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

  • Pingback: Trackback

Recent Articles

Video
Why Democracy Won’t Survive the New Depression

Richard Duncan

The hum of the printing presses and the steady drip of cheap credit over the past five years made it easy to believe the U.S. economy was in a true recovery. But what happens when the excess liquidity begins to dry up?


Don’t Blame Obama (He Has No Power)

Chris Campbell

The Americans who voted for Obama were expecting some big changes. But, six years later, the government he acquired has only spied harder, the drones have flown lower, and the weapons have gotten bigger. But don’t blame Obama. Read on…


Your Personal Gold Standard

James Rickards

All paper currency has a shelf life. It could be 5 years or 500 years, but at some point, the value of any paper currency eventually reaches zero. That's why, for centuries, people have turned to one shiny metal to safeguard their personal store of wealth. And, as Jim Rickards explains, you still have that option. Read on...


October Plays Another Dirty Trick – Here’s What You Do Now

Greg Guenthner

Bad things have a funny way of happening in October. Remember October 1929? It raised the curtain on the Great Depression. Or maybe you recall the infamous Black Monday crash in 1987. The Dow tumbled 22%— the largest single day loss ever. Guess what? That was in October, too. The 19th to be exact. Notice a trend here? Fast forward to this October... You know what happened this month. And if all that wild market action kneeds you in the gut, here’s what you should do now. Greg Guenthner explains…


In the Downdraft of Hormegeddon

Bill Bonner

The economist Milton Friedman didn’t go far enough when he said, “Concentrated power is not rendered harmless by the good intentions of those who create it.” Oftentimes, that power is rendered more harmful -- to the point of Hormegeddon -- the better the intentions behind it. In today's essay, Bill Bonner highlights the conditions necessary for popular delusions and the disasters they lead to. Read on...