Since the March lows in the stock market, the S&P has risen from 666 to 1000. This rally has had commentators on CNBC and elsewhere crowing that we are in the midst of a recovery and are busy trying to get everybody to lose their money by buying into the market. Keep in mind that any positive GDP reports coming out in the near future will only be because of increased government spending from our bottomless pit stimulus program that will have to end sometime. Housing is still on shaky ground as this article shows, and as goes housing, so goes the rest of the market.
About half of U.S. mortgages seen underwater by 2011
NEW YORK (Reuters) – The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.
Home price declines will have their biggest impact on prime "conforming" loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Prime conforming loans make up two-thirds of mortgages, and are typically less risky because of stringent requirements.
"We project the next phase of the housing decline will have a far greater impact on prime borrowers," Deutsche analysts Karen Weaver and Ying Shen said in the report....
http://tinyurl.com/n953x5
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