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Fed Policy a Boost to the Housing Market?

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    Wells Fargo Chief Economist John Silvia on the outlook for the housing market and economy.

  • Duration 4:03
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Joining me now John Silvia one of the best economists in the country chief economist Wells Fargo.

John good to have you here let's get right to it -- this market is starting to make.

Well some mysterious moves what are you what do you divine from what's going on after Ben Bernanke said here's the money.

While the market really respond initially to liquidity.

That the Fed was gonna provide in the marketplace enlist -- what went and I -- infinity yes hi but the second.

Problem is you have to have real economic growth justify -- earnings communities estimates.

And I think when you see is weak orders.

Higher inventories -- final sales were looking for GDP growth may be about 1% of south -- and -- fourth quarter.

And I think.

-- comment on bad act reemphasizes.

That the Chinese economy is weak we've got some news today that the Euro is still working through its problems so we don't have a resolution in Europe but settled sitting up there -- a buck thirty you 31 right.

Yes still sitting up there at about 31 -- -- -- that or does that tell us that tells us that we print an awful lot of money because -- it's always a relative exchange rate between euros and dollars.

And the -- -- an updated simply because people expect them.

Q we infinity and of money going forward.

We've got a housing market that's showing bonafide.

Signs of recovery and bottoming out moving it yes what's going to be the impact on housing -- Ben Bernanke's now even looser.

Monetary policy and support.

-- -- house well it's going to be a little bit Pozen I think loaded there's still a lot of constraints in the housing market.

But initially it is this spot and they gonna buy a lot of mortgage backed securities that's gonna provide liquidity into a -- replacing keep those interest rates low for long a -- -- But again legal back that -- fundamentals.

Who's gonna buy these houses do they qualify for the winehouse is picking up a little bit on what Gerri Willis haven't talked about earlier.

And just said hey you know can people qualify people have the jobs to people have the and company answers -- So there's a short run yes you got a little bit of -- benefit of long run does not help.

Sort of -- just about 25 million people unemployed underemployed -- -- up being employed.

We've got -- plotting government that does nothing seemingly to change -- -- there's status or to spur growth here.

-- -- the Fed doing so.

What is the results are we gonna see a lower unemployment rate what are the odds of the rest of this year.

By you know -- the DO -- being low is is driven.

In part.

By -- participation rates he would just not showing up into the workforce and so yes you could have a lower inspiring but it's -- low participation rate as a driving factor of that.

And again going back the fundamentals we're not creating the jobs those jobs -- -- in world.

Is it gonna take to change all of this nonsense because frankly we know it's now that's a -- out there.

But what we also know it's time for somebody to say the hell what does this isn't a normal we're going to accept let's get rolling.

Almost picked up by a -- a couple of stars that you've done recently.

Regulatory reform saying hey there's a limit -- regulation you can put into the marketplace second having some certainty in terms -- -- policy is going.

In terms of fiscal policy in taxes over the next you're -- your -- your dream.

-- -- Because we don't have time for you ask me what it's not going to change I understand and tell if if there's got away.

-- that we can get this country move.

And I mean right now as soon as a president is either reelected or elected.

I asking if leadership can start on November 7.

We're in a hell of a -- You -- -- and again once again you know why is DO also strong despite all the your problems it's comparison with the United States.

If you ask about entitlement spending and why -- -- YCBO has such drastic on you know me well I'm -- -- enhancement entitlement spending.

I'm gonna got to tell you about and does -- -- thanks for being here to tell us thank you to looks like.

-- dress it up a little renewable little club but Spencer or after -- -- that in US are up now.

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