Fed's Fisher: Housing Bust Complicates Fed's Task
Dallas Fed President Richard W. Fisher spoke today in New York: Confessions of a Data Dependent :
In retrospect, [in 2002 and 2003] the real fed funds rate turned out to be lower than what was deemed appropriate at the time and was held lower longer that it should have been. In this case, poor data led to a policy action that amplified speculative activity in the housing and other markets. Today, as anybody not from the former planet of Pluto knows, the housing market is undergoing a substantial correction and inflicting real costs to millions of homeowners across the country. It is complicating the task of achieving our monetary
objective of creating the conditions for sustainable non-inflationary growth.
So these clowns admit they F'd up and kept rates WAY TOO LOW for WAY TOO LONG! Too late to act now and prevent the coming disaster. Time to break out the mops and pails and get ready for the biggest clean up job in history!
Meanwhile back on the planet PLUTO. The Bakersfield Californian has a story out claiming, for the N'th time we are "Different".
Prices might dip next year, but Bakersfield will still have a lot going for it -- a growing population, affordability and a self-sufficient economy, Launer said.
"Developers are anticipating a resurgence in the market in Bakersfield," he said
That may be because builders are biding their time until the market picks back up, Launer said.
"Developers want to be ready," he said. "They want to be able to hit the market in stride