Globe’s Debt Trap. ‘Liberation’ of US Housing Agencies Seen as Solution to Housing Meltdown. Home Prices Soar, Sales Decline. More Bank Branches, ATMs Shutter. Trouble in China & Germany

The CONVERSATION conducts a post mortem on comments by Fed Reserve Chairman, JEROME POWELL, in his speech last week in Jackson Hole, Wyoming.  “There is this belief that he [Powell] doesn’t believe in what he says,” says DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. But he warns: “The market should not ignore him. Inflation is not beaten.” POWELL also seemed to telegraph that the course of interest rates would be “data dependent,” according to MAT VAN ALSTYNE, ODEON co-founder and managing partner. (Case in point: US job openings dropped in July by more than analysts had expected to a more than two-year low, providing new evidence for rate-setters that demand for workers is cooling.)

Either way, rising interest rates have negatively impacted US housing on several fronts. With the average 30-year fixed mortgage reaching its highest rate since 2001, home affordability and cost of ownership are pinching many buyers’ finances. DICK BOVE, once again, sounds the alarm for the real possibility of a housing crisis. Still, there’s a solution for the impaired financial mechanism setting up the housing market for potential collapse, according to BOVE. Private capital would be unleashed, and more affordable homeownership would be within buyers reach if housing agencies, Fannie Mae and Freddie Mac, are taken out of conservatorship, he says.

Elsewhere, the CONVERSATION looks at the latest stresses on banks from capital to the retention of customer deposits. On the global scene, China’s economy remains deeply challenged while Germany’s is shrinking. “[Global] debt got us to where we are now, and debt won’t be able to take us out,” says BOVE. Joining the CONVERSATION is JOHN AIDAN BYRNE.

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