Merrill Lynch gurus are now saying 15% more drop in house prices with next four quarters being contraction with leveling at a bottom in 2010. This is driven by a 11.2 month supply of houses, highest in a very long time.
They said it will be the worst recession since WW2 since the credit is being pulled back from people. Think the 17 million autos sold per year sinking to 10 million rate from October on could become the norm with little or no credit available for borderline people.
Supposedly the major banks are still being propped up with govt loans and they are essentially insolvent, illiquid, malfunctioning, biding time, counting their cards, going thru their retrenchment plans or whatever. AIG needs $10 billion more. Expect fillibuster today for auto industry bill.
Merrill talked about 10% unemployment with the rescession being a different type since credit is not available to borrow. They said we were looking more 90s Japanlike with zero cost to borrow money....
