Our pub-crawling friend Kondratiev, seeking a high-paying job at Maggie's Farm, offers this submission:
As Mark Twain said with attribution to Benjamin Disraeli, “There are three kinds of lies: lies, damned lies, and statistics.” Let’s look at U.S. foreclosure filings, which increased by 0.067 percentage points in March from a year earlier as adjustable mortgages increased and more owners gave up their homes to lenders.
More than 0.186% of the 125,892,000 U.S. households (234,000 properties) were in some stage of foreclosure. Properties in foreclosure in March 2007 were 0.118% of U.S. households (149,045 properties).
About 1.99% of US homes (or 2.5 million foreclosed properties) may be on the market this year and in 2009.
This doesn’t sound too scary, moving from twelve hundredths of one percent to nineteen hundredths of one percent, with a maximum two-year potential of less than two percent of US homes. However, a liberal press agenda is to maximize the fear factor in the months preceding the election, so let’s see how the press maximizes the potential fear factor editor’s comments in [brackets]:
U.S. Foreclosures Jump 57% as Homeowners Walk Away (Update2)
By Dan Levy
April 15 (Bloomberg) -- U.S. foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as adjustable mortgages increased and more owners gave up their homes to lenders. [that’s the ratio between 0.118% and 0.186%]
More than 234,000 properties were in some stage of foreclosure, or one in every 538 U.S. households[doesn’t one in 538 sound like a larger number than 0.186%?], Irvine, California-based RealtyTrac Inc., a seller of default data, said today in a statement. Nevada, California and Florida had the highest foreclosure rates. Filings rose 5 percent from February.
“We're not near the bottom of this at all,'' said Kenneth Rosen, chairman of Rosen Real Estate Securities LLC, a hedge fund in Berkeley, California and chairman of the Fisher Center for Real Estate at the University of California at Berkeley. “The foreclosure process will accelerate throughout the year.''
Rising foreclosures will add more inventory to an already glutted market, keep home prices down through at least next year and thwart efforts by Congress and President George W. Bush to help homeowners avoid default, Rosen said in an interview.
‘Drag' on Prices
About 2.5 million foreclosed properties will be on the market this year and in 2009, Lehman Brothers Holdings Inc. analysts led by Michelle Meyer said in an April 10 report. U.S. home price declines will probably double to a national average of 20 percent by next year, with lower values most likely in metropolitan areas in California, Florida, Arizona and Nevada, mortgage insurer PMI Group Inc. said last week in a report.
What PMI actually said was:
“Given the drop in prices already the broad S&P/Case-Shiller house price index could decline by roughly 15-25 percent [from the 2006 peak]. The narrower OFHEO index could decline by a lesser 5-10 percent, because it excludes jumbo loans and the large portion of subprime and Alt-A loans that Fannie Mae and Freddie Mac don’t participate in.
“The odds of the ultimate price decline being toward the lower end of these ranges (5 percent for OFHEO and 15 percent for S&P/Case-Shiller) has increased recently because of policy changes that have taken place in the past few weeks. . . .
“We still expect the housing market to stabilize sometime in the second half of this year in response to expansionary monetary and fiscal policy, while builders continue to reduce the number of single-family housing starts into 2009. If this occurs, then the inventory of unsold homes should peak later this year and fall throughout next year. As a result, the downward pressure on national house prices should begin to abate in the second half of 2008. It is likely, however, that prices will continue declining well into 2009, as inventories will still be large (even if falling).”
Note that this directly contradicts the statements by the Berserkley guy Ken Rosen, but the writer chose to ignore that.
Frightening the consumer is paramount in accomplishing regime change in the United States, and if we do indeed have a recession, it will be the first to have been entirely caused by the media – the underlying economics in the country are excellent!
