John Philip Mason is a residential appraiser with 20 years experience and covers the Hudson Valley region of New York. He’s a good friend and a true professional who provides unique insight to appraisal issues of the day. Here is his weekly post called Solid Masonry. Jonathan Miller
I’ll try and refrain from making this article about politics, which is nearly impossible in today’s world. Everything and everyone is accused of being either politically connected or politically motivated. Why, we even refer to proper dialog as “politically correct” rather than simply polite or respectful. Well here goes nothing.
In Chris Isidore’s recent article Bush Quietly Reshaping the Fed [CNN/Money] we find out that President Bush is shaping a lot more than the Supreme Court with his appointees. In fact, he may be messing with the “almighty dollar”. Mr. Isidore states “Once Bush replaces Vice Chairman Roger Ferguson, the only Democrat on the Fed’s board who resigned recently, four of the Fed’s seven governors will have taken office in 2006, and all seven will be Bush appointees.” He goes on to say, “That would make Bush only the third president to place all seven governors on the board, after Ronald Reagan in 1988 and Franklin Roosevelt in 1936.”
For the past several months I, like many others, was under the impression that the Federal Reserve was nearing the end of rate hikes. This was somewhat reassuring to those of us in the real estate and related industries, as a fair portion of our business volume is directly dependent upon mortgage rates, affordable mortgage rates to be specific. The statements coming from Greenspan when we were somewhere around the 10th increase, gave me the sense we were looking at one, two or maybe three more increases at most. I confess I’m one of those who strongly believe Mr. Greenspan is inclined to go one or two adjustments too far. Although I don’t claim to be nearly as smart as Greenspan is. So, I was downright relieved to know the end was near. But when the 11th and 12th increases were quickly followed by the 13th and 14th, I began to ask myself, what the hell do these people see coming at us? Is there some giant meteor way out in space hurling towards earth?
Now we find out we’re about to be chauffeured by a young, less experienced team who is even more inclined to over-steer the monetary supply. It sounds like a teenager just given a license to drive, with all the ambition in the world and just enough know-how to get somebody killed. My cautious concern is now giving way to downright fear. What I thought might be a healthy readjustment from strong price appreciation, as in softer increases or even modest but manageable declines, is turning to gloom.
(I can’t help myself, but here is where it gets political.) Now those haunting words from our president, in the early days of the aftermath of Katrina, ring louder and louder in my head, “Brownie, you’re doing one heck of a job.”