Global markets have synchronized their trading on the fiscal cliff and little else.

A positive public statement by anybody, then immediately stocks run up and bonds sell off. A negative slant to an eyebrow, a down-turned lip, no matter how minor the official… stocks tank, buy bonds, rates down.

This preoccupation has some merit, but only half. If no deal, and over the cliff we go, Wile E. Coyote in an Acme parachute with no ripcord, the landing will be unpleasant.

On the other hand, exuberance at a deal will be fleeting, replaced by awareness that the deal, any deal, will be the beginning of the largest round of tax increases and spending cuts in U.S. history.

Just as Mr. Coyote thinks he’s caught the Roadrunner, an Acme safe lands on him. Beep-beep.

It is nigh impossible to separate posturing public comments on the fiscal cliff from serious ones. Each of the negotiating sides must try to sell its ideas to the general public, but also try to reassure is own constituents that it is being tough, giving nothing away.

Last week the Republicans genuinely conceded the need for new revenue — losing an election will do that.

But this week’s White House counter beats all for chutzpah. Why not just go ahead with tax increases right now, $1.6 trillion over ten years, and talk about spending cuts some other year? And give the White House authority to borrow whatever it wants, whenever, no more of those silly debt-limit votes in Congress? Oh, and we’d like another $50 billion in stimulus spending right now.

Just posturing, I assume. Be able to tell the Democratic base, "We tried." I hope.

The economy is always hard to figure, but exceptionally so now, for three reasons: First the Acme Cliff, above. Second, any negative in economic data gets a "Sandy" response. And third, every salesman who would like you to make an optimistic stock market trade says that housing is about to boom.

October personal income arrived unchanged versus an expected 0.2 percent gain. Sandy. October personal spending declined 0.2 percent versus an expected 0.1 percent gain. Sandy. The Chicago Fed’s National Activity index added a deeper negative in October to a slide that began last spring. Sandy?

Third quarter GDP was revised happily from a 2.0 percent annualized gain to 2.7 percent. Unhappily, most of the gain was from bloating un-sold inventories, and consumer spending was revised down to 1.4 percent. Sandy?

Wait a minute — Sandy landed in the fourth quarter. Don’t bother me, I’m busy selling.

Housing. No question, housing is better. The avalanche of distressed inventory headed to fire sale is instead slumping and dribbling along. Prices are rising, especially in the disastrous spots in California, Nevada, and Arizona, although from extremely low levels. Even in places where prices are not rising, some liquidity has been restored.

Some owners can sell their homes in reasonable time frames, and without ruinous concessions. However, is housing the new economic "driver," as claimed in so many news media stories?

The New York Fed began to run two years ago a quarterly analysis of household debt. Some will be pleased to know that total consumer indebtedness fell $74 billion in the third quarter, to $11.31 trillion. Mortgages of all kinds are 76 percent of the NY Fed total, and they kerplunked $120 billion in 90 days — a 5.6 percent annual rate of decline.

Two questions: how are you going to get housing oomph with net mortgage issuance in its own Acme act? Cash buyers? Lemme know when you see a mob like that. Distressed-market cash cripple-shooters are in play, but not replacing a half-trillion-dollar annual shrinkage in credit.

Then, how come total consumer debt fell less than the mortgage portion fell? A lot less?

The ugly little secret: student loan debt up $42 billion in 90 days. Total now: $942 billion.

Student loan debt is up $100 billion in one year. It’s doubled since 2008. Why? A lot of home equity lost, can’t refinance to send Egbert to the U. Tuition is way up because state budgets go to health care, not the U. Thus student loans explode.

Hell of a way to run a railroad.

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