Has housing hit a bottom? Fox News declared that the bottom is in, as had many other talking heads.

In fact, the reality of the situation is a "good news, bad news" scenario.

(Bloomberg) -- The wave of “option” adjustable-rate mortgages recasting to higher payments, projected by some economists to represent a looming source of foreclosures that will hurt housing markets over the next few years, will be smaller than “feared” because many borrowers will default before their bills change, Barclays Capital analysts said.

So you see, the coming tsunami of foreclosures will be much small than expected because people are going to go broke beforehand. That's the good news.

The massive and unprecedented amount of debt being issued by the Treasury Department, and the relatively finite amount of savings in the world, has left the country vulnerable to a currency crisis. The place where evidence of this crisis might first turn up is in the treasury bond market.

That evidence might have happened in the last two weeks.

Just last week a treasury auction of 5-year bonds nearly failed.

but for the primary dealers the bid-to-cover was less than one, meaning that some of the issue would have been left on the table.

That's a fail; but for the primary dealers the issue would not have subscribed.

Two years ago Friday the financial crisis started.

Most financial media pundits and politicians didn't recognize that we had a problem until Lehman Brothers went under on September 15, 2008. The official start of the recession is marked at December 2007.

But the real start of the financial crisis was July 31, 2007, when Bear Stearns filed for Chapter 15 bankruptcy protection on its two major hedge funds (High-Grade Structured Credit Fund and High-Grade Structured Credit Enhanced Leveraged Fund).

And yet 24 months later, after all the job and capital losses, after all the heartbreak and stress on the average Americans, the financial media, the politicians, Wall Street, and most of the blogosphere still refuses to even acknowledge, much less address the root causes of our economic problems.

"When the going gets weird, the weird turn pro."
- Hunter S. Thompson

When you live in interesting times it is sometimes hard to distinguish the real news from the fake news. For instance, I read this today.

WASHINGTON—A new report has revealed that when it comes to the important matter of owing large sums of money, Americans display a level of expertise and proficiency unrivaled throughout the world.

The same day I also read this.

The Treasury Department said Thursday that it will sell a record total of $115 billion in new notes next week, more than market participants had expected.

They both look like the could be real news, don't they?

While everyone has been focusing on the housing bubble bust, the commercial real estate market is collapsing at a record rate.

Commercial real-estate prices fell 7.6% in May, according to Moody's Investors Service, as both dollar volume and transaction count reached record lows in the nine-year history of the firm's Commercial Property Price Indices...The indexes are down 29% from a year ago and 35% from their October 2007 peak.

That 7.6% drop wasn't a year-over-year drop. It dropped 7.6% in just May.
In April it dropped 8.6%, thus making a two month decline of 16%.