Housing in crisis, government revenues off, gasoline up 20 cents a gallon at least – is there anything good to talk about …?

Implications: The major market home builders are now dumping product nationwide at any cost to recover cash before they commit the cardinal sin of not being able to pay current bills. The financial institutions are flush with foreclosures and more homes are coming their way. Homeowners are trying to get out from under payments that have been stretched to cover double digit increases recently in fuel costs, healthcare, education, food and almost everything else. There now is no secondary home loan market and there may soon be no portfolio market either. Retail sales are off or soon to be off depending on your point of view as Chinese imports are ever more costly. Logistics buildings will be in greater availability as less warehousing is needed and more goods are manufactured for domestic consumption on the mainland. Offices are dumping real estate tenants and now there will be an exodus of those serving the import market.

Analysis:

Now to the good news – things are getting cheap for foreign buyers in the U.S. We are exporting a ton of every good and service now made cheap to the economies of the world by the weak dollar. Our financial services system is unparalleled in the world. We’re setting up call centers in every U.S. backwater to service first the U.S. and then maybe offshore markets. Can you imagine the Eastern Indian family sitting down to a dinner interrupted by a telemarketer from East Podunk? Our infrastructure needs are immense and critical and we now must fix them or turn into a 3^rd world economy. We have a Navy that will hit 150 combatants soon from the current 350 + if we don’t step up deliveries from the 5 we now commission annually. Our Air Force may be overwhelmed by our enemies if we don’t step up the pace. Our Marines and Army are state of the art, but more are needed with different future skills.

I’m not going to miss the housing business as it is presently constructed any more than I miss American Motors, Hudson, Plymouth, W.T Grant, the dozens of local department stores or the thousands of builders that preceded the current crop. In fact, I’m glad to get away from the wasted effort to make this market more than it deserved until it now has capacity that overcooks the market just like Detroit. Those who lose capital will lick their wounds and retreat to their future pursuits and a new breed will operate the business. No big deal as long as we let it go the free market way and get on with the next viable business sector.

I bet we do it the old fashioned way and good times will return when we get on to the next great pursuit. The sooner the better, I say.