Well, out in the real world, housing starts and housing permits both fell unexpectedly, and industrial production fell ½%, which looks bad, while the Baltic Dry Index, an index of ship activity, hit a 7 month high, mostly on Chinese demand for iron ore.

Note that the fall in housing starts and building premits was almost entirely related to a drop in construction of condominiums and apartments.

In the long run, this may be good news, as it means that the supply of new housing units is finally being outstripped by demand, as anemic as it is, which is a first step to recovery.

Note also, however, that housing starts is a leading indicator, and as such this does not speak well for “green shoots” in the economy.

My guess would be that that condos are driving this, as they used to be a step up to a stand alone house, but now people realize that a condo is as hard to get rid of as a case of herpes.

In the delusional world of bankers the news is fairly good, with the LIBOR hitting a to a 4 month low, the Volatility Index (VIX) below 30 for the first time since Lehman imploded, and >Barry Ritholtz’s semi regular credit crisis watch is showing signs of thawing in a number of metrics.

So at this point, the problem may be more the real economy than it is the banks, and the fact that Norway, the outlier in so many good ways, like its lack of corruption in a petro state, has finally joined the rest of Europe in a recession.

Meanwhile, it looks like Allstate and Ameriprise will not be among insurance companies taking TARP money.

I’m not sure if it’s the potential for pay limits, or the stigma, or the fact that they think that Geithner is a turd.

Meanwhile, in currency, the good news in the credit market pushed the dollar down on reduced demand for a safe haven.

Oil broke the $60/bbl barrier in interday trading, before settling at $59.65/bbl, largely on yet another refinery fire….Is it me, or is this beginning to sound awfully convenient?

I’m wondering if they timed it so that deferred maintenance would kick in just before the start of the Summer driving season.