Tuesday, August 15, 2006

Roach Sees a Slowdown

I know, he has been talking doom and gloom for years.


America’s slowdown represents an important transition in the sources of economic growth, away from the vigorous wealth creation of asset bubbles – first equities, then housing – and back towards more subdued labour income generation. The delayed impact of higher interest rates is also taking a toll. Even though the Federal Reserve has put its two-year monetary tightening campaign on hold, there is a risk it has already gone too far. The confluence of higher energy prices, rising debt-servicing burdens, and negative personal saving rates reinforces the possibility of a pullback in discretionary US consumption and GDP growth.

Full article...


Anonymous Anonymous said...

"It is the verdict from the housing market, where an emerging downturn in residential construction activity is knocking at least 1 percentage point off the GDP growth trend of the past three years."

This is evidenced in all of the talk coming out of many of the homebuilders, it would not be surprising to see continued contraction until some of the inventory is pared back.

Tuesday, August 15, 2006 7:16:00 PM  
Blogger Dave said...

By Joe Richter
Aug. 16 (Bloomberg) -- Home construction in the U.S. dropped
last month to the lowest level in almost two years after higher
mortgage rates slowed sales and left builders with bloated
Housing starts fell 2.5 percent, more than forecast, to an
annual rate of 1.795 million, a Commerce Department report showed
today. Building permits, a sign of future construction, declined
6.5 percent, the most since September 1999.

Wednesday, August 16, 2006 8:47:00 AM  
Anonymous Anonymous said...

AS much as I enjoy reading Roach's commentary, can anyone point to a call he made right in the last few years?

Wednesday, August 16, 2006 8:21:00 PM  

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