Post by unlawflcombatnt on Jun 9, 2007 17:27:47 GMT -6
Below is an excerpt from the latest post by economist Nouriel Roubini, titled Economists See Housing Slump Enduring Longer. Roubini's post comes largely from a recent Wall Street Journal article, describing the declining housing market, and it's effect on the economy. This article has been of great interest to many economists and economic analysts, and has been cited today in naked capitalism and in Dean Baker's Beat the Press. The WSJ article is particularly noteworthy in that it marks a partial return to reality-based analyis by some of the Corporate media propagandists, particularly the WSL.
"WSJ Lead Story: "Economists See Housing Slump Enduring Longer"
Nouriel Roubini | Jun 09, 2007
This weekend the lead front page story on the Wall Street Journal is "Ripple Effect: Economists See Housing Slump Enduring Longer. Downturn is expected to keep growth tepid; retailers feel the pinch".
The points made in this most excellent and interesting article are not new to those who have followed closely the housing recession and its effects on the economy: the housing recession is not bottoming out; the glut of unsold home is massive and rising given lower demand and foreclosures; demand will be further hurt by rising mortgage rates and the credit crunch in the subprime market; home prices are falling and they will fall even more; the effects of this housing recession on the broader economy come from the fall in employment in housing and in related sectors (mortgage finance, furniture, consumer durables, etc.) and from the negative wealth effect - and related fall in mortgage equity withdrawal - on private consumption and retail spending.
The last quote in the article is "They are living in dreamland" and was made by a participant in a recent distressed home auction with reference to the deluded expectations of home sellers to receive unrealistically high prices for their now lower-valued properties.
The same - "they are living in dreamland" - could be said of the now much smaller number of folks who are still clinging to the view that the housing recession has bottomed out and that it will not have any effect on the broader economy. Even Chairman Bernanke and the Fed admitted this week that housing has not bottomed out and will remain weak for a while.
Here are some excerpts of this article:
'Economists See Housing Slump Enduring Longer
Downturn Is Expected To Keep Growth Tepid; Retailers Feel the Pinch
By JAMES R. HAGERTY, JONATHAN KARP and MARK WHITEHOUSE
June 9, 2007; Page A1
Economists are giving up on the idea that the U.S. housing slump will be quick and relatively painless.
Instead, more are concluding, the downturn that began nearly two years ago will last at least through the end of 2007, remaining a major drag on the U.S. economy. The culprits: a glut of homes for sale and growing caution among lenders who now regret being so free with their mortgages during the boom....'"
The full article can be found at Nouriel Roubini's site at
Economists See Housing Slump Enduring Longer
"WSJ Lead Story: "Economists See Housing Slump Enduring Longer"
Nouriel Roubini | Jun 09, 2007
This weekend the lead front page story on the Wall Street Journal is "Ripple Effect: Economists See Housing Slump Enduring Longer. Downturn is expected to keep growth tepid; retailers feel the pinch".
The points made in this most excellent and interesting article are not new to those who have followed closely the housing recession and its effects on the economy: the housing recession is not bottoming out; the glut of unsold home is massive and rising given lower demand and foreclosures; demand will be further hurt by rising mortgage rates and the credit crunch in the subprime market; home prices are falling and they will fall even more; the effects of this housing recession on the broader economy come from the fall in employment in housing and in related sectors (mortgage finance, furniture, consumer durables, etc.) and from the negative wealth effect - and related fall in mortgage equity withdrawal - on private consumption and retail spending.
The last quote in the article is "They are living in dreamland" and was made by a participant in a recent distressed home auction with reference to the deluded expectations of home sellers to receive unrealistically high prices for their now lower-valued properties.
The same - "they are living in dreamland" - could be said of the now much smaller number of folks who are still clinging to the view that the housing recession has bottomed out and that it will not have any effect on the broader economy. Even Chairman Bernanke and the Fed admitted this week that housing has not bottomed out and will remain weak for a while.
Here are some excerpts of this article:
'Economists See Housing Slump Enduring Longer
Downturn Is Expected To Keep Growth Tepid; Retailers Feel the Pinch
By JAMES R. HAGERTY, JONATHAN KARP and MARK WHITEHOUSE
June 9, 2007; Page A1
Economists are giving up on the idea that the U.S. housing slump will be quick and relatively painless.
Instead, more are concluding, the downturn that began nearly two years ago will last at least through the end of 2007, remaining a major drag on the U.S. economy. The culprits: a glut of homes for sale and growing caution among lenders who now regret being so free with their mortgages during the boom....'"
The full article can be found at Nouriel Roubini's site at
Economists See Housing Slump Enduring Longer