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Clinton’s Law: ‘It’s the economy …’

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Long-term interest rates fell this week, and a lot: the 10-year T-note from its 3.85 percent peak last week to 3.51 percent, which took mortgages from 5.75 percent to 5.375 percent. This move thoroughly contradicts the one-way stock-market exuberance and the inventive reading of new data and the Fed's post-meeting statement. One day, when the "Green Shooter" economic optimists have it right, the bond market will get killed by the news, rates racing up. This week, despite the prospect of open-ended Treasury borrowing, bond investors voted via hungry buying: shoots there may be, but no crop. "Clunker" cash added 0.5 percent to July industrial production, and inventory pipeline-filling will add a little to U.S. gross domestic product, but these represent "statistical recovery," not the real deal. The Fed said "economic activity is leveling off," which some media headlined as "Upbeat Fed." Beware of spinners: Level is better th...