What Bubble, Dr Bernanke?

Epic h/t to our friend Jeff (who is known to squeal "I love you, JDA!" with more enthusiasm than just about anyone I know) for pointing us to this one. It's fitting.

Check this out, Washington Post October 27, 2005

Bernanke: There's No Housing Bubble to Go Bust
Fed Nominee Has Said 'Cooling' Won't Hurt

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.

Bernanke's testimony suggests that he does not share such concerns, and that he believes the economy could weather a housing slowdown.

Not to be outdone, Fund My Mutual Fund had an excellent post over the weekend on the spectre of Bernanke's second term (pffft) and included a video that has long-been a JDA favorite:

Remember this Fed head job is apparently not about being accurate or having any prescience in economic forecasts.. it's not about the fact you said Fannie and Freddie are just fine in early 2008.. it's not about the fact you did not believe housing prices could fall nationwide; it's not about the fact you denied a recession as we were heading full bore into one; it's not about the fact your institution's regulation was a farce (yet you want more regulatory power!), it's not about the fact you promised us that you would not bailout speculators at a Jackson Hole, Wyoming speech in 2007.

It is not the responsibility of the Federal Reserve--nor would it be appropriate--to protect lenders and investors from the consequences of their financial decisions. - Ben Bernanke, August 2007.

It's not about having a good track record is it? It's all about your big firehose Ben -, and as long as you make all our problems go away with more paper money creation - you are Wall Street's hero. *We heart Ben*

Who's your Daddy?

In case you missed it, here is our prescient Fed Chairman babbling on about the same concerns he totally missed above. Bubble? What bubble?

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


wcv said...

I think I just watched the biggest douchebag in the world.

I swear to God, as bad as some of our Photoshops have been and as crazy as some of our comments, you cannot make this shit up, there he is and he WAS ACTUALLY SAYING ALL OF THAT at that time. Worse, he believed it.

Keep in mind this is supposedly a brilliant man who has access to some of THE BEST economists in the world and ALL the data.

Holy fuck. I had to watch it a few times just to make sure it was real.

Anonymous said...

blast from past A. G. not to be outdone. It all seems just so stupid now in retrospect, huh? Hindsight is always 20/20 I guess.

JDA, thanks again. My old buddy John thinks I'm a fucking magician with this linking shit trick. It takes me 20 minutes to do one link but it's worth it...70 something year old John looks acts like he's 12 when this shit works. "ooooohhh, magic! Do it again, Jeff"