Housing and Jobs

MSN Money has a good two minute video out this morning. In it, Diana Olick indicates that 25% of mortgage holders or 15 million homeowners owe more on their house than it's worth. And because of that condition, many more consumers are deciding to walk away from their obligations. Which means the key to continuing this nascent recovery is to keep home prices from falling any further.

That also means creating jobs is of paramount importance. But you just can't lower the interest payment enough or even reduce the principal to an acceptable level if the mortgage borrower doesn't have job.

A government should not be in the job creation business. It should only provide an environment that allows the private sector to increase hiring. This way we know that the jobs created make sense; that they are economically viable and are accretive to economic growth.

I believe the private sector is under an almost unprecedented assault. Therefore I don't put any credence in a sustainable recovery in the job market or in the housing market. Since, our manufacturing base has been eroded; the job growth taking us out of the past two recessions has come from the building and servicing of asset bubbles. All we have today is a bubble in the bond market and I'm just not sure by servicing that bubble we can replace the over 7 million jobs lost since December of 2007.