NEW YORK ( TheStreet) -- The stock market, as measured by the S&P 500, rose almost 3% yesterday, perhaps pleasantly surprised that the Northeast doesn't resemble the Gulf Coast -- Katrina-cable-TV hype notwithstanding.

So as traders picked their way across tree limbs and flooded roads on their way to work Monday, perhaps they overlooked a commonplace sight that was even more prevalent than clogged waterways: for-sale signs on lawns, sometimes with the nauseating come-on "auction today."

We're in the middle of a real-estate depression, folks, and it's not getting any better. Perhaps it's good news that the financial markets have gotten used to the bad news out of the housing market, because the bad news keeps coming strong. But if the housing-market woes are an indication of the direction of the economy, we're in sorry shape. And as with a number of questions I've explored recently, it comes down to this: What, if anything, is the Obama administration going to do about it?

Yesterday, it was reported that foreclosures comprised 31% of housing sales in the second quarter, less than the 37% recorded at the peak two years ago, but still six times what you see in a healthy housing market, according to foreclosure-tracking firm RealtyTrac. The silver lining, if you can call it that, is that the percentage declined a bit from the previous quarter.

But, meanwhile, another bad housing number got worse. The percentage of "short sales" -- homes sold for less than what's owed on them -- climbed to 12% in the second quarter. And Bloomberg reported the other day that a third of the country's 800,000 foreclosed properties are owned by Fannie Mae, Freddie Mac and the Federal Housing Administration. In other words, Uncle Sam is now the biggest owner of misery-bedecked real state in the nation.

All these numbers have a kind of numbing effect on people. It's a bit like what motorists were seeing in upstate New York yesterday, as hundreds of miles of the New York State Thruway were closed because of not-quite-Hurricane Irene. You curse, and then you get out a map and plot out a detour, and then pull out your map again when the detour is blocked by downed power lines and flooding.

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