Crack has nothing to do with it. In case you didn't know this......our government "The Fed" LIES. Understand?
Posted by s at March 28, 2007 12:54 PMwell of course he's correct. He's a pro. He knows, just like we all do, that when summer vacation time rolls around gas prices always go down sharply.
Posted by T2 at March 28, 2007 01:19 PMDo our Grand Wizards EVER admit to seeing a looming recession?
They must be spooked by the bad consumer confidence numbers just out. Housing plummeting, dollar dropping, gas rising, consumers fading.
All systems go, eh, Ben? Happy Talk, that's what's always on offer at Fedco.
Posted by euzoius at March 28, 2007 01:28 PMEuzoius, I agree with you completely. Said another way, we are on the brink of a perfect fiscal storm.
No one discusses how home refinancing and low mortgage rates provided real economic stimulus that tax cuts to the rich failed to provide. As the home financing stimulus dries up, trickle down economics effects are showing, screwing the public interest to benefit special interest is wrecking our fiscal health, the failed trillion dollar Iraq heist is creating a deficit black whole, incompetent leadership is failing at every turn and the brainwashed apathetic public thinks this storm won't affect them.
This fiscal quagmire is worst than the Iraq war quagmire. If interest rates are lowered, the value of the dollar falls and U.S. debt is less attractive. If interest rates rise, the economy goes into recession or deflation.
The republicans are first class f**k ups!
I think smooth is right, but I'm still voting for crack.
Posted by John B. at March 28, 2007 01:57 PMgeorge bush appointed Ben Bernanke. Does anyone in the bush administration tell the truth? Enough said!
Posted by smooth at March 28, 2007 01:59 PMJohn B, It's hard to disagree with you. The crack would explain a lot.
Posted by smooth at March 28, 2007 02:10 PMNo one discusses how home refinancing and low mortgage rates provided real economic stimulus that tax cuts to the rich failed to provide.
You got that right, smooth. How many people got home equity loans to finance their lifestyles when they got passed over in the rush to give tax cuts to the wealthy? How many people listened to Alan Greenspan about how great ARMs are and now can't afford their monthly mortgage payment? How many people are looking at negative equity in their homes while the government touts the number of Americans who "own their own homes" as a sign of prosperity?
Posted by ann at March 28, 2007 02:25 PMBernanke doesn't have much room to do anything, short term there are inflationary pressures but they don't dare raise short term rates, the sub prime losses extend to Alt-A mortgages as well...foreclosures and coinciding price weakness will continue, historically your friend is probably right, the market will probably bottom out next winter some time.
the main problem for the market is that credit is being tightened... when you have 8 months worth of inventory in the market and you take out 25% of your potential buyers (people who no longer qualify for mortgages) things are not going to turn around. The economy and market need lower rates and eventually they will come via the bond market or the mortgage market or the Fed coming in doing it...
In his defense it isnt easy to be the big central banker giving words of wisdom when your storied predecessor (St. Alan of Finance) is predicting a recession and causing world financial markets to panic and sell(review equity markets worldwide on Feb 27).....
housing prices probably need to correct another 10-20% in some markets along with a corresponding decrease in rates to stabilize the residential housing market. the housing market since 2002 has been yet another fiction of the Bush "recovery" that is coming apart at the seams....
Posted by leftymn at March 28, 2007 02:35 PMLMAO!
Buttboy Bernanke is a lot like Condi Rice: both carry water for the Bush administration and their pronouncements mean very little.
Last I checked, there are 2.8 million homes in the USA at risk for foreclosure. Numbers like this hardly mean the housing problem is "contained."
Wake up Buttboy Bernanke.
Posted by Christopher at March 28, 2007 03:02 PMThe reeeeal Fed chairman has not spoken yet. As before, people only respect Greenspan and will wait for him to sing from retirement.
Posted by gtash at March 28, 2007 04:28 PMAs before, people only respect Greenspan and will wait for him to sing from retirement.
Now if only they could figure out what he's talking about...
Posted by dj moonbat at March 28, 2007 06:34 PM...people only respect Greenspan...
Now if only they could figure out what he's talking about...
Posted by dj moonbat at March 28, 2007 06:34 PM
****
But that is WHY they liked Greenspan. Greenspan can very clearly speak very clearly and plainly, as he recently demonstrated, and moved the market big time. Bernanke does not know how to obfuscate like that at all. It is unclear he understands his role. Bernanke does not even have Eisenhowerian levels of intelligently designed confusatory bafflegab and speechification within sight. So wadda we gonna do I just don't know. Learn to hedge our portfolios I guess.
He sounds like he's been talking to survivors of the Heaven's Gate group. I know too many people taking in the shorts over this one, including one friend that paid a million four for a McMansion who had to move to Northern California and doesn't have an offer that even reaches a million. It's been on the market for nine months.
Posted by Retired Catholic at March 28, 2007 07:16 PMHe sounds like he's been talking to survivors of the Heaven's Gate group. I know too many people taking in the shorts over this one, including one friend that paid a million four for a McMansion who had to move to Northern California and doesn't have an offer that even reaches a million. It's been on the market for nine months. The vacancy rate for apartments in San Diego hasn't been this high since the early nineties.
Posted by Retired Catholic at March 28, 2007 07:17 PMAnd yet, housing values continue. Go figure.
Posted by Judith at March 28, 2007 08:09 PMLet's try, " and yet, housing values continue to rise. Go figure."
Posted by Judith at March 28, 2007 08:18 PMDon't you understand? Only a tax and spend Democrat can cause a recession (oops, did I say the 'R' word?) Therefore, we can't have one until after the 2008 election.
Posted by Harry at March 28, 2007 08:23 PMLet's not forget that the Federal Reserve operates the biggest scam of the last two centuries (The Federal Reserve Act of 1912). The Federal Reserve uses the U.S. printing press to print "Federal Reserve Notes", loan the notes to the treasury and charges the U.S. Treasury principle and interest on the same notes printed on the U.S. press. The Federal Reserve puts J P Morgan, Cheney and Haliburton to shame.
Posted by smooth at March 28, 2007 08:37 PMAnn,
The situation you describe is wide spread. Yet, it is under reported. Unless friends, family members or someone is directly affected, most people don't care. Since consumer spending accounts for two thirds of the economy, Ben Bernanke and others have to keep us in the dark.
Posted by smooth at March 28, 2007 08:43 PM"Chairman Greenspan's success was that people had confidence in him. .... Now, the most important thing for Ben Bernanke to do is to build on that confidence and that credibility. " -- Sen. Chuck Grassley (R-Iowa).
Ben Bernanke will not gain confidence with the American people if he believes "the housing slump and collapse in the sub prime mortgage market have been contained and are not affecting the overall economy."
Posted by Judith at March 28, 2007 08:53 PMIf flip flop Ben thinks that there is much inflation the I'd vote with you who say he's smoking crack.
Also, it isn't that sub primes aren't a problem. But they are a small piece of the market and the loans in trouble are even a smaller piece.
But I wouldn't expect housing to increase much for the next five years. The real estate cycle usually lasts about seven years.
Posted by muckdog at March 28, 2007 09:17 PMHe is testilying. In Feb 2001, then-Fed Chairman Greenspan tesitfied there was not going to be a US recession. Guess what, the recession started in March of 2001.
I have the 180 degree rule. Whatever they say the opposite will happen.
Greenspan does not have a clue. Tell me I'm wrong Iamcrapola.
Posted by JohnT at March 29, 2007 05:16 AMGreenspan aided and abetted the asset inflation of the 90's and failed to stop the stock market hyperbubble caused by internet mania, the growth of outsourcing in homage to the globalization of the economy, his wife is supposedly a "journalist" who apparently never listened to the cardinal lessons of fact checking. Bernanke , like Greenspan is beholden to power in both Wall Street, London, Beijing and Riyadh, not to mention Washington DC. He can no more tell the truth than OJ Simpson can.
The truth is that much of our financial structure is a Ponzi house of cards and we know the beneficiaries, and the suckers are the ones who are being foreclosed, outsourced and shopping for everyday low prices....
Posted by leftymn at March 29, 2007 05:26 AMDidn't Clinton reappoint St. Alan at least once?
This position in the government is apparently reserved for Repubs, and we wonder how the Fed keeps being used to harm the Left's election chances.
The federal budget is on life support. A catastrophe, according to the Comptroller General. No serious expert in public finance thinks otherwise. Team Conservative's absurd across the board tax cuts for the wealthy are set to expire, right? So what's Benny B gonna say about that little matter of public policy?
I'll bet he'll be non-commital at best. At worst, he'll endorse them as "stimulative". Then in 2008 he'll start telling any new Dem president to "get this fiscal house in order", while Repubs (as usual) shoot from the sidelines, condemning any responsible (i.e tax raising) policy.
And if the Left does somehow put policies in effect that will clean up the Repub mess, the people will just give the keys back to the Repub louts for more joyriding over another cliff.
Posted by euzoius at March 29, 2007 07:01 AMDidn't Clinton reappoint St. Alan at least once?
Yes. And during the Clinton Boom, St. Alan said budget deficits were evil, EVIL, EVIL things. Since W snuck into office...not so much.
Posted by bartcopfan at March 29, 2007 07:14 AMJust a correction: The Fed has spoken up against deficits and promoted "pay as you go."
Congress hasn't been interested.
And again, as long as people have jobs and can make payments, there is no housing Armageddon. The unemployment rate is very low. I think what you'd need to see a collapse in housing prices would be a recession, where folks are being laid off from their jobs. We're not seeing that just yet.
The stock market would be the first to show the economy is in trouble. We're near record highs.
Heck, GDP came in higher than expected this morning...
Posted by muckdog at March 29, 2007 07:38 AMthe stock market is at all time highs.yes.. and it is near the end of its cycle..with Large caps (DJIA) pulling it up in the last leg... I remain unconvinced that the subprime/Alt-A/foreclosure meltdown will not affect the greater economy...
take a look at the Chicago board of Trade futures contracts on Lumber... and start considering the loss of jobs for carpenters, plumbers, electricians, and the manufacturers of cut lumber, furniture, and the transporters of these things, etc. that get sold into new houses...
as usual, the little guys... you wonder if they will be able to pay their mortgage bills?
Posted by leftymn at March 29, 2007 08:38 AMOf course Bernanke is lying.
I aleady know people who owe more than their house is worth, and, yes, they are the folks who bought McMansions and used home equity to buy vacations, not necessarily smart moves, but they were just regular folks who thought they were doing well. Government and economic policies encouraged this kind of behavior. We all know folks like this or who are soon to be in this situation.
What is Bernanke supposed to do? Tell the truth? Set off the recession or depression earlier and deeper than it might need to be? I'm glad he's lying. I hope enough people are fooled that this housing and housing equity bubble gets deflated slowly and very, very gently.
I don't get the defense of Greenspan. Bush and St. Alan (thank you leftmyn) handed Bernanke a shit sandwich and he's being asked to sell it to the American people, Wall St. and China. That's called being fucked, hard. Meanwhile, his predecessor is now running around predicting disaster. I bet Bernanke would love to see Greenspan thrown into a nursing home right about now. Bernanke needs to lower interest rates to stimulate the economy, but he can't because of the inflationary pressures and because the loans are all tapped out.
Look, I'm not predicting total disaster, but there's a lot wrong. We're surely facing a recession, but how bad it's going to be, I couldn't say, and neither can Bernanke. Keep up the good work, Ben, keep lying and maybe we'll all get through this.
Posted by Brian Bell at March 29, 2007 09:06 AMBut who cares if you are upside down in your mortgage? It only matters if you are in a nust sell situation. But with unemployment under five percent and wages growing, most are just living their lives and this isn't impacting them. Ten or twenty years down the road they probably won't be upside down anymore.
Posted by muckdog at March 29, 2007 09:35 AMJust a correction: The Fed has spoken up against deficits and promoted "pay as you go."
Congress hasn't been interested.
Yo, Muck! Got any links or dates to back these up?
Is that the 3-month old Democratic Congress or the former Rubber-Stamp Republican't one you're talking about?
Posted by bartcopfan at March 29, 2007 11:08 AMTen or twenty years down the road they probably won't be upside down anymore.
Do you know how few people live in the same house for ten years, much less twenty?
Sure, in twenty years few people would be upside down in their mortgage (owing more than the property was worth). But in the five years or so that the average US family lives in a house, particularly w/ min. down payment and declining prices, it would be real possible.
Hell, in the long run, we're all dead!
Posted by bartcopfan at March 29, 2007 11:47 AMBut who cares if you are upside down in your mortgage?
Only if you're ARM readjusts and doubles your payment.
But with unemployment under five percent and wages growing
Unemployment is 11% without Fed magic applied. Wages have not grown in years if you exclude the top 5%.
most are just living their lives and this isn't impacting them.
Except for the 7% of all homeowners with loans who went delinquent in 2006. Wonder if we can hit another 12-15% this year?
Posted by phidipides at March 30, 2007 07:01 AM