Real GDP Growth Chart

[BlueEyedSon]

[rzemanfl]

1. Is an eyeball or a box with an X in it?????

[BlueEyedSon]

6. Looks like everyone else can see it

[rzemanfl]

7. The NSA wiretap on my phone must be blocking it. Gotta link? nt

[BlueEyedSon]

8. LOL! Try here:

http://calculatedrisk.blogspot.com/2005/12/gdp-growth-with-and-without-mortgage.html

[rzemanfl]

9. Thanks. I've been saying this all along. n/t

[papau]

2. That does describe the Bush borrowed GDP growth

[brokensymmetry]

3. Interesting chart!

I had to mess with the link a little to bring the chart up, but it's well worth the trouble.

The economy depends on MEW (Mortgage Equity Withdrawals).

[fasttense]

4. So from what I get from the chart,

If we didn't have consumers borrowing the equity on their homes, and of course spending it, we would have a negative (or near negative) GDP?

[OneBlueSky]

5. pretty much . . . we've known all along that consumer spending . . .

is what's driving this economy . . . what this chart makes clear is where the consumers are getting the money to spend . . . and why the economy appears strong despite massive layoffs, plant closings, job outsourcing, rising energy and health costs, and all the rest . . .

at some point -- and it could be soon -- residential property values will stop rising and will seek some sort of equilibrium . . . in other words, the housing bubble will burst . . . and that will dry up the primary source of disposable consumer income and bring the economy to a crashing halt . . .

and as housing prices contract, those who have maxed out on their equity will find their loans called, since their property values will no longer provide sufficient collateral to cover their loans . . . look for a dramatic rise in foreclosures when that happens, accompanied by a dramatic rise in homelessness . . .

[fasttense]

13. Well you are starting to see an increase in foreclosures

"IRVINE, Calif., Jan. 23 /PRNewswire/ -- RealtyTrac(TM) (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released year-end data from its 2005 U.S. Foreclosure Market Report, which showed that 846,982 properties nationwide entered some stage of foreclosure in 2005, and a 25 percent increase in the number of new foreclosures from the first quarter to the fourth quarter."

Hmm, a 25% increase in foreclosures, does not bode well for our economy.

"Despite a 29 percent decrease in new foreclosures from the first quarter to the fourth quarter, Florida documented the nation's highest foreclosure rate and accounted for more than 14 percent of the nation's new foreclosures in 2005."

"New foreclosures in Texas increased 54 percent from the first quarter to the fourth quarter, and the state documented the nation's fourth highest annual foreclosure rate."

No surprise that Florida and Texas have high foreclosure rates.

http://biz.yahoo.com/prnews/060123/lam024.html?.v=38

[Kipling]

10. Holy hopping shit...

Do you realise what even a small sharp drop in house prices could do? Doesn't bear thinking about! This also shows that business investment is hardly rising at all. And that's not good.

[BlueEyedSon]

11. uh.... yeah. nt

[AX10]

12. kick

[Warpy]

14. That's one of the scariest charts I've seen in a long time

and it certainly bears out what I've said about why the economy is still grinding along: it's been floated on a sea of unsecured credit and mortgage refinancing, leaving consumers so deeply in debt that they'll never find a way out.

When this whole thing starts to go, it's going to get very, very ugly.