September 30, 2006

FLASH: Motley Fool picks up HP's fatwa against Nicolas P. Retsinas, the corrupt director of Harvard's Joint Center for Housing Studies

This, HP'ers, is our finest hour. Motley Fool has picked up our post from Wednesday, HousingPanic calls for the immediate firing of Nicolas Retsinas, Director of the Joint Center for Housing Studies at Harvard University

HP I believe is doing good work. The HP community (and eyes and ears) is having an impact. David (HP and the bubble blogs) can beat Goliath (the evil and corrupt REIC).

And maybe one day this madness will end, and houses will again be places people live in, and young kids out of college can save 10% down and get a 30-year fixed mortgage, a house they can enjoy, appreciation at the rate of inflation, and a payment they can live with.

Cheers to all of you. And please email this post to Harvard's President Derrick Bok (

Here's Seth's article. Big hat-tip for picking up the ball and running with it.

More "impartial" commentary on the housing bubble I owe another hat-tip to my buddies at the Housing Panic Blog. These folks are even more up in arms about the funny doin's transpiring in the real-estate industry than I am, and I don't share all their views, but I do think they've got an interesting point today. Let's set the stage.

Harvard. Ivy League, home to Biff, Buffy, and Chet. Warm scarves and deep thoughts. A place where we can trust the research as the work of independent-minded eggheads, right?

I wouldn't be so sure. Today, we see a strange article by one Nicolas P. Retsinas, director of Harvard's Joint Center for Housing Studies (JCHS). In it, he seeks to reassure a nervous and gullible public that all is well with housing. Prices won't drop too much, he claims, and the overall economy is not at risk.

Oh, really? Oddly enough, he doesn't cite any data to support these contentions. Well, maybe that's not so odd. Recent numbers from no less a home-selling partisan than the National Association of Realtors (NAR) show that prices are already dropping, not only in bubble-afflicted coastal areas, but in the previously believed-to-be-safe Midwest, as well.
But Retsinas shrugs past this. "Demand," he claims, was the reason for rising prices, and demand, he says, is still here.

Demand doesn't exist in a vacuum. Let me be blunt. I find this is a stupid argument. Dangerously, irresponsibly stupid.

Why would he pump out to the press a defense of the bubble without a single, salient data point to back it up? What's the motive?

I think the answer might be found in the cozy relationship between Harvard's JCHS and the home-building, -selling, and -supply industry.

I've got a message into Harvard to find out just how much dough is changing hands here. If it's much more than a pittance, I consider that an interesting -- and by interesting, I mean scandalous -- conflict of interest.


Anonymous said...

Keith this is important stuff. Watch this snowball.

Anonymous said...


Butch said...

Look HPer gang, I don't know how to put this tactfully, so I won't.

If you think that a few dozen e-mails to Harvard is gonna change the REIC game, think again.

In fact, Harvard is only one stop on "The Great Merry-go-Round" of the Money Masters/Government game.

The rich kids go to Harvard (and Yale, Wharton, and MIT) along with all the OTHER rich, politically-connected kids. After graduation, it's off to Wall Street, big business and government (In fact, Goldman Sach has more Wharton grads than any other institution in the world!).

From there, the players just rotate from post to post (Wall Street to big business CEO, to gov't.) over and over in a constant "wash-rinse-spin" cycle.

Along the way, they form tight bonds with their other "Old Boys Club" friends and trade inside information, give each other cushy board of directors positions, get each other lucrative contracts at the companies and government entities, and all funnel money back into the "Great K-Street-Influence Buying Machine".

And YOU think YOU have a chance against these very smart, well educated, politically conected guys?

Think again.


Anonymous said...


The hpers may not stand a chance, but the Feds do if they ever unleash their wrath and unlimited resources on wrong doers.

Can't happen?

Remember Enron?

Occasionally, even among the elite, a fall guy has to be shoved into the light.

haggis said...


Very true.

But, quite frankly, what is more interesting than the underlying story is a rather dramatic shift in the way information is disseminated.

Five (or less perhaps) years ago, my only source of info would be newspapers, TV and purchased journals. Blogs seem to be transforming the way in which information is distributed. And in a very dramatic fashion.

This isn't just topical to the housing issue. I think it has the ability to re-forge our pact with our governments because until now they and vested interests have controlled the means to distribute information.

I find it fascinating. And useful.

And Keith, thanks mate, for being cheeky enough to make it worthwhile reading.


Stuck in So. PA said...

With the article panning out as the truth. Do we now owe n appoloy?

Lets fac it ols We bet heavy on a poppin bubble. Some of you like me are now getting margin calls from their broker. OK we are now broke and can't afford a box to sleep in.

But will the bashing save us?

I'm done. We tried lying our way back into profits. Can't happen. We were wrong and I am done.

Homless and broke

InfidelWoman said...

stuck in so pa. where do you plug in your computer? Is your house getting repoed? Are you serious?

Anonymous said...

"The rich kids go to Harvard (and Yale, Wharton, and MIT) along with all the OTHER rich, politically-connected kids. "

Please don't confuse the rich kids who go to these programs from the naive middle classers who attend on financial aid thinking that these schools have leveled the playing field. Nothing could be further from the truth. The best shot a middle class person has is to be accepted into Harvard (or Yale, Columbia, Stanford) Law or a Johns Hopkins tier med school and go for a steady six figure income with the hope of being a partner at a smaller size law firm or gain employment at a major pharmaceutical-to-hospital liason program (big $$$). That's essentially where bright middle classers end up if they want to move up.

These other ivy leaguers with high posts are usually brown nosing weasels whose familial connections and alumni cliques have essentially formed their careers. Many were not from the middle class originally. A number of my truely brillant friends at MIT, Harvard, and Columbia have discovered this a bit late in their careers because those schools really didn't help them past dead end entry levels jobs at a JPM, Citicorp, or Proctor & Gamble.

Anonymous said...

This is a great story. Kudos to HP for shining light on this important issue.

Right now, I think that the media still feels the need to "tell the other side" of the real estate debate. After this crash is over, this may not be the case anymore.

I'm sure there was a time when tobacco scientists got equal play, or at least a quote, when the risks of smoking were discussed in the media. But nowdays, nobody seems to feel obligated to give a scientist employed by phillip morris a quote.

I don't really see why Lereah gets space anymore. He's obviously paid to have a point of view, and lacks any objectivity. He's only admitting to weakness in the housing market because it is *so obvious* that he has no choice. So he acknowledges a bit of weakness, but minimizes it as much as possible. Kind of like the tobacco scientist who admits there are health risks associated with smoking, but then tries to say it's no different from red meat, or too much coffee in the morning.

I'm sad to see that this has reached within the universities, though. There are still many reputable economics professors and reseach groups who say what they truly believe, rather than what they are paid to believe. But this story shows that you can't just rely on the reputation of a university. You have to look for the housing equivalent of tobacco scientists at harvard. Really sad.

Anonymous said...

My Harvard education has taught me that it's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.

Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.

This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.

uknowwhoiyam said...


panicearly said...

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