5 Responses to “Fed chair: things are getting better” »»

1. Gus
   Comment by Gus | 02/13/08 at 3:18 pm

   Anytime you make a prediction that is more optimistic than NAR’s, there is one question you must ask yourself: Am I on medication? If so, get off it. If not, get on it.

   Seriously, though, Bernanke and Paulson must know what’s going on, they are just trying to prevent a free fall.

   As for a recession, much more wealth was lost in the popping of the stock market bubble than could ever be lost in even the worst housing crash, and that only caused a mild nine month recession. The Fed just needs to keep interest rates low enough, long enough to fire up the next bubble to keep the economy rolling.

2. John A Keith
   Comment by John A Keith | 02/13/08 at 6:38 pm

   True.

   Well, just to be clear on what I think (does it matter?), I think we’re not going to be in a “recession”, by definition.

   I do feel we’ve seen the bottom of sales prices, at least on a national average.

   I don’t see Boston prices going down.

   I think sales volume will stay slower than prior years, so buyers should be able to choose from a wide selection.

   All anyone wants is stability! And, 5.5% fixed-rate mortgage loans.

3. Gus
   Comment by Gus | 02/13/08 at 7:04 pm

   I don’t know whether prices will fall, of course. It is provable that there are massive negative opinions, way beyond what presented in the media, which is not exactly positive these days.

   You can see it in the financial markets. If you try to make any kind of bet on a housing market disaster, you can’t do it cheap because too many people are already betting on it. Everything from housing futures to home builders to the mortgage bond insurers.

   So I guess they are trying to avoid panic among the home owning and home buying public that can make those predictions self-fulllfilling, and that happens at a rate that is disruptive to the financial markets.

4. Ormond Beach Florida Real Estate
   Comment by Ormond Beach Florida Real Estate | 02/14/08 at 7:44 am

   Gus I couldn’t agree with you more. Your last comment says it all and as we all sit back and watch it unfold together time will tell.

5. Bob
   Comment by Bob | 02/14/08 at 1:27 pm

   Follow the bond market! They get it. As I write this the DOW is down 145 points and the FNMA 5.5% bond is ALSO down (-28 basis points). There is a very good chance long term rates will rise due to deflation while we will continue seeing shorter term rates such as a 5 year ARM fall. We are seeing deflation occur. The Fed is not adding liquidity to the market. They are taking it away. If anyone has any doubt read the following Fed report: http://www.ny.frb.org/markets/omo/omo2007.pdf

   Deflation is as sure a sign of a recession as there is. Also, in the report you will learn that the Fed does not control short-term rates but rather FOLLOWS short-term rates.

   All that being said if someone wants to purchase a home long term it sure beats renting. For those who want a better understanding of what is occuring in the economy I suggest reading Karl Denninger’s website. http://www.denninger.net. He has been correct on his predictions over the past year and you can go back and look at his predictions.

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