The global economy ultimately affects individuals - especially high-net-worth
individuals whose personal wealth and business capital is subject to constant
economic changes on the other side of the globe, as well as the other side of
The good news is that the global economy is going through a healing process, in the opinion of Anthony Chan, chief economist for Chase Private Clients, a division of JPMorgan Chase.
Chan will be in Grand Rapids Wednesday to make a presentation on the global economy to some of the bank's private clients in West Michigan, who are mainly prominent, high-net-worth individuals.
Chan is quoted often in the news media, including The Wall Street Journal, Barron's, The New York Times, The Washington Post, Chicago Tribune, Los Angeles Times and Investor's Daily. He appears monthly on CNBC and other media outlets such as Bloomberg TV and public television's "Nightly Business Report."
Chan told the Business Journal he believes the global economy is "going through a healing process," although some parts of the world are doing better than others. There is faster economic growth in Asian countries, especially compared to Europe, he said. But central bankers around the world are working diligently to accelerate the healing process, he added. The European Central Bank has said it will do whatever it takes, and demonstrated willingness to lower interest rates, along with other options, if economic conditions there do not improve.
One of the strongest areas in the global economy is Asia, where the economy is being rebalanced toward a larger consumer sector.
"The consumer sectors in Asia offer great potential" for the world economy, Chan said. There is some potential in the U.S., too, he added, noting that discretionary sectors such as automobiles are doing a little bit better.
"I think we are starting to see early signs of renewed capital spending," too, he said, citing truck and car sales as those relate to both consumers and business.
The U.S. housing market is "on fire," he said, due to accumulated years of repressed demand, lower mortgage rates and home prices that are increasing again - all of which are very much in the minds of prospective home buyers these days.
"In some markets, you're even seeing shortages" of homes, said Chan, who predicts the expansion in the housing sector will continue to increase.
Home construction, of course, was a disaster zone in the Recession, with periods of housing starts that were at an annualized rate below a half million.
"Now we're hovering in the 1 million range, and I think that, by the end of the year, we will probably see housing starts exceeding 1 million - maybe 1.2 million," said Chan.
The U.S. Census Bureau and the Department of Housing and Urban Development, in their joint construction report on privately owned new residential units during March, said the seasonally adjusted rate was 902,000. That was about 3.9 percent below the February rate but more than 17 percent above the March 2012 estimate.
Building permits for single-family homes were estimated at an annual rate of 595,000, about one-half of 1 percent below the February rate.
Both the Associated Press and Reuters carried reports in early May that the Big Three in Detroit posted higher sales in April, driven by rising demand for
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