Last week, we saw fawning Wall Street mistakenly pointing to Wal-Mart's
Want a better economic bellwether? Take a look at today's announcement from the shamefully self-anointed "America's Builder," D.R. Horton
Unfortunately, there's proof in today's release that things can get much uglier. Cancellation rates for the fourth quarter were 48%. I say again, 48%. When nearly half your sales fall through, what does that say about the American consumer?
How about, "They were overextended house-flippers and now that they can't afford reasonable mortgages, they can't afford homes." The wild cards are these: What portion of consumer discretionary spending was based on the fiction that home prices always go up? How much money do American consumers have when they can't extract "equity" from their houses?
My guess is "not enough." There's a reason Citigroup
When an economy depends so heavily, as ours has, on an inflating asset bubble, companies like Horton and the other homebuilders serve as canaries in the coal mine. They're wheezing pretty hard about now.