Wednesday, May 14, 2008
Fun week... learn about economics, Part III! by gimleteye
As the graphs from Monday and Tuesday's posts showed, investors aren't stupid: if they are stupid, they don't stay investors, long. If 70 percent of the US economy is driven by domestic consumption, and 70 percent of economic growth is generated by housing, construction and related development, and if housing prices have fallen from 20 to 40 percent in the formerly fastest growing regions of the country, then investors are right to question whether risk is correctly priced. Investors in the US economy are pulling back: not just from US debt, but from all kinds of debt.
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2 comments:
The economic model of growth in south FL has a bleak future. Will we regress to farming and manufacturing?
There is little land left and the green commies frown on making anything here because of pollution.
I think I'll sell hats made from palm fronds to the tourists and live in the shell of a foreclosed home.
Tourism was at one time an economic engine. Miami is losing out to other areas in Florida. A growth based economy will not work anymore when you are boxed in by the Everglades and the Bay. We need to find something better. We need to attract better businesses.
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