Rocky Vega

Earlier today we looked at how the housing market is teetering atop artificially created price levels engineered through bailout and stimulus. Now, we turn our attention to the official evidence of it. In its latest Quarterly Report to Congress (pdf), the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) documents how, “Supporting home prices is an explicit policy goal of the Government.”

According to Tracy Alloway at the Financial Times:

“…propping up house prices is now an explicit goal of the US government… So explicit in fact, that the Special Inspector General for the Troubled Asset Relief Program has knocked up this little chart to show how various policy programmes (Hamp, MHA, etc.) lead to higher houseprices:”

Home Prices

Alloway goes on to cite the SIGTARP report:

“Supporting home prices is an explicit policy goal of the Government. As the White House stated in the announcement of HAMP for example, ‘President Obama’s programs to prevent foreclosures will help bolster home prices.’”

It’s pretty tough to see how the housing market can reach the kind of equilibrium price levels that will support a sustainable recovery with this unabashed government intervention. When the policy support goes away, which because of its cost it eventually must, the second leg down in housing is likely to follow in short order.

See Alloway’s complete post in Financial Times Alphaville coverage of the US housing bubble v2.0.

Rocky Vega

Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let?s Go Publications, Harvard Student Agencies, and The Harvard Advocate.

  • Runfastandwin

    As someone who bought a house in February of 2006, I certainly hope so.

  • http://www.yams.com TomPier

    great post as usual!

  • intinitweta

    My friend recently lost their home to foreclosure and now they are planning to file for bankcrupcy. They recently went to file their taxes and they found out IRS is billing them 52,000 for abandonment even though they have tried for months asking for help from the banks. Need some advise on how i can help guide my friend to the right people to settle the foreclosures.

  • http://www.pcdriverssite.com driver detective windows 7

    “The first requisite of success is the ability to apply your physical and mental energies to one problem without growing weary.” –– Thomas Edison

  • http://fatslicegame.blogspot.com Fat Slice

    Thanks. Very nice blog. Your web site is very beautiful….

  • http://www.ipad-buys.com iPad cost

    Finally something fresh and cool that make sense! I would like to see more about this and that is what I’m going to do.

  • http://www.ipadspeakers.info/ ipad speakers

    I benefit reading it. I have need of to learn more on this subject.. Thanks for the sake letter this marvellous post..

  • http://www.youtube.com/watch?v=qU7tigYFF0k Ways To Stop A Panic Attack Instantly

    Hello, i think that i saw you visited my web site thus i came to “return the favor”.I’m attempting to find things to enhance my website!I suppose its ok to use a few of your ideas!!

  • Pingback: Trackback

  • Pingback: Terminator Genesis

  • Pingback: agence location voitures maroc casablanca aeroport mohammed 5 rabat p

  • Pingback: Trackback

  • Pingback: Trackback

  • Pingback: Trackback

  • Pingback: Trackback

Recent Articles

A Simple Strategy for Investing in the US Energy Boom

Byron King

Too often investments are made in a vacuum. But as Byron King demonstrates, the global economic crash... easy money... and technological advancements are all interdependent. In particular, that connection has changed the investment calculus in the resource market. Read on to learn how...


The Traffic Jam That Kills Thousands of People Every Day

Juan Enriquez

Back in the 1980s, John Nestor became infamous for single-handedly causing massive traffic jams on the Capital Beltway. But in his professional life, he created a completely different kind of traffic jam... one that may have contributed to the deaths of thousands of innocent people. Juan Enriquez has the full story. Read on...


Laissez Faire
New and Unexpected Ways to Fund Long-Term Care Expenses

Jamie Hopkins

Too many people think that long-term care planning is just a decision about whether to purchase long-term care insurance. However, long-term care planning is so much more... It is a discussion about how you will fund this expense, where you will receive long-term care, and who will provide the care. Jamie Hopkins explains...


Beware the Barrage of New Tech IPOs

Greg Guenthner

Lately, the market seems to be obsessed with new tech darlings with flashy names and exciting stories. But there are more sinister forces at work... Today Greg Guenthner explains why you should pay no attention to the man behind the curtain, and avoid being tempted by big name tech IPOs. Read on...


5 Min. Forecast
The 2 Forces Driving the Current Stock Market Boom

Dave Gonigam

Stocks have started off this week pretty flat. But is more volatility to come as the week progresses? Today, Dave Gonigam takes a look at a few scenarios for the rest of this week, and for 2014 as a whole - specifically relaying what one analyst sees as the two main forces currently driving the market boom. Read on...