U.S. home prices as measured by the Case-Shiller index have now fallen by more than they did during the Great Depression, according to Capital Economics.
Paul Dales, senior U.S. Economist at Capital, said the Case-Shiller index released earlier on Tuesday — which tracks prices of single-family home in 20 major U.S. cities — are now 33% below the 2006 peak and back at a level last seen in the third quarter of 2002, edging out the 31% dip seen in the Depression of the 1930s.
“On that occasion, the peak in prices was not regained until 19 years after they first fell,” Mr. Dales said.
“The similarities between the current downturn and that seen during the Great Depression are striking,” Mr. Dales said in a note. He pointed out that on both occasions, prices initially fell by 31% and, after a temporary rebound, dropped back by 7%, the dreaded double-dip.
Double-dips are not on uncommon though. Denmark, the U.K. and Sweden all saw prices fall for a second time during the 1980s and 1990s, he notes.
Mr. Dales said the bottom has not yet been reached in U.S. housing: “We think that prices will fall by at least a further 3% this year, and perhaps even further next year.”
However he does offer a glimmer of hope. The rate at which prices are falling appeared to stabilise at 0.2% m/m in March.
“Moreover, the latest fall in prices has made housing appear even more undervalued,” he said.Financial Post
Marc Faber : "The absolute level of interest rates doesn't tell you whether there is tightening or not.
In China, they increased the interest rates over the several times. But with inflation running at between 8-10% per annum and the deposit rate at 3.25%, money is losing its purchasing power if you keep it on deposit," "In US, you will have a similar process. One day they will increase it by a quarter of percent but what does it mean when commodity prices are going through the roof, energy prices are going up, health costs are going up, insurance premiums are going up, everything is going up. Only at the Federal Reserves is there no inflation."
Iranian Ayatollah endorses evil: Radical religious cleric known as President Ahmadinejad's spiritual mentor says attacks on Israeli civilians permissible, suicide bombings a Muslim duty
Evil words in Islamic Republic: A senior Iranian cleric, who is known as President Mahmoud Ahmadinejad's spiritual mentor, urged followers to continue suicide attacks against Israelis, including children.
Ayatollah Mohammad Taghi Mesbah, considered one of the Islamic Republic's most radical clerics, issued a religious edict on his website whereby suicide attacks are not only legitimate but are a must for every Muslim, a special paper by the Middle East Media Research Institute shows.
The senior cleric was responding to a question from a follower regarding the difference between "martyr's death" and "suicide." The man, who wrote anonymously, noted that "some people say that martyrdom operations are considered suicide and that they are haram (forbidden) because they contradict Islam."
In response, Mesbah expressed his regret that his follower has fallen victim to "propaganda of the enemies of Islam." He added that the follower was wasting his time instead of focusing on "uprooting the Zionist regime."
"When protecting Islam, the Muslim people depend on martyrdom operations. It not only is allowed, but even is an obligation," Mesbah wrote.
The follower presented another question regarding Islam's position on harming Israelis, wondering whether Hamas and Jihad actions against Israeli civilians are forbidden. He also asked: "How about the Israeli children killed in such attacks?"
The Iranian Ayatollah did not see fit to forbid the killing of children, only noting that Israelis can be harmed unless they openly express their objection to their government's position. He added that even in such cases, harming civilians is permissible if "they are used as human shield and fighting the aggressors depends on attacking those civilians."
IDF chief Gantz says Israel's defense establishment needs a higher budget to contend with the changes in the Middle East and spectrum of threats from a single terror attack to Iran's atomic developments.
The Israel Defense Forces will ask the state to increase its defense budget significantly to contend with the growing terror threats in the region, Chief of Staff Benny Gantz said on Tuesday.
"The spectrum of threats in light of the changes in the Middle East is growing," Gantz told the Knesset Foreign Affairs and Defense Committee. "These threats range from knife to nuclear – from the knife used in a single terror attack to a nuclear Iran."
"The threats of the past are still in force, but new threats are developing that require the ability to operate in a number of different theaters with strength and determination," Gantz said, adding that this "new spectrum of threats requires a new and broader budget framework for the defense establishment."
One such threat was the upcoming aid flotilla bound from Turkey to the Gaza Strip, one year after the deadly Israeli raid on the Mavi Marmara ship. "The flotilla organizers are working to inflame hatred and provocation against Israel and not out of desire to help the population in Gaza."
"There is no humanitarian crisis" in Gaza, Gantz declared. "Every day, hundreds of trucks enter filled with food and materials. The IDF will work to stop any attempt to break through the naval blockade."
The international community has recognized the validity of this blockade, said Gantz, adding that even United Nations Secretary General Ban Ki-Moon recently defended its legality while blasting the illegality of the aid flotillas.
Vladimir Putin, the Russian prime minister, has hinted that Dominique Strauss-Kahn may be the victim of a conspiracy to force him from the head of the IMF.
Mr Putin said that he finds it hard to believe that the sex charges against the Frenchman are true and that he may have fallen victim to a shadowy plot to discredit him.
"It is hard for me to evaluate the real political underlying reasons and I do not even want to get into that subject, but I cannot believe that everything is as it seems and how it was initially presented," he said. "It does not sit right in my head."
Mr Strauss-Kahn was arrested at JFK airport in New York on May 14 for allegedly sexually assaulting a hotel chambermaid.
Mr Putin's public support for Mr Strauss-Kahn comes days after a French politician alleged that the former IMF chief had said before his arrest that he thought Mr Putin was actively plotting his downfall.
The politician, Claude Bartolone, said: "He said the Russians and notably Putin had allied themselves with France to try to have him fired from the IMF to stop him running for (French) president."
There are a whole host of events that can bring the world as we know it today to its knees. From a hyperinflationary economic collapse to an electro magnetic pulse originating from the sun or a nuclear weapon , there exists a real and present danger that our system may, in the near future, experience unrecoverable shocks to the power grid and clean water infrastructure, a halt to just-in-time agricultural transportation systems and a collapse of the currency exchange mechanisms that make the economy function.
US Representative Roscoe Bartlett (R-MD), lived through the great depression, so he’s seen how bad things can get. In a new documentary, Mr. Bartlett and others discuss the dangers posed to those living in cities and ways that your family can survive if the worst were to ever happen.
We realize that for most people this may be decried as fear-mongering and crazy survival talk. We can’t help but point out, however, that it’s not just Representative Roscoe Bartlett, economist Marc Faber, and trend forecaster Gerald Celente that are recommending you prepare and head for rural areas. The US Pentagon and Military are very much aware of these possibilities and they’re preparing for exactly the scenarios described in this documentary.
The threat is out there, and just because it hasn’t happened in our modern-day society up until now doesn’t mean it won’t happen in the future. In fact, it has happened through history – strife, poverty, depression, economic collapse, war. You name it and somebody in history has lived it. The government spends hundreds of billions of dollars on emergency preparedness, disaster planning, continuity of government and war gaming these scenarios. There’s a reason for that. We recommend our readers take a queue from them and others who are warning of these outlier possibilities.
