In one of life's larger mixed blessings, a return of financial panic is pushing mortgage rates lower. The approach to 6 percent is taking longer than I thought, but the week's events make crossover to the fives more likely than ever. Signs of slowdown are accumulating: Retail sales in October rose a meager 0.2 percent; new claims for unemployment insurance are now rising (slowly, but rising), and October industrial production slipped by 0.5 percent. Half of the commentariat still insists that inflation is the real trouble, the economy is fine, and the credit markets will soon self-correct. Two Fed governors also made these points today (Poole and Kroszner). This flight to quality -- 10-year Treasurys down to 4.14 percent this morning -- has nothing to do with expectations of an ...
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