2007-10-02 09:27:15 - In the wake of the subprime mortgage crisis, Dr. Thornberg explains the background, root causes and cooling down of the economy and the long term impact on the real estate market.

The Money-Rx finance blog ( money-rx.com/blog/ ) is publishing interviews with and profiles for prominent market analysts, finance professors and fund managers. The latest in this series is a profile for Dr. Christopher Thornberg, Principal for Beacon Economics, an L.A. based company.

'It is true that the housing construction sector is a small portion of the overall US

economycomprising about 3.5 percent of the economy on average, only about 5.5 percent this time at the peak-, says Dr. Thornberg. 'Consumers have been on a spending binge fueled by home price appreciation. Savings rates have been negative and the US overall has been running a massive trade deficit as consumers have used mortgage equity withdrawals to expand spending. The old rules about housing do not apply anymore. Now the housing market can cause a recession. Read the full profile and his comments here : www.money-rx.com/blog/2007/10/christopher-thornberg-beacon-econo ..

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