That quote from June 1990 about the stock market just before the dive, "It's the only game in town." was not preceded by a thundering housing boom that faltered driving the smart money to "the only game left in town".
But aside from that, boy it sounds like the same Business Week...giving us the same business.
Actually, the housing boom of 1985-1989 was pretty thundering in its own right. No, it wasn't quite as frothy as the most recent one, but it was still quite a housing boom.
Housing was strong in the Seattle area until 1991 when it took a big slide. Housing is still strong today, maybe we are a trailing market and due for the big hit, but for now we are still getting double digit appreciation (fingers crossed).
I don't want to be tedious, but I am still waiting on an explanation of how GDP and productivity can take this huge hit from 2002-2003 levels and still not see fundamental effects on labor. Certainly it didn't take long in past downturns to see layoffs.
People suggest changes in labor force participation but that just shifts the question.
The only plausible explanation I have seen is that there is a large pool of undocumented workers paid cash and so not subject to Social Security in housing. If the employment indices weren't catching them then the mathematical result of a sector slowdown would be the measurable decline in production wouldn't be offset by equivalent changes in labor hours. The result would be a more volatile productivity number, as housing picks up we could expect a surge in productivity as product comes on line with no increases in recorded labor force. Which raises some question of the usefullness of this measure going forward.
It is personally frustrating, right through Q3 2005 I was sailing, productivity was routinely clicking in at levels 50% above Social Security's Low Cost, I was ready to declare victory and move on. Then the number series went crazy and the whole measure revised in a way that stripped .3 points off of 2002-2004 but all in a way that had no measurable effect on Social Security receipts.
So again. Where are the labor effects?
Commenting by HaloScan
