Greenspan said that he could not see any bubbles. Bernanke said there was no bubble in 2006. He said housing prices would not fall.
Across America, people were flipping houses. Buy low, sell higher in six months: instant money.
My next door neighbor told me in 2005 that she was thinking of flipping houses. I knew the end was nigh.
It’s happening on Long Island. But it has ended in San Francisco, where the bubble has popped.
The Federal Reserve pumps $40 billion a month into Fannie/Freddie bonds. Bubble? By no means, says Bubble Ben. It can’t happen. Trust him.
When people with no experience think they can make $40,000 in a couple of months by buying and selling houses, you know the end is nigh.
This will end badly. Bernanke is just trying to hold on long enough to depart in February. He is skipping the Jackson Hole extravaganza next month — the first FED Chairman to skip it in 25 years.
He wants the bubble to keep floating until he gets off. He has a nightmare. This.