Sales are up 23.5 percent since their lows in October 2008, which also is a record for year-over-year jump, according to the National Association of Realtors.

It's not clear the surge represents a bottoming out of the housing market, as the sales are still not happening organically--that is to say, without a government incentive. And now that the home buyers' credit has been extended to April, we won't know if we have an organic, non-subsidized bottom until after then.

The median sales price of an existing home in October was $173,100, down 7.1 percent from October 2008. That's the smallest decline in median home price in more than a year.

How October existing home sales broke down by region of the country:

Northeast: up 11.6 percent.

Midwest: up 14.4 percent.

South: up 12.7 percent.

West: up 1.6 percent.

Why is the number up so little in the West? Remember, the biggest foreclosure home states -- that is to say, the ones that were overbuilt the most during the housing bubble -- were California, Nevada and Arizona.

Existing home inventories are down to a seven-month supply. A healthy housing market is generally regarded to have a six-month inventory of unsold homes.

And let's be clear about this: sales of distressed homes accounted for between 33 and 40 percent of all existing home sales in October, according to the data, so that shows investors are still bottom-feeding off people who've lost their homes. On the other hand, some of those people who lost their homes got mortgages they could not afford and never should have stopped being renters, so that's a necessary adjustment on the system.

On the upside, for the first time in more than a year, we're starting to see some movement in sales of more expensive homes, not just bargain-basement ones that are in foreclosure.

The October figures show some uptick in sales of homes in the $250,000 to $500,000 price range, but nothing yet in the $750,000 and up range.

-- Frank Ahrens
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In the first 20 minutes of trading, the Dow is up 1.4 percent.

The broader S&P 500 is up 1.7 percent, as is the tech-heavy Nasdaq.

The markets closed Friday on a three-day losing streak, which they appear to be trying to flip this morning. The key market-moving data this week comes Tuesday, when third-quarter GDP gets revised. Remember: the number that was reported last month (3.5 percent) was only a preliminary number and it always gets revised when the data gets fully cooked.

Forecasters are expecting a downward revision to 2.8 percent, so we'll see how that affects the markets.

-- Frank Ahrens
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First, a look at the markets right now.

As of about 2:15, the Dow is down three-tenths of 1 percent.

The broader S&P 500 is down four-tenths of 1 percent and the tech-heavy Nasdaq is down six-tenths of 1 percent.

Now, let's take a look back and see how the markets have been trending in recent months. (These numbers do not include today's moves.)

Since the March 9 bottom, the Dow is up about 58 percent, the S&P 500 is up a little bit over 60 percent and the tech-heavy Nasdaq, which has been leading the rally, is up a whopping 70 percent.

As I always say: That's great. That's money back in your 401(k) and your portfolio. But professional traders haven't understood this rally, because it's not based on solid underlying economic fundamentals -- unemployment has only risen during the rally and GDP turned positive only in the third quarter -- but they have thrown up their hands and said, using the Wall Street phrase, "You can't fight the tape."

I wrote a story in today's paper, which you can read by clicking here. But I wasn't able to squeeze some interesting things he said into the newspaper story, so I wanted to share them with you here today.

Let's be clear about this: This sale was probably Leonsis's best play for Revolution Money to continue growing. Trying to go up against the four big payment networks -- Visa, Mastercard, Amex and Discover is like trying to start your own auto company and go up against Toyota and Ford. The barriers to entry are very high and it's hard to overcome the trust hurdle -- complain as people do about their credit cards, they trust a name like Visa or Amex to handle their charges.

RevMoney will continue building online and mobile money transfer applications as it becomes part of Amex. In the best quote Leonsis gave me, he said, "We got their assurance they would not Borg the company," referring to the "Star Trek" alien species that assimilates every species it encounters with the chilling phrase, "Resistance is futile."

The highlights of our chat:

-- Leonsis said he wasn't initially looking to sell RevMoney. Instead, he said, about 45 days ago, he started contacting big financial institutions and card companies about licensing deals; essentially franchising RevMoney's person-to-person money-transfer technology and other applications to several buyers. While talking to Amex about the franchise idea, Amex came to realize it did not have a very strong strong digital platform or strategy and decided it would instead like to own RevMoney outright and exclusively. Hence, the $300 million purchase.

-- "Hopefully, we've learned a lot of lessons from past mergers," Leonsis told me, no doubt referring to the disastrous mega-merger between AOL and Time Warner a decade ago that is just now finally being unwound, with AOL set to spin off next month.

-- RevMoney had grown modestly on its own, but when the financial crisis hit last year, venture capital money started to dry up. Investors in RevMoney include Goldman Sachs, Morgan Stanley and Citi (which has had its own problems). RevMoney didn't have the funds to substantially grow its customer base, Leonsis said; hence the tie-up with Amex, which already has 90 million cardholders globally.

-- RevMoney's credit card business was 12 to 18 months away from profitability, Leonsis said.

-- Younger consumers are much more likely to accept online money-moving than their parents, Leonsis said, which is unsurprising. He said the older generation gets a credit card, then slowly learns how to use online services, such as checking their balances, making payments and so forth. The younger generation goes the other way: They use PayPal to, say, buy virtual characters for their games and, when they get older, they will qualify for a credit card. They go virtual-to-physical worlds, while their parents go, tentatively, the other way.

-- Leonsis gave me an illustration of how his Washington Capitals use RevMoney's 0.5 percent credit card to save money: Let's say a Caps season ticket holder decides to renew his or her tickets and tells the Caps to put the $10,000 on their Visa credit card, which charges the Caps a 3 percent processing fee.

The Caps ticket agent tells the ticket-buyer: "If you open a RevMoney credit card right now and charge your season tickets on that instead of Visa, we'll give you a free autographed Alex Ovechkin jersey." The Ovechkin jersey costs the Caps $125 to buy and the 0.5 percent processing fee to RevMoney amounts to $50.

With this deal, instead of being out $300 per season ticket-holder, the Caps are out only $175. Plus, RevMoney gets a new customer who's got a good enough credit rating to charge $10,000 worth of tickets. Leonsis said the Caps have delivered 2,500 new accounts to RevMoney this way.

-- Frank Ahrens
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Geithner is ostensibly before the committee to argue for financial reform, but Brady used the opportunity to launch a partisan attack on Geithner reading a laundry list of what Brady termed as economic failures of the current administration. Geithner responded with a spirited defense -- edgier than usual -- and was clearly angered by the attack.

Brady noted that the White House said earlier this year that unemployment would peak at 8 percent (true) and that it is now at 10.2 percent. He noted that reports of the number of jobs saved or created by the stimulus has been repeatedly ratcheted back by the White House (true). And he reported calls from both parties for Geithner's resignation (Not that I'd heard, but my colleague Ed O'Keefe informed me that Sen. Maria Cantwell ((D-Wash.)) wondered earlier this month whether Geithner still has his job. Hardly a groundswell calling for Geithner's head, to be fair.).

"Will you step down from your post?" Brady asked, concluding his statement.

Geithner shot back: "It is a great privilege for me to serve this president. I agree with almost nothing you said, almost nothing you said represents a fair and accurate picture of the economy today." He told Brady, "You gave this president an economy falling off a cliff."

Geithner continued: "Congressman, it's just a basic fact that a year ago, this economy was falling at a rate of six percent a year, it was losing between half a million and three-quarters of a million jobs per month and that process was not slowing" until President Obama began implementing his programs, Geither said.

Brady interrupted: "Mr. Secretary, the public has lost all confidence in your ability to do the job...It really is time for a fresh start."

Geithner then said: "If you look at any measure of the strength and stability and health of the American economy, if you look at any measure of confidence in the financial system, it is fundamentally stronger today than when the president took office. It happened not on its own. It happened because of a set of tough, difficult choices."

Geithner then directed his criticism back to the Bush administration, accusing it of "either years of basic neglect of basic public goods in health care, in education...in how we use energy and fixing those problems is the central objective of this administration."

Brady shot back: "Tell that to the millions of Americans who no longer have jobs because of your decisions.

Geithner would not take the criticism lying down: "They would have had more jobs and more confidence and more employment in this country if we had not let this crisis get to the point it did." Geithner said the Bush administration should have spent "eight years of paying for our commitments instead of borrowing against them."

This is the most bristling political theater I've seen on the Hill since last fall when Rep. Elijah Cummings (D-Md.) famously asked Neel Kashkari if he was a "chump."

-- Frank Ahrens
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First, let's look backward.

Here's a terrific graphic that The Post's Business section did today, comparing unemployment, consumption and industrial production during this recession compared with the four previous recessions.

Takeaway: If you had any doubt that this recession was the worst since the Great Depression, this graphic should put that doubt to rest.

Now, forward.

According to the Conference Board's monthly index of leading economic indicators out this morning, slow growth in the U.S. economy should occur during the first half of 2010.

The index ticked upward 0.3 percent in October, following a 0.1 percent gain in September and a 0.4 percent gain in August (fueled by Cash for Clunkers).

“The data indicate that economic recovery is finally setting in. We can expect slow growth through the first half of 2010. The pace of growth, however, will depend critically on how much demand picks up, and how soon,” Ken Goldstein, a Conference Board economist, said in a statement.

Remember this, though, and I can't stress this strongly enough: Most of this recovery so far has been driven by government stimulus -- Cash for Clunkers, the first-time home-buyers' credit, $787 billion in stimulus spending and so forth, while precious little attention has been given to long-term growth stimuli, such as tax cuts for employers.

The best quote on this whole situation still comes from Art Hogan, chief market strategist at Jefferies & Co., who told me the following when the Dow passed back up through 10,000 in October: "My biggest concern is much more akin to taking the IV tube out of the patient. We have to move from an economy that is stimulated by the government to an economy that's self-sustaining. That needs to be orchestrated extremely carefully."

-- Frank Ahrens
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In the first 15 minutes of trading, the Dow is down 1 percent.

The broader S&P 500 is down 1.3 percent and the tech-heavy Nasdaq is down 1.5 percent.

The markets are ignoring encouraging news from last week's new jobless claims report out this morning.

New jobless claims filed last week were flat compared with the week before, the government said in data released this morning, giving hope to those who believe that unemployment is beginning to crest.

New claims filed last week came in at 505,000, the same as the previous week's revised numbers. The four-week moving average fell for the 11th straight week.

New claims have to fall into the low 400,000s in order for the economy to actually start adding jobs. Nevertheless, the number of jobless Americans receiving continuing claims fell about 40,000 last week to about 5.6 million.

Congress has extended unemployment benefits four times during this recession. In the hardest-hit states, benefits can last 99 weeks.

The official U.S. unemployment rate jumped to 10.2 percent in October.

-- Frank Ahrens
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The White House says the stimulus has saved or created (or, more accurately, will save or create, once it's all paid out) 1 million jobs. This comes at a cost of $787 billion.

Cutting payroll taxes 6 percent would have reduced businesses' expenses by about the same amount the decline in employment has, it would have cost less than half of the stimulus and it would have created incentives for businesses to hire, Boskin writes, citing research by Stanford's Pete Klenow and University of Rochester economist Mark Bils.

You can read the entire piece by clicking here.

At the heart of this crisis has been an ideological war between fiscal conservatives, who oppose government spending, saying tax cuts are the way to go because they will encourage businesses to hire and put more money into consumers' pockets; and fiscal liberals, who believe that massive injections of taxpayer money from the government is the boost the economy needs. Boskin writes:

There is little likelihood that another round of similar fiscal stimulus would yield much more than the paltry return on the first one. The original transfer payments and tax rebates barely nudged consumer spending, and the federal spending has been painfully slow. The delayed infrastructure spending -- the shovels are still in the shed -- will have a bigger impact, though less than claimed. Some of the funds to state and local government did reduce layoffs. The stimulus bill surely ranks dead last compared to the natural dynamics of the business cycle, the Fed's zero interest rate policy, and the automatic stabilizers in the tax code (which have reduced taxes proportionally more than income) as far as explanations for the improvement in the economy.

I acknowledge that much of the stimulus has been back-loaded, meaning the bulk of it won't be spent until the end of next year. But even the White House has had to backtrack on what it expected from the stimulus, saying initially it could save or create 3 million jobs, a figure that is now down to 1 million.

This morning in China, President Obama in an interview on Fox News (!) gave a shout-out to deficit and debt hawks, saying the rapidly growing debts -- added to by his stimulus -- could cause a loss of confidence and maybe even a double-dip recession. He told Fox he is willing to consider targeted tax cuts to help bring down unemployment, effectively agreeing with Boskin's argument in today's Journal.

-- Frank Ahrens
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In the first 15 minutes of trading, the Dow is down one-tenth of 1 percent.

The broader S&P 500 is just barely above water and the tech-heavy Nasdaq is down three-tenths of 1 percent.

New homes construction and building permit applications fell unexpectedly in October. Why? Builders were waiting to see whether Congress was going to extend the first-time home buyer credit.

Congress did extend it, so presumably November housing starts should tick up a little (but still be dulled by the fact we're moving into winter) but what this tells you is that the new home market is rebounding only because of government help, not because it's rebounding organically.

Elsewhere, inflation edged up a little more than expected, but if you take out the volatile energy and food prices, core inflation was modest. This surprises inflation hawks -- such as myself -- who continue to wait for a jump in inflation, thanks to the fact that the Fed flooded the system with new dollars during the liquidity crisis last year. But I'll be happy to be wrong on this one.

-- Frank Ahrens
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I had breakfast with Cisco Systems chief executive John Chambers this morning in his suite at the Four Seasons hotel in Washington, where he is attending the Wall Street Journal’s CEO Council.

Cisco makes switches and routers — the plumbing of the Internet. But the company’s future appears to be in video. Earlier this year, Cisco paid $590 million to buy the company that makes Flip video cameras. Right now, Cisco has a $3.4 billion bid on the table for Tandberg, a Norwegian videoconferencing company.

Chambers might be more of a big-picture guy than most CEOs. He doesn't like to get down on the “transactional” level. He’s also salesman and a negotiator, and he’s got little tricks that he employs. He’s affable, but he’s got a little Sun Tzu in him. For instance, I once saw him get up during a group interview, walk over and sit down directly next to a tough interrogator, attempting to neutralize him. Today, Chambers asked if we could conduct the interview with our suit jackets off. (What? Take off my armor?)

In the interview, Chambers says why he believes that the U.S. will emerge strongly from the recession and why collaborative technology -- such as the TelePresence videoconferencing devices he sells -- will boost productivity, creating new jobs. He argues why complete net neutrality won’t work, why a second economic stimulus is a bad idea and why he won’t oppose Hewlett-Packard’s recent bid for a key Cisco rival, 3Com.

Chambers bestrides a number of worlds: His technology business is global and his politics span both parties. He co-chaired Sen. John McCain's presidential campaign, yet he has worked closely with the Obama administration.

Chambers and I both happen to be from West Virginia; hence, the references he makes throughout the interview to the Mountain State and West Virginia University. This interview has been edited.