Housing: “A slow-moving train wreck”

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All manner of bad news on the housing front weighed heavily on stocks today, to the tune of 148 Dow points. Housing, says economist Joe LaVorgna, is a ‘slow-moving train wreck.’

What went wrong today? From the L.A. Times:

‘D.R. Horton Inc., the largest U.S. home builder, said it would report a loss for the quarter ended June 30 after orders in the three months dived 40% from a year earlier.... After regular trading ended, Calabasas-based builder Ryland Group also warned that it would post a loss in the latest quarter.... Investors dumped many bank and brokerage issues after the bond-rating firm Standard & Poor’s said it might soon cut ratings on $12 billion of bonds backed by subprime mortgages, conceding that it failed to see the potential extent of losses on the bonds when it originally rated them.... Later in the day S&P’s rival Moody’s Investors Service said it downgraded 399 subprime mortgage bond issues, citing higher-than-expected delinquencies as struggling homeowners fall behind on payments.’

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Photo Credit: L.A. Times