Insight: Yellen Feared Housing Bust But Did Not Raise Public Alarm

In 2004, the new president told risk managers in San Francisco that closer supervision had "made our financial system far more resilient to shocks." In Phoenix that year, she reported "more positive signs in the economy."

She flagged real estate as a concern in March 2005, telling a banking group in Hawaii that her staff was examining commercial lending and was concerned about the "easing of credit standards and terms on loans" for home mortgages.

But Yellen ended optimistically, concluding that "we don't think widespread problems are likely" and that "industry conditions in many respects are stronger now than they've ever been."

Yellen said her staff had begun to realize by then that "there might well be a bubble." But as she concluded in an October 2005 speech, "the arguments against trying to deflate a bubble outweigh those in favor of it."

"My bottom line is that monetary policy should react to rising prices for houses or other assets only insofar as they affect the central bank's goal variables - output, employment, and inflation," she said.

In California, the median price of a previously owned home reached $556,430 in 2006, about nine times the annual median income; the national median price was just $221,900, or about four times median income.

In March 2006, she spoke via satellite to Australian economists and noted that "overall the economy has shown considerable resilience."

In a 2006 speech to bankers in California's agricultural belt, she encouraged banks to reach out to immigrants and other underserved populations, touting programs like one that encouraged home ownership for low-income families.

Suggest Democrats realize they need to appoint a Republican Economist. If this economy doesn't change and start to grow in 2014, there will be no faith Democrats can manage economic challenges. But I am suggesting this for the Country, not for Democrats. We remember all those Democrat Economist who shilled for the Stimulus bill that never worked, they won't do.

I would have more confidence in a Paul Ryan pick of who a good Economist is, since he was last I've known to do any budgeting math. Another Democrat Economist is going to get more of the same, no private sector growth.

It's not going to be easy to pay down all the debt, bonds - QE3 could total around $1.6 trillion, the Fed is buying. The private sector is responcible to pay off the debt, even as Democrats will promise the full faith and credit of the Government.

Add putting Americans back to work in private sector jobs, and the trajectory Democrat have the Economy on with raising taxes and increasing health insurance cost, and it's easily predictable as Alan Blinder observed in 2009 after meeting with House Democrats "the fact that we’re looking at an absolutely horrendous long-term fiscal outlook", but this is November 2013, and it is still "an absolutely horrendous long-term fiscal outlook"

This Could Be The Largest Fed Stimulus Yet
http://www.freerepublic.com/focus/f-news/3084498/posts

QE3 is on track to be its largest bond-buying program yet

Given this environment and the leadership transition as Ben Bernanke’s term ends in January, the Fed will likely continue its current stimulus program at full blast — buying $85 billion in bonds each month — until at least March 2014.

That means QE3 could total around $1.6 trillion, calculates Paul Ashworth of Capital Economics. That’s more than either of its two predecessors. In contrast, QE1 totaled $1.5 trillion and the second round of stimulus added up to about $600 billion.

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