These numbers are still in line with our projections which already had growth beginning to slow in the second half of 2006.

Rapid demand growth has created capacity constraints that are supporting higher prices and expanding margins. Investments are beginning to add capacity, but at a rate that will likely be absorbed quickly by rising demand.

November typically marks the beginning of the growth season in stocks. This is due in large part to pension fund buying patterns, which have produced an average gain of 5 percent from November 1 to January 31 over the last 50 years.

The fact MEW did not fully correct the large Q2 increase supports our view that conditions in the housing market are improving and that this will, at some point, lead to increased household consumption.

Presently it seems unlikely that he will be able to push through the sorts of reforms and spending decisions that are required.

It's indicative of strong underlying demand for housing relative to supply and it's supportive of the view you will not get a major correction in house prices.