Industry Figure Tom Chappell

In an article from The Guardian:

On Friday, the Chicago Purchasing Managers Index fell by more than 5 percentage points from its April level, approaching its low for the downturn. The employment component of the index did hit a new low.

These reports might have led to gloomy news stories, but not in the US media. The folks who could not see an $8 [trillion] housing bubble are still determined to find the silver lining in even the worst economic news.

For example, National Public Radio told listeners that the new home sales figure reported for April was up from the March level. While this was true, the April figure was only 1,000 higher than a March level that had just been revised down by 5,000. April new home sales were 4,000 below the sales level that had originally been reported for March. USA Today touted a “surge” in durable goods orders, which was also based on a sharp downward revision to the prior month’s data.

The media have obviously abandoned economic reporting and instead have adopted the role of cheerleader, touting whatever good news it can find and inventing good news when none can be found.

This is not the beginning of a bull market. It is (pretty close to the end of) a bear market rally. We haven’t even begun to feel the impact of the Option ARM recasts (vs. resets, btw) yet, not really, and the number of Alt-A and even Prime mortgage defaults are increasing markedly, because even if you can afford your current mortgage, it’s hard to justify continuing to pay it when you’re 25% underwater, especially if you’ve got a nice job offer in another city, say.

Read the Full Article in The Guardian
“Economic Recovery is Wishful Thinking”
by Dean Baker
June 1, 2009