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rather than historical. Certainly, the U.S. experience - which essentially spawned the whole 'developed-world' housing bubble - was planned by Greenspan, Rubin, Gramm, and ilk. And Bubbles Greenspan was in charge of the interest rate component.

That component was essential in the arguments that I experienced. Hard-heads like myself said that 'what goes up, comes down'; the CW became 'with rates this low, it's free money'.

Seriously - I was there.


paul spencer

by paul spencer (paulgspencer@gmail.com) on Mon Sep 12th, 2011 at 07:23:31 PM EST
[ Parent ]
In the case of the US, Alan Greenspan actually encouraged people to get variable rate mortgages when interest rates were at their floor from his bully pulpit as Fed Chairman.
Federal Reserve Chairman Alan Greenspan said Monday that Americans' preference for long-term, fixed-rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives.

In a standing-room-only speech to the Credit Union National Association meeting here, Greenspan also said U.S. household finances appeared generally sound, despite rising debt levels and bankruptcy filings. Low interest rates and surging home prices have given consumers flexibility to manage debt, he said.

"Overall, the household sector seems to be in good shape," Greenspan said.

That was in 2004...

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Tue Sep 13th, 2011 at 02:39:27 AM EST
[ Parent ]

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