Foreclosure Weather Forecasting

May 6th, 2008 | Tags: Foreclosure

Foreclosure weather forecasting, tantamounts is surveying the economic picture for tomorrow. The US economy is at an all time low. It is going to further fall – this is the opinion of a good number of economists as projected in Wall Street Journal in April 2008. Three out of one said that the economy is in recession. Three quarters commented that the economic fall has not as yet peaked. Lou Crandall of Wrightson ICAP opined that “it doesn’t feel like anything we’ve experienced in decades.” This survey was conducted to find out the pulse of economic thinkers. It is the first of its kind since the Federal Reserve nosed in to stop the collapse of Bear Stearns. Forty-six economists were asked questions. Of these, 80% approved of the way the Feds have been dealing with the issue of Bears Stearns.

It did not however win full marks for Federal Chairperson Ben Bernanke or for Treasury Secretary Henry Paulson. Both were closely connected with the deal concerning Bears Stearns. In September Bernanke’s rating was 92. In February it fell to 75 but now after the Stearns matter it has risen slightly to 78. Paulson slumped slightly from 74 in February to 73 in April. At the background is continuing of foreclosure numbers.

One opinion is that the Feds moved too slowly while dealing with the foreclosure related credit crisis but since January it has caught up with it. The moves of the central bank may be unconventional but it is better than sitting on the fence and just watching the economy fall part. Something is better than nothing even if that something is not the perfect solution for the foreclosure tornado.

About 35% of the economists said that there would be further falls in the credit market. 25% predicted a fall in consumer spending and 13% commented that the foreclosure crisis would rage on ahead. Richard DeKaser of National City Corp was an optimist and said that the economy would soon start to pick up. He pointed to signs of stabilization and increase in sale of foreclosed houses. The credit market uncertainties are clearing. The steps taken by the government like the economic stimulus package will soon start showing results. But all are not convinced as real estate prices are continuing to dive. It does not seem that the sale of foreclosed houses have reached a point of stability. One has to wait for next spring to really gauge the weather.