Back a few weeks ago, I wrote this post concerning the effects of government-directed rewriting of mortgage contracts. Of particular interest that day were the comments of former Lehman economist, now Barclays Capital chief economist, Michelle Meyer.
Coincidentally, I noticed an explosion of hits on this blog today due to searches on Miss Meyer.
How propitious. Because this morning, new housing data was released.
Listening to CNBC's reporting of the breaking data this morning, it was clear that various measures of housing activity failed to meet expectations, helping to send the S&P500 Index, my and most institutional money managers' preferred measure, skidding nearly 2% as of 3:30PM, as I write this.
On the subject of housing prices, the Wall Street Journal noted in today's edition,
"Real-estate prices increased for the fourth consecutive month, but consumers are feeling more glum, a disconnect that shows how rising unemployment continues to weigh on households even as the economy improves.
Analysts warn that prices are being propped up by the government and may resume falling in the coming months as that support fades away. The first-time home-buyer tax credit has sparked demand, in the process pulling sales that might have happened in late 2009 and early 2010 and jammed them into the past few months. The supply of foreclosed homes on the market, meantime, has temporarily decreased as a result of rules that require banks to consider more people for loan modifications."
Perhaps Ms. Meyer spoke too soon earlier this month? We'll soon see.
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