Quote of the Day
“My guess is that the job declines across the economy are greater than the monthly numbers we are now seeing, and that will be evident when revisions are published later this year.” - Jan Hatzius of Goldman Sachs. (NY Times, July 4th)
Macro Effects of the Housing Slump
Builders Bearish On California. “
Housing, the Subprime Mortgage Crisis and the Enduring Resilience of the U.S. Economy. “The economy of the last decade has mostly produced low-inflation economic growth despite a series of shocks—Long-Term Capital Management in 1998, the [tech bust] in 2000, 9/11… and now the subprime mortgage crisis… American Enterprise Institute’s Peter Wallison: “The financial resources of the government today are no longer large in relation to the size of the private sector." The Federal Reserve's balance sheet is $800 billion while the real assets of the 10 largest private-sector banks are $17.4 trillion—more than 20 times larger. Currency markets trade something like $618B every day. The Fed can take on loans from Bear Stearns. But its capacity for intervention is limited.” (U.S News & World Report, July 7th)
Outlook Darker as Jobs Are Lost. “Bureau of Labor Statistics: Apart from the 62,000 jobs eliminated in June — and 438,000 since January — most workers lost ground to inflation last month. While the average weekly wage of most ordinary workers was up 2.8% in the 12 months through June, the Consumer Price Index was up more than 4%… The [biggest] job cuts were in… professional and business services, which lost 51,000 jobs, most of them temps... Construction was next on the list. For the 12th straight month, employment in that sector shrank, this time by 43,000 workers.” (NY Times, July 4th)
Residential Construction Sheds More Jobs in June. “Bureau of Labor Statistics: The residential construction… sector lost roughly 6,700 jobs in the past month. Specialty residential trade contractors… lost 14,300 jobs in June. Ivy Zelman of Zelman and Associates: “Since the peak, jobs related to residential construction have fallen 17% and residential contractor employment has declined 15%.” Nigel Gault, chief
State Budgets Axed By Housing Downturn. “BusinessWeek: At least 29 states and
Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.
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