Imagine for a moment reading a news story that began like this: "There is no limit to the amount of alcohol a human being can consume as long as the liver can absorb it, said the U.S. Surgeon General."
Belaboring the obvious? Begging the question? No matter your reaction, brace yourself:
There is no limit to the amount of money the Federal Home Loan Bank system can lend to support the mortgage finance industry as long as investors are willing to keep on buying its debt at moderate prices, said the system’s regulator.
“I do not think there is anything that sets a maximum amount of potential advances,” Ronald Rosenfeld, chairman of the Housing Finance Board, said in an interview with the FT.
“If the market were to perceive some excess and therefore began to resist buying our securities, that would obviously impose a limitation,” said Mr Rosenfeld. “I simply could not begin to quantify that nor do I see it coming in the near future.”
Just file that away mentally for future reference.