Housing Crisis
April 30, 2008
From today’s FT:
“Flow of funds data put the value of household real estate at the end of 2007 at $20,155bn. Roughly calculated, the Case-Shiller index’s 5 per cent drop since then equates to $1,000bn wiped out in the space of two months – almost 10 times the size of the federal tax rebate. Much of that will be saved rather than spent.”
I’d like to have some conviction on what this information means for global equity markets over the next year. It seems obvious that there will be a steep decline in consumer spending… but the question is will this recessionary impact be offset by recent history-making monetary and fiscal stimulus.
Lex article from FT on the housing crisis:
http://www.ft.com/cms/s/2/38130794-15f2-11dd-880a-0000779fd2ac.html
