Wednesday, October 19, 2011
Back to Basics
In today's NYTimes article entitled "Chasing Opportunity in an Age of Upheaval," the author quotes UVA-grad and past leader of Hunt Private Equity Group Stephen Smiley as saying: "At some point we’ll start building houses again, and the consumer will go back to the store and buy what he needs. That’s going to create a demand for energy.” Of course Smiley's track record investing within the energy (oil and natural gas) sector is essentially unmatched, but is it really that simple? Does such a black-and-white projection qualify as legitimate?
Subscribe to:
Post Comments (Atom)
Smiley's operative phrase: "At some point."
ReplyDeleteWith economic forecasts and political realities as bleak as they are, this point may lie further into the future than many would hope. In the long run, housing may rebound, and with it, the economy at large. But as Keynes said, in the long run, well, you know the rest.
Which leads to another viable question: do we really need to "start building [more] houses?" In this morning's WSJ Morning MarketBeat, Gongloff says it best: "Also at 8:30 a.m. we get September housing starts. Economists think these rose to a 590,000-unit annual pace, from 571,000 in August. Both are very low numbers - but we don't need that many more houses anyway."
ReplyDeleteFor the record, via BusinessWeek: Housing starts climbed 15 percent to 658,000 houses at an annual rate, the most since April 2010, Commerce Department figures showed today in Washington.
ReplyDelete