Couldn’t Help But Notice (012408)

Write, it, down — Unless the government manages to screw up the housing market beyond recognition (an unfortunate possibility), these guys are wrong:

The worst housing financial crisis in decades is only going to get worse, a Merrill Lynch report said Wednesday.

The investment bank forecasted a 15 percent drop in housing prices in 2008 and a further 10 percent drop in 2009, with even more depreciation likely in 2010.

From the same link, with the same caveat, these guys are right:

By contrast, the National Association of Realtors (NAR) expects housing prices to remain flat in 2008. NAR did cut its home price estimate for the current quarter, however, to a 5.3 percent year-over-year decline, which represents the steepest drop in that price measure on record. But NAR sees an uptick in home prices in the last two quarters of 2008.

A reminder: The latest comprehensive nationwide report on home prices issued for the third quarter of 2007 showed that they dropped by all of 0.4% during the quarter, and were still UP by 1.8% over the previous year.

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Although, as I noted last week, the first six months of the Ohio’s fiscal year were okay, but the next 18 months look pretty bleak:

The state faces a budget shortfall of between $733 million and $1.9 billion dollars by the middle of next year, the governor’s office said Wednesday.

Gov. Ted Strickland briefed legislative leaders on the state’s money woes this morning and is asking state agencies to draft plans on how they can cut costs, said Strickland spokesman Keith Dailey. “He’s going to manage the situation very aggressively,” Dailey said.

The budget — the Democratic governor’s first — was approved by the Republican-controlled legislature at the end of June with prediction of a $56 million surplus at the end of two years. The poor economy — both nationally and in Ohio — has changed the outlook.

This is so tired: The “poor US economy” grew 3.9% and 4.8% in the second and third quarters; it almost definitely grew in the fourth. Ohio’s, on the other hand, is growing at about 1% (link is to a 2005-2006 chart; 2007 will probably be no better). This is a state-specific problem; don’t try to pass this off on Washington.

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Recession, reschmession — It isn’t just little old me (link probably requires subscription) not buying into the gloom:

NYSE Euronext Inc.’s chief executive sees no evidence that the U.S. economy is moving into a recession and expressed surprise at the magnitude of the Federal Reserve’s rate cut, according to published reports.

“I don’t see any evidence that implies we’re headed into a recession,” Duncan Niederauer told a business group in Vienna, Va. yesterday, according to the report.

Of course, as you can see from the results of this Google News search, Old Media doesn’t care about what a mere executive of “the world’s largest and most liquid exchange group ….. (that) offers the most diverse array of financial products and services” thinks. What could he possibly know? (/sarc)