it's housing, stupid

could it be that the morons in government and the fed finally get it that what's wrong with the market and the economy in general is that housing prices keep going down? gee, maybe the fha should get in on the act and start guaranteeing those who can't get a refinance even though they should be able to because the banks won't take any risk. gee, maybe reducing the supply of houses on the market, cutting prices, as some homebuilders are at last doing, and cutting rates is the way out of this mess!! i monitor the las vegas home market very closely, and have alternately been amused/scared that the update emails they send me have all been houses that are TRYING to be sold over 400,000 with no price reductions in over a year. that's a good one! finally - these update emails have started to reflect a little reality, with prices being cut to below 400,000. still a ways to go, but it's a start. i don't think it's an understatement to say if one could just guarantee florida, california, ohio and michigan, then one could have a shot at fixing the problem because as the endless parade of real estate agent bulls keep saying: all real estate is local. really, the incompetence of the people running the government and the fed is just extraordinary. think back to all the silly things this fed has tried: small scale debt tenders, small cuts in rates until panic set in, small reactions to things here, bigger reactions, amazingly, to europe! no recognition that the monoline problem is all rooted in housing; some belief that the market can somehow take care of itself even as it is clear that it cannot; i mean, it's downright revolting. and it continues to spread. the sheer lack of creativity, the lack of smarts, the profound insistence on expensive giveaways like the $600 plan are incredibly astounding because nothing addresses the core problem of excess supply of houses and a drying up of demand, including no financing. they should hang their collective lemonheads in shame!! until the house price depreciation is addressed -- and the inflation caused by ethanol, which is in part hamstringing one of the crucial components of a potential turn, the high short rates vs. the two and five years, where short-rate money could be borrowed from the fed and invested in the curve -- get used to faded openings and crummy markets. we all know the solution by now. but bush, congress, the treasury and dunce ben have done so little to address it, i wish i'd been a pakistani investor the past year instead of an american one.