I hate to say I told you so, but.....

The Reuter's article reinforces what I have been saying for the past several years.  More importantly, it reinforces what I have been saying (and writing)  for the past several months; we have a ways to go before the real estate market bottoms-out!  Despite all the glowing news from the realtors, mortgage bankers, etc., we need to be leery of the sources and look at the facts.  We have a HUGE backlog of REO, a large portfolio of upside down neg am loans which are yet to recast (and offer little in the way of loan mod potential), homeowners who are resigned to the fact that their values will not come back any time soon, tax policy which encourages abandonment, lenders who are unwilling to negotiate, poor policies from a well-intentioned government, and cheap postage to mail keys back to the lenders.  The list goes on and on.  We will likely see the bottom of the trough at around 45% to 50% of the peak.  Not to be too political, but we need to let this bleed and recover rather than use inneffective anesthesia on a wound that is festering: it lessens the pain, but does nothing for the infection.