Behind the "good" economic numbers for home sales lies a monster. Yield curve is the steepest in history, which means banks are doing very well by borrowing at 0 and lending at high rates. Spreads are huge. With these good numbers though, you have to look deeper, the home sales are low cost home prices that were bought at distressed levels by investors and reselling them at quick turnarounds. Also people thought the November tax credit was going to end, so, Nov home sales were inflated. Also we saw GDP revised down, but no one cares. Mortgage rates rising is seen as a good thing due to economic recovery, but when all the tools are put back in the Fed's tool belt, is the building going to collapse? Time will tell, but in Q4 expect huge bank earnings which will get everyone excited. Expect good retail sales, but we are comparing these numbers to last year, which was horrible. This better than worse mentality has to stop, and let's start comparing ourselves to "normal" economic times, we'll see we have a long way to go.
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