Inside the Fed in 2006: A Coming Crisis, and Banter

[groovedaddy]

WASHINGTON — As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers.

The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”

But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast.

“We think the fundamentals of the expansion going forward still look good,” Timothy F. Geithner, then president of the Federal Reserve Bank of New York, told his colleagues when they gathered in Washington in December 2006.

http://www.nytimes.com/2012/01/13/business/transcripts-show-an-unfazed-fed-in-2006.html?nl=todaysheadlines&emc=tha25

[Warpy]

1. "The fundamentals of the expansion going forward still look good"

"The fundamentals of the economy are still sound."

And you know they'll say that as long as 20% of us are still employed and not starving, hoping we'll support their keeping the 80% brutally oppressed and, given the wage suppression and substitution of debt for honest wages over the last 30+ years, we're getting to that stage fast.

"The fundamentals of the economy are still sound!" will be their wailing cry as the mobs finally burst through their compound walls, literally or metaphorically, and destroy them.

[Po_d Mainiac]

2. chart porn