Housing still at risk: Shiller and DeLong

Shiller Sees ‘Substantial’ Probability of Recession: “Forecasting models would say no” on the question of whether the U.S. will face a double-dip, Shiller said. “But I’m seeing signs that encourage me to worry about that.”...The summer season could see a pickup in prices, he said, but “I still worry about the general downtrend.”

“There might be a turnaround if psychology changes,” he said. But “I fear that it may just continue down.

“It just doesn’t look good,” he said in an interview with The Wall Street Journal...
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Delong: But the underlying VAR correlations [of the aforesaid forecasting modles] still largely come from an age of inflation-fighting recessions and rapid bounce-back. Thus that is an input to what the markets are forecasting. And is that input still valid for today?

That is why I am alarmed
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