Horrendous! Terrible! Shockingly disappointing! These are just some of the adjectives the financial press quoting the analysts, quoting the economists, quoting the experts used to describe last night's disappointing US housing data.

Latest figures from the National Association of Realtors has again proved the phrase "safe as houses" wrong -- as it had during America's housing meltdown of 2007-2008.

Horrendous! Terrible! Shockingly disappointing! Take a look at the stats and you'll arrive at the same conclusion - or worse, it may be enough to tick you over the double-dip camp.

US new home sales plummeted by 27 per cent in July - nearly doubly worse than expectations for a 15 per cent fall - to an annual rate of 3.83 million units - the lowest since record began 15 years ago.

Because of collapsing home sales, July figures show that it would now take 12.5 months - the longest in 11 years -- to clear the supply of existing houses, up from 8.9 months in June. The inventory of unsold homes increased by 2.5 per cent to 3.98 million units in July.

Worse, the shadow inventory of unsold homes is not included in this calculation. Shadow inventories are comprised of foreclosed homes that are not yet in the market or homes whose owners would like to offload but are waiting for conditions to improve. Some reports estimate shadow inventories of up to 7.3 million units. Now how long would it take to clear up all these stocks? Go figure.

We don't need a rocket science degree to know that to reduce or clear the number of unwanted homes prices have to fall, or for the Fed and the Obama administration to re-stimulate the housing sector or for the economy to grow strong enough to create jobs - or all of the above.

Because of the chicken and egg relationship of housing and the economy, the last option is probably doubtful. The weak housing market - and its linkages - would put downward pressure economic activity and on jobs and... on housing.

Ergo, we're left with further price declines and re-stimulation - or both -- as the only options.

The Fed is reportedly planning more quant easing - buying government bonds to bring mortgage rates down even lower. And according to Bloomberg, "the Obama administration will offer $1 billion in zero-interest loans to help homeowners who've lost income avoid foreclosure as part of $3 billion in additional aid targeting economically distressed areas."

What if? What if? Blame the anti-Keynesians for forcing the Fed and the government's hands for withdrawing the stimulus too soon. Ben Bernanke - a scholar of the Great Depression - knows this all too well.

History really has a tendency to repeat. But similar to the Great Depression, they've been pressured to withdraw at the first hint of growth rather than letting the juice flow until recovery becomes really, truly sustainable and inroads made on the jobs market. With sustainable growth, debts and deficits are easier to repay.

Now we're back to square one. Rinse. Wash. Repeat. Rinse. Wash. Repeat.