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Forecast: ‘State of shock’ hits home

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It wasn't supposed to happen. "Housing prices weren't supposed to decline absent a significant decline in employment, but they have: big time," according to a quarterly economic forecast released today. "Put bluntly, housing consumers and financiers are in a state of shock," states the latest University of California, Los Angeles, Anderson Forecast report. "Consumers no longer believe that home ownership is a path to wealth, and lenders are busy raising standards to avoid repeating the debacle of this decade." Anderson Forecast senior economist David Shulman, in a report section titled, "Stalled," also states that the economy is operating at "stall speed" in which "any modest shock can trigger a full-blown recession." The federal takeover of secondary mortgage market giants Fannie Mae and Freddie Mac "only reinforces our view that a major overhaul of the regulatory structure is imminent," Shulman writes...