mbborak

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  • Admissions of Spin at the NAR
    Some will simply do/say anything to maximize their own private gains. This is why we need oversight and regulation. Lereah is no different from the loan originators, investment bankers, and finance CEOs who sacrificed all consideration of their client's well-being to pump up their next bonus check. He rode the real estate bandwagon all the way up and jumped off before it tumbled down the mountain.

    I remember wondering to myself when the media would stop going to the NAR for forecasts when every single one of them was proven too optimistic.

    The question is, if the realtors themselves won't hold him accountable, who will? Certainly not the mainstream press. And unfortunately, Seeking Alpha is not considered "mainstream"...
    Jan 06 12:32 pm |Rating: 0 0 |Link to Comment |View article
  • Is Financial History Bunk?
    I think this article reflects the author's frustration with the impossibility of finding a neat historical reference point that explains the present market conditions and predicts a future outcome. Certainly, many out there in the financial press try to oversimplify current and past recessions into "narratives" that can be easily understood in one concise (and easily published) article. The expectation that we can simply point to a previous recession and say "ditto this time!" needs to be put to rest.

    History can definitely lend insight into the current market turmoil, but because we are in the middle of it and have so far seen outcomes that were largely unexpected, the instinct is to throw our hands up and say that history has failed us. I simply cannot believe that there is nothing to learn from past events in our financial history, and I would argue that up until the Fed and Treasury started their meddling, a prudent financial historian could have largely predicted the onset of this recession (and several did). The picture is certainly cloudy and there are no easy answers. To echo Mark Twain, history gives us clues, not prophecies.
    Jan 05 12:21 pm |Rating: 0 0 |Link to Comment |View article
  • Let's Clarify "The Worst Economy Since...." Debate
    Mark, it would have been beneficial to see a chart comparing the forecasts of economists with the actual rise in unemployment for each of the last eight peaks. If there is one consistency in the last 12 months, it has been that economic forecasts have been over-optimistic and slow to revise downward. Keep in mind that throughout this past summer the majority of economists surveyed predicted the US would avoid a recession (2Q of negative growth).

    Wachovia just came out today with a forecast of 9% unemployment by late next year. Not that they're correct, but suffice it to say that these forecasts will likely follow a downward trend for the forseeable future.
    Nov 12 16:48 pm |Rating: +1 -1 |Link to Comment |View article
  • Bloomberg Picks a Fight With the Fed on Disclosure
    Don't worry, the Fed has our best interests at heart and is doing everything it can to protect the taxpayer and the long term health of this country. They won't spend too much on unrestricted loans to large corporations who got us into this crisis and refuse to take the risk to help us get out of it. After all, these Fed and Treasury guys are geniuses, right? Most of them are former bank executives, so they definitely know what they're doing with our money.
    Plus, what right do we have as citizens to know what these unelected officials are doing with our $800+ Billion tax dollars?

    Even if we end up losing all this money, our kids will eventually pay for it so we're in the clear!
    Nov 11 12:45 pm |Rating: +1 0 |Link to Comment |View article
  • The Plague of Short-Termism
    Thank you for your article. It is amazing how many aspects of our society, government and economy are subject to this "short-term" mindset. We can't wait until we have savings to go out and spend; we can't fund long-term infrastructure projects because the upfront cost is politically unpalatable; we won't accept short-term economic pain in order to allow the system's problems to work themselves out. Every time I hear a comment like "deficits don't matter because we need to put out the fire now" I think of how we will look back in 10 years and see how wrong that sentiment was. Just like Greenspan's overstimulation of the economy in 2001-2002, we will sacrifice everything to avoid the dreaded recession, not realizing that it will set us up for inflation and huge budget deficits once the "crisis" is over.

    We have simply become too spoiled and too entitiled to simply batten down the hatches, keep our noses to the grindstone and work through our problems. We cry out for a safety net to rescue us from the inevitable downside to our "get rich quick" economy. The result is constant imbalance and volatility, with the worst consequences being passed on to future generations.
    Nov 04 11:22 am |Rating: 0 0 |Link to Comment |View article
  • The Right Way to Encourage Home Ownership
    Once again, I agree with the above comments. Home prices simply have to come down to reasonable, even cheap levels. Once they are there, we can worry about how low-end buyers will be able to finance them and perhaps offer temporary tax credits that would have to be be repaid in order to spur the market's recovery.

    Remember, we are coming off of record hight home ownership rates, and I simply don't see the need to offer further subsidies at this stage of the game, since we would just be propping up a market that has further to fall. It would be folly to try to get low income families into houses that will be worth less in a few years rather than simply waiting until these families can make their own determination of what they can afford.
    Oct 24 17:09 pm |Rating: 0 0 |Link to Comment |View article
  • Have We Learned Anything Yet?
    Thank you for this article. Somebody needs to step up and speak "in defense" of recession. It is the natural forest fire that cleans out the underbrush and allows new sprouts to grow and thrive. The thinking that we can have endless prosperity with no downside is dangerous to our economy and disastrous in the long term. Realizing when things have gotten out of hand on the upside is a skill that we should learn from this crisis.
    Oct 07 13:57 pm |Rating: 0 0 |Link to Comment |View article
  • Asking for a Housing Bailout
    Cramer's proposal is the surest way to put the US housing market on life support for the forseeable future, leading to a long, slow decline in both property values and mortgage lending. Think Japan-style "lost decade". We will revert to the mean eventually, folks, it's just a matter of how long we want to wait until its over.

    Maybe we can have an "equity sharing" deal where the government owns 50% of all troubled real estate and simply rents their share out at a subsidized rate. Or, the government could ban private appraisals and release its own "CHPI (Core Housing Price Index)" that reassuringly lets us know that real estate values are consistently rising at 5% per year.

    Do these people call themselves capitalists?
    Sep 08 14:17 pm |Rating: 0 0 |Link to Comment |View article
  • Where We Should Be Investing: The Paradox of Thrift
    Wow, thanks for that breath of fresh air. A great explanation of how investing in unproductive assets has put us behind the 8 ball.

    Now we just need to figure out how to convince financiers and government to stop plowing our savings and taxes into ventures that produce only short-term gains and long-term liabilities.

    Perhaps a follow-up article would be warranted?
    Jul 31 10:57 am |Rating: 0 0 |Link to Comment |View article
  • Just How Terrible Is Housing as an Asset Class? Roubini Weighs In
    The only productive effect that housing has on the economy (once it is actually built) is in propping up consumer spending. Those consumers with more space tend to accumulate more stuff and spend more on upkeep and improvements to their houses. Aside from that, it is a drag on federal, state, and local budgets, as households continue to demand public services, and a drag on the actual long-term financial health of the consumer by way of the increased debt burden that they must finance. Now, as the illusory price increases of the past decade reverse themselves, we will unfortunately see even more demands for subsidies resulting in an even higher burden on the taxpayer.

    Policymakers have to resist the enormous pressures of the housing/housing finance lobby and the baby-boomer homeowners in the interest of putting this locked-up capital to better use. Good luck - maybe that bit about bankrupting the US economy wasn't so far off.
    Jul 17 13:39 pm |Rating: 0 0 |Link to Comment |View article
  • Bullish on China After My Recent Visit
    What would give this article more credibility is a wider perspective on how China's strengths compare with its weaknesses. After a short visit to a huge and vastly different country, almost anyone would be awed by their experiences. Living in the country for over a year allows this initial "glow" to wear off and you see some of the more mundane and unimpressive aspects of the nation, such as the pervasive and unforgiving repression of free speech.

    That said, China is a tremendous force that will certainly lead the world one day. The youthful energy and exuberance you highlight can lead to positive change, but also has the propensity to trample over anything obstructing the path of China's torrid growth.
    Jun 05 11:42 am |Rating: 0 0 |Link to Comment |View article
  • Zillow: Homeowners Sinking 'Underwater' As Prices Fall - Housing Tracker
    Looks like at least some of the housing inventory is moving out there:
    www.baltimoresun.com/b...
    May 08 17:10 pm |Rating: 0 0 |Link to Comment |View article
  • The Worst Is Over ... Again ... And Again ...
    It is a shame that this kind of insight is confined to only the smallest corners of the US media, and that the constant flow of information and predictions from high-profile individuals is largely taken at face value rather than looked at with a critical eye. Case in point is the National Association of Realtors relentless spin of their data in calling a bottom in housing, while month after month (even year after year) their predictions are proven over-optimistic. Why do major media outlets still go to these sources for information and not simply write them off as the cheerleaders and PR spinsters that they are?


    In reference to the preceding post, the author does not take into account the massive pyramid of leverage built on mortgage securitization, nor the knock-on effects on the overall US and global economy in his assessment of the total losses from the housing bust. However I do applaud his effort to put some of the rhetoric out there into numerical perspective.
    Apr 30 17:12 pm |Rating: 0 0 |Link to Comment |View article
  • From Housing to Employment: We're in Big Trouble
    Although I agree with the general underlying direction of this article- namely that the real estate boom was a culmination of the consumer debt pyramid that has been growing ever since manufacturing began its long decline a half century ago- I think its conclusions are unrealistically dire. Sure, we may be in for a long economic slump, but once the consumer begins to see more value in saving, this will improve our economic footing and eventually allow inflation to cool and growth to return. Please don't throw the entire economy out with the recession bathwater.
    Apr 30 10:39 am |Rating: 0 0 |Link to Comment |View article
  • Mortgage Lenders Can't Escape Morgenson's Wrath
    I do not think Ms. Morgenson is incorrect in blaming the lenders for both irresponsibly lax standards and aggressively cutting off home equity loans. After all, these two situations are occurring in two very different environments, and both demonstrate the inability of these companies to temper their greed during good times and fear during bad times with sound underwriting and responsibility to their customers. Even though many borrowers share the blame for taking on too much debt, it is the lenders who have the resources and expertise to make the determination as to whether or not they are offering a loan that has a reasonable chance of avoiding eventual default.
    Apr 15 17:53 pm |Rating: 0 0 |Link to Comment |View article

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