Commercial PropertyRealty Viewpoint: Wall Street is Desperate
Whenever the National Association of Realtors says the housing market should be improving shortly, Wall Street pundits stomp Yun and company for being self-serving.
Back in December, Newsweek editor Daniel Gross called the NAR cockeyed optimists while noting that the trade organization"s economist "is uniquely ill-equipped to deliver sobering forecasts. They work for a trade group whose mission is to buck up the spirits of real-estate brokers. And real-estate brokers—who live to sell, promote, and market -- are constitutionally disinclined to hear anything but good news."
Back in June 2004, I wrote a story called "The Perfect Real Estate Storm."
"But homebuyers in 2004 are facing a set of conditions that previous generations have never had before in the aggregate. National news, economic conditions, lending and borrowing conditions, and buyers" expectations, and much more are creating a perfect storm of conditions that separately and combined could flatten the existing housing market, and impact new homes as well," I wrote.
I listed jobs, ongoing terrorist threats, Alan Greenspan, inflation, affordability, the overburdened consumer, debt service, easy loans, and high tapped-equity asking prices as my reasons why we might be looking at the "largest housing recession in modern history."
Gee, I"m good, and I"m not even an economist. But the one thing I didn"t see was the impact of subprime loans. Nobody did, not even Yun, because the magnitude of those numbers were being hidden from investors by the very banks supplying the loans to be packaged into securities.
Now the shoe is on the other foot. Wall Street is desperately trying to assure its scalded investors that a 2000-point loss by the DOW is just a short-term fluctuation and all part of the fun.
Asset manager Rob Stein told CNN Money that the US "market really hasn"t been all that volatile if you look at what it"s done over the past few weeks."
Guess that doesn"t count the 5.2 trillion dollars in world stock market losses calculated by Standard & Poor"s which blamed the US subprime crisis.
Then he says that stock market wealth is built over time. "We have a jittery market and if you don"t like that, sit on the sidelines. But whenever the market falls as much as it has over the past few months, it"s usually a good time to buy."
You mean when prices fall, that"s a good time to buy? Funny, that sounds just like Yun!
As Gross notes, "Many economists are associated with corporations, Wall Street firms, and trade groups, where it doesn"t pay to be bearish."
Or a pot calling the kettle black.