Housing Data helpful - momentarily
Equity markets have turned sharply lower and bonds have turned up having worn out the post Existing Home Sales bounce. While the data was better than expected coming in at a 5mln annual pace and the October Data was revised higher, there is little hope that this anomaly is an actual upturn in housing. Indeed, with Employment data hitting 2 month lows (4wk moving average of initial claim and continuing claims), abysmal readings in Durable Goods and Consumer Confidence not to mention spiraling energy and food cost there is little reason believe the FED can come to the rescue in housing. Robert Schiller of the Case/Schiller Index predicted in an interview that U.S. house prices have fallen about $1trillion thus far in the slump and he sees potential for a tripling of that amount plunging the U.S. into a recession. Schiller has been a long-time bear on housing, in fact years before the implosion, so there is some scope for error here. However, if the Equity Markets are looking for a V shaped recovery in the housing markets, it will be a long time coming.