Looking Past the Headlines and Through the Political Conventions for an Economic Antibiotic

Why You Care notes that CNNMoney.com has two stories posted today that are really the same story. The first headline is Mortgage Applications Hit a Six Year Low, while the second one promises Falling Home Prices: The Silver Lining. What's going on here is simple supply and demand. In fact as bad news as that might be for the person who is trying to hang on to their property because their mortgage has reset, it is equally good news for those that saved their pennies and waited for the market to cool off before jumping in. We've said repeatedly whether you want land or stocks of those who are involved in land/lending, the real estate after Christmas sale continues.

That is likely intuitive to you. Thus, we suggest instead spending your time today with the New York Times editorial which is interesting on a number of levels.

Here's why you care: The Times editorial raises the caution that we raised yesterday by linking to a Wall Street Journal story regarding 100 banks on a government watch list due to their financial health. In other words, there's more to come. The Times also raises the issue we raised Monday which is that economic solutions are easily paved over in election year rhetoric. What the Times does that we didn't do is call for immediate action by Congress to begin work on another stimulus package. That is indeed interesting. What should be in it? Should the government wait? Should other options be explored instead or at least simultaneously? That is fertile ground for debate.

It would be terrific if the next few weeks of political convention coverage became an incubator for ideas. Whether you agree with the Times' suggestions or not, reading this will help you understand the campaign slogans over the next few weeks.