Alarmist Economic Predictions Multiply - Housing Tracker

Quotes of the Day

“Basically we’re in uncharted territory. It seems we have developed a speculative culture about housing that never existed on a national basis before.” - Yale economist Robert Shiller, on the housing crisis and the outlook for more severe price declines. Shiller said people were crazy to think that housing prices would continue to increase 10% annually. (Wall St. Journal, Apr. 22nd)

“Now the US debate is not anymore on whether we are going to have a soft landing (slow growth patch) or a hard landing (a recession) but rather on how hard the hard landing will be (i.e. how deep and severe the recession will be).” – Economist Nouriel Roubini. (Global EconoMonitor, Apr. 22nd)

Macroeconomic Effects of the Housing Slump

The Incomes Of Most Americans Have Stalled. “Middle-class earnings aren't keeping up with the cost of living. Rising gasoline and food prices, health bills, child-care and education costs are leaving less to set aside for retirement. With the housing market in turmoil, even the asset many had come to count on — the value of their homes — is threatened. It isn't just a reflection of the current economic slowdown and rise in commodity prices: Middle-class incomes have been stagnant for several years. The well-heeled keep doing better, with the wealthiest 1 percent of U.S. families garnering the largest share of income since 1929.” (Wall St. Journal via WSBT, Apr. 23rd)

Yale’s Shiller: U.S. Housing Slump May Exceed Great Depression. “Yale University economist Robert Shiller, pioneer of Standard & Poor’s/Case-Shiller home-price index, said there’s a good chance housing prices will fall further than the 30% drop in the historic depression of the 1930s. Home prices nationwide already have dropped 15% since their peak in 2006, he said… Mr. Shiller, who admitted he has a reputation for being bearish, said real estate cycles typically take years to correct. Home prices rose about 85% from 1997 to 2006 adjusted for inflation, the biggest national housing boom in U.S. history.” (Wall St. Journal, Apr. 22nd)

WREN Report: Store Sales Down, Foreclosures Up. “Furniture store sales slipped to $62.2 billion in February, down 0.2% from January, according to the U.S. Census Bureau, the arm of the U.S. Department of Commerce which tracks retail sales by store type. Compared with year-earlier results, furniture store sales declined 2.7%. Included in sales are all products sold by furniture stores, whether or not they are furniture products, such as major appliances, consumer electronics, floor coverings, etc. From 2006-2007, sales in furniture stores increased 1.9% to $65.1 billion.” (Home Furnishings Business, Apr. 21st)

Bear Stearns’s New Hires Become Job Seekers. “A small group of college and business school students are discovering that their careers at Bear Stearns (BSC) ended before they began. JPMorgan Chase (JPM), which bought the beleaguered investment bank last month, rescinded many of their job offers... Since August, the financial industry has shed more than 38,000 jobs... Citigroup (C) [said Friday] it would eliminate 9,000 more jobs… Many of Bear’s 14,000 employees are expected to lose their jobs in the coming months. JPMorgan is running what its CEO, James Dimon, has called a “military operation” to decide which employees at both banks will stay and which will go.” (NY Times, Apr. 19th)

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