Home builder confidence up as housing starts fall off a cliff

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Home Builder Confidence Climbs To Highest Since October 2008 so said a report issued by Wells Fargo and the National Association of Home Builders (NAHB) yesterday. In case you were wondering about the NAHB’s prognostication ability today the Commerce Department reported new home construction declined nearly 11% in March, dropping to the second lowest level on record. The lowest on record? Why that would have been the numbers reported in January.

In fairness to the NAHB, they did say that the highest confidence level since 10/8 was still really, really bad.

The housing market index came in at a level of 14 for April, against expectations for a reading of 10 and following the previous level of 9 in March. The reading is the highest reported since October 2008, but still remains far below the critical 50 level that would indicate a return to positive sentiment.

I continue to believe that February’s increase in starts was an aberration. Sadly, supporting this are the most recent foreclosure numbers.

Foreclosure filings for the first quarter of the year jumped 24% year-over-year and were up 9% from the last quarter of ‘08, according to a report by RealtyTrac. Of the 803,489 filings in the first quarter, 341,180 happened in March – a 17% increase from February and a 46% jump from March 2008.

On the plus side, the banks are doing better even if you and I aren’t. Well at least they LOOK like they’re doing better. JPMorgan reported a $2.1 billion first-quarter profit today. Last week Wells Fargo said it “expected to report” first-quarter net income of about $3 billion. Some analysts are expressing doubts about this number. Paul Krugman on NPR said that he expects to see significant revisions before the actual number is published. Bloomberg’s Jonathan Weil has a great list of four gimmicks to look out for when the company releases its actual first-quarter results on April 22. In short there is deep suspicion that this is either another anomaly or sleight of hand.

Speaking of sleight-of-hand, my hat is off to Goldman Sachs for declaring a profit in large part by playing games with the calendar. As Jesse’s Cafe reports

Last night in a surprise move Goldman announced their earnings early, showing a surprising profit of $1.8 billion, beating the Street estimate handily. The bulk of their profit purportedly came from speculative trading for their own accounts, using ‘cheap FDIC guaranteed funds.’ … What was not reported last night is that Goldman had changed their reporting periods to begin the 1st quarter in January 2009 when they declared themselves to be a bank holding company. Prior to that, their fiscal 2008 year ended on November 30.

This made the month of December 2008 an ‘orphan month’ that was ignored in the financial headlines.

And to think people still don’t have confidence in our financial system.

Constantine von Hoffman is a veteran business journalist and social media consultant. He write the blog CollateralDamage, a satirical look at marketing and business.