By David Gaffen,(WSJ)
11:46 a.m.: Sometimes when the market gets caught on an idea, it won't let it go until it's violently shaken from its hands. For a long time, the "housing collapse" was the ongoing theme, but investors have replaced that worry with the more soothing notion of a soft landing/Goldilocks scenario, where high real estate inventory levels are corrected quickly, housing prices stabilize, economic hardship is avoided, and everybody celebrates (see: new high in Dow industrials).

Where analysts see more pain in the real-estate market is in lending and the adjustments builders must make to whittle down high inventories. Michael Pento, senior market strategist at Delta Global Advisors, estimates in a commentary that approximately $1 trillion of the $9 trillion in outstanding mortgages will reset at higher rates, forcing consumers paying adjustable rates to deal with higher mortgage payments. Michael W. Perry, chairman and chief executive officer of Indymac Bank of California, recently predicted that up to 4% of America's mortgaged homeowners might lose their homes to foreclosure in coming months -- four times worse than the historical average.

*The excerpt above ran in the "Market Beat" column. WSJ.com subscribers can access the full article by clicking here.