In the New York Times article today Reports Suggest Broader Losses From Mortgages  indicates that employment levels will be impacted from the job losses associated with problems in the mortgage industry. So now we have, lower levels of mortgage production, lower levels of construction and lower levels of consumer spending.
I guess thats why federal funds futures are indicating a 70%  probability that the Fed will cut rates at their next meeting by 25 basis points.
Since August, Lawrence Yun, Chief Economist of the National Association of Realtors, has kept characterizing the mortgage and credit market problems as temporary. Every month, as the blogosphere continues lament the loss of his predecessor, David Lereah, Mr. Yun has been able to continue the tradition of reality distortion and he does not disappoint.
Temporary? Relative to what? Will mortgage problems continue on forever? Of course not. Merrill Lynch reported an $8B loss due to mortgage related problems today . National lenders are having difficulty selling paper to the secondary market investors. Will this problem go away in a few months? I don’t see how.
If we relied on Mr. Yun’s use of the word temporary and heeded his advice back in August  and September , credit market issues would have long been resolved. For next month, here are some alternatives to the word temporary. I vote for fugacious. 
I have long lamented how NAR has missed its golden opportunity to gain the trust of the consumer as being the authority on the housing market, despite the fact that they are a trade group. Rather than leveraging the wealth of information at their disposal, they provided comments like this:
“Mortgage problems were peaking back in August when many of the September closings were being negotiated, and that slowed sales notably in higher priced areas that rely more on jumbo loans,” he said. “The good news is that mortgage availability has markedly improved in recent weeks with interest rates on jumbo loans falling, and more people are applying for safer and conforming FHA mortgage products.
The quote attempts to parse out problems with the mortgage markets from the timing of contract and closing dates. Elements of the statement are correct, but out of context, and ultimately paint an inaccurate picture.
Speaking of disconnect, did you hear George Carlin’s comments on The View about the fires in southern California  regarding people losing their homes?