Another week, another report. Once again it is going to be a fun ride.

Housing starts are going to be a key concern and looking at a consensus that matches prior reports, it is clear that most are very worried about the fact that there is little buying activity. The same day, building permits are revealed for January. That will be a double-whammy for the markets. If there these numbers come in anywhere near expectation (above or below), we are apt to see nice rally.

One the proverbial other hand, disappointment will be painful for Mr. Dow.

Then there is the CPI. Besides the fact that it is reported on the same day as the housing indicators, on Feb 20, the CPI will show if Benanke has been right all along in calling for slight inflationary pressures. The problem is that he realizes that some of the inflationary pressure is due to the massive exports we are experiencing. Of course these would not be as intense if we had a stronger dollar, but that is old news.

Balancing the hope for consumers and home buyers versus a need to keep inflation down is the job of the FED and these days it is more difficult than ever. It would seem that one thing is for sure…unless he has a few more tricks up his sleeve, we are going to be in for a long and tough 2008.