Another Bernanke Gem…

[GoUSC]

This guy is just precious. Here’s my favorite quote from this moron:

“But in his speech, Bernanke said that the ‘vast majority of mortgages, including even subprime mortgages, continue to perform well.’

He said that past gains in home prices have left most homeowners with significant amounts of equity in their houses and the growth in jobs and incomes should allow most households to keep their financial obligations in a manageable range.”

So let me get this right…Even though savings rates continue to be negative, consumer debt is exploding, auto sales are plummeting, home owners still have huge amounts of equity sitting in their homes? Uh no, wrong, incorrect, try again. I can’t believe that Bernanke is even comfortable saying this. There is no more equity in homes because people spent all their equity living well beyond their means for the past 5+ years.

Case in point. My neighbor and his wife are in their 50’s. Modest house, nothing fancy. They have lived there 30+ years. In the past 2 years they have bought:

1. A new F150
2. A new Excursion
3. A new Toy Hauler
4. A new Nissan Titan for their daughter
5. A ski boat
6. A couple of desert toys.

He works for the city and see doesn’t work. You want to tell me that stuff WASN’T bought with home equity??? yea…and I’m from Mars.

Here’s the article:

http://biz.yahoo.com/ap/070517/bernanke_mortgages.html?.v=10

[Duck]

Sounds like your neighbor needs to use his HELOC to pay his gas bills. I hope for you all those vehicles aren’t sitting in the street.

[Duck]

Sounds like your neighbor needs to use his HELOC to pay his gas bills. I hope for you all those vehicles aren’t sitting in the street.

[GoUSC]

Oh half of them are indeed parked on the street. At least all of the vehicles are new and shiny. I guess????

[GoUSC]

Oh half of them are indeed parked on the street. At least all of the vehicles are new and shiny. I guess????

[AK]

I guess it all depends on the definitions of “vast majority” and “most households” in Fedspeak. Like, if the subprime default rate rises to 15%, that still might fall within a colloquial definition of “vast majority.”

[AK]

I guess it all depends on the definitions of “vast majority” and “most households” in Fedspeak. Like, if the subprime default rate rises to 15%, that still might fall within a colloquial definition of “vast majority.”

[4plexowner]

Some of the “most households have lots of equity” comments are based on looking at analysis of 1st mortgages only

The more accurate statement would be “if you ignore 2nd mortgages and HELOC, most households have lots of equity”

This might be OK if only a few people had 2nds and HELOCs

When MOST people (speculators and subprime) are using 2nds and HELOCs it is less than truthful to make statements based on analysis of only 1st mortgages

Its almost like the Chairman of the Federal Reserve (a private corporation with its own agenda) was intentionally lying to the people of America …

[4plexowner]

Some of the “most households have lots of equity” comments are based on looking at analysis of 1st mortgages only

The more accurate statement would be “if you ignore 2nd mortgages and HELOC, most households have lots of equity”

This might be OK if only a few people had 2nds and HELOCs

When MOST people (speculators and subprime) are using 2nds and HELOCs it is less than truthful to make statements based on analysis of only 1st mortgages

Its almost like the Chairman of the Federal Reserve (a private corporation with its own agenda) was intentionally lying to the people of America …

[GoUSC]

When I pull public records of basically every house in my neighborhood that has sold within the past year, they almost ALL have HELOCs. Federal Reserve is criminal organization.

[GoUSC]

When I pull public records of basically every house in my neighborhood that has sold within the past year, they almost ALL have HELOCs. Federal Reserve is criminal organization.

[cr]

Here is a short clip on reactions to his comments. I like the “Well, you’re probably right…” line.

It sounds like BB’s logic is since sub-primes are so bad, the standard loans must have cleansed themselves of all bad loans and have 0% defaults. Therefore we are past the worst of it. Again. No seriously, for real this time.

I also love the “no spillover” effects BS, and the convenient “blame it on the rain” line. Retail sales are down at Home Depot, Sears, and Wal-mart, and car sales are down. If that’s not spillover I don’t know what is.

Lie to the public so they think everything is okay and keep spending money they don’t have. I guess that’s the only way to fight deflation and inflation at the same time.

[cr]

Here is a short clip on reactions to his comments. I like the “Well, you’re probably right…” line.

It sounds like BB’s logic is since sub-primes are so bad, the standard loans must have cleansed themselves of all bad loans and have 0% defaults. Therefore we are past the worst of it. Again. No seriously, for real this time.

I also love the “no spillover” effects BS, and the convenient “blame it on the rain” line. Retail sales are down at Home Depot, Sears, and Wal-mart, and car sales are down. If that’s not spillover I don’t know what is.

Lie to the public so they think everything is okay and keep spending money they don’t have. I guess that’s the only way to fight deflation and inflation at the same time.

[taz]

Another possibility: if your neighbors have lived in their modest house for 30+ years, it’s quite possible they have paid off their mortgage, and have a VERY low tax rate thanks to Prop. 13. Since he has about the most secure job possible (govt.), maybe they’re just indulging themselves with some new toys using money that previously went to the mortgage company.

[taz]

Another possibility: if your neighbors have lived in their modest house for 30+ years, it’s quite possible they have paid off their mortgage, and have a VERY low tax rate thanks to Prop. 13. Since he has about the most secure job possible (govt.), maybe they’re just indulging themselves with some new toys using money that previously went to the mortgage company.

[Author]

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