Slack is huge. But if Trump thinks most these gig workers are going to do infrastructure work, he is sadly mistaken. His infrastructure work will be pulled from full time workers, maybe and from some newly entering the work force. And there is the question of whether the infrastructure work and the alienated work force is even remotely in the same vicinity.

Super demand for bonds exist. And it may not be as high as I thought regarding collateral in derivatives, but I believe what Zero Hedge said, that in times of stress that collateral will balloon, meaning demand now for bonds is massive due to firms keeping a spare supply if there are margin calls or if counterparties default, etc. Zero hedge said collateral needs could be as high as 11 trillion dollars. Hoarding of bonds is fact, not fiction, and the yield declines that you brilliantly show, prove it, IMO. The Fed helped in doing the war bond drive. The Fed actually cared about the real economy, the war economy. Now it apparently could care less about the real economy, the domestic economy.

I know it is a minor point in an otherwise very interesting article, but I agree with Scott Sumner that the Fed tightened in 2007, as NGDP cratered while inflation was constant. They turned a housing bubble in 4 states into the Great Recession. Where I disagree with Sumner is that it was a bubble in 4 states. Looking at the nation as a whole it didn't look like a bubble, but in the 4 states it was a bubble. But he is right that the Fed tightened.

I was not a fan of Obama for many reasons, but the Republican congress actually limited the stimulus that he would have passed. That stimulus, while many were unemployed, would have bolstered the economy. The Republicans wanted power more than a successful economy. Now, at almost full employment, Trump may have trouble finding warm bodies to push his agenda ahead.

Add to all your indicators a nearly full employment in the US and who is going to fuel this recovery? As I said recently, Trump better keep most of the illegals around and find some more because there are not enough warm bodies willing to fuel a recovery like he wants. And you pointed out that QE also had a bad effect, as asset inflation increased the wealth gap.

My adult daughter says they should get more aggressive with coupons, 20 percent off all orders. The retail landscape is not healthy right now.

Collateral shortage. So many people don't believe it. But clearly there is collateral shortage in derivatives markets.

I do think though, that MBS's were not all bad. The Fed just declared them all bad and destroyed the commercial paper market that funded subprime. Not all subprime was bad. But since it has been judged bad, non asset backed securities are preferred, meaning treasury bonds.

You would kill crony capitalism if senior bondholders had to take haircuts. One thing though, I don't think mark to market is necessary if the loans are performing. That is what happened in the US and it was a disaster and unnecessary.

Toronto is a world class financial center. It probably benefits from a healthy oil market quite a bit. And as you said, Norman, it is a closed access city, with few new houses and a tight market. But this will push workers out of the city.

That would probably be a mistake as long as oil production is somewhat stable and prices are stable. But if there is a recession and oil prices decline significantly the market will bail on the Canadian housing market.