Pending Sales of U.S. Existing Homes Decline by Most in a Year

[cthulu2016]

22. PS

>The Fed is not out of bullets, it's just shooting blanks. See: "pushing on a string". Only fiscal policy can succeed now.

You are responding to a patient explanation of why pushing on a string does not work by repeating my conclusion as a stunning refutation of my conclusion?

Well. I stand corrected.

And if only fiscal policy can work (I agree) and the Fed is not out of bullets (I assume bullets are things of effect) then the Fed must have some ability to dictate and manifest fiscal policy... which would be awesome but it doesn't.

As for your theory that "Demand for loans and availability of creditworthy borrowers are what drive lending, not nominal interest rates."

Your thesis is: Price does not affect demand.

(Availability of creditworthy borrowers is part of demand so your statement only has two terms.)

Lowering mortgage rates to 0% would, in your framing not cause more purchases of houses. Would raising mortgages to 8% reduce purchases of houses? How about 300%/year mortgage interest? Any effect? Of course not.

Should Toyota stop offering 0% financing promotions since they cannot increase demand for Toyotas? The fact that sales of Toyotas always increase during 0% rate promotions must be a coincidence.

Does the price of a loan affect the number of creditworthy borrowers? A lot of people could service a 1% mortgage on a given property with ease but couldn't possibly service a 6% mortgage.

I give the credit of assuming you do not mean what you say.