AND THE HOUSING SLOWDOWN IS JUST A FUNCTION OF FED ERROR:

Banking on the economy (Donald Lambro, December 10, 2007, Washington Times)

It will probably come as a shock to most people, even to those who follow the economy, that mortgage applications rose last month as a result of declining interest rates.

In the midst of the hysterical media-fed notion that a tidal wave of subprime-loan foreclosures was going to plunge the country into a recession, the fact is that the economy is still growing and Americans are still buying homes.

The torrid pace of recent years has slackened, but homes are being sold, banks are lending money and most Americans — even those saddled with subprime mortgages — are paying their mortgages on time.

And we're all getting richer, US Household Net Worth Up 1.1% To $58.60 Tln In 3rd Qtr (Jeff Bater , 12/06/07, Dow Jones)

U.S. households' total net worth rose 1.1% to $58.60 trillion in the third quarter, the Federal Reserve said Thursday.

The Fed's quarterly "flow of funds" data also showed U.S. nonfinancial debt rose at a 8.9% annual rate July through September.

The 8.9% rate was above the revised 7.2% rate in the second quarter, initially reported as a 7.1% growth rate. The Fed said the acceleration was in the federal government and business sectors, with the household and state and local government sectors showing modest decreases in the rate of debt growth.

Household net worth in the third quarter decreased to about 5.72 times disposable personal income, from a second-quarter level of about 5.74 times income. Household net worth is a measure of total assets, such as houses and pensions, minus total liabilities, such as mortgages and credit card debt.

Posted by Orrin Judd at December 10, 2007 11:14 AM