Bottoms are Only Visible in Retrospect

That said, the fact that the Fed is close on resolving the Fannie and Freddie mess, as reported today by the WSJ and others, seems like a big deal. It's not my first choice for the government to be the owners of these properties but there's a good chance that the right operators can clean up these balance sheets and actually make money for taxpayers on the deal. Investors have short memories.

The Misery Index, a highly unscientific sound byte generator, is calculated by adding the unemployment rate to the inflation rate. The index hit its highest level in the last 18 years this week. I will be surprised if this indicator moves much higher, just because the recent fall in commodity prices has to have alleviated the inflation problem. If the mortgage mess gets cleaned up and the banks can start lending again, a better job market can't be far behind.