Nothing was more annoying during the bubble than watching Rolodex-of-Realtors Catherine Reagor and the Arizona Republic cheerleading the bubble and allowing realtors to serve as unbiased "experts" worthy of quotes, when sane people knew it was just a big corrupt ponzi scheme doomed to collapse.
Their amateur-hour reporting actually inspired me to start HP, and I'm sure most of the other bubble bloggers have similar stories. The media failed America (again) and it was up to individuals to do the job that the local media wouldn't or couldn't do.
So, why did this segment of the media fail? Why do they still quote government and NAR housing numbers as gospel? Why isn't Lawrence Yun mocked? Why do they rip-and-read versus analyze, dig and report? Why do discredited realtors get to write unedited cheerleading pieces masquerading as articles? And why don't local papers capture true local market conditions?
Simple. Because of REIC ads.
They didn't want to bite the hand that feeds them. And they chose their REIC masters over their readers. And now America pays the price.
Nice thing though is that these ads are going away (along with the realtors and builders who placed them). What rises from the ashes, time will tell. America needs a strong and UNBIASED media. And the downfall of the REIC may be the best thing that ever happened. Take away the crack, and hopefully the junkie recovers.
Subprime crisis hits papers' property adverts
The subprime mortgage crisis is tearing through the newspaper industry as US papers suffer sharp falls in real estate advertising.
The extent of the damage was visible this month when Tribune Company, which owns the Los Angeles Times and Chicago Tribune, reported a 40 per cent decline in November for its real estate classified advertising revenues.
Gannett, the largest chain, said recently it was on track for a 27 per cent drop in real estate advertising for the fourth quarter after reporting a 23 per cent slide in the third quarter.
Edward Atorino, an analyst at Benchmark Capital, said: "It's spiralling downward at an accelerating pace." He predicted that the problem would "get worse before it gets better".
December 29, 2007
Want to know why local newspapers like the Arizona Republic did (& do) such a crap job reporting on the bubble and crash? Just look to their REIC ads
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Here's the Greg Swann "article" in the Arizona Republic last year that I linked to in the post. Damn, this one was hilarious!!!
The Republic should issue a public apology to its readers. And stop allowing this hack to pollute their paper.
Don't be chicken about the real estate market
If you follow the real estate news, sooner or later you have to ask yourself, "How many times can the sky fall in a given day?" During our recent run-up in values, the Chicken Littles couldn't stop clucking about imminent doom. Since then the market has cooled, but the Chicken Little chatter is hotter than ever. The real estate market must collapse. It simply must.
This prediction will lay an egg. But don't hold your breath waiting for an admission of error. And if you yourself are waiting for the explosive report of the real estate bubble popping, you might just hear a pin drop instead. Here's why:
* Real estate and securities are both leveraged, but the real estate market is not the stock market. Stocks are instantly transferable. You can acquire or liquidate a portfolio in seconds. Moreover, while stocks are subject to margin calls, it would be insane for lenders to call their mortgages en masse.
* More to the point, homes have intrinsic value. A stock is worth what someone will pay for it, right down to nothing. In any place where it rains, snows or gets really hot, homes will be worth something.
* Which leads us to demand. Some locales have more houses than occupants. No bubbles will burst in those places, either, but their values will slowly deflate. In a market like metropolitan Phoenix, long-term demand exceeds supply. As long as it does, our long-term trend in values should be nothing but upward.
* Finally, sellers in a buyer's market are a lot less time-sensitive than buyers in a seller's market. In the latter case, the longer that buyers delay acting, the greater their costs. Hence, the frenzy. But if sellers stand fast in a buyer's market, they might suffer a loss. But they might do better by waiting. Or the marginal cost of waiting may be less than taking a low-ball offer. Or they may elect simply to wait out the market.
The bottom line is, Chicken Little be fried, the real estate market will be fine.
Greg Swann, a broker for Bloodhound Realty, specializes in West Valley real estate. You can reach him at (602) 740-7531
Just remember that this isn't the only cockroach in the MSM kitchen. They feed the public lies in many important areas. Financial, social, criminal, and political.
Keith, this is one of the best posts that you've done in awhile. It is shrewdly well written and every word is undeniable truth. I love when you are in this particular mode and is what keeps me coming back to your blog.
RE: Nothing was more annoying during the bubble than watching Rolodex-of-Realtors Catherine Reagor and the Arizona Republic cheerleading the bubble and allowing realtors to serve as unbiased "experts" worthy of quotes, when sane people knew it was just a big corrupt ponzi scheme doomed to collapse.
“News is what somebody somewhere wants to suppress; all the rest is advertising.”
Lord Northcliffe
The job of a true reporter is to snoop, scoop and get the poop. Then, keep it stirred up, no matter how much it stinks.
Anyone who believes that Catherine Reagor is a reporter might also believe that Vanna White is a Scrabble expert.
Where are Woodward and Bernstein when we need them?
V.L.
Greg Swan is a Hack and his blog can die.
This is nothing new. Advertising has alway colored media's coverage of events. The newspapers have been losing REIC ads for years as online databases provide better and MUCH cheaper altervatives.
What many don't know is that Newspapers CAN and DO charge MORE for real estate ads from REALTORS than they do from individual homedebtors. Went all the way to the Supreme court back in the 70's. Not sure why it is legal, but these newspapers are finally getting their due with declining ad revenue and the internet eating their lunch.
Seriously there can't be anyone stupid enough to hire Swann as their REALTOR
Keith,
The thing is that this is how the MSM behaved in the area of housing, which you know so well. I have personally seen the same in other contexts. What I follow, due to my profession, the most is the tech industry. What I have come to learn over the years, and I could write dozens of books about it, is that the MSM generally speaking knows nothing about anything. They would learn, if they were independent thinkers, but they are not. They are not even interested in learning to understanding many things well, given that due to their loyalities to the advertisers etc. that would be worthless information as they could not report it. By the way, did you know that "Public Relations" was a nicer sounding synonum coined for "Propaganda" between the two world wars? This PR machine, literally propaganda machine, is what the MSM bases its reporting on. So sad.
Keith,
Excellent post.
Right On!
One of their ads is for a brand new 3bd/2ba house for $119,000, that according to the ad leads me to believe is not yet built. Yea, I'm going to give some bankrupt builder who probably hasn't paid his employees in weeks several thousand of dollars in escrow money on the promise he will complete the house.
I like this comment
"When the Phoenix crash is complete, we'll be back to haunt you for the remainder of your days. Count on it. Consider it payback for being the incredibly arrogant and pompous ass you are."
I'd just like to know one area where the media actually gets it right more often than not. I can't think of what that might be.
They are more interested in taking a PR release, rewording a few sentences and slapping their bylines on it.
Keefer,
You are seeing too many conspiracies dude. The MSM is just incompetent that's all. Aside from covering sports really well, newspapers can't do shit.
Arizona Republic is corrupt just like most everyone else in Arizona. Before moving to Phoenix I lived in Las Vegas for a few years and even Vegas doesn't have anywhere near as many shysters, con artists, and quick-buck hucksters as Phoenix/Scottsdale.
Look at the "businesses" in the Scottsdale Airpark and you'll think Vegas whorehouses are the epitome of wholesomeness.
So, is it any surprise that their newspaper is slime too?
Right Greg Swann, all these homeowners waiting it out are current on their mortgage and comfortable paying it. All the lenders/banks are going to approve loans at inflated prices ignoring the historical 3X income. All the big investors holding mortgage bonds are going to wait several years with their money tied up hoping they get at least their principal back. Finally all the people wanting to move to the valley will of course find good paying jobs because employment will stay strong here, led of course by housing related jobs.
You are seeing too many conspiracies dude. The MSM is just incompetent that's all.
Isn't there a saying about people with the lowest test scores in college are journalism majors? Most of them are dumber than dirt.
but but but...
Suzanne researched it. She wouldn't lie, would she?
"Oh Suzanne, now don't you cry for me,
I'm off to Clownifornia to pick a HeLOC off a tree."
I'll be here all wekk.
Someday, read "Manufacturing Consent", or rent the documentary. Chomsky and Ed Herman wrote the definitive book on propaganda. The first observation is that media exist to serve the interests of their advertisers, not the public.
It's the simplest and most basic observation.
The book also goes on to describe the function of the media in society, and its use and abuse by the US Government.
Read the book. It really describes how the media works. And why it is so wretched at getting things 'right'.
"America needs a strong and unbiased media."
Come on Keith. Even you must know that a strong and unbiased media in America is as likely as pigs flying in Maddison Square.
Chomsky? Yikes, you gonna bring back mood rings too? For crying out loud you aging hippies need to shut the fuck up already. It's not 1968 anymore.
Isn't there a saying about people with the lowest test scores in college are journalism majors? Most of them are dumber than dirt.
I have worked in TV for over 30 years, and this is 100% true. Almost all of them come from wealthy families as well. They show up for their first day of work driving a new sports car and wearing a $1000 suit. All for a $8 an hour job. The stations keep the pay low because they can, and it has the added benifit of keeping a wealthy republican corporate bias in the news.
Mr. Anonymous:
What horrors to bring up a reference work co-authored by Chomsky in 1988. Why, that's so twenty years ago. Things couldn't have gotten worse since that time, could they?
Do you offer an alternative? No, of course not. Chomsky is still one of the most referenced living authors, still writing important papers and books every month.
And you? What horrors to bring an ad hominem attack on someone who ISN'T an 'aging hippy'.
Maybe you ought to have substance in your argument, instead of invective. Maybe you ought to try reading the damned book.
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