Bulls vs. Bears: Trying to Predict this Economy

     As we have noted in previous posts, trying to analyze this economy, much less predict where it's going is if not a fool's errand, pretty fraught with difficulty.

     In previous posts I have built both a bull and bear case, and today's headlines are much the same. On the one hand the market is up big, with the Dow up over 200, on the heels of a good week last week, the best week in 8 weeks. Ok, that's bullish!

    This rise is predicated on a rise in July consumer spending from strong car sales. Again bullish!

    "U.S. consumer spending rebounded strongly in July to post the largest increase in five months on strong demand for motor vehicles, a government report showed on Monday, supporting views the economy was not falling back into recession.."

    Sounds good!

    However, there was on the same CNBC home page this cautionary headline "Pending Home Sales Fall 1.3% In July to June."

    Ok: bearish?
   

  "Pending sales of existing U.S. homes fell in July from June in the latest sign of weakness in the housing industry, data from a real estate trade group showed on Monday.

   The National Association of Realtors Pending Home Sales Index, based on contracts signed in July, was down 1.3 percent to 89.7 from 90.9 in June.

Economists polled by Reuters ahead of the report were expecting pending home sales to fall 1.3 percent.

In a sign of how much the sector has recovered from a year ago, the index was up 14.4 percent from July of 2010. "

   So it has improved 14.4% since July 2010 even if down by 1.3% since June. So maybe bullish?

   But in the front page current headline on CNBC we read "Why Finland Could Re-ignite Crisis Over Bailout of Greece."

   Potentially bearish.