Economics Update

Philadelphia-area manufacturing activity lowest just after 911.

Lehman Brothers is downsizing its mortgage arm. I believe that there is an expression, involving the words, "barn", "door", and "cow" that would be appropriate here.

It looks like the real estate crash is finally starting to effect rents, with rents increacing by only ½% in 2007 in a sampling of 10 metro areas. (In previous years, it was in the 3% range)

Housing starts and permits plunge to multi-decade lows. Housing starts are the lowest in 27 years, permits the lowest in 33 years. The market is still on the way down.

This analysis predicts 5 years to recover. It's probably wrong.

Local housing crashes have all taken at around 5 years to recover, and the markets were far less inflated. Additionally, the underlying economic situation is very grim, and the home buyers were less leveraged, meaning that foreclosures will be higher this time.

The Dollar has recovered somewhat against the Euro in response to an inflation hawk on the ECB saying that right now recession is the problem, not inflation