Greenspan Waffles!
Unbelievable!So I suppose all the hyper-optimistic bulls on Wall Street and particularly in the real estate industry were a little quick in interpreting the “maestros” words from October.
Today, it was reported that former Federal Reserve Chief Alan Greenspan is revising the comments he made recently suggesting that the housing market had possibly bottomed.
Back in the first few weeks of October Greenspan stated to following:
“I suspect that we are coming to the end of this downtrend, as applications for new mortgages, the most important series, have flattened out,”
“There is a good chance of coming out of this in good shape, but average housing prices are likely to be down this year relative to 2005. I don't know, but I think the worst of this may well be over”
THIS MORNING Greenspan offered these observations regarding the nations housing market:
"This is not the bottom, but the worst is behind us,"
"I think that while we are past most of it there a lot of negatives..."
"we still have a ways to go on the downside, [but] it looks as though the worst is behind us"
Possibly the greatest fallout of this waffling of position is that the National Association of Realtors included Greenspan’s original comment verbatim (with some additional spin) in the “Positive Outlook” section of their “Buy Now” campaign advertisements recently run in six top US newspapers.
For all we know, this may be the precise reason Greenspan revised his statements as his credibility was clearly being hijacked by the overzealous and unabashed Realtors association.
housing+bubble mortgage real+estate housing Greenspan waffles may+well+be+over Unbelievable October buy+now campaign waffling
Copyright © 2006
PaperMoney Blog - www.paperdinero.com
All Rights Reserved
Disclaimer
Copyright © 2006
PaperMoney Blog - www.paperdinero.com
All Rights Reserved
Disclaimer
Copyright © 2009
PaperEconomy Blog - www.papereconomy.com
All Rights Reserved
Disclaimer
PaperEconomy Blog - www.papereconomy.com
All Rights Reserved
Disclaimer
posted by SoldAtTheTop at
11:07 AM
1 Comments:
the quote from Greedspan: "I think that while we are past most of it there are a lot of negatives...but it is no longer subtracting from the [gross domestic product] growth," the former Fed chairman said.
If housing investment goes down, which it has, it very definitely subtracts from GDP growth. And so does the spending reduction from reduced home equity extraction.
Greenspan also touched on the potential adjustment in loan costs for homebuyers with nontraditional mortgage products.
While some individual buyers may feel the pinch as their payments adjust upward, Greenspan said those changes were "very unlikely to a have macroeconomic effect."
Really? If buyers have to make much higher mortgage payments, isn't that going to cut down on money spent on consumer goods? Uh, won't that have a "macroeconomic" effect on reduced consumer spending?
At the same time, he seemed to sound a mildly skeptical note about the surge in non-traditional loans, saying "a lot of that stuff is very flakey."
Hmmm. Won't that lead to some foreclosures and have some "macroeconomic" effects?
The "maestro" should stay retired. We already have enough propagandists in the Bush administration.
EconomicPopulistForum
By
unlawflcombatnt, at 3:39 AM
Post a Comment
Links to this post:
Create a Link
<< Home