I have often written and talked about the US housing situation being the Achilles heel of the US economic outlook. As stated before, the unwinding of the US housing situation has some way to go before the system rids itself fully of all the excesses accumulated during the multi-year upswing.

The video clip below features Prof Robert Shiller, economist of Yale University and of Case-Shiller Home Price Index fame, warning of a significant US recession risk if house prices drop more.

Source: Bloomberg.com

For the sake of completeness, here are the latest S&P/Case-Shiller Home Price Indices showing a rather dismal picture.

case-shiller-graph.jpg

The US housing situation is turning out to be a nightmare of much worse proportions than was generally expected not so long ago. And, to re-emphasize my viewpoint, it is still rather difficult to detect even the faintest ray of light at the end of the proverbial tunnel.

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