Buying During a Housing Recession

Monday's worldwide stock plunge may signal, some experts say, that we are heading into a full-blown recession, triggered by the staggering U.S. housing recession.

Others say we have been in a housing recession for months but that fear of the "R" word has kept everybody mum. Although Monday was the official observance of Martin Luther King's birthday, in 2008, it will be remembered as the day worldwide stock markets plummeted into a tailspin. India's benchmark stock index fell more than 7%, China Shanghai's Index lost 7.2%, and Japan's benchmark Nikkei suffered a 5.7% slide.

It was a wild ride on Tuesday when US markets opened. The Dow Jones Industrial Average fell 400 points before rebounding to close down 1 percent. The Nasdaq dropped 2.04 percent, and it might have been worse had not the Federal Reserve Board made an emergency decision to cut a key interest rate by a startling three-quarters of a point to 3.5%. Is it enough?

It would appear that President Bush's economic stimulus package, presented January 18, came a day too late and a dollar too short to inspire investor confidence. All eyes are on the U.S. housing crisis, amid fears that it may spread beyond the housing market to snare the broader U.S. economy or even set off a worldwide recession . . . read more about the U.S. Housing Recession.

More Articles by Elizabeth Weintraub, click below:

• Why Subprime Mortgage Lenders Crashed
  
• Secrets for Timing the Real Estate Market
  
• Buying in a Down Market

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