Yet Another Housing Surprise?
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You keep using that word. I do not think it means what you think it means.
-Inigo Montoya
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For the record, the definition of the word surprise is:
1: to attack unexpectedly; also : to capture by an unexpected attack
2 a: to take unawares (police surprised the burglars in the store)
b: to detect or elicit by a taking unawares (sometimes surprised a tragic shadow in her eyes — Willa Cather)
3: to strike with wonder or amazement especially because unexpected (his conduct surprised me); to cause astonishment or surprise (her success didn't surprise)
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Which leads me to these truly frightening comments:
"Boston Federal Reserve Bank President Eric Rosengren said the delay in a rebound of U.S. home sales continues to "surprise.''
"People have been expecting a recovery in housing much sooner than it has occurred and that's continued to surprise on the downside,'' Rosengren said in a telephone interview with Bloomberg News.
Rosengren said it's "confounding'' that housing shows little sign of recovery after the Fed's six interest-rate reductions since September. Fed officials are in the eighth month of a credit crisis that began with rising delinquencies on subprime mortgages.
"The housing market is still weaker than we would like and that has contributed to some of the financial problems as well,'' Rosengren said."
Surprise? Really?
I find it disturbing to see a fundamental lack of comprehension from a regional Fed President as to what the root causes of the Housing problem actually are.
Hey guys! Here's a clue: It ain't high interest rates . . .
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Previously
Housing: US vs Japan (March 2008)
http://bigpicture.typepad.com/comments/2008/03/housing-us-vs-j.html
Source:
Fed's Rosengren Calls Delay in Housing Recovery a `Surprise'
Anthony Massucci
Bloomberg, April 7 2008
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aMFTYMCW_0.Q
Tuesday, April 08, 2008 | 09:15 AM | Permalink
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Comments
Inconceivable!
Posted by: Ben Gordon | Apr 8, 2008 9:25:14 AM
I am surprise all these FED regional Presidents ACT stupid. I really don't think they are Truly stupid, given the fact that they hold PhD and major in economics.
I see a pattern that they Consistently come out every month (on a rotation basis to other presidents/governors) to talk UP housing and economy.
In order to talk up these dead economy, they must act in a STUPID way as Public is thinking, to convince these idiots to jump back into STOCK and REAL ESTATE and SPENDING.
In other words -- FEDs ARE EVIL. VERY EVIL.
Posted by: Sean | Apr 8, 2008 9:27:53 AM
Perhaps one of the reasons that the bubble expanded so far was that the Fed was not looking at median household income vs median home values. I also think that they only look at the macro numbers which look better than the conditions in the bubble heartland of CA,
AZ and FL.
Posted by: larster | Apr 8, 2008 9:33:13 AM
I say we send the fed to the pits of despair! Where they wont even think about escape because the chains are way too thick!
Posted by: UrbanDigs | Apr 8, 2008 9:33:24 AM
INCONCEIVABLE!
Posted by: Asshat | Apr 8, 2008 9:38:00 AM
I wish it were intentional market-boosting, but the extent of ignorance of current conditions -- measured by the amount of money being lost by the biggest players -- is just extraordinary.
Posted by: rw | Apr 8, 2008 9:42:08 AM
You foreclosed my father.
Prepare to refinance!
Posted by: Unsympathetic | Apr 8, 2008 9:46:52 AM
You foreclosed my father.
Prepare to refinance!
Posted by: Unsympathetic | Apr 8, 2008 9:47:46 AM
You foreclosed my father.
Prepare to refinance!
Posted by: Unsympathetic | Apr 8, 2008 9:47:59 AM
You foreclosed my father.
Prepare to refinance!
Posted by: Unsympathetic | Apr 8, 2008 9:48:53 AM
"No one anticipated the [insert name of problem] would [insert characterization of the impact the problem] or [insert characterization of the tenacity of problem]." - [Insert name of Bush Administration official/Appointee]
.
Posted by: The Politzanian Citizenry | Apr 8, 2008 9:50:53 AM
This only proves for the millionth time that people at the socioeconomic level of Rosengren don't have the slightest clue about what's going on down on the ground where the little people like me live. Rosengren and his ilk live in the same wealthy neighborhoods and gated developments, attended the same set of ivied private colleges, go to the same exclusive restaurants and clubs, go to the same expensive resorts, have vacation homes in the same exclusive western or eastern towns, and send their children to the same small group of exclusive, cosseted day care and private schools. To them, everybody they know is doing fine, and the workers who wait on them hand and foot, mow their lawns, serve their drinks, clean their pools, and raise their children are always happy and respectful. How can there possibly be any problems with the economy that a $600 check from the federal government won't cure?
It's not just the elites on the east coast with that view, either. The local paper where I live in Michigan carried an opinion piece by an investment professional in which he stated that the recession is really nothing more than the result of all the naysayers in the media talking about it, and he encouraged everyone to go out to their favorite restaurant and have a nice dinner to show that they're not being unnecessarily burdened by all that negative psychology.
In other words, homeowners aren't going into foreclosure because they don't have the money to make their monthly mortgage payments; it has nothing to do with job loss, or health care costs, or getting into an unaffordable mortgage in the first place. Nope, it's because they've been scared into a state of economic panic by the likes of Barry. If they get over that fear, then the mortgage payments will easily start flowing again and there'll be ponies for everyone.
Posted by: bluestatedon | Apr 8, 2008 9:56:11 AM
The problem is that most economists suffer from "physics envy" -- they have a deep psychological need to believe that the world can be described by simple and elegant equations.
But if they were truly pursuing economics as a science, they would have to approach it like biology, in which the usefulness of equations is, though not zero, quite limited.
Posted by: jm | Apr 8, 2008 9:58:19 AM
Stop Saying That!
Posted by: Kathy | Apr 8, 2008 9:58:39 AM
Funny, my real estate agent seems to know more than these idiots. She told us last week that under current projections, our house won't be worth as much as it is today for at least the next four to five years. And it won't be worth as much as we paid for it for at least six years.
How is it that a real estate agent knows this, but the Fed doesn't? Hmmmm. I think it's probably because she has to make her living in this market and wishing for ponies isn't going to put food on her family.
Posted by: Jeff | Apr 8, 2008 9:59:20 AM
"...I really don't think they are Truly stupid, given the fact that they hold PhD and major in economics..."
And our President holds an MBA from Harvard.
A degree from one of our "Institutions of Higher Learning" is not an indicator of smarts. It is, instead, a receipt for having traded one piece of fiat paper for another.
There are bags of hammers smarter than most advanced degree holders I have met.
Posted by: Marcus Aurelius | Apr 8, 2008 10:08:03 AM
Didn't we fight a war a few hundred years ago to rid ourselves of elitist opinions on what is best for society? And their ability to dictate to us simple folk? Is this appointed royal clown any different? Elitists created this mess over a period of decades. They wouldn't realize what the problem was if it hit them between the eyes with a 2x4. Why does anyone care what some nattering naybob living in his castle of mess making has to say?
It's about time we kick all of the sunsubitches out and start over. What an epiphany. That's exactly what society is going to do. People don't really care what goes on in the tea & crumpets circle until they feel it in their pocket book. Then they arise to be heard. The roar of populism is deafening. And, it has the elitists scared shitless. I kinda like it.
Posted by: Thomas Paine | Apr 8, 2008 10:12:46 AM
Barry, I find your lack of faith . . . disturbing.
Posted by: attobuoy | Apr 8, 2008 10:13:38 AM
Does the apex of the US kleptocracy at all fathom that it has fostered the conditions required to suddenly find the population in open revolt? In fact, all the ingredients are in place for a fantastic Revolution of epic impact.
1. The polity has waged a treasury busting and unpopular war abroad, and continues to do so with no end in sight.
2. The country's leadership has engaged in a lengthy plundering of the national coffers; and have also redistributed national wealth in its favor, while escaping the tax burden under pretexts of wishing to stimulate the economy.
3. The economy is entering a state of depression, with potential stagflation threatening.
4. Wage earning power has been reduced, while the cost of living is threatening to rocket, as previously inexpensive (out)sources of manufacturing are becoming expensive - no longer providing a buffer required to help people ignore point number 3.
5. Regions of the polity are finding themselves in conflict, with growing concerns about its ability to provide required essentials such as energy, food, water. The federal impulse is negated by localized concerns.
6. The leadership's ability to instill pride in the populace is at a nadir - with both the executive, legislative and judiciary being seen with great skepticism, if not outright hostility.
7. The people is finding itself without a voice - as the media is seen to be operating on behalf of the polity's economic and political leadership, against the interests of the people.
8. The polity's laws are being twisted and turned in accordance with the executive's whims, thus removing the respect for the laws that are a prerequisite for a polity's existence.
9. The populace has not been as down on the polity's raison d'etre ever before in its history.
Enjoy the revolution - rinse, and repeat. It's going to be gruesome, and it's going to happen.
There's no difference between what happened in Russia, then again in Soviet Russia - and what could very well happen in the US.
Posted by: SteinL | Apr 8, 2008 10:22:54 AM
I was at teh Boston Fed last month for a conversation on housing in Massachusetts. They aren't surprised. They are hoping this isn't worse than the mid-70's
Posted by: Stav | Apr 8, 2008 10:24:23 AM
Speaking of degrees:
http://online.barrons.com/article/SB120675340444773623.html?mod=b_hpp_9_0002_b_this_weeks_magazine_home_right
Many folks have earned honorary degrees and many deserve them. But Ph.d dissertations are not supposed to be invisible, even if unpublished.
By their fruits shall ye know them (or not?).
Posted by: Harold | Apr 8, 2008 10:27:54 AM
Ph D. = Piled higher and Deeper..
Exactly what we are left with from his legacy.
Ciao
MS
Posted by: michael schumacher | Apr 8, 2008 10:53:41 AM
This guy heads up the Boston Fed?? How embarrassing!!
Posted by: Glenn_In_MA | Apr 8, 2008 10:54:49 AM
I really don't think they are Truly stupid, given the fact that they hold PhD and major in economics.
Both of these facts plus their combination point precisely to the conclusion they are truly stupid.
Posted by: jerry | Apr 8, 2008 11:07:28 AM
VIZINI
As I told you, it would be absolutely, totally, and in all other ways, inconceivable. No one in Guilder knows what we've done. And no one in Florin could have gotten here so fast. Out of curiosity, why do you ask?
INIGO
No reason. It's only, I just happened to look behind us, and something is there.
Posted by: bigdayj | Apr 8, 2008 11:08:15 AM
