With the RBA raising interest rates (because the need for emergency low rates has ended in their opinion), the US$ under major pressure and gold rallying to record highs, the Fed’s credibility is on the line in terms of how easy they are and for how long that will be. Last night non voting Fed Pres Hoenig said “we will need to remove our very accommodative policy sooner rather than later.” The last thing he wants is tight money but said that even after they start to hike, it would still be a while before they would even get to neutral policy, let alone tight. ABC confidence rose 1 pt to a 5 week high as the State of Economy component rose to a 1 yr high. The MBA said refi’s rose 18.2% and purchases were up 13.2% as the average 30 yr rate fell to the lowest since late May at 4.89% and buyers rush to close on a new home by Nov 30th. The $ is up a touch vs the Euro even after better than expected German factory orders.