Are Things Better or Worse

At a Glance:

Housing:

New home sales collapsed 8.1% in June to a 590k annualized unit rate missing the expected 655k consensus number.  In addition, cancelled sells in May came in at 54,000.  Talk about cold feet.  According to Rosenburg research “Average house prices plunged 11.1% and the only other time in this 47- year data series we saw this was in … August 2008.  With the inventory excess at the highest in twelve years, rest assured that more residential real estate deflation is coming.”

“Mortgage applications declined for the fourth consecutive week to the lowest level of activity since February 2000. Increased economic uncertainty and prevalent affordability challenges are dissuading households from entering the market, leading to declining purchase activity that is close to lows last seen at the onset of the pandemic,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.

Recession and Repentance:

Recessions in my view are like the word Repentance in a gospel context.  Most people view the R word with disdain and negative feelings.  In reality, repentance/ recessions can be good things as they weed out unnecessary excesses.  That’s not to say we don’t feel any pain in the process.  Its not an all purging but instead very small changes.  Recessions bring small changes in peoples spending habits to where they focus on needs rather than wants.  Inflation has been helping in this regard, and we might catch ourselves eating out less, driving less, flying less.  The point is we do less we buy less.  As we all know sometimes less is more.  If you’re not religiously inclined perhaps the other R word revitalize would be a good comparison instead. 

The Big Question:

There's not much new perspective on current events I can offer. Markets are still locked in a volatile pattern and will probably continue that way for the foreseeable future. We're watching the data closely.

Today, I have a big-picture question for you if you're interested.

While absorbing the recent news, we can be forgiven for thinking that the world is going off the rails.  There's a global pandemic, worrying inflation, atrocities in Ukraine, and "unprecedented" developments everywhere.  A fear arises that it's all getting worse, somehow.  If we feel that way, we're not alone. A lot of people feel that way.¹

So, let's ask the big question: Is the world getting worse? Or is it actually getting better?

Honestly, I'm not sure that question can really be answered.  Why?  I imagine that you've heard the statistics of how far the world has come in terms of measurable progress (it's pretty amazing).  But, though it might be nice to know that global poverty is down or that the rate of people killing people is historically low, that's not really helpful when you're getting gouged at the pump, your kid is home sick, and you're seeing images of ruined lives on the news.

For the first time in human history, we can instantly communicate with folks thousands of miles away and see what they're doing.  We have access to real-time news from everywhere in the world, and because of how the news is constructed, it's nearly always the bad stuff that gets our attention.  Most of us spend hours each day consuming media of one kind or another.²  The question we ask each other has changed from "how are things in your neck of the woods" to "have you heard about {crisis of the moment}?"

We're human. We live our lives one day at a time inside a fairly small bubble. And that bubble is easily influenced by daily hassles, media filters, and our own outlook on the world.

So, what do we do? How do we combat the existential dread and pessimism?  I think this is a serious and important question, by the way.  We need to know how to put things into perspective, for ourselves, for the children and young people who look to us for guidance, and for our loved ones who might need a boost.

A Few Ideas:

• Invest time in relationships with the people we love.
• Be selective in the news and media we consume.
• Follow our faith if we have one.
• Look for beautiful moments and treat them with awe (like that little girl at the fair in the photo above).
• Make art, make music, and build something beautiful.
• Volunteer, donate, and be the change we want to see.

What do you think? Any advice for keeping it positive?

I'll close by asking you: How are you doing? What's going on in your neck of the woods?

Sean West, Wealth Management Advisor/ CFP®

Disclosure

This blog reflects the personal opinions, viewpoints and analyses of the White Cloud Wealth Management employees providing such comments, and should not be regarded as a description of advisory services provided by White Cloud Wealth Management. The views reflected in the blog are subject to change at any time without notice. Nothing in this material constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security.