by Rand E Oertle

Created on: June 05, 2009   Last Updated: July 22, 2009

A better question than "Will the real estate market rebound soon?" would be, "CAN the real estate market rebound soon?" The short answer is no. Investors talk about the fundamentals. A majority of housing fundamentals for the foreseeable future are not promising. The negatives are wide, deep and extend well into the future.

The American dream has been shattered. No longer is an owner-occupied home the foundation of our economic stability. In the late 1970s when Congress passed the Franks/Dobbs red-line laws, which forced banks to loan money for mortgages in high risk communities and then added penalties if the banks failed to ignore red-line warnings statistics, the stability of home loans had nowhere to go but down. Americans are paying that price today. A bumper sticker put it very succinctly: "Honk, if I'm paying your mortgage."

For the future, the eight-hundred pound gorilla in the room is hyper-inflation. Add to that the usurpation of power by the federal executive branch of government to dictate executive compensation, whether by way of company acceptance of TARP (Troubled Asset Relief Program) funds or by way of the presidential bully pulpit, it bodes ill and is a leading indicator of presidential efforts to control all wages. The same executive compensation control efforts are being applied to banking and brokerage firms and a number of other economic sectors that are becoming executive compensation targets as well.

The reason executive compensation is a critical factor in the housing market is that it is a leading edge factor in wages. When executive wages go down, employee wages are not far behind, and the domino effect reigns.

Consider when General Motors Chief Executive Officer, Rick Wagoner stepped down. He was pressured by the White House to resign his post despite assurances that once GM accepted government TARP funds, the company could move forward. There was a tacit commitment by the Barack Obama Administration that there would be no retaliation against executives. That commitment, obviously, was not kept. Now, that threat, like the sword of Damocles, hangs over all executives, whether they have accepted TARP funds or not.

Already the threat has filtered down to wage earners. Wages and benefits for auto workers in Michigan have plummeted as the result of actions taken by President Obama. The wage threat pressures are being applied in a different way against workers. It's through union worker concessions, despite the perception that Obama

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