If Spin were Reality - We'd have a Recovery
Wednesday, March 23, 2011 at 2:37PM Wouldn't it be awesome if spin could actually solve problems? Then, you could just say the word 'recovery' every time you gave a speech, ignore any negative data, assume the markets are up because of general economic health and not a mass infusion of cheap money, and it would be so.
It wouldn't matter that New Home Sales are at their lowest rate since reporting began in 1962.
It would be fine that Existing Home Sales (the number of completed transactions) were down 9.6% over the month, and 2.8% since last year.
It would be cool that Pending Home Sales were down 2.8% over the month, and 1.5% over the year.
It would be a symptom of recovery that the average Sale Price for non-foreclosed homes is $246,358 - below 2003 levels, and for foreclosed homes, is $169,965.
It would just be a coincidence that 39% of homes sold in February were distressed (sold at a discount), many of those to investors, not to end-home-dwellers, up from 35% last February.
It wouldn't have anything to do with people's housing situations, that Realty Trac, 'the leading foreclosure online market' maintains a top ten 'Hot' foreclosure property states list. (Ohio leads the list, with a 43% 'foreclosure savings' rate for 'investing' in a foreclosed property vs. paying up for a non-foreclosed one.)
You could be the Treasury department, and announce an 'orderly' sell program to get rid of 'up to' $10 billion per month of your $142 billion agency-guaranteed mortgage-backed securities portfolio (and yes, you would still be backing the agencies guaranteeing those securities which has nothing to do with propping up their value) - the one you bought as part of a multi-trillion financial market bailout, ur 'stabilization' program - when you became a hedge fund on behalf of the taxpayers. You wouldn't have to mention, ANYWHERE, IN ANY SPEECH, ANYTHING about the $4.1 trillion of Treasury and other government debt you issued since September, 2008, because, what's $4 trillion when you're stabilizing the market - on behalf of the taxpayers.
You could be a mega bank, with a CEO that is also a Class-A NY Fed director (or Jamie Dimon) and impress your new soon-to-be-higher-dividend-receiving shareholders, with your ability to reduce loan loss provisions, and it wouldn't have anything to do with accounting rules that don't require you to acknowledge the tremendous gap between the notional value of your loans, and their underlying collateral (the real home values) or Fed support.
You could be a mega bank (as say, above), pass your second stress test with flying colors, be assured by the Fed that no details of the test will be disclosed, and act coy about whether you want to disclose them or not.
You could be the Fed Chairman, and disregard the idea of inflation, because if you don't count the cost of food or gas or health insurance or clothes or anything else sporting a price that has inflated, there is no inflation, and you can carry on buying, holding or subsidizing, the various forms of debt sustaining the 'recovery'.
Well, actually, if you looked at the housing market or the financial condition of the majority of borrowers, there wouldn't be any inflation. Maybe spin is reality. But, let me know if I'm missing something.
Reader Comments (10)
How dare you bring into question the CPI. Everything I buy except for Gas, Health care, Education, anything based on a commodity, or anything based on something grown from the Earth HAS stayed stable. Now you're sounding like Matt Taibbi ... ho long until you sound like Dr. Paul?
Speaking of spin, today I heard the "news" from AP "news" which repeated something from what they referred to as a "think tank" (New Century Foundation) as the "news."
[For anyone not familiar with that clown act, it is principally the foundation for white supremacy, etc.]
AP went on to claim that American "economists" (I'm guessing they are referring to Glen Beck and Rush Limbaugh and the entire Bretton Woods Committee membership) found it "inexplicable" that housing construction was down to almost zero.
Apparently none of them ever read, nor are familiar with Michael Hudson, R.T. Naylor, Prof. James Galbraith, Prof. Ravi Batra, Dean Baker et al.
http://www.youtube.com/watch?v=qAfPyCxShpI
silver 38. gold 1446. that's no spin.
True, read my Silver's Rise interview, there will continue to be more inflow into silver and gold, precisely because of the true state of the rest of the economy and related devaluation of paper currency. It's all consistent....
I just have to add the 14 million that want a job and can't find one, standing shoulder to shoulder, would reach from Los Angeles to Bangor Maine....twice. But that doesn't matter, after all, unemployment is less than 10% and is on its way down!
Good points regarding the extend and pretend policy and maintaining "confidence" at all costs.
hold on there! uncle ben said the recession ended on sept.15 th 2009,and he did say that the recovery will be slow. but did say 2010 will be a year of recovery. now then just because the cost of living hit a record high in feb. surpassing the old high in july of 08 and the cpi which has been at a record high for awhile now,increased by 0.5 % the fastest pace in one and half years . we shouldn't look so carefully at those figures,uncle ben doesn't he prefers to look the feds measure of cpi which only increased by 0.2 %, now granted it doesn't include such items as ..well food and energy. uncle ben and terrible tim are looking at the big picture the deficit, where the goal is reach a balance budget .... well that is....except for the interest payments on the 14 trillion dollar national debt. remember we only have to sell 75 billion dollars worth of treasuries per month to keep "under control" we needed qe2 and the coming soon qe3 to create all those jobs we are currently seeing, note the lower unemployment figures,well......... i reminded of what a friend of mind told me of a quote he had read somewhere that keynesian economics was mis-taken to mean kenyan-sian economics or "grass huts for everyone"
KEISER/PRINS 2012
Sounds just like "Affordable Heath Insurance" Hey, that is the label they give it so it must be so.
They call it "freedom" so it must be so.
Liked you on Facebook, too. =) avgsxl avgsxl - red bottom.