Foreclosure damage to be worse than expected

Mortgages are relatively steady in the 6.75-6.875 percent band, but they are the only semi-stable financial instrument out there. The money world is thrashing around, trying to identify the true extent of the housing/mortgage trouble. June retail sales fell a surprise .9 percent -- maybe the often-forecasted, ultimate fade by consumers, maybe just a modest pullback from an outsize 1.5 percent gain in May. Markets always oscillate across baseline, overdoing it one way, then another. However, the last year has been unusual in that all the lurching has had one cause, re-played again and again, one long Groundhog Day. A year ago, as the Fed reached its current 5.25 percent, many bright and well-informed financial operators were just sure that the housing market would knock over the economy. Over and over and over again, the "just sure" bought bonds in anticipation of the recession to come, and within a week or a month were clobbered by resilient data. Now it's changing. This week the rati...