Bernard L. Weinstein, Ph.D.

1
The Sub-Prime Mess and the Credit Crunch What it
Means for Texas

• Bernard L. Weinstein, Ph.D.
• University of North Texas
• Presentation to Texas Credit Union Real Estate
  Network
• Fort Worth, Texas
• February 14, 2008

2
Real Economic Growth
Gross domestic product
4Q 2007 0.6
03 2004 2005
2006 2007
Source Commerce Department
3
Nonfarm Payrolls
Monthly change, in thousands
Jan. 08 -17,000
2006
2007
08
Source Labor Department
4
U. S. Jobless Rate
In percent, seasonally adjusted

2007
08
Source U.S. Department of Labor
5
Retail SalesRetail Sales
Total retail sales in billions of dollars,
seasonally adjusted.
Dec. 2007 382.9 billion
06 2007
Source U.S. Commerce Department
6
Industrial Production
Index, 2002100, seasonally adjusted
Dec. 2007 114.0
Source Federal Reserve Board
7
Construction Spending
In billions of dollars, seasonally adjusted
Dec. 2007 1.14 trillion
06
2007
Source Commerce Department
8
Productivity
Nonfarm business productivity, percent change
from previous quarter at annual rate, seasonally
adjusted
2004
2005 2006
2007
Source U.S. Department of Labor
9
Consumer Prices
Percentage change, month to month (seasonally
adjusted)
06
2007
Source Bureau of Labor Statistics
10
End of Cheap Food
11
Employment Change 2004-2007
Source Texas Workforce Commission
12
Unemployment Rate, U. S., Texas, D/FW
U. S. Texas Seasonally Adjusted D/FW not
Seasonally Adjusted
U. S. Dec. 2007 5.0 Texas Dec. 2007
4.5 D/FW Dec. 2007 4.2
Source Texas Workforce Commission
13
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14
Housing Starts
New private housing starts during the month, in
millions, at seasonally adjusted annual rates.
Dec. Starts 1.01
06
2007
Source Dept. of Commerce Dept. of H.U.D.
Census Bureau
15
New-Home Sales
Single-family homes (in thousands)
Dec. 2007 604,000
Source Commerce Department
16
Existing-Home Sales
Annual rate, in millions of dwelling units.
Dec. 2007 4.89 million
Source The National Association of Realtors
17
Texas MLS Residential Housing Activity
18
Home Value Decline
19
Source Wall Street Journal, Oct. 11, 2007
20
Source Wall Street Journal, Oct. 11, 2007
21
Highest Subprime Exposure
Source Wall Street Journal, Oct. 11, 2007
22
Subprime Loans in 2006
Source Wall Street Journal, Oct. 11, 2007
23
Dip in Household Ownership
24
Tremors
25
Worst Yet to Come?
26
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27
Construction Lending And Sub Prime Loans
28
Bankruptcies on Rise
29
Consumer Confidence Index
From a monthly survey of 5,000 U. S. households,
1987 100
Jan. 2008 87.9

2007
08
Source The Conference Board
30
Leading Indicators
Index of 10 indicators designed to lead, or
predict overall economic activity 1996 100.
Dec. 2007 135.9
2006
2007
Source The Conference Board
31
Conclusions