

Inside the Fed in 2006: A Coming Crisis, and Banter - mattquinn
http://www.nytimes.com/2012/01/13/business/transcripts-show-an-unfazed-fed-in-2006.html?hp

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nextparadigms
There have been people like Peter Schiff warning about the recession and
specifically saying when it will happen and how long it will last, and even
politicians like Ron Paul warning about the housing bubble since 2003. They
just refused to believe it, and I guess everyone in the Fed fell prey to group
think. They couldn't admit to themselves that their strategy was failing, and
even worse, that they were responsible for the economic failure through their
policies over the past few years.

<http://www.youtube.com/watch?v=LfascZSTU4o>

<http://www.youtube.com/watch?v=mnuoHx9BINc>

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mattquinn
I also vividly remember when Greenspan stepped down - the government and the
media was effusive in praising the guy. For an area of study that stresses the
importance of lagging indicators, most economists were content with
immediately solidifying Greenspan's legacy. Looking back on that period of
calm before the storm is really interesting.

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mattquinn
Based on the transcripts, we need more innovative thinking in all walks of
life, not just technology/software/etc. Economic forecasting will always have
a large degree of uncertainty involved, but the frivolity with which the Fed
approached the unusual signs of an aberration in the housing market shows that
the Fed provided commentary on the crisis as it unfolded instead of taking
action.

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jinushaun
Based on the transcripts, sounded like the Feds have never heard of mortgage-
backed securities! It might not be their official job to know, but one would
figure, being in their position, that they would know how prevalent it was.
How could any of them expect no collateral damage in the event of a housing
market implosion when a lot the growth of the big banks in the previous decade
was fueled by the housing market?

