Is Bernanke Parroting Lereah?
David 'the paid shill' Lereah has been busy cheerleading the housing market and downplaying any risks. A few weeks back Lereah stated:
"Lending problems in our nation's subprime marketplace are building, which could inhibit future housing activity and further dampen our forecast. Even so, these problems are likely to be contained and not spill over into the prime mortgage market."Just a week or so later Ben Bernanke, Federal Reserve Chairman, in a statement before the Joint Economic Committee, U.S. Congress, he stated:
At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency. We will continue to monitor this situation closely.Is our Federal Reserve chairman just taking the National Association of Realtors' talking points and incorporating them into his economic outlook?
posted by David @ 9:05 PM
18 comments
18 Comments:
US Census data shows housing bubble pop. Graph at http://infohype.blogspot.com
Or maybe they are colluding together. A major spin/propaganda campaign.
David,
I strongly doubt one influences the other.
Keep in mind there are many buyers who are waiting to get a good deal on a home. Where exactly the bottom is, nobody knows.
"Keep in mind there are many buyers who are waiting to get a good deal on a home."
not if there are much more number of sellers who are looking to get a good deal on their houses. Atleast the data shows it that way.
Keep in mind there are many buyers who are waiting to get a good deal on a home.
This a myth, there are just not that many buyers as has been in the past nor will there be.
We can now say, "lying Bernanke" along with "lying Lereah". What a putz.
Most major market strategists are saying simmilar things: subprime woes shouldn't effect the value of 30 year loans made in the 90s. I don't think that Bernanke is really suggesting that no loans will default that aren't subprime. He is sending this message to bankers and is saying that the mortgage backed securities market shouldn't need a LTCM type bailout. Some people will end up lossing money, some gaining money, some with houses, some without, and the economy will eventually move on.
"Keep in mind there are many buyers who are waiting to get a good deal on a home."
I think he's talking about the bubble sitters. In this case, he's correct. But this group won't be buying anytime soon, and I think their numbers are being exaggerated in the MSM. There are WAY too many homes built for the current demand.
"Where exactly the bottom is, nobody knows."
It's true that nobody knows where the bottom is, but it's obvious that we're nowhere close to it today. In fact, we're still at the peak.
Somebody asked for some facts. Here's an interesting one. The long term trend line of foreclosures is below the historical average. It appears to defy the theory that the sky is falling.
http://bigpicture.typepad.com/comments/2006/02/home_foreclosur.html
Pretty crazy, right? Well, he's the real shocker: Even though foreclosure activity is accellerating, at 0.7%, its still below the long term trendline of 1%.
"January's 27% increase in foreclosures is consistent with the increasing foreclosure trend seen throughout 2005. In total, nearly 847,000 properties entered foreclosure in 2005, representing 0.7% of total households. This is still below the historical average of approximately 1%, according to RealtyTrac."
What's the basis of this increasing foreclosure trend? Take a wild guess:
"In our opinion, the recent sharp increases seen in foreclosures are indicative of the heightened leverage taken on by home buyers through the past several years of robust price appreciation and record-low interest rates.
In addition, we expect the proliferation of adjustable rate mortgage (ARM) and interest-only mortgage products tied to the short end of the curve to provide an additional headwind as short-term interest rates continue to increase. For 2006 year-to-date, on average, the one-year ARM is 132 basis points higher than last year."
Somebody asked for some facts. Here's an interesting one.
Hey Einstein. The date of the article is Monday, February 27, 2006. I really didn't bother reading it. Care to wake up and provide some current facts?
Providing statistics when we were near the housing market peak doesn't make me very smart.
Didnt NAR PAC spend 68M in Washington DC?
Yes they did boys and girls
Anonymous. You make an excellent troll. Where are your facts? All you have are rather limited spitwads.
Anonymous. You make an excellent troll. Where are your facts? All you have are rather limited spitwads.
Huh? You were the one claiming you have facts. So you have nothing? Come on even Lance does better than that. As far as trolls go, you are a distant second to Lance.
Thanks anonymous for proving my point. You have nothing to offer but negativity.
Thanks anonymous for proving my point. You have nothing to offer but negativity.
What? Another post and still no facts? Darn, its hard to keep a positive attitude under these circumstances. But I'm trying.
Total loser. On ignore.
The foreclosure rate has been artificially low because of the bubble. Why would you default if your house goes up in value? You just sell it for a profit.
The foreclosure pipeline is very long, I think in NY its over a year.
Julius Clever, the data you linked is a year old. That was while the subprimes were snatching up the homes, not failing to make payments on them. Anon was right when he criticized the relevance of your rebuttal,
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