Sales of previously owned homes in March fell 8.4 percent from February, the group reported. It was the largest one-month drop since sales plummeted 12.6 percent in January 1989, when the country was in a housing recession. It was also 11.3 percent below the number of units sold in March 2006.
Not surprisingly, industry shill David Lereah attributed the decline to "bad weather". Where did you go to college again, David? The housing bubble Greenspan created got people greedy about real estate. They saw other people make LOTS of money for doing nothing and figured "if it's raining gravy, why I am standing here with a fork" and they bought houses they didn't intend to own so they could sell them a few months later and double their money.
I actually met Alan Greenspan once, but I was in celebrity shock so I didn't tell him what I thought about the job he was doing.
If someone offered to loan me money so that I could buy a million dollar yacht, I wouldn't take them up on it because I have no business owning a million dollar yacht. So just because Greenspan made it possible for banks to offer lots of people enough money to buy homes that they couldn't afford, doesn't mean they should take him up on it either. After all, Alan's not the one who's gotta make the mortgage payments.
Friend: Holy sh1t, man, we just shook Greenspan's hand. Alan Fcuking Greenspan, man!
Me: Yeah...but I forgot to call him an asshole.
Greenspan created an artificial boom that made people feel like things were okay, but it has to be paid for eventually. It's like buying things on your credit credit card. You FEEL like you are doing okay because you have all this new stuff in your house, but then the bill comes and you're screwed. You can't make people richer by printing more money.* If you could, the government would just gear up the printing presses and send everyone a check for a million dollars? There are lots of millionaires in Turkey, unfortunately a million turkish dollars is worth about $0.18. And you don't know what disgusting is until you've seen a Turkish Toilet.
Unfortunately, Alan burned the dinner and now we all have to eat it. The drop in housing prices will mean people in the housing sector will get laid off. Greenspan is making great money on the lecture circuit though, so as long as his parachute opens, he doesn't care.
A lot of people who bought houses they couldn't afford, but figured they would sell them to a bigger sucker in 6 months will go into foreclosure and the banks will get burned and will be hesitant to make new loans. We'll be paying for his foolishness with higher interest rates.
I hate to say I told you so, Alan, but you suck!
*See the www,mises.org website on my sidebar for information on the Austrian Business Cycle Theory (for which Hayek won the Nobel Prize in Economics), which proves this point empirically.