It’s pretty easy to lie with number, charts, and juicy factoids. Take example the new numbers from Fannie Mae. They announced a $2.19 billion quarterly loss and cut its dividend to 25 cents a share and will raise $6 billion in capital.

Fannie’s CEO sees home prices falling about 7-9% for the year, which would lead to a 15-19% peak-to-trough decline in the average national home prices.

But, the problem is that Fannie Mae does not use foreclosed properties in its price index. The FNM significantly understates home price declines. The S&P/Case-Shiller Home Price Index is already down 5% nationally from the beginning of the year. Annualized, that means a 30% for all of 2008.

Home prices minus foreclosures! Wonderfully useless indicator!

Sources: Minyanville | The Big Picture