The trap Bernanke can't escape (housing ATM)

Caught between rising inflation and a slowing economy, the new Fed chairman needs to be tough and tight if he hopes to gain credibility. He's not up to the task.

Despite the stock market's recent daily pattern of schizophrenia, we can't lose sight of the single-biggest story of the last five years. By that I mean the housing ATM and its ability to allow folks to spend beyond their means and live happily ever after, after our epic stock bubble of the late 1990s.

As the ATM gets jammed and ultimately broken, it will have a huge impact on consumer spending. This breakdown will be an inflection point.Of course, just saying the phrase "inflection point" makes it sound as though there's a specific day or hour when everything changes. That is not the case. Inflection points often take a long time to evolve, as is true for the unwinding of the housing ATM.