Thursday, July 19, 2007

Helicopter Ben, At It Again


For the benefit of headlines, Ben Bernanke predicted rosy, hold-hands-as-we-run-through-the-meadow growth through 2008 before Congress yesterday. The Fed chair said he expects the U.S. economy to grow 2.25-2.5% this year and 2.5-2.75% in 2008.
Later, under his breath, Bernanke came clean about the effects of the housing predicament:
“To a considerable degree,” Ben said, “the slower pace of economic growth in recent quarters reflects the ongoing adjustment in the housing sector [which] will likely continue to weigh on economic growth over coming quarters.”
Still later, he whispered:
"Rising delinquencies and foreclosures are creating personal, economic, and social distress for many homeowners and communities -- problems that likely will get worse before they get better."

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