The quarterly report on home prices issued by the government's Office for Housing Enterprise Oversight (OFHEO) is the most comprehensive and most reliable measure available of what is happening in the housing market.
For the first time in nearly thirteen years, U.S. home prices experienced a quarterly decline. The OFHEO House Price Index (HPI), which is based on data from sales and refinance transactions, was 0.4 percent lower in the third quarter than in the second quarter of 2007. This is similar to the quarterly decline of 0.3 percent (seasonally-adjusted) shown in the purchase-only index. The annual price change, comparing the third quarter of 2007 to the same period last year showed an increase of 1.8 percent, the lowest four-quarter increase since 1995. OFHEO’s purchase-only index, which is based solely on purchase price data, indicates the same rate of appreciation over the last year.
As the Christmas shopping season went into full swing in 2005, I sensed that journalists in general have a strong preference for using the term "holiday shopping" instead of "Christmas shopping" when covering business and commerce, but that when it came to people losing their jobs, they preferred to describe layoffs as relating to "Christmas."
My instincts have been proven correct, as you can see below from the results of three different sets of Google News searches in November and December in each of the last two years (links to last year’s related posts are here, here, and here; 2005's are here, here, and here):
CNN's senior business correspondent Ali Velshi had an interesting question for viewers this morning.
Before telling viewers that consumer confidence is at the lowest level in two years, Velshi asked if the media have anything to do with it.
"Do you think we're feeding this thing? Do you think we're fueling this sort of misery?" asked Velshi on "American Morning" November 28.
A question for Newsbusters readers: How would you answer Velshi's question?
The Business & Media Institute has found that the media certainly don't reinforce the soundness of the economy when things are going well. BMI's "Bad News Bears" study that looked at one year of reporting, found that 62 percent of network (ABC, CBS, NBC) economic stories focused on negative news. Those stories were also given more airtime.
Other BMI research has shown that the media have emphasized the possibility of recession since the economic recovery began in August 2003.
As the 2008 election approaches, the New York Times uses the image of a sinking red "RECE$$ION" to communicate a fear that is so far only a phantom menace. Peter Goodman's Sunday Week in Review cover story, "Trying to Guess What Happens Next," displayed plenty of pessimism about the U.S. economy after years of foreign-financed easy money.
But the accompanying graphic communicated even more starkly the feeling the Times no doubt wanted to convey -- a fearful, sinking feeling among U.S. consumers (and November voters). The top half of the page was dominated by white space, with the big red word "RECE$$ION" sinking below the horizon.
Is there a single economist who thinks the U.S. economy, with inflation tamed for now and a low unemployment rate, is currently in recession? Not even Goodman himself goes that far, though his pessimism seems pretty overblown.
Of course, the expectations game can be frustrating, and we won't know for sure until the actual report is released Thursday at 8:30 a.m. But there appears to be remarkably good economic news ahead. Naturally, it is getting the barest of coverage from an Old Media business press corps that seems intent on talking the economy down.
First, a week ago Monday, MarketWatch's Greg Robb, in an article entitled "Economists think U.S. can dodge recession," said the following (bolds are mine throughout this post): "The economy grew at a 3.9% rate in the third quarter, and many economists expect an upward revision above 4.5% when the government revises the data on Nov. 29."
Then, at MarketWatch.com yesterday, ("Dollar under pressure as credit fears loom"; link requires free registration), reporter Lisa Twaronite got this quote from an industry expert:
For years, NewsBusters and its parent, the Media Research Center, have been reporting on the disparity in economic coverage by mainstream media outlets during the Clinton and Bush administrations.
In the past seven years, economic data that would have been praised when Bill Clinton was in the White House has continually been presented as recessionary, or even depression-like.
With that in mind, CNN's Lou Dobbs was discussing the economy, and, in particular, the recent holiday sales figures with WOR radio's Steve Malzberg Monday. The conservative host asked Dobbs, "If these numbers were the numbers nearing the end of a Clinton administration or a Democrat's administration, wouldn't they be touting it as a wonderful, strong economy?
Old Media reporters have worked themselves into such a lather trying to talk down the economy that you have to wonder if retailers got lulled into believing them.
The Associated Press's report on Black Friday sales by reporter Anne D'Innocenzio went through the normal good news/"yeah, but" routine (bolds are mine throughout).
First, the good news:
The nation's retailers had a robust start to the holiday shopping season, according to results announced Saturday by a national research group that tracks sales at retail outlets across the country.
According to ShopperTrak RCT Corp., which tracks sales at more than 50,000 retail outlets, total sales rose 8.3 percent to about $10.3 billion on Friday, the day after Thanksgiving, compared with $9.5 billion on the same day a year ago. ShopperTrak had expected an increase of no more than 4 percent to 5 percent.
But in bringing out the supposed "bad news," D'Innocenzio may have inadvertently exposed a retailer miscalculation:
Financial Times US Managing Editor Chrystia Freeland has become a "Hardball" regular of late.
CHRYSTIA FREELAND: The other thing that people worry about is if someone forecloses on their home, and that's the issue we haven't really seen raised too much in the Rudy-Romney debate. I think as we move into 2008 and the economy looks a lot grimmer, that's going to be another important battleground.
Just in time for Thanksgiving, BMI Director Dan Gainor stopped by ‘Fox and Friends' to remind everyone that the economy is not as bad as people think, and that despite what the media said about your Thanksgiving dinner, it wasn't that bad.
"If you look at the inflation-adjusted number, it [Thanksgiving dinner] is actually 9 percent cheaper over the last 20 years," Gainor said.
Was that Mike Huckabee on "Morning Joe" today -- or John Edwards? The former Arkansas governor found an odd way to refute charges he's not a true conservative, indulging in some class-warfare rhetoric that would have been the envy of the former North Carolina senator.
Mika Brzezinski hit Huckabee with an excerpt from Bob Novak's column of today. Here are the opening paragraphs from Novak's False Conservative:
Who would respond to criticism from the Club for Growth by calling the conservative, free-market campaign organization the "Club for Greed"? That sounds like Howard Dean, Dennis Kucinich or John Edwards, all Democrats preaching the class struggle.
*****Update at end of post includes detailed response to unhappy e-mail messages concerning this subject.
As someone that has done a lot of economic writing and financial media analysis, I'm used to gloom and doom from journalists.
However, Saturday's Associated Press article concerning the credit crunch and how it's impacting the mortgage market could be the worst example of economic and financial misreporting and exaggeration I've seen since the press universally forecast an economic downturn after Hurricane Katrina hit New Orleans.
Entitled "Have We Seen the Worst of the Mortgage Crisis," Joe Bel Bruno's piece actually suggested that a depression could be looming, and that housing prices in some areas could decline by 40 percent (emphasis added):
For years one of the great unanswered questions along Main and Wall streets has been why, in the midst of 24 consecutive quarters of uninterrupted growth, polls have regularly found Americans sour about the economy.
On Tuesday, a battle between the New York Times liberal economics columnist Paul Krugman and WOR radio's Steve Malzberg offered a clue.
In fact, after 16 minutes of sparring on subjects from healthcare to the Iraq war, a truly inconvenient truth became evident concerning the left's continued bearishness since the economy emerged from recession in the fourth quarter of 2001: too many folks listen to people like Krugman.
As a perfect illustration of just how separated this man, and anybody who reads him, are from reality, when Malzberg asked Krugman where he'd seek medical treatment if he was really ill, the Times columnist said (16 minute long audio link available here):
I receive the old-fashioned text version of MarketWatch's daily e-mail. That version of the e-mail always starts out with a short note from the editor about something that is being covered at the site that day.
Monday's e-mail from Steve Kerch, assistant managing editor/personal finance, was uncharacteristically enthusiastic about the economy. It was an enthusiasm that you'll see, after the jump, wasn't exactly reflected in his journalists' stories:
You have to wonder about all those doomsayers who predict the U.S. economy is on the brink of recession when you look at hotel rooms in New York that are filled at $600 a night, airplanes packed with passengers paying top dollar for flights to the Caribbean and Europe and highways jammed with cars guzzling $3-plus gallons of gas.
As far as travel goes this Thanksgiving holiday, the American consumer is in full rally mode. And it's not just the short jaunt to a family dinner on Thursday that's on the menu: More and more folks are making the Thanksgiving week a major vacation window, with international travel in particular seeing a big jump.
Don't you love it when you find out that leading political figures in America think just like you?
Before you answer, consider a recent comment made by former House Majority Leader Tom DeLay about the New York Times "economic" columnist Paul Krugman.
Due to language that might offend some, the actual quote comes after the break.
However, let's just say that as reported by the Washington Examiner's Yeas and Nay's blog Tuesday, DeLay is about as fond of Krugman as most Americans with an above body temperature intelligence quotient (fair and final profanity warning):
According to ABC anchor Diane Sawyer, a new Oklahoma law making it a felony for U.S. citizens to knowingly provide shelter or transportation to illegal immigrants goes "across the line," "too far," and turns people into "vigilantes." Interviewing Lou Dobbs, CNN host and noted opponent of illegal immigration, on Tuesday's edition of "Good Morning America," Sawyer appeared to be aghast at what she considered "turning people in" for offering assistance to illegals.
The GMA host even quizzed Dobbs about whether his problem is with Hispanics in general. After noting a new Census Bureau report that found last names such as Garcia and Rodriguez are increasing in number, she guardedly wondered, "To Lou Dobbs, is this a good thing or a bad thing?" After Dobbs responded in favor of legal immigration, Sawyer plowed ahead with her question about the new Oklahoma law. She incredulously queried, "People are vigilantes about transportation and shelter? Isn't that going too far?"
‘Tis the season for lackluster holiday sales and prosperous debt collectors. Fa la la la la, la la la la...
Everything is a little downbeat according to the economic news leading into the holiday shopping season reported on the November 18 "CBS Evening News" - that is of course unless you're in the debt business.
"It happens to be pretty good," said Brandon Bradshaw about this shopping season. "So, we're one of the lucky ones."
But, CBS Correspondent Randall Pinkston trotted him out for a reason.
"Brandon Bradshaw's business? Debt collection," concluded Pinkston. "Russ, retailers are counting on shoppers like him because this is the make-or-break season. Fourth quarter - stores depend on holiday shoppers for 25 to 40 percent of their annual profits."
What is it with the MSM and their fetish with worrying so much about everyone but Americans? For the L.A.Times, for instance, even the weakness of our dollar is cause for worrying over how bad it is for... wait for it... foreign companies. While our dollar weakens and could perhaps bring us major economic trouble, the L.A.Times shows serious concern and laments that the soft currency crisis is hurting European companies who are finding their prices rising because of our falling dollar.
The Times is all upset that foreigners are losing profits, but there isn't a word in its story about what it might do to Americans, befitting its general disinterest in America and perfectly reflecting its heightened concern for foreigners. Worse, the tone of this article serves only to make America look like the bad guy once again, like it's our fault that the falling dollar is hurting those poor, innocent Europeans.
On Tuesday, "Good Morning America" reporter Bianna Golodryga hyperventilated about high gas prices and highlighted a man who alleged that the cost of fuel is keeping him from going to church and that it could ruin Christmas. Golodryga piled on, suggesting that some Americans would be forced to eat "cheaper foods" such as pasta and peanut butter instead of fruits and vegetables.
Only a few days later, Golodryga, who covers business and economic issues for GMA, proved her journalistic independence by gushing over liberal billionaire Warren Buffet, or "Robin Hood," as she called him. While Golodryga lobbied for holding on to the death tax (or, as she called it, the estate tax), co-host Diane Sawyer rhapsodized over how Buffet is battling "on behalf of fairness in taxes." (The leftist billionaire has claimed recently that he pays less taxes, percentage-wise, than his receptionist.)
The Anchoress, a three-time Weblog Awards finalist and 2007 Catholic Blog Awards Winner (congratulations!) in the Best Political/Social Commentary category (scroll down at link to see it), delivered a cold but necessary shower earlier this evening to those of us who are tempted to exaggerate or overstate the impact New Media is having on most Americans.
I'll bet that a lot of us can relay similar stories to the ones she referred to in her very perceptive post ("Good news leaks past the embargo on good news…"; links that contradict the Old Media-driven beliefs described and bolds/italics were included in her original):
Unfortunately, it is still true that until a new president is installed in the WH, preferably one with a D after the name, only the downsides are newsworthy, and that holds true in every subject. Every subject. My elderly family members are convinced that everything, everywhere, is going to hell, and they are fretful and terrified. They think everyone is out of work, the economy is in a recession, the war in Iraq is lost and there are no real terrorist threats - that’s just made-up stuff. They’re sure America is dying. They are sure the world is headed for famine. They are depressed and do not want to send out Christmas cards, because how can you do that when so much is bad in the world?
What's another $1 trillion here and there among friends - especially when it promotes a leftist agenda?
Throwing around a big number like that obviously isn't a problem for one liberal executive. Woody Tasch, the chairman of Investors' Circle wrote in the November 15 Christian Science Monitor that since we can spend money on Iraq, we can spend $1 trillion over five years for socialist causes.
"Economists project that the cost of the war in Iraq, when all is said and done, will come in at $1 trillion or more," wrote Tasch. "I say: Let's do it again! Let's allocate another trillion dollars - but this time for the good of all humanity and all species. Let's do it with the same moral urgency and vision that has made America great at so many critical junctures in history."
After Wal-Mart (NYSE:WMT) reported higher third-quarter earnings and predictions of a "strong" holiday shopping season, the Dow Jones Industrial Average (DJIA) surged 320 points after taking a battering over the previous week.
In an Andy Rooneyesque rant about how his latest movie-going experience "left much to be desired," CBS White House correspondent Mark Knoller hinted he wouldn't mind seeing liberal consumers groups tackle hefty snack prices at the nation's movie theaters. He even suggested the short titles for two bills Congress could draft on that front.
From Knoller's November 12 Couric & Co. blog post (emphasis mine):
The fact is, most movie theaters are glorified snack bars. On average, they keep only 50% or less of the ticket price, far less for blockbusters in their opening weeks. Much of a theater’s profit comes from the concession stand.
Regal, one of the nation’s largest multiplex chains, reported the 3rd quarter profit margin at its snack bars exceeded 86%.
And the markup – especially on popcorn – is eye-popping. The Los Angeles Times last year calculated that just $30 of raw popcorn can translate into as much as $3,000 in sales at the snack bar.
That sounds like a markup that would make the oil industry blush.