How Concerned is Bernanke about his possible legacy?

I suspect the Chairman is seriously concerned about living out his life with his legacy, as told by the mainstream, going something like this:

“Blindsided by an intense financial crisis, the Chairman, a champion of full employment and student of the Great Depression, did everything he could come up with to support growth and employment. However, after nearly 5 years of 0 rates and massive QE were beginning to hint at positive results, and just as his term ended, he fell asleep the switch, allowing mortgage rates to spike by over 1%, sending the economy back into recession.”

;)

The latest housing starts spike seems most likely to be revised lower or followed by a big drop.


Full size image

Purchase Applications:


Full size image

Housing Starts:


Full size image


Full size image

MBA Purchase Applications December 18, 2013

Scary stuff for a Fed chairman who sees asymmetrical risk to the downside.

MBA Purchase Applications

Mortgage applications plummet amid uncertainty

By Diana Olick

Total mortgage applications are down 56 percent from a year ago, with the plunge in refinances leading the way. Purchase applications though are down 10 percent, mirroring a slowdown in home sales in many previously hot markets.

California Realtors reported Tuesday that November sales fell 15 percent in Los Angeles and 13 percent in San Francisco year over year.

With credit still tight, and Fannie Mae and Freddie Mac announcing fee hikes, fewer borrowers can afford a home loan.

Compounding this, the government’s mortgage insurer, the Federal Housing Administration, has lowered loan limits in hundreds of local markets starting in 2014. That will make thousands of potential borrowers ineligible.

The share of all-cash buyers remains high, accounting for more than one-third of home sales in October, according to the National Association of Realtors.

Same number of all cash buyers is a higher percentage of the lower total ;)