Alan Zibel

In a report so riddled with errors, inconsistencies, incompleteness and sloppiness that it's really hard to know where to begin, Associated Press real estate writer Alan Zibel couldn't even keep his housing recovery benchmark remotely consistent with what it was only a month ago.

The Census Bureau's September release of information about August housing starts and building permits informed the country that those items came in at seasonally adjusted annual rates of 598,000 and 569,000, respectively (they were revised slightly upward in yesterday's reports covering September).

On September 21, after disclosing the housing starts number, but not the one for permits, Zibel quoted Paul Dales, U.S. economist with Capital Economics, who said:

"Homebuilding activity remains at an astoundingly weak level," Dales said, adding that construction has to be more than double current levels for the market to be considered healthy.

My math says that means that annualized starts have to reach more than 1.2 million before health returns.

Now look at what Zibel told us in his report yesterday:

There are quite a few shaky assertions in Alan Zibel's Associated Press report yesterday about Freddie Mac's latest quarterly loss ($6 billion), its latest bailout installment request to the U.S. Treasury ($1.8 billion), and the cumulative taxpayer bailout amounts that have been paid out to Freddie Mac and big sister Fannie Mae thus far ($148.2 billion) -- too many to cover in a blog post.

So I'll concentrate on the howlers present in just a single paragraph near the end, wherein the AP reporter attempts to explain why the two formerly government-sponsored mortgage giants that are now government-bailout enterprises ran into the ditch. The verbiage pretty much states the meme that the establishment press seems to want the public to swallow about what went down, and who's to blame:

During the housing boom, Fannie and Freddie faced political pressure to expand homeownership and competitive pressure from Wall Street to back ever-riskier loans. When the market went bust, defaults and foreclosures piled up, and the government had to take them over.

It seems that when they saw today's today's disappointing unemployment claims report from Uncle Sam, the Associated Press's Alan Zibel, perhaps with the help of contributors Jeannine Aversa, Martin Crutsinger, and Tali Arbel, decided to start playing the expectations game with June's Employment Situation Report, which isn't due to arrive from the Bureau of Labor Statistics until July 2.

If so, from a propagandist's perspective, it's a pretty slick strategy, given that the BLS's report will probably be the last significant piece of economic news before the July 4 weekend, making it a larger than usual topic of conversation among the American people in the days that follow.

Private sector job growth shrank to a seasonally adjusted 20,000 in May. Maybe if the AP and others make us think that June will go negative and the actual result comes in barely positive, it won't seem so bad. The worse possibility is that they're aware of more information than the rest of us have, and that things really are heading south in this "Rebound? What Rebound?" recovery.

Here are key paragraphs of Zibel's report (link is probably dynamic and subject to revision; bolds are mine):

After the closing bell on Friday, just in time for everyone to stop paying close attention, mortgage behemoth and ward of the state Fannie Mae ("Fan") released its fourth-quarter and full-year financial results. Its press release (PDF) informs us that its $74.4 billion loss in 2009 (inclusive of dividends paid to the government) followed a $58.8 billion loss in 2008.

For those keeping score at home, Fan's three-year losses of $137 billion, as reported by the Associated Press's Alan Zibel yesterday evening, plus the roughly $80 billion lost in the same period at kissing cousin Freddie Mac ("Fred"), is over three times the highest-end estimate of $66 billion in total losses at household word Enron, and over four times the roughly $50 billion investors lost to household name Bernie Madoff. Enron and Madoff are history; Fan and Fred are just warming up, and a large portion of the public has no idea who they are.

Oh, by the way, Fan also told us yesterday that it will need another $15.3 billion in cash by the end of March. That would bring the total of Uncle Sam's combined Fan-Fred cash infusions to $126 billion.

These outrageous results are made even more maddening by Zibel's kid-glove treatment of the problems at the two entities in paragraphs 8 through 10 of his report:

The Obama administration's Home Affordable Modification Program (known as "HAMP" to lenders and services, and MHA, or "Making Home Affordable" to the general public) is "failing."

I only learned this because I looked at the Associated Press's feeds on Christmas evening and saw this headline -- "No consequences for lying borrowers."

In an item time-stamped December 25, AP national business columnist Rachel Beck (note: not a reporter) used language that would ordinarily cause many in the press to characterize such a person as a hard-hearted meanie to describe the results of this core Obama initiative this far:

No consequences for lying borrowers

The government shouldn't reward liars. But that's the effect of changes to the Obama administration's failing program to help homeowners modify their mortgages.