Long-term rates have continued a modest retreat from the December highs, 10-year Treasurys to 3.67 percent, mortgages sliding toward 5 percent. Further improvement depends on Fed Reserve and Treasury policy regarding 1) their desire to get the Fed out of the mortgage-backed-securities-buying business, 2) the embalmed state of Fannie and Freddie, 3) private markets closed to mortgages, and 4) the slowly collapsing theory that housing and the economy are in self-sustaining recovery. A financial-market accident somewhere would do the trick, too. New economic data are weak. The National Federation of Independent Business small-business survey declined broadly in December; consumer credit continued its freefall, off $17 billion in November, triple the forecast drop; and December retai...
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