New York City Housing Bubble - 'The BIG Picture'

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2008 Housing Outlook To Revisit It's A Wonderful Life
2007-12-31 22:33:00
Top economist says America could plunge into recession by Times UK - snip:Losses arising from America?s housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world?s leading economists has told The Times. Robert Shiller, Professor of Economics at Yale University, predicted that there was a very real possibility that the US would be plunged into a Japan-style slump, with house prices declining for years. Professor Shiller, co-founder of the respected S&P Case/Shiller house-price index, said: ?American real estate values have already lost around $1 trillion [£503 billion]. That could easily increase threefold over the next few years. This is a much bigger issue than sub-prime. We are talking trillions of dollars? worth of losses.? He said that US futures markets had priced in further declines in house prices in the short term, with contracts on the S&P Shiller index pointing to decreases of up t...
More About: Life , Outlook , Housing , Wonderful , A Wonderful Life

Jumbo Whammy Will Escalate NYC Home Price Declines In 2008
2007-12-31 00:54:00
More Hoops for Borrowers by Washington Post - snip:If you hope to get a mortgage this coming year, look beyond your credit score, because that's what lenders will be doing. The mortgage mess that has grabbed the attention of politicians, economists and investors has also altered the loan options available to borrowers. Mortgages that require no down payment or no verification of income or assets have fallen out of favor. So have mortgages that exceed $417,000, also known as jumbo loans. It's still possible to find all those types of loans, but count on paying higher rates and jumping through more hoops...------BushwickBK - Bushwick?s $725,000 CondominiumBusinessWeek - Home Price s still too high for average buyerReggie Middleton - Lennar Insolvent: Enron redux?AP - Sales of New Homes Worse Than ExpectedLA Times - A "classic double bubble", it not just SubprimeCalculated Risk - Looking back at 2007 Housing PredictionsCNN Money - How they got housing wrongComstock Partners - Too Ear...
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November New Home Sales Plunge 9% - 2008 Will Be Full Of Nasty Financial Ni
2007-12-29 01:39:00
Worst Housing Recession Ever: No End in Sightby Nouriel Roubini - snips:Following the meltdown in new home sales - down a whopping 9% in November alone based on data published today ? it is clear that this is not going to be the worst housing recession in the last 50 years as I predicted; it is rather going to be the worst housing recession since the Great Depression or, better, the worst housing recession ever in US history. At this rate of falling sales (and they will fall much more ahead) housing starts that have already plunged over 40% from peak to a level of about 1.1 million will have to fall another 25% - to a level below 900K ? to start clearing the excess supply of unsold new homes that is now at 9.3 ratio relative sales. And even a 20% fall in home prices now looks like too optimistic; the total cumulative fall in home prices may turn out to be closer to 20% with some urban areas of excess (in Florida, California, Nevada, Arizona, etc.) showing even 40% fall in prices......
More About: Sales , Financial , Home , Full , Nasty

NYC Metro House Prices Averaged 4.1% Decline In '07 As Of October
2007-12-28 00:35:00
S&P/Case-Shiller® Home Price Indices - October '07by Standard & Poor's - snip:Data through October 2007, released today by Standard & Poor?s for its S&P/Case-Shiller® Home Price Indices, the leading measure of U.S. home prices, show broadbased declines in the prices of existing single family homes across the United States, marking the 10th consecutive month of negative annual returns and the 23rd consecutive month of decelerating returns. The 10-City Composite?s annual decline of 6.7% is a record low. The previous largest decline on record was 6.3% recorded in April 1991. In October, the 20-City Composite recorded an annual decline of 6.1%. ?No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim,? says Robert J. Shiller, Chief Economist at MacroMarkets LLC. ?Not only did the 10-City Composite post a record low in its annual growth rate, but 11 of the 20 metro areas did the same. If you look at th...
More About: House , House Prices , Metro , Prices

Happy Holiday's
2007-12-23 23:34:00
To all NYCbubble readers... Wishing you and those nearest and dearest to your hearts a very happy Holiday Season, and a prosperous New Year.New York City Housing Bubble - The BIG Picture
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Housing Depression - No Improvement Anytime Soon
2007-12-23 17:06:00
Pain Street USA: '08 housing outlook by CNN Money - snip:The forecast is for a longer, deeper home-price slump than previously expected, with double-digit declines in many markets. The United States is deep in its worst housing slump since the Great Depression , and according to a new report, it's not going to get better any time soon. In a new survey, Moody's Economy.com says many metro areas will record losses of 20% or more during the downturn, with the national median price for single-family homes dropping 13% through early 2009. Factoring in discount offers from sellers, the actual price decline would be well over 15%...Sales of New Homes Probably Fell, No End to Housing Slump by Bloomberg - snip:Sales of new homes in the U.S. fell in November, signaling no end to the housing recession that threatens to stall economic growth, economists said before a report this week... The real-estate slump, already the deepest in 16 years, shows no sign of abating as discounts fail to lure ...
More About: Improvement , Anytime

Delinquencies Have Spread Into Every Crevice Of The Mortgage Industry
2007-12-22 01:02:00
Nomura, Impac, Bear issued worst "Alt-As"-S&P by Reuters - snip:...S&P studied the top 20 issuers of Alt-A securities responsible for 95 percent of the market. Delinquencies on Alt-A bonds issued in 2006 are more than double that of 2005, and the trend appears to be continuing for those sold this year, it said. Poor performance of loans in U.S. mortgage bonds "at first seemed limited to the subprime mortgage sector, but has since filtered through to virtually every corner of the non-prime mortgage industry," S&P said in the report...Brains Filled with Mush while Nation Crumbles by SafeHaven - snip:It absolutely baffles my mind. Turn on the news to see what's happening in the world and what are they talking about? The latest murder mystery; which mega-star is sleeping or breaking up with whom, etc; I could go on and on with the idiotic list, but my new favorite is the mainstream BREAKING NEWS that 16year old Lynn Spears (Britney Spears' younger sister) is pregnant. WOW...
More About: Industry , Mortgage , Spread , Mort

"We Are Shocked Management Withheld This Information" - LOL
2007-12-21 01:12:00
Making Sense of the Manhattan Real Estate Marketby True Gotham - snip:Anxiety levels are high in the Manhattan real estate industry as many eagerly await some sign of market direction in January. Some signs are already appearing as Fall sales have been slow, inventory is increasing (albeit modestly) and price direction seems to be stabilizing at best. Lauren Elkies of The Real Deal (check out the entire article, well worth the read) asked some industry experts about the current market. Here are those responses:...Rents - It's Upper West Side vs. Upper East Sideby NY Observer - snips:In December, apartment rents dropped in both Upper West Side and Upper East Side non-doorman buildings, according to a report out Tuesday from brokerage The Real Estate Group New York. The best deal for a non-doorman studio can be found on the Upper West Side for an average of $1,734 monthly compared to $1,870 on the Upper East Side, the report said. But studios in doorman buildings on the Upper West Si...
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ALT-A Mortgage Securities Getting Whacked In Fantasyland
2007-12-20 01:40:00
Analysts in Fantasyland by Fortune - snip:Despite years of reform, the latest numbers show that Wall Street prognosticators are every bit as deluded and inaccurate as they ever were. Maybe Wall Street analysts are more honest and less compromised than they were pre-SarbOx, but recent events show that they're still awful at their most important job: predicting bad news. They haven't lost their habit of falling in love with the companies they cover and refusing to face unpleasant realities until everyone else has already done so. Now, eight years after they were inflating the bubble, we again have to question whether analysts do retail investors any good. The latest evidence: Analysts have only just discovered that corporate profits in the fourth quarter aren't going to be nearly as strong as they had supposed a month or two ago. The consensus view going into the quarter was that S&P 500 profits would go up 12 percent to 15 percent, a large jump coming on top of the 20 percent ...
More About: Mortgage , Securities , Whack , Mort

Greed & Ignorance Begets Lack Of Confidence & Trust
2007-12-19 01:19:00
Financial District apartment rents dropby NY Real Deal - full article:Apartment asking rents in the Financial District have fallen by an average of 5% since November, compared to a citywide decline of 1%, according to The Real Estate Group's December Manhattan Rental Market Report. Doorman studio and one-bedrooms in the neighborhood fell by 16 and 11 %, respectively. Landlords in the Financial District had already been offering incentives such as a month's free rent. The credit crunch and concerns about job security in the financial services sector were blamed for worsening the usual year-end slowdown.HOUSING - SIMPLE AS THATby Dr Chris Martenson at FSU - snips:Q: ?Has the housing market bottomed, soon to bottom, or in the process of bottoming?? A: No, nope, and no... Executive summary: A series of government bailouts attack the symptoms, utterly fail to address the root cause. The bailouts were for the big banks, not you. House prices need to decline in price by 30% to 50%, an...
More About: Confidence , Trust , Greed , Ignorance , Lack

"If Bank Funding Routes Are Not Reopened, 1929 Will Look Like A Cakewalk"
2007-12-18 01:24:00
December home builder sentiment holds at record lowby NAHB - snip:Builder confidence in the market for new single-family homes remained unchanged for a third consecutive month in December as problems in the mortgage market and excess inventory issues continued,... The HMI held even at 19 this month, its lowest reading since the series began in January 1985. "Builders continue to look for signs of improvement in the ongoing mortgage market crisis that is weighing on housing and the overall economy"...You Can Almost Hear It Popby Stephen Roach for NYT - snips:THE American economy is slipping into its second post-bubble recession in seven years. Just as the bursting of the dot-com bubble led to a downturn in 2001 and ?02, the simultaneous popping of the housing and credit bubbles is doing the same right now. This recession will be deeper than the shallow contraction earlier in this decade. The dot-com-led downturn was set off by a collapse in business capital spending, which at its pea...
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NYCbubble One Year Anniversary
2007-12-16 17:31:00
Actually, my first post was on Monday, December 18th 2006. Today is close enough given a questionable Gregorian Calendar. Hope you've all learned as much as me about the Real Estate and Financial markets over the past year. If you sold in late 2006 you're one of the lucky ones. From that time forward the market drastically changed and there are still several years to go on the downside. Thanks for your participation and comments. The NYCbubble blog will continue. Also, if anyone is up to the task of publishing here as the NYC market is impacted, and you're familiar with blogging geekness, drop me an email via the address posted on my profile. Have a great weekend.Here is the first article posted/linked on the NYCbubble...Monday, December 18 2006Take 2 Aspirin Call Me in the MorningNo Recovery Anytime SoonBUSINESSWEEK Cover StoryDecember 25, 2006 EditionHousing: Curb Your Enthusiasm About A Recovery Home prices still have room to decline, and it may take 15 years or more to reach ...
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Ron Paul on Jim Cramer's Mad Money 12/14/07
2007-12-15 02:08:00
12/14/07Ron Paul on Jim Cram er's Mad Money discuss the Federal Reserve, Monetary Policy, Monetary Inflation, and the Housing Bubble. Jim says "I think I've found a fellow traveler"!http://youtube.com/watch?v=peVw -g0nRgk New York City Housing Bubble - The BIG Picture
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FANNIE: "No Housing Recovery Unitl Late 2009, At The Earliest"
2007-12-15 01:00:00
NYC Monthly Property Shark foreclosure report debuts by NY Real Deal - snip:...The property research data firm created the report after being inundated with requests for the latest foreclosure information in between its quarterly reports, said Brian Scully, vice president of marketing for Property Shark. "A quarter is simply too long to wait to keep on top of fast moving market conditions," he said. Last month, the number of New York City foreclosed properties scheduled for first-time auctions jumped 129.5 percent over November 2006, increasing to 257 from 112, the data shows. This was the first increase in foreclosures since August, when the number increased to 250 from 203 in July. November saw the same number of foreclosures as June, both a high for the year...Fannie CEO: Housing won't recover until late 2009 NY Post/AP - snip:Fannie Mae's (FNM) CEO told shareholders Friday he does not expect a housing market recovery until late 2009, "at the earliest," and that the mortgage-f...
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Officialdom - Economy Is DOA, Recession Is Here
2007-12-14 00:43:00
Morgan Stanley Issues Full US Recession Alertby Telegraph UK - snip:Morgan Stanley has issued a full recession alert for the US economy, warning of a sharp slowdown in business investment and a "perfect storm" for consumers as the housing slump spreads. In a report "Recession Coming" released today, the bank's US team said the credit crunch had started to inflict serious damage on US companies. "Slipping sales and tightening credit are pushing companies into liquidation mode, especially in motor vehicles," it said. "Three-month dollar Libor spreads have jumped by 60 to 80 basis points over the last month. High yield spreads have widened even more significantly. The absolute cost of borrowing is higher than in June." "As delinquencies and defaults soar, lenders are tightening credit for commercial, credit card and auto lending, as well as for all mortgage borrowers," said the report, written by the bank's chief US economist Dick Berner. He said the foreclosure rate on residential ...
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The Great Fed Bluff That Got Whacked Back
2007-12-13 01:53:00
Folks, we must be mindfull of the fact that we're only in maybe year 2 of at least a 5 year residential mortgage cycle full of resets. Today was a roller coaster, huge. Markets opened high on upside due to the 'Fed Auction' surpise pump this morning, then reality set in by 4pm with only a minor gain, way down from yesterday's whipping. Here are two astute reader comments from Roubini's blog... a) "It seems absurd that the Fed would think a secret and anonymous auction of central bank funds could be useful in addressing a crisis of confidence arising from a lack of transparency and liquidity for unpriced, unmarketed synthetic assets and liabilities. The bids and winners will be secret, but everyone will know that whoever won was damn desperate - and that whoever didn't win will be tight and desperate too." b) "All you guys/gals have to do to see who will be at the auction is just go to Bankrate.com and look at the top offering rates for 3 month CD's and you will see that name...
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No Dope For Wall Street & No Dope For Homeowners In The Hole
2007-12-12 01:04:00
Fed cut 1/4 point on Federal Funds Rate, 1/4 point Discount Rate. Growth slowing, inflation risks remain. Then, the stock market tanked. Apparently, not enough narcotic for the addicts: DOW -294.26, S&P -38.31, Nasdaq -66.60...WSJ - Fed Cuts Rates by Quarter PointWells Fargo Chairman Slams Fannie Mae Fee Increaseby Reuters - full articeWells Fargo & Co's chairman on Tuesday assailed Fannie Mae for raising fees for guaranteeing mortgages, saying the move runs counter to the government-sponsored lender's mandate of encouraging home ownership. "I can't think of a worst time to be increasing fees and costs, when we're trying to keep people in their homes and trying to get this market stimulated," Kovacevich told Reuters. "It seems to me they're more concerned about their shareholders than they are about housing." He told Reuters in an interview that the move would increase the cost of buying a house by about $4,000 starting March 1. Fannie announced the fee increase last we...
More About: Wall Street , Street , Wall , Hole , Dope

"The Press, Unlike Wall Street, Is Finally Getting The Message"
2007-12-11 01:58:00
Small increases in pending sales of existing homes is good? Not necessarily. Foreclosures change the name on the deeds, which is subsequently counted as a sale of an existing home. Same goes for new home sales...Pending home sales index rises 0.6% in October by MarketWatch - snip:A gauge of future home sales increased 0.6% in October, the second straight increase, a real estate trade group reported Monday. The pending home sales index is down 18.4% compared with October 2006, the NAR said...Lower Wall St bonuses, layoffs to hurt NYC housing by Guardian UK - snips:Plentiful jobs and big bonuses in the financial sector have supported home prices in New York City's richest borough even as other once red-hot property markets have cooled. But with financial markets hitting a rough patch this year, even Manhattan could feel some pain. "Manhattan is the center of the financial sector and it is being particularly hard hit," said Robert Shiller, a Yale University economist and co-developer...
More About: Wall Street , Press , Street , Message

U.S. Nationalized Mortgage Industry Humor
2007-12-10 02:53:00
Click Toons To EnlargeTeaser Freezer Mort gage Bail My Fat Ass OutHousing Price DenialAll Time Highs HeadlineMartin Feldstein: The Danger Ahead by BusinessWeek - snips:Harvard economist Martin Feldstein, who was chairman of the Council of Economic Advisers under President Reagan and on the short list to succeed Alan Greenspan at the Fed, is worried that the economy will teeter into recession......How is Treasury Secretary Hank Paulson doing? I'm not a fan of the proposals to freeze interest rates on adjustable-rate mortgages, which Secretary Paulson now supports. There's a fundamental problem, which is the lenders now are no longer banks holding plain-vanilla mortgages. Those mortgages have been sliced up in many ways, syndicated, and the holders are all around the world. Are they going to be willing to continue to buy U.S. corporate bonds, U.S. mortgages, and mortgage-backed securities if the government can come along and change the interest rate because it thinks that would be goo...
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The Ron Paul DVD Project
2007-12-09 19:03:00
  The Ron Paul DVD Project ...Voters are becoming more and more aware of the biased corporate media who routinely dismiss and ignore some candidates while they pander to others. Education is the key to addressing the issues realistically, we cannot have a meaningful debate until voters truly understand them.- The Central Coast Ron Paul 2008 Group   http://www.ronpauldvdproject.com New York City Housing Bubble - The BIG Picture

Sub-Prime Aren?t The Only Kind Of Loans Imploding
2007-12-08 02:09:00
Straight Talk on the Mortgage Mess from an Insiderby MarketWatch - snip:Even before this mortgage mess started, one person who kept emailing me over and over saying that this is going to get real bad. He kept saying this was beyond sub-prime, beyond low FICO scores, beyond Alt-A and beyond the imagination of most pundits, politicians and the press. When I asked him why somebody from inside the industry would be so emphatically sounding the siren, he said, "Someobody?s got to warn people." His current thoughts, which I urge you to read: ... The Government and the market are trying to boil this down to a ?sub-prime? thing, especially with all constant talk of ?resets?. But sub-prime loans were only a small piece of the mortgage mess. And sub-prime loans are not the only ones with resets. What we are experiencing should be called ?The Mortgage Meltdown? because many different exotic loan types are imploding currently belonging to what lenders considered ?qualified? or ?prime? borrowers...
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ARM Freeze Inherently Unfair - Privatizes Profits & Socializes Debt
2007-12-07 01:04:00
See table a this link - Delinquency and Foreclosure Rates by State and Regionby USA TodayMortgage foreclosures reach record high by Reuters - full article:Home foreclosures and the rate of homes entering the foreclosure process rose to record highs in the third quarter, the Mortgage Bankers Association said on Thursday. Problems with payments on all loan types drove up the pace of homes entering the foreclosure process, the trade group said in its delinquency and foreclosure survey. "The effect of seizure of nonconforming securitization, broad-based house price declines, continued regional economic weakness and broad-based payment adjustments on adjustable rate mortgages were all working together in the quarter for the first time," said the MBA's chief economist Doug Duncan. The percentage of loans in the foreclosure process rose to 1.69% of loans outstanding, up 0.29% point from the prior quarter and up 0.64% from a year earlier. The rate of loans entering the foreclosure process...
More About: Debt , Profits , Freeze , Unfair

Financial Prudence May Be Penalized - Gov't Setting A Dangerous Precedent W
2007-12-06 01:46:00
When you put down that 10-20% required down payment over the next few years to acquire an 'earned' conventional mortgage qualification on your first home at a great price, do you think you'll be given a 'frozen' teaser rate for 5 years? HaHaHa, don't think so! You should be FURIOUS!It's Not 1929, but It's the Biggest Mess Since by Washington Post - snip:It was Charles Mackay, the 19th-century Scottish journalist, who observed that men go mad in herds but only come to their senses one by one. We are only at the beginning of the financial world coming to its senses after the bursting of the biggest credit bubble the world has seen. Everyone seems to acknowledge now that there will be lots of mortgage foreclosures and that house prices will fall nationally for the first time since the Great Depression. Some lenders and hedge funds have failed, while some banks have taken painful write-offs and fired executives. There's even a growing recognition that a recession is over th...
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HELLO: Affordability Is The Issue - NOT Interest Rates
2007-12-05 01:21:00
Rate freeze success: Devil's in the details by CNN Money - snip:...If you can afford your adjustable-rate mortgage now, but not if it were to reset to a higher interest rate, increasingly there is help to be had. There's just one problem: Who decides if you can afford your mortgage? "There's no uniformity. That's the problem," said Michael Shea, housing director of the Association of Community Organizations for Reform Now (ACORN). And it's a problem that may not be resolved by the latest effort to help borrowers and mitigate the effects of the mortgage crisis on the economy. Hope Now - a coalition of government, industry and community groups coordinated by Treasury Secretary Henry Paulson...Paulson Goes to Washington, Loses Way by Bloomberg - snips:...In the old days, a mortgage lender -- in many cases, your local banker -- had a relationship with the borrower. When a homeowner fell upon hard times, he and his banker would sit down to renegotiate the loan. It was in the interes...
More About: Interest Rates , Interest , Rates , Issue , Eres

NYC Seller's In Need Of Major Reality Check
2007-12-04 00:22:00
Signaling Cooling Market, Prices Cut at New Buildings by NY Sun - snip:Roughly a dozen new developments have slashed their prices by as much as 13% over the last several weeks, one sign the slowing housing market is reaching New York City. Developments in areas that began gentrifying in the latest real estate boom cycle, including Central Harlem, Chinatown, DUMBO, and Prospect Heights, are now cutting their prices to compete better, according to brokers representing the developments and statistics from the real estate site Streeteasy.com. "We are obviously realists," a vice president at Prudential Douglas Elliman, Larry Michaels, said after reducing the prices on six listings at 50 Orchard St., a new development on the Lower East Side. "In the current environment, people are shopping for apartments, versus six months ago, when people were just out buying apartments"...Between Buyers and Sellers, a Stalemate by NYT - snip:...Manhattan is apparently full of sellers who think foreign b...
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ARM Rate Freeze Plan Wags The Dog
2007-12-03 03:34:00
Click Image to PlayThornberg: Affordability Is The Problem, Not Interest Rate sThe Longer The Drum Roll The Shorter The Plan by Jim Sinclair - 12/1/07 snip:...Are people so thick that they do not understand the problem is so grave that desperate measures are being considered and might be implemented?...1) A form of price control by holding interest rates on ARMs at the teaser low rate that was the bait in the trap set by the lenders of adjustable rate mortgages. 2) Selectivity of some sort by class, not on a case-to-case basis, to determine what homeowner will receive this treatment. 3) The increased interest rate not being paid to the lender by the homeowner is added to the cost of the home, increasing the principle which is now compounded as the nut is bigger. 4) An inducement to the lenders in some form of tax treatment of the deferred income.So let us look at this potential under the microscope of logic and rational judgment. A panic to stop a panic always denies financial leader...
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New Home Sales Plunge And Foreclosures Thru The Roof
2007-11-30 01:26:00
New Home Sales : That Sinking Feelingby BMO Capital Markets - snip:First the good news?U.S. new home sales rose for the first time in six months in October, chipping away at the massive glut of unsold homes on the market. And now, all the bad news. Because of sharp downward revisions the prior three months, totalling -74K, sales undershot market expectations by a wide margin, 728k versus 750k. The 1.7% gain in the month is merely a dead cat bounce off the lowest level in a dozen years. Worse, it took the biggest decline in median prices in nearly four decades (-13% y/y), and likely truck-loads of freebies, to spur demand in the month. And yet, inventories remain bloated, with the months? supply sitting at a still-high 8.5, though down from the 17-year high of 9.3 reached in August. It also took a little longer to make a sale in October compared with the prior month and a lot longer than a year ago. And with consumer plans to purchase a new home sitting at a 13-year low in November (...
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The Existing Homes Sales PlungeOmeter
2007-11-29 01:27:00
In the media today, you will read and hear the 1.2% number for declines in Existing Home Sales . That's comparted to last month. Since last year, housing is down 20.7%. Prices declined 6.3% from last year. Inventory is up by 15.4%, a 10.5 month supply the highest in 22yrs...US Home Sales: Grim and Grimmerby BMO Capital Markets - snip:There was no shortage of bad news in today?s U.S. existing home sales report. Even after falling off a cliff the prior month, sales managed to slide further and more than expected in October, down 1.2% to the lowest level in the eight-year history of the series. Sales have plunged one-fifth in the past year and nearly one-third from their 2005 peak. Many people looking to buy can?t because of tightening credit conditions, and those that can, are holding back for fear of buying a depreciating asset. Median prices of single-family homes declined the most on record back to 1969 (-6.3% y/y), with steeper declines to come. Weak demand and growing foreclosu...
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Record Plunge In Home Prices 3Q07
2007-11-28 03:17:00
NYC Metro took a 3.2% hit from Sept 06 to Sept 07, see table below...Home prices take steeper downturnby CNN Money - snip:Home prices have fallen steadily since July 2006, but plunged even more steeply in the third quarter, according to a report released Tuesday by S&P Case/Shiller. According to the Case/Shiller index, which covers 20 local markets and a national average, third-quarter home prices dropped 1.7 percent from the second quarter. The housing market could possibly get a lot worse, according to Yale economist and index co-founder, Robert Shiller. He was asked at a press conference following the release of the latest index data whether housing price increases, which had far outstripped income gains, could revert back to more normal ratios. Shiller said, "You're talking about [home-price] declines of 50% in real terms. That's not out of the question." Referring to the latest declines, Shiller said they were notable for two reasons. "First, the third quarter decline, at...
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Massive Layoffs Coming To A Corporation Near You
2007-11-27 03:50:00
Larry Summers: Wake up to dangers of a deepening crisisby Financial Times - snips:Three months ago it was reasonable to expect that the subprime credit crisis would be a financially significant event but not one that would threaten the overall pattern of economic growth. This is still a possible outcome but no longer the preponderant probability. Even if necessary changes in policy are implemented, the odds now favour a US recession that slows growth significantly on a global basis. Without stronger policy responses than have been observed to date, moreover, there is the risk that the adverse impacts will be felt for the rest of this decade and beyond. Several streams of data indicate how much more serious the situation is than was clear a few months ago. First, forward-looking indicators suggest that the housing sector may be in free-fall from what felt like the basement levels of a few months ago. Single family home construction may be down over the next year by as much as half fr...
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