......Countrywide Financial Corp., the biggest U.S. mortgage provider, last week stopped taking applications for no- money-down loans from risky borrowers without proof of income.
The new constraints on lending may be real-world evidence of the ``lags'' in monetary policy that policy makers flagged when they ended two years of rate increases in August. The central bank will keep its benchmark rate at 5.25 percent, economists predict, counting on slower growth and past rate boosts to bring inflation within their tolerance zone.
``The market is definitely tightening standards, and to the degree the market controls the flow of capital, the Fed does not have to,'' said Carl Tannenbaum, chief economist at ABN Amro Holding NV's LaSalle Bank in Chicago. Officials have kept their tightening bias at the past five meetings, meaning any policy shift is likely to be a rate increase.
.....Wells Fargo & Co., the largest U.S. subprime lender, said in a March 7 statement to Bloomberg News that it changed standards effective Feb. 16 for some risky customers.
And housing starts increased today. Just who is going to buy those new houses? Total household debt is now over 90% of total US GDP; debt payments as a percentage of disposable income are at a record. How must more debt can the US consumer put on his books?
