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Posts Tagged ‘CNBC’

[In The Media] CNBC 4-2-09

April 2, 2009 | 11:57 pm | Public |

Yesterday Diana Olick, the housing reporter for CNBC sought me out to talk about the state of the New York housing market. I had short notice but the studio is located at 30 Rock which isn’t far from my office. It’s my second consecutive non-tie interview at CNBC so dammit I’m a rebel. We taped for about 20 minutes and then they used this portion of it in their show today.

Diana’s Realty Check blog has been on my blog roll for a long time so it was nice to get to speak to her before the interview.

Watch the video.


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[Planting A Garden] DJIA Surge = Better Mood = More Home Sales

March 23, 2009 | 11:32 pm | |

Who says the Dow Jones Industrial Average has anything to do with the outlook for the housing market?

I am certainly skeptical, and get downright annoyed every time someone would refer to the DJIA result that day as a litmus test for some sort of national mood.

Yet people seem to be feeling a little better about things (the economy/housing) today than a few weeks ago. Here’s a chronology of cause and effect (DJIA rises and home sales rise) conveniently edited to make my point:

First of all, this has been one heck of a busy news cycle and the path from DJIA to rising home sales is obvious.

Secondly, I need to splash some cold water on my face and get back to work.

Aside: we don’t need bipartisanship.

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Bank Failure Is An Option

March 8, 2009 | 11:30 pm |


Watch CBS Videos Online

60 Minutes had a good segment this Sunday called Your Bank Has Failed: What Happens Next? which was perfect timing because a number of people seem to be worried about their own banks failing.

I bank at one of the national firms in the headlines and, while the thought has crossed my mind, I still place a lot of faith in FDIC’s handling of the problem. Of course, the fact that FDIC could run out of money is a growing concern. Let’s hope our the message from elected officials doesn’t weaken confidence at a time of growing bank failures.

The clip discusses the too big to fail concept. In most cases, the failure of a small bank has limited if any impact on the depositors in those institutions, but it can wipe out investors in those institutions. Sheila Bair, FDIC chairman and one of the consistent voices of competency in Washington, suggested that lawmakers may consider some sort of cap on size – giving some definitions toward the “too big to fail” concept.

The larger exposure to mortgages over the past decade by most lenders in search of larger profits is a key factor here aside from the recessionary environment.

UPDATE – something I shared last week but thought I’d insert again because it was so good. Think banking, bailouts and “loser mortgagees.” Good grief.


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TED’s Excellent Adventure

February 13, 2009 | 3:23 pm | |

Link to Bloomberg Chart

Ok, so this is my second Bill & Ted reference this week, but hey, Keanu Reeves starred, Matrix, etc.

I was having lunch with a good friend (other than the grief I regularly get about my bright shirt colors) the other day and he suggested I follow the TED spread more closely. While I have followed it, I’ve not been as fanatical about as many economists are. Perhaps I should be since, like the Fed’s Senior Loan Office survey, TED provides useful insight into the lending environment beyond mortgage rates.

I watched the CNBC special last night House of Cards, which was very good – not too much I hadn’t heard before but it did provide more clarity to the sequence of events and expanded my understanding of the roles Fannie/Freddie, Greenspan, CDOs and the rating agencies played in the risk/reward disconnect.

I also learned that the word Credit is derived from the Latin for Trust.

The TED spread (Treasury Eurodollar) for the uninitiated is the rate spread between treasury bills and and LIBOR.

Treasury bills are thought to represent risk free lending because there is the assumption that the US government will stand behind them. LIBOR represents the rate at which banks will lend to each other.

the difference in the two rates represents the “risk premium” of lending to a bank instead of to the U.S. government.

When the TED spread is low, banks are likely in good shape because banks feel nearly as confident lending to each other as if it were backed US government (The US has recently proved we’ll back pretty much back anything).

The spread is usually below 100 basis points (“1” on the chart). It reached a recent low of 20 basis points in early 2007, which in my view, shows a disconnect in the pricing risk since the subprime mortgage boom began to unravel in early 2006.

The spread spiked in in mid 2007 at the onset of the credit crunch (that was a summer to remember) and later spiked to 460 on October 10, 2008 as the wheels came off the financial system and became the new milestone or “tipping point” for the new housing market.

The spread has been contracting which is perhaps a sign that banks are starting to feel less panicked about each other. I think lending conditions will improve over the next few years, but there is a long way to go as measured by years rather than quarters.

Note: Another TED worth noting. A great resource for the intersection of Technology, Entertainment and Design.


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CNBC Original – House of Cards

February 11, 2009 | 3:54 pm |

CNBC is premiering a special documentary tomorrow night that explores the relationship between risk and reward in real estate.

There have been a number of specials on this topic but it is always good to review what is happening on the ground right now and reflect on how we got here. I watched the trailer and it is compelling.

CNBC sent me the announcement about the special tomorrow:

Was reading your blog and thought the upcoming documentary on CNBC might interest you and your readers…

Tomorrow (Thurs Feb 12), the CNBC Original “House of Cards” will premiere at 8p ET / 9p PT on CNBC. “House of Cards” explains how we got into today’s economic mess – with inside accounts from key players from home buyers to mortgage sellers to Alan Greenspan.

The documentary launch page.


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[Apologist Pollyanna Prognosticator] For $495/Year, Lereah Will Drop The Spin

February 11, 2009 | 12:48 am | |

Back in January, David Lereah, former chief economist for the National Association of Realtors, came clean with the Wall Street Journal. It appeared to be more of a timed interview to coincide with the start of his new venture.

Mr. Lereah, who says he left NAR voluntarily, says he was pressured by executives to issue optimistic forecasts — then was left to shoulder the blame when things went sour. “I was there for seven years doing everything they wanted me to,” he said, looking out his window to his tree-filled yard in this Washington suburb.

Of course his successor, Lawrence Yun, who started off with the same hard core spin, but a few months into the credit crunch pulled back from his wildly optimistic ways which was, for lack of a better word, refreshing (relatively speaking).

Coverage after the WSJ article was here, here, here and here, etc. You get the picture.

The spin from NAR was excessive and offensive during his reign – so much so he inspired blogs like David LereahWatch and kept the blogosphere full of content for many years. I remember thinking the disconnect of his press releases during his reign was significant and infuriating.

I got to meet him in the green room before we were both on a CNBC special in 2004 at his height (I was an obviously lesser figure in the program) yet he seemed embarrassed about his prognostication.

It’s hard to imagine that NAR and Lereah were not acting as a team in the false message delivered in a procession of press releases. Although both have separated ways, NAR and Lereah are still at it.

MarketWatch did a humorous recap of the major forecasting errors provided by Lereah.

So why am I bringing all this up when I said I was tired of the topic of Lereah?

Because I came across a press release today from his new venture Reecon Advisors, Inc. For $495 per year, you can get to hear what Lereah thinks about the housing market – he writes his newsletter from home and has less than 50 subscribers but hopes to get more. Because he is now independent, he will provide an non-biased viewpoint. Ok, doesn’t the very fact that he would say this completely discredit because it infers – he – can – be – bought. Why is now different?

Listen, I don’t fault the guy for trying to make a living. After 7 years of hard core spin, a subsequent apology that confirmed this, mockery by the blogosphere who outed his frequent misdirections, and later disenfranchisement with NAR, who on earth would actually subscribe?

The web is a beautiful thing. You can set up a web site and appear like a big research think tank. Makes your head spin doesn’t it.


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[Quadrillions In Indebtedness] 4Q 2008 Manhattan Market Overview Available For Download

January 8, 2009 | 2:25 am | | Radio |

The 4Q 2008 Manhattan Market Overview that I author for Prudential Douglas Elliman was released on Tuesday.

Other reports we prepare can be found here.

The 4Q 2008 data and a series of updated charts are also available.

All in all, well over 100 media hits covering the report (that we know about, but who’s counting) without a formal press release. Apparently there is interest in the Manhattan housing market.

An excerpt

…At the close of the prior quarter, there was significant turmoil in the financial markets and unprecedented intervention by federal government agencies. The bailout of Fannie Mae, Freddie Mac and insurance giant AIG, the investor run on the money market Reserve Primary Fund and the bankruptcy of Lehman Brothers, marked a significant change in the Manhattan housing market as well as the US housing market. The fourth quarter was characterized by a sharp decline in contract activity and a downward correction in contract price levels. Sales contract activity showed evidence of a decline in activity of 40% to 75% compared to the same period last year. Contract price levels showed an average decline of 20% from August 2008. As a result of the 45-60 day lag between contract and closing date, a decline is anticipated in both the number of sales and closing price levels in the first quarter of 2009…

In 2005, I began posting the links of the coverage of each report to see how each media outlet reports the market using the exact same data. I find it to be an interesting way to look at how this information is interpreted and presented.

The media coverage of the report was provided here as they were released (in no particular order). The headlines selected below provide an interesting media perspective of the report contents since every outlet was working off the same information. I didn’t include all the wire stories from AP, Bloomberg or Reuters.

Print/Web

Television/Radio


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[In The Media] CNBC Squawkbox 1-6-09

January 8, 2009 | 1:21 am | | Public |

I love doing a live interview on CNBC, especially when my earpiece falls out during the interview without warning and would not stay in the remainder of the time (a 4.5 minute interview). I was at a remote site so they cut away to show Manhattan skyline photos as the technician later said, to “save me from embarrassment” and cut back to me just at the end. A bunch of my friends teased me but said I didn’t miss a beat!

Becky Quick interviewed me this time – she was sharp as always. I exhaled a slew of Manhattan stats from my report released that day. Here was the press coverage for the Manhattan 4Q 08 report.

Here’s the clip.

When I was done, went down the block to a Starbucks to give an insanely ALL CAP style Curbed IMterview.


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[Bonus Thinking] All Children Are Above Average

November 10, 2008 | 12:43 pm | | Radio |

A survey found that despite all the gloomy economic news, 1/3 of Wall Street think their compensation will exceed last year’s levels.

If people think that, it’s a combination of human nature and the Lake Wobegon effect,’ he said — a reference to the mythical town in Garrison Keillor’s “Prairie Home Companion,” where “all children are above average.”

Don’t forget that “all the women are strong and all the men are good looking.” (I am long time podcast devotee of Lake Wobegon.)

One of the key reasons that the New York City metro area was one of the last residential housing markets to be impacted by the housing market slow down was the financial might – that is Wall Street bonus compensation. Last year bonuses accounted for just under 50% of total wages paid out in the financial services sector. It’s a long time annual economic ritual in New York.

It’s going to get painful for many in NYC over the next few years. I have many friends on the Street who work hard and make a decent living, but have or will lose their job as a result of a sector of Wall Street that went haywire. It’s simplistic reasoning to lump all segments of Wall Street all together. However, we do like to do that, especially when pointing fingers. Lower bonus compensation will impact the housing market in the New York region over the next few years with less income making it’s way toward mortgage payments.

Bonuses, which soared to record heights in recent years, could drop by 20 to 35 percent across the industry, according to a private study to be released on Thursday. Bonuses for top executives could plunge by 70 percent.

If 50% of your total compensation drops 50% or more, that’s a major decline in spending power. It’s very easy to be generic about all of this. The message given out is: Wall Street is BAD and all Main Street is GOOD. Yet, they are not mutually exclusive.

Is some of the logic for compensation crazy? You bet (no pun intended).

Should New York Attorney General Cuomo go after financial abuse and fraud? You bet. Of course it furthers the notion that bonus compensation is somehow criminal so he needs to walk the path very carefully. Judging by how Cuomo handled appraisers’ role in the mortgage crisis, I suspect he will do it right.

Somehow along the way, the word “bonus” has become another word for “greed”. Sure, there are upper bracket wage earners who make mind boggling compensation. But that is not the masses.

Main Street was pitted against Wall Street as an election theme (just like small town America was presented as the ‘Real America’).

Greg David, editor of Crains New York writes in his post “In defense of Wall Street Bonuses” He makes the case that:

The mayor gets 9% of his revenue from Wall Street, and the governor relies on it for 20%. Bonuses are key to spending on education, health care and police.

One of Greg’s students at the CUNY Graduate School of Journalism gives a more ground level perspective:

So, every time I hear about Wall Street cutting jobs or cutting salaries, all I think of is Eddie. A 25-year-old guy who works his tail off about 50 hours a week–and even more since the financial crisis made its landfall.


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[In The Media] CNBC Squawk Box 10-3-08

October 5, 2008 | 6:25 pm | | TV, Videos |

We released the 3Q 2008 Manhattan Market Overview on Friday for Prudential Douglas Elliman.

CNBC offered to have me come to their studio in NJ, which is a terrific facility, but I had a tight schedule as a result of the report release and opted to do this at 30 Rock.

We’ll have the formal report here on Monday afternoon. The unanticipated frenzy of coverage put me a little behind schedule. I had hoped to post the report on Friday. Oh, well.

Here’s the clip


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[Think] Fear (and Anger) Beats Out Greed For The Hearts And Minds Of Americans

September 30, 2008 | 12:03 am | |

I had MSNBC and CNBC on as white noise for much of the day and was somewhat surprised that the markets saw such a sharp drop on the news that the bailout was rejected by the House. I suspected it would be close, but it really wasn’t. In fact, the stock market fell below levels seen at the start of the first term of our president. Television pundits were interpreting the sharp decline as the market’s way of telling us that the bailout, if to be passed, had to be re-jiggered.

Did you notice how any discussion of the housing market problems has been shouted out by congressional bickering?

In reality, the Constitution worked well today and thats why we have elected officials, no matter how much we complain about them. Conventional wisdom says we will have a revised deal within a week, or even less. And perhaps even a better deal. A different proposal is what 56% of taxpayers want.

This just in: $700B is not a lot of money. $1.2T was lost in the stock market today. Memo to self: I need to think really, really big.

It’s interesting because Wall Street has got a bad rap because I suspect many Americans lump everyone in the industry in one big pile. Here’s an example: Dot-Com Billionaires are Good, Wall Street Billionaires are Bad. Even CNBC used the term “fatcat” more times today than I could count. The people I know who lost their jobs over the past week were not “fatcats.”

Speaking of “fatcats,” perhaps there is distortion in news accounts that are dramatizing the “anger” that main street is feeling right now against a “bailout.” It’s all how you phrase the question.

And here’s a commentary written before the vote by Edward Leamer, Professor of Economics and Management at the UCLA Anderson School, who sent me this link to his article: Please Think This Over. The article takes issue with the broad powers to be yielded to the US Treasury. In fact, the wording reminded me of the intimidating legal language commonly used in my flirtation with Wall Street last year. My way or the highway.

The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgagerelated assets from any financial institution having its headquarters in the United States. Decisions by the Secretary pursuant to the authority of this Act are nonreviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Wow. It’ll be interesting to see whether Congress is able to rework this. I am getting anxious to talk about housing again, but for now, it’s all about credit and changing that light bulb in my entry foyer. Its also about remembering that this was the day I was born, as many years ago as the contiguous states and yet I don’t feel red or blue.

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[Hindsight Is 007] Market Bloom Is Not On The Rose

September 17, 2008 | 12:26 am | |

Today, my senior appraiser told me I had to watch the Charlie Rose Show he saw Monday night called “A discussion about the crisis on Wall Street” with Lawrence Summers, Charles Gasparino, Andrew Ross Sorkin, Nouriel Roubini and Josh Rosner.

He was right – it was engaging (not many have the interview skills of Charlie Rose). I highly recommend watching it.

While you’re listening, take a look at Megan McCardle’s of The Atlantic’s post called Hindsight regulation.

I hope that this will result in deep changes to our regulatory system, starting with unifying the diverse bank regulatory body, and giving them a stronger mandate to watch systemic risk like a hawk. I hope the GSEs will be broken up, stripped of their government guarantee, and regulated like other companies that do the same thing. I hope the central bank will pay more attention to inflation, and less to unemployment.

While you’re pondering all this hindsight, consider tragedy of Jack White and his unhappiness with his music in the advertisement for Coke Zero Zero Seven for the new James Bond movie.


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