Jenkins: Let Houses Find a Bottom

Megan McArdle posted on Wednesday on Fannie Mae's 4th quarter loss of $3.6 billion. Whew! Sooner or later that's going to start running into real money. (As Everett Dirksen apparently didn't say.) This leads commenter Fred to link to Holman Jenkins in the WSJ: Let Houses Find a Bottom.

We have nothing to fear but fear itself, a president once said, and thereupon embarked on a series of ad-libs some of which deepened and prolonged the country's depression.

[…] drawing out the correction prevents the market from finding a bottom. It prevents owners and shoppers alike from having confidence to judge what houses are worth. It bails out lenders and investors who incautiously or fraudulently financed home purchases for speculative buyers, which can only encourage more of the same behavior in the future.

There's more downside to house prices coming, it's just going to take longer to get there.