Rossputin.com Rational Thinking About Our World

The stock market took a minor beating yesterday primarily based on two stories out of the housing sector.

First, S&P's Schiller-Case index of residential real estate prices dropped in January, representing the first time in 11 years that there was a year-over-year drop. In other words, real estate prices as measure by this index were lower in January than they were in the prior January.

Well-known economist Robert Schiller says the reading represents the "dire state of the U.S. residential real estate market."

You can (and should) read the whole story here:
http://www.marketwatch.com/news/story/home-prices-go-negative-first/story.aspx?guid=%7B30B54985%2D2189%2D4AE9%2DB8E5%2DECF89F6095F3%7D&dist=MostReadHome

Along with that came yesterday's profit warning from Lennar (NYSE: LEN) reported earnings 73% lower than the same period a year ago and gave a profit warning for 2007.

You can (and should) read that story here:
http://biz.yahoo.com/ap/070327/earns_lennar.html?.v=8

I continue to believe that my friend Brian Wesbury, as brilliant an economist as he is, is far too optimistic that the economic results of our real estate bubble will be benign.