Housing prices fall, economy to follow?
I say no, but I'm not an economist.
But then again, neither is CNBC's John Carney, who is predicting trouble ahead for the economy as the slide in home prices picks up speed.
He cites recent research by Karl Case the Wellesley College professor emeritus, that tracks the connection between fluctuations in home prices and consumer spending.
To summarize, when home prices go down, consumer spending takes a hit.
Just in news terms, this is the obvious follow to yesterday's story on falling home prices.
But I am skeptical that one double dip, in housing, will trigger a second double dip, in the economy - a double double-dip if you will.
The wealth effect makes sense when a stretch of rising home values are followed by a deep plunge. But we've already been through that roller coaster from 2006 to 2009 - last year's modest tax credit driven rise in prices hardly had people rushing to cash in on their homes.
Maybe I'm wrong, but I am betting on the side of the optimists.
