, from WSJ article, “Bernanke Affirms Bond Buying” (my emphasis):
“Federal Reserve Chairman Ben Bernanke came down firmly in favor of continuing the central bank’s bond-buying programs, even as he acknowledged concerns that the efforts might encourage risk-taking that could someday destabilize markets or the economy.”
Item Two, from WSJ article, “Builders Fuel Home Sale Rise” (my emphasis):
“Home builders … have hosted free credit-counseling sessions for buyers with bad credit scores, and made heavy use of government-backed mortgage programs that allow buyers to get a home with little or no down payment.”
The latter article then described the home-buying quest of Lynda Riley and her husband in Stafford County. With past credit problems, including a 2008 bankruptcy filing, the couple figured they could spend between $200,000 and $250,000 for a house. They ended up paying twice as much. A relative assisted with a $12,000 gift to help with the down payment on the $426,000 transaction, while the home builder chipped in with $5,000 in closing cost assistance.
Said Ms. Riley, a 41-year-old mother of two who works with disabled children in Alexandria: “The builder’s whole attitude was, ‘No worries.’ They help you and they trust you. They really, really want you to get approved.”
Bacon’s bottom line: Apparently, the Federal Reserve Board, federal agencies and the American people have learned abso-friggin-lutely nothing from the devastating experience of the easy money-fueled housing boom and bust of the 2000s. Here we go again, shoveling money to home buyers with lousy credit. In return for a fleeting lift to the home building sector and a transitory boost to the Gross National Product, we’re setting ourselves up for another fall. It won’t be a perfect re-run of the 2007-2008 crash — the banks are not as over-leveraged today as they were then — but it’s all soooo unnecessary. And we don’t know what other credit-fueled bubbles are lurking out there.
We have become a nation of short-term thinkers addicted to short-term fixes. We’ll do anything to avoid even momentary economic discomfort, even if it means greater pain down the road. The people have the government they want, and the government is giving them what they want, as the H.L. Mencken saying goes, good and hard.
Boomergeddon is coming, baby. It’s coming sooner than you think.
— JAB