Weekly Observation for February 11, 2012: Don’t Believe everything You Hear or Read, We have either a Corrupt or Incompetent Media, Meanwhile Springfield Home Sales Up and Sales Pending Way Up in 2012
February 11th, 2012Once again this week the media proved they cannot be trusted for their reporting. You need to exercise caution when reading reports that are merely regurgitation’s from government agencies and politicians. The media is either complicit in reporting the misinformation because they support the politicians, or they are negligent in their investigative journalism.
Last week I shared the reports on January unemployment. The AP and SJR stories would have you believe the unemployment rate of 8.3% was due to a surge in new jobs. When the truth is the rate declined due to people who are no longer counted and a participation rate, which is the number of people in the workforce, falling to 63.7%. This means 36.3% of Americans are not working. A misleading story portraying a false image of the economy.
This is important because housing cannot recover until the jobs market recovers and the economy can’t recover until housing recovers.
This week comes more regurgitation of political spin with big headlines in the SJR Business section on Friday: Illinois’ share $1 Billion, with a sub heading; Five major lenders to pay a total of $25 billion. Another report patently misleading with politicians blaming evil banks for the housing collapse. Nothing could be further from the truth.
Here’s why. Were banks guilty of overload and cutting corners by robo signing mortgage documents? Absolutely. But are they guilty of lying to consumers to get them to take out loans they couldn’t afford? Maybe a few, probably a teaspoon in an ocean of loans.
This is a prime example of government causing a problem, blaming a private sector industry to cover themselves, and then punishing the industry for doing what they were ordered by government to do. What was the crime? Following the mandates from government to make loans to low income families through lowered lending guidelines.
Let there be no mistake, there would never have been a housing meltdown and a financial collapse had government not ordered banks how to do their business. I will not go into all the details but for you who are interested in the truth read: “Audacity of dishonesty hijacks truth in lending” at Investors.com.
One quick quote from this article:
According to Peter Ferrara, senior fellow at the Carleson Center for Public Policy:
“This over regulation reached the point of forcing lenders to discount bad credit history, no credit history, no savings, lack of steady employment, a high ratio of mortgage obligations to income, undocumented income, and inability to finance down payment and closing costs, while counting unemployment benefits and even welfare as income in qualifying for a mortgage.
“This” he said, “turned into government-sanctioned looting of the banks.” [end quote]
While the SJR and AP foist the false premise that banks were at fault either because they politically support the president, or due to total incompetence by not investigating beyond the spin, or they know and overtly fail to report the truth.
If anyone should be investigated, indicted, and punished you could start with Reno, Gorelik, Raines, Johnson, Dodd, Frank, Waters, and Cuomo. Where are these people who laid the foundation for the biggest financial meltdown since the Depression? Either serving in congress, as a governor, as advisers to President Obama, or retired having been paid millions in bonuses for causing this economic disaster.
Again this week more purported good news on the economy reported by an untrustworthy media. These miscreants posing as journalists wrote stories about how good it is that consumer debt has increased. Their story infers consumer confidence is back and people are spending. Failed journalism again. With any investigation of substance, you discover the majority of debt was racked up in student loans. How does that help create jobs? How is more debt on families good for the economy?
Why are so many people borrowing? Because they cannot save as the cost of living has skyrocketed, while a corrupt government and media tell you there’s no inflation. We know there’s no surge in wage increases. How can a family save when they are paying the highest average per gallon for gas in history, and the highest food prices in twenty five years? Families have to borrow, they have no choice.
How can government, presidents, and bureaucrats get away with saying their policies are effective when they are failures? Because the media have deserted their charge by the founders to protect the people from the powerful. The reason we have no recovery is due to an over reaching government going beyond its constitutional limits, interfering with free market commerce, issuing dictates, mandates, violating peoples rights, and depressing growth with debt, deficits, taxation, and over regulation. Acts of commission and omission by the sycophant liberal media fails to report to you..
In spite of this administration’s economic policies depressing private sector growth, the Springfield housing market continues to be off to a fast start. January home sales were up over last January by 2.78% to 184 closed home sales, sales pending were up a whopping 21.9% to 295, the median sale price is up 1.36% to $111,000. Days on the market were up 19.75% to 109 days.
Year to date the bright spot are the number of listings going under contract up by a healthy 32.8% to 417 in the first six weeks of the year. Be careful not to read too much into this increase, if you recall last year at this time we were in snow up to our patooties.
My optimism is tempered with the knowledge that this activity is likely unsustainable based upon the economy. Without a significant number of jobs being added there won’t or can’t be a significant number of buyers added to the market. We’re just trading spaces. The burst in activity in my opinion is due to pent up demand coming off the fewest home sales in 13 years, the lowest interest rates on record, and mild weather.
I shared that opinion with you last week and low and behold this week came an article about what the economists at Goldman Sachs are saying about the economy. Posted at the businessinsider.com this week; Goldman suggest three reasons why not to get too excited about the economy.
One-lenders are tightening credit. Who can blame them with Obama, Holder, and States AG’s extorting $25 billion from mortgage lenders for making loans the government mandated they make. Two-the price of gas rising which will adversely impact consumer spending. Hurting, already hurting families even more in 2012. Third-unseasonably warm weather may be resulting in greater activity now followed by slower activity later.
Exactly what I believe we are seeing in the Springfield real estate market today. Take advantage of this burst in activity while you can.
The opinions expressed here are solely those of Fritz Pfister or identified sources, and not necessarily those of RE/MAX Professionals of Springfield or RE/MAX International.
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