It means that the housing market is seriously slowing. It's not great news for the economy.

One quarter doesn't make for a whole year. Time Warner still has a long ways to go. They still have some problems with AOL.

If people are comfortable with where inflation is, they feel comfortable with investing, and it does drive the market.

The news should improve in the second half as likely Fed rate cuts begin to affect the economy and earnings momentum improves on easy comparison,

The good news is more rate cuts are on the way. The bad news is the economy is weaker and that will put pressure on earnings.

[The good news first. The economy has been picking up. Corporate profits are high, banks have begun to lend again and investors (especially optimistic foreigners) have been piling into Japanese stocks with abandon, pushing Tokyo markets to four-year highs. Koizumi can claim at least part of the credit, thanks to his cleanup of the moribund banking sector and his refusal to succumb to the sort of pump-priming public-works programs favored by his predecessors. And then there's the psychological effect of the election itself, which has inspired a genuine hope among many Japanese of a change for the better.] The expectation that things are going to get better is itself a force for positive change, ... That in itself creates a positive boost to the economy.