Gavekal Capital: The FRB is the Mortgage Market

Monday, October 14, 2013

The FRB is the Mortgage Market

Over the last year, between the FRB and commercial banks, around $500 billion in net new real estate credit has been extended. That is the good news. The concerning part is that the FRB has accounted for over 100% of all real estate credit created. The only mortgage credit being extended to the American home buyer has been via the FHA + FRB. This doesn't illustrate a private credit market that is likely to support the economy post-QE.

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
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