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Wednesday, February 16, 2011

Time to believe in housing? CNBC thinks so

Each financial news site has a different kind of spin on the current Great Recession.  Some are excessive cheerleaders and other are amazing minimizers when it comes to any facts that cast pretend 'recovery' in a negative light.

Then there's CNBC-   on occasion you'll find an article on their website that is sound and solid reporting.  More often than not, you get headlines which are empty questions or declarations that anyone older than 10yrs old can see through.  The other day a 'brilliant mind' at CNBC wrote a headline asking if there's currently a wealth gap in the US.  

Today's 'winner' of a headline....

It May Be Time to Believe in Housing Again - "As the economy improves, and consumers start to feel better about their personal finances, they are starting to think about investing in their homes again."

Ok, so.. is this true?  It is time to believe in housing again?  Let's see...

Reuters - 2/16/11 -- "The housing market recovery is being hobbled by an over-supply of homes that is depressing prices. A high unemployment rate also means the sector, which was at the heart of the worst recession since the 1930s, will struggle to recover even as the broader economy gains momentum... An independent survey on Tuesday showed sentiment among home builders hovering near all-time lows in February." 

Associated Press - 2/16/11 -- "Optimism is in short supply among U.S. homebuilders, a sign that the depressed housing market will slow the economy's gains this year.  The outlook by builders hasn't improved since the fall, when new-home sales were in the midst of their bleakest year in a half-century.
Less home building means fewer jobs for the economy...  Analysts say the economy needs to accelerate job creation before the housing industry can fully recover. Without more jobs and higher wages, home sales will stagnate."

CapitalTimes - 2/11/11 -- "At this point, it's almost piling on to continue writing about the housing slump. But given that sprawl development has played such a key role in driving the nation's growth since World War II, it's important to note that U.S. housing prices have now fallen further during this economic downturn (26 percent), than during the Great Depression (25.9 percent)."

New York Times-  2/14/11 -- "In the last year, home prices in Seattle had a bigger decline than in Las Vegas. Minneapolis dropped more than Miami, and Atlanta fared worse than Phoenix.  And it's likely to get worse before it gets better ...“So many sellers are waiting in the shadows,” said (Seattle real estate brokerage) Redfin’s chief executive, Glenn Kelman. “The inventory is going to expand and expand and expand. I don’t see any basis for significant price increases.”"

And on and on and on...

~  It really offends me that CNBC and other mainstream news does this..  Deeply so!  Just outright liars... It is a toxic mix of overly wishful thinking, news editors pressuring pretend journalists to write something 'optimistic' and a deviant belief that if enough fluff is put into the public forum, people will believe all is well without government actually having to fix anything.

Meanwhile nothing gets done.  No one in government is addressing how to create jobs, in particular how to Truly help small businesses and self-motivated entrepreneurs wanting to start up businesses, which are the backbone of American employment.

And no one in government has a clue how to stimulate the housing market without making one of two hard choices--  either prices need to Fall dramatically to levels where people can afford and not the inflated mid-2000 levels, which of course will hurt current homeowners immensely, or figure how to get more people approved for mortgages which will mean relaxing the standards as to qualifications which they tightened up in '09 and the government via Freddie & Fannie Mae taking on even greater fiscal risk.

Both are difficult choices, which is why the government has avoided having to make one for 2 full years.  But no matter what, headline declarations like "Its time to believe in housing again" with nothing substantive to back it up, does no one any good.

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