The housing market, which is the main source of bubble financing, is finally rolling over:

“NEW YORK (Reuters) - … The Mortgage Bankers Association said its seasonally adjusted market index, a measure of mortgage activity, declined for the week ending Aug. 20 by 6.3 percent to 646.3 from the previous week’s 689.4….The Washington trade group’s purchase index, a gauge of new loan requests for home purchases, fell last week by 5 percent to 443.7 from 467.1 in the prior week. The purchase index was still well above its year-ago level of 375.5…. Meanwhile, the Washington trade group’s seasonally adjusted refinancing index decreased last week by 8 percent to 1,824.9 from the previous week’s 1,982.7.”

“WASHINGTON (CBS.MW) - …Sales of new homes in the United States fell 6.4 percent in July to a seasonally adjusted annualized rate of 1.13 million, the Commerce Department estimated Wednesday…. There was also a large downward revision to June sales…. The department said sales fell a revised 5.6 percent in June to 1.21 million units, compared with the initial estimate of a 0.8 percent drop to 1.31 million units…. The number of new homes for sale on the market rose about 4.2 percent to 393,000, representing 4.2-months of sales at the July pace…. The median sales price rose 9.0 percent year-over-year to $207,400, but was down 2.6 percent from June…. The National Association of Realtors reported earlier this week that sales of previously owned homes fell 2.9 percent in July.”

And one more data point (anecdotal, but…) Las Vegas cools off

This means liquidity generation from housing is declining rapidly (6.3 percent in a week is rapid). This means the economy will be heading south because it is only new liquidity (debt) generation which drives it, in the absence of savings and investment. While price action today was less than satisfactory to this bear, the economic news is encouraging. All is evolving as expected.