"Facts are Stubborn Things" - John Adams

It seems this economy takes one-step forward with a new government program, and two-steps back with the expiration of the same program. Case in point, housing. For several months, the government granted an $8,000 credit for home buyers as an incentive. Contrary to expectations, this housing program cannibalized future purchases, much the same way as cash-for-clunkers. Now, in the most recent announcements, we see homebuilder’s attitudes approaching historic lows and homebuyers nowhere to be seen.

Housing and jobs are the linchpins which are necessary to create a strong economy. As both of them continue to erode, the strength of our economy will continue to be drained. This makes a dramatically lower stock market no surprise.

Till next time,

Bill


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