The Fed knew about the housing bubble before it burst but lied and said they didn't: Bill HR 1424 to buy bad paper (eventually called TARP) was introduced in March 9, 2007, before there began to be bad commercial paper from private subprime RE loans, in August. I have published on two other ...
more The Fed knew about the housing bubble before it burst but lied and said they didn't: Bill HR 1424 to buy bad paper (eventually called TARP) was introduced in March 9, 2007, before there began to be bad commercial paper from private subprime RE loans, in August. I have published on two other prominent financial websites, Seekingalpha.com (as Gary A) and at Businessinsider.com. I muckrake the banking system and found premeditated causes for the housing bubble and subsequent meltdown. I am married with 4 grown children.
Specialties: Impacts of politics on the economy, interpreting economists, writing about the negative impact of some aspects of globalization and pros and cons of the new normal. I don't like tariff wars. Email bgamall at gmail
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Freegold Will Kill The Paper Gold Casino
I suppose your scenario is always possible, but if anything, the last collapse was because the Fed printed too little money and the money it printed went to interest on bank reserves and not into the economy. The Fed was too tight. The Fed and banks in general tend to be procyclical, tightening in downturns. But they should be more countercyclical, unless their goal is to prune wages and speculation. Ok for the speculation but pruning wages weakens labor share of GDP. Continuing to to that could be a problem, which is why helicopter money would be a good thing if done properly.
US Income Inequality Through The Prism Of Different Studies
The only thing that matters is from 2000 to 2018. That is where things changed drastically.
Tariff Trouble: Treasury’s Tales
I just spoke to a ceiling fan guy who warned of price increases. It is anecdotal, but hardware of all kinds could be increasing.
Tariff Trouble: Treasury’s Tales
Prices are going up in January for things like ceiling fans in anticipation of tariffs! This will be a disaster, and Bespoke is too sanguine about the situation brewing.
The Bond Rally Was No Surprise
Well thought out. Weak labor is a major problem in the USA but also so is the massive demand for bonds for use as collateral. Studies have shown that demand does impact yields.
When Banks Get Beat, Who Wins?
Everybody says real estate is no longer important. So, those must be the same people who think banks are no longer important. But with credit growth declining across the board, you wonder what will drive the economy going forward.
Housing Starts & Permits Near Cycle Troughs?
Housing postponed a recession after the Dot Com crash. What will postpone the next recession, more easy money housing? That is certainly what Trump wants, with rules guiding lending being rolled back. But will anyone bite now that the prices are near the top? Seems like fear could enter these markets, especially where Wall Street has a large stake.
No One Ever Said Brexit Was Going To Be Easy
Looks like May is staying on. No one wants to take over that can of worms.
Corporate Bond Spreads Widen Signalling Greater Risks Ahead
So, subprime grew to include those alt A jumbo loans in California. It was far larger than what we normally think of subprime. These were loans made for over 500k with very easy money. These were not cra loans that Fox News railed about, but which were quite conservative by comparison. These jumbo loans turned out to be quite risky.
Corporate Bond Spreads Widen Signalling Greater Risks Ahead
Excellent article, prof. This is why banks have been shunned. Our own little subprime lending market run amok. And we worry about the Chinese off bank balance lending!