- Font Size:
- Default font size
- Larger font size
BY KEITH BENMAN
kbenman@nwitimes.com
219.933.3326 | Sunday, May 27, 2007 | (No comments posted.)
Interest rates, inflation and unemployment all are low by historical standards and the economy is responding as one would expect.
When Fortune 500 companies reported first quarter earnings this year, fully 67 percent beat Wall Street analysts' expectations, Nelson said.
Add to that the recent bull run in the stock market and a healthy world economy and the prospects for a prolonged economic expansion look good.
With all the talk of the crisis in subprime home mortgages, one might think the opposite. But Nelson pointed out subprime constitutes a small portion of the home lending market as a whole.
And subprime lending is done with the expectation that those loans will have higher failure rates than conventional ones.
To emphasize his point that financing of projects deemed less than creditworthy is nothing new, Nelson showed the Board of Economists a Hammond Times front page from 1929 with a banner headline which read: "Shoestring financing a factor in $20 million market crash."
One reason for the recent run-up in stocks is due to the fact that real estate has become a less-attractive investment. Also, as hedge funds take more and more companies private, there is less stock to buy.
"There's still a lot of capital out there, but there are fewer places where it can find a home," Nelson said.
Back to story No comments posted.
- It wasn't clear, concise or focused on the topic in the story.
- It was a personal attack, vulgar, explicit or degrading, used actual or implied profanity or contained potentially libelous statements.
- It accused someone of being guilty of a crime.
- It promoted violence or illegal acts.
- It contained telephone numbers or street addresses, or e-mail addresses and links to Web sites other than nwi.com or government agencies.
In no way do these comments represent the views of The Times or Lee Enterprises.
Passionate views, pointed criticism and critical thinking are welcome. Name-calling, crude and profane language and personal abuse are not welcome.
Reader comments will not be edited - they will be approved or declined. They may be used in the print edition of the newspaper.
If you feel a posted comment has violated these guidelines, please email our New Media team the commenter's name, the comment and a link to the article.
For more information please read our Terms of Service.
Post a comment Once your comments are approved, they will appear here.
» More Business Stories
- Professionals on the Move
- NWI businesses grapple with higher fuel costs
- THE TIMES BOARD OF ECONOMISTS: Don Nelson, first vice president of investments, Merrill Lynch
- THE TIMES BOARD OF ECONOMISTS: Matt Riek, manager Westfield Shoppingtown Southlake
- THE TIMES BOARD OF ECONOMISTS: Don Coffin, assistant professor of economics at Indiana University Northwest
- THE TIMES BOARD OF ECONOMISTS: John Rudy, president of Northwest Indiana region for Harris Bank
- THE TIMES BOARD OF ECONOMISTS: Pamela Stalling, executive director Consumer Credit Counseling Service