A Stampede of Bulls(hit)

Is there any member of the Bush Administration who isn't delusional and incompetent? If there is, it's not our Treasury Secretary:

"The major slump in the housing market is nearing an end and should not have a significant impact on the overall economy, Treasury Secretary Henry Paulson said Wednesday."

Sure Hank, whatever you say...

"We have had a major housing correction in this country," Paulson said in an interview with a small group of reporters at the Treasury Department. "I do believe we are at or near the bottom."

So, we have Hank P. trying to assure us that we are at or near the bottom of the housing correction. Now let's hear Ara Hovnanian, CEO for K Hovnanian Homebuilder, weigh in:

"There is not a recovery that is about to happen.''

Hmmm. And what about the recent homebuilder confidence index? Maybe that press release hasn't made it to Mr. Paulson's desk yet.

But back to Ara. He might be the only CEO willing to speak to the media about the current housing 'slump'. From CNBC comes this report:

"I'm blogging to you...in mid-town Manhattan, where I've never in my life seen so many freaked out CEOs. I say this only because not nine months ago I attended a similar UBS conference, where the homebuilder CEOs and their CFOs and their PR reps and their baggage handlers and their mother-in-laws were all fighting with each other to jump in front of our cameras to talk about the recovery shining brightly ahead in the housing market."

CEOs from Ryland Homes, Standard Pacific Corp, and DR Horton all refused to answer press questions regarding the current 'slump'. I guess if you don't have anything nice to say, don't say anything at all?

*************************************************************

From another bull comes this headline: "US Economy to Expand in Coming Months". Please tell me more:

"The U.S. economy should expand modestly in coming months as a healthy job market continues to trump weakness in housing prices, a gauge of future business activity showed on Thursday."

But Wait! What about this:

"Initial jobless claims rose by 10,000, a third consecutive increase, to 324,000 in the week ended June 16, the Labor Department said today in Washington."

Oh, I see you explain it by saying this:

"While the big increase was unexpected, analysts said it did not change their view that the labor market remains hardy."

So a "healthy job market" entails a "big increase" in jobless claims?? Oh well, they're the analysts, right? I'm sure any objections I voice can be explained away somehow or another...

*************************************************************

Not to be outdone, Marketwatch had this headline: "US Economy Weathered the Worst, Index Shows". This is great! Maybe these main stream perma-bulls have changed my mind after all:

"'These data may be suggesting that the economy has weathered the negative impact of the housing slump and the spring run-up in gas prices,' said Ken Goldstein, labor economist at the Conference Board."

Do "labor economists" specialize in energy or real estate? I always thought they were job market specialists. I'm not saying the man doesn't have the authority to speak on topics other than the job market, but it would've sold the story more if the guy commenting on gas prices was an "energy economist", or if the guy commenting on the housing market was a "real estate economist".
There are a few problems with what Ken said and what he didn't say.
What he said: the economy has weathered the housing 'slump'. What he didn't say: the housing 'slump' is far from over.
What he said: the economy has weathered the run-up in gas prices. What he didn't say: we don't know how long this 'run-up' will last or if the 'run-up' is done running up.

*************************************************************

The spin-cycle is running on high these days. Don't let the bulls confuse you.