In The Blogs

Chart of the Day

| Tue Jun. 30, 2009 3:16 PM PDT

Today's economic green shoot is the latest Case-Shiller report, which shows that although house prices are still declining, they're declining at a slower rate than before. Hooray!

But Henry Blodget is right about this:

We're still talking about an astonishing rate of collapse....So the folks who use this slight moderation in the rate of decline to spin tales of a "bottom" or, worse, a "recovery" are smoking something. Prices have at least another 10%-15% to fall, and they'll likely be falling for at least another year or two.

To show this graphically, I've helpfully extended the S&P chart Blodget includes in his post. It's this simple: as long as the line is below zero, house prices are dropping. And if price declines slow down at about the same rate they accelerated, it means we won't get back to zero until sometime in 2011. Put even more simply: the price decline between 2007-2009 — which started slowly and then picked up steam — will probably be mirrored by the price decline between 2009-2011 — which started with a head of steam and will end up dropping ever more slowly until it finally flattens out. And that price drop was about 25%.

So if anything, Blodget might be too optimistic. We might still have 25% to go.

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Kevin Drum is a political blogger for Mother Jones. For more of his stories, click here.

Comments

Kevin said: Blodget might

Submitted by JS (not verified) on Tue Jun. 30, 2009 5:28 PM PDT.

Kevin said:

Blodget might be too optimistic. We might still have 25% to go.

If I read this chart right, along with Kevin's red line addition, then by 2010 prices would have fallen about 12% from current levels, and by 2011 they will be flat to 2010 levels -- so total decline from today's levels would be that same 12%.

Which would mean that Blodget is right to predict a 10% - 15% further decline.

BTW it's very tricky to chart YoY changes at a monthly frequency. It's easy to misinterpet the chart.

You call THAT a chart of the day?!?

Submitted by GA-Sen Watcher (not verified) on Tue Jun. 30, 2009 7:41 PM PDT.

tagged as:

result

Please indulge the lovely and talented Rebecca over at News and Economics blog and I bet you will change your opinion about exactly which chart is worthy of the singular article on this fine day.

So, not to change the

Submitted by godoggo (not verified) on Tue Jun. 30, 2009 8:55 PM PDT.

So, not to change the subject or anything, but according to this NOVA show on TV, when you see these 2-word captcha images, one of the words is for the commenter to do free work digitizinge some book. Are not outraged about this?

Why would you be outraged?

Submitted by Anonymous (not verified) on Wed Jul. 1, 2009 2:54 PM PDT.

Yeah, you are doing "free work" but you missed the whole point of the segment. First off, the work was being done anyway. Captcha was already a popular spam security tool. Re-captcha took that wasted time and applied it to "free work" digitizing books in the public domain that you can read for free! This is one of the places that offers free public domain works. I'm not positive whether the re-captcha books are part of this collection or not but they are online somewhere if you want them!

http://www.gutenberg.org/wiki/Main_Page

Hey, there was no captcha.

Submitted by godoggo (not verified) on Tue Jun. 30, 2009 8:56 PM PDT.

Hey, there was no captcha. Never mind.

the real green shoot

Submitted by luke (not verified) on Wed Jul. 1, 2009 4:01 AM PDT.

Isn't the real green shoot that Henry Blodget is predicting more drops - that's surely a sign that recovery is on the way.

Graphs

Submitted by RM (not verified) on Wed Jul. 1, 2009 7:25 AM PDT.

You're probably right, but I don't really see any evidence other than the point that the little line on the graph has to go up pretty fast to get to zero any time soon.

Kevin, That's an interesting

Submitted by Anonymous (not verified) on Wed Jul. 1, 2009 7:32 AM PDT.

Kevin,

That's an interesting chart, so thank you. Off topic, but something I'd like you to blog about: what happened in the blogosphere regarding Ricci? You didn't blog about it (you could claim being out of town, perhaps). Atrios cowardly ignored it completely. In fact, in the leftosphere, the reaction has mostly been either silence, or reactions like Greenwald's which is to not talk about the actual decision, but mainly talk about how this means Sotomayor is in the mainstream and the decision means nothing regarding her confirmation.

And while I agree completely with Sotomayor, and that's good, I am surprised to see the silence, especially Atrios' dog that didn't bark. We have very few bloggers like BTD who will outright defend the actions of New Haven or declare the decision wrong wrong wrong.

There was even a Kos diarist who wrote a post comparing Ricci with Kelo as one of those times when he was siding with the conservatives against the liberals, Ginsburg spectacularly wrong on Ricci, Title VII and that diarist wasn't particularly abused, flamed, kicked out of Kos or what have you.

So....

What's up with Ricci and the leftosphere? Are we all secretly pleased with Kennedy? Are we afraid (more afraid than in Kelo) to say that? If it wasn't for Sotomayor would we be more outspoken about this?

I am probably all wet and haven't surveyed the blogosphere at all. I read much less of the blogosphere these days, but I do read you and Atrios and TL and Greenwald and follow the links. So that's my impression of the situation.

Hello, Jerry

Submitted by Anonymous (not verified) on Wed Jul. 1, 2009 9:54 AM PDT.

Anonymous at 8:32 -- Hi, Jerry. How've you been?

I'm doing fine, thanks. I

Submitted by Anonymous (not verified) on Wed Jul. 1, 2009 10:09 AM PDT.

I'm doing fine, thanks. I know you feel you're so clever, but it was never a secret that I don't bother registering here. I don't go through the hoops to register at any site anymore, why bother?

Either we support anonymous speech or we don't.

Appears you don't and you don't to the point that you feel it important to try and out people, ignoring even whether what they had to say was truthful or interesting.

I guess that makes you another bully who dislikes free speech. How progressive of you.

Actually, you've outed

Submitted by Anonymous (not verified) on Wed Jul. 1, 2009 11:08 AM PDT.

Actually, you've outed yourself
If you'd said nothing, I'd a lost 10 bucks.
We're sitting here in a barroom in downtown Gary, Indiana making bets.
I won.
Thanks.

"Either we support anonymous speech or we don't. "

Submitted by Trippp on Wed Jul. 1, 2009 12:43 PM PDT.

Black or white.

This or that.

Thanks for the illustration of the binary thinking that poses as rationality amongst authoritarian followers.

You guys are just so predictable.

C'mon, tell me how we need to 'get back' to something. I'm begging you.

Tripp

"Green Shoots"

Submitted by Chris Brown on Wed Jul. 1, 2009 5:32 PM PDT.

It has taken only four months since Fed Chair Bernanke indicated there were “green shoots” appearing in an otherwise barren economy for the term to reach cliche status. That must be a record for descent into clichehood.

It’s to the point that, like when I encounter the word “paradigm” or the terms “think outside the box”, “push the envelope”, “learning curve”, “sea change”, “tectonic shift”, or “stakeholders” I cease reading whatever it is I am reading.

Strive For The Ideal, But Deal With What's Real

Stupidity.

Submitted by Anonymous (not verified) on Wed Jul. 1, 2009 7:34 PM PDT.

Year over Year. Rate of change.
geez.

is the whole world stupid or something?

if you want to draw lines on the chart do everyone a favor and draw a vert line one year ago.

And draw it on a actual chart of the prices, not the Rate of Change chart.

lazy lazy lazy.

woo hoo!! prices are falling only 10% per year!! green $hits! woo hoo!! everything is great!!

Shiller chart is lacking in many ways

Submitted by Anonymous (not verified) on Sat Jul. 18, 2009 4:56 AM PDT.

As much as I respect Dr. Shiller, there is something missing from the chart. There is an interesting twist emerging in the "Giant Pool of Money" theory recently worth noting. Check it out Washington Post's Ezra Klein article on the subject.

http://voices.washingtonpost.com/ezra-klein/2009/06/a_new_spin_on_the_gi...