The Fed keeps adding MBS to its portfolio.

A trillion dollars worth of support for the mortgage market should have given housing a bit more of a kick, on top of the first-time homeowners’ tax credit scheme. Given the staggering level of federal support for housing, it is very hard to be impressed by the dead-cat bounce of the sector.

This sort of thing can’t go on forever, although it will go on longer than many of us expected, given the desire of Asians and Europeans to avoid a tumble-back into deflation. Everyone enables the American addiction to cheap money because no-one wants to face the alternative. It’s still miserable out there.

This entry was posted on Thursday, December 3rd, 2009 at 9:24 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.