Thursday, March 15, 2007

 

Alan Greenspan acknowledges the housing ATM

The housing ATM is the jump in consumer spending that results from home equity loans taken out on ever increasing real estate prices.

Meantime, though, Greenspan said much of the strength in consumer spending over the past five years can be traced to capital gains on surging housing prices, whether they were both realized or not. That means that if home prices keep falling, there could be more of an impact on the broader economy's momentum, he indicated, since consumer spending fuels two-thirds of national economic activity.


This is the equivalent of, "You're damn right I ordered that code red!" Greenspan has just admitted that he knows that much of our economic growth was the result of the housing bubble. Not productivity, speculation.

At this point he should be lead out of the room in handcuffs or whatever they do to failed central bankers.

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