Posted on 12/19/2006 7:14:11 AM PST by finnman69
Wall Street has a soft spot for the "soft landing" thesis, but to me it's crystal clear that a serious economic slowdown is under way. What has been surprising: not that the economy is weakening but that so many people seem to expect a soft landing, and therefore remain in denial about the seriousness of the slowdown.
I guess the predilection toward a soft landing is a function of the following: So many folks in the investment business -- and in the country at large-- haven't experienced a consumer-led recession in so long that they think this outcome is just not possible. That's because the Federal Reserve Board has evolved into being a business-cycle suppressor and bubble manager. Consequently, folks just assume that economic weakness is a feature of the business cycles of yesteryear.
(Excerpt) Read more at articles.moneycentral.msn.com ...
See these new maps of the 100 biggest US housing markets
http://money.cnn.com/popups/2006/fortune/invguide_realestate/index.html
There's my cue to buy.
Now, however, it's quite clear that the consumer is being affected -- whether one looks at the sales data from Wal-Mart and other retailers, or at the Liscio Report's data on state sales-tax receipts. To quote from Liscio's latest survey: "The weakening consumption trend is now established, and the majority of our tax contacts expressed real concern about a slowing in sales-tax collections. It now appears clear that consumers are not spending the billions of dollars they have saved on gas in recent months." Furthermore, when I e-mailed Liscio to share my view that we are entering a recession, here's the response I received: "We note with a shudder that our indexes look a lot the way they did in fall of 2000, especially the weakening and then big drop in the sales tax survey. The SDI led us into the last recession, and the states that led are very weak right now, as well."
Tell me ALL about it. I could write for a solid hour about the denial I see in school children who think they can avoid homework, not study, remain ignorant and STILL demand the same pay and benefits that an educated person is going to earn. Pay day has to come or all of God's laws, economic laws, etc. will have been broken.
housing permits down...PPI up too...
My thoughts we are on the first tier of the housing crash..two more tiers to go...
Why do bubble heads always proclaim themselves correct when they have missed out of the biggest housing boom in history and we still haven't seen anything remotely close to the crash they have been predicting. The only people in denial are the bubble heads.
Amen to that, brother!
http://calculatedrisk.blogspot.com/2006/12/housing-starts-and-completions.html
Click on graph for larger image. The first graph shows Starts vs. Completions. Starts have fallen "off a cliff", but completions have just started to fall.
This graph shows starts, completions and residential construction employment. (starts are shifted 6 months into the future). Completions and residential construction employment are highly correlated, and Completions lag Starts by about 6 months. Based on historical correlations, it is reasonable to expect Completions and residential construction employment to follow Starts "off the cliff". This would indicate the loss of 400K to 600K residential construction employment jobs over the next 6 months.
Doomed. Doomed I say.
Depends. I live in one of the five fastest growing towns in MA. There is no slow-down here in housing with over 1,000 building permits pulled last year.
I have several college-aged employees here in town and several in Argentina. I've found that the ones in Argentina, who speak English as a second language, are significantly more literate in English (and better spellers) than their counterparts here in the US.
I have no doubt that the US employees are very intelligent - however it's also very apparent that our educatational system has failed them miserably. As the person who makes compensation decisions, I can assure you that it's going to cost them dearly in terms of cold, hard cash.
" The bubbles are mainly coastal, "
Beware of the "isolated bubbles" fallacy -- it's the equivalent of saying something like, "Those leaks in the dam are over there; it looks just fine where I am."
When the dam bursts, the whole valley gets washed away....
How many were pulled the prior year?
"our educatational system"
Is that like Strategery?
Of course building has slowed down. What is the point? We were building at record pace, and have dropped down to more substainable levels close to the historical average. The price for newly built homes has actually gone up in the last year.
Based on what? The author is either an idiot or a Democrat.
Hey extexan, remember calling me a jerk & a liar for saying housing values in my area have not dropped? This map says exactly what i have claimed for my area, that house prices are not dropping.
Are you ready to apologize yet for calling me a jerk and a liar, because the facts are, you are just wrong.
Pelosi's fault.
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