Negative economic reports...yeah but what if?

---Housing starts declined again, which means fewer jobs in construction, more financed land lying fallow, and pressure on homebuilding companies. This is certainly not positive news but what if housing starts were rising while inventories of unsold homes are at the highest levels since the early '90's.
---Prices on houses sold declined again to over 10% since January '07, as price insensitive foreclosure sales grew in the lower end of the market. In the aggregate this leads to a decrease in household wealth and on the margin puts more mortgage holders in jeopardy of funding negative equity. But what if financial institutions were not actively clearing foreclosure inventories, taking charges to do so, and attracting investors at bargain prices to reinvest in neighborhoods.
---Consumer confidence numbers from the Conference Board are way down, in some respects at levels not seen since the 1970's. This may be unnerving but what if, considering the high levels of consumer debt and the negative savings rate, consumer confidence was staying steady or rising reflecting an intention to keep spending and charging at pre-downturn levels.
---Expectations of wage increases in the next six months fell to a level not seen in decades, but what if companies big and small were raising wages in the face of declining revenues and sticky pricing ability.

There's really no good news here but much of the bad news, if it doesn't get too dire, is necessary and ultimately constructive as a way to work out of this economic hole.