 |
| Dees Illustration |
USA Watchdog
I have been telling you the economy is not in any kind of real recovery for more than a year. Sources I have been quoting have been proven right, and all the economic cheerleaders dead wrong. Reuters reported yesterday, “Data showing a double-dip in home prices, pessimistic consumers and a slowdown in regional manufacturing raised concerns on Tuesday that the economy’s soft patch could become protracted.” (Click here to read the complete Reuters report.) “Could become protracted?” It is protracted, and now the data is suggesting the economy is getting ready for another cliff dive.
Let’s concentrate on what has been a huge driver of the economy—housing. A double-dip in housing could start a daisy chain of very bad news for the big banks exposed to derivatives and residential real estate. According to the latest S&P/Case-Shiller home price report released yesterday, prices hit a new low in the first quarter–plunging 4.2% in just three months! If you look back six months, prices are off nearly 8% according to Case/Shiller. If you look on the chart on the first page of the Case/Shiller press release (click here), it clearly shows a double dip in housing. That is exactly what was predicted nearly a year ago on this site. One of the many people I quoted was renowned banking analyst Meredith Whitney who said last June, “Unequivocally, I see a double-dip in housing. There’s no doubt about it . . . prices are going down again.” (Click here to read my original post from a year ago.) At the time, many people thought Ms. Whitney was being overly pessimistic. In fact, her dire prediction has come true. This is despite the more than $2 trillion spent in QE1 and QE2 (printing money out of thin air to buy government and private debt) by the Federal Reserve. QE1 &QE2 helped fuel the stock market and artificially held mortgage interest rates at absurdly low levels and, yet, housing continues to crash. Good call Ms. Whitney!
Read Full Article
Enter your email address to subscribe to our newsletter:
Delivered by FeedBurner
