Futures are up huge, apparently based on some combination of Dell’s earnings reports, Bush’s announcement of what seem to me extremely modest measures to support the mortgage market and Bernanke’s forthcoming speech. If these gains hold, the markets will close up for August. Yes, that is the same August when the credit markets fell apart. Yet the stock market, which entered the month overbought, overvalued and overbullish, leaves the same way, within 3-4% of its highs before the credit mess became apparent. Amazing, is all I can say.

The reality is that the housing market is nearly frozen. Inventories are ballooning and financing is hard to obtain, except within the GSE limits. Anyone who thinks that this is not going to affect consumption (and those beloved tech companies) is smoking something really good.