Bernanke's speech to home builders:"housing may no longer be viewed as the secure investment it once

[stockholmer]

3. no, but THIS is

Bernanke telling us not to worry about housing, mortgages, or car companies in the years before the recession, like denying a train wreck that is coming down the tracks. Bernanke was chairman of President Bush's Council of Economic Advisers, and now as chairman of the Federal Reserve, he's the fourth most powerful person in the world according to Newsweek.

July 2005

INTERVIEWER: Tell me, what is the worst-case scenario? Sir, we have so many economists coming on our air and saying, "Oh, this is a bubble, and it's going to burst, and this is going to be a real issue for the economy." Some say it could even cause a recession at some point. What is the worst-case scenario, if in fact we were to see prices come down substantially across the country?

BERNANKE: Well, I guess I don't buy your premise. It's a pretty unlikely possibility. We've never had a decline in house prices on a nationwide basis. So what I think is more likely is that house prices will slow, maybe stabilize: might slow consumption spending a bit. I don't think it's going to drive the economy too far from its full employment path, though.