This is one of the best post that I have seen in awhile. Bernanke is taking transparency to a new level.
From Ben Bernanke:
Speaking on behalf of all the Fed members we thought it was time to honestly address the situation the country is facing. This is part of our new policy to be as candid and honest as possible. Quite frankly we are frightened by the rapid falloff in housing permits, the rise in jobless claims, the rise in inventories, and the slowdown in consumer spending. It now appears the landing is not going to be soft and it is also doubtful the financial markets are fully prepared for it.
This slowdown in jobs and wages could not have come at a worse time because consumers are cash strapped already. We now forecast a downward spiral in construction jobs that will spill over into other segments of the economy resulting in additional losses in wages and jobs. Compounding the problem is the fact that many home buyers took the advice of former chairman Greenspan by taking out adjustable rate mortgages with teaser rates that are now about ready to be reset.