Unexpected drop in US housing starts says Bloomberg and The Times

Bloomberg, The Times and all the other major newspapers are apparently shocked thta there was a drop in US housing starts in April. According to Bloomberg yesterday:

U.S. stocks declined as banks fell after Moody’s Investors Service said commercial property values plunged and Home Depot Inc. retreated following an unexpected slump in housing starts.

And the Times ran with a similar lead in, which is entertaining because in March they reported “an unexpected rise in new home sales,” which apparently heralded  “the first tentative signs of economic “green shoots.”

The dictionary definition of unexpected is Coming without warning; unforeseen.

So allow me to offer a little warning. Housing starts and new home sales are at an extremely low point in history. In fact, the lowest point in recorded history – since 1959. There are liable to be slight up and down blips in the volume of sales. This does not herald a recovery, nor does it mean the sky is falling on our heads.

Bloomberg shocked at unexpected drop in US housing starts

Realistically, the banks are still in trouble and the simple fact is that what we have right now is not a crisis of confidence. We have a liquidity crisis. until this is dealt with, we are going to continue to see dropping sales volumes  dropping real estate values, and dropping new home starts.

Perhaps if the newspapers did not jump all over A 0.000003% increase in sales as a “green shoot of recover,” it would not be such a disaster when they fall 0.0000001%. There is a massive inventory of property for sale both in the United States and elsewhere in the world. We over built people – deal with it – and if you are a small investor with some cash in hand – get out and start looking for some bargains. It does make me wonder just exactly the quality of “advice,” bloomberg can offer………