Home Prices Continue to Slide
Tags: Asia, Cats and Dogs, Government, History, Inflation, MSM, Unemployment.
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While Obama and Co talk about signs of recovery, the real signs of of disaster turning into catastrophe:
U.S. home prices continued their multiyear tumble in March, according to the S&P Case-Shiller home-price indexes, as the downdraft shows no near-term signs of abating.
Meanwhile, U.S. consumer confidence improved sharply in May, especially in expectations for the economy six months from now, a report released Tuesday said.
For the first quarter, the S&P/Case-Shiller U.S. National Home Price Index posted a 19.1% drop from a year earlier, the biggest quarterly decline for the reading’s 21-year history. S&P Case-Shiller releases 10-city and 20-city indexes every month, but also releases a broader national index every quarter.
The highlighted part is the MSMs “we can’t report the straight news” bit of Obama cheer leading – as if consumer confidence will fix the collapse of the housing market. Its a reverse on the way it was during the Bush Administration – you know, when the MSM was forced, kicking and screaming, to report some bit of good news about Bush, they always inserted a bit of negative to ensure there wasn’t a chance people would feel good about things. Be that as it may…
A friend of mine relates the story of a friend who thought he got a house at a bargain for $150,000…until someone bought the house across the street for $75,000. As of right now, there is no bottom to the housing market – it can keep going down because there are simply too many houses on the market, too few people in the market to buy and all indications are that buyers will become fewer as unemployment rises and houses more plentiful as the next round of foreclosures hits. And even those who can buy will likely hold off for lower prices, thus putting further downward pressure.
What does this mean? That the “troubled assets” are even more troubled – that we’ve spent hundreds of billions propping up a financial industry which is completely doomed. One of the world’s allegedly healthier banks – HSBC – had an interesting news release:
HSBC Holdings PLC’s (HBC) Asian unit said Wednesday it will cut the interest it pays on Hong Kong dollar savings deposits of HK$5,000 or above to 0.001% effective Thursday.
Hongkong & Shanghai Banking Corp. said the new rate will drop from the current 0.01%. It didn’t explain the reason for the rate cut. It said its zero interest rate will remain for account balances below HK$5,000.
Don’t get confused here – that isn’t “US dollars in Hong Kong”, its Hong Kong Dollars; the currency of Hong Kong. Given inflation, HSBC has essentially said that if you deposit money in their bank, you’ll lose money by the end of the year. The Chinese people – likely wiser than us by a wide margin – save a lot of money; they don’t go on spending sprees and don’t buy useless nonsense they don’t need. They save, save, save…for a rainy day. Like today. Except it isn’t rainy for the Joe Average in China who has a fat bank account…it is, however, raining cats and dogs for financial institutions who are heavily invested in real estate, like HSBC. A very large amount of the world’s wealth is tied up in real estate investments of various types…and prices have been falling, and not just in the United States. HSBC might be just trying to get the Chinese people to disgorge their savings in order to keep the economy moving along (the Chinese government? Already pi**ing through their foreign reserves at an alarming rate…not too much left there).
This is not to pick on HSBC – but to show that there is a lot of screwy things going on out there as everyone tries to dodge the massive avalanche of economic collapse. The only way out of this is for the world’s leading economy to reduce spending – by whatever means prove necessary – to less than revenues and to spend whatever we can on new farming, manufacturing and mining enterprises. We’re going to have to work our way out of this – we won’t be able to spend our way out.
Thank you for visiting Blogs For Victory. If you enjoy our content, please consider making a donation to help us cover the costs of our servers.Mark Noonan is co-author (with Matt Margolis) of Caucus of Corruption: The Truth About The New Democratic Majority. He also blogs at Nevada News and Views. Follow Mark on Twitter.
6 Responses to “Home Prices Continue to Slide”
Caucus of Corruption
Interesting. My kids just sold their house for a $47,000 profit. Guess it’s different depending on where you live.
casper,
Also depends on when they bought – but, be that as it may, its never everywhere and all the time…but the bulk of the housing market is collapsing.
really strange how market data tells facts…and we dont even know for sure if casper is human, let alone…if he has children…
First you decry the rigged system that led to artificial inflation of home prices and say that the market should be allowed to adjust accordingly. Then when it starts to adjust and housing markets that where most susceptible to such adjustments because no one in their right mind would have ever chosen to live there at such prices, you cry foul. So, which one is it.
Note that you have focused on trailing indicators but nearly ignore the leading indicators such as consumer confidence. Any indications of recovery will be a mixed bag until we are well into the recovery. But go ahead, continue to cheer for something worse.
the leading indicators such as consumer confidence.
Yes, but the leading indicators are, as Mark explained, liberally biased. You know, them being a part of reality and all.