Builder - August 2008 - (Page 15)

EDITOR’SNOTES The Long Haul In our desire for good news, we may be failing to focus on the things we can control. T hanks to online news, electronic newsletters, e-mail alerts, and the blogosphere, the housing recession and the current state of the economy are perhaps the most closely inspected and thoroughly dissected subjects ever to take hold of the American people. Like Talmudic scholars, known for their painstaking search for true understanding of the meaning conversations, everywhere: at the dinner table, at work, at parties, among colleagues, friends, family members, complete strangers. Lately, most of these discussions center around when the bottom of the housing downturn might occur. Various (and otherwise smart) people declared the bottom was upon us starting back in 2006. We’ve been looking for it for so long now that many think it must be imminent, regardless of whether the indicators warrant it or not. And what about those indicators? Even economists who’ve been through this a couple of times and were able to discern a pattern from past downturns that might portend a recovery say this time is different. And they’re right. The U.S. economy is different; it’s far more dependent on foreign of sacred texts, we parse every sentence issued by the Federal Reserve Board, measure the ups and downs of each individual econometric statistic and then weigh them against other numbers both recent and historical, contemplate the nuances contained in the statements of economists and Wall Street analysts, mull the signiﬁcance of who’s buying what, where, and for how much, and analyze how consumers are “feeling” about buying almost anything. The feeding frenzy that surrounds the release of construction numbers would take down entire forests if all of the articles written about them were still being inked onto newsprint. An extreme example occurred when the housing starts and permits numbers for June were released by the U.S. Census Bureau in mid-July. A few reporters eager to get the jump on everyone else wrote “just the facts”—that both starts and permits were up for the month, by 9.1 percent and 11.6 percent, respectively. Well, that would be news. Unfortunately, as the Census Bureau indicated plainly at the bottom of its press release—and most reporters picked up on—the uptick was due to a new set of construction codes in New York City that encouraged a rush for permits for multifamily residential buildings. By removing the New York numbers, starts were, in fact, down by 4.0 percent from May. A whole new cycle of stories then appeared, calling out the misleading headlines of others and explaining the anomaly yet again. But talking about the state of the housing industry is not just the province of professional observers. It’s the topic of endless W W W.BUILDERONLINE.COM money and goods and the actions of an activist central bank. U.S. businesses are different; they have accrual-based accounted themselves into a complete lack of ﬂuidity. And we the people are different; we have been improvident and we have no actual savings to bail ourselves out of jams of our own making. All of our “wealth” is tied up in our rapidly depreciating assets. We have leveraged ourselves into a colossal mess. So we search continually for signs that things are looking up. We look for the bottom because it will mean we can breathe again, that we can go back to doing things the way we were before. But the fact is, we won’t know when the bottom was until we’ve passed it by and we can see it in the rearview mirror. And besides, the search for bottoms is a day trader’s game. It’s not for people who are in it for the long haul. As someone responsible for your company’s continued existence, you cannot allow the hope that things are—maybe, possibly, surely—getting better to distract you from the business at hand. And that business is, pure and simple, tending to your business. Doing whatever it takes to keep your business viable, regardless of what happens on Wall Street, regardless of whether the Fed raises or lowers interest rates, and regardless of which housing rescue plan Congress comes up with. Keep an eye on the news and the numbers, sure, but use them for planning purposes. If your business is not in the best shape it can be when the recovery does occur, you’ll be overtaken by those that are. james kegley Denise Dersin Editor in Chief e-mail: ddersin@hanleywood.com augus t 2 0 08 B U I LD E R ■ 15 http://www.builderonline.com

Table of Contents Feed for the Digital Edition of Builder - August 2008

Builder - August 2008 Contents Editor’s Notes Bmail Book It Inside Story Success Stories Top Shelf Green House Sales Strategies Products Digital Home National Beat Seiders' Economy Trade Secrets: Staying Afloat Sign of the Times Missing Links Ad Index Last Word

Builder - August 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.