Matrix Blog

Posts Tagged ‘CNBC’

[The Real Deal Magazine] Will Own Lincoln Center

September 7, 2008 | 8:53 pm | | Public |

The Real Deal magazine’s New Development Forum at Lincoln Center was sold out at the 3,000 capacity venue last year. For lack of a better description, it was fun.

So this year, I was more than happy to help spread the word (all 3 seconds worth). The ad is running hourly on CNBC on Time Warner Cable and on NY1.

Since Publisher Amir Korangy knows how to pack content into his magazine, there’s no doubt he’ll pack ’em into Lincoln Center for another sell out. He lined up a group of interesting guests and with the housing and credit markets in turmoil, this event will prove especially informative.

To buy tickets


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Catch Phrases That Capture Our Housing Hindsight Morality

July 21, 2008 | 12:23 pm | |

Here’s a collection of phrases that caught my eye for our newfound understanding about our new housing/credit morality/thinking:

Moral Hazard – I have linked to Holden Lewis’ brilliant post before: Moral hazard is when people take unwise risks because they are sheltered from the consequences. For example, if you wear a seat belt and drive a car with airbags, you’re more likely to tailgate.

Rally between Concern Phase and Fear & Capitulation Stage – Comstock Partners has some great commentary about the housing market: Now even Fed Chairman Bernanke has caught on to the dangers of the bursting of the bubble.  He stated in both Tuesday’s and Wednesday’s testimony before Congress, “the housing market is the central element of the financial crisis.  Anything we and Congress can do to strengthen the housing market, or strengthen the mortgage financing market, will be helpful.  We can do this by restoring confidence in the Government Sponsored Enterprises (GSEs).”  We are happy to have Mr. Bernanke on board, but are not too happy about begging Congress to slow down the process by trying to get bills passed that would postpone the inevitable decline and make the eventual decline even worse. We have to let the free market work its way through the housing crises.

Flat is the new up – Daniel Gross of Slate’s column captures the feeling of victory in today’s economy. Last weekend, at a suburban barbecue, I asked a friend who works for an asset-management company how his firm was faring in these turbulent times. “We’re actually doing OK. Keeping our heads above water.” At which point another guest chimed in: “Hey. Flat’s the new up.”

Nexus between fear and greedI wrote about this one before.

Foreclosure Contagion – Zubin Jelveh’s Odd Numbers blog in Portfolio.com offers a wealth of sharp insight on an array of economic topics: The researchers also find that the negative hit from a foreclosure is strongest right before a lender takes control of the property. They argue “that when foreclosure is inevitable, efforts to speed the foreclosure process would be effective at reducing the contagion effect.”

It’s a good time to buy real estate – housing prices double every ten years – NAR is hard selling and yes, it may be a good time to be real estate in certain markets and for some people. Because NAR says this 24/7, it’s hard not to cast a jaded glance their way.


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[Foreclosure Bus Tours] Lost In Translation

June 23, 2008 | 4:29 pm | | Public |

A foreclosure storyline is probably better without a tie, no?

Click here to view.

CNBC interviewed me for a story covering the growing foreclosure situation on Long Island and how it is entering Manhattan. Natalie Erlich did a nice job with the piece. The foreclosure tour bus running on Long Island is now entering Manhattan.

Foreclosure bus tours are appearing in other parts of the country. Some with boxed lunches!

What I find fascinating, is that there were only 23 residential foreclosures in Manhattan in Q1 2008 down from 25 in 2007, according to PropertyShark.com

Hardly a significant trend or pattern…no? There must be another justification to run the tours to Manhattan with such a low foreclosure rate. I’m guessin’ it was a publicity play, to contrast the resiliency of the Manhattan market.

UPDATE: Click here to view the second video for the storyline. The disconnect between the number of foreclosures and the ability to run a bus seems to be because there are middlemen that buy blocks of distressed properties before they go into foreclosure and then re-sell for a profit. Sort of an inverse flip.


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[Housing On Fire] Blogoshere Hose-Down, Time Capsule Edition

May 13, 2008 | 12:08 am | |

Periodically, I like to round-up some of my favorite recent blog posts that are housing market/credit/economy related. A lot of good information can be backed up in a Time Capsule.

Quote of the week…

The paperless society is about as plausible as the paperless bathroom.” —Jesse Shera [librarian and author]


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[Housing On Fire] Blogoshere Hose-Down

April 21, 2008 | 12:01 am | |

Periodically, I like to round-up some of my favorite recent blog posts that are housing market/credit/economy related. And of course, a few extras…

Honesty may be the best policy, but it’s important to remember that apparently, by elimination, dishonesty is the second-best policy – George Carlin


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[Picture In Picture] Memory Lane Has A For Sale Sign On It

March 24, 2008 | 11:07 pm | Public |

To view clip

I was sent an email clip of a spot on today’s CNBC broadcast covering the existing home sales stats released for California, except I was included in the broadcast. Unless it was due to too much Easter candy, I didn’t remember being on the show today. 😉

Real estate correspondent Jane Wells reached into her video archive and pulled out an interview we did in 2005 where I estimated 75% of all appraisals were inflated. I remember that my concerns fell largely on deaf ears in the industry back then. Its been a frustrating three years. (And to her comment, her hair looks just as great now).

It was a picture in picture clip, where the anchors watched the tv that was playing the interview. Very cool. I actually posted the same clip of the 2005 interview a little over a week ago.

While it’s satisfying to be proven correct (and have actual video evidence), it’s a shame the lights were on and nobody was home (sorry). She was one of the few national correspondents that covered the housing market at that time that understood the “appraiser” problem growing at an alarming rate.

It’s making me feel both a little old and like a broken record because I have been saying the same thing since that interview (and at least a year before) but finally there is some hope for change.

Appraisers need to be able to perform independently to be able to function.

What was striking about the home sale stats she mentioned was that 1/3 of all sales in California were foreclosures in February. Crazy.


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[Appraiser Pressure Archives] CNBC Clip from 4-5-05

March 15, 2008 | 10:50 pm | Public |

To all readers of Matrix, I am sorry to pelt you with so many appraiser posts right now, but the issue, in many ways, is the smoking gun of the mortgage/credit crisis we are now in the middle of.

Here is a CNBC video clip by Jane Wells back in April 5, 2005 which was based on my claim that about 75% of appraisals are inflated. She cited the widely quoted October Research Report that indicated that appraisers were under pressure – 55% claimed that they were regularly inflated. I thought it was conservative.

My main point was that those in charge of ordering appraisals had a vested interest, personally (a commission), in the outcome of the appraisal. Simply making it illegal to pressure appraisers won’t solve the problem (that bill never passed as one of the bill sponsors went to jail for…you guessed it…taking bribes).

After the segment aired back in 2005, there wasn’t much reaction because no one seemed to understand, appreciate or believe the scope of the problem with appraisers within the mortgage process.

It was a very frustrating time for me personally, because I could see what was happening and there didn’t seem to be a solution….and three months later, became a blogger so I could vent.

When you listen to Jane Wells in the piece now with the perspective of the last 9 months of events, appraisals are more important than a seemingly trivial piece of the mortgage process, the conventional wisdom in 2005.


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[In The Media] CNBC Power Lunch Clip for 1-25-08

January 25, 2008 | 10:12 pm | Public |

I got a last second call from CNBC to provide commentary on the stimulus plan, specifically how and increase in conforming loan limits for both the GSE’s and FHA helps housing, if at all.

To view the clip.

The key point with the expansion of the loan limits is the potential increase in availability of mortgage products in higher priced home markets. Right now the east and west coasts have less representation in conforming loan pools because their price points are much higher. For example, the cost of living, specifically to housing in San Jose, CA is 5x as much as Cleveland, OH. This proposal could spread the access around. However, it also has the effect of restricting access in lower priced markets because the portfolio caps the GSEs abide by aren’t on the agenda to be raised. That limits the effectiveness of the expansion of loan limits (if you believe Fannie Mae and Freddie Mac can be receive adequate oversight).

OFHEO raises legitimate concerns about oversight of the GSE’s and the higher potential for risk. However, OFHEO was asleep at the switch when FNMA had accounting issues a few years back so I am not convinced OFHEO would be able to understand what changes would be needed to better oversee GSE actions. Also, any stimulus plan form needs to be implemented quickly or not at all. Government is not known for being nimble.

Interestingly, Diane Olick, who was interviewed in the above clip, mentions (via Housing Doom) that the Fannie Mae home page has changed in the past 2 years to reflect a different mission. I wonder if OFHEO understands what that change means?

The rate actions by the Fed this week and this expansion of loan limits, if passed, seem to push us in the right direction (symbolically and politically), in finding a solution to the weakening economyt. Much of the solution is correction and letting time go by.

In reality, its all about credit. So far, the symbolism in these gestures would go toward restoring confidence, but I suspect there is a long way to go.


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Better Than Coffee: Stimulating Discussion About Stimulus

January 25, 2008 | 12:44 pm |

The White House and the House agreed to a $150B plan to reinvigorate the economy, which because of the housing market slide, may either be in a recession or about to enter one.

Democratic and Republican congressional leaders reached a tentative deal Thursday on tax rebates of $300 to $1,200 per family and business tax cuts to jolt the slumping economy.

Its not a done deal, however, since the Senate still has to approve the measure and Senate Democrats are talking about tacking on additional items which could slow down its approval, but the speed at which the House approved may influence the Senate’s speed to approve as well.

Actually, the speed at which this was approved was annointed as a new sign of bi-partisan cooperation. The rebate elements and newfound cooperation are because its an election year and people vote with their wallets. I had fleeting thoughts that they know something we don’t know which prompted the quick action. I’ll try to keep those feelings in check as this unfolds.

Yesterday I participated in a roundtable discussion that addressed the impact of the stimulus package. The take away was that the rebate component was an important gesture, albeit political, but won’t be enough to prevent recession or further weakness. After all, the total stimulus plan represents about 1% of the US economy. Since 70% of the economy is consumer generated, the rebates are seen as a way to prime the pump. Whether its spent or saved, its a plus but a very small one at best. For a sense of Deja Vu, go here.

The idea of a expanding the OFHEO size restriction on conforming loans from $417,000 to $625,000 is a good thing, I believe, as well as doubling FHA loan limits from $367,000 to $729,750.

The California Association of Realtors has been saying that the conforming loan limit restriction is an impediment to economic recovery and I probably agree with them with some caveats. The existing conforming loan limit set by OFHEO seems to be arbitrary, simply because it doesn’t float with the housing market. When housing prices slipped, OFHEO kept the loan limit unchanged. The coastal markets, where housing prices are significantly higher, is disproportionately penalized by OFHEO restrictions.

By expanding the loan limits to be more consistent with local housing markets in higher priced areas, the availability of credit, may be expanded and that would help with refi and sales activity which could temper foreclosure actions and temper the slow down in transactions.

My concern is that there would be more risk placed on the GSE’s (Fannie and Freddie) and thats OFHEO’s concern as well. Congress forced portfolio size restrictions on the GSE’s in light of their accounting problems and I have yet to find whether this issue was addressed in the package. In other words, will more loans actually fall under this change or would there simply be a reallocation of mortgage types.

Media Appearance: I’ll be on CNBC Power Lunch at about 12:30 today on a panel discussion covering this issue.

UPDATE: As far as I can tell, the portfolio caps on the GSE’s are not being expanded, which significantly mutes the benefit of expanding the loan limit because it will result in the spreading around of loans taking from lower priced markets and moving availability to higher priced markets. Hopefully the Senate version will expand them.


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[In The Media] CNBC Squawk Box and Bloomberg On The Economy Clips for 11-30-07

December 1, 2007 | 2:51 pm | | Public |

My new venture Radar Logic released the September 2007 RPX Monthly Housing Market Report on Friday at 9 AM.

Mark Haines & Erin Burnett, hosts of CNBCs Squawk Box interviewed me at the New York Stock Exchange about the release of the report. Its a tight fit on the balcony, overlooking the exchange with about a dozen people within about 6 feet of me off camera. I have been interviewed by each of them from a remote location but this was the first time I have met them in person. A lot of cheering and yelling was going on behind me on the floor of the exchange.

CNBC Squawk Box Interview

Kathleen Hays, who hosts one the leading news programs On The Economy, and who is one of my favorite anchors at Bloomberg, interviewed me regarding our report release. She is a moderator at this monday’s OTS’ National Housing Forum.

I was joined by Nicolas Retsinas, Director of Harvard’s Joint Center for Housing Studies. I did a split screen with Nicholas once before on another program and have always enjoyed his insights.

Bloomberg On The Economy Interview

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[Crunch Report] 3Q 2007 Manhattan Market Overview

October 2, 2007 | 11:23 pm | | Radio |

The 3Q 2007 Manhattan Market Overview [pretty version will be posted later this week] that I author for Prudential Douglas Elliman was released today. The report is prepared in the same manner as in quarters past but in association with Radar Logic, where i am the director of research.

The numbers were released and my summary of their interpretation were provided to the media for the coverage today. The actual data and charts will be available later this week as well.

More than a year ago, 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 process.

This list of articles is presented basically when I found them. I also include some duplicate news feeds because I like to see what regions are interested in the story – I place those near the bottom because of the repetition. I’ll keep adding links through the end of the week.

The Link List

Manhattan Home Prices Rise 2.3% on Luxury Condo Sales [Bloomberg]
Home Prices Buck Trend, for Now [New York Times]
Manhattan continues to buck U.S. housing trend [Reuters]
Manhattan housing boom continues [CNN/Money]
Manhattan apartment market prices hit record high [New York Daily News]
Manhattan Apartment Prices Soar, Bucking the Trend [CNBC]
MANHATTAN CONDOS $KYROCKET [New York Post]
Manhattan Housing Market Still Sturdy, For Now [TheStreet.com]
Manhattan housing market still healthy [The Real Deal]
No City For the Young [The Real Estate/New York Observer]
Manhattan real estate bubble hasn’t burst [Newsday]
Your Morning Credit Crunch: Manhattan Stays Bullish [Curbed]
Manhattan real estate sales, prices still climbing [Inman News]
Pre-Credit Crunch Apartment Prices Increase Real Estate [New York Sun]
NYC Real Estate Prices Strong – For Now [Gothamist]
No Surprises In Manhattan Real Estate Poll [NY Press]
Manhattan housing prices in record high [Construction Digital, UK]

Radio and TV clips

[October 2, 2007] CNBC

[October 2, 2007] Bloomberg Television

[October 2, 2007] NY1 News

[October 2, 2007] Bloomberg Radio


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Staking Revisionist Mortgage Market History Yields Different Tomatoes

August 21, 2007 | 7:49 am | |

My son planted about 30 tomato plants in our garden this year so needless to say, I am now full of tomatoes.

One of the things that have come out of all the upheaval in the mortgage markets has been the frequency and clarity of explanations as to what happened and how the markets got into this predicament. Hindsight is 20/20 so they say. It was not long ago that people were scratching their heads about how prices can rise at an expotentially higher rate than income for a seemingly indefinite period of time.

It was all about the Benjamins mortgages and how easily the payments could be managed. Downpayment became monthly payment in the dialog between buyers and lenders. Lenders reduced underwriting requirements to bare bones, appraisers were encouraged to become form fillers. The lending community came up with mortgage products to stimulate transactions and Wall Street responded, creating a labrynth of tranches designed to move risk around to the right places…except investors ulitmately figured out that few on Wall Street really understood the risk. And then the world changed.

As Jim Grant wrote in Time Magazine (special thanks to “the man who wears shirts that look like graph paper.”):

That is the way great ideas end, not with a bang, not with a whimper, but through reductio ad absurdum. You know investment bankers are not satisfied until every good idea is driven into the ground like a tomato stake.

Here’s a few recent summaries of what happened over this period of mortgage excess that I found particularly interesting.

How Missed Signs Contributed to a Mortgage Meltdown [New York Times] with a very cool chart. Things were moving so quickly but we should have seen it coming.

As far back as 2001, advocates for low-income homeowners had argued that mortgage providers were making loans to borrowers without regard to their ability to repay. Many could not even scrape together the money for a down payment and were being approved with little or no documentation of their income or assets.

In December, the first subprime lenders started failing as more borrowers began falling behind on payments, often shortly after they received the loans.

Reaping What You Sow: Hedge Fund and Housing Bubble Edition [Huffington Post]. This article suggests that a Fed rate cut represents help for the wealthy and not the masses.

Last week we got to watch as the markets went wild with the realization they were over leveraged on bad debt, until Bernanke rode in with a huge bailout, answering a question (and settling some bets) on whether he was an inflation fighter, or an inflationist (he’s an inflationist, and he has now proved it.)

Bloody and Bloodier – The subprime-lending crisis is worse than you think, and could crush financial and real-estate markets for years. [New York Magazine]. Besides sharing dentists, I can empathize with Jim Cramer’s pain as of late. Barron’s Magazine dedicated its cover story to analyzing how wrong his advice has been in his CNBC show Mad Money in the article: Shorting Cramer.

You’re losing money right now. This very minute. You’re losing money if you own an apartment. You’re losing money if you own a country home. You’re losing money if you own a stock or bond mutual fund. You’re losing money if you have a pension plan. You’re probably losing money here or there, you’re probably losing money everywhere (except maybe from your savings account and wallet). But this is no Dr. Seuss story. It’s more of a John Steinbeck tale, and we are the victims, a new generation of Tom Joads, and it’s the damn bankermen who broke us. No, there won’t be a police officer to investigate, and the government, at least this federal government, won’t save us.

Panic on Wall Street [Salon]. It starts with an obligatory blame Greenspan bent but goes deeper.

There is a standard explanation included as a paragraph in almost every story attempting to explain the current turmoil. It goes like this: Anxious to goose the U.S. economy out of its dot-com-bust doldrums, Alan Greenspan and the Federal Reserve Bank lowered interest rates to rock bottom in 2001. The resulting flood of cheap money encouraged an orgy of borrowing at every level of the U.S. and world economies. Whether you wanted to buy a house or a multibillion-dollar conglomerate, lenders were your best friends, falling over themselves to offer you whatever amount of capital you desired — and charging low, low rates of interest. Cheap money led to a growing complacency about risk. If you ran into trouble, you could just refinance your house, or borrow a few billion more dollars today to pay off the billions you might owe tomorrow.

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