- The Big Picture - http://www.ritholtz.com/blog -
Chart of the Week: GDP w/o Mortgage Equity Withdrawal
Posted By Barry Ritholtz On December 13, 2005 @ 12:24 pm In Economy,Real Estate | Comments Disabled
Calculated Risk  notes that Mortgage Equity Withdrawal (MEW), was $171 Billion in
Q3 2005, out of total household mortgage
increases of $289.5 Billion dollars.
Goldman Sach’s estimates ~2/3 of MEW is flowing through
to personal consumption. Using their numbers, we can estimate the impact of
Mortgage Equity Withdrawal on GDP:
Source: Calculated Risk 
Its readily apparent from the graph how crucial MEW has been
to GDP spending. If MEW falls significantly, it will be a major drag on GDP:
Expect personal consumption to slow, impacting retail. The Real Estate Complex
will also see job creation fade.
See also Northern Trust’s Paul L. Kasriel Households – Another Quarter Older And Deeper In Debt .
THE GOOGLEVERSE 
Quote of the Day:
The Stock market is that creation of Man which humbles him the most
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2005/12/chart-of-the-week-gdp-wo-mortgage-equity-withdrawal/
URLs in this post:
 Calculated Risk: http://calculatedrisk.blogspot.com/2005/12/gdp-growth-with-and-without-mortgage.html
 Image: http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/gdp_w_and_wo_mew_2.jpg
 Households – Another Quarter Older And Deeper In Debt: http://www.northerntrust.com/library/econ_research/daily/us/dd121205.pdf
 : http://online.wsj.com/article/SB113434924242819801.html
 Recession looming, some fear: http://www.kansascity.com/mld/kansascity/13386391.htm
 Let Your PC Do the Investing: http://www.wired.com/news/business/0,1367,69710,00.html
 Does the Market Know How to Price Al-Qaeda?: http://www.bloomberg.com/apps/news?pid=10000039&sid=aD5fopgVFN2s&refer=columnist_lewis
 Delicious, Digg, and the New Balance of Power: http://www.aventureforth.com/2005/12/06/delicious-digg-and-the-new-balance-of-power/
 Google: Ten Golden Rules: http://www.msnbc.msn.com/id/10296177/site/newsweek/
 THE GOOGLEVERSE: http://www.siliconvalley.com/mld/siliconvalley/13233755.htm
Copyright © 2008 The Big Picture. All rights reserved.