Standard & Poor's S&P/Case-Shiller Home Price Indices are the "leading measure of U.S. home prices," S & P says in its press releases. Apparently if you say you're the leader, it must be true, because the financial press appears to buy every word, even if they're superficially skeptical.

When the financial press quotes the Case/Shiller Indices, there's always a bit of defensiveness, which implies that other housing indices have some reason to lie about their results. What's galling is that every index has some kind of deliberate exclusion that regulates its results.

The National Association of Realtors' monthly housing sales come from multiple listing service records. That excludes homes that sold without a Realtor participating, such as some builder homes and for-sale-by-owner properties.

The Commerce Department along with the National Association of Home Builders, tracks the sales of only new homes, because it's interested in gauging producer sales, not resales.

The Case-Shiller Indices are derived from tax property records compiled by Fiserv of the same single-family homes in 100 markets as they sell over the years. The purpose of the Index is to help futures traders bet on housing. In fact, the S&P just licensed Bear Stearns to trade over-the-counter (OTC) contracts based on the S&P/Case-Shiller Indices.

It's flawed, too, but you'd never know it by these comments.

Les Christie of CNNMoney writes,"The Case/Shiller indexes compare same-home sale prices. The industry considers them to be among the most accurate snapshots of housing prices."

Rex Nutting of CBS Marketwatch, wrote last week, "The Case-Shiller index, which tracks multiple sales of the same homes, is considered by many observers to be the best gauge of national and metropolitan-area real-estate values."

What observers? Who are they? And do they care that attached housing and newer homes, both of which cost more than existing single family homes, are excluded? Do they care that the information doesn't come out for two months?

To his credit, Nutting also points out: "Its major flaw is that it may overemphasize the coastal regions that had the biggest bubbles."

And that's only one reason why the Indices are coming under question, but Wall Street is still fawning.

David Wessel for The Wall Street Journal Online, writes that the Office of Federal Housing Enterprise Oversight's Index (OFHEO) and the Standard & Poor's Case/Shiller Index are the "two best--though far from perfect."

He points out some big differences. "The OFHEO index relies on data collected by Fannie Mae and Freddie Mac ... so it excludes loans too big for Fannie and Freddie to guarantee or too shaky."

In other words, the OFHEO index only covers the price of homes purchased with non-conforming loans, which is optimistic to say the least, particularly when they are used by the Federal Reserve to help calculate household wealth.

About Case/Shiller, Wessel points out that the indices cover only 100 major markets, areas where house prices, says a source, "may be doing worse than those in other places."

No kidding! The Index has incomplete coverage in 29 states and fails to include coverage from 13 states, according to a report by OFHEO economist Andrew Leventis.

What that means is if you're from Maine, Indiana, Wisconsin, North Dakota, South Dakota, South Carolina, West Virginia, Alabama, Mississippi, Idaho, Montana, Wyoming, or Alaska, the Case/Shiller Index doesn't mean diddlysquat. By the way, these are the middle America states that missed the housing bubble, and they're also missing the bust.

The point is none of the indices is perfect, but the financial press should know better than to applaud one indice over another. What they should do instead is simply explain what homes are included, how the information is obtained, and what the intended use for the information is. That way, readers can draw their own conclusions as to which numbers are relevant -- property tax data or sales, or both.

Real estate is local, and even in an area where home sales are soft, there will be pockets of strength, and pockets of weakness in strong markets. That's just the way it is.