Damon (who generally writes a good blog) must have:
1) not talked to Krugman over the weekend about the column he was working on (see next HP posting)
2) ties to the real estate industrial complex
3) a nice $500,000 condo in NYC that he's worried all this negative-nilly bubble talk is gonna hurt it's appreciation
4) family members who are realtors
5) a boss who is telling him to protect the last few NY Times advertisers (that haven't gone to craigslist or the net) - the real estate listings
HP readers can comment here
Here's Damon's posting:
Believing Is Seeing
Scientists say that the human brain is wired to look for patterns in the chaotic data that assaults us throughout the day. The trouble is, we are not really good at telling what the pattern is. That’s why we see the face of Jesus in a grilled cheese sandwich or think that a stock graph that looks like a cup means the stock is a good buy.
Same goes for folks waiting for real estate prices to collapse. The bubble blog crowd does a great job collecting the data, but because they are seeing what they want to see, the pattern recognition may be off . (Or it might not be. My skepticism of pattern recognizers is based on drawing patterns from the past results of pattern recognizers.)
There are good examples of this pattern-seeking at the Marin Real Estate Bubble and Housing Panic and at BusinessWeek.
And this, from Housing Panic, has become a fairly common meme:
It’s here. Just read the headlines. Add it up. It ain’t brain surgery. The bubble has burst. Someone had to officially declare it, so let Housing Panic be the first.
“Yield Curve Inverts”
“New Home Sales Fall 21% in West”
“Gold Hits Record High”
“Median US Home Value Falls in November”
“Fed Raises 13th Straight Time”
“Phoenix Home Listings Soar”
“Tougher rules eyed on risky mortgages”
“Investors Moving out of Housing”
“Mortgage Applications Fall to 11-Month Low”
“Housing Slowdown May Claim 800,000 Jobs”
Pop. Tilt. Game over.
I’m still waiting for the hard evidence. – DAMON DARLIN
January 02, 2006
Blame the Messenger: HousingPanic gets flamed by New York Times real estate blogger for saying housing bubble has burst
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14 comments:
Danon is weenie. He is just trying to be controversial.
"I'm still waiting for the hard evidence."
Yeah ok buddy have a seat here beside Mary Mapes and OJ Simpson...
Those who have a firm foundation in accounting, economics, and finance KNOW it is a BUBBLE! But those who only have a marketing or sales mind simply can't connect the dots. The herd or greed instinct resides in us all but some of us will exercise caution and will not fall prey to Real Estate Industry hype and spin. Experts who know but say otherwise are part or the industry or have something to gain by saying otherwise.
Just yesterday I took a tour of a wealthy section of the Chicago Suburbs. I was amazed by the number of FOR SALE signs. Usually this is not the time in the cold Chicago climate to sell a home let alone list one. But the nervous situation is HERE and those with the homes listed do not want to wait for further deterioration in the market... thus the spiral down feeds on itself. Expect a NIAGARA FALLS of listings in the SPRING!
It's hard to get a grip on Damon's argument here, because he uses the fact that people often see patterns where no pattern exists to undermine the *concept* of seeing patterns in data. He does anticipate this objection and "cover" at the last minute by acknowleging that sometimes patterns do exist... but this comes after equating an analysis of housing stats with seeing the face of Jesus in a grilled cheese sandwich.
While I personally think the data points to a cooling of the national market with a substantial risk of a drop in prices in a some of the high flying areas (ie., the "zoned zone" vs "flatlands" argument), I'm sure that a well reasoned opposing argument can be made. I'd be interested in reading some of those arguments.
That would have been more interesting than (i.e., housing bears ~= (sort of equal) people who see the face of Jesus in a cheese sandwich).
Is the writer of this editorial the Fidelity trader troll? He does have a point about human nature. Unfortunately, he is seeing what he wants to see when it comes to housing. He's no different than anyone else.
The jerk deleted my comment. I called the NYT blog a derivative effort that commandeered other peoples' comments because they couldn't do any original work. He suggested in an email reply that my beef was with housingpanic and not NYTBlog.
I recommend a boycott or at the very least a hounding. Reply to every post with "old news" "stolen from housingpanic" "as already discussed in Ben's Blog" etc.
I saw the face of jesus in that new york times blog!
My grilled cheese sandwich had the face of Jesus in it at lunchtime. He even spoke! He said, there is no housing bubble, that it's a silly idea that just because the affordibility index is in single digits in my zip code, sales are falling, interest rates are rising, and the market for Interest Only and option ARMs that account for 67% of loans in my area is disappearing this means housing prices might fall. He said I should have faith and then everybody will get a 487% raise in the next five years and the housing prices will be perfectly sustainable. I thanked the grilled Jesus sandwich for clearing that up, put in a bid of $800K (10.1 times my annual income) on a two bedroom fixer next to an on-ramp and then ate him.
Tell him to buckle up and hang on, the evidence will throw him from his seat. It's about to rear it's ugly head and Damon will look like a fool for doubting it.
That pattern recognition argument cuts both ways. And he gives no mention to wishful thinking. Maybe he should read Barbara Tuchman's "March of Folly".
You have a great website here, and I'm going to tell all my friends about it.
damon's point is kind of bizarre. he seems to be equating the case for a housing bubble with a grilled cheese sandwich. We're not looking at Ven diagrams here, Damon. We are making a fairly straightforward argument based on historical ratios and observations of supply and demand. House costs to personal incomes, rents, etc. I'll concede that housing bubble bloggers and readers do tend to reinforce their beliefs with endless reiterations of our favorite points. But would you say that the stock skeptics who pointed to out-of-whack stock valuations (using P/E ratios, discouted cash flows, etc) in late 1999 were seeing Jesus on their lunch plates?
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