White House Economic Advisor, Ben Bernanke, wants to be the next Federal Reserve Chairman after Alan Greenspan steps down. The problem is, he's no Alan Greenspan. Mr. Greenspan knows when to lie and when not to. He knows not to sound alarmist and he knows not to cheerlead. Mr. Bernanke does not know these skills. He recently went on record to say that the economy is strong and the housing market is proof of that. That's exactly like saying the economy that was strong in 2000 owed its strength to the astronomical prices of tech stocks. He says that although housing prices have gone up a lot, that there are "strong fundamentals" underlying it. The only strong fundamental is that money is easy because banks are lending money at very low interest rates. If that ends either by interest rates going up or banks not willing to lend as easily due to a flat yield curve, then the housing market will evaporate overnight. He then went on to say that "We've never had a decline in housing prices on a nationwide basis." This is false. The IMF did a study titled "When Bubbles Burst" of historical (since 1970) housing busts where prices fell by 30% over a four year period and they found five busts in the U.S. (20 worldwide). Busts follow booms and when they do, people loose money. It's just a matter of time until our housing market declines. The only people I find that don't share this sentiment are those that are leveraged in the real estate market and those that stand to gain from this shakey economic boom, like Mr. Bernanke.
The Dow topped 10,700 on Thursday and then fell 50 points. We will never see 10,700 again in our lifetimes.
1) Hilarious (and probably unintentionally so) that Howie rants on about someone being overly alarmist, when he has become the most irrationally alarmist person i know.
2) Dow will top 10700 before end of this week, forget about lifetimes.
you have a cool blog. i like the flies... oh well, that was a little random
