Matrix Blog

Posts Tagged ‘CNBC’

Housing Stats Can Be Misleading (Long Live The Fed)

May 26, 2006 | 7:55 am | |

Well, the bad news is that we have to work today (well, most people) but the good news is that we have a long weekend ahead of us (and a lot of kayaking to do). I prospose we use the time to ponder how the housing market is really doing.

The housing stats and the anticipation of the Fed’s next move, seems to be largely reliant on misleading data. The Fed has ready indicated that they themselves are waiting to see what the data tells them before the next FOMC meeting. That in and of itself is reasonable, but the message seems to be that they are not in the driver’s seat. That is a big concern for the consumer.

I still contend that the weaker housing data has not yet impacted the overall economic stats in any significant way. When it does, the Fed may find itself needing to loosen monetary policy again after two years of belt tightening.

Housing Stats

  • Housing market hangs in Fed’s balancing act [USAToday]. Adjustable-mortgage products that made the housing market more resilient over the past five years have left it more fragile as interest rates rise, complicating life for the Federal Reserve…a slowing housing market increases rental rates. In the Labor Department’s formula for calculating the consumer price index, rents are a big chunk of what’s called “core inflation,” a measure that excludes food and energy. Higher core inflation, in turn, spooks bond and stock traders, who fear an outbreak of inflation, putting more pressure on the Fed.

  • Mortgage apps fell by most in three months USAToday.

  • New home sales rise [Matrix] but we know that the new home sale stats is so flawed that it should not be relied on.

  • Inventory fell [BW]. Inventory supply fell from 6 months to 5.8 months.

  • Sales of existing homes [BW] increased but at the slowest pace in 4.5 years and prices increased 4.2% to $223,000 which is the smallest annual price gain since 2001.

Fed Commentary

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[In The Media] CNBC Squawk Box Clip for 5-2-06

May 3, 2006 | 12:01 am | Public |

Here is the clip of my appearance on Tuesday’s morning edition of Squawk Box on CNBC.

I spoke of market conditions in the northeast (ok – I know Washington DC is mid-Atlantic, but they asked for it).

Fun stuff.

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[In The Media] Squawk Box 5-2-06

May 1, 2006 | 12:01 am | | Public |

I’ll be on Tuesday’s morning edition of Squawk Box on CNBC. I’m tentatively scheduled to be on at 7:40am (May 2, 2006).

I’ll be discussing the current state of the residential real estate market, east coast real estate trends, specifically New York. I believe they are doing a daily segment with representatives from different parts of the country. This morning Brad Inman will their guest.

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[In The Media] Squawk Box 5-2-06

April 24, 2006 | 9:31 am | Public |

I’ll be on Tuesday’s morning edition of Squawk Box on CNBC. I’m tentatively scheduled to be on at 7:40am (May 2, 2006).

I’ll be discussing the current state of the residential real estate market, east coast real estate trends, specifically New York. I believe they are doing a daily segment with representatives from different parts of the country. On Monday someone will discuss the west coast markets.

UPDATE: Thats Tuesday, May 2, 2006 not April 25, 2006 as originally posted.

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Washington DC Real Estate Speculators: 26 Square Miles Surrounded By Reality

April 24, 2006 | 12:01 am |

The title of this post was previously reserved for politicians but now it seems more appropriate to real estate investors. Apparently investor speculation in DC [WaPo] was more rampant than we gave fair credit for. [This was a front page WaPo story on Saturday]

Not just condominiums, but also townhouses and single-family houses, were snapped up by investors using no-money-down financing and non-traditional loans. They helped send prices soaring at unprecedented rates.

The investor element of the housing boom [cnbc] appears to be the segment that is suffering right now.

In Florida, the oversupply of rental to condo conversions are causing the landlords to have second thoughts [SoFl Bus]. Known as the “condo conversion reversion,” many condos are reverting back to rentals.

Is this unexpected? Not really. You can’t pile on thousands and thousand of units in a market and expect prices to rise indefinitely.

Ever made Hollandaise sauce? You can keep adding butter but risk having the emulsion break and being forced to start over. [sorry, will try to keep the cooking analogies to a minimum -ed]


Judging A Book By Its Cover: David Lereah Changes Titles

February 23, 2006 | 12:06 am | Public |

According to Bubblemeter, David Lereah, the Chief Economist for the National Association of Realtors (NAR) is changing the title of his real estate book (as seen on Amazon) from:

Are You Missing the Real Estate Boom? to _Why the Real Estate Boom Will Not Bust._

Notice how the word BOOM is the same size and the graphics are identical? The Walk-through’s Old Fish In A New Wrapper says the content is the same – Damon Darlin’s post provided a pretty good chuckle.

I had the chance to meet David Lereah in the green room before the taping of CNBC’s Town Hall: Real Estate Boom last year. It was me, Suze Orman, Robert Shiller and David Lereah. Surreal to say the least. All very nice I might add. I only had a small appearance – these people were the main characters in this production.

Mr. Lereah has provided a tremendous amount of fodder for the blogosphere, myself included. Up until now, its been the use of language which would seem to be misleading. Now its book titles. This sort of stuff might have worked 5 years ago but not today. People have access to information almost immediately.

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Bubble Challenge: Just The Facts

December 12, 2005 | 12:01 am | Radio |

In George Chamberlin’s column By George: Words for Investors [North County Times] in San Diego provides some plain language to the discussion of the current state of the real estate market. He is a TV and radio commentator.

  • After the Fed release its quarterly household wealth report, CNBC ran alerts that Americans were deeper in debt than ever before but the report said that net worth rose to a record level.

  • Foreclosures are lower today than a year ago

  • As far as a slowdown in sales, the California Association of Realtors said it took 34 days to sell a house in October. A year ago it took 33 days.

  • The NAR report that pending home sales dropped 3.3% in November and that was reported as a sign of collapse yet in California, they rose 0.8% indicating that real estate is local.

  • The UCLA Anderson Forecast calls for a crash of Southern CA real estate prices over the next few years yet excludes San Diego county from their stats.

  • Wall Street has a vested interest in seeing housing slide to prompt more people to return to the financial markets.

Although this commentary is California-orientated and I am not an advocate for the real estate industry, the lesson here is for the media to fairly interpret the information released.

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Can It Be A Bubble If Many Recognize It As Such?

August 2, 2005 | 9:16 am |

An article by By Mark Hulbert of MarketWatch titled Can it be a bubble if many recognize it as such? wrote a great article titled “Are bubbles only seen in retrospect?” based on research by

Professor Robert Schiller, the author of Irrational Exuberance which predicted the NASDAQ market correction and his recent book Irrational Exuberance: Second Edition which discusses the housing boom.

Professor Robert Schiller, who I admire greatly for his insight on the housing market and for whom I got to meet in the green room at the taping of CNBC Town Hall: The Real Estate Boom [Note: WM Clip] basically says that we are not protected from a housing bubble simply because people are worried we are in one.

He defines a bubble as “a market situation in which news of price increases spurs investor enthusiasm which spreads by psychological contagion from person to person, bringing in a larger and larger class of investors, who, despite doubts about fundamental value, are drawn to the investment partly through envy of others’ successes and partly through a gambler’s excitement.”

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