Is it time to buy a house? Depends…

If you need a place to live and want to own a house, why not? Prices in some areas are fairly reasonable. But if you’re speculating, our guess is that you’ll get a better deal if you wait.

Why? For the many reasons we have given you in these Daily Reckonings. House prices may be firming in some areas – that’s what the Case-Shiller numbers seem to show. But nationwide, they are probably headed down for quite a while longer.

Herewith, four reasons why:

First, as you know, this is a depression. It will probably be long. And deep. You wouldn’t know it from looking at the stock market or reading the news. The Dow went up another 114 points yesterday. Oil rose to $71. And the dollar – anticipating inflation – fell to $1.44 per euro.

But that’s what bounces are supposed to look like.

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Do you remember the first time you saw a rain drenched Peter Finch scream, “I’m as mad as hell, and I’m not going to take this anymore!”? We do. We were too young to see Network in the cinema (the movie came out the year we were born: 1976). Instead, we watched it late one night on TV. And we’ll never forget the moment when Finch’s character, news anchor Howard Beale, arrives in the television studio in his tan raincoat with a deranged look on his face and begins to speak to camera.

I don’t have to tell you things are bad. Everybody knows things are bad. It’s a depression. Everybody’s out of work or scared of losing their job. The dollar buys a nickel’s worth; banks are going bust; shopkeepers keep a gun under the counter; punks are running wild in the street, and there’s nobody anywhere who seems ...

Boy, the government is smart. We bet even the great illusionist David Copperfield couldn’t have pulled of a trick quite as intricate, quite as convincing.

Since their March lows, bank stocks, as measured by the Philadelphia Bank Index (BKX), have risen 126%. But aren’t these the same banks that investors sold off in panic back in September of 2008? And don’t they still have the same toxic assets rotting on their books?

The answer, bizarrely, is yes. Nothing has changed at the banks except investors’ perception of them. Of course, the banks, aided and abetted by the Department of the Treasury, the Financial Accounting Standards Board, the Fed and the other failed regulators at the FDIC and the Office of Thrift Supervision in charge of the fudge tests, have sprinkled as much fairy dust in faces of investors as they can get away with.

Starting with a ‘leaked’ memo proclaiming a return

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Blog traffic appears it’s a good indicator of stock market prices. According to Barry Ritholz of The Big Picture, an increase in blog traffic is a good contrarian indicator of stock prices.

Since the market peaked in October 2007, I have pointed out (repeatedly) when TBP traffic soared in response to the credit crisis. Each time, we noted this was a good contrary indicator, and used it as a good short term buy signal for a trade.

And after each short term rally, the public angst was proven correct, and lower lows were had.

This month, I could not help but notice the opposite: that traffic dropped substantially – from over 2.5 million page views in March to just over 2 million in April.

Not coincidentally, we had a rip roaring rally over the same period of time (during which we were suitably bullish). As the economy’s free fall slowed (improving 2nd derivative),

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In October of last year, Warren Buffett wrote an op-ed in the New York Times announcing his intention to buy U.S. equities. In the months since, we’ve seen the markets oscillate wildly but ultimately head only further down into its trough, sparing no one in its path. Was he wrong? Is it still not safe to get your money back into the stock market? 

For those that follow Warren Buffett, his recommendation is not just a far out attempt to be contrarian as his op-ed piece makes it sound. Yes, the general tenet to be “fearful when others are greedy and greedy when others are fearful” will serve most investors well. But, Mr. Buffett has backed up this tenet with a very interesting bit of theory based on the total market cap of U.S. stocks versus its gross national product as outlined

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– Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), the two last major investment banks left standing after the carnage Wall Street, have ended the era of investment banking by changing their status to bank holding companies. The change means the two firms can now create commercial banks that will be able to take deposits.

– The move marks a sea change on Wall Street 75 years since the Glass-Steagall Act that separated them from deposit-taking banks. The Federal Reserve will now take over from the Securities Exchange Commission as regulator of the two banks.

– “The decision marks the end of Wall Street as we have known it,” said William Isaac, a former chairman of the FDIC. “It’s too bad.”

– Concern is growing that Hank Paulson’s vast rescue plan for Wall Street may “crush” the dollar. According to Bloomberg: “The combination of spending $700 billion on soured mortgage-related assets and providing $400 …