Sunday, February 21, 2010
Former Federal Reserve Chairman (the good one) Paul Volcker stated the obvious during an interview with Bloomberg on Friday as recounted in this report at the Huffington Post.
Former Federal Reserve Chairman Paul Volcker said the nation's home mortgage market is in trouble and will have to be "reconstructed."Really! Where do you go from here and how do you possibly get there?
"It's totally dependent, heavily dependent on government participation," Volcker said Friday in an interview with Bloomberg Television. "It shouldn't be that way. That's going to have to be reconstructed."
The federal government was responsible for up to 95 percent of all new home mortgages in the fourth quarter of 2009, said Guy Cecala, publisher of Inside Mortgage Finance, a leading industry publication.
"Anyone who looks at the numbers says, 'My God, look what it's come to,'" Cecala said in an interview Friday.
In a country where the government sees no apparent limit to how much it can interfere in both financial markets and the economy, and where growth had become dependent to a very unhealthy degree on rising asset prices, any adjustment away from the near-complete control of the housing market by the folks in Washington is going to very painful.