2012 Biotech Charity Contest Message Board

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Biotech / Medical : 2012 Biotech Charity Contest

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To: The Dodgy Ticker who wrote (250)	6/24/2012 2:44:11 PM
From: Steve Lokness	Read Replies (3) of 513

<<<< how did we grow the economy before the housing boom?>>>> Through normal business cycles - of supply and demand. Before Greenspan, there were normal business cycles that investors and speculators could rely on. Sooo, when the economy started to slow down in the past, interest rates fell (a normal and expected cycle). When interest rates dropped, housing, because of the nature of the length of the loans, became more attractive. People started to build and housing in the past almost always led us out of a recession. One of the reason housing was so successful at that was because of all the myriad components that go into new homes. ........This time, because we had so overbuilt housing, demand fell off the cliff. Housing stopped. Housing couldn't lead us out of a recession because every one who could afford a new house - and many who couldn't - already bought. At the top of the housing boom we were building I believe about 1.5 million houses annually. At the bottom it was close to 1/2 a million. Now think of all the demand that represents. Demand that disappeared almost over night. You can't replace that just by starting new businesses.

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