http://www.sigtarp.gov/reports/congress/2010/January2010_Quarterly_Report_to_Congress.pdf
I told you it was long.
But the gist of the report is that Neal Berofsky doesn't pull any punches and says it like it is. This guy is a lot like Bruce Bartlett in the sense that he doesn't care who he offends and how many bridges he burns to get there. He is looking for the truth not a job once he leaves public office.
The one thing that is clear in this report is this: Propping up housing prices is the explicit goal of the US Government.
Not convinced?
Still not convinced?
Straight from the report.
"Supporting home prices is an explicit policy goal of the Government. As the White House stated in the announcement of HAMP for example, “President Obama’s programs to prevent foreclosures will help bolster home prices.”
In general, housing obeys the laws of supply and demand: higher demand leads to higher prices. Because increasing access to credit increases the pool of potential home buyers, increasing access to credit boosts home prices. The Federal Reserve can thus boost home prices by either lowering general interest rates or purchasing mortgages and MBS. Both actions, which the Federal Reserve is pursuing, have the effect of lowering interest rates, which increases demand by permitting borrowers to afford a higher home price on a given income.
Similarly, the Administration is boosting home prices by encouraging bank lending (such as through TARP) and by instituting purchase incentives such as the First-Time Homebuyer Tax Credit. All of these actions increase the demand for homes, which increases home prices. In addition to direct Government activity, home prices can be lifted by general expectations among homebuyers of future price increases."
Talk about moral hazard?
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