Greenspan: Price Declines Will Be 'Larger Than Most People Expect'
From the Financial Times:
US house prices are likely to fall significantly from their present levels, Alan Greenspan has told the Financial Times, admitting that there was a bubble in the US housing market. In an interview...the former chairman of the Federal Reserve said the decline in house prices "is going to be larger than most people expect".
...
Mr Greenspan said he would expect "as a minimum, large single-digit" percentage declines in US house prices from peak to trough and added that he would not be surprised if the fall was "in double digits".
10 comments:
The Maestro speaks in a language most can now understand. Before he had to dupe those who scratched their heads wondering if all the money he pumped into the system was truly necessary. When he saw the errors he made he cut and run and left Ben (with helicopter at the ready)with the daunting task of undoing the mess he created. Now he can sit back and critique the problems we're facing without fear of
retribution.
Hail to the Maestro!
Yeah, I really got fearful when Greenspan retired, because I figured that meant that The End was imminent and it would probably be big.
But single digit drops?
Cmyst...I think he meant single to even double digits across the country as a whole. That would mean that some places in the south, southeast, and midwest- where appreciation in some states was nominal, would be offset by states like California, Nevada, Florida, and Arizona, where appreciation was extreme.
"Cmyst...I think he meant single to even double digits across the country as a whole."
Yep, remember, until this housing bubble, the nation hadn't seen ANY national decline in home prices since the great depression. So high single digit drops or even double digit drops across the nation is massive! And as Cymst said, the drops will be many many times higher in bubble areas (like Sac).
Now he fricking tells the SheepLe!
Bet you alot of people were puking up their dinners last night while watching him finally come clean on 60 minutes.
Now we await the Fed's decision tomorrow about what they'll do with short term rates. Any bets?
If Bernanke thought an interest rate cut was necessary he wouldn't have to wait until the FOMC meeting tomorrow. He could have done it weeks ago when the credit market was in turmoil. What's changed in that short period of time to sway a decision one way or the other? The jobs report? Unempolyment? We all know that one month's data doesn't make a trend. The meeting is window dressing for the media. It's a storyline that talking heads can cling to and draw the public to them.
Hate to say it but if Bernanke had any guts he'd be raising rates tomorrow in the face of a crumbling dollar and rising inflation.
My vote would be he stands pat and leaves rates alone. That'll crush the stock market and continue to punish those who bought into all this excess liquidity. But it certainly won't add to the dollar's problems nor will it help with inflation.
Bernanke will not lower the fed rate tommorow. What would be the point, to save what, the stock market, so what if he does and the dollar goes down in value and stocks get a boost then stocks will only be making gains to catch up to what they are already valued in dollars. Its a lose lose situiation, this Country needs to get its head out of axx and start kicking some axx. Hopefully the days of conartist and crooks running the economy are over and real innovation can return or did we out source that too, I think we did, where is the pride? I have been very happy that crook in Bakersfield is getting nailed though, it has given me a glimmer of hope, Bernanke will crush it in the morning though.
I think he'll lower the rate, but I'll be really happy if I'm wrong.
2/24/2004 2:13 AM
Greenspan says ARMs might be better deal
By Sue Kirchhoff and Barbara Hagenbaugh, USA TODAY
WASHINGTON — Federal Reserve Chairman Alan Greenspan said Monday that Americans' preference for long-term, fixed-rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives.
In a standing-room-only speech to the Credit Union National Association meeting here, Greenspan also said U.S. household finances appeared generally sound, despite rising debt levels and bankruptcy filings. Low interest rates and surging home prices have given consumers flexibility to manage debt, he said.
"Overall, the household sector seems to be in good shape," Greenspan said.
...yeah, Al. Whatever.
You, sir, are the TOOL who caused all this mess. So shut up with the backwards prognosticating already. "Look what I hath wrought," says Greenspan. Does he want us to then THANK him?
Effing Tool.
*steam coming out of my ears...
How wrong can one be in guessing Bernanke's decision...
Fed cuts short term rate by 1/2 a point. This is significant because the Fed now acknowleges that the troubles in the real estate and credit markets are far worse than they had originally anticipated.
Down goes the dollar, inflation will rise in response, and the market might like this in the short term. But for how long is a key question?
How many believe this bails out the homeowner who's mortage is about to reset? Personally, if it does anything, it will just prolong the process. And we get to inhale a little more euphoria along the way.
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