Conversation Between bobbyw24 and YumYum

Check your Private Messages for my info. Thanks

http://www.ronpaulforums.com/showthread.php?t=268669

Where ya been Yum. The Econ sub-forum could use your insight

http://www.ronpaulforums.com/showthread.php?t=230309

http://www.ronpaulforums.com/showthread.php?t=228207

I believe that the Fed played a major role in the housing crash. However, in my profession I have been able to understand secruitization of mortgage loans and know that they caused a great deal of this mess. I post many of these type pieces for RPF and for my professional assoc. so that they can learn about RPF. (Most members are not Ron Paul or Mises fans, but a few have come around.)

Haven't seen you post since that one guy attacked you. There are many immature people here, unfortunately. Hope to see you posting more soon.

Here is the chart and rest of article



That’s “toxic crap” cumulative compared to house prices, OK only seven pairs of data but the correlation is 98% and the Student’s “T” Statistic is 6.4.

By contrast the best Ben could produce in his “The Fed didn’t do it” address; was an R-Squared 31% and a 2.3 “t” statistic.

That’s a better chart.

Where the Fed went wrong:

The “job” of the Fed (I paraphrase) is to ensure financial stability, control inflation (not of assets of course – ha ha), be the lender of last resort, and make sure that there is full employment.

It is clear that they didn’t do their job.

They say it’s because of this or that; but none of what they say is very convincing, and given that the current problem was caused by bubbles (Dot.com followed by housing) and (a) both Allan Greenspan and Ben Bernanke are proud that they can’t spot one, and (b) Allan Greenspan was adamant that even if could have spotted one, he would have done nothing about is, it’s not hard to figure out the main cause of the problem.

Basically they need better spectacles.

George Soros said, correctly, that (a) if someone who gave a damn had persuaded the SEC (even if it wasn’t under the Fed’s jurisdiction it was under their remit), to cut back or freeze IPO’s in the build up to the Dot.com; there would not have been that bubble, (b) if in 2003 or 2004 the Fed had persuaded someone (again not their jurisdiction but their remit), that no mortgages could be written with an LTV more than 60%, until further notice, there would not have been a housing bubble (they do that in Hong Kong).

And if Greenspan, Summers and Rubin hadn’t shut Brooksley Born down, derivatives would have been regulated just like corn futures, so the collateral damage of the pop would have been much less.

Those were their mistakes – that’s what people should be angry about and throwing rotten tomatoes at them for. And those are the things that need to be fixed first, because those were the things that broke.

Lowering the base rate was irrelevant.

So ought to be discussions about “fire-fighting” the next time they screw up so bad; granted fire-fighters are important, but the best way to make sure there are no fires is to stop people starting them.

By Andrew Butter

http://www.ronpaulforums.com/showthr...33#post2480933