Mortgage rates are back in the 4 percent range, taken there by the 10-year Treasury note’s drop to 3.42 percent, which has wiped out the whole early-February spike. We have Libya, oil, stocks, housing and the economy to thank, but how those pieces interact is not obvious.

Arriving economic data is obscured by incessant "recovery" cheerleading among business media. Some news is pretty good: both consumer-confidence surveys found three-year highs, which may indicate some hiring.

New claims for unemployment insurance are holding down near 400,000. Every measure of manufacturing is doing well, although scratching in at 15 percent of our economy.

The "wait-a-minutes" are led by today’s downward revision in supposedly corner-turning fourth-quarter 2010 U.S. gross domestic product (from 3.2 percent to 2.8 percent).

Mortgage rates are back in the 4 percent range, taken there by the 10-year Treasury note’s drop to 3.42 percent, which has wiped out the whole early-February spike. We have Libya, oil, stocks, housing and the economy to thank, but how those pieces interact is not obvious.

Arriving economic data is obscured by incessant "recovery" cheerleading among business media. Some news is pretty good: both consumer-confidence surveys found three-year highs, which may indicate some hiring.

New claims for unemployment insurance are holding down near 400,000. Every measure of manufacturing is doing well, although scratching in at 15 percent of our economy.

The "wait-a-minutes" are led by today’s downward revision in supposedly corner-turning fourth-quarter 2010 U.S. gross domestic product (from 3.2 percent to 2.8 percent).

Growth? Sure. Self-sustaining, accelerating … not so much.

Wal-Mart’s sales in the last 90-days fell 1.8 percent. Orders for durable goods in January (excluding super-volatile transportation and defense) tanked 6.9 percent. The Chicago Federal Reserve’s January national index rolled to a minus sign.

If you’re in doubt, consider housing. New-home sales dumped 12.6 percent in January. But, the National Association of Realtors says sales of existing homes rose 2.7 percent. Hmmm.

A story cooking for months: NAR may have overreported those sales for 10 years or more, high by perhaps a half-million each year vs. CoreLogic (its parent is a title company using real data), and since 2008 resulting in as many as 1.5 million imaginary sales each year.

Nothing intentional, of course — I first joined the National Association of Realtors in 1978 and quickly learned not to trust the association to count to 10 on its toes and get the same answer twice in a row.

If existing-home sales are running below 4 million annually instead of above 5 million, then we have rather more trouble with distressed-inventory absorption than we thought. And market buyers and sellers have left the field or been elbowed from it.

On that subject, NAR said only 37 percent of January sales were distressed ("only" … sheesh). CampbellSurveys.com, meanwhile, says the distressed fraction was 44 percent in November, and shot up to 49.6 percent in January (California at 66 percent, Florida at 63 percent, Arizona and Nevada at a whopping 72 percent).

Now two things not to worry about: inflation and the Middle East.

Inflation comes in a few well-defined forms. The deadly one is the wage-price spiral, which plagued us in the 1970s and can be stopped only by recession.

The U.S. today is impervious to such a spiral because we have near-zero wage growth. In fact, rising oil prices will slow this economy by crowding out other spending. Note that commodity prices have fallen — not following oil, instead anticipating slowdown. Same for stocks.

Other inflation forms include the classic money-printing of Zimbabwe and Weimar. The Fed’s "quantitative easing" (QE) program does print monetary electrons, but the money cannot make it into wallets because the credit system is still broken. No credit, no money.

The last form, cost-pushed inflation, is temporary — it is not a structural ramp-up in general prices. That’s what this is. Oil is driven by speculators, just as it was in 2008, and all should be reassured that this spike has stopped far short of that run to $150 per barrel.

Middle East … it takes some serious chutzpah to be relaxed about the place. But, concept No. 1: the Middle East nations need to sell oil worse than we need to buy it, no matter who is in charge over there.

Non-oil economies in the Middle East have never developed, and 10-fold growth in population has made ’70s-style embargoes impossible today.

No. 2: Despite U.S. bejabbers about radical Islam, these brave Tunisians, Egyptians, and Libyans are in their streets waving their national flags, not pictures of Osama.

No. 3: Post-revolutionary peoples’ governments, no matter how they may roil and rock, are steadier by far than rotten autocracies, especially in dealings with neighbors. Some go sour (Iran), some are in doubt (Iraq), but dictatorships breed anger and extremism, and dictators need to pick external fights with pretend enemies.

Refounded nations, even while struggling to establish representative government, have stabilizing advantages. The greatest of these: pride at self-liberation won hard.

We live in one of those places.

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