2004 FOMC Transcripts

Not quite Irish Economy but of interest to anyone wondering how we got here. Calculated Risk discusses the newly released 2004 transcripts of FOMC meetings. Signs of a housing bubble are already clear. CR digs out a chart presented to the FOMC showing the yield on housing relative to long term real Treasury yields and then extends the chart to show what happened after 2004.  CR also shows how the housing yield chart would have looked using the usually preferred Case-Shiller index.

6 replies on “2004 FOMC Transcripts”

The Huffington Post are trying to claim that Greenspan tried to prevent public debate about the housing bubble, citing him as saying

“We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand”


If you go to the March 2004 transcript, you’ll see that this comment comes at the very end and appears to be in relation to a more general discussion of how transparent the Fed should be in publicising its deliberatons, not specifically about the house price issue.

Well done! However, not news. At all. How does this change your world view? This was predicted and arranged. Insiders existed. They made out. Patsies were found until they were no longer found, then the GFC happened. The borrowing continued until just after every dollar borrowed made a very small fraction dollar of fees and attracted another sucker willing to sign.

That is the normal end of the credit cycle. They just reinflated in 2001, using US housing stock as core bubble material. It was a deliberate policy of TPTB as all involves would make money to buy something non-fiat.

Do you agree or disagree?

Yeeees. You did read the article? That’s OK then. Get PRaT to explain it?

Whenever OPM is involved and a government that can award jobs for defective kids etc then the trap is set. All we need then is a compliant Gardai, who do not want to do their job, investigating corruption. They get jobs too. In fact everyone gets to take their place at the trough except for the taxpayer, unless we are Greek, and then no one needs to pay the correct taxes.

Corruption at the top eventually rots the whole. OPM then becomes the toy of the TPTB, until the taxpayers wake up, if they ever do.

Interesting, although I believe the existence and actions of Freddie Mac and Fannie Mae had more impact than almost anything the Fed could have done to tighten credit.

The most recent figures I read is that their total debt is 8.1 trillion USD. Most, if not all, of it relating to issued debt that where the risk is/was underpriced due to government guarantee. Without them, I doubt the americans could ever have blown up their bubble as much as they did.

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