Well, That's Better. But About Housing And The Credit Markets...

Stock markets up a startling 5% on renewed hope for a bailout plan. But credit markets still seeing a flight to Treasuries and TED Spread remarkably tight (albeit down modestly from yesterday).

Also, we don’t mean to rain on the parade, but did anyone notice the Case-Shiller housing numbers? Awful. Some people still think house prices will only fall 20%-25% from the peak. We’re already down 21%–and prices are now falling at a 17% annual rate.

The bailout plan the spanked Congress will now rush to pass (assuming today’s rally hasn’t emboldened the hold-outs) also isn’t one that most smart folks think we’ll do much. And violent rallies are the hallmarks of a bear market. And stocks are still expensive.  And the credit crunch seems poised to finally trickle down to consumers.

But we’ll worry about all that tomorrow…

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