Unadjusted home sales numbers. Found this in Fleckenstein's piece tonight. I thought the numbers looked a little odd since I watch the mortgage application numbers every week and they have been down lately.
"Vivaldi's 'Four Seasonally Unadjusted Seasons' Turning to today's fictional installment, let's take a look, why don't we, at the crowing about existing home sales, through the double mouthpiece of The Wall Street Journal and The New York Times. The Journal in particular took pains to point out that this was the first time ever that home sales exceeded six million units. Except for the fact that it didn't happen, it would be a great story, but just try prying people away from their illusions. In any case, yesterday I noted that perhaps seasonal adjustments had something to do with the improved numbers. Little did I know how dramatic the change was, and I am indebted to Joanie for pointing this out in her morning piece. Here's the real data: While seasonally adjusted housing starts were up 16.2%, unadjusted they were off by 16.8%. Obviously, the warm weather that I mentioned yesterday had a dramatic impact on this. In the "fun with numbers" department, the former (seasonally adjusted) works out to a 503% annualized compound rate of change, versus a decline of 89%, as measured by the latter. Those numbers are close, right?
Times and Journal Trained To Extrapolate On The Paper What I find outrageous is that while both The New York Times and The Wall Street Journal described these numbers as seasonally adjusted, they did not bother to tell you what the real numbers were. I think that is somewhat disingenuous. It seems that people are so desperate for good news, they take any number at face value. That's of course what we see on Wall Street and on Bubblevision, where any one data point is extrapolated into future and one good piece of data is assumed to override 10 bad pieces of data. The fact of the matter is that often, one has to look at both the seasonally adjusted numbers and the actual numbers in order to determine whether the numbers make sense."
Joe |
