As noted before, home sales are picking up, and look to have bottomed out. This has got to be very good news, since it means housing prices have fallen to levels that are now allowing the market to clear. If prices find a bottom soon, this will remove a huge source of uncertainty from the market. I keep thinking that with the Fed ensuring that money is available to those who want it, the market can sort out the subprime losses and life can go on, and this financial nightmare will soon fade into the past.
One hurdle that has popped up of late is government waffling on whether the debt of Freddie and Fannie is actually backed by the US government or not. If the government were to walk away from the mountain of debt these agencies have issued, it would be a true nightmare of unthinkable proportions. Clarification of this matter is needed urgently.