Oh, the financial sector that lost $7 trillion in the stock market, and the Fed which “allowed” it to happen, has the ability or power to save the housing market?
Hmmm, which financial sector has ever kept any asset bubble from reverting to them mean? Let’s make it an easier question to answer: which sector of any kind,financial or otherwise, has prevented an asset from reverting to its mean?
Why didn’t this financial sector prevent the S&L crisis or the LTCM collapse? While the markets in general were bailed out so there would not be a systemic collapse of the financial system, no individual investor was bailed out.
It will be interesting to observe the Fed’s response to the recession. Probably they’ll cut rates like crazy, but it won’t help. It will be like pulling on a string; there is no further debt the American consumer can take on.
BTW, you think I’m doom and gloom, you should read Roubini, my favorite hip and cool economist.
