE CHAIRMAN OF THE FED have been so stupid as to have been calling this "Contained" only months ago.

You had every Economist worth their salt predicting this crisis years ago, and it made perfect sense that it WOULD happen based on how completely out of WACK prices had become.

Now during an election year, Ben Bernanke is only doing and saying what Bush and Co. want him to. "Smiles Smiles, everyone"!!

WAKE UP BEN!! The Titanic is sinking on your watch!! How do you sleep at night?!!???

xxxooo said...

what he believes and what he says he believes are two different things. I feel confident that Bernanke knew exactly what was going to happen.

gadfly said...

No conscience, no principles, no morals and no integrity. Perfect qualifications for a Fed Chairman appointed by George Bush with the blessing of Wall Street and the MSM.

Anonymous said...


I agree. It's more Greenspan's fault. Ben raised rates for awhile, but now he's lowering because Greenspan's bubble is imploding, and the government wants to inflate out of this massive debt since they don't want to end costly preemptive invasions.

Anonymous said...

You people just haven't met many PhD's. These people don't live in the real world. They don't understand that there can be widespread fraud and corruption. All they understand is crunching numbers and theory. There are a few, like Peter Schiff, who live and work in the real world. The ones who work for the government or academia are completely out of touch. I had PhD professors from MIT and Columbia who were buying Citi at $55 because of the yield and low PE.

OrDude said...

Even if it's true that nearly all PhD's are effectively morons, there are a few such as Peter Schiff who are NOT lame.
The President and Congress are charged with the task of finding competent people such as Schiff.
If the President were not a moron himself and if Congressional leaders had a brain, they'd be able to spot the difference between incompetent losers such as Greenspan (who can't even communicate in English!) and Bernanke (who is too stupid or corrupt to see the housing bubble and the insanity of lowering rates again!) and someone who has a track record of success in the real world such as Schiff.
As long as we elect morons and morally bankrupt people, we're in trouble.