FED SAYS RECESSION OVER: Housing market at rock bottom!

Below is a great article by Brendan Case. The FED actually thinks that we are at the very bottom of the recession and that we should begin to see a steady increase in the stability of our economy.

What does this article say about the housing market?

THERE IS NO BETTER TIME TO BUY A HOUSE! You buy investments low and sell them high. Right now you can buy a bank owned property at pennies on the dollar! Not to mention, if you are in Dallas you are in one of the best housing markets in the country. DO NOT MISS THIS WINDOW!! Check out the article and let me know what you think.

Recession over, Dallas Fed chief says, but jobs lag
07:21 AM CDT on Wednesday, August 26, 2009

By BRENDAN CASE / The Dallas Morning News


The Great Recession is over, says Richard W. Fisher, president and chief executive of the Federal Reserve Bank of Dallas.
The U.S. economy is no longer in free fall, and a healing process has begun, he said Tuesday. Consumers are more confident. And housing is showing a few positive signs.
"We're beginning to see indicators that we're coming out of this," he said.
That's the good news. Now for the bad:
Don't expect a rapid recovery, especially when it comes to jobs. In fact, it could be painfully slow, with the economy gradually reawakening instead of roaring back, Fisher said.
"People, as long as their memory cells are in place, will still be cautious," he said. "I think it will be a while before businesses rehire or increase pay. They're all going to be very, very conservative on that front until they feel comfortable that we have a global economy that is proceeding. I think that will take some time."
Not everyone concurs that the recession has come to an end, but there is broad agreement that the economy is bottoming out. Fisher uses this analogy:
"If you think of a check mark with the long part going out to the right, we were in a sharp downturn, and we're getting a pop upward where the check mark turns up," he said.
"I think we're there," he added. "The question is: What's the slope of the long part of the check mark?"
Fisher and others think the upward slope will be less steep than we'd like.
Texas is apt to remain healthier than the national average, Fisher added.
After slashing payrolls every month from November 2008 to June 2009, Texas employers added 37,900 jobs in July, according to preliminary figures released by the Texas Workforce Commission. Despite that turnaround in job growth, the unemployment rate rose to 7.9 percent from 7.5 percent in June.
Bottoming out
Not all analysts are willing to declare the grinding U.S. recession over, and many economic gauges point to continued pain. The question of whether the downturn has indeed drawn to a close elicited loud guffaws from Bernard Weinstein, an economist from Southern Methodist University's Cox School of Business.
"That's a good question," he said.
But he added that gross domestic product – the broadest measure of economic activity – may show growth as early as this quarter.
During the third quarter of 2008, the economy shrank at an annualized rate of 2.7 percent. It then contracted at an annualized rate of 5.4 percent in the fourth quarter, 6.4 percent in the first quarter of 2009 and 1 percent in the second quarter.
More recently, industrial production ticked up in July for the first time since October. Consumer confidence rose in August after falling in June and July, according to a Tuesday news release by the Conference Board, a business research group.
"I think the worst is over, but I don't think we're going to feel a lot better for another six to nine months," Weinstein said. "This will be a jobless recovery for awhile."
Huge debt
Helping to revive the economy are extremely low benchmark interest rates, an array of lending programs installed by the Fed and added government spending.
But government life support won't last forever, analysts say, a point that was underlined Tuesday when the Obama administration released revised deficit projections. Officials said the federal deficit would add more than $9 trillion to the national debt over the next 10 years, or about $2 trillion more than they forecast earlier this year.
The government's public debt will rise to $17.5 trillion, they said, or more than 76 percent of GDP – the highest such percentage since the aftermath of World War II. The debt now amounts to about 56 percent of GDP.
Businesses and consumers alike will take months to emerge from their defensive crouches, analysts said. In the meantime, unemployment will remain a gaping wound at the heart of the economy.
The national jobless rate was 9.4 percent in July, but the Obama administration said Tuesday it could hit 10 percent at some point over the next year and a half, echoing what many economists have been saying for months.
Fisher, who has said that the jobless rate could surpass 10 percent, warned that the labor market will lag even if economic output starts clawing its way back.
For now, he says, the worst declines may be over for residential investment, inventories, exports and even consumption.
"The way the math works, I call it the Johnny Mercer effect," he added, referring to the singer, lyricist and songwriter who penned the phrase, 'Accentuate the positive, eliminate the negative.' "When you start to eliminate the negative ... you get a little positive momentum."