Monday, September 17, 2007

The Physics of Home Mortgage Debt - 2007 - Q2

Based on the data below, a potential peak appears to have been pushed out a few quarters. It could even be argued that a peak is not coming.

Think of this chart as the speedometer of our car. The velocity continues to be positive and may be starting to level off.

The acceleration picture has improved somewhat. It looks somewhat likely that the Fed may have hit the brakes fairly well. It is possible we're very nearly coasting now.

Overall, I would rate this data as encouraging. Based on $80 oil and an improving picture here I would consider an aggressive rate cut by the Fed as extremely risky.

Links to source data and further commentary:

Home Mortgage Debt Possibility
The Physics of Home Mortgage Debt


Stagflationary Mark said...

I rearranged the data and forgot to change the left scale in the charts. The error has been fixed. New charts are up.

Anonymous said...

.25 cut Sept, .25 cut oct., .25 cut Dec. Back to a measured pace me thinks.

Stagflationary Mark said...


Stagflation has worked for several years so far. Your scenario would suggest we may continue to see more of the same.

TIPS are up today.
Oil is up today.
Gold is up today.
Silver is up today.

Disco balls up tomorrow?