In terms of the credit crunch issue, which is the second part of your argument ; take a look at Total Consumer Credit Outstanding. It reached an all-time high as of July ’08, printing $2572.3 Trillion from $2564.6 in June (credit supply has never been higher.) Yet, the general assumption out there is the supply of commercial bank credit has completely dried up. Not true. The numbers simply do not support the claim. In addition, the most recent report, for Aug ’08, shows outstanding loans of $1,514 billion, an all-time high. This loan volume is nearly 16% greater than it was a year earlier, and 30.8 % greater than it was two years earlier. You have to wonder, if credit is really drying up so much as the media hypes it. What surprises me is how little attention is being paid to the data.

It is critical to recognize that contrary to the claims of the central bank, the Treasury, or the financial newspapers – in reality, we are not facing a liquidity crisis, which by definition implies a financial turmoil caused by insufficient supplies of money flowing through the veins of the financial system. Instead, we are dealing with an ‘insolvency crisis’ caused by the fact that many financial institutions are effectively broke. And the effect of it is a trauma in the banking sector. Basically, the root problem is not a lack of liquidity in the system. It’s the existence of all sorts of institutions out there that nobody wants to lend to. The distinction is very important.

As far the housing sector goes, the picture is not rosy by any stretch of the imagination. Certainly, looking ahead, the backdrop for the housing market will continue to be challenging over the next q’s. Nevertheless, based on NAR’s numbers, the inventory of new and existing homes for sale has diminished somewhat in the last several months – which is a positive sign. The backlog of unsold homes shrank by 7% from July’s record high. Housing demand continues to indicate signs of some stabilization, and more importantly, the U.S. housing market didn’t deteriorate further in August. Now, using the term ‘turning point’ doesn’t mean spiking action. It is rather a process where the sector will try, as it’s currently doing, to form a bottom, range, hopefully consolidate and then start uptrending. The key point, is that some improvement is occurring.

The last line in the article:
“This bill should mark the turning point in the house sector’s downturn and the country’s credit crunch.”

Shows just how wrong Mr. Haruni was, and is.