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I get it now, look for dark clouds in every silver lining. The airline travel projection was just out today and is great news. Capital spending on software/hardware, buildings, has nothing to do with the housing boon. Productivity gains and low inventories have nothing to do with re-fi either, but mean that business will need to find employees. The 4.6% GDP projection for the forth quarter was out today. You do realize that jobs were not lost, even though unemployment was up? There are 2 million more jobs now then there were a year and half ago.

4.6% projection? I would like to know based on what. Again, one has to look at reality, look at the reasons why the economy grew, anmd the blunt and brutal truth is that the economy has been mostly propped up with housing activity, either on the construction end of the re-fi/financial end of it. Agaian, think of the impact housing has had on employment, it has enabled consutcution jobs to increase and it has enabled retailers to avoid layoffs. The re-fi boom even has put a massive cushion underneath the automakers because risiong home prices have made consumers feel bolder to spend money, even if they didnt extract their homes value though a home equity loan.

What has enabled this to take place is the fact that the 10 year bond, the bond that determines home loan rates, has had a steady decline in yeild from 6.3% in summer of 2000 to 3.07% by mid June. The 10 year bond yeild is back at almost 4.4%, and the burst in home sales reflects panic buying. Again, the "lock in low rate" mantra has created many suckers, but the sheeple have not been good with their finances for 20 years now. If rates resume their downward trend, and go below 3.5%, or even 3.75% on the 10 year bond, they may be able to keep the re-fi boom and real estate bubble going for a little longer, if bonds stay where they are, real estate will go on for a few more months but re-fis will remain dead, if the 10 year bond goes above 4.5%-5%, then the bubble will pop. When the real estate bubble pops and consumers can not longer extract equity out of their homes, it will rapidly cause a whole new set of problems.

Spin and soundbites make for great politics and radio, but do liyttle to describe economic reality. Because of the record number of re-fis in the first half of this year, especially in May-June, the re-fi money in the pipeline will help growth this quarter, but unless the FED and Tresury can get bond yeiolds to go back down, this one trick ponyy that has been used to stimulate the economy since Fall of 2000 will lose its punch.