Thread: Get While the Gettin' is Good - The understatement of the day comes from Fed chairman

Friday, March 22, 2013 3:49 AM

Get While the Gettin' is Good

The understatement of the day comes from Fed chairman Ben Bernanke who essentially says: I'm Dispensable.

“I don’t think that I’m the only person in the world who can manage the exit,” Bernanke said when asked at a news conference in Washington if he’s discussed his plans with President Barack Obama.

What Bernanke said is best translated as "I'll get while the gettin' is good. Besides, I really don't have an exit plan in the first place, nor does anyone else."

• What better time to leave when the world has forgotten about your ignorance in blowing the biggest housing and debt bubble the world has ever seen?
  
• What better time to leave than when equity and bond prices are back in enormous bubbles?
  
• What better time to dump what comes next on Janet Yellen (the obvious next dove Fed chairperson appointee)?

Bernanke's big hope is that he can keep this house of cards from collapsing until January when his term expires, and Yellen takes over.

He claims he is tired and wants out of the public life. He ought to be tired after sponsoring the world's biggest housing bubble then bailing out every "too big to fail bank" in the wake.

For that, he gets the praise of Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York, who says "His knowledge and experience is too valuable to let him go."

What a joke.

Hans Nichols, says "Bernanke, a student of the Great Depression, took steps unprecedented in the Fed’s 100-year history to steer the economy through its worst crisis since the 1930s."

If Bernanke was a student of the great depression, precisely what did he learn?

The "cause" of the great depression was not inept policies by the Fed in response to the downturn in 1929 as Bernanke proposes. Rather, the "cause" of the great depression was the debt bubble that preceded it, just as the cause of the global financial crisis was the housing and debt bubbles that preceded the crash.

Bernanke is no savior, nor did he have any clues as the following video proves.



Bernanke Was Wrong - YouTube

Please play that video, again, and again until you get it.

People are entitled to their opinions, but I am entitled to the "facts". The fact of the matter is the housing bubble was obvious, yet time and time again Bernanke did not see it coming, nor did he understand the severity when the crash did come.

As a self-proclaimed "student of the great depression", Bernanke gets an "F". He did not learn a damn thing. History will not be kind to the man.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Read more at Mish's Global Economic Trend Analysis: Get While the Gettin' is Good

Friday, March 22, 2013 11:39 AM

Hollande Announces 20 "Confidence Shock" Measures to Support Home Building

Sticking with his economically insane campaign promise to construct 500,000 new homes in 2013, Hollande Announces 20 Measures to Support Home Building.

Advocating a "confidence shock" to revive the building "against the Emergency Economic, social and environmental" the head of state has shown its desire to remove "all obstacles to construction", while there was about 340,000 starts of new homes in 2012, below the target of 500,000.

Housing Starts Insanity

I commented on this once before but it's worth a repeat now that Hollande is hell-bent on forcing his will on the market.

Reader Tim Wallace helps put the insanity into perspective. Wallace writes ...

Hello Mish

I was astounded to see that France wants 500,000 units of housing starts. According to the World Bank in 2011 France had a population of 65.5 million people. This compares to the USA population of 311.6 million from the same source. Therefore France is approximately 21% the size of the USA. For the USA to have an equivalent number of housing starts to population (the people who would get the units) we would need to have 2,380,952 starts!

We know how that would end.

Indeed, we do know how this would end.

The US is currently running about 890,000 housing starts annually, on a seasonally adjusted basis. And Hollande wants an equivalent 2,380,952 starts "for the public good".

US housing is distressed. However, France is in the midst of a bubble now burst, and it is beyond stupid to keep building anywhere in the face of falling demand.

"Confidence Shock Coming Right Up"

Before the election, people assured me Hollande could not possibly be foolish enough to actually follow through on his campaign promises. To them I say, never underestimate what a socialist fool (or any other kind of politician) might attempt to do.

Should Hollande actually succeed at getting developers to build 500,000 new homes even though developer Nexity predicts 280,000-300,000, I can guarantee you there will be a "confidence shock" because home prices will crash through the floor.

Mike "Mish" Shedlock
Mish's Global Economic Trend Analysis


Read more at Mish's Global Economic Trend Analysis: Hollande Announces 20 "Confidence Shock" Measures to Support Home Building