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consumption is plummeting, home prices in real terms are down 24%, yet the freidmonites desperately cling to their failed polices, and discredited assumptions, asset deflation may be setting in:U.S. House Price Decline Could Be Worse than Great Depression

http://finance.yahoo.com/tech-ticker/article/53094/U.S.-House-Price-Decline
-Could-Be-Worse-than-Great-Depression?tickers=%5Egspc,fre,fnm

U.S. House Price Decline Could Be Worse than Great Depression
Posted Sep 04, 2008 01:36pm EDT by Henry Blodget in Newsmakers,
Recession
Related: ^GSPC, FRE, FNM
Eight years ago, Yale superstar professor and MacroMarkets chief
economist Robert Shiller famously called the top of the stock market
in his book Irrational Exuberance. Then, a year before the housing
bubble peaked, he predicted the colossal bust we are now experiencing.

If you recognize Shiller's name, it’s because the Standard
& Poor's/
Case-Shiller home price indexes, which he developed with Wellesley
College economist Karl Case, have become the nation's most
authoritative source for home price trends.
 
In part
one of my one-on-
one with Shiller, we discuss the grim outlook for U.S. housing, which
he tackles in-depth in his new book The Subprime Solution. Highlights
of our first discussion include:
•	Home price declines are already approaching those in the Great
Depression, when they plunged 30%t during the 1930s. With prices
already down almost 20%, it's not a stretch to think we might exceed
that drop this time around.
•	There are about 10 million homeowners whose debt is higher than
their home value, which has broad implications for how Americans feel
about their wealth and spending habits (read: more pressure on
consumer spending).
•	The current hopeful consensus -- that house prices will bottom s
oon
and then begin to recover -- is most likely a dream. Housing markets
don't usually have "V-shaped" recoveries. And even if house prices
stabilize in nominal terms, after adjusting for inflation, most
homeowners will continue to lose money.

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