The Failure to Get HAMP in Proper Gear Was Another Large Unforced Error from the Obama Administration

Alan Beattie and Robin Harding:

US data emphasise lingering risk to recovery: House prices and consumer confidence have fallen by more than expected, according to data released on Tuesday, emphasising the lingering risk that a weak housing market will dent domestic demand and undermine the US economic recovery. According to the widely followed Case-Shiller index, house prices dropped by 1.3 per cent between September and October, the fourth consecutive month in which prices have fallen. Prices across 20 US urban areas stood 0.8 per cent below the level of October 2009, a sharper fall than economists had expected. Separately, the Conference Board, a research group, said that its index of consumer confidence had declined to 52.5 in December from a revised reading of 54.3 in November, confounding the expectations of most economists who had predicted an increase to nearly 57....

While most data show the US economy is continuing to pick up steam, the housing market and its effect on consumer confidence is one of its weakest links. House prices are being held back by a huge pipeline of foreclosures that has not yet worked through the system and by the continued difficulty that many consumers have in getting a mortgage...