Can't last forever. If it does then everything we own will be worthless anyways, shorts included. This is overblown but it is something that will take time to recover. Housing has to bottom eventually.
I don't think you understand the housing market, it works on supply and demand and on credit. More charge offs, equals bad credit, bad credit unfortunately is not a forgiving thing like the stock market, it takes 4 to 7 years to correct.
More people defaulting equals worse credit, even if employment jumps and people get a better paying job 2 years out, they still can not buy a house with 620 credit score, decreasing demand massively.
Then you have this massive supply of houses waiting to be dumped on the market that banks are holding on to, if they feel housing is in a downturn they will star dumping these houses on the market as fast as they can, increasing the supply with zero demand, dropping prices, causing more houses under water and creating new round of defaults, this could on forever and last forever.
And to boot you don't have the demand for the mortgages anymore, there isn't this rush to bundle these as fast as they can and sell them off, thats what drove the last boom, and the only thing that drove the last boom, so i don't see a single positive for a V shaped recovery in housing, at least 3-5 years out...
housing will bottom eventually, but pmi will be out of money by then and in runoff like tgic, and bad news can't last forever, but it hasn't even really started yet, this report was the first really that shows how weak the housing market will be without govt stimulus, what do you think prices are going to do now that volume is cratering, prices will go down, which puts pmi's borrowers even more underwater, which means they are even more likely to be foreclosed on, it is a downward spiral that is only getting worse from here.