This column was originally published on RealMoney on Aug. 24 at 12:56 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.

Don't know which triggered a rally in homebuilders: the strength in housing, as expressed by new-home sales, or the weakness in the economy expressed by durable goods.

Sometimes it is that tough. We are at a really and truly bizarre moment where the papers and the television shows are all filled with how buying a condo's now worse than buying eToys common on that secondary in 2000.

We are convincing ourselves -- typically through journalists who couldn't afford or didn't buy homes -- that owning an apartment's dumber than paying $30 for Webvan and owning a beach house is like buying the Viant $100 secondary.

May I suggest that most of this stuff is plain stupid? The truth is that new-home sales remain robust but the rest of the economy is much weaker than we think and the result is that the game is all Fed. If the Fed takes its cue from the durable goods number, then, correctly, the housing stocks should go higher. If the Fed is paying attention only to the journalists who write about the bubble -- good chance of that by the way, and don't forget Alan Greenspan's married to one for heaven's sake -- then we are still in for pain and you should lighten up on this rally.

The amount of misinformation out there is pretty incredible. The New York Times today talks about the condo glut, but national data from Deutsche Bank and Goldman show that condo starts are way, way down, and if anything, there could be a condo shortage developing.

We are convinced that the resale numbers are really weak but that's simply not true, and when taken with today's new sales numbers, paints a very robust picture. There are pockets of undervaluation in housing and pockets of overvaluation. There are places where there are gluts and there are places where there are scarcities.

Business as usual.

Yet, it is true as it was in 2000, if the Fed decides that it is worried about borrowing on homes, as it was worried about borrowing for stocks, it has the ability to wreck the whole economy to cool homes. Just like in 2000, when the Fed should have raised only margin rates, the Fed simply has to say: "We don't want interest-only mortgages sold."

Does it have the power to say that? It has the power to say whatever the heck it wants, although it actually regulates margin through Regulation T. It choose to not use its regulation in 2000 to the great disadvantage of the U.S., so it is unlikely that it will do anything about the interest rate-only mortgages either.

In fact, the Fed is like a very active Teddy Roosevelt: It speaks softly but it carries, and swings, a big stick, at the whole economy, even when it is one section -- interest rate-only mortgages on second, third and fourth homes -- that it really wants to cool.

Everything else, my friends, is already cool!

Random musings: It is exciting that this time around, unlike in the 1980s when we last had a commodity boom, we have good, responsible smart companies like BHP Billiton ( BHP) to trust. They were more worried about taking down a lot of debt to buy expensive properties than they were worried about being the supermarket to the world for minerals. What a good, sober company. Remember Amax and Asarco? What a bunch of jokers they were. ... Anyone know Cubic ( CUB)? I know it has screwed up in the past, but you have to admit that a combination of defense and subway businesses, something that sounded pretty stupid before London's bombings, now makes an awful lot of sense!


P.S. from TheStreet.com Editor-in-Chief, Dave Morrow:
It's always been my opinion that it pays to have more -- not fewer -- expert market views and analyses when you're making investing or trading decisions. That's why I recommend you take advantage of our free trial offer to TheStreet.com RealMoney premium Web site, where you'll get in-depth commentary and money-making strategies from over 50 Wall Street pros, including Jim Cramer. Take my advice -- try it now.

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for ActionAlertsPLUS by clicking here. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict."

More from Personal Finance

Best Real Estate Markets for Homeowners in the U.S.

Best Real Estate Markets for Homeowners in the U.S.

How to Be a Winner Like Legendary Former General Electric CEO Jack Welch

How to Be a Winner Like Legendary Former General Electric CEO Jack Welch

Best U.S. Cities for New College Grads

Best U.S. Cities for New College Grads

33 Pictures of the Drastic and Deadly Impacts of Climate Change

33 Pictures of the Drastic and Deadly Impacts of Climate Change

30 Mind-Blowing Concept Cars and Cars of the Future We Want to See Built

30 Mind-Blowing Concept Cars and Cars of the Future We Want to See Built