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Interesting how high housing starts were when interest rates were a lot higher than they are now.

And if you ‘population adjust’ the housing starts the ‘Greenspan super bubble’ fell far short of previous highs, even with much higher mtg rates back then. (add about 2% to the 10 year note rates to approximate mortgage rates.)

In fact, it’s hard to attribute housing performance to interest rates in general.

I saw a graph from Goldman a couple of years ago showing how housing related to the fiscal cycle and at that time it was forecasting a decline. And interest rates were nowhere to be found in that model. While I did criticize some of the policies of the Greenspan era, I never have ‘blamed’ him for the housing bubble. Ironically he’s watched this destroy his reputation and largely believes it himself.

Interest rates didn’t get us into this and they won’t get us out, as the late John Kenneth Galbraith stated in his last book, ‘The Economics of Innocent Fraud.’

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I suspect this is what Iran is developing as well to drive the US Navy out of the Gulf region.

China’s New Missile May Create a ‘No-Go Zone’ for U.S. Fleet

By Tony Capaccio

Nov. 17 (Bloomberg) — China’s military is close to fielding the world’s first anti-ship ballistic missile, according to U.S. Navy intelligence.

The missile, with a range of almost 900 miles (1,500 kilometers), would be fired from mobile, land-based launchers and is “specifically designed to defeat U.S. carrier strike groups,” the Office of Naval Intelligence reported.

Five of the U.S. Navy’s 11 carriers are based in the Pacific and operate freely in international waters near China. Their mission includes defending Taiwan should China seek to exercise by force its claim to the island democracy, which it considers a breakaway province.

The missile could turn this region into a “no-go zone” for U.S. carriers, saidAndrew Krepinevich, president of the Center for Strategic and Budget Assessments in Washington.

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