The Myth of Less Bad
By Sean Hannon
27 October 2009 @ 09:27 am EDT
Today's release of the Case Shiller home price index (CS) show that prices fell a better than estimated 11.3% year-over-year and actually increased 1.2% from the prior month. We can expect all the perma-bulls to climb atop their soapboxes and declare that housing and the economy have finally turned positive and the stock market will continue marching higher. At the center of their argument is the belief that a slowing rate of decline, where economic data is "less bad", equates to good news. I have never agreed with this view and a deeper look at the data explains why.