The big news was the release of Retail Sales, which increased a larger than expected .6%, best explained by the seasonal back to school rush.  The bond market snoozed through the news but the stock market reacted positively.

Items of note:

• Consumer Confidence fell to 82, lowest reading in a year, keep in mind this survey consists of 300 consumers, so not sure how representative it is of the overall segment.

• Bond Market closed the week with lower prices, higher yields:

        2 year  yield     4.20%

        5 year yield      4.41%

        10 year yield    4.68% 

• Producer Price Index rose by 1.1%, higher than expected, but core PPI only rose by .1% vs. the .2% number expected. 

I read Kaye Thomas' Manhattan Beach, Market Snapshot post and want to reference the Wall Street Journal article she mentioned.  The point of interest in this article is the fact that many of the "subprime" mortgages went to the middle class and wealthier communities and those mortgages are not due to reset until late 2008.  The point they make is well taken in that many loans are still at risk for going bad and we may not be feeling the pain until next year.

It is interesting to note that we've gone from TV shows like Flip This House to Buy Our House, which tracks several desperate families, some reflecting sale price cuts up to $400,000.  The show showed that adding a little feng shui to the mix actually helped some of the homeowners sell their homes.  

Stay tuned for the Week Ahead post coming up on Sunday!!!