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June 09, 2011 at 09:47 AM
Speaking at the Pershing Insite conference on Wednesday, Richard Hoey, chief economist for BNY Mellon and Dreyfus Corp., proclaimed that “we’re still in a global economic expansion,” but said that the rate of growth differs sharply between those countries that have experienced a “debt hangover” and those who did not.
Hoey (left) told the full crowd of broker-dealer executives and advisors that he expected continued 2% growth in developed countries, most of which experienced that “debt hangover,” but that emerging markets’ GDP growth is “running around 6%,” yielding global growth of about 4%.
Addressing the housing crisis, Hoey said that “the right price of housing is where it is today,” and blamed the crisis on “people in Washington” who wanted to increase the nation’s home ownership rate, which had stood “at 64% for 20 years” and boost it closer to 70%. But since many of those buyers couldn’t actually afford their new homes, the rate has now fallen to about 66%.
He then discussed oil prices, noting in passing that 87 million barrels of oil are used daily worldwide, close to the 92 million barrels that would represent full supply capacity, which is why the Libya oil cutback helped increase prices. Hoey said, however, that he doesn’t expect oil prices “to spiral higher and higher.”
As for the likelihood of any more economic stimulus money from Washington, Hoey said that the “political attack on QE2 has changed the risk-reward” ratio for further easing by the Fed. Far from being able to make a case for a QE3, he said Ben Bernanke (left) is having a hard enough time making the argument “that QE2 worked.”