Here's Bernanke's testimony in October of 2005 - at the very height of the speculative and criminal madness of the Late Great Housing Bubble:
"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.
House prices are unlikely to continue rising at current rates. However, as reflected in many private-sector forecasts such as the Blue Chip forecast mentioned earlier, a moderate cooling in the housing market, should one occur, would not be inconsistent with the economy continuing to grow at or near its potential next year."
And yet here's what Bernanke should have known, and simply said:
"The US and world housing markets are caught up in a speculative and fraud-filled madness, one that will come crashing down in a historic way, with many markets falling 30%, 40%, 50% and more. Housing's historic fundamentals led by the price-to-income and price-to-rent ratios have become significantly and obviously distorted by massive criminal mortgage fraud and rampant speculation. This will all end soon, and in tears."
Maybe they should put "Manias, Panics and Crashes" on the required reading list at Harvard and MIT. Pumping out ivory tower real-world-ignorant graduates like Bernanke (and Greenspan) is just such a shame.