I have spent a few entries in this endeavour talking about how it was that the Great Recession was not a Black Swan event. In particular, that I saw it coming by 2003. Thanks to yesterday's reporting, I found it in the NY Times, we now know that the Fed agreed with me. We didn't know it at the time, of course. Once again, I feel vindicated, but more importantly, this should be enough for anyone to tell those who make the Black Swan assertion to shove it up their sphincter.
The money quote from the article:
In the June 2004 meeting, Stephen D. Oliner, a Fed researcher, cautioned that housing prices appeared to be out of line.
"I don't want to leave the impression that we think there's a huge housing bubble," Mr. Oliner said. "We believe a lot of the rise in house prices is rooted in fundamentals. But even after you account for the fundamentals, there's a part of the increase that is hard to explain."
Ya think????? Median housing expenditure to median income is a stable, long term value. It can't get out of whack without fiddling going on. The Fed knew it by mid 2004. I knew a bit before that, and I'd expect they did, too. The data was just that obvious.
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