Wed 5 Sep 2007
Robert Shiller: ”We have a housing crisis developing”
Posted by Prieur du Plessis under Markets, Money, Investment, Housing, Economy, Business
I have often written and talked about the US housing situation being the Achilles heel of the US economic outlook. As stated before, the unwinding of the US housing situation has some way to go before the system rids itself fully of all the excesses accumulated during the multi-year upswing.
The video clip below features Prof Robert Shiller, economist of Yale University and of Case-Shiller Home Price Index fame, warning of a significant US recession risk if house prices drop more.
[youtube=http://youtube.com/watch?v=b4wFqA124RA]
Source: Bloomberg.com
For the sake of completeness, here are the latest S&P/Case-Shiller Home Price Indices showing a rather dismal picture.
The US housing situation is turning out to be a nightmare of much worse proportions than was generally expected not so long ago. And, to re-emphasize my viewpoint, it is still rather difficult to detect even the faintest ray of light at the end of the proverbial tunnel.
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September 5th, 2007 at 6:30 pm
This just goes to show that most of what passes for analysis in the financial markets is nothing but sheer wishful thinking and a denial of reality and economic fundamentals. It would be hilarious if it didn’t involve other peoples hard earned money and savings. Hopefully the coming crash, like a forest fire will clear the deadwood and lead to a more efficient allocation of capital.