Politics might be more of a sideshow to the real business of the economy, which is driven primarily by credit. Housing is booming, with sales of existing homes running at an annual rate of 6 million units in August, while new home sales topped the 1 million yearly rate, the highest level since 2006, with sales of both constrained by lack of supply. It’s not just the flight from cities to the suburbs that’s causing the trend, but cheap mortgages, with 30-year conventional fixed-rate loans averaging 2.90%, according to
just a hair above the record low of 2.86% touched earlier in the month.
Speculative-grade corporations also have been feeding at the credit trough. Even before the third quarter ended, junk-bond issuance set a new yearly record, topping 2012’s mark of $329.6 billion this past week, Bloomberg reported. But there are