Federal Reserve on Housing (June Minutes)
Submitted by
CalculatedRisk on Thu, 07/21/2005 - 10:04am (8 comments)
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Isn't it more like there is nothing that they want to do?
Better to come in after the crisis and try to save the day, than to be blamed for causing the crisis?
Tim, I think you are correct on their view - the FED believes asset prices are outside their purview. I can't say I disagree, but I do disagree with a portion of Greenspan's recent letter
to Congressman Jim Saxton on "regulatory substitutes" (using regulatory oversight to tighten up lending standards). I'll post some comments on that letter.
I also recommend Dr. Thoma's post: The Fed Should Take More Responsibility for the Housing "Bubble"
Best Regards!
You know, I read the Q&A and then reread the last question and answer many times, then commented on it today.
I look forward to your comments on that last question and answer - I found the reasoning to be flawed - but maybe it's just me.
CR,
Agree with you.
It still sounds like they are cheering the whole thing on.
I believe that they are playing it right up against the edge to achieve maximum economic growth.
That's what I find troubling. The string will be run out, the financial institutions will be ok, but the people will sink or swim. And that doesn't appear to bother them.
The risk was transferred to "others"? What a relief!...now I can sleep better.
The Fed created this housing bubble.
For political reasons. They can't stop and won't stop and will make everyone suffer the consequences.
But they figure, they will "own" the Supreme Court and all Federal courts so when we try another Franklin Roosevelt in the coming depression, they can nix everything just like they did before.
I thought real estate was way too high a couple of years ago. I think that was true in a lot of places.
Bush tax cuts and low rates kept the "too much money" problem we had in the nineties. People call stocks and real estate "investment" but mostly they are buying things that don't exist. Stocks got knocked down a little so people with too much money went into real estate.
Now they are going to lose all the money the tax cuts gave them and a lot of other people are going to suffer as well. It is simply mmoral to let the upperclasses have too much money, they are spoiled and irresponsble like children. Bush and Greenspan are responsible for this candy eating binge, but all of are going to have to clean up the sticky mess.
Matilda Harris said:
"It is simply [i]mmoral to let the upperclasses have too much money, they are spoiled and irresponsble like children."
Thank you. You've captured the essence of modern liberalism.