Economics Update

Tom Toles

It appears that the Fed's best efforts to revive the housing market through low interest rates may be reaching their limits as mortgage rates and long term bonds climb higher.

Additionally, it appears that the Obama administration is seriously looking at winding down and liquidating Fannie Mae and Freddie Mac in the long term, which would generally push up mortgages issued after that point.

In the long run, I see this as a good thing. Home ownership as a goal in and of itself has driven much of the ills in our society whether it is the housing bubble, or the suburbanization of our society and out energy consumption levels,

In energy, oil fell on inventory growth, but that has not lowered retail gasoline prices, which are up 9% over the past 2 weeks.

In the mean time, the dollar and the Yen both rose, as the stock market decline pushed investors into safe havens.