Bloomberg - The Ministery of Truth

Some of Bloomberg's misleading headlines come straight out of Orwell's Ministry of Truth. Consider this act of misdirection from a headline written by Bloomberg's Brian Swint:

U.K. Housing Market Improves as London Index Rises

The U.K. housing market improved last month as more London real-estate agents and surveyors said home values increased rather than fell for the first time in 20 months, the Royal Institution of Chartered Surveyors said.

The rest of Swint's piece is filled with plastic green shoot optimistic blather and even an admission that house prices are likely to fall further into next year before stagnating in 2011 based on a PricewaterhouseCoopers LLP report. And yet another admission that in May, house prices dropped 12.5 percent from a year earlier.

Now consider this Guardian UK headline published on the same day:

House prices will stay in the doldrums for years

The Guardian's Larry Elliot writes: PricewaterhouseCoopers said recent signs of a recovery in the market which had been detected by a fresh survey of estate agents were a "false dawn". John Hawksworth, the chief economist at PWC, said prices would experience a gentle decline for the next 18 months and then pick up slowly over the following years. PWC said it was more likely than not that real house prices in 2015 could still be below average levels seen in 2008, after adjusting for inflation. Even in 2020, after five years of relatively strong growth, the consultancy saw a 30% chance that real house prices could be below 2008 levels.

"Although the estimated average UK house price overvaluation of around 25% in mid-2007 has now been largely eliminated, our analysis suggests that house prices could still have further to fall over the next year.

"Despite some recent reports of rises, we are not out of the woods yet by any means. It is important for buyers to take a long-term rather than a short-term view."

And Jeremy Leaf, The Royal Institution of Chartered Surveyors' own spokesman had this to say:

"Although the market is showing signs of improvement, it is unlikely that there will be a sustained upturn while mortgage lenders remain risk adverse. A lack of stock on the market is providing a platform for modest price increases. While supply remains tight, the market may continue to show tentative signs of firming but instructions are starting to increase in some regions and this could dampen any meaningful recovery as long as economic conditions remain quite so uncertain."

John Hawksworth, the chief economist at PWC went on to say: "What would be a surprise would be if house prices now started to recover strongly in a sustained way. That would go against the lessons of history. There may be the odd month where the market seems to be going up but it is a false dawn because there is no underlying strength."

He added: "The pace of recovery in house prices seems likely to be relatively modest until the middle of the next decade, although it could pick up again beyond that as supply shortages reassert themselves, credit conditions return to normal and negative memories of the current housing bust fade."