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Housing Prices: Why Greenspan Is Right About Real Estate Investments
I’ve disagreed with some of the things that former Fed Chairman Alan Greenspan has said and done over the years.
But what he said last week – that falling housing prices in America are “nowhere near the bottom” – you can take to the bank.
This may surprise some, especially since the national media just reported the single largest year-over-year drop in U.S. housing prices, May’s record 15.8% plunge.
But over the past several months, I’ve spent time looking at residential housing prices in cities large and small. I’ve been to areas that have held up relatively well, like Dallas, TX and Asheville,…
6Aug2008 | Investment U | Comments Off | ContinuedInside Wall Street: The Real Reason the Federal Reserve Can’t Raise Interest Rates
Given that the U.S. Federal Reserve is the master of “Three-Card Monte,†can you tell what’s in the cards for short-term interest rates?
Three-Card Monte is a confidence game in which manipulation and misdirection are employed as the “mark†tries to guess where the “money card†is among the three facedown choices.
The Federal Reserve’s job is to masterfully manipulate the public’s perception of where interest rates are headed. And it runs this larger-than-life game with three specific face cards:
-Inflation.
-The U.S. dollar.
-And the actual “money card,†which is interest rates.
For the Fed, the end game is public confidence itself. The…
23Jul2008 | Money Morning | Comments Off | ContinuedFed Holds Rates Steady in Face of Upside Inflation Risk
Citing the risk of high inflation, the U.S. Federal Reserve voted to hold the Federal Funds rate steady at 2.0% yesterday (Wednesday).
“Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased,” the accompanying Federal Open Market Committee (FOMC) statement read.
The statement did not allude to any future rate hikes at the next FOMC meetings scheduled for August or September. It was a very balanced statement overall, acknowledging the dual threats of stagnation and inflation currently facing the U.S. economy.
“It is more or less a neutral…
26Jun2008 | Money Morning | Comments Off | Continued
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