Don Nicholaisen, former chief accountant of the Securities & Exchange Commission, started off his talk at Atlanta Rotary today by addressing students in the audience.
He told them they should feel excited about the future because they can help model the new economy.
And then he spoke to the other people in the room.
“Those of you who have been around a while should be scared to death,” he said. “We are seeing something we’ve never seen before.”
He then made a comparison to weather.
“We probably are today in what might be best thought of as the 100-year flood,” he said. “Almost all the economic indicators are struggling.”
Part of the problem is that we’ve been a consumer-based economy, but now consumers would rather save their money or pay back their debts rather than spend their money on consumer goods.
Nicholaisen said he wasn’t sure how or when the economy would recover, but he said: “We have the most innovative, creative population in the world.”
When it comes to residential real estate, Nicholaisen said he had just returned from a trip to Hong Kong.
“They require 30 percent down on residential real estate,” he said. “They don’t have the problems that we have here.”
But he also added that home ownership is part of the fiber of the U.S. economy, and over the longterm, it has been a solid investment for most homeowners.