The principal linkages between Japan and the U.S. global economies are trade, financial markets, and commodity markets.

There are different flavors of recession. You can get into some pretty dark scenarios pretty quickly.

Lenders look at potential borrowers from many angles before extending credit: How much of its income will a household need to put into debt repayment? How large is the down payment? Does the borrower have a job with a stable income? What is the borrower's credit score?

There is a banking adage that if it's growing like a weed, it's a good chance that it's a weed.

It is hard to be enthusiastic about the economy's prospects when house prices are falling: Households spend less, small business owners can't use homes as collateral for loans and local governments are forced to cut jobs and programs as property-tax revenue disappears.

Investor demand for distressed property has been healthy, as rents rise to levels that can cover investors' costs while they wait for properties to appreciate. Giving investors a small tax break should further juice up demand, supporting prices for distressed homes and the market in general.

Buying a home wouldn't make much sense if house prices were likely to decline further; no one wants to catch a falling knife.