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In Fed Officials’2006 Meetings,No Deep Worry on Housing[Elegant as Eiffel Tower, Paris or Vegas]
NYTimes ^ | January 12, 2012 | BINYAMIN APPELBAUM

Posted on 01/12/2012 5:56:10 PM PST by fight_truth_decay

WASHINGTON – The desperation of homebuilders was a running joke among top Federal Reserve officials during the waning phase of the housing bubble in 2006, according to transcripts released Thursday.

They laughed about the cars that builders were giving to buyers. They laughed about efforts to make empty homes look occupied. They laughed at a report that one builder said inventory was rising “through the roof.”

(Excerpt) Read more at ...

TOPICS: Business/Economy; Culture/Society; Extended News; Government; News/Current Events
KEYWORDS: bernanke; bondcollapse; dollarcollapse; economy; federalreserve; fomc; geithner; housingbubble; kohn; markets; transcripts
September 20, 2006 12 of 132 Excerpt
CHAIRMAN BERNANKE. Approved, without objection. Thank you. Let us turn now to the economic situation. Dave?
MR. STOCKTON. Thank you, Mr. Chairman. I cannot recall the precise baseball analogy employed by David Wilcox at the last FOMC meeting, but I have a vague recollection he speculated that I was either due for a forecasting hit or due to be hit by the forecast. [Laughter] In any event, since the Greenbook was completed last Wednesday, we have made several trips to the plate with consequential economic statistics on the mound. And how is the team doing? I guess I'd say, better than the Washington Nationals, not as well as the New York Mets.
Then, as the downturn in housing wanes and the associated multiplier and accelerator effects largely play out, the growth of real GDP picks back up toward potential in 2008. Meanwhile, the output gap that develops over the next year or so, in combination with inflation expectations that remain well anchored and a near flattening out of oil and other commodity prices, is projected to impart a mild tilt down in core inflation—to 2¼ percent in 2007 and 2 percent in 2008.
So, what should you make of this forecast?
Is it a construction as elegant and durable as say the Eiffel Tower in Paris, or is it more like the Eiffel Tower in Las Vegas—it looks pretty good a few blocks away but isn't that impressive upon closer inspection?

CHAIRMAN BERNANKE. Vice Chairman Geithner. December 12, 2006, 121 of 134[Excerpt]:
One final point, and I think Don said this more eloquently than I can say it, which is that we all have an interest in having this discussion take place below the radar screen of public debate until, again, we have a better sense of where consensus is going to lie. The more we move it into the public debate, the more risk we face of all the concerns that Governor Kohn referred to.

More Comedy Central from the Federal Open Market Committee can be found at
The Federal Open Market Committee discussions are interesting and informative, if you have the time.

1 posted on 01/12/2012 5:56:18 PM PST by fight_truth_decay
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To: fight_truth_decay; Toddsterpatriot; SAJ; SJackson; ex-Texan; blam
Thanks, fight_truth_decay.

Like *PING*, dudes.


2 posted on 01/12/2012 6:08:04 PM PST by grey_whiskers (The opinions are solely those of the author and are subject to change without notice.)
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To: All
"October 24-25, 2006 10 of 203 [EXCERPT:] A snap-back in consumer spending in coming months—an outcome that seems to underlie some of the outside forecasts that are stronger than ours—might lead to no landing rather than a soft landing. In contrast, any serious faltering of consumer spending is “buckle the seat belts and assume the crash position.”

"With energy prices leveling out, the upward impetus from drilling and mining activity seems likely to gradually abate."

"MR. FISHER. Karen, the most arresting figure, as you pointed out, is reported Chinese growth in the third quarter. What does that stem from? Is it their faux monetary policy or moral suasion or what we call, negotiating with the Chinese, “immoral suasion?” Or do you sense that some capacity constraints are at work here? MS. JOHNSON. Well, I don’t know that we have enough detailed information to speak definitively to the question of whether some capacity constraints were reached. We do see the slowdown occurring, importantly, in the sector of fixed investment." October 24-25, 2006 16 of 203

MR. STOCKTON. "The downward tilt in our projected trend in labor force participation is driven principally by two factors. One is the end of the large uptilt in the participation of women in the labor force. For a long time, women’s participation had been driving the upward trend; that continued rise offset the downward trend in the men’s participation in the labor force, which actually has been a long, ongoing trend that we expect to continue. Now the labor force participation of the entering cohort of women looks a lot like women exiting. We’re not getting any further upward press there, but we are seeing some continued downward press from men...we’re at the front edge of the baby boomers who are eligible at age 62 to collect Social Security payments."

"CHAIRMAN BERNANKE. Okay, Governor Kohn.,BR. MR. KOHN. I wondered, President Moskow, if you had a sense of whether Ford was in a kind of death spiral—I might be influenced by the headlines of today and yesterday—at risk of losing the confidence of customers, so it won’t be able to sell cars, and of creditors. I’m wondering whether that would have any effect on the macroeconomy, or whether we just take down the Ford signs, put up Toyota signs, and continue to produce.October 24-25, 2006 25 of 203

MS. PIANALTO. Thank you, Mr. Chairman. For a while now, I’ve been somewhat more pessimistic than most of the Committee about the downside risk to the real economy. I was beginning to get worried that this might be the perpetual disposition of someone from Ohio. [Laughter] As a prominent member of our business community said to me not too long ago, it’s not the weather, it’s the climate. [Laughter]October 24-25, 2006 33 of 203

3 posted on 01/12/2012 6:25:44 PM PST by fight_truth_decay
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To: fight_truth_decay

Look on the bright side. Residential real estate will pick up, after we Baby Boomers are finished with most of our dying in 20 years or so.

4 posted on 01/12/2012 7:11:57 PM PST by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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To: fight_truth_decay
the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday.

I believe that this is reported correctly from the actual archives, but it is absolutely impossible that they actually believed that housing wouldn't collapse or that any housing slowdown would not affect the economy at large. It was, quite simply, too obvious and easy to predict.

5 posted on 01/12/2012 8:03:14 PM PST by jiggyboy (Ten percent of poll respondents are either lying or insane)
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To: jiggyboy

Bush knew it before 2006 and was told to sit down and shut up about it.

We have a truth telling problem in this country. We fear that if we tell the truth, we will be shouted down or ruined because we will cause the house of cards to fall down.

Any indication that the real estate market was a sham of bad loans and resold bad loans would have crashed the market so no one wants to be the one to examine reality and tell the stark truth. Instead they lie to themselves and each other to keep the balls in the air and snort at anyone who dares challenge any of it.

It the deception is repeated in government, a million times. The elite in and out of government are more and more secret and panicky because everything is getting worse and worse. This generation’s elite are amoral cowards and shysters who play along in lock step with one another while the building is on fire. They can smell the smoke but they assure each other it’s a just bar-be-que out back.

6 posted on 01/12/2012 9:32:06 PM PST by SaraJohnson
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To: familyop
"Experts" used to say, and I do agree from personal experience, that 7 years is how long it takes to normally make money on one's home--which is an investment along with a roof over one's head--so in many cases 14 years means much of the mortgage is paid off.

Now people would be wiser to go for shorter term mortgages and more money down---which was the norm before. 20% was recommended. Then became 0 down and lets roll in your car and the new furniture you are going to buy on this new "one time only--new temporary loan" we have for you. Forget you have been bad in the past..the government forgives you!! Here's the key. [We had an extra made just in case].

The job losses however greatly effect the housing situation. If the layoffs are in upper management where they most often are in making a trim--that hurts these prior big spenders, larger donors to charitable organizations, private schools, auto industry as bigger consumers, aka building wealth for the overall rest of the economy.

It's OUR investments not making the percentage gains they once did because we have such lack of faith in this Administration. We have locked up the investment cash box and will take little revenue, just to have revenue.

I feel if we find Confidence in a new leader, everything positive is possible. Reagan gave Confidence--I guess not an easy trait to muster, considering we have not seen IT for a while. I would have to admit under torture that Clinton gave confidence[but the Internet revolution was unfolding], that Bush gave confidence that we would be safe after 9/11, his sworn priority! ALL compared to what we feel from this Obama Administration now.

Being a house all divided is not helping anything at the moment but the Left love to watch a "good crisis" and hope they can win by default.

This lack of Confidence in the Obama Administration is a HUGE HUGE job, housing and overall MOOD killer!!

7 posted on 01/16/2012 9:51:16 AM PST by fight_truth_decay
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