Presently it seems unlikely that he will be able to push through the sorts of reforms and spending decisions that are required.
It's indicative of strong underlying demand for housing relative to supply and it's supportive of the view you will not get a major correction in house prices.
These numbers are still in line with our projections which already had growth beginning to slow in the second half of 2006.
The fact MEW did not fully correct the large Q2 increase supports our view that conditions in the housing market are improving and that this will, at some point, lead to increased household consumption.
The ECB have already indicated that they will look through the volatility of the GDP data and, like us, are quite positive on the growth prospects in the euro zone during the first half of 2006.
This move will not solve the real problem - the oil cannot be refined. Even before the loss of 1.8 million barrels per day of output refineries were struggling to keep up with demand. So increasing the crude supply will not overcome this bottleneck.
Overall we still believe the recovery in the housing market will start to boost household confidence and spending.
If damage to the infrastructure is found to be reasonably severe, prices will increase over the coming weeks.
