A Quote by Ben Bernanke
We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s going to drive the economy too far from its full employment path, though.
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No politician can praise unemployment or inflation, and there is no way of combining high employment with stable prices that does not involve some control of income and prices. Otherwise the struggle for more consumption and more income to sustain it-a struggle that modern corporations, modern unions and modern democracy all facilitate and encourage-will drive up prices. Only heavy unemployment will then temper this upward thrust. Not many wish to confront the truth that the modern economy gives a choice only between inflation, unemployment, or controls.
If oil prices will go too high, it will slow down the world economy and would trigger a global recession.
Initially, QE contributed to a pretty significant increase in inequality. It raised asset prices, which are owned primarily by the wealthy, while having relatively small if any positive impacts on bank lending, employment, wages or economic growth, so ordinary people haven't had much help. By the third round of QE in 2012-2014, the effects had likely muted quite a bit. There were probably not big impacts on asset prices from QE and the positive effects on employment growth might have strengthened somewhat.
Buying a home wouldn't make much sense if house prices were likely to decline further; no one wants to catch a falling knife.
I don't think anyone can speculate what will happen with respect to oil prices and gas prices because they are set on the global economy.
There's no denying that a collapse in stock prices today would pose serious macroeconomic challenges for the United States. Consumer spending would slow, and the U.S. economy would become less of a magnet for foreign investors. Economic growth, which in any case has recently been at unsustainable levels, would decline somewhat. History proves, however, that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse.
The key to house prices is the share of foreclosure or short sales in the total housing market. When that share rises, house prices will fall, because distressed properties sell for significantly less - currently around 25 percent below non-distressed houses.
Housing was ground zero for the Great Recession. Between early 2006 and Obama's inauguration in 2009, average house prices fell by a third across the country. In certain areas, including cities as diverse as Akron, Orlando and Las Vegas, house prices fell by more than half.
If the 1,990-page House Health Care Bill becomes law, the average American will receive worse health care, American physicians will decline in status and income, American medical innovation will dramatically slow down and pharmaceutical discoveries will decline in number and quality. And, of course, the economy of the United States will deteriorate, perhaps permanently.
I was going to do a big radio show, and I said to my driver, 'Radio can wait, take me to the Full House house.' It literally was a drive-by. I photobombed the Full House house yesterday. I took like 20 pictures because I thought I didn't look good in any of these - you can't see the house! You gotta really show that that's the house!
I've never had the Lord say, 'Jesse, I think that car is a little bit too nice.' I've had vehicles and the Lord said, 'Would you please go park that at your house. Don't put that in front of my house. I don't want people to think that I'm a poor God.'
Spending a lot of time away from home was strange. My parents visited me, obviously, but I was in hospital a lot, alone. And then when my health had improved a bit and I was in a sick-bed in the house, with the life of the house going on around me, that was very vivid for me. I always think that's a bit like the position of a novelist in a novel, going through drafts: there but not there, one remove from reality.
Just from a political perspective, do you think the president of the United States going into re-election wants gas prices to go up higher? Look, here's the bottom line with respect to gas prices: I want gas prices lower because they hurt families.
It is time to move on. House prices won't rise and the economy won't fully engage until more distressed properties are resolved and put back into ordinary use.
Now, suppose that a homeowner puts down only 3% of their own money or 3.5% for the FHA. That means if prices go down by only 3%, the house will be in negative equity and it would pay the homeowner just to walk away and say, "The house now is worth less than the mortgage I owe. I think I'm just going to move out and buy a cheaper house." So it's very risky when you have only a 3% or 3.5% equity for the loan. The bank really isn't left with much cushion as collateral.
The bull market, rising prices, earning lots of money, make it seem as if the good days will never end. When prices are falling and there is a recession, that also feels as though it will last for ever. Politics is the same. People simply can't imagine changing circumstances.
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