Friday, June 05, 2009

There is no free lunch

The Obama administration is learning the hard way.  Now that there is good evidence that the recession is ending (no thanks to the as yet un-dispersed stimulus spending) the already issued debt and opened-ended spending commitments of the first 100 days are driving up long-term interest rates. How long can the housing market rebound with interest rates going up 26 basis points a week?  Not long I suspect. Like Bill Clinton before him, he is going to learn that the bond market is the 5th branch of government.

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