The Daily 2¢ - Et Tu, Bernanke?

To Bail or Not To Bail… That is the Question!

So here we are, waiting on pins and needles for the decision that many hope will rescue the markets from themselves.

Seems like a fairly intrusive action considering that only a month ago this “crisis” wasn’t even acknowledged by the Federal Reserve who, to this day, still insinuates that the housing recession will stay mostly contained.

Why all the fervent action?

Whatever happened to the Federal Reserve being more efficient at “mopping up” the aftermath of market turmoil rather than attempting to prevent it as Ben Bernanke himself suggested back in 2002?

The risks of responding so quickly lies not only in creating a “moral hazard” for market participants as they learn to rely on the Feds rescue actions but it may possibly turn the Fed into a “paper tiger” should things continue to worsen.

This brings up another point.

It seems to me that today’s pending rate cut action (which, as of this writing, is still an educated guess as history has yet to be written) might be an indication that they really do believe their own housing containment story.

It could very well be that they STILL do not truly see the full extent of this historic housing correction.

Think of it this way, one the most significant structural changes, namely the vanishing of no-low-doc and Jumbo loans have just materialized in the last 30 days.

How is it that any expert can accurately purport to see a containment or a bottom without even one month’s worth of data showing the outcome of such a momentous change?

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings September 2007

Today, the National Association of Home Builders (NAHB) released their Housing Market Index (HMI) showing additional evidence that the new home market is experiencing a new leg down in declines.

The release came along with a guarded yet optimistic perspective from Chief Economist David Seiders who now sees home sales recovering by the second quarter of 2008.

“Certainly problems across the mortgage finance arena are taking their toll on buyer demand, which is weighing heavily on builder confidence measures, … We now expect to see home sales return to an upward path by the second quarter of 2008 and we expect housing starts to begin a gradual recovery process by the third quarter of next year. At that point, the market will have substantial growth potential.”

Measuring builder confidence across six key data points, the builder survey has been a bellwether for the new home market since 1985.

The component measures used to formulate the overall HMI are respondent ratings on “present conditions”, “future conditions” and “buyer traffic” all of which continue to indicating significant current and future weakness as the new home market slumps its way slowly forward, now long separated from an exceptionally disappointing spring selling season.

In fact, July’s “present”, “future” and “buyer traffic” condition results have moved even nearer to the worst levels seen since early 1991 when the nation’s housing market was slumping through its last major housing bust.

The following charts show “present conditions”, “future conditions” and “buyer traffic” both smoothed since 1986 and unadjusted since 2005 (click for larger versions).

Keep in mind that for each measure respondents are asked to assign both a “good” and “poor” rating so in each chart you will notice “good” slumping while “poor” is surging.

The Daily 2¢ - Greenspan’s Benevolent Era

Greenspan Greenspan Greenspan!

He’s back, the gloves are off and he’s coming for your economy!

Look out everyone, the oracle hath spoken…

The “benevolent” era is over, inflation is on the rise and the problem will not be short lived.

Additionally, not only is there a housing bubble in America, but they have occurred all over the world!

These are some of the “revealing” concepts Greenspan is now putting forward as he makes the rounds on the national TV talk shows pumping his new book “The Age of Turbulence: Adventures in a New World”.

Greenspan is either a little late to the party or, more likely, simply exercising a little legacy damage control in the face of the now obvious unwinding of his easy money days of the past.

Forgive me for feeling a little short changed when contemplating Greenspan’s suggestion that the Federal Reserve’s low funds rate between 2001 and 2004 and call for more innovative mortgage products in 2004 was not even partly to blame for inflating the US housing bubble since housing bubbles also occurred in as many as twenty other countries around the world.

It’s pretty hard for me to believe that he could seriously see US monetary policy as being totally isolated from affecting the other world economies and that our housing bubble is simply a result of some benevolent disinflationary era that independently affected the US and other major economies alike.

I suppose the new book and all the interviews will supply plenty of fodder for those that that would defend and others that are critical of Alan Greenspan’s legacy but one thing I have noticed seems to be now firmly unarguable.

Starting today, there IS a housing bubble in America and it is now in the process of unwinding.

All debate is over, it is now totally unequivocal given that Bears have been using this term for years and now, with Alan Greenspan’s gentle guidance, Bulls must join in the fray, a point that is positively clear after watching just a few hours of CNBC this morning.

Conspicuous Correlation: August 2007

Today, the Commerce Department released their monthly Retail Sales Report for August which continued to show an interesting correlation between declining consumer spending, particularly on discretionary items, and the decline in home values.

As in past months, I have isolated the primary discretionary retail sales categories into a single “discretionary” retail sales series, and then charted the year-over-year percentage changes since 2000.

I then added the year-over-year percentage changes of the S&P/Case-Shiller Composite index which broadly and accurately tracks single family home prices using data from Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, and Washington DC.

The result is a significant correlation between the deceleration, and now outright decline, of home prices and a deceleration and subsequent decline in discretionary consumer spending.

The first chart (click for larger version) shows the complete discretionary series comparison from January 2000 to the latest reported months of 2007.

Note the precipitous deceleration and decline to home prices starting in January 2006 and the very well correlated decline in “discretionary” retail sales.

Also note that the latest decline to retail sales is easily the most significant and sustained seen since 2000, handily surpassing the decline that occurred during and preceding the 2001 recession.

The second chart (click for larger version) simply isolates the results from January 2006 in order to provide a clearer view.

The Daily 2¢ - The China Solution

Seeing Housing and Urban Development Secretary Alphonso Jackson sitting next to Treasury Secretary Paulson at yesterday’s lender bailout summit jogged my memory of Jackson’s recent trip to China that, although covered in the traditional media, didn’t seem to garner the attention it deserved.

In early July, Jackson appeared in a very candid Bloomberg interview in Hong Kong as he was passing through on his way to meetings with Chinese People's Bank of China governor Zhou Xiaochuan, Construction Minister Wang Guangtao, and other Chinese officials.

In the interview, Jackson showed no hesitation when revealing that the purpose of his visit was to attempt to persuade China to participate in the “very lucrative” market of American mortgage backed securities.

Specifically citing both FHA and Ginnie Mae, Jackson’s intention was to lean heavily on the explicit federal guarantees that both of these programs provide when making his case to Chinese officials who, as he stated, had already showed some interest in the investment.

“The best argument that we can make is that they have the full faith and credit, and backing, of the US government. “

This was the precise message he pressed during the delivery of his speech as well stating “They are a sound, solid investment, a win/win situation for the investors and for the American people. These securities are attractive because they have no credit risk and are backed by the full faith and credit of the U.S. Government. Also, most Agency Mortgage-Backed Securities even have a higher yield than the Treasury Securities.”

The result of the meeting was a lengthy “Memorandum of Cooperation” that was signed on August 30 between the two governments that established many areas “of mutual interest”.

Given that the federal government now seems bent on dramatically expanding its role in the mortgage market, I thought it was important to recount the events surrounding the Jackson visit to China.

Keep in mind that all mortgage related programs and agencies of our government (Fannie Mae, Freddie Mac, Ginnie Mae, various FHA programs etc) require some form of private investment in order to function.

With a reeling and risk averse Wall Street now pulling back from mortgage securities, possibly even including government agency investment, China may inevitably pick up the demand for agency securities and even drive an expansion.

It seems to me that a more sensible approach, considering that compensation for failed government agency securities would be funded by the US taxpayer, would be to let the turmoil in the US housing markets play itself out before looking for additional fuel from foreign investors.

More private investment will likely equate to a broadening of these programs possibly putting them further in jeopardy of overreaching.

This would be especially risky considering the uncertain state of the housing markets at the moment.

Countrywide Foreclosures: August 2007

Today, Countrywide Financial (NYSE:CFC) released their August Operational Results showing again that delinquencies and foreclosures are continuing to worsen with delinquencies jumping 21.69% and foreclosures soaring 150% since August of 2006.

Prior to January 2007, Countrywide reported foreclosure data as a percentage of the total number of loans serviced which obviously lacked complete clarity.

Below, are charts of both measures; foreclosures by total number of loans serviced and foreclosures by percentage of unpaid loan principle (Click for larger versions).

Either way you slice it, Countrywide is looking at some significant increases in foreclosure activity but notice that for the “unpaid loan principle” method, things are really looking dire.

Be sure to check out the Countrywide Financial Foreclosures Blog’s Inventory Tracker for some more startling evidence that foreclosures are skyrocketing over at Countrywide Financial as well as some excellent REO tracking features.

Reading Rates: MBA Application Survey – September 12 2007

The Mortgage Bankers Association (MBA) publishes a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as application volume for both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage decreased since last week and now stands near the peak for the year at 6.25% while the purchase volume increased 5.2% and the refinance volume increased 6% compared to last weeks results.

It’s important to note that the data is reported (and charted) weekly and that the rate data represents average interest rates, and the index data represents mortgage loan application volume for home purchases, home refinances and a composite of all loans.

The following chart shows how the principle and interest cost and estimated annual income required to cover the PITI (using the 29% “rule of thumb”) on a $400,000 loan has changed since January 2007.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages over the last number of weeks (click for larger version).

The following charts show the Purchase Index, Refinance Index and Market Composite Index since January 2007 (click for larger versions).

NARcasting The Future: September 2007

Today, the National Association of Realtors (NAR) released yet another downward revision to their outlook for existing home sales for 2007 along with another dose of truly ridiculous spin.

In an effort to put their absurd bias into perspective I compiled all their forecasts for 2007 home sales into a chart along with a list of prominent quotes supplied with each forecast.


12/11/2006 Prediction: 6.40 million units.
Lereah "Most of the correction in home prices is behind us."

1/10/2007 Prediction: 6.42 million units.
Lereah "The good news is that the steady improvement in sales will support price appreciation moving forward."

2/7/2007 Prediction: 6.44 million units.
Lereah "After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008."

3/13/2007 Prediction: 6.42 million units.
Lereah "Although existing-home sales will be marginally reduced due to subprime lending restrictions, they should be gradually
rising this year and next."

4/11/2007 Prediction: 6.34 million units.
Lereah "Tighter lending standards will dampen home sales a bit, but by less than a couple of percentage points from initial
projections."

4/30/2007
Lereah Leaves NAR for Move.com

5/9/2007 Prediction: 6.29 million units.
Yun "Housing activity this year will be somewhat lower than in earlier forecasts."

6/6/2007 Prediction: 6.18 million units.
Yun "Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year."

7/11/2007 Prediction: 6.11 million units.
Yun "Home prices are expected to recover in 2008 with existing-home sales picking up late this year."

8/8/2007 Prediction: 6.04 million units.
Yun “With the population growing, the demand for homes isn’t going away – it’s just being delayed.”

9/11/2007 Prediction: 5.92 million units.
Yun “Patient buyers in most areas who do their homework will recognize that housing remains a good long-term investment.”

The Daily 2¢ - Opps! Spoke Too Soon

Krikies!

Remember all the stuff I wrote yesterday about recent congressional actions being limited and not qualifying as a federal bailout? Well you can just scratch all that.

In a really disturbing and outright reckless move, New York Senator Charles Schumer (D-NY) yesterday publicized details of a soon to be introduced bill that, if enacted, would both raise the portfolio caps on Fannie Mae and Freddie Mac by 10% ($145 billion with $72 billion being allocated for refis of rate shocked mortgages) and increase the conforming loan limit to as much as $625,500 in “high cost” metro areas.

In his statement, Schumer stated that by enacting the “Protecting Access to Safe Mortgages” act, the federal government would be “deploying Fannie and Freddie to do the job they were designed to do.”

Obviously, the devil will be in the details but what I find most alarming is the possibility of the GSEs (and the federal government by a supposed but tenuous promise) stepping into the role as Jumbo lender of choice for the housing bubble’s metro markets.

Schumer’s suggestion that Fannie and Freddie were “designed” to lend up to $625,000 buyers of metro areas single family homes is both offensive and preposterous.

Originally created during the throws of the Great Depression, Fannie Mae and later Freddie Mac were designed to bring liquidity into the nation’s housing markets and help foster affordable housing NOT offer the most affluent of Americans a “government guaranteed” loan on their trade up to a luxury metro home.

What is it with this conforming limit anyway?

If it’s not the OFHEO director refusing to lower the limit, even after two consecutive years of declining home prices, it’s Congressmen like Senator Schumer and Representative Barney Frank (D-MA) proposing to raise it by as much as 50% simply to buy the housing bubble some more time.

And what about affordability in the metro areas?

How will it help the metro housing markets to support the artificially inflated home values that leave hordes of first time homebuyers permanently sidelined?

This is just completely idiotic and ill conceived.

The government is seriously risking getting in the way of a much needed correction in home prices that will materialize one way or another.

If the correction is left unfettered it will be destructive but likely come quickly and resolve as the market works through the damage and resumes some level of normal historical growth.

By tinkering in the market to extent proposed by Senator Schumer, the federal government will likely cause the housing correction to be draw out, with multiple failures and false bottoms, causing a slow bleed that could last for many years (i.e. the Japan model).

Be sure to let Senator Schumer know what you think of his proposal.

The Daily 2¢ - Bailing Out

Nothing seems to get tempers flaring more than the topic of government bailouts.

Whether it’s for the Auto, Airline or other troubled industry or now for the home lender and homeowner, the notion of the government stepping in to “prop up” the market seems to run against the grain of the proud notion of the American free market economy.

Then again, it’s not like we have truly free markets.

There are rules and regulations that strive to control either prices or other aspects of many markets, labor laws that set many standards for organization, compensation and safety and of course there’s the Federal Reserve that plays an important, possibly overzealous, role in regulating economic growth.

Don’t get me wrong, I’m not in favor of a government bailout of lenders and homeowners but the point is, given that we have many examples of government tinkering in the markets, what level of response is appropriate and what is likely?

Keep in mind, many of the proposals specified to date are very limited and barely qualify as market bailout.

The “FHA modernization” bills have, in some form or another, been floating around congress for several years now.

Originally authored as a response to the affordability problems created by the booming housing market, they are currently being positioned as the crutch to be leaned on now that things are on the rocks.

Other proposals and measures, such as the recent FHASecure program, the temporary tax changes related to forgiven debt, HUD’s foreclosure avoidance initiatives, and even Hillary Clinton’s bailout fund concept, may be inherently wrong-headed, but it’s hard to see how any could make a discernable impact on the immense housing recession.

As housing and the economy continue to deteriorate, and as the main push of the 2008 presidential elections draws ever closer, I expect we may witness many new concepts but it seems almost impossible to imagine that any politician would propose any measure that would seek to blunt the downside for speculators or even middle income to affluent homeowners who got in over there head.

This likely leaves only the Federal Reserve’s rate actions as the main bailout that could possibly be on the horizon.

Again though, even with rate cuts, it seems to me that the key force behind the housing boom, namely ridiculously loose lending standards and mortgage liquidity, are things of the past.

Now, the great unwinding is underway and it doesn’t seem likely that any actions will prevent its conclusion.

The Daily 2¢ - The Final Needless Markup

What in the world has happened to America?

This little nugget came to my attention yesterday and I don’t think I’ve been the same since.

It appears that developers have been busily putting the finishing touches on a truly awe inspiringly bizarre “luxury” condo project in Natick Massachusetts.

In short, called the “Nouvelle at Natick”, it is a condo complex of 215 units that are built directly attached to the newly remodeled and expanded Natick Mall (now branded as the “Natick Collection”).

Yep… you heard right… Abutted right up against Neiman Marcus, Nordstrom’s and only a short stroll past the food court to Sears.

I’m not sure what to say… I mean, am I alone in thinking people have completely lost their marbles?

Here’s the kicker… the units, already listed on Realtor.com, range from $439,900 for a 953 square foot 1 bedroom 1 bath to… get this… $1,599,900 (yes... $1.6 million) for a 2190 square foot 3 bedroom 3 bath!

Remember this is NATCK we are talking about… and the complex is actually attached directly to the mall.

For all you non-Boston area readers, and with all due respect to Natick residents, I should note that Natick is a fine suburban town but it is located 20 miles out of Boston and up until now, it’s most notable feature was the now even larger mall…. Opps… I mean “Collection”.

Obviously, this project was years in the making and likely seemed more sensible when planned but I’m hard pressed to understand what demographic would be buying any of these units today.

What person actually wants to live AT the mall… no... I mean actually IN the mall…. Not to mention, pay through the nose for the privilege.

This brings up a larger issue as well.

America seems to have gotten seriously carried away with the notion of luxury.

First there was the pricey morning coffee, then the extravagant cars (think hummer, Lexus, etc.) and finally the granite and stainless steel kitchen in the luxury loft, McMansion or colonial gut rehab.

It appears to me that the average Americans expectations are for premium quality, regardless of economic status.

I know this isn’t true for everyone; there is plenty of foot traffic at WallMart, Target, and Costco to prove that, but still, there is undoubtedly a swath of American society that has grown accustom to a false perception of affluence that has been carefully crafted by marketing firms in virtually every product arena.

The housing boom seemed to really exemplify the fact that, given almost unrestricted access to capital, even borrowed capital, consumerism goes wild.

This new condo complex seems to take it even a step further.

The Daily 2¢ - The Next Leg

Well, I think it’s safe to say the next leg down is finally here.

Up to now, I think it was reasonable to conclude that the significant fall-off in the demand for single family homes seen during 2006 and 2007 was largely caused by buyer sentiment.

Anyone looking to buy, especially in the bubbliest markets, had to be well aware of the implications of the downturn, leaving many likely sitting on the sidelines as willing spectators.

Now though… I think we have fully crossed the threshold over to a fundamental structural change.

The evidence strongly suggests that the highly greased debt machine that was so effective at flooding the housing markets with loot laden frenetic buyers is now essentially working just as efficiently in reverse.

Buyers are literally being subtracted, permanently sidelined, by Wall Street’s newfound aversion to risk.

I had the opportunity recently to talk with a local mortgage broker who, quite candidly, reported that the Jumbo loans were effectively gone, “no doc” loans were completely gone, buyers were being denied with some instances of loan cancelations preventing closings, his backlog numbered in the single digits and his employees were all let go.

He is currently in the process of being certified for brokering FHA loans and even considering other non-home loan business alternatives.

Banks, he says, are stepping up to offer alternatives and new programs for brokers but in each case it’s a return to the far more conservative portfolio lending model of the past.

The most recent results of the National Association of Realtors (NAR) Pending Home Sales Index also seems to corroborate the structural pullback showing pending sales volume for July falling below the results seen in the dead of winter.

This suggests that the actual sales results for the remainder of the year will be heading further down, well below the results seen in 2006.

Any notion of a bottom being set now is totally without merit and until there is some significant fundamental change to the current circumstances, such as considerable declines to home prices, the housing recession will continue.

Pending Home Sales: July 2007

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for July 2007 showing a truly stark and horrendous continuation of the historic decline to residential housing on a month-to-month and year-over-year basis, both nationally and in every region.

There is simply no doubt that these forward looking results are predicting a substantial new leg down to demand and inevitably prices.

Additionally, the Northeast, Midwest, West and the National regions have now fallen WELL BELOW 100 indicating that, seasonally adjusted, July’s home sales activity was below the average activity recorded in 2001, the first year Pending Home Sales were tracked.

As usual, NARs Chief Economist, Laurence Yun takes another crack at false optimism pointing the finger at Jumbo loans and insinuating that drop-off in demand is temporary.

“These temporary problems are primarily with jumbo loans, and there are continuing issues for subprime borrowers, but there are no serious problems for the majority of buyers who qualify for conventional financing or FHA-insured loans. Some consumer concerns remain, but since mid-August the market has been stabilizing somewhat.

“If lenders focus on the essentials of creditworthiness and adjusted valuations based on comparable sales, and ignore speculation on what might happen in the future, broader stabilization will come sooner rather than later,”

The following chart shows the national Pending Homes Sales Index since 2005 compared monthly. Notice that each year, the months value is decreasing consistently (click for larger version).

The following chart shows the year-over-year changes to the national Pending Home Sales index as well as comparing the latest results against the values seen in the peak year of 2005 (click for larger version).

The following chart shows the pending home sales index nationally and for each region tracked (click for larger version).

Note that in the above charts, I had to use the Not Seasonally Adjusted (NSA) data series as NAR changed the methodology for their Seasonally Adjusted (SA) series a while back and never republished the numbers. This is why none of the data appears to be breaking below a value of 100 because it’s the SA series that is now below 100.

Keep in mind the current pending sales decline comes ON TOP of last years historic fall-off so the continued weakness is a sure sign that the decline is not ephemeral.

Look at the July seasonally adjusted pending home sales results and draw your own conclusion:

• Nationally the index was down 16.1% as compared to July 2006.
• The Northeast region was down 10.0% as compared to July 2006.
• The West region was down 21.8% as compared to July 2006.
• The Midwest region was down 15.8% as compared to July 2006.
• The South region was down 15.2% as compared to July 2006.

So it appears that, year-over-year, contract activity is still dropping rather sharply with ALL regions continuing to show significant declines.

Reading Rates: MBA Application Survey – September 5 2007

The Mortgage Bankers Association (MBA) publishes a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as application volume for both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage increased marginally since last week and now stands near the peak for the year at 6.42% while the purchase volume increased 0.4% and the refinance volume increased 2.3% compared to last weeks results.

It’s important to note that the data is reported (and charted) weekly and that the rate data represents average interest rates, and the index data represents mortgage loan application volume for home purchases, home refinances and a composite of all loans.

The following chart shows how the principle and interest cost and estimated annual income required to cover the PITI (using the 29% “rule of thumb”) on a $400,000 loan has changed since January 2007.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages over the last number of weeks (click for larger version).

The following charts show the Purchase Index, Refinance Index and Market Composite Index since January 2007 (click for larger versions).

BNN MUST SEE TV! – Peter “Dr. Doom” Schiff, Robert Shiller, and Nouriel Roubini

Here’s another new round of fairly calamitous forecasts from three of the most accurate economic prognosticators of our recent times.

Keep in mind that the respective outlook of all three forecasters has not changed measurably in the last year or so and, in fact, it seems quite obvious now that they were among the very few who clearly envisaged the full breadth and depth of the housing decline and the spillover effects that it’s reversal would have on the economy as a whole.

Peter “Dr. Doom” Schiff, President of Euro Pacific Capital joins CNN and CNBC to discuss the mortgage-housing crisis and its effects on the wider economy. Schiff points out that many of the subprime and toxic exotic loan borrowers were not victims but, in fact, speculators.

As lending standards tighten, returning to normal, home prices will correct and home equity will “vanish” leading Schiff to predict that he is “100% certain that we are headed for a severe and prolonged recession” while also suggesting that it will take time for all the aspects of the collapse to fully unwind.

Watch Dr. Doom’s Recent CNN Appearance on BNN!

Watch Dr. Doom’s Recent CNBC Appearance on BNN!

Yale Professor and Chief Economist of MacroMarkets LLC Robert Shiller joins CNBC to discuss the psychology of homeowner sentiment and the outlook for housing.

Shiller continues to suggest that, although the course of the housing market is slow and hard to predict, he is still worried about the impact of the correction and the likeliness for it to worsen.

While homeowners and homebuyers are generally still optimistic about housing and consumption, Shiller suggests that falling home prices and increasing inventory may likely erode that confidence.

Watch Robert Shiller’s Recent CNBC Appearance on BNN!

Watch Robert Shiller’s Recent Larry Kudlow Appearance on BNN!

New York University Professor and Chairman of RGE Monitor, Nouriel Roubini joins Bloomberg to discuss the outlook for housing and the economy.

Roubini now puts the odds of a recession at over 50% with the mortgage-credit crunch and a declining housing market leading to a weakening consumer.

While predicting an inevitable rate cut from the Fed, Roubini suggests that it will likely be too late to really affect the housing decline.

Watch Nouriel Roubini’s Recent Bloomberg Appearance on BNN!