Housing to finish last in recovery?

Commentary: U.S. plays caboose to China's economic engine

Forces building since October have at last blown long-term rates to the next levels. The all-defining 10-year Treasury note was trading at 3.66 percent this morning (prior range: 3.28 percent to 3.51 percent, which held since early December), and there is nothing to stop it short of 4 percent, the April top in 2010.

The mortgage damage is similar, low-fee 30-year loans pushing 5.25 percent.

The twin impetus pushing the rate rise — stronger economic numbers and borrowing by the Treasury — are not rocket science, but the details are more "Through the Looking Glass" than normal recovery cycle.

The economy has not changed pattern; we just have a great deal more of the same. Business giants, joined by any venture plugged into the global economy, have accelerated to a new plane — not just earnings, but now "top line" growth in revenue.

Those who thought the emerging world could pull the U.S. caboose were correct. The Institute for Supply Management has surveyed big business for 88 years, and the January findings are spectacular: manufacturing to 60.8 (versus 57 in December and 58.2 expected, and the best reading since 2004) and the vastly larger service sector to 59.4, one of the highest results on record.