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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (37275)7/30/2005 8:47:03 AM
From: Ramsey Su  Read Replies (2) of 110194
 
She noted that in a hypothetical 25% drop in house prices, some $4.5 trillion of housing wealth would be wiped out. "This amounts to a decrease in consumer spending of about 1 1/4%" of gross domestic product, and "if house prices were to drop by 25%, the impact on the economy might be about half what it was when the stock market turned down a few years ago," Yellen explained.

Is she suggesting that a $4.5 trillion wipe out would have no effect on other parts of the economy other than consumer spending, such as employment?

Should it make me feel better that somebody that incompetent is no longer on the Fed Reserve Board? But then again, isn't she suppose to be a professor somewhere, teaching future economists this garbage?
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