Good bye stimulus

President Obama has announced a spending freeze and the ECB is taking about reducing stimulus as well. We would suggest then, that it is only a matter of time before home prices in the U.S. yield to what is still a obvious excess supply backdrop

Also, we have heard no comments that would suggest that the Fed plans to change their minds on the plan to end the home loan or housing tax credit initiatives. What we did get from the President  was an announcement of his intention to freeze about 20% of government program spending.

It is going to be very interesting to see how this global economy grows without all of these central government handouts that have pumped over $2 trillion of stimulus into the global economy. We suspect that risk aversion will soon become the trend. Be warned!