Ongoing weakness in the housing market will push the national economy to the brink of recession, but growth in other areas should put the country back on a slow road to recovery by 2009, according to an economic forecast released Wednesday.
The quarterly Anderson Forecast by the University of California at Los Angeles predicts growth in the gross domestic product of just over 1 percent for the fourth quarter of 2007 and first quarter of 2008.
The slide from grace is really more like gliding And I've found the trick is not to stop the sliding But to find a graceful way of staying slid
The real hit to the economy isn't going to be the housing slowdown per se, but rather the lack of all that refi and home equity loan money sloshing through the economy. Homeowners got used to the idea of their homes being a magic cash machine spitting out a good $10-30K of home equity loan money every year. Anecdotal evidence suggests many of these homeowners are now turning to credit cards to substitute as a source of "extra income." Of course, that's only going to last so long.
Of course, this all goes back to the fact that America's standard of living peaked in the 1970s, and the real income for the working class has been declining for some time now. This accounts for all the deficit spending and asset bubbles built with the tacit consent of the Fed as increasing amounts of pixellated cash are shoveled into the growing income gap. This only works for so long...and sooner rather than later the music is going to stop.
- - - - in a credit-scoring postnuclear Stone Age...