Worries of a housing-led consumer spending bust are overblown.

We haven't had a single year of falling consumer spending since 1938. There's no boom or bust in consumer spending.

The cooling U.S. housing sector should apply a dampener to consumer spending as 2005-2006 unfolds, but some of this could be offset by still-decent job growth.

Although the cooling U.S. housing sector is going be a major drag on consumer spending as 2006 unfolds, consumers are starting the year in an upbeat mood, buoyed by solid labor markets. As such, U.S. consumer spending could display more early-year resilience than is currently expected.

Rising long rates threaten the bellwether housing industry as well as consumer spending. The higher [bond] returns begin to compete with stocks for institutional affection.

I don't think home values will crash -- they will rust, not bust. Demographics have underpinned demand, courtesy of a wave of immigration in the past 16 years that reduced supply, and you don't see the speculative overhang that could contribute to a bust in home values.