Every Sunday, the “spin doctors” at Bloomberg sit down in front of their keyboards, look at the upcoming economic data, and start “pumping” U.S. markets with all their might.

I haven't poked fun at this transparent attempt at brainwashing for quite some time, so I thought I would punch some holes in their nonsense this week.

This week, Bloomberg was attempting to call (yet another) “bottom” in the housing market. Since I have pointed out that it is totally impossible for this occur for many years (see “U.S. mortgage-crisis to get MUCH worse in 2010-11”), I'll focus my wrath on this despicable propaganda.

There are two pieces of housing data coming out this week, and as is always the case, the propagandists only tell half-truths about this data (literally). To start with, Bloomberg was waving its pom-pom's over the fact that “new home sales” were expected to inch a little higher.

What the propagandists never ever mention (in the same article) is how many new homes are being built. There is a very obvious reason for this omission. For the last eighteen months, U.S. home-builders have been starting construction on new housing units at anywhere from 50% more to double the rate at which they are selling homes.

To be specific, in May, U.S. home-builders reported 532,000 “new home starts”, while the Bloomberg estimate on “new home sales” was a paltry 360,000. This silly game has been going on for many months (see “A Revealing Look at U.S. Housing Propaganda”), and still neither the media parrots nor the brain-dead “experts” have caught on.

Here's a quick quiz to see if people are paying attention. What happens if every month U.S. home-builders build 50% more homes than they sell? That's right: inventories go higher and higher every month. What's interesting to note here is that inventories for new homes are not rising at nearly that astronomical rate.

Part of the answer to this conundrum is that U.S. home-builders have been forced to bulldoze many new homes – often before construction is even complete (see “U.S. Banks bulldozing NEW homes”). However, unless those bulldozers have been much more active than what has been reported in the media, there is still a significant discrepancy in the data – suggesting that the “new home starts” data has been fictionalized (like most other U.S. economic “statistics”).

Regardless, the bottom-line is that U.S. home-builders continue to build significantly more units than they sell every month. Thus, the new homes data does not suggest that the U.S. housing market is approaching a “bottom”, rather, it strongly indicates that all U.S. home-builders are rapidly approaching bankruptcy.

Turning to “existing homes sales”, here the attempt to “spin” the data into positive-sounding propaganda is even more contrived. Bloomberg is trying to convince the sheep that an estimated annual rate of sales of 4.8 million units is “good news”, and indicates a “bottom” in the housing market.

Here is what is going on in the real world. Total foreclosures and repossessions this year is on track to hit about 4 million units. Meanwhile, there are 20 million U.S. homeowners with “under-water” mortgages – with most of those homeowners desperate to sell.

In addition, there are over 20 million empty homes in the U.S., with somewhere around 2 million of those units being recent foreclosures/repossessions that have not been listed on the market – because the banks holding those homes are afraid to put them onto the market.

Part of that fear is with respect to the collapse in U.S. home prices. With prices currently falling more than three times as fast as during the worst year of the “Great Depression”, bankers don't want that collapse to accelerate even faster. Secondly, they are also afraid to list these homes on the markets, because as soon as they sell them, they are forced to incorporate the losses onto their balance sheet (rather than the fantasy-valuations the banksters currently have on their books).

Finally, there are tens of millions of baby-boomers just beginning their retirement, with savings which are totally insufficient to fund their retirements (see “U.S. Pension Crisis: the $3 TRILLION question”). The only way they can maintain a standard of living even close to their pre-retirement years is to dump real estate – with U.S. seniors needing to dump somewhere around $1 TRILLION in real estate over just the next decade.

The bottom-line is that with annual U.S. housing sales less than 5 million units/year, it is not even theoretically possible for this market to be anywhere near a “bottom”. In the real world, barring a multi-trillion bail-out of all U.S. homeowners, the best-case scenario for a “bottom” would be some time around the middle of the next decade.

In the meantime, shameless propagandists in the U.S. media continue to utter calls for one (false) “bottom” after another, and every month they lure tens of thousands of American families into financial disaster with their despicable lies – as Americans buy into a market which (at best) is only half-way to the bottom.

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