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US housing bust getting worse, warns Goldman
January 16, 2007 (Ambrose Evans-Pritchard - Telegraph)
The US Federal Reserve will need to slash interest rates three times this year as the housing slump goes from bad to worse and the American consumer begins to buckle, Goldman Sachs has warned.
"Americans have shown a complete lack of self-control. The personal savings rate is at its lowest point ever, and has actually been negative since April 2005.
"We believe that housing will soon become the proverbial 'straw that breaks the camel's back'," said David Kostin, the investment bank's US strategist.
(Thanks jk for the story.)
AntiSpin: Three rate cuts? Our sources tell us that the Fed intends to raise rates this year.
Bank of England watchers got a surprise last week when rates were raised among nearly universal expectations of a cut. Guessing at rate actions by central banks is never a productive use of time, but when the consensus is so far off it's worth noting. We suspect US rate watchers are in for similar surprises.
The LEAP/2020 guys in Europe expect rate hikes quickly followed by cuts.
January 16, 2007 (Ambrose Evans-Pritchard - Telegraph)
The US Federal Reserve will need to slash interest rates three times this year as the housing slump goes from bad to worse and the American consumer begins to buckle, Goldman Sachs has warned.
"Americans have shown a complete lack of self-control. The personal savings rate is at its lowest point ever, and has actually been negative since April 2005.
"We believe that housing will soon become the proverbial 'straw that breaks the camel's back'," said David Kostin, the investment bank's US strategist.
(Thanks jk for the story.)
AntiSpin: Three rate cuts? Our sources tell us that the Fed intends to raise rates this year.
Bank of England watchers got a surprise last week when rates were raised among nearly universal expectations of a cut. Guessing at rate actions by central banks is never a productive use of time, but when the consensus is so far off it's worth noting. We suspect US rate watchers are in for similar surprises.
The LEAP/2020 guys in Europe expect rate hikes quickly followed by cuts.
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