Good thing “Nightly News” is focusing on global warming solutions or the network might even try to pin that on the housing market.
“Even Toyota sales fell and blamed a weak housing market for a plunge in light truck sales,” said “Nightly News” anchor Brian Williams on August 1. Williams also managed to mention that the DJIA finished up 150 points “despite the fact that the housing and mortgage market are showing even more signs of weakness now.”
Consumer confidence hit a six-year high in July, a widely watched gauge of sentiment showed on Tuesday, as Americans shrugged off falling home prices to focus on a healthy jobs market, instead.
The New York-based Conference Board said that its Consumer Confidence Index, rebounded to 112.6, its highest level since August 2001 when it recorded a 114.0 reading. That compared to a revised 105.3 in June. The July 24 cutoff for the preliminary survey of 5,000 U.S. households was before last week's stock market tumble, however.
It has to. A six-year high is bad enough; we surely can't afford to let the index get to an 8-year high, or someone might get the mistaken idea that the current economy is as good as or (heaven forbid) even better than the Golden Age of the 1990s (even though by a couple of respected measures it is).
The ABC, CBS and NBC evening newscasts on Friday all devoted full stories to the fall in the stock market, touted as “the worst two-day point drop for the Dow in five years,” but barely had time for a sentence about the 3.4 percent second quarter jump in the GDP, the biggest in over a year. In fact, neither ABC nor NBC cited the specific 3.4 percent rise in the Gross Domestic Product, the measure which the AP on Friday described as the “best barometer of the country's economic fitness.” Not one of the three evening newscasts mentioned how the Dow is still well above the 13,000 level it broke through in April and none noted fresh good news on inflation.
ABC was the most negative. “Stock slide,” World News anchor Charles Gibson teased, “Wall Street finishes the worst week of the year down nearly 600 points.” Gibson soon highlighted that news, as he only alluded to the good GDP number, when he reported “the worst week for the Dow in five years. Even positive news on economic growth wasn't enough to keep investors from selling. Among other things, they had to contend with a battered housing market.” Reporter Betsy Stark agreed as she too only made a passing reference to the GDP: “It sure is, Charlie. In fact, buried inside that positive report on Gross Domestic Product today was more evidence of what economists now describe as an outright recession in the housing sector.” ABC didn't even put the GDP number on screen as Stark devoted her entire story to the impact of the declining housing market before concluding that “it increases the odds of a downturn in the overall economy since housing now accounts for roughly one in ten American jobs.”
And that's exactly how the mainstream press treated it. What goes down, must go down further. Even with the sour coverage on NBC and CBS on July 26, there were voices of reason that warrant commitment to the markets.
"So this is not a crash, if anything, it's a correction," said CNN "American Morning" business correspondent Ali Velshi. "It might not even be a correction; it might just be a stop on the way."
Wow, good news, even on CNN.
Others experts point at signs our economy is still in tact and still moving in the right direction as evidence not to panic.
Yesterday, Brent Baker at NewsBusters caught the Old Media emphasis on the decline in existing-home unit sales, even though the median existing-home price went up. CBS and Katie Couric apparently invoked the Great Depression in their existing-home sales commentary (I think any number of those 90 and older could say: "I knew the Depression, and Katie, this is no Depression.").
The median price of a new home sold last month dropped to $237,900, down by 2.2 percent from a year ago. It was the biggest year-over-year price drop since a 6.5 percent fall in April. The median price is the point where half the homes sold for more and half for less.
But at the risk of sounding like a broken record, I'm forced to make the same point I made a couple of months ago in more detail -- by the time you consider changes in the regional mix in home sales, you're left with an overall new-home market where regional prices are holding steady or perhaps even slightly increasing -- and definitely NOT in decline.
A quick look at the following figures will illustrate the point:
On a day when the National Association of Realtors (NAR) reported a rise in the price of homes so the average median price is above where it was a year ago, Wednesday's CBS Evening News featured a soundbite claiming “home price depreciation” unprecedented since the Great Depression. Apparently, reality wasn't negative enough for CBS, so they felt a need to add some embellishment.
“The housing market is going deeper in the dumper,” anchor Katie Couric rhymed, as “America's Realtors reported today that used homes were selling in June at the slowest pace in four and a half years.” She acknowledged “a bright note for homeowners,” but added a caveat in relaying that “house prices went up for the first time in nearly a year, but just barely.” The headline for the NAR press release from which CBS cribbed gave equal weight to two developments -- “Prices Rise, Existing-Home Sales Decline” -- but Anthony Mason's story explored only the negative, as he focused on rising foreclosures and declining sales, and even managed to spin the climbing home prices into a dire situation. “In a Wall Street conference call, Countrywide's CEO, Angelo Mozilo, had this warning,” Mason stressed. Then, with matching text on screen, viewers heard audio of Mozilo from a day before NAR's numbers were released on the higher median home price: “We are experiencing home price depreciation almost like never before, with the exception of the Great Depression.”
As NewsBusters has been reporting this week (see this and this), as the stock market hit new all-time highs, the media have been dour Nervous Nellies carping and whining about gas prices, the low value of the dollar, the housing slump, and the rising trade deficit.
Yet, there are a variety of issues that press outlets have conveniently ignored during this record bull run that not only explain rising stock prices, but also give a more accurate view of what is going on in the global economy.
For instance, Bloomberg was one of the only major media outlets Tuesday which reported record purchases of U.S. securities by foreigners in May (emphasis added):
“In stock market terms alone, this is now the longest consecutive uninterrupted stock market rally,” said Lawrence Kudlow on MSNBC’s “Morning Joe” on July 13.
“It started in early 2003, so that’s four and a half years. And it’s incredible how much wealth is being created out there and it’s unfortunate, really – almost tragic – that the president just doesn’t get any credit for it at all because he’s got a lot to say on the economy.”
While Kudlow found the record worth cheering, the three major networks supplied "some worries" and "some dark clouds" to viewers on July 12. Each one offered its own spin of gloomy news following the record high closings of the Dow and S&P 500.
"There are still some dark clouds looming over this market," said correspondent Dan Harris on ABC’s "World News with Charles Gibson." "The housing market is in a slump, interest rates are rising and gas prices are ticking back up."
You'd think successfully preserving the bald eagle and helping its population increase would garner a positive news report. You'd be wrong.
NBC "Nightly News" found reason to worry that the bald eagle, which is now flourishing, will be wiped out now that it has been removed from the endangered species list.
“[Nationwide resurgence of the eagle] is not the end of the story. Now the question is will man maintain the eagle’s habitat or will the eagles adapt to man,” said chief environmental affairs correspondent Anne Thompson on June 28.
“American Morning” provided another forecast of mostly cloudy skies for the housing market on June 26.
“I got to tell you John [Roberts, “American Morning” co-host], this is not good news for people who are out there trying to sell their house and this of course is supposed to be the biggest time of year for sales,” said Gerri Willis to begin her report.
Willis, the personal finance correspondent for CNN and host of “Open House” was reporting new data from the National Association of Realtors that showed lower median home prices and slipping sales.
While the NAR data was downbeat, Willis called it too “upbeat” and “optimistic.” She then labeled a doomsayer with a more negative prediction “respected."
Update: SEE Editor's Note at bottom of post for related MRC content.
1Q07 Home Prices Up 0.5%, 4.3% Over 12 Months Ago
Those looking for a pervasive and severe nationwide decline in home prices are going to have to keep looking.
The Office of Federal Housing Enterprise Oversight (OFHEO) just released its House Price Index (PDF) for the first quarter of 2007. This most comprehensive of home-price reports shows that nationwide prices increased 0.45% (rounded to 0.5% in the announcement) in the first quarter of this year, and went up 4.25% (rounded to 4.3% in the announcement) in the past four quarters.
Core inflation during those two time periods was 0.6% and 2.5%, respectively. OFHEO says that inflation excluding only shelter costs only rose 1.6% during the past year.
Context (from Pages 4 and 5 of the report):
From 1990 through 1997, reported four-quarter appreciation was less than the 4.25% just reported 28 out of 32 times.
During that same time period, individual-quarter appreciation was less than the 0.45% just reported 14 out of 32 times -- including six nationwide quarterly declines.
I recall no discussions of pervasive real estate "bubbles" or fears of steep, widespread declines during the 1990s.
That's right. Bubble, shmubble, despite this picture from Matt Drudge, who got snookered on this one:
Fire sales, schmire sales.
The Chief Snookerer in the latest search for the elusive housing bubble is Martin Crutsinger of the Associated Press, with a significant assist from the Commerce Department (link is to a PDF), which inexplicably did not, and apparently does not, report the regional sales data needed for a more detailed look.
Crutsinger took Commerce's housing report showing a significant decline in the nationwide median selling price of a new home, both in the past month and year over year, and ran with it at an all-out sprint (bold is mine):
As the stock market has continued to regularly make new highs in 2007, how many times have you heard or read a media report carping about how the rich are getting richer?
Quite a bit, right?
If you feel bombarded with such inanities, consider that a completely unaudited LexisNexis search of major American media outlets identified 234 reports which included phrases like “rich get richer,” “income inequality,” “wealth disparity,” etc., since January 1.
Add it all up, and that’s almost two a day.
A fine example of this nauseating mantra was demonstrated by CBS’s Charles Osgood on “Sunday Morning” April 15:
On April 25, 2007 the Dow soared to another record close, this time above 13,000. As Newsbusters reported here, here and here, the networks did anything but cheer. In fact, network broadcast reporting of the Dow's recovery since 2003 has been marked by pessimism.
Katie Couric introduced the April 25, 2007 CBS "Evening News" report with this dismal statement:
"Even as investors are making money in the market, Anthony Mason reports there are concerns tonight about the rest of the U.S. economy."
Mason made good on Couric's tease, with a class warfare remark that "Wall Street and Main Street appear to be headed in different directions" because of housing and gas prices.
CNN's "Open House" host Gerri Willis called for new mortgage regulations on April 21.
Willis said that lawmakers were "jawboning" in D.C. about problems in the subprime mortgage market. She also mocked Sen. Chris Dodd (D-Conn.), who held "a homeownership preservation summit," for not doing anything.
"There's many simple, even money-saving ways that we can actually give our little bit of help in our own lives and in our own homes and make a little bit of a difference," said weatherman Sam Champion on April 19 "Good Morning America."
But when it came to cost, the April 19 USA Today contradicted Champion:
“Products that help people use less energy – or leave a smaller ‘environmental footprint,’ as green advocates say – often are more costly than their alternatives, causing some to argue that going green is only for those who can afford it,” said USA Today.
Champion's segment focused on a special energy-efficient home built by BASF The Chemical Company that is 80 percent more energy efficient than other houses.
"We should have went to the mob for a loan," said Bronx homeowner Ana Rosado on CNN's March 27 "American Morning."
Her statement, extreme as it was, rivaled network reporting in March about subprime loans and foreclosures.
Reporters called the situation a “meltdown,” an “epidemic” and a “crisis” that could potentially lead to recession, and blamed lenders while almost entirely ignoring personal responsibility for borrowers. Instead, media accounts portrayed borrowers as victims, many of whom seemed shocked when their adjustable-rate mortgages adjusted upward.
While lenders were painted as the bad guys, they were rarely allowed to give any perspective. The networks, ABC, CBS and NBC, have done at least 26 stories on subprime loans just in the month of March, but only six of those included a lender’s voice. That meant an overwhelming 77 percent of stories didn’t even try to explain the lenders’ position.
During his online "Critiquing the Media" chat on Monday, Washington Post media reporter Howard Kurtz agreed with criticism that today's story on immigrant "victims" of mortgage lenders didn't seem to assume that borrowers are in any way responsible for failing to make their mortgage payments. He even agreed with the online questioner's suggestion there was "subtle racism" in the tone of the story:
Northern Virginia: Howard, question regarding the headline and terminology used in today's Post story on foreclosures. In both the current washingtonpost.com headline and the lede the term "victim" is used. The word implies predation and an I see an implication that these people aren't smart enough to understand what they're signing when they apply for mortgages. Am I reading too much into this or is there a subtle racism to writing about immigrant "victims"?
The top right-hand corner of Monday's Washington Post sounds like the return of Hurricane Katrina. "Foreclosure Wave Bears Down on Immigrants" is the headline. Reporter Kirstin Downey begins: "Immigrants are emerging as among the first victims of a growing wave of home foreclosures in the Washington area as mortgage lending problems multiply locally and across the country."
But the "victims of a wave" line fails to ask the question: at what point are people who make bad financial decisions responsible for their own fate? The heart-breaking individual stories Downey tells could have been avoided if the struggling homeowners had stared harder at the numbers.
Mike Strizki lives in the very first solar-hydrogen house in the U.S. and according to The Christian Science Monitor, "It sounds promising, even utopian: homemade, storable energy that doesn't contribute to global warming."
But the very positive profile of Strizki and his unusual new home left out the cost to other New Jersey residents.
“The total cost, $500,000, was paid for in part with a $250,000 grant from the New Jersey Board of Public Utilities,” correspondent Jared Flesher wrote on March 15.
Let's see ... a grant from New Jersey. Since New Jersey isn't a person that means the $250,000 came from taxpayers.
Last night, ABC "World News with Charles Gibson," and CBS "Evening News" both blamed increased foreclosures on lending companies and mentioned tightened regulation instead of discussing the issue of personal choice. NBC "Nightly News" was the only network to bring individual choice into the story on March 13.
"Mortgage companies were lending to people with questionable credit," said ABC's David Muir.
But it is not as if lending companies run around just handing out money to bad credit risks, people actually have to apply for home loans because they want to buy a home. Both ABC and CBS missed that.
Instead Muir's "World News" report pitied one couple "fighting to hold on."
Given the recent gloomy reporting about the industry, you may not know that housing prices nationwide actually went up a bit more in the fourth quarter (1.12%) than they did in the third (1.07%). Though there are certainly problematic metro areas, it would appear that the sky was not falling on home prices.
In fact, based on the press's coverage of the housing industry during the past year or so, you might think that OFHEO Director James B. Lockhart was blowing smoke in the News Release on Page 1 that introduces the report:
“These data show that, on the whole, prices are still rising, albeit at a much slower pace,” said Lockhart. “This suggests that house price appreciation is, for now, more in line with historical norms.”
He's kidding, right? Wrong (from page 4 of the report):
Apparently it's not much to CBS "Evening News" which promoted California's solar power initiative to "get people to think green by giving them some green," according to anchor Katie Couric on March 6.
Reporter John Blackstone argued that families who choose solar power do not suffer and "get something priceless. By living under one of California's million solar roofs they're helping the earth while helping themselves."
But the panels still costs at least $18,000 after the state and federal rebates and a Washington Post article said they actually cost $5,000 more initially than CBS said.
Blackstone also explained that Californians use less electricity per capita than other states, but left out how expensive energy is in California. You can find Dan Gainor's full story from the Business & Media Institute here.
"Well you know I wish I had better news, but the numbers this week were just horrific," said CNN correspondent Gerri Willis.
The numbers she referred to were home prices and new-home sales, which were down. After briefly mentioning the increase in existing-home sales (which make up a larger share of the housing market), Willis dismissed it.
With the help of CNN's Allen Wastler, the duo played up fears of recession on the March 3 program.
Wastler and Willis wrapped up the housing segment playing on viewers’ fears of a recession after an up-and-down week on Wall Street. Willis said the question wasn’t simply what happens in the housing market, but in the overall economy.
“The conversation about recession this week isn’t just bad for the stock markets; it’s also bad for housing,” Willis said. “When people lose their jobs, we know what happens.” You can read the Business & Media Institute article here.