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Wednesday, January 11, 2012

Bernanke Doubles Down On Fed Bet Defied By Recession: Mortgages

Jan. 11 (Bloomberg) -- Ben S. Bernanke is signaling his willingness to double down on a three-year bet that’s failed to revive housing, showing the extent of the Federal Reserve chairman’s effort to wrest a recovery from the deepest recession.

Since the Fed started buying $1.25 trillion of mortgage bonds in January 2009, the value of U.S. housing has fallen 4.1 percent, and is down 32 percent from its 2006 peak, according to an S&P/Case-Shiller index. The central bank is poised to buy about $200 billion this year, or more than 20 percent of new loans, as it reinvests debt that’s being paid off. Some Fed officials have said they may support additional purchases that Barclays Capital estimates could total as much as $750 billion.



Anonymous said...

Robert Shiller, the man behind the Case-Shiller index, is calling for a 15-20% decrease in overall home values over the next 3 years. He also "called" the housing bubble, and was warning about it from 2001-The collapse. This guy is on point, too bad no one listens to him. You can check out his recent interviews with Larry Kudlow and others on youtube. His credentials speak for themselves.

Anonymous said...

I don't see how they can compare the "fake" housing values of 2006 to anything.
They were artifically inflated numbers to begin with.
To use those numbers is ludicrous!