Ok, so we always need to blame someone because it lets us off the hook and it can make the issue more tangible. In the world of housing, the biggest target of blame is generally the media. I hear this at most real estate functions.
- The media distorts the negative aspects of real estate
- The media doesn’t look deep enough into the housing market in order to explain what is wrong with it
- The media scares buyers away
- The media hype kept me from making that sale last month
Really? No, really?
- The media caused me to drop my entire Oreo cookie in my glass of milk.
Ok, not really. I just threw that one in there. I’ve always been bothered by this positioning besides the negative energy (whining). Is the media part of a big conspiracy?
I am not an apologist but were the media blamers complaining about the housing market hyperbole when it was on the way up?
I’ll say this – some reporters get stories wrong and some real estate agents don’t sell houses. Yet does media error and hyperbole actually make an adverse impact? Even create an asset bubble?
Here’s another way to look at the issue as presented in Catherine Rampell’s Economix post:
The media — especially as embodied by Jim Cramer — has been accused of starting, perpetuating or inflating bubbles. A new study looks at the dotcom bubble of the late 1990s and declares otherwise.
News coverage tended to increase around public offerings but there wasn’t a noticeable impact on stock prices. The same could be applied to the most recent asset bubble: housing.
Yes, the media basically behaved badly, but its bad behavior did not appear to have much influence.
View early draft of research paper: THE ROLE OF THE MEDIA IN THE INTERNET IPO BUBBLE.
And don’t forget to blame the weather too.
They separated the data before reporting. Your conclusion appears to be drawn on the second set of data – the post public offering data. The hype and driving of stock prices occurs during the first phase, the pre-IPO.
It appears what they are saying is that the hype goes away and then the market takes over. So, long-term the media hype does not determine value, but, it in the pre-IPO phase it sure does by running prices up above the initial offering price.
The media is having an affect on the housing market. People are acting on the information. The media is not the only factor, but it is a factor. How much of a factor is the question, not whether it is a factor.
well sure it’s a factor. So is the weather. But if we step back and really look at it, I feel it’s adverse impact on housing is over hyped. Aka yw red light theory. You only remember all the red lights in your commute.
While there was some isolated over-building in places like San Diego and Orlando, there never was a housing bubble.
Jonathan, you’ve nailed it before, we had a mortgage bubble in spite of the efforts to blame everybody from appraisers to builders. These mortgage folk built several castles in the sky for every loan they made. Bubble may not be descriptive of what they did since bubbles have more substance. Hot air is what it was and is. They could have leveraged a box of Kleenex to equal the value or San Francisco during the frenzied heights. Now the junk they invented is called a toxic asset. Spin spin, spin. Hot air it was and is I say. I think the reason the media doesn’t talk about the mortgage bubble is that mortgages don’t have the romance of houses. Anyway, the house sellers around here are happy. Oh, I forgot to say the mortgage bubblers totally disconnected their products from any requirement about how the borrowers were going to pay it back. Does that guarantee toxicity or measure greed and stupidity?
The Treasury plan uses a new word for toxic: It’s called “legacy.”
The WSJ article on Legacies said, “the Oxford dictionary defines it thus: ‘1. gift left in a will. 2. thing handed down by a predecessor.'” Somehow, I’ve been brain-washed to think of these “gifts” as being similar to the kind left on the front porch in a bag by a prankster. Toxic = Legacy? Too late a spin on that one.
And finally, to my beloved nephew, I give all of my poison and may he use it wisely.
The WSJ article said these whatever assets don’t belong on bank books. Well maybe not, but they thought ’em up and then bought ’em, and anyway, that begs the question as to where do they belong? Where do you put something that had no reason to be and won’t live?
Gosh, I’d rather have a gift of something else or absolutely nothing at all.