MORE ECONOMIC SIGNS – AT 10:22 A.M. ET:  Given the economic picture, it's hard to see how President Obama can even run for releection.  How can he show his face?  Consider this:

WASHINGTON (AP) - Falling real estate prices are eating away at home equity. The percentage of their homes that Americans own is near its lowest point since World War II, the Federal Reserve said Thursday. The average homeowner now has 38 percent equity, down from 61 percent a decade ago.

The latest bleak snapshot of the housing market came as mortgage rates hit a new a low for the year, falling below 4.5 percent for a 30-year fixed loan. But even alluring rates have failed to deliver any lift to the depressed housing industry.

The Fed report is based on data from the first quarter of this year. Another report last week found that home prices in big cities have fallen to 2002 levels.

Normally, home equity rises as you pay off the mortgage. But home values have fallen dramatically since the bubble in prices burst in 2006. So many homeowners are losing equity even though the outstanding balance on the loan is getting smaller.

COMMENT:  Remember the days when a house was a home?  A place to live?  A place to raise a family?  In recent decades Americans have been sold a fast hustle – that "real estate" was a great investment, that buying a house or apartment was really a financial move, and that it was a "sure thing."

There are no sure things.  There never have been.  A lot of Americans are feeling pain because they bought into the hype.

Oh, by the way, there's one area of the country where real-estate is actually doing quite well – Washington, D.C.  Big government, you know.  The machine needs people, and people need homes.  But what happens when the GOP takes over and starts cutting those federal agencies?  All those new government types will learn that, in Washington, as well as the rest of the country, there are no guarantees.

June 10, 2011