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Federal Reserve Meetings in 2006: Laughter Over Real Estate Bubble

Written by Gary North on February 1, 2012

Someone has produced a report on the Federal Open Market Committee’s laughter. The FOMC sets monetary policy for the Federal Reserve.

CNBC has picked up this story.

Back in the pre-crash days, there was a lot of playful banter. The study reveals that the members of the FOMC did not take seriously warnings that the FED’s interest policy had produced a real estate bubble.

Since it was not a bubble, it could not pop.

In what may be the strangest market indicator ever, a blogger found that the amount of laughter recorded in the official transcripts of Federal Reserve Open Market Committee meetings from 2000 to 2006 correlates almost perfectly with the rise in housing prices taking place at the time.

A particular series of side-splitting meetings by the central bank in 2006 marked the very top of the housing bubble. . . .

“Group-think dominated the FOMC meetings and Sir Alan, as we pointed out so often, was completely wrong about the potential negative effects of derivatives,” wrote Alan Newman, who nicknamed the bloggers findings “The Laughter Index” in his Crosscurrents newsletter to clients this week. “We can never know within a reasonable period of time if the FOMC actually knows what it is doing. We are not laughing.”

It will be interesting to see if the amount of laughter decreased in 2008 and later. My guess is that it did. We will have to wait for full transcripts to be released.

All talk of Federal Reserve transparency is a bad joke. An audio of the meeting should be released on the day of the meeting. That would be transparency. Anything else is secrecy with a thin veneer of public relations on top.

Here us a private committee that sets policy for the nation, and Congress is not allowed to get a full transcript for 5 years. This is democracy, as defined by the elite whose agents control the 12 Federal Reserve banks.

Continue Reading on www.cnbc.com

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2 thoughts on “Federal Reserve Meetings in 2006: Laughter Over Real Estate Bubble

  1. These people could care less about the "working class." I guess the number of foreclosures in the U.S. really brings down the house. Federal Reserve employees are paid with taxpayer money and they get a "laugh" when we can't find jobs and lose houses. Hey! Why don't they take this show to Vegas. Earn extra money while they steal ours.

  2. The sad but untold truth of this whole sordid affair is that the property records of some 65 million mortgages are now messed up. That is to say that there is a cloud on the title of these loans and just exactly "who" is true owner of record, on loans taken out and/or refinanced during the past decade.

    How did this happen? The big investment banks on Wall Street found a way to make a ton of money by using our mortgages as investment tools as they bundled up thousands of mortgages together, good ones and bad ones, got the ratings agencies to rate these bundles AAA and then sold them several times over to thousands of unsuspecting investors who were deceived into believing that all these loans were good and their investments were solid.

    As we now know, they were not via the financial/housing crisis.

    The people have been violated by the Wall Street big banks who were allowed to ignore state property laws in place for over 200 hundred years that required that every time a loan is sold, it must be recorded in county land record offices. Instead, the big banks created their own entity, Mortgage Electronic Registration System, MERS, to take over the recording with only 50, official, employees but also with many who had dual jobs with MERS while also working for the banks. A definite conflict of interest.

    The big banks sold MERS as a way to relieve local county land recording offices during the housing boom when homes were often sold in one day. The banks guaranteed that MERS would electronically maintain the same standards of property recording previously done locally by the counties … something they did not and could not do.

    State property law was also violated in another crucial way. The original wet ink signed documents, the NOTE and the MORTGAGE, are to be kept together by the banks. This means that the NOTE (evidence of the debt) cannot be sold off and given over to another entity without the MORTGAGE (the house as collateral) following. This did not happen. The NOTE was sold over and over again, transferred over and over again, while the MORTGAGE remained behind.

    Btw, another little known fact is that the day you signed your closing papers, the loan was sold off to another bank or, most likely, to Fannie or Freddie Mac which was Gingrich's employer for 8 years during the run up to this disaster. From day one, the bank you thought owned your loan was really only your loan "servicer" … collecting your payments, hopefully sending your payments off to anyone who has an interest in the note, and providing an amortization schedule to you as the borrower.

    The banks are trying to foreclose even though they sold their ownership of a loan at the beginning. The issue for all homeowners is one of clouded title on millions of mortgages.

    People are starting to challenge the banks in court by demanding that the banks bring in both the wet ink signed, original, NOTE and the MORTGAGE documents which seems to be something many banks cannot do because they don't have them.

    The banks are trying to use copies instead of the actual original documents, along with highly illegal process of robo-signed signatures of these documents, by low level bank employees (college students and older part-timers) who had no clue what they were signing, transferring ownership months and years after the original start date of the loan.

    Then there is the fact that foreclosed people may be able to regain their property due to these violations because the banks decided to violate fundamental property rights laws via their massive derivatives scheme. Of course, this affects not only those in foreclosure but also anyone else whose loan was used in this way.

    Please read this article. It lays all of this out far better than I can. http://www.rollingstone.com/politics/news/matt-ta

    Then here is an excellent financial website to follow by a true Conservative, Karl Denninger, who has been railing about this gigantic bank fraud against the American homeowner whether in foreclosure or in good standing. http://market-ticker.org/akcs-www?post=167790