US Property To Rebound This Year: Deutsche Chief

Source : The Straits Times, May 19, 2008

'CREDIT CRISIS ENDING SOON'

ZURICH - THE end of the global credit crisis is getting closer and the United States real estate market should recover in the second half of the year, Deutsche Bank chief executive (CEO) Josef Ackermann said in a newspaper interview.

'I think that we are getting closer to the end of the financial crisis,' he told the Swiss Sunday newspaper SonntagsBlick. 'It is not fully over yet, but the signs from the US are encouraging.'

He said the pragmatic approach being taken in the US to resolve the crisis should start to pay off soon.

'We should feel the effects in the second half of the year already and should see a strong recovery of the US real estate market,' he told the paper.

His comments add to growing optimism among analysts who say the worst might be over for the US economy, even if it still struggles for some time because of weak housing, tight credit and high energy costs.

The latest data suggests the world's largest economy might have averted a calamitous downturn and could even escape a recession, by the most common definition, Agence France-Presse reported.

'Remarkably, the economy has been able (barely) to keep its head above water despite all the negative shocks - a testament to its underlying resiliency, an aggressive policy response and the relative strength of global growth,' said Mr Josh Feinman, the chief economist with Deutsche Bank's DB Advisors.

He predicts the US economy, which saw sluggish growth at a 0.6 per cent pace in the past two quarters, will grow 1 per cent for the second quarter and 2 per cent for the July to September quarter.

But Mr Paul Kasriel, the director of economic research at Northern Trust, cautions against reading too much into recent data.

'Any blue skies you see are likely to be short-lived. The economy is in the relative calm of the eye of the business-cycle hurricane. The mortgage credit problems are not over. And credit problems in other sectors are just beginning as the housing recession spreads to the rest of the economy.'- REUTERS, AGENCE FRANCE-PRESSE