Yep, there is never a good time to buy housing.
Posted on 12/01/2006 8:49:30 PM PST by InvisibleChurch
Friday, Dec. 1, 2006 10:36 p.m. EST Greenspan: Worst is Over for Housing
Former Federal Reserve chairman Alan Greenspan said on Tuesday that the worst of the housing adjustment was over, and that he was preparing to publish an analysis of the "serious dispute" over the true effect of mortgage wealth on consumer spending.
Housing starts and other data indicated the dampening effect that a slow housing market had on gross domestic product was at its maximum in the third quarter, when growth slowed to a weaker-than-expected 1.6 per cent annual rate, he said at an investor conference organized by investment bank Friedman, Billings, Ramsey Group Inc.
Greenspan said he expected inventory levels to come down at a "reasonably rapid pace" and that "it looks as though sales figures have stabilized." But he also said there would be actual price declines in housing. "That will have some impact on consumer expenditures," he said. "We haven't seen it yet."
Separately, the National Association of Realtors reported Tuesday that the median price of a home dropped to $221,000 in October, a decline of 3.5 per cent from a year ago. It was the biggest year-over-year price decline on record for an asset that many Americans use as a gauge of their financial well-being.
The question over mortgage equity extraction was whether equity that is extracted is "acting as a proxy for all types of financing of goods that would've been bought anyway."
"The debate going on is a very interesting one, but I would say is inconclusive," Greenspan said. Continue Article
The paper Greenspan is co-writing will include data on gross equity extraction dating to 1968 and a more detailed analysis of data from 1991 to the present. He did not say when the research would be released.
He also spoke on topics ranging from the burden of the Sarbanes-Oxley law, the transfer of workers from centrally controlled economies to market-based ones, the separation of banking from commerce and the appeal of gold.
While he said it was difficult to tell whether Sarbanes-Oxley has affected capital investment, he was critical of the accounting aspects of the landmark 2002 reform law. He said most of the law is a "cost-creator with no benefit I'm aware." Greenspan said the whole process of accounting dictated by the regulation is essentially a diversion that keeps chief executives from doing what they should be, namely thinking through projects, instead of figuring out how to stay out of jail.
He said regulators were examining regulatory adjustments but he believed there should be statutory changes in the law.
"I hope it happens before the whole financial system walks off to London," he said.
On the separation between banks and other companies, he said that the changing nature of the economy was making the distinction between the two less obvious.
"Over time, we will find it impossible to make that distinction," he said, in response to a question about Wal-Mart Stores Inc., which has applied to establish an industrial loan corporation, a kind of bank. "Banking is now essentially in cyberspace."
He predicted that physical bank branches would become anachronisms but conceded that an obstacle to that was that people like dealing with people.
About global inflation, he said the shift of people from rural areas to urban ones, such as the one happening on a large scale in China, is leading to a very significant fall in labour costs around the world. He said it would reduce the rate of inflation and accelerate growth in developing countries.
Greenspan, who retired as Fed chairman in January, is writing a book and runs Greenspan Associates, a consulting firm in Washington.
© 2006 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.
He's attempting to cover his "legacy."
A loan company in our area is offering one year of mortgage covered by them if the homemoaner pays taxes and insurance, AND will throw in a nifty stove, refrig or washer to boot.
It isn't recovering. There is a glut of inventory to work through the system.
"the Fed will begin to ease at the next meeting."
And the energy markets are just daring him to do so. Prices are up this week and will skyrocket if he does. FCB's that buy our paper will not allow him to cut.
LOL, I feel sorry for you. I really do.
Bookmarked stupid prediction for later reference.
We are in stagflation and the Fed must choose between rescuing the dollar or the economy.
It can't do both.
I am betting on continued debauchery of the dollar.
BUMP
Inventories have been falling for 4 months in Northern Virginia.
I think the falling dollar and swooning stock market are due, in fact, to the expectation rates WILL be cut soon. The FCB's, as you call them, are grumbling. But demand for Treasuries seems only to rise -- witness the falling rates of 10-year bonds.
I keep hearing "stagflation, stagflation, stagflation." Is anyone actually looking at the inflation numbers? Does anyone remember the Carter years? If this is stagflation, I'll take it.
I don't see them cutting. I know the smart money has already priced in the cut, but I'm oil, currency and pm's which I'll add to as the dollar comes up on a dead cat bounce. Oil's priced in dollars and will continue to rise as the dollar drops while it drops or stabilizes as the other currencies rise.
Paulson and Bernake are in for a good hinney bustin' if they drop the rates. Stagflation will get them.
"While he said it was difficult to tell whether Sarbanes-Oxley has affected capital investment, he was critical of the accounting aspects of the landmark 2002 reform law. He said most of the law is a "cost-creator with no benefit I'm aware.""
The headline says housing...above makes the most sense...
Yep, there is never a good time to buy housing.
yes, oil prices will rise.
Is that across the board, or in a specific area/s?
You DO know, don't you, that there has never been and is not now, an across the board housing price in America.
Goldbuggery has been the cri de guere ( sp? ), for some here ( most of them long ago banned, with a few newbies taking their place ) for at least seven years. LOL
"cri de guerre"
But I would give you full credit for knowing the phrase...loony French spelling is extra credit only. ;O)
Thanks....my spelling stinks in ANY language and FR's spell check function only works for English words and sometimes, not even them. LOL
"cri de guere..."
How about cri de coeur?
Seriously, I'm not wedded to a position but you could have made some serious coin on the metals over the past three years. I have one miner I donk with regularity.
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