Friday, June 22, 2007

It's not just a housing recession anymore

"It's not just a housing recession anymore, it looks more and more like an economic recession."
So says Nouriel Roubini, a Clinton administration Treasury Department director and economic adviser who now runs Roubini Global Economics in New York, in a story on Bloomberg, yesterday, via TruthOut.Org.
The worst is yet to come for the U.S. housing market.

The jump in 30-year mortgage rates by more than a half a percentage point to 6.74 percent in the past five weeks is putting a crimp on borrowers with the best credit just as a crackdown in subprime lending standards limits the pool of qualified buyers. The national median home price is poised for its first annual decline since the Great Depression, and the supply of unsold homes is at a record 4.2 million, the National Association of Realtors reported.

``It's a blood bath,'' said Mark Kiesel, executive vice president of Newport Beach, California-based Pacific Investment Management Co., the manager of $668 billion in bond funds. ``We're talking about a two- to three-year downturn that will take a whole host of characters with it, from job creation to consumer confidence. Eventually it will take the stock market and corporate profit.''

Confidence among U.S. homebuilders fell in June to the lowest since February 1991, according to the National Association of Home Builders/Wells Fargo index released this week. Housing starts declined in May for the first time in four months, the Commerce Department reported yesterday. New-home sales will decline 33 percent from 2005's peak to the end of this year, according to the Realtors' group, exceeding the 25 percent three-year drop in 1991 that helped spark a recession.

That was the recession which prompted the most memorable bon mot of recent Presidential campaign history: "It's the ECONOMY, stupid!" and propelled Bill Clinton, the most effective Republican president of the last 100 years, into office.
Follow the links to read more at either Bloomberg's or TruthOut.


Dirk Gently said...

you know, the great depression created a lot of wealth and power for the few that were in a position to expoit it. it's not a steady rise that divides the rich from the poor as much as fluctuation and who can ride the waves.

no sense in selling high if there isn't a low coming to buy at again.

maybe we should try something new. noo?

WGG, Rogue Scholar & Tokin Lib'rul said...

ya think?

but, of course, there's no incentive to change courses or paradigms...

other than saving the planet, i mean...

an' who wants to do dat?