Record Stagflation, Foreclosures & Home Price Declines

Fed funds futures indicate a 76% chance of a 50 bps cut, 24% on a 25 bps cut.

Economist estimate: for each dollar lost in home price or stock values... American consumers spend 5 cents less.

Cost driven inflation and slowing growth, the S word...

Japanese Consumer prices, excluding fresh food, rose 0.8% in December, the fastest pace in more than nine years and double November's 0.4%.

Corporate profit and retail sales, both fell for the first time in five years in Q307, bankruptcies rose to a four-year high...

while the ratio of jobs available to each applicant fell to a two-year low. Wages have not risen and consumer spending is eroding.

US Foreclosures Increase 75% in 2007...

A total of 215,749 foreclosure filings were reported in December, up 97% YOY. Q4 total at 642,150 filings up 86% YOY;

2007 total of 2,203,295 foreclosure filings, up 75% from 2006.

S&P/Case-Shiller home-price index: The 11th consecutive month of negative annual returns & a full two years of decelerating returns.

Prices in 20 American cities fell 7.7% in November from a year ago, the biggest drop since the 20-city gauge was started in 2000.

The 10 city composite had a 8.4% annual decline, a new record low. Leaders: Miami -15%; San Diego & Las Vegas -13%;

only 3 increasing Charlotte +2.9%, Portland +1.3% & Seattle +1.8%.

Robert J. Shiller, Chief Economist: "We reached another grim milestone in the housing market in November.

Not only did the 10-City Composite post another record low in its annual growth rate,

but 13 of the 20 metro areas, each with data back to 1991, did the same. If you look at the monthly figures, every MSA has now posted three consecutive monthly declines.

Eight of these MSAs, in addition to the two composites, have had more than 12 consecutive months of falling prices.

Fourteen of the 20 MSAs, in addition to the two composites, recorded their single largest monthly decline on record in November
."

Comments