Several weeks ago I read an interesting article on this site about why the housing crisis and credit crunch was being overblown. Why? Because unemployment is still very low, and the US and world economy is fundamentally sound. Despite what everyone would have you believe, it is still the consumer who drives the market and not the other way around.
Sure, not all is great on consumer-land, but it isn’t as gloomy as the pundits would have you believe. They see catastrophe when there’s a down day and nirvana when the market is doing okay.
Today, the government reported a larger-than-expected increase in new home sales and big jump in durable goods orders. In other words, consumers are still spending, the economy isn’t that bad, and the housing market, although not as strong as it was, is still chugging along. That wounds pretty different from last week, when the sky was falling and the global economic system was in jeopardy.
So how do you filter the hype? Easy, look at yourself, your neighbors, your family and ask yourself how everyone is doing. Are you losing your home? Are your friends? Are you still able to afford that trip to Disney and buy a new dish washer? Because that’s where the real decisions will be made about this economy; not in the ivory towers of Wall Street.
