Today I'm listening to Bloomberg radio, and you would think that it is all sunshine and rainbows out on the street from the spin. The housing numbers were better than expected so everyone says things like this:
"The housing market has decisively turned for the better," said Lawrence Yun, NAR chief economist. "A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales."
"Home sales certainly beat expectations and obviously the market like that very much -- it's just further confirmation that the economy is out of a recession, and of course, that the housing market is certainly on the mend," says Peter Cardillo, chief market economist at Avalon Partners. "The big debate is how strong of a rebound are we looking at."
Stocks are up 1-2% today on the news.
But you're left with a few things to consider:
Home prices are still falling (just not as fast), reducing people's wealth and feelings of wealth, and prompting some with the ability to pay to leave the keys with the bank
Unemployment was still increasing as of last month, meaning people do not have jobs and for most without jobs, no income (not the Kennedys).
Mortgage default and delinquency rates are spreading and rising
70% of GDP is consumer spending - and roughly 16% of our population currently does not work (the real unemployment rate)
And of course, you've got that whole $1 trillion deficit spending thing going on and projected to go on indefinitely.
What is my point? Stash your cash. A 50% total gain in 5 months is crazy money.
of course, the market could shoot through 15,000 at this pace, what do I know.