Borrowers look like IEDs to lenders

Commentary: Fear has thinned the pool of borrowers to the point that housing cannot recover

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Today’s payroll flop — only 20,000 real jobs created in May — will take some time to settle all the way in. Immediately: 10-year T-notes are 3.22 percent (from 3.36 percent yesterday and 3.99 percent six weeks ago), and mortgages are below 5 percent.

The payroll report has confirmation: New unemployment has held high for five months; May retail sales look soggy ("same-store" data); auto sales flubbed in May; and housing shows every sign of a serious fade, post-tax credit.

Purchase applications have hit a 13-year low; the unemployed do not apply, nor do the underwater, and the few, the brave, who think they are qualified often find themselves in the "rejected" pile.