More Bad News

As if to prove my point from yesterday, this morning's Dallas Morning News has a blaring headline that existing home sales fell 28%!

However, when you read the article, near the end, you see that this is actually not the case. Home sales did not fall 28%. They are off 28% from the same February period a year ago.

In terms of change in sales volume, they are about the same as they were last month, with a little uptick. Moreover, the inventory of unsold homes is - at their present pace of sales - about a 6 month supply. Realtors quoted in this same story said that is "about right" and is consistent with the market even in the best of times.

So what's the real piece of news to be reported here? A more truthful headline might be something like "Home Sales Remain Flat: Off 28% from Last Year's Volume." What do you suppose the Dallas Morning News intends to accomplish with their inaccurate, misleading and most of all - depressing and discouraging reporting? Do they really think this will help them sell more papers and salvage their own financial butts?

I live in a pretty average neighborhood. The house across the street from me went on the market just before Christmas and sold in one week. One street over, a house on the corner has been empty for a couple of months and just sold last week. The new owners just moved in. We may not be enjoying a booming period of real estate sales. However, the real estate market is far from dead.

Houses are still selling. In some pockets, sales are up. Foreclosure volume is down. Mortgage applications are up. Inflation is not even a concern. Even the stock market rallied yesterday. Come on, news media - get your act together and provide society with something truly worthwhile!

Bad News

I don't know about you, but I've had about enough of the bad news. Every morning I walk out into the darkness to pick up my subscription to the Dallas Morning News. I bring in the paper, take it out of the bag and the first thing I see is some sensationalist, blaring headline of doom and gloom. Moronically, it is often not even something bad that happened --- but rather just some one's prediction that Texas will lose more jobs, bankruptcies will climb, America will get deeper in debt, etc.

Why is it that the newspapers seem to revel in blaring bad news at us? Do they think this is helpful reporting? We are certain that it is not factual reporting. Just what is the purpose of a newspaper? To influence public opinion? To discourage the masses? To entertain? To threaten?

As you might guess, I'm not one that readily settles for status quo. In my old age, I've learned that the truth isn't usually apparent or even readily accessible. Sometimes it takes a little digging to get under the story that's being told to find out what really is.

There is a great deal of talk about the ailing auto industry. The U.S. auto makers are nearly bankrupt. Auto sales have slumped beyond any one's imagination. That could well be the case. But other things are the case as well. And they are relevant to this story.

There are something like 245 million automobiles in America right now. At the current pace of new vehicle sales, it will take more than 27 years to replace that fleet of vehicles. Now seriously, how many of us expect our current vehicle(s) to last until they are more than 27 years old? Common sense would tell you something is going to have to happen in the auto industry. Pent up demand is being created right now!

Then there are the home building and real estate industries. Sales have slumped. Home values have fallen. (Some would say it's simply a correction in what were unrealistically inflated home prices in the first place!) So that market looks soft. But is it really possible that the home builders have no future?

The U.S. Immigration Service projects that, based on current immigration levels, the population of the U.S. will double in the next 42 years. Just where do you suppose all of these people will live? Surely there is not sufficient housing available to them in the U.S. right now. Demand for housing in the U.S. is arriving on our shores every day!

Finally, let's consider the stock market. Yes, it has lost half its value in the past year or two. We've all lost money ... on paper. Those of us who sold our stocks actually realized those losses in hard dollars - with no chance of getting them back. But of course those of us who haven't sold can reap the benefits if and when the stock goes back up.

Right after the Great Depression, the stock market soared 75% in just a year or two. It has been said that what goes down must go up. It would seem that even a bear market will turn bullish somewhere along the line.

My point here is that the sky is certainly not falling. I'll be the first one to admit that things are difficult and we are in the most dire straits many of us have seen in our lifetimes. However, there is reason to be optimistic about the future. General Motors or Chrysler may disappear from the American landscape. Home builders may go out of business. Existing home sales may languish for a while. And the stock market could take a while to recover. But folks, the evidence is clear. America will still need cars - and someone has to build and sell them. America will still need homes - and someone has to build and sell them. And American companies will still need to be owned by someone.

Let's try to overlook the blaring noise from the foolish news media these days. While they may be reporting the news, they are clearly not telling us the whole story!