The Fed’s Beige Book came out today. The key graf on the Boston District housing market: “Notwithstanding their reports of recent increases in activity, (real estate) contacts emphasize that activity levels in the region’s housing markets remain far from what they would characterize as ‘normal’ and they anticipate a lengthy recovery.”

Back in 2005 Federal Reserve Chairman Greenspan told us “there was a little froth in the real estate market.” Yet that was not what his economists were telling him at the time. The Federal Reserve has a 5 year moratorium on it’s meeting notes being released so we are now just being told the reality [...]

Michael Burry, who’s been made famous by Michael Lewis’s new book The Big Short, wrote an op-ed for the New York Times on Sunday, basically saying, I told you so. It’s just another assault on Greenspan’s legacy:
“ALAN GREENSPAN, the former chairman of the Federal Reserve, proclaimed last month that no one could have predicted the [...]

From TIME Magazine: Person of the Year 2009 Extended Interview
TIME: Do you have a mortgage?
Bernanke: Oh, yes, we refinanced.
TIME: Oh, perfect. When?
Bernanke: About 5%. A couple of months ago.
TIME: Good time.
Bernanke: Yes. We had to do it because we had an adjustable rate mortgage and it exploded, so we had [...]

Willem Buiter, Professor at the London School of Economics and Political Science, has a great critique of the Federal Reserve over at the Financial Times. Buiter says the Obama administration’s plans to enhance the Fed’s powers and turn it into the country’s systemic risk regulator spells trouble……. BIG TROUBLE. He writes:
If the same institution, [...]

Four more banks closed down last week. Total number of banks that failed this year? 29

The subject won’t be the drama inside the central bank or its role in the current financial crisis. Rather, Fed officials plan to launch advertisements in movie theaters to warn homeowners about foreclosure scams.
Read the full story: Wall Street Journal

Just so you are not confused, the Federal Reserve had absolutely, positively nothing to do with the housing bubble. That is according to an editorial Alan Greenspan wrote in the Wall Street Journal. It was all due to China and other emerging markets. The Federal Reserve had nothing to do with it.

Lou Barnes says we should (still) be concerned about a tight credit market and that the Fed’s doing darn good (he’s of the minority view on that one, I think). One thing he doesn’t want to happen? Bailouts, handouts, and deficit spending.
The Fed is playing a very dangerous game exceptionally well. Inflation is [...]