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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (2939)	7/23/2002 10:11:52 AM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

For some insight on Chicago real estate here's a clip from the latest issue of our local business journal... NEW-HOME SALES PLUNGE IN 2ND QTR. July 22, 2002 Crain's Chicago Business <<...New-home sales in the Chicago region fell 9.7% during the second quarter, compared with the same period last year, according to a survey by Schaumburg-based Tracy Cross & Associates. Driving the decline were slumping sales in Chicago, which came in 36.6% lower than a year earlier. Sales of new homes in the suburbs declined 4.4%. Prices rose slightly, with the average price of a new single-family home increasing 4.1% to $249,718, and the average price for a new townhome or condominium up 1.9% to $260,227...>> chicagobusiness.com ____________________________ From what I've heard from friends in the industry the prices are starting to soften -- slowly but surely...There are only a few areas where they seem to be holding up. Yet, the sales are dropping and we seem to have a large number of condos, brownstones, and homes on the market.

To: Jim Willie CB who wrote (2939)	7/23/2002 10:16:33 AM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

A Talk with Bush's Chief Economist BusinessWeek Online Tuesday July 23, 9:05 am Eastern Time With the stock market continuing to swoon and cases of accounting abuses still multiplying, Americans are looking to the White House for reassurance that the economy remains on track and isn't about to relapse into recession. To get the latest on the Administration's thinking, BusinessWeek Senior Writer Rich Miller recently spoke with President Bush's Chief Economist, R. Glenn Hubbard, who chairs the President's Council of Economic Advisers. Edited excerpts of their July 16 conversation follow: Q: How much of an impact will the swoon in the stock market have on the economy? A: A lot depends on where we end up and how temporary the drop in stocks is. But assume that the decline that we've seen since May is permanent -- then you'd have GDP [gross domestic product] growing about 0.7% slower [than otherwise] four quarters out. It would be a substantial effect. But it wouldn't derail the recovery. And again, that's for a permanent decline in the market. Q: So you don't think this decline will be permanent? A: There's very little in the fundamentals to suggest that it would be permanent. The only case you could make for a permanent decline would be if somehow the risk premium [demanded by investors] for holding equities had suddenly changed once and for all. Q: Given doubts about the veracity of corporate earnings statements and the threat of terrorism, isn't that possible? A: Terrorism is a real uncertainty and it's going to be there awhile. But the accounting numbers are something we can get right. It's relatively transitory and can be fixed by changes to [corporate] transparency and accountability. Q: Do you think that can be fixed in the next couple of months? A: I think there's a great chance that will be the case. Q: Do you see any role for fiscal policy to cushion the impact of the stock market on the economy through tax cuts or other means? A: I don't see the need at the present. The real economy is in very good shape and we still have a lot of policy stimulus in the pipeline. Monetary policy remains very accommodative. Q: Are you worried that the drop in the dollar will hurt the economy? A: I don't think a steady change in the exchange rate is likely to be a substantial macroeconomic concern. The concern would be more if there's a sudden change. I don't have a crystal ball, but nothing I see would suggest that's imminent. Projections for U.S. productivity growth are higher than they are for Europe and Japan. And inflation is very low in the U.S., even relative to Europe. Q: What about a housing bubble? Are you worried about that? A: I don't see any sign of a national bubble. Indeed, you'd expect the decline in interest rates that we've had to lead to an increase in housing prices. There are some doubts about some regional markets, but nationwide, I'm not familiar with any evidence that would suggest there's a bubble. And I think that's pretty much the Federal Reserve's view as well. biz.yahoo.com