By now, I'm sure you've heard the stories about what was said at some of the Federal Reserve meetings in 2006. If not, let me refresh your memory.
From an article in the LA Times:
"We believe that, absent some large, negative shock to perceptions about employment and earned income, the effects of the expected cooling in housing prices are going to be modest," said Timothy F. Geithner, the current Treasury secretary, who then was president of the Federal Reserve Bank of New York."
From the Chicago Sun Times:
“I agree with most of the commentary that the strong fundamentals support a relatively soft landing in housing, Bernanke told his follow FOMC members."
From the actual December 2007 FOMC meeting:
"Today’s action, combined with the policy actions taken earlier, should help promote moderate growth over time."
With comments like that, who could possibly doubt the Federal Reserve's ability to manage the current financial turmoil?
