Taxpayer-Funded Garbage

The Federal Reserve recently released a research article titled “How Sensitive Is Housing Demand to Down Payment Requirements and Mortgage Rates?


ben-bernankeFormerly ruling over rooms full of really smart guys: ex-Fed chairman Ben Bernanke

Photo credit: Karen Bleier / AFP


There are two reasons why I even bother ranting about this:


  1. The FOMC and other policy makers actually rely on this garbage for policy decisions.
  2. We (i.e., taxpayers) actually paid for this!!!


Real estate is a field with no barrier to entry.  In California, per the Bureau of Real Estate, all it takes to obtain a real estate license is to be 18, be a resident and most importantly … Honesty: Applicants must be honest and truthful … I am sure glad that I was totally honest when I received my license years ago.

So it takes two heavily credentialed PhDs, Andreas Fuster and Basit Zafar, with not a trace of actual real estate experience to answer the simple question: How sensitive is housing demand to down payment requirements and mortgage rates?  Ask any 21st century neighborhood professionals and they can give you the same answer in two seconds.

When Ben Bernanke was chairman of the Fed, he repeatedly made reference to how smart its staff was.  What he really meant is how the Federal Reserve is composed of academics like himself, strong in theory, but lacking in practical experience.  I believe that it will take the economy a long time to recover from their ill-conceived policies.

Enough of the Fed bashing, on to more important things.  Did Trump say anything profound today?


trumpThe Donald: a newly minted politician of truly excellent entertainment value. What more can one expect from a politician? Go, Donald!

Photo via


Image captions by PT




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2 Responses to “Real Estate According To The Federal Reserve”

  • AustrianJim:

    I once saw a figure somewhere – how many useless PhD’s they have employed at the Fed, doing studies like this. What a waste of money.

  • Calculus:

    “When Ben Bernanke was chairman of the Fed, he repeatedly made reference to how smart its staff was”

    ‘Smart’ is a well worn cliche these days.

    If you notice almost every CEO (or people like Bernanke) say crap like ‘we’ve got really smart people working here’ or the ‘secret to our success is employing really smart people’.

    I always ask myself, are there any non-smart people actually working in America these days because almost everyone seems to be described as ‘smart’?

    No different from the stock Hollywood question – what was it like working with Tom Cruise/Arnold/Sly/etc?.

    Answer is always something like – ‘oh, he/she is so great, we had so much fun, he/she really made me feel at home’.

    So there you go, all actors are great/fun and all employees these days are ‘smart’.

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