Florida is doomed...
One of my favorite Wall Street economists, Jan Hatzius of Goldman Sachs, put out a report recently predicting that Florida — not California or New York or DC — would be the “epicenter of the U.S. Housing Bust.” To appreciate the context for Hatzius’ prediction, you first have to take a step back and realize that Hatzius isn’t a housing gloomster. He’s not predicting a dramatic 30% plunge in values that sends us into recession or depression the way some seers have it. He believes the direct and indirect housing drag on GDP will “only” be a cumulative 3-4 percentage points, with that spread out over 2-3 years. Not enough to cause a recession because he thinks that improvements in the trade imbalance — read: higher exports — will help pick up the slack from housing.
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