Fed Members Laughed As Housing Bubble Grew

[kpete]

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Fed Members Laughed As Housing Bubble Grew
Published: Monday, 30 Jan 2012 | 7:04 PM ET T
By: John Melloy


It was good times at the Federal Reserve five years ago: Low interest rates instituted by then-Fed Chief Alan Greenspan had housing prices booming, the stock market was rising and Fed members were—literally—laughing their way to the...well, central bank.

.........................

In what may be the strangest market indicator ever, a blogger found that the amount of laughter recorded in the official transcripts of Federal Reserve Open Market Committee meetings from 2000 to 2006 correlates almost perfectly with the rise in housing prices taking place at the time.

A particular series of side-splitting meetings by the central bank in 2006 marked the very top of the housing bubble.

The blog, The Daily Stag Hunt, tracked the times “laughter” was recorded by the Fed’s stenographer during the FOMC meetings. In 2001, the FOMC averaged 16.5 moments of guffaws per meeting. In 2006, there were, on average, 44 outbreaks of laughter.



MORE:
http://www.cnbc.com/id/46194541

[xchrom]

1. Du rec. Nt

[SleeplessinSoCal]

2. Deja vu from Enron days. Waterboard anyone?

[WCGreen]

3. So many people look at the wrong indicator as to how housing is priced...

That is a clear inverse relationship between the "market" value and the interest rate.

It get's down to how much people can afford on a monthly basis that is the the real price indicator.

So if rates are high, that bites into the principle amount borrowed and so the over all cost of the hone declines.

When the interest rates are low, the cost of the house is increased to get to that same number, ie the monthly payment.

[Hotler]

4. Fuckers! All of them. Fuckers! n/t

[Tx4obama]

5. Locking. Not LBN

Please consider reposting in GD or Good Reads forum.

Thank you.