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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (1205)	3/4/2004 4:42:44 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 116555

no willing borrowers? essentially easy credit has backed all the helicopter money out possible through easy finance of housing (homeownership at an all time high), cars (zero/zero/zero financing), Lasik surgery, zero down for six months on sofas, computers, and all manner of other consumer goods. it seems likely that the US today has the most permissive consumer financing regime in human history. the scary thing is, once you have put such a system in place, you can't eliminate it without causing a depression. this is something the bond bears need to explain: how do we go from here to 8% mortgages without causing a massive consumer retrenchment, which would reduce GDP and credit demand (and hence rates)? as for helicopter money, i guess they could just give it away, as they are effectively doing through tax cuts, but this introduces its own set of variables and runs into the current fiscal deficit spending wall at 5% or so of GDP. thus the proverbial pushing on a string which leads Gentle Ben to wax eloquent about "unconventional measures".