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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (68806)	8/24/2006 9:55:36 PM
From: yard_man	Read Replies (1) \| Respond to of 110194

YHOO poll results: What is the likelihood that the U.S. economy will go into a recession by next year? Greater than 76% chance 15% 51% to 75% chance 21% 26% to 50% chance 32% zero to 25% chance 34% 24131 Votes to date

To: ild who wrote (68806)	8/25/2006 12:21:15 AM
From: CalculatedRisk	Respond to of 110194

Housing Gets Ugly, by Paul Krugman, Commentary, NY Times select.nytimes.com Excerpts here: economistsview.typepad.com Bubble, bubble, Toll’s in trouble. This week, Toll Brothers, the nation’s premier builder of McMansions, announced that sales were way off, profits were down, and the company was walking away from already-purchased options on land for future development. Toll’s announcement was one of many indications that the long-feared housing bust has arrived. Home sales are down sharply; home prices ... are now falling in much of the country. The inventory of unsold existing homes is at a 13-year high; builders’ confidence is at a 15-year low. A year ago, Robert Toll, who runs Toll Brothers, was euphoric about the housing boom... In a New York Times profile ... published last October, he dismissed worries about a possible bust. “Why can’t real estate just have a boom like every other industry?” he asked. “Why do we have to have a bubble and then a pop?” The current downturn, Mr. Toll now says, is unlike anything he’s seen: sales are slumping despite the absence of any “macroeconomic nasty condition”... He suggests that unease about the direction of the country and the war in Iraq is undermining confidence. All I have to say is: pop! <MORE> THis is funny - Krugman finishes with: Last week, Richard Fisher, the president of the Federal Reserve Bank of Dallas, dismissed “Eeyores in the analytical community” who worry about a possible recession. Call me Eeyore. While I don’t share Mr. Roubini’s certainty, I see his point: housing has been the main engine of U.S. economic growth over the past three years, and with that engine now going into reverse, it’s hard to see how we can avoid a serious slowdown.