Long-term interest rates and commodities are in the natural rebound upward following any straight-line decline.

The 10-year T-note is 4.64 percent (from 4.54 percent), taking mortgages a little above 6.25 percent (6.125 percent bottom), gold $605 (from $575), all in step with energy: oil $63 (from $59), and natural gas $5.45 (from $4.75). Only gasoline is still unwinding, and wholesale $1.48 might break two bucks at the pump after Halloween.

All of these markets are struggling to identify the slope of economic slowdown. “If” is in the past; the economy is slowing, and the Fed’s “moderation” is the most optimistic description in play. (Fed note: from now to the election, the Fed will attempt total invisibility, avoiding the appearance of favoritism with either party.)

You know we’re in a slowdown when every observer drags out the ol’ soft landing and hard landing economic airport, and then drifts to metaphorical sea, hedging his or her forecast with the always-slow-to-turn supertanker.

The newest economic data show steady slowing — neither abrupt nor stabilizing. August consumer spending rose a meager .1 percent, but that followed a .8 percent spike in July; reality is in the middle somewhere, slowing. Weakness in August orders for durable goods was a surprise, as everybody’s model has assumed a strong business sector and capital spending; two declines in a row say that slowing is spreading.

Housing is the gorilla in the slowdown, and perceptions are all over the place. (Ever hear the one about the blind men and the gorilla? Safer to feel elephants.) Analysis by people not connected to housing is now a competitive auction to see who can predict the worst disaster. Robert Shiller (of “Irrational Exuberance” fame, published the day the stock market nosed over in 2000) is in the lead, predicting a nationwide 25 percent decline in home prices. Stocks he knows; housing … he lives in.

Newsies know that bad news sells, and they are selling, putting on camera a parade of nouveau housing experts, one gleeful I-told-you-so after righteous it’s-about-time, or they-deserve-it-don’t-they. 

Housing people are notorious for their immemorial “It’s a great time to buy!” and it’s hard to tell which of the genuinely experienced housing experts are playing it straight, and which are shills. Even the straights can get it wrong; we are, after all, in the aftermath of the biggest housing-price run ever.

The best thing is to stick with the data, and evaluate commentators by what they say about it. Example: this week the National Association of Realtors announced that median home prices fell in July, headlines shrieking. Someone who really wanted to know what is going on would have to dig deep to find reality: a decline in median prices just means that more cheaper homes are selling than expensive ones; the median says nothing about the fate of an individual house or neighborhood, or city.

So far, declines in price from prices actually paid a year ago are very minor, and centered in economically weak zones. So far, we have a 20 percent year-over-year decline in new home construction. So far, we have a 50 percent nationwide increase in inventories of unsold homes, but from all-time lows. So far, there is no sign of a downward price spiral in any market. We know that we have a decline in home-equity extraction to support consumer spending, and can’t identify alternate stimulus to replace it.

Stick with the airplanes and supertankers, and let the catastrophists handle Iraq.

Also, while waiting this out, for black comedy never miss David Lereah, top economist for the Realtor association. Latest in a line of the inept in that job, he has decided that the only thing wrong with the housing market is that sellers want too much money for their houses. Cut prices far enough, and demand will return.

Noting that the median price of homes rose in the West in July, he said, “Something is going to give in the West. Sellers are stubborn there.”

Lou Barnes is a mortgage broker and nationally syndicated columnist based in Boulder, Colo. He can be reached at lbarnes@boulderwest.com.

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