That is why preventing unrealistic principals is an important regulatory function, even if people can afford the monthly payment.

But interest rates affect other things than the mortgage market. They also raise the risk-free rate of return, which means that they subsidise lazy money and reduce investment in real capital (if you can invest in a machine that gives 1 % or in a sovereign bond that gives 1 %, you're going to pick the bond. But the bond generates 0 % added value to society, while the machine generates 1 % added value to society - so that's a net loss).

- Jake

Friends come and go. Enemies accumulate.