So this week's $64-million question - that's $64,000 adjusted for inflation - is: Will the stock markets grab hold of a tree root and hang on? Or will the free fall off the cliff continue?
The Dow sank more than 500 points Thursday and Friday last week after investors decided the housing market was worse off than they imagined, and that rising borrowing costs would hurt consumers and companies. It was the worst week for the Dow and the S&P 500 since 2002 - when the movie A Beautiful Mind (about an economist, of all things) won the Academy Award for best picture.
The sliver of good news, I guess, is that while the Dow tanked, the government reported the U.S. economy grew faster in the second quarter than it has in a year.
Meet the bipolar economy.
The battle of opposites is under way in Florida, too. While the state unemployment rate remains below the nation's, the state's housing market has the consistency of our wetlands. The more you wander into it, the deeper you sink.
It's no secret that the housing malaise is infecting other industries. But the variety of those affected keeps growing. Here's a sampler in each company's own words from SEC filings filed within the past week or so:
- Car retailing giant AutoNation, parent of the AutoWay dealerships in the Tampa Bay area: "Results for the first three and six months of 2007 were adversely impacted by a decline in new vehicle sales especially in California and Florida, driven in part by continued weakness in the housing market. ... To the extent that we continue to see weakness in the housing market, we anticipate that our sales trends will be adversely impacted."
- Prominent area home builder Beazer Homes: "Most housing markets across the country continue to be characterized by an oversupply of both new and resale home inventory, reduced levels of consumer demand for new homes, and aggressive price competition among homebuilders. These factors together with a pronounced credit tightening in the mortgage markets ... are likely to lead to continued difficult market conditions," said CEO Ian McCarthy.
- Boat manufacturer Brunswick Corp.: "Higher interest rates, weak housing markets and higher prices for fuel, food and other essentials have continued to erode consumers' disposable income. Further, the depressed housing situation is most pronounced in Florida and California, which are two of the nation's largest boating markets," said CEO Dustan E. McCoy.
- Media General, parent of the Tampa Tribune: "Our second-quarter results mostly reflected a decrease in publishing division operating profit, driven primarily by a significant decline at the Tampa Tribune... " said CEO Marshall N. Morton. "Over the past few years, we saw significant growth in our Tampa operations, as the economy and market conditions in Florida outpaced many U.S. markets. Florida's economy, however, has dramatically reversed, driven by an adjustment in the housing market following several record-breaking years."
(This newspaper's not immune to tougher times, either - though we are locally owned and don't report to a corporate parent in Richmond, Va.)
The point? Plenty of businesses are feeling the squeeze on the wallet in their own ways - whether the Dow drops or not - brought on by housing's severe slump.
Robert Trigaux can be reached at email@example.com or (727) 893-8405.