Bond Outlook [by bridport & cie, October 11th 2006]
A recent speech by Alan Greenspan gives us a further opportunity to disagree with him! He thinks that the worst of the housing-led slowdown is already over. He seems to be looking only at housing prices, while ignoring the impact of mortgage equity withdrawal (“mewing”). In fact mewing is still expanding, encouraged by a fall in 30-year mortgage rates, as long-term yields have fallen despite rises in the overnight rate. |
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