Thursday, September 4, 2008
Auto sales have been dismal, no question. But on a seasonally adjusted basis they bounced quite a bit in August from pretty low levels. This is one more sign that we may have seen the worst of the economic news. Meanwhile the stock market is having a bad hair day as unemployment claims remained somewhat elevated and Bill Gross warned of a coming "financial tsunami" if the feds don't take extreme action to prevent further declines in home prices. Sounds like Gross will be voting for Obama, who has said that falling home prices violate an essential part of the American Dream. I personally don't see why the government should try to prop up home prices. Guaranteeing people against any loss associated with home ownership would be a sure-fire way to create another housing bubble that would inevitably have to burst. The news is not good, to be sure, but the warnings of worse to come are intense, and that may be another reason that we have seen the worst (i.e., it's always darkest before dawn).
Posted by Scott Grannis at 12:14 PM