by Harry Denton, The Burning Platform:
A Yahoo Finance headline this morning reads: “Unhappy New Year: The U.S. Economy Is Stalling Out.”
We recently learned that existing home sales in November crashed 10.5% from the month before.
Guess when the last time was when we saw these levels? The housing crisis of the mid- to late-2000s!
I also recently shared a chart showing a cataclysmic 82% drop in the ratio of new home sales to the U.S. population. To put it simply, we won’t need more real estate for decades to come, with baby boomers increasingly dying to offset rising millennial home purchases.
I and a few other experts like David Stockman have continued to argue that this re-bound since 2009 has been all smoke and mirrors – artificial stimulus that has only created greater bubbles in financial assets like stocks, and financial engineering to create rising corporate profits. None of it goes toward real expansion for future jobs, productivity and growth… things like new office space and industrial capacity.
Wall Street analysts and corporate CEOs can argue against this with their “this is not a bubble” logic, but this chart tells the real story.
Below is a chart that shows the office space per worker in square feet. It shows a rise into the height of the financial crisis, after which it’s fallen like a rock!
At first this could seem counterintuitive. Why did the square footage per worker go up into the worst of the recession into mid- to late-2009? That’s because companies were laying off workers going into that recession, meaning there were more workers per square feet.
But the real story comes in the recovery from late 2009 forward.
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