If you pay attention to the stock market, you know this past year was a roller coaster ride.  What you may not know, however, is just how drastic the trading year was.  Take a look at this graphic from Bloomberg/New York Times:

This last year was the worst in terms of volatility since the 1930s.  There is no way that the volatility will end simply because the new year has started.  While it may not be as bad as last year, expect some wild rides in the next trading year….

A few days ago I commented on the recent “refinancing rush” which has/is taking place due to the recently lowered interest rates.  I would have no problem arguing that there is no “rush” as a 3% rise really isn’t a “rush”.

Anyway.. Here is the proof…

(Sources – Bloomberg and Ritholtz.com)

Here is the important question that everyone needs to be asking – if the housing market continues to fall, what can the government do to stop it?  

The belief has always been that lowering interest rates will spur buying, and in turn, property values stabilize.  Since it appears common market  principles are no applying, what is to say this will work?  

The only option, and it would have helped significantly if this was done in the first place, is to buy the toxic mortgages…