Fudging The Numbers – Home Sales Up? Down! Sales Up 5.1% From Jan 09 – Down 9% From February 08.

Ever heard the old saying, “statistics don’t lie, but liar’s use statistics”.

There is a classic example taking place in the news today.

Reports abound that “existing home sales are up 5% from January”, the biggest one month jump in ages. http://www.foxbusiness.com/story/markets/economy/existing-home-sales–february/ The reports are accurate and terribly misleading at the same time.

The reports are referring to sales of existing single family homes. To be fair the article provides a small disclaimer, the sales, disportortionately involve “distressed” or foreclosed homes”.

The reports also provide the following “statistic”: Annual housing sales (2009) were projected upward to 4.72 Million Units from previous estimates made in January.

Why is this report cynical at best and an example of “fudging the numbers” rather than “fair reporting” at the worse?

Because the reports fail to present the numbers in a Proper context”. 

Why doesn’t the report compare February 2008 to February 2009.  The “good news” being manufactured by the article doesn’t note that this months increase is related to the fact that last month, January 2009, was one of the worst months in history.

Secondly, the report doesn’t note that home sales always rise between January and February – last year and this year were no exceptions. It has something to do with the time of the year. Home sales always increase entering Spring and decrease in the Winter.

SEE:  http://www.banks.com/blogs/mortgages/2008/03/24/existing-home-sales-rise-in-february/

This time last year the Press saw no “hopeful signs”, or “trend”, in the increase between January and February – the increase was attributed to “lower home prices” – as you know, home prices are even lower this year, as are interest rates.

In 2008 the press reported: “The seasonally adjusted home sales figure was revised upward to 5.03 Million.” http://www.banks.com/blogs/mortgages/2008/03/24/existing-home-sales-rise-in-february/

Comparing February 2009 with February of 2008, there has been a drop of 9% in existing home sales. As we all know 2008 was a horrible year for sales and the just released numbers show an additional  projected decrease for 2009.

In keeping with this month’s theme of March Madness, (I’m looking for an excuse to make an basketball analogy), compare today’s news report to the following hypothetical.

Game-end stats for your favorite team’s star player reflect he scored 3 points in the last contest, up from the 2 points he scored in the first Tournament game. A hefty 50% increase in offense. The 50% increase is worthy of reflection, but if the player’s season average is 19 points a game, what conclusions might you draw from the reflection. The 50% increase certainly isn’t going to guarantee him a “start” in the next game.

The “slanted” press reports today deny readers the opportunity to “reflect” and draw their own conclusions from the statistics being presented. To return to the Basketball analogy, a sports fan would want to know how many minutes the player played, whether he was injured or in foul trouble? The necessary information to put the report in context.

Today’s press reports on the housing numbers reflect an attempt to “slant the context” rather than comunicate an accurate picture.

I’m looking for good news as much as the next person, however, I’d like that news to be based on “reality” and not “wishfull thinking”. The housing numbers cointinue to be down from last years horrible numbers. February’s numbers are better than January’s. That is true every February  – but the February 08 numbers did not signal a rebound in the housing market – neither do the February 09 numbers. Housing sales are still on the decline.

Lets hope a turn around is on the way and lets not misrepresent that one has arrived when it hasn’t.   

Another gloomy but accurate statistic: Housing starts are down 47% from last year.  http://www.reuters.com/article/domesticNews/idUSTRE52G1GP20090317

Isn’t the public entitled to the straight story?    

Reminds me of another old saying, “Don’t believe everything you read in the paper”.  

Obama Waffles Again – Administration Now “COOL” to AIG Bonus Tax

Remember This?

Obama tries to stop AIG bonuses: ‘How do they justify this outrage?’

“This is a corporation that finds itself in financial distress due to recklessness and greed,” Obama told politicians and reporters in the Roosevelt Room of the White House, where he and Treasury Secretary Tim Geithner were unveiling a package to aid the nation’s small businesses.

“Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?” 

 http://www.cnn.com/2009/POLITICS/03/16/AIG.bonuses/index.html?eref=time_us

After inflaming public sentiment what does Obama do …… waffles. Did someone remind him that he was the top recipient of AIG Political Cash and that AIG’s Derivative Unit, the Unit receiving the bonuses in question, are big  Contributors to the Democratic Party. Read about the “waffle” below …..    

Proposal to tax bailout bonuses draws scrutiny

White House is cool to bill; Could violate constitution

WASHINGTON – Days after President Obama pledged to explore “every single legal avenue” to recover $165 million in bonuses paid to executives at bailed-out insurance company AIG, administration officials yesterday shied away from an effort in Congress to heavily tax the bonuses.

Jared Bernstein, Vice President Joe Biden’s economic adviser, told ABC’s “This Week” yesterday, that a bill the House passed overwhelmingly on Thursday may go too far and could be unconstitutional because it uses the tax code “to surgically punish a small group.”

“That may be a dangerous way to go,” he said of the bill, which slaps a 90 percent tax on executives who make more than $200,000 per year at firms that have taken more than $5 billion in government funds.

White House chief economic adviser Christina Romer told CNN’s State of the Union that a tandem effort in the Senate which broadens the bill to include firms that have not taken federal funds may not be looked upon favorably by the White House.

http://www.boston.com/news/nation/washington/articles/2009/03/23/proposal_to_tax_bailout_bonuses_draws_scrutiny/

MSNBC DESCRIBES THE WAFFLE THIS WAY:

Obama signals opposition to punitive bonus tax

WASHINGTON – President Barack Obama wagered significant political capital Sunday, signaling opposition to a highly popular congressional drive to slap a punitive 90 percent tax on bonuses to big earners at financial institutions already deeply in hock to taxpayers.

Obama defended his stance by saying the tax would be unconstitutional.

http://www.msnbc.msn.com/id/29815039

The bonus scandal is just a smoke screen to keep people from questioning why the AIG and Financial Institution Bailout Cash was channelled to Hedge Funds. The same Hedge Funds now being invited to “buy back” or repurchase “toxic assets” in the latest Government Program. The first round of “bailouts” paid 100 cents on the dollar for the “assets” – these same assets are now being “repurchased” by Hedge Funds for 10 cents on the dollar.

Who pays ….. The American Taxpayers.

SEE: https://mcauleysworld.wordpress.com/2009/03/21/hedge-funds-what-they-are-the-economic-collapse-how-the-funds-are-getting-our-bailout-dollars/     

Obama’s Toxic Mortgage Plan – Taxpayer Money To Enrich Billionaire Hedge Funds

Trillions have been paid or pledged to companies like AIG, Goldman Sachs and Morgan Stanley. In addition a dozen Domestic and Foreign Banks have also received the cash.

What did these companies do with the money? They paid the infamous, but unidentified holders of “CDOs” (Credit Default Obligations).

Who were these holders? Hedge Funds, those privately owned and managed funds who made fortunes off the sub-prime mortage crisis. See: https://mcauleysworld.wordpress.com/2009/03/22/obamas-toxic-asset-plan-who-benefits-the-hedge-funds-plan-to-be-announced-monday/    

These Funds are the exclusive playground of the wealthy. Your Mutual Fund is not a Hedge Fund. Your Mutual Fund is not allowed to invest in your Hedge Fund. Hedge Funds are not regulated by The Government.

The Hedge Funds were the real beneficiaries of the Bailout Cash that hass been distributed thus far.

Now the Obama Administration has invited these very same Hedge Funds to particpate in the next Government Toxic Asset program.

The Hedge Funds have been invited to “repurchase” the toxic assets that the Government just paid them for.

Unbelievably, the Hedge Funds can repurchase these very same assets for 10 cents on the dollar. The Government bought them for 100 cents on the dollar but is reselling them for a dime.

That means a Hedge Fund can repurchase a Trillion Dollars of toxic assets for $100 Billion Dollars. (AIG received $180 Billion, after the Government “leverages” that money it can pruchase $1.8 Trillion in Toxic Assets).

IF YOU DON’T KNOW WHY THE PRESIDENT WAS SMILING THIS PAST WEEKEND – IT IS BECAUSE YOUR NOT A BENEFICIARY OF THE PROGRAM.   

https://mcauleysworld.wordpress.com/2009/03/21/aig-cash-channelled-to-hedge-fund-millionaires/

http://en.wikipedia.org/wiki/Hedge_fund

http://www.reuters.com/article/fundsFundsNews/idUSN1546365820090315

http://www.nytimes.com/2009/01/25/business/25gret.html?scp=1&sq=gretchen%20morgenson%20c.d.s.&st=cse

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