Unsealed Docs Show The Fed Was Fully Warned of a Housing Crisis

[Hissyspit]

Source: Business Insider

BUSTED: Unsealed Docs Show The Fed Was Fully Warned Of A Housing Crisis
Gregory White | Jan. 14, 2011, 3:16 PM

New minutes released today show Fed members were fully aware of the growing housing bubble in the U.S. in June of 2005.

The materials include several presentations made on the subject of the emerging housing bubble in the U.S. economy. They have titles like "Is Housing Overvalued?" by Joshua Gallin and "Monetary Policy Implications of a House Price Bubble" by John C. Williams of the San Francisco Fed.

In October of 2005, future Federal Reserve Chairman Ben Bernanke told Congress he didn't think we were in a housing bubble. Bernanke was not at the June 2005 meeting, having recently become Chairman of President George W. Bush's Council of Economic Advisers.

Click here to the Fed's early warning >

Read more: http://www.businessinsider.com/federal-reserve-housing-bubble-2005-2011-1

[Kingofalldems]

1. Bush----worst president ever. It will take decades to undo the damage.

[FiveGoodMen]

2. And we really haven't started yet!

[TheMadMonk]

4. No. The next bloke's compounding it instead. /nt

[PSPS]

6. Decades plus a democratic president to start the process. Still waiting on the latter.

[molly77]

17. Remember in 2000 when it was decided that it would be too upsetting

to the country to count the votes in Fl.? In hindsight, maybe we would have been better off with the president that the American people elected instead of the one the SC selected. That was a coup.

[lonestarnot]

11. Fucking decades!

[Sherman A1]

22. Precisely

If the damage can ever be undone and I suspect it cannot nor will not be.

[SpiralHawk]

23. "Smirk." - xCommander AWOL Bush & RepuliCronies

[JackRiddler]

41. Hello, this is not about Bush, but about the Federal Reserve -- and the dynamics of capitalism.

Also, I missed the part where Obama used his opportunity to dispense with the disastrous Fed leadership that Bush had appointed.

[defendandprotect]

3. Banksters pulling the rug out from under the public, provides them with high windfall profits...!!

[ixion]

5. of course they knew. This WAS THE GOAL of the so-called 'ownership society'

more aptly titled the 'pwnership society'... and it was BOTH the dems and repubs that helped to orchestrate it.

[underpants]

7. Jan. 14, 2011, 3:16 PM

Stinks of a data dump. The Rove/Bush (in that order) washed lots away with late Friday info dumps.


This was nothing new to anyone who had a brain. Real Estate was clearly inflated (mostly due to drastic cuts to localities by W in in first budget) and capitalism (predator lending) in the midst of a Yes-man societal breakdown.

[Adsos Letter]

8. Brooksley Born tried to warn Greenspan and Congress about the derivitives market

and Greenspan, et. al., and Congress blew her off. In 1998.

Excellent FRONLINE video about it at this link: http://www.pbs.org/wgbh/pages/frontline/warning/view/

This video is absolutely worth a watch if you've not seen it already

[sharesunited]

13. True that. The AIG part of the crisis was ALL derivatives.

That goddamned company was gambling with a lot of annuity money intended for retirees.

[No Elephants]

37. Much more than only the AIG. part.

The huge market for derivatives orrupted and skewed everything from mortgage brokers to real estate appraisers (who inflated appraisals0 to mortgage lenders (who paid brokers more for originating unsound mortgage loans than for sound ones), to raters like Moody's. Not a link in the mortgage chain nor in the mortgage derivative securities chain was unaffected by the corruption.

And AIG insured it all.

And, when the entire house of cards fell, all parts of both those chains were affected. And you and I paid.

And the right tried to blame it all on borrowers. LMAO--and not in a fun way.

[midnight]

36. Brooksly Born tried to block these banksters to prevent them

from taking our jobs, our homes, and our savings.... And those in the federal reserve stopped her... The derivatives mess, causing the hedgefund CTCM meltdown and a dire warning of what would come if regulations were not put in place, was ignored.... One person who was so outraged about this was journalist Mark Pittman.


Mark Pittman, Reporter Who Foresaw Sub-prime Crisis, Dies at 52
By Bob Ivry

Nov. 28 (Bloomberg) — Mark Pittman, the award-winning investigative reporter whose fight to open the Federal Reserve to more scrutiny led Bloomberg News to sue the central bank and win, died Nov. 25 in Yonkers, New York. He was 52.
Pittman suffered from heart-related illnesses. The precise cause of his death wasn’t known, said his friend William Karesh, vice president of the Global Health Program at the Bronx, New York-based Wildlife Conservation Society.
A former police-beat reporter who joined Bloomberg News in 1997, Pittman wrote stories in 2007 predicting the collapse of the banking system. That year, he won the Gerald Loeb Award from the UCLA Anderson School of Management, the highest accolade in financial journalism, for “Wall Street’s Faustian Bargain,” a series of articles on the breakdown of the U.S. mortgage industry.

Pittman’s story proved prescient. So did his reports on U.S. banks exporting toxic mortgages overseas, on Treasury Secretary Henry M. Paulson’s role in creating those troubled assets while he was chief executive officer of Goldman Sachs Group Inc. and on the U.S. bailout of American International Group Inc.

Bloomberg’s lawsuit against the Fed, which was filed after Pittman’s requests under the U.S. Freedom of Information Act were denied, continues without him. The central bank won a delay pending an appeal, which is scheduled for the week of Jan. 4.









http://waronyou.com/topics/mark-pittman-reporter-who-sued-federal-reserve-dies-at-52/

[No Elephants]

38. Was she testifying (in vain) against repeal of Glass Steagall by

the Gramm–Leach–Bliley Act? The one that Bubba said he wanted on his desk ASAP?

[gratuitous]

9. A scant eight months after Bush touted his ownership society

2005 State of the Union address, Bush was gushing about the housing market. Our MBA president.

[cbdo2007]

10. To be fair...that's kind of the point of the "bubble" mentality. Even with warning, after warning...

after warning, people continue the risky behavior until the bubble pops.

It happens with every bubble we've ever had and ever will have.

Like right now gold is in a "bubble" but that doesn't stop people from arguing until their heads almost explode that it's the best investment to make right now.

[Arctic Dave]

19. If they knew it was an out of control bubble and did nothing to

deflate it would seem they hold a large responsibility for the aftermath.

Seems the Fed should have raised the rates for lending to cool borrowing a long time ago.

Side note: Were they in cahoots to let the economy tank on the next President.

[cbdo2007]

32. Or in cahoots to let it fail to make tons of $$$ off the failure.

many, many, many people made money by shorting the market just before the crash and also then buying more stock after it to make money in the recovery. All these people should be investigated to see how much their portfolios profited from the latest crash and the housing market failing.

[handmade34]

12. fact

administrations play with, tweak, alter, etc...the economy in order to affect elections... Bush adminstration hoping the burst wouldn't come until he was gone...

[HCE SuiGeneris]

14. There you go again.

Putting the truth out there for all to see.

Thanks, my friend.

[L. Coyote]

15. You had to be in a coma to NOT see the housing bubble!

This is such a none story.

[applegrove]

16. Think of all the people who bought houses after 2005. What a transfer of wealth it has been from

those middle class people to the rich bankers on Wall Street. Just disgusting.

[sofa king]

40. They were trying to shovel Social Security into it, too.

So they could kill that at the same time.

http://www.nytimes.com/2005/08/15/opinion/15krugman.html

And of course, I and many others pointed out before the fact that the Bush Administration was going to have to leave in the midst of a nation-threatening crisis in order to deflect legal vengeance for their years of criminal behavior.

[Kokonoe]

18. They have titles like

"Do not look at this one"

:sarcasm: ;(

[orbitalman]

20. It's stuff like this they want to keep sealed or secret, and the ignorance besides. n/t

[mackerel]

21. I think more than anything this shows how inflated everything

was, even the job market. Basically the unemployment levels we're seeing now would have been here much sooner had the Bush Admin not been so heavy big into pushing home ownership.

Our country has too large a population to be sustainable anymore.

Empire of debt spiraling downward.

Canada and Australia are the countries to watch.

[nebenaube]

25. Your comment regarding population size.

Sorry but that's just stupid, we are at 310 million, while the Netherlands has 280 million (in an area the size of a small state).

[subterranean]

34. Where do you get your facts?

The population of the Netherlands is about 16.6 million. I'm not sure what the Netherlands has to do with this topic anyway.

[xchrom]

24. recommend

[Overseas]

26. K&R ! //nt

[bvar22]

27. The signs were there for everyone to see.

Too many were blinded by all the Free Money (re-fi & flipping) to ask the right questions.
My brother (graduate degree in International Economics) laughed when I told him in 2005 that property value (especially suburban residential & condo) were going to collapse.

He said, "That will never happen. Real Estate is one of the safest investments in America."

I got out just in time.
He didn't.

[niceypoo]

28. Anyone could see it coming

It was about this time that Bush was bragging about the, 'ownership society.' He bragged that home ownership was at historic highs.

[Enthusiast]

29. K&R!

Too bad the warning did no good.

[NorthCarolina]

30. This actually explains a lot. The entire crisis was made to happen.

Part of the consequences will be Social Security. You must establish an appropriate crisis in order to attempt to sell the public on the need to cut back on and/or privatize entitlements. The biggest part of the bloated Federal budget is entitlement spending don'cha know....well, that's the theme they're peddling anyway.

[young_at_heart]

31. The Bush/Cheney years ----so many negative adjectives to descibe them

The list of wrong-doing or worse just keeps on giving and giving!

[No Elephants]

39. Yes, iI does keep on giving. Despite the 2008 crash, it gave us Timmeh Geithner, head of the NY Fed

as head of Treasury and re-appointment of Ben Bernanke as Federal Reserve Chairman. Republicons still in charge of our money (and our Defense Dept). Halleluyer.

[Major Hogwash]

33. Greenspan was so full of shit back then. I hope Andrea tries to explain all of this.

Because she can't.

[subterranean]

35. Alan Greenspan has always been full of shit.

[toopers]

42. Umm . . .The Whitehouse warned of housing troubles in 2001 . . .

and issued a greater warning in 2003. Remember who opposed the Whitehouse suggestion to transfer oversight of Fannie Mae/Freddie Mac after Fannie Mae disclosed a $1.2B accounting error. Remember who was chairman of the Financial Services Committee in 2007. If you do not remember, it was Barney Frank.
Frank stated in 2003 about Fannie Mae and Freddie Mac, "These two entities...are not facing any kind of financial crisis.... The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."<66> In 2003, Frank also stated what has been called his "famous dice roll":<67> "I do not want the same kind of focus on safety and soundness that we have in the Office of the Comptroller of the Currency and the Office of Thrift Supervision. I want to roll the dice a little bit more in this situation towards subsidized housing."

While I agree that the Whitehouse and republicans did not do enough to reduce the problems, they certainly are far from the only group to blame.