Well, we now know that in May, foreclosure was up 48% over a year ago, which is why we are seeing stories about places where foreclosures are a majority of sales, and banks are becoming more flexible on prices on the property that they have assumed.

Increasingly, it looks like the bump in house sales was just a bump in sales of lender own properties.

If interest rates go up, this will get worse, and May data points to increased inflation. It exceeded expectations again.

That’s why Fed Governor Plosser is calling for a quick rate hike. He is worried about the dreaded stagflation.