Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Bush says housing’s ‘correcting itself’
March 16th, 2008, 7:50 pm · 22 Comments · posted by Jon Lansner/O.C. Register columnist
Here’s a slice of President Bush’s economics speech on Friday (seemingly eons ago) on housing, from the White House’s transcript …
… the temptation of Washington is to say that anything short of a massive government intervention in the housing market amounts to inaction. I strongly disagree with that sentiment. I believe there ought to be action, but I’m deeply concerned about law and regulation that will make it harder for the markets to recover — and when they recover, make it harder for this economy to be robust. And so we got to be careful and mindful that any time the government intervenes in the market, it must do so with clear purpose and great care. Government actions are — have far-reaching and unintended consequences.
I want to talk to you about a couple of ideas that I strongly reject. First, one bill in Congress would provide $4 billion for state and local governments to buy up abandoned and foreclosed homes. You know, I guess this sounds like a good idea to some, but if your goal is to help Americans keep their homes, it doesn’t make any sense to spend billions of dollars buying up homes that are already empty. As a matter of fact, when you buy up empty homes you’re only helping the lenders, or the speculators. The purpose of government ought to be to help the individuals, not those who, like — who speculated in homes. This bill sends the wrong signal to the market.
Secondly, some have suggested we change the bankruptcy courts, the bankruptcy code, to give bankruptcy judges the authority to reduce mortgage debts by judicial decree. I think that sends the wrong message. It would be unfair to millions of homeowners who have made the hard spending choices necessary to pay their mortgages on time. It would further rattle credit markets. It would actually cause interest rates to go up. If banks think that judges might step in and write down the value of home loans, they’re going to charge higher interest rates to cover that risk. This idea would make it harder for responsible first-time home buyers to be able to afford a home.
There are some in Washington who say we ought to artificially prop up home prices. You know, it sounds reasonable in a speech — I guess — but it’s not going to help first-time home buyers, for example. A lot of people have been priced out of the market right now because of decisions made by others. The market is in the process of correcting itself; markets must have time to correct. Delaying that correction would only prolong the problem.
To read more of the speech, CLICK HERE
March 16th, 2008 at 8:10 pm
“Any government, like any family, can for a year spends a little more than it earns.
But you and I know that a continuance of that habit means the poorhouse.”
Franklin D. Roosevelt, 1932
March 16th, 2008 at 8:21 pm
love that quote
*irony on*
Unfortunately during the time of the Great Depression they new nothing of Government Bailouts or Government intervention. If they only knew !
*irony off*
well, the gub-ment gonna do all they can, just like the Japanese government did in the 90s….. good luck
March 16th, 2008 at 9:35 pm
This is probably the only time I have agreed with Bushy.
March 16th, 2008 at 10:00 pm
Me too! The WPE actually sounds like he knows something about… anything.
March 16th, 2008 at 10:12 pm
Wow. I must say this speech rings familiar.
What a nice relief…finally.
I, for one, is just about done paying for other people’s mistakes.
I’ve never heard anyone talk about the lack of assistance handed out to families who lost jobs due to direct action from the Fed - shutting down projects, closing bases and many defense contractors shut down. They lost homes, careers, after much sacrifice.
Today, most of these people are still in the same jobs as when they decided they could afford to buy the home in the first place. Most of these foreclosures are due to bad decisions, not government cutbacks.
I just don’t get it. What gives?
March 16th, 2008 at 10:20 pm
What so many don’t realize is that even homeowners stand to win in letting this market correct naturally and find a static point where the market can sustain home prices and healthy appreciation.
Look - the fire deals will be available to all. Yeah, I own property but its not a loss if I DON’T SELL. I have no plans on selling and every other bull on this blog has stated the same. (I would retract that if prices were appreciating at a double digit pace - than another plan would be in effect). So I look at this way - I get to own more property without having to pay as much. In the end, its a wash.
All the whining - just doesn’t seem warranted.
March 16th, 2008 at 10:24 pm
I look at this way. This is now a life’s lesson for many. Time for those to learn that there’s a limit to borrowing and paying back obligations should not be taken lightly. Ten years from now, this correction will have been appreciated.
March 16th, 2008 at 10:46 pm
In the Lemon Heights and North Tustin areas (mostly custom homes), I just keep waiting for the good homes to go in foreclosure and all I see is the crappy homes people overpayed when the market was good. I guess this is a great market for people who like to live on busy streets or buy a home that’s never been remodeled that some homeowner sucked all the equity out of, then walked from it. This weekend, I spent hours driving through the neighborhoods I wanted to buy in and it looked like 2003, very few homes to buy in the established, nice neighborhoods and what was out there sucked. Where are all the good foreclosures I keep hearing about? I’d like to know what areas these foreclosures are in? Are we talking about mostly newer areas at the entry level prices or downtown Santa Ana, because I’m not finding the deals and when the good ones come-up they get top dollar and often have multiple Buyers bidding on them. The Realtors keep telling me you can’t steal a good home, I hate to think they’re right!
March 16th, 2008 at 10:55 pm
I look at it this way…the Bear Stearn fire sale…is exactly the nature of the financial system…JP Morgon knows this. I would only buy a house if the price I got…already had a future price reduction priced in…and other buyers know this too..that’s why the only thing selling right now are the very discounted homes…as the nature of this financial fiasco comes into focus…we also see what the real value of RE is…
March 17th, 2008 at 6:22 am
Generally I can’t stand Bush at all. But his speech here was right on the money!
March 17th, 2008 at 6:37 am
This is all talk, as usual from this clown.
He just signed off on a $30 billion taxpayer guaranteed loan to help JPM buy Bear Stearns.
March 17th, 2008 at 7:18 am
Even Henry Paulson admitted on tv yesterday that whatever the government does won’t stop the necessary correction of the housing market. It looks like the people who refused to buy at the peak and are still not buying, are going to get a big payoff in a year or two when the housing market bottoms.
I wish I had sold my place back in 2005 as I wanted to. My wife didn’t let me do it.
I could have sold my place at the peak and buy a better place in 2009 or 2010 for 25%. Oh, well. Honestly, even I didn’t think that the price correction was going to be this big.
March 17th, 2008 at 7:58 am
Every country deserves its President, Commander in Chief, and Administration. I love Wizard Alan Greenspan.
March 17th, 2008 at 9:20 am
I certainly feel better after reading the statement he made
however I’m still gonna keep my life preserver at close
quarters and am fully prepared to man the lifeboat
March 17th, 2008 at 9:52 am
I agree not buying it.
I think the only bulls here who are calling for false bottoms like sigburdood and Thoughtless are the ones who were maybe about to sell some property to fund their retirement. If people were going to keep their property just to live in for the long-term, they should not care if values fall so that their children’s generation can actually afford to buy a place in OC without having to spend $6,000 a month on a mortgage, when half the county doesn’t even make that much money.
March 17th, 2008 at 10:55 am
Finally!!! Someone speaks for the first time home buyers with good jobs that were responsible enough not to buy a home they could not afford. If you take on the risk of being a home owner, and all the tax benefits that go with it, you also take on the burden of losing money or your credit history. Paying rent in a small home and saving money up is also a burden. Something my family and I have had to do to put us in a position to afford a reasonable home in O.C. Way to go W. Leave the government out of this overinflated housing market.
March 17th, 2008 at 12:56 pm
I echo what David Poggi says. I paid my OC house off 1½ years ago and welcome a steep correction. What has happen in the housing market (prices soaring) is ludacrous. Anyone who says values must be propped up is an F-N idiot. The sooner it corrects, the better.
March 17th, 2008 at 1:20 pm
Well, think about it. If you own several homes in areas like Mission Viejo and Lake Forest where home prices are crashing, wouldn’t you try to convince other people that the bottom is near so you can get rid of your real estate investments before the next leg down in housing?
That explains the irresponsible advice provided by the permabulls.
March 17th, 2008 at 1:49 pm
Mark my words, either Obama or Clinton will win - and the legal changes they bring will force a more equitable distribution of wealth AND risk. First, rebuild the social safety net, shredded by decades of rightwing mismanagement. Second, better govt regulation will bring more centralized control back over the markets. As time goes on, the federal govt will reassert its rightful authority over more sectors of the economy, and we will march together into a brighter future for our children! I recently read an article called “Does the National Association of Realtors really need an economist?” you can check it out at: http://www.brokerforyou.com/brokerforyou
March 17th, 2008 at 2:19 pm
Wow…. Bush Jr. actually sounds intelligent for once.
March 17th, 2008 at 3:53 pm
It’s taken 7 1/2 years but Bush finally said something intelligent……………. Re-Elect Bush.
March 30th, 2008 at 9:19 pm
people always look to make money but when they have to work a little harder to earn the money they run and blame everyone else for the loss. to bad so sad. bush needs to stay out of it and focus on the people who give us freedom. yes i am pro military and always have our men in uniform are under paid and over worked.