Fed missed the housing bust
Who would want a detailed, public record of our business decisions? Unfortunately, if you are an esteemed Fed governor, you must confront your exact words from meetings that occurred 5 years ago. The central bank released 1,566 pages of transcripts from each of the Fed's eight monetary policy meetings in 2007, which is customary. What is not customary, of course, is that 2007 was the year that one would have hoped that our most esteemed bankers would have gotten the drift that there was something rotten in the nation's housing market.
Clearly Chairman Ben Bernanke would like to take back this January 2007 comment: "The housing market has looked a bit more solid, and the worst outcomes have been made less likely." Or his June remarks, which may have been a "bit" of an understatement: "A bit of cooling in the financial markets might not be an entirely bad thing." Bernanke is not alone in his misjudgment of the economic and financial industry landscape. Outgoing Treasury Secretary Tim Geithner, who in 2007 was the NY Fed president, said "Direct exposure of the counterparties to Bear Stearns is very, very small compared with other things." Oops! Read the rest of the story at www.cbsnews.com.