Tuesday, February 28, 2012

Checkmate: The New York Fed as Totally Missing the Housing Bubble

NEW! The Fed Flunks: My Speech at the New York Federal Reserve Bank

By Robert Wenzel



Price: $9.50
Ships in 1-2 business days
In April 2012, Robert Wenzel delivered a speech at the New York Federal Reserve that rocked the financial world. The Fed Flunks contains the speech he delivered, plus two other essays. In addition, Wenzel explains in The Fed Flunks just how it came about that he, a major critic of the Fed, was invited to deliver a speech at the Fed, how the event was almost sabotaged, who was at the speech and the reaction of the Fed economists there.

 Product Details

ISBN                                  9781312047235
Copyright                          Gallatin House LLC (Standard Copyright License)
Edition                              First Edition
Publisher                           Gallatin House
Published                           May 15, 2014
Language                           English
Pages                                 73
Binding                              Perfect-bound Paperback
Interior Ink                         Black & white
Weight                              0.35 lbs.
Dimensions (inches)           6 wide x 9 tall


    1. I believe that those numbers are nominal values. If you factor in currency devaluation (even using the bogus CPI numbers) the story is much worse. Am I wrong in my assumption that the values are not adjusted for inflation?

    2. "Also, I was wondering what metric you used to conclude that home prices were overvalued in 2004 and 2005."

      The telltale sign of an econometrician.

    3. @graham dugas

      Factoring in purchasing power parity would likely illustrate a massive devalution of housing.

      Measuring houses in terms of Gold would be even worse (for the Fed's position).

      Using the following data gathered from Wolfram Alpha charts and Kitco:

      2001 Jan. Avg home price: 156,600
      2011 Q3 Avg home price: 170,000

      2001 Jan. Gold price per oz: 272
      2011 Q3 Gold price per oz: 1620

      Cost of home in gold in 2001: 575.7oz of gold to buy a house.
      Cost of home in gold in 2011 Q2: 104.9oz of gold to buy a house.

      I used 2001 as the base to get a pre-bubble number but post-nasdaq burst.

    4. "Also, I was wondering what metric you used to conclude that home prices were overvalued in 2004 and 2005."

      I suppose the metric of "common sense" is not the one he is looking for...lol

      Anyway, that being most likely the case I love Anon @ 9:08AM's use of gold.

      Gold is the ultimate long term BS eliminator in stuff like this...which is why I liked it the first time I saw Peter Schiff using it for the DOW in 06' when I was just beginning to wake up. Thankfully I moved my and my wife's entire 401k into gold in 06'....

    5. It may not be Austrian, but it is what I used back in '04 to determine that we were in a housing bubble, and that my family should rent and not rebuy.

      Historical home price to rent ratio: 9 to 11
      Actual home price to rent ratio over 2001-2004:
      '01 -- 14
      '02 -- 16
      '03 -- 18
      '04 -- 21

    6. It'll be fun to see your response to the "what metric" question.

    7. To paraphrase the Mel Brooks film "Spaceballs" just before Dark Helmet is going to ludicrious speed.

      "Sir, shouldn't you use econometrics?"

      Dark Helmet: "Econometrics this!"