Did federal reserve policy inflate housing for another crash?
invite response
2014 Jul 13, 11:37pm 1,093 views 4 comments
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How does the mix of variable interest rate mortgages factor in this time around? Irrespective of inventory, if rates go up, folks will dump.
It is quite likely that MBS continue to be fraudulently rated by the criminal and unprosecuted rating agencies.
And the TBTF's are even bigger, and are an even larger Ponzi based upon lending what they do not have.
John Bailo
2014 Jul 14, 1:13am
They tried to flush the holdouts who were still waiting for a giant bonus on their unsold home.
But it's closing time at the real estate bar.
darlag
2014 Jul 14, 1:55am
Of course the Fed is complicit, as are the crony capitalist politicians and the blood sucking investment bankers they both support...
indigenous
2014 Jul 14, 2:09am
This article is only true because of the Fed monetizing the MBSs and because they have not required mark to market on foreclosures.
The whole reason for the anemic recovery is because of this. IOW the market has not been allowed to find real prices.
So the author may be right? The Fed will likely keep ZIRP until it is forced to go off of it because of inflation. That IMO is a tenuous position.
http://ochousingnews.com/blog/federal-reserve-policy-inflate-housing-another-crash/
Federal Reserve’s zero interest rate policy made debt cheep and widely available to investors who inflated asset values setting the stage for another crash.
Pundits like to call asset bubbles; it attracts attention and helps make a name for the analyst. Most often they are wrong, but every once in a while, someone calls a bubble just before one pops, and they look like a prescient genius — and sometimes they are: Robert Shiller called both the internet bubble and the housing bubble right at the peak of each, and he won the Nobel Prize for his efforts.
The pundit sounding the alarm today is Charles Hugh Smith. I like his writing, and he generally displays a great understanding of financial history and the workings of housing markets; however, this time I think he is wrong. Like every other housing bear, he overlooks one basic fact: inventory restriction overrides all bearish predictions.
Source: http://ochousingnews.com/blog/federal-reserve-policy-inflate-housing-another-crash/#ixzz37RwlkVJA
#housing