We now have about 1. 4 trillion in mortgages on their own Balance Sheet. Making the fed as i previously said the Worlds Largest savings and loan. The feds goal is to push house prices higher, and in my view, they have no overachieved. I want to look at house prices in a much longer perspective. I hope you can see some of his chart. This is a 60 year history that goes from 19532015. Its a slight of the Consumer Price index versus average u. S. House prices, both indexed to 1953 equal 100. What you can immediately see if you cant read numbers is that there is an extremely strong correlation and mean reversion of house prices to general inflation, which makes sense if you think about it. Obviously, with the bubble we went far off that underlying trend, and then with a shriveled house prices came right back. If you can look over on the right hand side they came right back and touched the trend but now have bounced up, well over the trend again. Indeed, as far over the underlying inflation
Rear rear end, with that, youll back the balance of my time to the chair. Thank you. Thank you, alex. Thank you for that explanation. What i want to talk about is europe. I would like to say that theres a great sense of complacency about the european prospects amongst the european policymakers and in fact, at this weekends meeting it was part of this meeting that was dominated with very little mention about the problems in europe. I want to do is indicate the remarks as to why i dont share that complacency. This is a liquidity event is being provided by printing and together with the Transaction Program of the ecb but the market has been part of, it is really made people focused on what i think our economic and important fundamentals and i think it is processed as this goes on. I have set previous seminars is there is a fundamental reason i dont think your can work in the end because basically the economics dont make much sense. The idea is that there are two kinds of issues that they
Mauney view is that europe is going to continue to constitute the primary press to the Global Economic recovery in the year ahead and i simply dont i can understand the reasons why they want to be optimistic but i dont think that there is a real basis for being as optimistic as the europeans are on their economic outlook. Thank you. Thank you, desmond. Chris . Thank you, alex for sponsoring this interesting session that we have been having for quite a few years. I think it is extremely important to note how much time has gone by since the break in the house in housing bubble. Im going to comment on the housing side what is or is not happening in the Banking Sector and then finish up talking about the fed and some of the objectives of qualitative easing. The reason is one of the three criteria is in keeping Interest Rates so low is to encourage credit creation. The mortgage industry traditionally has been the primary, a year built for Monetary Policy. A drop rates, borrowing costs go do
This is Eleanor Roosevelts typewriter. This is the typewriter on which she read her my date was code column. I have some that i want to share. My day column. I have some that want to share. She is talking about here about the comings and goings in the white house after getting back to a regular schedule after the holiday season. From november 6, 1940, election day, she talks about how, at midnight, a larger crowd than usual came in from a hyde park. The president went out to greet them. This is a tradition on election. Ight care first lady eleanor roosevelt, monday night, live at 9 00 eastern on cspan and cspan three. Also on cspan radio and c span. Org. Next coming discussion on the state of the u. S. Housing market and what the Federal Reserve is doing to prevent another housing bubble. Reckoningthe enterprise institute, this is a little less than two hours. It is my pleasure to welcome you. In a postbubble and does bernanke world. Post bernanke world. At the peak of the infamous hou
Thank you very much. Er with live if chicago for one of the highlights of the investing year. The mutual fund manager of the year awards from morning star. Five managers all five stars, fiveyear returns, that put them in the top one, two or three percent of their peers. You will find out in this hour how they made so much money in 2012, what they think about 2013, and whether you, sue, want to invest with them in this new year. I cant wait, ty, thanks. We are also watching google right now. Ftc making an announcement they are looking into the company over alleged anticompetitive conduct. We are monitoring. When they begin that news conference, we will bring you headlines. To the markets where buzz down here is about the fact that mark set adding on to yesterdays spectacular gains. After a little profittaking, we are on the plus side to 13,420. Nasdaq is up two points, almost two and three quarters. Bob pisani joins me on the floor. I was talking to some of the guys this morning and the