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Economy Headed in Right Direction in 2013?

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    Professor Peter Morici on the stae of the economy early in 2013.

  • Duration 4:23
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Should we be hopeful are those hopeful signs that we've been saying about our economy Peter.

Well certainly the numbers on nine new unemployment claims are very hopeful last week we had a dip but we offing at one offs but now the we've had two weeks in a row.

-- substantially lower unemployment claims it indicates a somewhat stronger labor market.

-- right point out to you.

That employment and the labor market tend to be lagging indicators.

And we've seen some real softness for example in fed reports on manufacturing.

In New York Philadelphia Richmond and so forth.

-- that would indicate that there's a lot of softening in the manufacturing sector.

The housing sector you mention.

There's good reason to believe that this is.

-- sort of above elect a very temporary -- mauling two constraints on supply because of the you know hold up -- bankruptcies.

And and the fact that people remain underwater in -- bringing houses to market is not a lot supply out there right in the housing market.

I think housing.

Uninteresting conversation because.

Been reading -- read a couple articles this morning as a matter of fact about how.

If people think that we've turned the corner that -- turned things around and I saw some Bob -- comments -- Case Shiller Index.

He's over in not -- most of everybody else except for -- not Peter apparently but he you know he's basically saying in 09 we saw something similar which I think is what you're alluding to that.

The look like a head fake that you start to think are here we go and it's -- we're not quite there yet.

Dallas on teaching this week and I can't be two places at once.

-- you have to watch out for he tends to be one of the most pessimistic people on earth you know like that guy and little -- with the cloud over his head of however there are other analysts who are making the observation.

That you know this real constraints on supply right now in the resale market which -- artificial.

And that once that logjam breaks out.

It's it's kind of hard to justify as substantial rise in prices remember the end of the day.

Housing prices have to follow wages which had not been rising.

And that and that's a real problem.

We got ahead of wages during the bubble and and and housing prices may be about where they belong right now interest -- so.

Then the other question becomes how does the politics of the day kind of play into all this and we -- the debt ceiling.

-- up for three months and everything else and we keep having this same conversation over and over.

One cliff to another -- What about what's happening in Washington.

Well actually that could push the housing market a bit to things.

One is over the F Federal Reserve that group that regulates financial services is pushing for regulations that are very very friendly to people who are behind on their mortgages that sort of that they sharecroppers view of what mortgage rules should be namely they shouldn't be any.

At the same time we're gonna get -- change next year at the Fed.

The outlook for Janet Yellen to come -- and if you think Ben Bernanke's running the printing press and over time we haven't seen nothing yet thank you get are in there.

We may have the printing press explode overheat and an absolutely collapsed yet they try to print more and more money they'll have to -- Xerox machines to satisfy our is that -- -- -- As did so that's your prediction Janet Yellen -- the president's nominee to be the next.

Fed Chairman next year well she's very qualified him whenever there's a woman available just like at the SEC the president goes in that direction also frankly.

Elect god -- the woman who recently took over -- IBM she has checked all the boxes and -- the job.

And the president wants a loose money Fed Chairman Welch show -- the -- Our normal won't go into -- -- -- we've actually had to -- Mary Jo White you see your literature at the SEC.

Former prosecutor here in new -- got a ton of detail -- -- a discussion about how the president if anything hasn't appointed very many women and also high power.

Positions but these.

-- -- -- when they're available when there were available he he will going that direction.

And by the way marriage or white is very very well qualified I mean I think that she fits what the president once again you have to.

Be qualified and fit the direction the president wants -- going and he wants a tough enforcer.

And she gosh -- it is a tough lawyer now a lot of people said negative things or raise concern you are accurate by the fact that she's been a defense attorney wrote lately.

Well that's the way the law works in the -- -- one side or the other but that doesn't mean she won't be a great prosecutor.

Again at the SEC had just as she was when she had the southern district in New York.

Which is probably the toughest DA job in the country yes it is that's a big job here.

In no no doubt about it as a federal prosecutor Peter -- you thank you very much at a DC today let's go back at.

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