We added to our short position in the S&Ps on Friday’s close, breaking a personal rule which holds that one should never stake out a new position minutes ahead of a weekend. But the temptation to augment our “don’t” bet proved irresistible, what with so many troubled-world bellwethers acting…troubled. Gold was staging for an assault on $450, bond yields were rising, bank stocks were getting pummeled, and crude oil prices were once again on the rise. It’ll be quite a challenge for TV’s talking heads to spin all of this bullishly over the weekend, so we shouldn’t be too surprised if the glum mood that prevailed on Friday lingers into the new week.

The weakness in bonds in particular is starting to weigh on investors, and even though 30-year Treasury futures have yet to reach the critical, bearish threshold I flagged here last week, they’ll be in lousy shape to resist its pull come Monday. Not that that would catch every bond-watcher unawares.  For one, fellow ex-New Jerseyan Burt R. appears to have caught the recent upturn in yields just right:  “Thanks for you excellent call on the long bond,” he writes.  “I used your hidden pivot to nail the low on mortgage interest rates.  The 30 year fixed is up one half percent since I refinanced. I'll be watching your future recommendations to see if I can do it again at an even lower rate.”

Re-Fi Boom,. R.I.P.

I just re-fied myself, Burt, in order to get a recalcitrant ARM under control. But my guess is that you and I will not be refinancing again for a long, long time. In the first place, to cool speculation, the Fed is rumored to be intent on preventing yet another re-fi cycle from gestating.  As we know, the central bankers have no control over long-term rates to begin with. But you can’t blame them for pretending, now that market forces are starting to reassert themselves, that it is the Fed’s wish and desire to see the housing boom wither. Actually, some measured withering might be a blessing, since no one really knows what’s going to happen to the real estate market if the brakes seize. But my hunch is that this attempt at a soft landing is about as likely to succeed as an aircraft carrier trying to land on the moon. Complacency has had an amazing run these last couple of years, but it may be about to end.