Blast from the (recent) Past: "Bernanke: There's No Housing Bubble to Go Bust"

[El Pinko]

http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html


Bernanke: There's No Housing Bubble to Go Bust
Fed Nominee Has Said 'Cooling' Won't Hurt
By Nell Henderson
Washington Post Staff Writer
Thursday, October 27, 2005; Page D01

Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.

U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president's Council of Economic Advisers, in testimony to Congress's Joint Economic Committee. But these increases, he said, "largely reflect strong economic fundamentals," such as strong growth in jobs, incomes and the number of new households.

Bernanke's thinking on the housing market did not attract much attention before Bush tapped him for the Fed job Monday but will likely be among the key topics explored by members of the Senate Banking Committee during upcoming hearings on his nomination.

Many economists argue that house prices have risen too far too fast in many markets, forming a bubble that could rapidly collapse and trigger an economic downturn, as overinflated stock prices did at the turn of the century. Some analysts have warned that even a flattening of house prices might cause a slump -- posing the first serious challenge to whoever succeeds Fed Chairman Alan Greenspan after he steps down Jan. 31.


:rofl:



"It doesn't matter if Bush is stupid", they said. "He'll surround himself with the best and brightest", they said.


:mad:

[mediaman007]

1. Isn't it funny how the Internet keeps giving these jewels of hindsight!

[PDJane]

2. of course........

hindsight is always 20/20, eh?

[El Pinko]

3. I knew in 2004- 2005, and know a lot of other people who knew too.

Why did the brilliant people with the MBAs not seem to know?


It was 2004 when I first read in the SF Chronicle that only 15% of SF Bay area families could afford to buy the MEDIAN bay area home, and that fully SIXTY PERCENT of all new Bay Area mortgages were exotic.

That was when I knew it was a bubble and we were in for a mess. I underestimated how big the bubble would get and how long it would continue, but I knew it, and plenty of other people did too.

[tech3149]

5. Thanks El Pinko You've been putting up a lot of good posts

and this is another. The bubble was mostly seen by those without MBA's. I have to wonder if reason and logic are "taught out" of those who use their degree in business and finance. It seems they ignore realities that conflict with what they hold as sound theories. I hear that delusional logic every time I hear someone like Bernanke, Greenspan, and most CEO's.

[erpowers]

4. Your Response to Recession Comments?

Is this your resonse to Bernanke saying there will not be a recession? I was fairly shocked to see in yesterday's USA Today that Bernanke was saying the U.S. would miss a recession. While reading I was once again thinking if there was a recession in 2001 why is there not a recession now.

http://www.usatoday.com/money/economy/2008-02-14-bernanke_N.htm

[El Pinko]

6. I think there is some disagreement among economists as to whether 2001 was a real recession.

Personally, with the liquidity crunch and decimation of equity taking place, the weak dollar and flight of foreign capital from the US, I don't see how there can not be a recession this time - a severe one.

I certainly hope I'm wrong, but the government seems uninterested in making the real changes that have to be made for long-term growth and rising wages, and instead are just growing the debt more with this stupid stimulus package.

The irresponsibility of the present government is unconscionable and shocking.


I don't post this as a response to Bernanke's comments - it stands on its own, but it certainly doesn't cast a very favorable light on his progostic abilities, does it?

[ananda]

7. Duh..

Isn't it a bubble that's already burst, or else leaking
at an alarming rate??????????????

[El Pinko]

8. The comments are from 2005. Hence "Blast from the Past"

NT

[unblock]

9. politics, folks, politics!

bernanke said, publicly, what he felt he needed to say. and he's now fed chairman. so who's the stupid one?

now, let's find someone who talked to him PRIVATELY back then to tell us what he REALLY thought at that time....