Nikkei books biggest loss in 9 months [Stockmarket about to crash]

Mon Mar 5, 2007 1:12am ET

TOKYO, March 5 (Reuters) - The Nikkei share average fell 3.3 percent on Monday, its biggest one-day tumble in nine months and a new low for 2007, as investors continued to dump exporters such as Toyota Motor Corp.and Canon Inc. following the yen's rise.

The sell-off pushed the benchmark share average below the psychologically important 17,000 level for the first time in nearly two months and left investors wondering when stocks will rebound.

The Nikkei <.N225> tumbled 575.68 points to 16,642.25, its lowest close since December and its biggest one-day percentage loss since June 2006

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The second Great Depression

By Mike Whitney
Online Journal Contributing Writer

Feb 22, 2007, 00:45

“The US economy is in danger of a recession that will prove unusually long and severe. By any measure it is in far worse shape than in 2001-02 and the unraveling of the housing bubble is clearly at hand. It seems that the continuous buoyancy of the financial markets is again deluding many people about the gravity of the economic situation.” --Dr. Kurt Richebacher

“The history of all hitherto society is the history of class struggles.” --Karl Marx

This week’s data on the sagging real estate market leaves no doubt that the housing bubble is quickly crashing to earth and that hard times are on the way.

“The slump in home prices from the end of 2005 to the end of 2006 was the biggest year over year drop since the National Association of Realtors started keeping track in 1982.” (New York Times)

The Commerce Dept announced that the construction of new homes fell in January by a whopping 14.3 percent. Prices fell in half of the nation’s major markets and “existing home sales declined in 40 states.” Arizona, Florida, California, and Virginia have seen precipitous drops in sales. The Commerce Department also reported that “the number of vacant homes increased by 34 percent in 2006 to 2.1 million at the end of the year, nearly double the long-term vacancy rate.” (Marketwatch)

The bottom line is that inventories are up, sales are down, profits are eroding, and the building industry is facing a steady downturn well into the foreseeable future.

The ripple effects of the housing crash will be felt throughout the overall economy; shrinking GDP, slowing consumer spending and putting more workers in the growing unemployment lines.
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