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Commentary: Housing market damage deepens

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Long-term rates rose again this week, the 10-year Treasury note and mortgages continuing the spurt that began last Friday, to 3.46 percent and just shy of 5.25 percent, respectively. As always, economic optimism was the cause. In legitimate good news, retail sales rose in September, only 0.5 percent net of "Cash for Clunker" effects, but beat the forecast decline and have been stable for three months. Also, new claims for unemployment insurance have continued their glide-path decline, now about 150,000 weekly below the April peak at 668,000, but still 200,000 weekly above anything resembling health. The stock market took off when Chase reported positive third-quarter earnings -- nevermind that's entirely due to bond trading, loans-on-books contracting another $28 billion, with yields from loans falling. And for Chase and Citi and other reporting banks, serious analysts doubted the adequacy of new reserves for losses (which, if minimized, puff earnings). The Dow ...