"We find that the red-hot housing sector alone, which typically represents just 5% of the total economy, accounted for an astounding 50% of the overall growth in the U.S. economy by the first half of this year, and more than half of the private payroll jobs created since fall 2001 were in housing-related sectors,"
"We argue this represents an unhealthy and disproportionate share of economic growth. The overreliance on residential investment leaves the economy very vulnerable if housing demand and prices cool -- prices do not need to even fall; just a slowing in the pace of home price appreciation would have a noticeable negative impact on economic growth -- not unlike the fallout following the frenzied tech overinvestment in the late 1990s."
Monday, August 29, 2005
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Merrill Lynch economists Kathleen Bostjancic and David Rosenberg said in a economic commentary:
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It makes me absolutely sick that after 9/11 the fed basically gave money to anyone that wanted it. Instead of taking this influx of capital and reinnviogorating a manufacturing sector wwhich basically sucks, or building more gas refineries (would be good now!?) people took the money and made real esate the driver of this economy. Real esate returns absolutey zero to the future of america, and now we will have to pick up the pieces. Truly sad, if people could see beyond their own purposes, we may be able to get ahead.
ReplyDelete50%! That is shocking. Do you have a link to that? Thanks.
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