The former GE (GE) Chairman was in Boston yesterday and commented on a range of subjects…
Welch said he’s optimistic about an economic recovery and looking closely at the housing market for signs as to when it may begin.
“I want (new) housing starts to go down, down, down,” he said. “It’s the only way to get housing prices stabilized, and we need to stabilize housing prices.”
Housing starts slid 13 percent to an annual rate of 458,000, a lower level than forecast, Commerce Department figures showed today in Washington. The drop was led by a 46 percent tumble in multifamily starts, a category that tends to be more volatile. Housing starts fell 10.8 percent to an annual rate of 510,000 in March.
“While the market didn’t like it — housing starts going down again — I like it,” Welch said.
This goes to commentary on this blog. With the demand side of the equation plummeting, housing cannot be stabilized until the supply side of the equation is adjusted. With foreclosures hitting the market at a record rate, the ONLY way left for this to be done is for housing start to fall……dramatically, for a prolonged period.
Disclosure (“none” means no position):