Thursday, November 20th, 2008

Housing Crisis: Case-Shiller Index Reveals 13% Price Drop

May 27th, 2008 | By Contrarian Profits | Category: Featured, Financial News

The US housing crisis looks sets to deepen after S&P’s/Case-Shiller Home Price index showed that home prices in 20 US cities fell almost 13% in February from a year earlier. This from AP:

“Month-to-month, it gets consistently worse,” said David Blitzer, chairman of the index committee at S&P, noting that February also marked the sixth straight month that all 20 cities experienced declines. “The slope is one direction. There is no sign of a bottom.”

“If you expect a ‘muddle through’ economic recovery to persist over the next 12 months – and I do – then the Fed will have to stay on guard as housing attempts to establish a bottom,” says Eric Roseman in The Offshore A-Letter.

“This doesn’t imply the dollar must fall further. But it does suggest commodities and gold will continue to rally because most central banks will continue to print credit while they try to look concerned about inflation.”

Bill Bonner in The Daily Reckoning says, “The last two big bubbles – in residential housing and the financial industry – are deflating. Prices are going down for both assets. But inflation-sensitive commodities, most notably oil and gold, have soared. And now prices seem be working their up all along the chain… from the oil wells, to the shipping containers, to the Chinese sweatshops, to the shelves of Wal-Mart.

“What this means to central bankers is that they have to watch it. They can’t cut rates so freely… not while consumer prices are rising. Instead, the pressure will be on the other side – to raise rates.

“To the man on the street it means that he has to prepare to pay higher prices for everything.”


AdvertisementSarb-Ox Panic Hands Investors 7 Times Their Money

Why would a CEO voluntarily sell valuable assets at bargain basement prices? Why would a CEO do anything to "cause" investors to dump his company's stock ...artificially? Answer: to avoid jail time and huge fines. Fortunately, Horacio Marquez has found a way to use one CEO's fear of Sarb-Ox penalties to increase your money 7 times this year.
Read Report



More on this topic (What's this?)
Case-Shiller off Big in Q1
Credit where it’s due
How to Miss the Housing Crash
Read more on U.S. Housing Market, S&P/Case-Shiller Home Price Indices at Wikinvest
Tags: , , , , , , , ,

By Contrarian Profits

Related Articles