would any one person have been so wrong...

[acroyear]

Greenspan's "No Housing Bubble" Prediction: Five Years Later:

"Although a 'bubble' in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels.... Although we certainly cannot rule out home price declines, especially in some local markets, these declines, were they to occur, likely would not have substantial macroeconomic implications."

Cringely makes an even better point:

We can spend all day beating up Greenspan for a huge mistake five years ago, but a more constructive approach would be for us to learn from this experience and apply those lessons to Greenspan's replacement, Ben Bernanke.

We should ask him regularly the question nobody every asked Maestro Greenspan: "Why should we believe you?"

Comments

[wilhelmina-d.livejournal.com]

Oh, yeah, and now Bernanke's saying "no double dip" when several other analysts are predicting next year to be a bad one.

[thelongshot.livejournal.com]

Unfortunately, the record of either isn't exactly great, so hard to say who's right.

I'll stand with the side that says that it is too early to see if we are going into a double dip recession. Things aren't growing as they should for a full recovery, but they aren't declining either.

[acroyear70.livejournal.com]

well, they're not growing that fast because
1) the larger companies that saw the most benefit from the stimulus package aren't hiring, and many are still doing layoffs in spite of their handouts.

this is the great misunderstanding about large corporations - Apple's recent Jobsian magnificence not withstanding, the large corporation really never succeeds in increasing their profit margin by offering better products or selling to more. At a certain point either they have saturated the market and are only selling upgrades to existing customers, or their product line is such a commodity that there's no profit margin in it.

thus to increase profits and keep wall street happy, they have to either buy companies that still have growth potential (and lay off the redundant elements like middle management, sales, HR, and Administration types), or they simply cut their own production line and workforce by cutting out the people who would normally be designing the updates and replacing them with cheaper, which is one reason why some product line later versions suck so much compared with the high increase in quality of years before.

New job growth only comes from the start-up, and start-ups need capital, and THAT is the problem at the heart of all of this: the banks still aren't loaning.

I've been in the middle of a refi process since January, with no clue if it'll ever be resolved in my lifetime, in spite of my consistent work history and brilliant credit rating, and the fact that i'm in a housing area that's one of the few already recovered from the bottom-out of last year.

meanwhile i'm hearing about people with jack shit credit, people who almost defaulted (intentionally, not because they couldn't afford it), people with lousy job prospects, all getting their houses refi'ed successfully because of one thing: they qualify for government backing.

that's it. the banks quite literally no longer trust anybody over the long haul except the government to actually pay up, so they are doing all they can to AVOID loaning money.

THAT is why the economy hasn't recovered and will never recover properly: the banks simply are too scared to do their damn job and actually loan money.