“Davidson” submits:

There is myth in political thought and Central Banker thinking that lower mtg rates will be inflationary. This is not in fact true. It should be clear that lower mtg rates, i.e. narrower credit spreads globally is DEFLATIONARY

If lending institutions cannot lend profitably, then they will not lend, duh!

A credit spread wide enough to satisfy the historical need for financing we have enjoyed for 100s of years is not present today. This has been in part due to Central Bankers jawboning mtg rates lower and actually buying longer term maturities with issuance of govt debt. This is deflationary as those lower on the credit ladder cannot borrow and cannot even refinance at lower rates.

Housing, commercial construction and the flow of non-professionally trained individuals into middle class income levels occurs with a much more vibrant lending environment than we have to day. The MCAI(Mortgage Credit Availability Index) shows we remain at very low credit issuance levels as do Single-Family Starts and Construction Employment trends. Central Bankers do not show they understand how economic activity is connected to credit availability.

Doesn’t anyone get it: Low Lending Spreads = Deflationary Environment

The architectural billings index came out today and while backing off the previous record number, the index is solidly in the “growth” mode meaning increased construction in the coming months.

Billings by architecture firms remained strong in October thanks to continued activity by developers of rental apartment buildings as well as new demand from such institutions as schools, hospitals and municipal governments, according to the American Institute of Architects.

The Institute’s monthly Architectural Billings Index hit a score of 53.7 in October. That was down from 55.2 in September, but any score above 50 indicates an increase in billings, according to the institute. October was the sixth consecutive month that the score was above 50.