Diana Olick, by far the best reporter at CNBC, and not merely an anchored regurgitator of propaganda bullet points, let one slip today, by posting an article on CNBC titled: "Home Price Double Dip Begins" (and we have a screenshot in case CNBC realizes the grave error it has made and retracts it). While nothing new to Zero Hedge readers, where we have been making the case that the economy has nothing to double dip to, considering it has been in one depression for 33 months now, it may catch the broader public by surprise. Ms. Olick's arguments: "given the combination of the expiration of the home buyer tax credit and the increasing number of loans moving to final foreclosure, we knew that home prices overall would take a hit, but it would take a while. Well we're here." And there you have it - there is little that can and should be added when dealing with the simple truth. Of course, for CNBC to regain its floundering Nielsen ratings it would take all the daily staff to follow in Ms. Olick's example and report what is actually happening to the country, instead of what Joe LaVorgna believes should be happening, based on the goalseeked output his "economic" model is spewing forth. Alas, it is now far too late for the cable station to regain much needed credibility, especially when anchors tell guests who dare to question the propaganda assumptions that they disagree with they are not welcome.
More from Diana.
Two new reports out today prove the consequences of oversupply of organic inventory (12.5 months on existing homes in July according to the National Association of Realtors) and the shadow inventory of foreclosed properties (estimates vary widely and wildly). CoreLogic's Home Price Index shows home prices "flat" in July as transaction volume continues to decline. "This was the first time in five months that no year-over-year gains were reported," according to the release. In June, prices were up 2.4 percent year over year. In addition, "36 states experienced price declines in July, twice the number in May and the highest number since last November when prices nationally were still declining."
And there's the rub.
Prices have been recovering since last Fall, largely thanks to the artificial stimulus of the $8000/$6500 home buyer tax credit. But prices were also benefiting from a slight bump in confidence in the housing market, fed by an apparent drop in the foreclosure numbers. In reality, the foreclosure numbers were dropping only because banks and states were delaying the process, as they tried to cram as many borrowers as possible into what we now know is a largely unsuccessful government-backed mortgage modification program.
Now home buyer confidence is back in the dumps, which is clear from another report out today showing that for the 3rd straight month the percentage of home sellers on the market who have slashed their asking prices at least once has gone up. Twenty-six percent of sellers on the market in August, according to Trulia.com, had lowered their expectations, and hence their prices. Sellers on the market today have cut $29 billion off their collective home equity.
There is simply much more pain in store for home prices, which of course means that Jamie Dimon jumped the shark on beginning the trend of reducing NPL reserves and charge offs, when very soon even this artificial boost to earnings will no longer be applicable. And what is oddest is that just today JPM announced that both credit card delinquencies and charge offs have started to increase - this is the environment in which the bank sees loan performance continuing to improve?
h/t Mark Mansfield