Eli Broad: Economy in Worst Slump Since WWII

More straight talk from an old hand in the building sector:

"Billionaire investor Eli Broad said the U.S. economy is in the "worst period” of his adult life as a housing market recovery remains "several years” away.

"This is worse than any recession we’ve had since World War II,” Broad, 75, said in an interview yesterday. Broad, the founder of homebuilder KB Home, said the U.S. should avoid a depression on the scale of the 1930s because the country now has sufficient "safety nets.”

The economy expanded at an annual rate of 1 percent in the first quarter, the Commerce Department said last week. That caps the weakest six months of growth in five years. The U.S. lost 49,000 jobs in May, when the unemployment rate rose to 5.5 percent, the fifth straight month with a drop in payrolls and the biggest jump in the jobless rate in more than two decades.

"This is the worst period of my adult lifetime,” Broad said, speaking about the U.S. economy. "I do not think things are going to get any better” before the next president takes office in January.


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Check out that chart in the background — Ouch!

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Source:
Broad Says Economy in Worst Slump Since World War II
Anthony Massucci and Erik Holm
Bloomberg, July 1 2008
http://www.bloomberg.com/apps/news?pid=20601103&sid=aAZwgRY7yikM

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What's been said:

Discussions found on the web:
  1. Matthew Rafat commented on Jul 2

    Here is the issue I have now–Warren Buffett says to buy when others are fearful, and to sell when others are greedy. What is an investor to do now, with money markets providing only 2%, and GE offering a yield of over 4%?

    http://www.gotshares.com

  2. Steve Barry commented on Jul 2

    I’m not going to listen to this interview…I heard Wilbur Ross on Bloomberg earlier today and had to turn it off after the 5th word. Almost every current Billionaire became one by riding this massive credit bubble that has formed since 1950 and by being an “optimist”. To some degree you can almost forgive Kudlow for always being an optimist…that has worked for 60 years. If any group is talking their book and out of touch with the average American, it is the Billionaires. Even Buffet has jumped the shark IMO, with his now common CNBC appearances and 2 Million dollar lunches with people for charity. The real leaders of organized crime are the ones you never heard of (Reductimat, don’t now conclude I am calling Buffet a criminal…it is an analogy). How many people followed Joe Lewis into Bear Stearns? Icahn into GM?Corporate insiders (the most influential of which are a subset of the Billionaire club), are the ones who presided over this mess on Wall Street and should also be ignored IMO. They couldn’t foresee the music stopping. How about Billionaire Jerry Yang at Yahoo? Jerry, you are supposed to make deals that make your stock go UP, not down.

  3. Jim Haygood commented on Jul 2

    I heard this interview on the car radio yesterday morning. A key message was not in Broad’s words, but the tone in which he delivered them. His voice was thin, reedy, warbling. He sounded both elderly, and in great emotional distress. Of course, that’s entirely appropriate under the circumstances.

  4. Philippe commented on Jul 2

    When reading the last hedge funds market watch from Société Générale they are few salient features from the « herd driving forces « 
    Funds are now reducing their net exposure on short of SP and Nikkei
    Getting back in volatility compression
    Shorting the Pound
    If it provides no inspiration, the best is to go sailing, mountain climbing, or consult a psychiatrist for further guidance.

  5. Homes for sale commented on Jul 3

    It getting that way over here in the UK too. I keep a close eye on the US market as we usually follow what happens over there. Unfortunately it looks like we are in for increasing house prices for a forseeable future. The problem is that for new time buyers its now at breaking point. Mortgage rates are now at 7% which means the average mortgage is going to cost you about £950 a month!

  6. Concerned Canadian commented on Jul 3

    White collar crime is rampant with little or no application of law save Enron, Martha Stewart and the likes lip service. Borders are disappearing with no authorization of citizens but rather behind closed doors by ‘elite’ types. Special interest groups control just about everything and the average persons rights are being eroded out of existence by thieves, tyrants and parasites. Alternative energy research was largely ignored by North American business. What’s next? War? Not my war.

  7. Caesar Parisi commented on Jul 4

    I am truly hoping the economy gets better. The hardest question to answer is how long are we going to be stuck in this slump for?

  8. Jim Grapes commented on Jul 5

    I went to many open houses at different KB Homes neighborhoods when on active duty in the US Navy stationed in San Diego. I remember thinking, “Sure it’s nice, but the prices are outrageous.” Perhaps the overheated prices have cooled down enough to where a normal person could afford a KB Home now.

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