Housing Weakness Poses a Significant Threat to GDP and Stocks

[Roman]

As you can imagine, the issues discussed in our forums, are all over the news.

Housing Weakness Posses a significant threat to GDP & Stocks

[img_assist|nid=1638|title=S&P Correlation with Housing Index|desc=|link=node|align=left|width=400|height=314]

[(former)FormerSanDiegan]

This was brought up previously in a thread titled “S&P500 dropping to 600 by spring 07”.

Since I don’t know how to do links to threads, I’ll add a comment to that thread to bring it near the top of the stack.

[powayseller]

I posted this a few weeks ago, just to see what kind of comments it would bring. But the first thing I questioned when I saw this chart is why it only goes back to 1996. The data series is available for many decades earlier. Well, another poster found out why: the series do not correlate before 1996, so this chart is an example of presenting data to make your point.

However, the housing market is a big chunk of our economy, and the IMF and Fed officials are concerned that a slowing housing market will cause a US and global recession. I expected the stock slowdown to occur in fall to winter 06, and we could still be on track.

[Author]

Posts