Lawmakers to meet on housing bubble
From Reuters:
Lawmakers to probe housing "bubble," mortgages
Lawmakers to probe housing "bubble," mortgages
U.S. lawmakers will question some leading government and industry economists about the perils of a possible 'housing bubble' in a Wednesday hearing.
Lawmakers wanted the session "because we've heard a great deal about the possibility of a housing bubble for several years now," said Sen. Wayne Allard, a Republican from Colorado.
The hearing, "The Housing Bubble and its Implications for the Economy," will be held in an open session of the Senate Banking Committee at 10 a.m..
Next week, the same committee will hold a hearing on the growth of innovative mortgage products that have mushroomed along with the housing sector.
Lawmakers behind Wednesday's hearing said that they were concerned that a steady flow of soft housing data could put the nation's economy in peril.
House prices increased by their smallest margin in over six years during the second quarter of 2006, a recent government study found. Sales of new and existing homes, too, are much slower than their recent break-neck pace.
"The economy has been buoyed for some time by unrealistic expectations about the appreciation of housing prices," said Jack Reed, a Democrat from Rhode Island, who is helping sponsor the meeting. "Now that the housing market is cooling, the economy may be headed for a bumpy landing."
The lawmakers will hear from several chief economists like Richard Brown of the Federal Deposit Insurance Corporation, Patrick Lawler of the Office of Federal Housing Enterprise Oversight, Dave Seiders of the National Association of Homebuilders and Tom Stevens of the National Association of Realtors.
14 Comments:
From the NY Post:
HOME FIRES DYING
A New York hedge fund is betting big time what apartment-obsessed New Yorkers have been whispering about for months: that the real estate boom is over.
In July, Paulson Credit Opportunities Funds raised $147 million in equity and promptly put it to work on a leveraged $1.8 billion bet that home owners are going to have a very difficult time paying their mortgages.
The bet is concentrated on the lower end of the credit world, reckoning that the housing bubble will crack first among borrowers with the worst credit.
Although a Paulson fund spokesman declined to comment, its July letter to investors made clear that when it comes to the housing market, its research team doesn't just see the glass as half-empty, but more likely, as broken.
From Reuters:
Yellen says U.S. housing slowing roughly as expected
The U.S. housing market is slowing roughly as the Federal Reserve has expected, San Francisco Federal Reserve President Janet Yellen said on Tuesday.
Speaking to reporters after a speech to a local business group, Yellen said the main thing that could trigger unexpectedly harsh weakness in housing would be heavy job losses, which she said she did not foresee on a national basis.
i think the following week the hearing for innovative mortgages could have a big impact. it could cause credit contraction. you might have to be alive to get a mortgage after this hearing.
One thing for sure, it is the kiss of death for this market if our senate banking committee is holding hearings. Are ss,set to be depleted by 2040, and the medicare hosp ins.trust fund,set to be delpeted by 2018, hearings set for this time also??? What a comforting thought to homeowners;Wash will hold hearings on the bubble. Fasten your seat belts.
BC Bob
Eee-gads, another "bumpy landing" quote! I can't take it! The amount of ink and paper and hot air that has been wasted on this hand-wringing is ridiculous.
If the housing market slumps, if the economy tanks, so be it. It's not the end of the world, and it's certainly not worth a federal investigation.
There is alot of read between the lines with this one. I should be REALLY interesting. Going to keep an eye on this one.
SAS
Thank heavens the Senate has decided to take action. Everything will be okay now. Yay.
Anybody here think that meeting hasn't been pre-scripted? Q&A text distributed for reference at least by last week? Purpose: Get the CYA stuff in the record.
Raise your hands.
Only optional text inserts are the number of times commenters may cough or preface statements using "as we all know," instead of "it is commonly accepted."
Pat
Home prices might be down. Look for savvy investors to take advantage of low home prices.
When?????
T
BC Bob, you wrote:
Are ss,set to be depleted by 2040, and the medicare hosp ins.trust fund,set to be delpeted by 2018, hearings set for this time also???"
Those trust funds don't exist. What matters is cash flow, and Medicare is already negative. I expect SS to go negative in about 2016. So it's a problem, but it's a problem that's going to hit us a lot sooner than most gov. emps. are willing to concede.
I know they exist on paper, but that paper only says that when SS or Medicare needs to spend more than it receives, it has a right to get funding out of the regular budget. If the paper didn't exist, that's what would happen anyway. So they don't exist except as an entry in ledger. The net result is that the taxpayer has to make up the difference between tax receipts and program outlay.
I think it's a good point though. These unfunded progams, just like the federal, state and local pensions, all serve to lessen the government's ability to intervene in the economy.
"Look for savvy investors to take advantage of low home prices."
9/13/2006 03:06:24 AM
I disagree. Look for savvy investors to take advantage of future lower home prices.
BC Bob
http://banking.senate.gov/_files/lawler.pdf
http://banking.senate.gov/_files/ACFE05D.pdf
http://banking.senate.gov/_files/seiders.pdf
http://banking.senate.gov/_files/ACFE061.pdf
It kind of sounds like the govt. employees are the rosy bulls, and the private guys are worried about their paychecks...bears.
Hmmmm.
Pat
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