Back in June 2005, the Federal Open Market Committee, a key component of the Federal Reserve system, discussed an ominous real estate bubble that was building in south Florida.
The transcript runs to 171 pages and I don’t plan to speed-read it this afternoon. But it contains some interesting insights into our recent civil conversation here about the role of Fannie and Freddie, aka “The GSEs” in the housing bubble.
Among other things, the committee members note that the “interest only” loans that were causing concern were being transferred to private bond investors, not to Fannie and Freddie.
Maybe some of you would enjoy studying it over the weekend and reporting back here next week.