For if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupefied by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realise that the privileged minority had no function, and they would sweep it away. In the long run, a hierarchical society was only possible on a basis of poverty and ignorance. - George Orwell, "1984"The ability to perceive and understand the truth about Government/Federal Reserve/Industry economic reports is getting more difficult for those who only look at the headlines or take a cursory glance at the story, without delving into the details. I'm sure eventually, if Orwell's vision plays out accurately even further than it has already, the details behind the headlines will be conveniently obfuscated - “Yes, sometimes two plus two is four. But sometimes it’s five or even three. Sometimes it’s all of those at the same time.” (from "1984").
So today the NY Fed released its monthly Empire State Manufacturing report, which showed that the general index increased from April's decline. But the new orders index was -6.7, shipments index was -11.8%, unfilled orders -14.5%, labor index -10. I believe the source of the increase was derived from prices paid, +21, and prices received, +11.3. There was an increase in the "outlook," a touch-feely sentiment poll, but the 6-month future outlook was negative.
In fact, beneath the headline number the report was down-right ugly. You can check my ability to read and copy numbers here: Empire State Manufacturing Survey.
The other Orwellian Orgasmic business report released today was the National Association of Homebuilders "Confidence" Index sponsored by Wells Fargo, the biggest home mortgage lender. With Wells Fargo as the promoter of the index, you can see how this thing gets spun around on its head with Orwellian deception. In fact, here's how the survey is based: "the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months" LINK As you can see, the questions asked are analogous to polling a classroom of kindergartners if they think they'll still like to eat candy at the end of the summer.
The truth is, that based on all the data I've been collecting and analyzing over the last 4 months, it would appear as if the housing market is getting ready to fall off of a cliff. Here's just a flavor of the information which I will be turning into a couple of articles - this is from Mark Hanson, a private consultant who has been the most accurate housing market analyst I've observed over the past 12 years:
This morning [June 5, 2013] I was made aware that three large private mortgage bankers I follow closely for trends in mortgage finance ALL had mass layoffs last Friday and yesterday to the tune of 25% to 50% of their operations staff (intake, processing, underwriting, document drawing, funding, post-closing). This obviously means that my reports of refi apps being down 65% to 90% in the past 3 weeks are far more accurate than the lagging MBA index, which is likely on its' way to print multi-year lows in the next month.The point here is that the entities putting up the money to finance homes are aggressively reducing their operations - i.e. that's how the big money is betting. The new homebuilders index is reflecting sentiment. One is hard cash, one is hot air that belies the underlying facts.
Someone asked me a little earlier if I had any thoughts on what Bernanke might say on Wednesday after the FOMC meeting breaks. My reply was "no thoughts, barely interested." I went on to say that "I'd be interested if they talked about why the Government has already incurred a $626 billion spending deficit 8 months into its fiscal year (end of May) when the CBO released a report three weeks earlier on May 8th that projected a full FY deficit of $649 billion...