You're watching...
Charles Schwab senior vice president Liz Ann Sonders weighs in on the positive impact of housing on the economy.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
This dot com now let's move on.
The economy certainly at a crossroads here with the fiscal cliff Lumix that the data -- talking about a moment ago our next guest though says people underestimate the positive impact that we're seeing right now.
In housing.
Was and -- -- chief investment strategist senior vice president Charles Schwab she's here in studio consumers and that's always there are.
What are we missing on housing we have had some good numbers here.
That we've -- get a string of good numbers and -- It's been five consecutive quarters -- housing has been a positive contributor to GDP as measured by residential investment which is the housing peace and that's after six years.
Of a steady drag on the economy.
Now it's only about two and a half percent of GDP so it's not you know the elixir to all that ails us but I think people are underestimating the ripple effect into things like confident.
So what does it mean for the future because the actual.
GDP numbers that we have received during Munich as we know and a 1% and this week it's interesting to see other conversation -- -- for example.
We had does get brought -- it was -- yesterday comes on all the time but you know he's very optimistic usually about the economy and he's always saying to people stop talking about this recession.
But even he yesterday was using the recession -- -- the possibility of us falling back and into recession have you completely discounted that possibility.
I'm no I think it's a fiscal cliff.
Deciding factor I think given -- the full hit of three and a half to 4% of GDP and by the way.
I don't think we fully fall off of -- so the likely impact is going to be something less than that but when you only have.
4% or so nominal GDP growth -- 2% real GDP growth there's not much of a cushion so I do think that if we.
If we get a big hit as related to fiscal cliff I think of recessions -- and have a.
You because when we talk to people in this word gets thrown around I think too often.
Investing in everything else but uncertainty is a wishes we don't know what -- think we never know what the future's gonna hold but this time we really are uncertain about something like that.
So how do you handle it for your clients -- You say -- -- say 6040 chance to try to put odds on -- to -- We're not attempting to put odds on -- we have laid out scenarios for our clients as to what the ultimate -- as likely to be depending on the election none of which suggests you wanna try to monkey around with your portfolio.
Purely as say -- as a play on the fiscal cliff I think that's fairly dangerous is.
A lot of investors whether it's solely for that reason or other reasons that are very defensively positioned.
-- -- demand that -- strategy at the end well the election I mean I think yes I think to some degree it's related to see you look at and I like business surveys unified be.
Uncertainty about taxes and regulation in particular is the number one concern they have yes right now with had a declining.
Number of respondents say it's.
-- demand or weak sales but overall again you use you find did you find reasons to be positive and housing -- -- more risk take more risk as a result -- that a little -- well I think that a lot of investors ought to look at real state again.
So I think that that should be a an asset class portfolios to the future -- cents on his own -- thanks money.
-- -- I just gave -- like -- the was named stimulus stay in now I'm not buying -- -- I think you're just -- pulled -- fingers above my head them whenever and it now I don't.
