Industry NewsMortgage

Housing stars in economic freak show

Commentary: Time running out for fix

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Mortgage and Treasury rates have stayed within a tight range for six-straight weeks: 5.875 percent to 6.25 percent and 3.7 percent to 3.92 percent, respectively. Given the lurching in other markets, the credit market stability may seem other-worldly, but it is not -- recent bond trading accurately reflects the current economy. We are still stumbling forward, avoiding one open manhole after another. The cardinal indicator: The labor market is still intact; there are no waves of layoffs; and new claims for unemployment insurance are just as steady as interest rates. The Fed knocked 1 percent off its prior GDP forecast, down to a range of 0.3 percent-1.2 percent for the remainder of 2008. The unprecedented mix of oil, inflation risk, housing recession, credit crunch and explosive growth overseas has turned normal economic discussion -- the search for centerline probability -- into a freak show. Back to the center, here, in three parts beginning with oil. Markets have had it ...