Housing first, and the rest will follow

Commentary: War on recession more like 'sitzkrieg'

One line in Federal Reserve Chairman Bernanke’s testimony dominated the week, but in an odd way: it was an anti-forecast. "Uncertainty about the outlook for growth and unemployment … greater than normal …"

The stock market took it as good news (in that never-never land, the only uncertainty is how high it will go), but bond and mortgage people took it the other way — the 10-year T-note briefly fell to 2.88 percent (a 15-month low), with mortgages still near 4.5 percent.

Fed policy is established by six governors appointed by the nation’s president and confirmed by Congress, and six of the presidents of 12 regional Feds (the voting rotates). The appointed governors tend to be a sharp lot; the regional presidents tend toward an uneven mix of able people and narrow, pinched, country bankers — hard-money types who think people should be punished for their mistakes (and several times for each one).