HOUSING LIES

[unlawflcombatnt]

HOUSING LIES

Again, the government has downwardly revised previously posted statistics. For the 2nd month in a row, they have downwardly revised the previously posted "New Home Sales " numbers. Both times, this allowed them to claim that new home sales increased for the current month, despite the current number actually being lower than that posted the preceeding month. This was accomplished by simple "revisionist history."

The new home sales for March were initially reported to have increased to an annual sales rate of 1.431 million/year. This was gleefully reported as "the highest rate ever." Following this, the April new home sales were reported to have INCREASED to 1.316 million/year. Increased?? Yes, because they downwardly revised the previously reported March home sales to 1.313 million/year.

Now the May new home sales figures are in. Again, they have INCREASED to 1.298 million/year, "the second highest level in history." Increased?? Yes, again they downwardly revised the previous numbers given for April, from 1.316 million to 1.271 million/year.

Apparently, the Bush administration has some serious "counting" problems. They couldn't just be deliberately altering the numbers, could they? They've never altered the facts to fit their agenda, have they?

They did begrudgingly admit, however, that "the median price of the homes sold did fall sharply...." The real estate speculators must be choking over that revelation. Sometimes the truth accidentally slips out. Maybe they can revise it later. Creating facts, not simply reporting them, is this administration's forte.

The link for the AP news story, posted on Yahoo, is as follows:

http://news.yahoo.com/s/ap/20050624/ap_on_bi_go_ec_fi/economy;_ylt=AuUqgACfPpHb94NvkmVF2FGs0NUE;_ylu=X3oDMTA3bGI2aDNqBHNlYwM3NDk-

The following are links to the respective Economic Calendars that show the revisions made:
for this week: http://biz.yahoo.com/c/e.html

for the week of 5/21: http://biz.yahoo.com/c/ec/200521.html

unlawflcombatnt

EconomicPopulistCommentary

http://www.unlawflcombatnt.blogspot.com/

______________________
Capitalism cannot function without consumer income. The benefits of capital investment are limited by consumers' ability to buy the products of capital investment.

There must be balance between the "means of consumption" and the "means of production."

[mrdmk]

1. Appears to worst than just the housing market

Leading indicators have been down for the last Six Months

<snip>
The Recession Alarm has officially been sounded. According to Briefing.com, "The recession alarms go off when the cumulative 6 month decline exceeds 1.0% amid a string of 3 or more consecutive monthly declines..." "With a 5th consecutive decline and a cumulative 6-month decline exceeding -1.0% the index suggests an economic contraction..." There has actually been a 6 month decline of -1.4%.
Note: economic "contraction" = RECESSION.

It is of interest to note, however, that Briefing.com is calling this a "false alarm." That's what financial experts always claim, when their own criteria result in a negative finding. (There must be some reason our criteria led to an incorrect conclusion, because we just don't want to accept it. And we don't want the public to accept it, either, because they'll stop spending and investing.)
<end of snip>

link
http://www.unlawflcombatnt.blogspot.com/



I hope everybody has some money in their piggy bank.

[unlawflcombatnt]

7. Thanks

Mrdmk,

Thanks for plugging my blog. Initially the "Leading Indicators" graph showed up here, but I can't seem to get it to show up. I'll repost the link to the graph you posted in your letter. I'm not sure which of these links will work best, so it may be necessary to try both of them. If I can stick the graph in here directly, I'll do that.

http://www.briefing.com/Silver/Calendars/EconomicReleases/leader.htm

http://www.briefing.com/GeneralContent/Active/PrintPage/PrintPage.aspx?PageId=217

It appears the above links aren't working at present. Briefing.com may be down for maintenance. I'll try to load the images a different way -- through my Yahoo Briefcase

?bf8YdvCBhqULcqQQ

?bf8YdvCBx1TBuBRc

[spooky3]

2. Interesting. However, I think there's another story in the numbers.

The numbers show that sales were much higher in the midwest than in the much more expensive northeast or west. That may account for the decrease in the average home sale price in this particular month. Without knowing this it's hard to interpret what the #s say about speculation. So why are the #s of houses sold going up in the midwest and down in the west or northeast? One possibility: in my overheated market (DC area), the main reason more houses haven't sold is that people can't afford to buy a move-up home, so they don't put their current homes on the market and stay put. As a result there is a very limited stock of houses for sale. The only ones that stay on the market long are the ones that are overpriced and/or very expensive.

[unlawflcombatnt]

5. Home Speculation

I don't what's happening in the midwest, but home speculation (or "investment" buying, as it's tactfully called) is rampant in California. I know many people who own 2 or more homes. A San Diego real estate agent recently wrote an article stating that 3/4 of homes sold now were "investment" homes. These "investors" have artificially increased the demand for homes and driven prices through the ceiling.

I think we have created an artificially high demand for homes by dropping interest rates, along with the latest creative financing schemes. The government is doing its very best to talk up the housing market as well. But prices dropped this month. They're going to have a hard time spinning that.

unlawflcombatnt

[spooky3]

6. I agree there's lots of speculation; there is here too, but

I don't see any reduction in it, and there is NO reduction in prices. That's why I am proposing that other things may be going on in that aren't fully clear from these numbers.

I am just saying that I'd like to know some other numbers besides the ones reported, to have a better understanding of these.

[unlawflcombatnt]

8. Price Reduction

I'd like to see some other numbers as well. There was one interesting point mentioned in that article. The median home price had declined $20,000 since February, 2005.

From the Yahoo News story: "The median, or mid-point, price for sales last month fell by 6.5 percent to $217,000... New home prices set an all-time high of $237,300 in February." Again, the link for this story is: http://news.yahoo.com/s/ap/20050624/ap_on_bi_go_ec_fi/economy;_ylt=AuUqgACfPpHb94NvkmVF2FGs0NUE;_ylu=X3oDMTA3bGI2aDNqBHNlYwM3NDk-


To me this means that median home equity has dropped about $20,000, and available for home equity has declined as well. This reduces the money available for home equity loans, and as such, the money available for consumers to spend. Thus, it most likely will decrease consumer spending, especially if the trend continues.

unlawflcombatnt

EconomicPopulistCommentary

http://www.unlawflcombatnt.blogspot.com/

______________________
Capitalism cannot function without consumer income. The benefits of capital investment are limited by consumers' ability to buy the products of capital investment.

There must be balance between the "means of consumption" and the "means of production."

[spooky3]

10. Yes,but as I said in my earlier post, this could be the result

of more houses sold in the lower cost midwest, not price reductions in the northeast and west. If that's the ONLY cause, then there has been no loss in equity, but rather, people are sitting on expensive houses in expensive parts of the country because they don't want to/can't move, and people needing houses there are buying less expensive houses or condos, or renting.

As you say, we need more numbers and analysis. And it would be helpful to see this over time.

[unlawflcombatnt]

21. Housing Speculator Mobility

I just wanted to add that many housing speculators are very mobile. They literally travel from 1 housing market to another. If their current market is cooling, they sell and try to re-invest in a hotter market. For example, if the Las Vegas market cools, and the Miami market is hot, they'll leave Las Vegas and go to Miami and buy homes there. And they'll repeat the process when Miami starts cooling.

unlawflcombatnt
EconomicPopulistCommentary

___________
The economy needs balance between the "means of production" & "means of consumption."

[spooky3]

22. I'm aware of this but the point is, no one can tell just from these

numbers alone exactly what is accounting for what.

[newswolf56]

3. It is my impression there is increasing evidence...

...the Bush Administration is lying about many things: all governments lie, but this is unprecedented across-the-board application of the Josef Goebbels doctrine of governance. My impression is bolstered by my own (journalism related) contacts with the federal bureaucracy. Indeed I would like to see some investigative reporter (with the means to pay for the requisite telephone bills and computer time) take up this story -- for story it is -- and disclose how the administration is censoring and/or distorting information at virtually every level, from economic data to health statistics, from census facts to global climate-change numbers, etc. ad infinitum. Alas, it won't happen: folks who have the inclination don't have the money, and the monopolist media's only intent is to continue deluding us by feeding us "all-Michael-Jackson-all-the-time" bread and circuses.

[buzzard]

4. I couldn't agree with you more someone needs to do the

investigative reporting that use to be the norm, it seems most journalists have become lazy and complacent and instead of reporting offer opinions rather than facts.

[SpiralHawk]

9. BushCo = Propoganda

Doublethink
Doublespeak
Doubleplusungood
BushCo lies

[unlawflcombatnt]

11. The Bush Ministry of Propaganda

I'd like to call it the Bush propaganda machine, or the Department of Misinformation. At least we should rename the Dept. of Commerce as the Dept. of Commercials.

Did you know that 34% of Americans think we are in a Recession right now? This comes from the Rasmussen poll.
http://www.rasmussenreports.com/Bush_Job_Approval.htm


unlawflcombatnt

EconomicPopulistCommentary

http://www.unlawflcombatnt.blogspot.com/

______________________
Capitalism cannot function without consumer income. The benefits of capital investment are limited by consumers' ability to buy the products of capital investment.

There must be balance between the "means of consumption" and the "means of production."

[Auntie Bush]

23. They don't even offer opinions anymore. They just repeat

what the White House tells them to say. No 4th Estate what so ever!

[unlawflcombatnt]

24. Wesley Clark

You're the 2nd person I've seen advocating Wesley Clark. Can you tell me more about him? In particular, what might his economic policies would be? I hope he's not a free-trader.

unlawflcombatnt
EconomicPopulistCommentary

___________
The economy needs balance between the "means of production" & "means of consumption."

[1932]

12. About three years ago, I read an article that said that the majority of

interagency communication in DC was about keeping the real estate market going -- the entire federal government apparatus was enaged in a coordinated effort to make sure that real estate prices stayed up, since that was the only thing that was keeping the economy from tanking. I don't remember if the article made the following point: it didn't sound like they were going to be able to keep all the balls in the air forever.

[unlawflcombatnt]

13. Very Interesting

Not only is that interesting, it's very believable.

The latest on real estate came from a BusinessWeek online article posted at Yahoo:

http://news.yahoo.com/s/bw/20050627/bs_bw/nf200506245186db081/nc:1203;_ylt=Aje7ftUWrB8BEYk_QZtLFyDv5rEF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

The salient part of the story shows that the Housing industry is showing signs of decline. The Mortgage Bankers Association's purchase index for the week of June 17th declined sharpyly to 479.4, down from 529.3 in the week of June 10th. The MBA's refinancing index also decreased to 257.5 for the week of June 17th. This was a 39 point decrease from the previous week's 296.7


unlawflcombatnt

EconomicPopulistCommentary

http://www.unlawflcombatnt.blogspot.com/

______________________
Capitalism cannot function without consumer income. The benefits of capital investment are limited by consumers' ability to buy the products of capital investment.

There must be balance between the "means of consumption" and the "means of production."

[unlawflcombatnt]

14. Housing Lies - Supplement

Housing Lies - Supplement

Median home prices were $237,000 in February 2005. So May's median home price is almost 10% lower at $217,000. Of course, maybe these numbers will be revised as well.

May's decline to $217,000 is a drop from $232,000 in April is a HUGE monthly decrease. This is a 6% price decline in 1 month. In addition there was a HUGE drop in the Mortgage Bankers' Association purchase index. That index dropped from 529.3 for the week of June 10th, to 479.4 for the week of June 17th. That's a 9% decrease in one week.

This comes from the BusinessWeek/Yahoo News story from 6/27/05 at:
http://news.yahoo.com/s/bw/20050627...HNlYwMlJVRPUCUl

I'd say the housing bubble is on the verge of bursting, if it isn't a bursting already.

If long-term interest rates ever start rising, the housing bubble isn't just going to pop, it's going to explode.


unlawflcombatnt

EconomicPopulistCommentary

http://www.unlawflcombatnt.blogspot.com/

_____________________
Capitalism cannot function without consumer income. The benefits of capital investment are limited by consumers' ability to buy the products of capital investment.

There must be balance between the "means of consumption" and the "means of production."

[unlawflcombatnt]

15. Mortgage Applications Also Decreased

Home mortgage applications fell for the 2nd week in a row. This occurred in spite of a 15-month low in 30-year mortgage rates.

The Mortgage Bankers Association has stated a decrease in mortgage application activity of 1.1% for the week of June 24th. This follows the previous week's decline of a whopping 11.3%.

The above information comes from a 6/29/05 Reuters-Yahoo News article at: http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-06-29T113340Z_01_N10103329_RTRIDST_0_ECONOMY-MORTGAGES-UPDATE-1.XML

unlawflcombatnt

EconomicPopulistCommentary

http://www.unlawflcombatnt.blogspot.com /

______________________
Capitalism cannot function without consumer income. The benefits of capital investment are limited by consumers' ability to buy the products of capital investment.

There must be balance between the "means of consumption" and the "means of production."

[kineneb]

16. Observation from my office

I work for a Chamber of Commerce in NorCal, and I seem to have had fewer requests for relocation packets than during the winter. I just thought it was a curious thing. I will go back and check the amount of requests for last year, just for fun.

Being out in the country means the bubble will last slightly longer, since our prices started much lower than in the urban areas. But I have been waiting for something; sort of like the witches' scene from Macbeth:"By the prickling of my thumbs, something wicked this way comes."

[PsycheCC]

17. Yes, It Is Something Wicked...

LOVE YOUR QUOTE! And like Macbeth, many today have perhaps waded too far into trouble in pursuit of their dream. Those witches with their bubbling cauldron created something of an irresistible temptation for Macbeth. While Macbeth overreached grabbing for his crown, we may be overreaching with our "creative financing," like interest only loans, grabbing for our dream homes.

But when the cauldron stops bubbling, or the "froth" subsides, how many will lose their overvalued homes, unable to make the payments in the wake of expected interest rate hikes? Then the forrest truly will have come to the castle, and the end will be at hand. Perhaps then many will feel as Macbeth did, that "Life is a tale told by idiots, full of sound and fury, signifying nothing." :(

[PsycheCC]

18. What, no Shakespeare fans?

Well, it's a great post whether or not you like the Macbeth analogy. :(

[unlawflcombatnt]

19. Excellent Analogy

You're mirroring Alan Greenspan and his housing market "froth." I'm not a literary type, but I can follow the relationship to overvalued homes.

[PsycheCC]

20. Thanks

Thanks Unlawful. You're very kind. I really do see interesting analogies between classic literature and current life. That's why they call them "classics" really, because they stand the test of time, remaining relevant as decades and centuries pass.

One universal truth of such literature is that people will be corrupted by greed for wealth and power. In their pursuit, people inflict the worst kind of suffering on the innocent.

All one need do is look to the White House, Congress, and the Courts to see such corruption. The stories are almost endless. The "masses" go along as best we can, often unaware our role as pawns in the game, but we do suffer even as they gain. And losing one's home is a perfect example of that suffering.