Posted on 09/21/2007 5:28:58 PM PDT by GodGunsGuts
House prices to drop much lower: Greenspan
Fri Sep 21, 2007
VIENNA (Reuters) - A big overhang of property will bring U.S. house prices down further, but it is too early to say if the economy will plunge into recession, former Federal Reserve chief Alan Greenspan was quoted as saying on Friday.
Greenspan said in an interview with Austrian magazine Format that low interest rates in the past 15 years were to blame for the house price bubble, but that central banks were powerless when they tried to bring it under control.
"It's a difficult situation, there is an enormous overhang on the real estate market," Greenspan was quoted as saying. "Many buildings which just have been finished can't be sold ..."
"So far, prices have dropped only slightly. But it was enough to cause alarm around the world," he said. "Prices are going to fall much lower yet."
"However, it is too early to answer the question about a recession. We simply don't know yet. It depends on how flexibly the economy can react," he said.
Greenspan said deregulation and the introduction of market economies in the former Communist bloc after the Berlin Wall fell in 1989 had caused a global boom and a worldwide reduction of interest rates, which both helped fuel the property bubble.
"There is no doubt about the fact that low interest rates for long-term government bonds have caused the real estate bubble in the United States," he said.
"The Federal Reserve began a series of interest rate increases in 2004. We were hoping to bring the speculative excesses in the real estate sector under control. We failed. We tried it again in 2005. Failure," he said.
"Nobody could do anything about it, neither us nor the European Central Bank. We were powerless," he said.
Actually we are in the middle of an epic beer market according to hydroshock. Had the best one week gain all year.
Your one week fed-induced gain is not unlike the firebombing of Dresdon. At first everybody comes out to fight fires and to help rebuild. But over time, less and less people come out after each bombing.
Wait for your bear market. I see a market going to 15,000 by years end.
You might want to change your screen name. You’re going to look oftly silly after this whole thing plays out.
Pls put it up so the rest of us can read. TNX
Pretty soon the Kumbaya crowd will show up and accuse us of being stupid because we might believe Mr. Green Jeans, when obviously, he don’t know what the hell he talking about.
So there you have it. If we listen to him, we’re stupid.
If we don’t listen to him, we’re stupid.
I guess we’re just stupid!
There is always some expert out there preaching doom and gloom. I have seen hundreds and have yet to see one that has been right. Maybe one day but I am not holding my breath living scared.
LOL. If they do call us stupid for believing him it is because he’s finally beginning to tell the truth. They don’t like our message because it means the light of truth will invade their sub-terrestrial dwellings. And if they insist on issuing their stupid mantras, even in the face of overwhelming evidence to the contrary, I say fry them all.
I’m not going to argue with you. If you refuse to look at what is right before your very eyes, then you deserve what’s coming to you.
What’s your prediction, a 10,000 or 12,000 DOW? Come back in three months and see who’s closer. I am betting I will be closer.
Put him and Jimmah Carter on an isolated island somewhere.
I don’t care what the DOW does. It’s built on a mountain of debt that will inevitably come crashing down. Read the article.
“Wonderful, anyone want to buy a home just outside of Indianapolis.....I am selling mine....”
You can trade it for a house in Detroit, maybe:
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070918/BIZ03/709180393/1001/BIZ
House prices tumble 18%
Glut, foreclosures push Metro values down from ‘04 peak
Nathan Hurst / The Detroit News
Years ago I worried about friends who didn’t handle their money well. I worried because they wanted to take vacations and wear $700 suits but they didn’t save and weren’t looking to buy their own home.
Then I realized, it was their preference. And the more people who were like them, the easier it would be for me as a landlord.
Of course now, in D.C., our legislators are putting together a package to bail out these folks. *Our* tax dollars will be used to pay *their* mortgages. hmmm...I wonder who the smart people really are.
I hate dollar cost averaging into record market levels, give me the bear. As for Greenspan, one word, FORMER. As for housing market, yes some houses are overpriced, but in the long term, most aren’t going to get cheaper.
I read the article and hundreds of others just like it. Not impressed. You called me wrong and told me how I would look silly, but are afraid to make a prediction of your own. Figures, because I don’t think I would be the one who looked silly.
I don’t make predictions about the DOW cause I’m not into short-selling anymore. If you want me to make predictions about market sectors that will appreciate, I’m all yours.
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