Monday, December 6, 2010
I noted last week that there is a double-dip in housing.
Today, Nouriel Roubini agreed:
The country’s real estate problems are “underappreciated,” and banks could face another $1 trillion in housing-related losses, Mr. Roubini said in a phone interview with DealBook on Monday. At the same time, he played down the issues in Ireland, Greece, Portugal and Spain, calling the matter “contained” for now.
The United States “real estate market, for sure, is double dipping,” Mr. Roubini said. “The apparent increase in prices has been fully reversed, demand is falling, and supply is going to increase.”
As I've previously pointed out:
The failure to prosecute fraud and the stubborn drive to prop up the too big to fail banks at all costs is what has prevented real action that would have helped stabilize the housing market. See this, this, this, this, this, this, this, this and this.
PhD economists John Hussman and Dean Baker (and fund manager and financial writer Barry Ritholtz) say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks.