David Rosenberg is back on housing, and has an interesting non-Case Shiller chart to show you:

Home prices: There remains a glut of at least two years supply on the market

when the ‘shadow’ foreclosed housing inventory data are included in the

calculation and home prices on average have 10-15% downside before fully mean

reverting with respect to residential rents and wage income. This is the canary in

the coalmine when it comes to wealth, confidence, spending — and writedowns

(the market is expecting write-ups this year) in the banking sector. The big surprise

will be the renewed turndown in the closely-watched Case-Shiller (CS) index of

home prices, which in the past two months has slowed to an average gain of

+0.25% after 1%+ advances in July-August, which gave beta-hungry investors

more reason to add risk to their portfolios. But the CS series is a three-month

average and for all we know, the renewed price declines we expect to see may

already be occurring now. Note that two home price series are already back in

decline for two straight months — LoanPerformance and Radar Logic. This is key

for any sector that remotely touches the housing industry from the homebuilders,

to the financials, to the consumer discretionary group.

Don't miss: David Rosenberg's key themes for 2010 -- >