Tuesday, February 27, 2007

Stock Market Bust - What Isn't and Won't Be Reported

Immigration is down. You know, the illegal kind. Whether it is because our Homeland Security improvements are working, or because the Mexican economy is on a roll, or because of our construction slump, fact is, there are fewer apprehensions. That is how the HSD determines how many are trying to get in.

But this reduction could end up being one of those unintended consequences that most economists will never actually figure into the historical pattern. Let me see. Less new adults added to the population, fewer families looking for a place to live, less people buying goods and services. This is very likely to lead to an economic slowdown, starting with housing. Checked out the value of your home recently.

In checking around with my friends in the business world, construction work is very slow, truckers are looking for loads, and almost everyone seems to be complaining about new business in the last three weeks of February. So Alan Greenspan says: We might have a recession later this year. China hears that (he said it at a meeting in China.) They aren't stupid, and they can feel the cough in America long before it becomes a cold in Asia. So their market dumps 9% in one session.

Does this mean we should encourage illegal immigrants to start crossing over again? Does it even mean we should dramatically increase the number of work visas and such. Not necessarily. We just need to know that there will be pain in the process.

PS. This is not to say that this is the only thing impacting the economy or housing prices. And I am not predicting a recession later this year. As a card carrying member of the Optimist Party, I expect a major increase in business tomorrow or the next day.

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