Donald Lambro

-- Google, the fabulously successful global Internet information system, saw its stock climb to a stunning $676 a share based on record earnings.

America's largest corporations, most of them major players in the global economy, reported similarly strong earnings and profits: from McDonald's and Coca-Cola to top defense-industry leaders, such as Boeing, General Dynamics and Lockheed Martin.

These earnings statements helped to stabilize a jittery stock market last week, at least for a time. But the financial markets remained volatile as a result of troubling evidence that the housing sector was still in decline.

The National Association of Realtors said existing-home sales dropped last month, for the seventh consecutive time, by 8 percent, which sent the closely watched Dow into another steep drop -- though the blue-chip index was still up by nearly 10 percent for the year.

No one knows how much deeper the housing slump has to go or how much longer it will last. Millions of adjustable-rate mortgage holders still face interest resets that many may not be able to handle amid predictions this will trigger a wave of foreclosures that will worsen the credit crunch.

But the good news is that the Fed has been pumping billions of dollars into banking institutions, and lenders have begun to preemptively offer refinancing packages for endangered homeowners that could ease the credit downturn.

The other side of this problem is a positive development for people who want to buy a home but have been effectively priced out of the market by exuberantly irrational real-estate prices of recent years. Housing prices are slowly but surely coming down in a self-correcting adjustment by market forces that at some point, when they get low enough, will lure new buyers into the housing market. I think this is going to happen sooner rather than later.

In the meantime, let's keep the excesses of the housing crunch in perspective. It's one sector of a $14 trillion economy, but by no means the biggest one. We will get through this, because 150 million people are still working and we have full employment, consumer spending remains healthy, 70 percent of Americans still own their own home, half of them outright.

Donald Lambro

Donald Lambro is chief political correspondent for The Washington Times.