The jobs market continues to improve: 200,000 jobs were added in March. Corporate profits are exceeding forecasts for about three out of four firms, and the quarter that ended yesterday is the best first quarter for stocks in twelve years. Real consumer spending (adjusting for inflation) is up a bit, and researchers at State Street Global markets report that their index of investor confidence is up, with investors in North American the cheeriest of all. Better still, there is talk in Washington that the politicians are now serious about agreeing to spending cuts for this fiscal year, and to a longer-term combination of plans to rein in deficit spending. That would help to halt the decline in the dollar.

Unfortunately, that’s only part of the picture. Home sales remain over 9 percent below the level in 2010, even after a bit of improvement in February. Four million unsold homes overhang the market, and four out of every ten homes sold were put on the market by owners who could not pay the mortgage, or decided that the value of the home was so far below the mortgage that it paid to send jingle mail to the bank—an envelope containing the keys and a note, saying, “It’s all yours.” No surprise that prices continue to drop.