US housing, money, bad loans mean crisis not yet over

The world economy is far from exiting the global financial crisis and three elements point to further weakness - the still fragile state of US housing, a worrying contraction in money supply worldwide, and a mountain of bad loans to be worked through by banks, says economist Ian Shepherdson from High Frequency Economics. He told the Urban Land Institute conference this week that the crisis was a super-cyclical event not seen since the 1930s, and damage to the world's banking system will take years to work through. The earliest trend growth may resume is 2012 or 2013. His remarks came in contrast to the general mood: 68% of real estate specialists in an electronic quick vote said they expected investment to restart this year. While some 44% predicted a W-shaped crisis - a further dip before sustainable improvement sets in - another 36% saw a U shape recovery. (See upcoming PIE editions for full story)