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Strategies & Market Trends : Z Best Place to Talk Stocks
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To: BWAC who wrote (52689)1/6/2005 3:28:19 PM
From: E.J. Neitz Jr  Read Replies (1) of 53068
 
The central figure in this SSI agenda is Alan Greenspan....he has been touting reform for years.......he screwed the retired first with absurdly low interest rates(and created a real estate bubble--see following GS comment) and now he is the point man in this. The old fa_t keeps a workin and workin.

Economic Insight--Goldman Sachs Research
Irrational exuberance revisited?
01/06/05 7:47am ET
The minutes from the December 14 FOMC meeting specifically mention "reports that speculative demands were becoming apparent in the markets for single-family homes and condominiums" as part of a more general discussion about excessive risk taking. Is the FOMC becoming concerned about a housing market bubble?

Now that the growth outlook appears to be on firmer footing, Fed officials can turn their attention to potential excesses in the economy. Elevated housing prices are one of these, although not yet a major worry, judging from the full content of the minutes and Fed officials' statements. The housing boom does exhibit some "bubble" characteristics--speculative activity has increased and expectations of future returns are clearly unrealistic--but the degree of overvaluation appears much more modest than the extremes of the 1990's stock-market boom.

The key factor supporting current housing prices is the low level of long-term interest rates. At present mortgage rates, valuations look only modestly stretched in most regions. But if forecasters' expectations of rising rates are finally realized, an extended period of flat to falling prices is in store, with California and the Northeast most likely to see outright declines.
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