What an UGLY week of economic reports:
- New home sales for July 276,000, which was the lowest sales number EVER on record and pushed inventory of new homes to 9.1 months.
- Existing home sales plunged by 27% (record drop) to 3.83 million and inventory exploded to 12.5% month supply.
- Durable goods (items that last for several years like TV’s and cars) orders were down this week, the largest decline since January 2009.
It looks like the Obama Tax Credit while good while it lasted, simply pushed forward buyers instead of creating them. The sugar high of the stimulus has worn off and has left us with a federal deficit that will be around for a LONG time…
However, I am hopeful that the smart investors and buyers recognize the best opportunities are often found at the most pessimistic time. To give us better perspective and some hope, I want to share this Time Magazine article passage from 1992:
“The US economy remains almost comatose. The slump already ranks as the longest period of sustained weakness since the Depression. The economy is staggering under many “structural” burdens, as opposed to familiar “cyclical” problems. The structural faults represent once-in-a-lifetime dislocations that will take years to work out. Among them: the job drought; the debt hangover; the banking collapse; the real estate depression; the health care cost explosion and the runaway federal deficit.”
Sound familiar? It’s amazing how that description sounds much like it was taken out of this month’s Time Magazine. We all know there was incredible growth and opportunity in the economy in the years after 1992. I’m confident history will repeat itself and give way to much better days ahead, which points to today as the time to search for opportunity.