Thursday, November 15, 2007

Recession and US interest rates heading for 2%

Insight: All signals are pointing in the direction of a US slowdown

This article in the FT written by an Economist working for Merrill Lynch. Amongst other things he thinks interest rates are heading for 2%. Bring on the next housing bubble...

Posted by happyrenterz @ 09:42 AM (647 views)
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2 thoughts on “Recession and US interest rates heading for 2%

  • “The record surge in US house prices made households feel richer and willing to spend more of their after-tax earnings. No other cycle has seen consumer spending growth so wildly exceed personal income growth – by nearly a full percentage point annually over the past six years. Since late 2001, households’ debt-to-disposable income ratio has surged from 100 per cent to a record of 136 per cent. In six years, the personal sector tacked on as much debt as the prior 40 years combined. This has been the most pronounced credit cycle in history, but this process is now in reverse and will prove to be a multi-year adjustment.”

    80 YEAR DEBT CYCLE BLOW-OFF
    SECOND GREAT DEPRESSION

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  • the northerner living in oz says:

    The U.S has a serious debt problem that may take a decade to recover from
    And all probability affect the rest of the western economy

    I read a book on the debt cycle 20 years ago and I am sure the cycle length was then described as 54 years
    I was so convinced at the time I sold my shares just before the stock market correction.

    so now the debt cycle is 80 years confused.

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