The Government reports garbage and the morons in the financial media reports that garbage as hard facts - Charles Biderman, Trim Tabs Independent ResearchMr. Biderman didn't exactly discover plutonium here with this revelation, but he provides excellent analyis of why the Government-released retail sales report this week is a complete farce. Yesterday's retail sales report for March was reported to be up strongly led by auto sales. However, as Biderman details in the brief video presentation linked below, the Government numbers on auto sales for March are at an extreme divergence from the numbers reported by the auto manufacturers themselves, which showed an unexpected and precipitous drop for March. Biderman's 4 1/2 minute rant is well worth watching, and he offers realistic replacements to track retail sales data and employment simply by tracking credit card sales and tax revenues. Not only would that be more accurate, but it would enable to the Government to get rid of part of its Census Bureau and BLS bureaucracy, cut expenses and take a step toward reducing wasteful, useless Government spending: LINK
On to housing. Yesterday the National Association of Homebuilder's builder sentiment index was released. It plunged 3 points from the previous month to 25 and was 4 points below consensus expectations. Note: any reading below 50 is negative. Then today housing starts for March were released and those plummeted nearly 6% from the previous month and were substantially below the Wall Street consensus estimate. Of course, the media had to spin a positive on this so it was highlighted that building permits jumped. But this was entirely for multifamily/apartment dwellings. Here's a LINK An increase in the number of apartment units is another variable that will put downward pressure on home values. In fact, for most of the last year, any perceived strength in the housing market has been due primarily to an increase in demand for rental units. We also know that foreclosures are quickly ramping up again and this will further depress home values.
It's going to get a lot worse in the housing market. Make no mistake about that, despite any Orwellian attempt by the media and industry pimps to put lipstick on the pig and despite the enormous amount of taxpayer-subsidized support that the Fed and the Obama Government are throwing at the housing market. In fact, this chart below pretty much will explain the basic problem with the housing market - and for the entire economic system for that matter. I sourced this chart from the daily King Report and the numbers were compiled by Sentient Research from the Government (BLS). Just to clarify this data series, it is MUCH uglier if you strip out Government entitlement/transfer payments (social security, welfare, etc), which are included in the Government calculation of household income: