Several readers want to discuss the cost of capital. "Topic suggestion: How much further will the ten year treasury note yield have to increase (a lot of mortgage rates are being effected too) before the housing markets really implodes."

Another said, "Now that Ben Bernanke has been on the job for 60 days, any revised thoughts on where his policies will take the US economy? Some possibilities:

1) Business as usual, as advertised when he took over. Under this scenario, the housing bubble, commodities bubble, and hedge fund bubble (did I forget any?) keep inflating until they eventually pop in a catastrophic, mutually-reinforcing collapse.

2) A return to normalcy. Under this scenario, he stays the course on tightening until the speculative mania is choked to death. Overvalued stock, housing, and commodities prices suffer collateral damage and T-bonds turn out to have been the place to invest.

3) Other scenarios?"

A reply, "3) It doesn’t matter, either way, the damage has been done; we are in debt up to our eyeballs with the record US deficit, trade deficit and household debts. There’s no end to the madness and any number of scenarios could bring down the whole house of cards."

Some related reports. "The words of the Kansas City Federal Reserve Bank President Thomas Hoenig explain the inevitable. While speaking at a breakfast organized by the St. Joseph Missouri Chamber of Commerce on Friday, Hoenig said, 'Only with that constant incoming data will we know where we are in the policy cycle.' The conclusion? Stay tuned to each incoming economic report, as the Fed has left the markets and the economy guessing regarding its future course of action."

"'Even though the Federal Reserve has been raising interest rates, they are also increasing the money supply,' Paul Levine said. 'You also have a lot of money that was going into real estate going into stocks now, since the housing bubble is bursting.'"

"'The problem is that the ten-year note yield is currently standing at 4.85 percent and is pushing toward 5 percent and our friends at the Fed are not telling us when rate hikes are done,' said Ram Kolluri. Last week, the benchmark 10-year note surged to a 22-month high amid bets that interest rates are set to rise."

"'We've got a lot of economic news between now and the next Fed meeting in May,' Art Hogan said. 'The path of least resistance is higher, but there's a bumpy road.'"