Today, the chapter one of the economy, the first one to go, the housing sector will be the major event, as the U.S. existing home sales are expected to highlight the lowest in almost 9 years, dropping 1.8% to 4.8 million housing units, and giving a clear sign that the housing slump is still undergoing in the first month of the new year 2008.
We've all noticed the leak that the housing sector still got on the U.S. economy, as manufacturing indicators are falling massively, and the consumer confidence is at lowest levels, while PMI indices are falling below 50, which is clear cut sign of a contraction.
Well, the U.S. economy is now between a rock and a hard place, from one side there is the great possibility of a recession, from the other side, if they could escape recession they might fall into stagflation, and the fed has to decide what to do about it, and they actually has to be prepared a head not to fall in another new crisis, and again the main driver will be the housing market.
Existing homes sales contributes for a great portion from the overall housing market, and the other part of it the new home sales, will be released on the 27th of February, by then we will have a clear view on that market after we had the housing starts and building permits were released last week.
The week is just getting started dear reader, and we have a lot to deal with, so be prepared and fully armed to whatever dangers that might befall you.