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Sen. Barney Frank to America's Kids "There is no Santa Claus."

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Elliott

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Apr 23, 2002
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Certified General Appraiser
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Oregon
I really would give a days pay to know how gov't is going to
dig their way out of this one.

Todays WSJ,

"We now have confirmation of two facts we have known for some time: One, the Federal Reserve System is not a strong advocate for consumers, and two, there is no Santa Claus," Rep. Frank said yesterday. "People who are surprised by the one are presumably surprised by the other."

The Fed's overall response to the housing bubble is becoming a sensitive topic now that the repercussions are clear. The late Edward Gramlich, a Fed governor from 1997 to 2005, recalled earlier this year that he proposed in or around 2000 that the Fed use its authority to send examiners into the offices of certain consumer-finance lenders to tackle the growing problem of predatory lending. Alan Greenspan, then Fed chairman, opposed the move, Mr. Gramlich said. Mr. Greenspan has confirmed his opposition. More recently, Mr. Greenspan told National Public Radio there was little the Fed could have done short of a sudden increase in interest rates that would have popped the housing bubble and also "broken the back of the economy."

Years of lax lending by banks and other institutions have led to a surge in mortgage defaults over the past year as home prices have fallen from their peaks at the top of the recent housing boom. Unless lenders greatly step up efforts to restructure loans, Moody's Economy.com forecasts that three million home loans will go into default in the 30 months ending in mid-2009, and about two-thirds of those will result in foreclosures.
 

Claude From NY

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Jan 16, 2002
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Certified Residential Appraiser
State
New York
I guess he's never seen the movie Miracle on 34th Street (1947) :)
 
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