SCANDAL: CBS News reported a late breaking story on July 31 of corruption at Home Depot involving a kickback scheme by four purchasing managers who allegedly accepted large sums of money to place certain flooring products in company stores. The three men and one woman, described as lower-level managers, were fired two weeks ago for their role in the scandal. They allegedly were paid millions of dollars by foreign vendors of tile and other flooring products to secure shelf space in stores of the worlds largest home improvement retailer. The situation was brought to the companys attention by an unidentified person, and it was looked into immediately. The four managers and the vendors were not identified either, though it was disclosed that the vendors were Asian. Home Depot reported $91 billion in sales last year and operates more than 2,000 stores.

HOW COME?: Consumer confidence exploded in July. In the just-concluded month it hit its highest level since the summer of 2001, soaring to 112.6, according to the Conference Board. I was surprised because it blatantly opposed the sentiments of most retailers in our industry. For months now, dealers have been bemoaning a drop in business, sluggish sales, consumer apathy. They blamed it on runaway gasoline prices, a sagging economy, consumer anxiety and an assortment of other excuses. But, delving deeper, I was more surprised to read this comment by Lynn Franco, director of consumer research for the Board: An improvement in business conditions and the job market have lifted consumers spirits in July. I find it strange that floor covering retailers dont realize how well theyre doing.

RATIONALE: Franco explained that consumers seem optimistic about the economy in the near future. Do you want to know why? Well, she says it reflects a decrease in the number of pessimists, rather than an increase in the number of optimists. I guess thats progress. You dont have to vote for me, just dont vote against me. Wins every time. Anyway, Franco added that the rebound in consumer confidence, which had slipped in June, suggests economic activity may gather a little momentum in the coming months. However, fewer consumers in July than in June said they plan to buy big-ticket items, like TV sets, clothes dryers or air conditioners, in the next six months. But more consumers do plan to purchase ranges and carpeting. Now, that will help our dealers rebound.

PARADOX: Figure this out. The number of existing homes for sale dropped again in June for the fourth consecutive month to 5.75 million. The median price of the homes sold rose 3.3% to $230,100. Sales decline, prices increase. It doesnt seem so, but thats a sound business phenomenon of supply and demand. While the number of sales fell both monthly and yearly in all regions of the country, housing prices rose in the Northeast, Midwest and south, but declined in the west. To round out the picture, demand for mortgage applications slid to its weakest levels in more than five months. Industry authorities, noting the decline, indicated that the distressed housing sector has yet to hit bottom. Applications to buy homes are unlikely to jump much any time soon, and loan approval could get even tougher, according to some analysts. So the housing market is still under siege.

GETTING AHEAD: I had dinner with an industry executive last week and he said something that impressed me: All junior executives should know that if they work hard 10 hours a day, every day, they could be promoted to senior executive so that they can work hard for 14 hours a day.