What the next president must do

The presidential candidates, in coordination with the White House, are taking aggressive steps to facilitate a smooth transfer of power to the new administration. At the top of the agenda are national security and the economy, of course. However, considering the housing market kick-started the over-leveraged credit debacle, the administration must act swiftly to address the drifting housing market, which weighs so heavily on the economy. First, the problem must be properly diagnosed. Rampant foreclosures, collapsing housing values, sloppy underwriting and anemic sales are the symptoms of the larger problem during the boom: too much liquidity chasing bad loans in an unaffordable housing market. The market downturn has zapped liquidity, pushed down home prices and put a stop to poor underwriting -- this correction has, in effect, already rid the market of its worst woes. But foreclosures are the consequence, which is keeping the housing market from finding a balance, as mor...