House prices continued to tumble in March, according to the Case-Shiller index. Time to see what the futures say (keeping in mind the forecasting capacity of the Case Shiller futures are not well known).

Figure 2: Case-Shiller 10 city price index, (blue line), CME futures prices, 26 May 2009 (red triangle), and CME futures prices, 21 Sep 2008 (green diamond). NBER-defined recessions shaded gray, and start date dashed gray line Source: Standard and Poors' [xls], ino.com, St. Louis FRED II, NBER, and author's calculations.

So as of March, the 10 city is 40% lower than its May 2006 peak, in log terms (37%, in percent terms). The CME futures indicate that the 10 city index will be 52.7% lower by May 2010 (41% in percent terms). Compared to last September, the trough has moved up (the trough back then was slated to be in May 2011).

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I'll just take the market's view here; using the futures prices from the CME (via ino.com), prices will fall about another 16% from June (or 17% in log terms):

Figure 1: Log Case-Shiller 10 city price index, (red), CME futures prices (red squares), and CPI adjusted SP Case-Shiller 10 city price index (dark blue). CPI-All rescaled to 100 2008M01-08M06. NBER defined recessions shaded gray. Dashed line indicates start of plotted futures data. Source: Standard and Poors' [xls], ino.com - real estate (accessed 21 Sep 2008), St. Louis FRED II, NBER, and author's calculations.

The latest reading from ino.com for the Case Shiller US composite futures indicates a nominal bottom in May 2010, with a reading of 151.6 (or a bottom of of 151.4 in May 2011 if you want to nitpick.

This would represent about a 40% decline (in log terms) in housing prices

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Over the past few days I conducted a snap poll on the performance of Messrs Bernanke and Paulson over the past year, i.e. the first year of the credit crisis. The poll was devised in order broadly to gauge readers’ sentiments regarding the gentlemen’s actions during testing times.

In total about 400 people participated in the poll and responded as follows:

Bernanke’s grades were all over the show, with about 42.4% of the participants rating his performance above average and 57.6% expressing the opinion that he performed in the bottom half of the grading card.

Paulson, however, had the bulk of his grades in the low numbers, with as many as 30.1% of the participants giving

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Article Source Some thoughts about the role played by the GSEs in the run-up in mortgage debt and house prices. Paul Krugman ably lays out the case for why it's conceivable that Fannie and Freddie could have made a contribution: Here's the background: Fannie Mae-- the Federal National Mortgage Association-- was created in the 1930s to facilitate homeownership by buying mortgages from banks, freeing up cash that could be used to make new loans. Fannie and Freddie Mac, which does pretty much the same thing, now finance most of the home loans being made in America. The case against Fannie and Freddie begins with their peculiar status: although they're private companies with stockholders and profits, they're "government-sponsored enterprises" established by federal law, which means that they receive special privileges. The most important of these privileges is implicit: it's the belief of investors that if Fannie and Freddie are threatened with failure, ...