The Fed: Transcripts for 2006 Realeased

The Fed in the form of the Federal Open Market Committee meets every six weeks through the year to conduct it business of overviewing the nation's business.  There is a lag of five years and the minutes from 2006 have just been released: 2006 was the beginning of the implosion of the housing market.

By going to The Cunning Realist, preview the situation and follow the links to further materials:
Straight Outta Pyongyang
http://cunningrealist.blogspot.com/

My favorite is this from the WSJ summary:

MAR. 27-28: In Bernanke’s first meeting as Fed chairman, housing looms as a risk, but officials haven’t grasped the severity of the threat. The Fed’s chief economist, David Stockton, offers some ominous warnings. “Right now, it feels a bit like riding a roller coaster with one’s eyes shut,” when discussing his forecast for a modest slowdown in housing. “We sense that we’re going over the top, but we just don’t know what lies below.” Later, he notes that housing is “the most salient risk” to the economy. “I just don’t know how to forecast those prices,” he says of housing prices.

As for forecasting, even a gradual return to historical averages before the bubble would certainly indicate big trouble ahead, and there is no reason why a return to historical averages would not be in the cards... other than some sort of "sectarian" belief that History itself had changed, and had done so for the better, and had done so - seemingly - just because we, the USA, wanted it to do so! We had new computer models which told us what we wanted to believe, simple as that.

But we did a lot of that type of wishful thinking in the years 2000 through 2006...
It was only in 2006 that most of us let the blinders drop from their eyes about Iraq, about the fact that the mission was not accomplished, and that we were on the verge of being defeated.

The inability to see things as they are, rather than as our prejudices, desires, and our long, extensive, drawn-out, table-covering spreadsheets and analyses say they are is with us still. We cannot face the truth that the Meek will inherit the Earth, because if we were to believe such nonsense, it means we might miss out on a sweet deal!

As The Cunning Realist chillingly states: These people are still running things.
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