Tuesday, June 16, 2009

Sick of the Spin

Folks, I know being a card carrying member of the alternative media likely makes me biased. But I don't know how to explain the below other than simply atrocious financial journalism with at least an attempt at maliciousness via a misrepresentation of information.

Housing start numbers were released for the US today and there was really very little to report either way. But Yahoo took matters into its own hands:

The full text of the article follows:

WASHINGTON (AP) -- Construction of new homes jumped in May by the largest amount in three months, an encouraging sign that the nation's deep housing recession was beginning to bottom out.

The Commerce Department said Tuesday that construction of new homes and apartments jumped 17.2 percent last month to a seasonally adjusted annual rate of 532,000 units.

That was better than the 500,000-unit pace that economists had expected and came after construction fell in April to a record low of 454,000 units.

In another encouraging sign, applications for building permits, seen as a good indicator of future activity, rose 4 percent in May to an annual rate of 518,000 units.

The better-than-expected rebound in construction was the latest sign that the prolonged slump in housing is coming to an end, which would be good news for the broader economy.

The current recession -- the longest since the Great Depression -- was triggered by a collapse in the housing market that led to soaring loan losses and a banking system crisis. A healthy home market is needed to support an economic recovery.

President Barack Obama is scheduled to unveil on Wednesday the administration's plan to overhaul financial regulation in an effort to crack down on the lending abuses that triggered the most severe upheaval in the nation's financial system in seven decades.

Even with the encouraging news, analysts don't expect a quick rebound in housing, since the economy is still shedding jobs and home prices are falling in many places, making people hesitant to commit to buying a new home.

Many economists say home construction likely will stop falling in the current quarter but any sustained rebound isn't expected to take hold until next spring.

That's partly due to the huge overhang of unsold homes and a record wave of mortgage foreclosures dumping more unsold homes on the market.

The 17.2 percent rise in housing construction for May still left activity 45.2 percent below where it was a year ago.

The jump reflected a 7.5 percent rise in construction of single-family homes. Construction of multifamily units rose 61.7 percent in May to an annual rate of 131,000 units. This volatile part of the market plunged 49.4 percent in April.

Minuets later, Calculated Risk reports:

Housing Starts May

Total housing starts were at 532 thousand (SAAR) in May, rebounding from the all time record low in April of 454 thousand. The previous record low was 488 thousand in January (the lowest level since the Census Bureau began tracking housing starts in 1959).

Single-family starts were at 401 thousand (SAAR) in May; above the record low in January and February (357 thousand) and above 400 thousand for the first time since last November.

Permits for single-family units were 408 thousand in May, suggesting single-family starts will remain at about the same level in June.

Here is the Census Bureau report on housing Permits, Starts and Completions.

Building Permits:
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 518,000. This is 4.0 percent (±1.7%) above the revised April rate of 498,000, but is 47.0 percent (±2.1%) below the May 2008estimate of 978,000.

Single-family authorizations in May were at a rate of 408,000; this is 7.9 percent (±1.5%) above the revised April figure of 378,000.

Housing Starts:
Privately-owned housing starts in May were at a seasonally adjusted annual rate of 532,000. This is 17.2 percent (±14.4%) above the revised April estimate of 454,000, but is 45.2 percent (±5.8%) below the May 2008 rate of 971,000.

Single-family housing starts in May were at a rate of 401,000; this is 7.5 percent (±14.2%)* above the revised April figure of 373,000.

Housing Completions:
Privately-owned housing completions in May were at a seasonally adjusted annual rate of 811,000. This is 3.3 percent (±20.6%)* below the revised April estimate of 839,000 and is 28.8 percent (±11.1%) below the May 2008 rate of 1,139,000.

Single-family housing completions in May were at a rate of 491,000; this is 9.4 percent (±13.8%)* below the revised April figure of 542,000.

Note that single-family completions of 491 thousand are still significantly higher than single-family starts (401 thousand). This is important because residential construction employment tends to follow completions, and completions will probably decline further.

It is still too early to call the bottom for single family starts in January, however I do expect single family housing starts to bottom sometime in 2009.

So tell me, if you were objectively trying to obtain information where would you turn? To the multi-billion dollar conglomerate with the power of the American Press at its side? Or to the guy who runs the same information out of his living room while maintaining the same kind of turnaround time (more or less)?

I'll let you decide. But to me, the choice is clear. There is absolutely no reason to continue reading newspapers, watching television or even visiting mainstream financial websites. The dissemination of information has been left to the free market, and guess what? The natural competition that has arisen is destroying the former media monopolies.

Good riddance.


A totally unrelated, yet far more disturbing development I came across this morning:

ABC Turns Programming Over To Obama

(this is now a confirmed report by the RNC - no tinfoil required)

Tue Jun 16 2009 08:45:10 ET

On the night of June 24, the media and government become one, when ABC turns its programming over to President Obama and White House officials to push government run health care -- a move that has ignited an ethical firestorm!

Highlights on the agenda:

ABCNEWS anchor Charlie Gibson will deliver WORLD NEWS from the Blue Room of the White House.

The network plans a primetime special -- 'Prescription for America' -- originating from the East Room, exclude opposing voices on the debate.

I have said for a long time that America has transformed into a fascist state. It started with Bush and is accelerating under Obama. The logo you see above is that of the Obama Administration - the rising sun of sorts over the American flag - now juxtaposed with the ABC logo. I would be hypocritical to not point out, however, that Fox News appears to be doing the same with the Republican Party.

It may seem a bit sensational to some for me to equivocate Obama/Bush with fascism. But I let the evidence speak for itself. And the evidence tells me that the major corporate interests (including the media) and the interests of the government are one and the same. That, taking place anywhere else, is undeniably fascist.

But that's okay. I'm sure everything will work itself out. No need to do anything about it. You may return to your regular programming...

Update #2: You didn't really think they were going to just stop reading our e-mails and intercepting telephone calls when Bush passed the baton, did you? Of course not, so this isn't surprising to anyone.

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mike.montchalin said...

The Full Text wasn't much better than the Yahoo Spin.

The author is oblivious to the seasonality of construction, and the differences between month-on-month, year-on-year and aggregates v sectors.

A starting point for analysis might be:

"Privately-owned housing starts in May were at a seasonally adjusted annual rate of 532,000
but is 45.2 percent below the May 2008 rate of 971,000."

Regarding ABC, it seems they should put more effort into the appearance of independence,.... like "Fair & Balanced" and "No Spin Zone" and not set up digs at the Whitehouse.

The real problem for Command & Control News is the internet. I am fearing internet regulation. Maybe it will be called Net Nuetrality.

Matt Stiles said...

No, it wasn't 'good' per se (the CR version). But it did not tell me how to interpret the information. The headline was simply "Housing Starts May." Period. The numbers follow with a short blurb at the end how the author interprets the data. The reader is explicitly told that the interpretation is belonging to the author. The Yahoo piece interprets the data and passes of the interpretation as the news, rather than the other way around.

One is manipulative journalism. The other tells you information and allows you to determine whether the interpretation is legitimate or not.

ViewFromTheSouth said...

On the ABC piece, It must be said that down here, Obama would have zero chance of getting his side of the story out without some tactic like this. The right wing and the lobbies will (are) already Bombarding the the air waves with their misinfomation and fear messages about the new plan.

Having said that, health insurance industry has already won 90% of the war because single payer is off the table. Funny how a program that has a good deal of support in the wider population is off the table. It is also funny how its supporters are excluded from the discussions.

I guess this is really just more proof of your original point.

Fish10 said...

How about this for spin, a 'simple mistake' that substitute price for sales...


Matt Stiles said...

Amazing, Fish. Amazing.

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