The latest numbers from the Mortgage Bankers Association are pretty nasty. Right now, 6.99% of mortgages are delinquent in some form, and 2.97% are in the foreclosure process. That means that 1 in every 10 mortgages is not being paid on time.

But the good news is that it could be worse. The foreclosure number should be higher.

There was a sharp jump in the number of mortgages that are late by 90 days or above. Typically, those move from the delinquent column to the foreclosure one. But, banks are hesitant to foreclose, so they're remaining delinquent. In short, banks should be foreclosing on these homes, but they're not.

Why? Two reasons. First is the market: the housing market is so weak that a bank doesn't get much out of foreclosing on a home and selling it. They can make more simply letting the homeowner work through the problems and wait out either the homeowner getting his act together or the market improving so that a foreclosure is more financially worthwhile.

Second is political pressure. The Feds have been pressuring banks to halt foreclosures, and many have complied. Some states have also passed laws preventing banks from foreclosing.

The situation could get worse, particularly in light of the big job losses we saw today, but, if the trend holds, look for more delinquent mortgages and a flat rate in foreclosures.

A quick tidbit from Fed chair Ben Bernanke's speech today in Austin:

"(A)lthough further reductions from the current federal funds rate target of 1 percent are certainly feasible, at this point the scope for using conventional interest rate policies to support the economy is obviously limited."

Bernanke notes that nominal rates have been well below 1 percent for a while, and the Fed is "constrained by the fact that nominal interest rates cannot fall below zero."

That means that those betting on another 50-basis-point cut in December may be sorely disappointed.

On the good-news front, Bernanke does note that the Fed still can pump the economy with liquidity.

Johnson & Johnson said today that it would buy Mentor Corp. for about $1 billion in cash. Folks have been watching J&J to see if it would start trolling for bargains in this market since it's sitting on a ton of cash and its stock has held up relatively well in the current bear market.

The Mentor deal, though, is a head-scratcher on two levels. For one, the premium is close to 100 percent. Mentor closed Friday at $16.15. J&J is paying $31 a share. Now, the current market has beaten down many companies to areas where boards probably think they are grossly undervalued, but even a 50% premium would probably be welcomed by Mentor's shareholders in this environment.

Secondly, one has to wonder whether Mentor is the right purchase in the current economic environment. Mentor is known for its breast implants, and that is very leveraged to good economic times. True, many patients need implants after mastectomy, but better detection of breast cancer is expected to continue to reduce the need for mastectomies over time. That means that the real growth in the implant business will come from those just wanting an augmentation, and that's going to require disposable income.

Still, it's tough to second-guess J&J, given its corporate track record. But, company executives must see something in Mentor other folks don't.