Voodoo econ demonstrated

It’s the Fed talking to itself in ’06, almost all bullish on the housing market. WSJ item, subscription only.

Some quotable quotes, however:

Again, I think we are unlikely to see growth being derailed by the housing market, but I do want us to be prepared for some quarter-to-quarter fluctuations, Bernanke says. He identifies housing as a crucial issue, but adds that he agrees with most of the commentary that the strong fundamentals support a relatively soft landing in housing.

Timothy Geithner, who is now Treasury Secretary and was then president of the Federal Reserve Bank of New York, doesnt see the parallel risks building in the financial system. Equity prices and credit spreads suggest considerable confidence in the prospect for growth, he says. Overall financial conditions seem pretty supportive of the expansion.

These gnomes of Washington heard some nay-sayers out but in their wisdom made their umpirical calls. Point is, who the hell can read the future that way? Does not the market have its own self-correcting mechanisms, when millions vote with their purchases and sales? And who

Official portrait of Federal Reserve Chairman ...
Chief gnome

says these fellows can read the entrails?