Tuesday, May 05, 2009
Ben Bernanke talks about real estate and the economy
Calculated Risk: Fact Checking Bernanke on Real Estate
Bernanke testified before Congress today. Summary: The U.S. economy has contracted sharply since last autumn; GDP down 6pc (annualised) in the last two quarters. Loss of 5 million payroll jobs over the past 15 months. Further sizable job losses and increased unemployment in coming months. Credit conditions for consumers remain tight. Conditions in commercial real estate are dire. Vacancy rates for existing office, industrial, and retail properties have been rising while prices of these properties have been falling. House sales volumes peaked in June-July 2005. House prices peaked in July 2006. In California last month, 57.4pc of all sales were foreclosures [repossessions]. Government-imposed foreclosure moratoriums are flattering the figures; underlying stats are even worse (see comments).
2 Comments
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1. drewster said...
Also from our cousins across the pond, Mish has a story about somebody being refused credit simply because they live in a bad town.
Capitol One denied me a credit card, saying: "There are worsening economic conditions in your area. We did not request a copy of your credit file and therefore no inquiry will be placed on your credit report."
There you have it, a credit worthy borrower denied credit just because I live in Tampa.
2. devo said...
Bernanke said that after the results of the Treasury's "stress tests" of the financial health of the country's 19 largest banks are released later this week, banks that need additional capital reserves will have six months to comply.
He said that while the Fed prefers to have the banks raise the capital in private markets, if they are unable to do so, "they will have to take government capital to meet those standards."
http://www.businessweek.com/bwdaily/dnflash/content/may2009/db2009055_546682.htm?campaign_id=rss_daily