patrick.net

Let me see if I can can explain the irony in the title "The Sky is Falling" in simple enough terms for the lurking trolls. Chicken Little panics when an acorn falls on her head. She starts a hysteria by crying out "the sky is falling" to anyone who will listen. That does not mean the sky is falling, merely that those who are willing to listen to her think that it is falling.

The point of this post is that people respond to the mass media when they are all saying the same thing, good or bad. So if the media picks up on bubble theories that suggest a catastrophic ending when the bubble bursts; what impact, if any, will it have?

I think most people here, whether bearish or bullish on the market, are smart enough to understand that the most outrageous claims on either side of the bubble discussion are very unlikely outcomes.

SactoQt, looks like you really love the italics now. The delete comment feature is just as fun. ;)

Peter P

I told you, I love a new toy. :D

If anyone feels any comments need deleting, I'll be glad to oblige. I thought we were keeping the troll comments for now, unless they were too offensive. Did I miss a meeting?

Love the Haiku TWIT, can't wait for the sonnet.

I'm not supposed to love the haiku???

@SactoQt,

I think TWIT meant "no" to deleting troll's comments --because that would render his Haiku "without context".

Darn --he beat me to it! Must type faster.

I feel so silly now. How insightful am I looking now. :oops:

OK Peter, how about the commands for underline, bold and other cool formatting features?

Just what I need. More toys to annoy you with.

Jack, If you were a "winner" you wouldn't have noticed that. ;-)

Btw, that was an interesting anecdote on the '89 quake. Here's one of mine: I crossed the Bay Bridge 20 minutes before the quake hit (and collapsed that section). Missed my date with destiny that time!

Try <u>underline</u> and <b>bold</b> for underline and bold.

Looks like underline does not work.

Welcome all, to Advanced Blogging 101 --Peter P will be your instructor tonight.

There's a fly buzzing around my head. Should I swat it?

I'm sure most people who post here read the article links, but I think the headings of many of the recent news articles illustrates my point about the media all grabbing onto a story and showing a common bias.

Wed Jul 27 2005 Investors fret mortgage balloons will burst
Wed Jul 27 2005 A Housing Boom Built on Folly
Wed Jul 27 2005 As house prices rise, so does buyer risk
Wed Jul 27 2005 Over a year of house price falls (England)
Wed Jul 27 2005 D.C. Area Housing Market Cools Off
Wed Jul 27 2005 Housebuyer Beware
Wed Jul 27 2005 Past not indicator of future
Wed Jul 27 2005 Interest-only loans offer payment shock down the road
Wed Jul 27 2005 House market in flux Rapid shifts putting chill on hot June data
Wed Jul 27 2005 Jobless Rate Up
Wed Jul 27 2005 The Marginal House Buyer
Wed Jul 27 2005 Where Could Housing Bubble Burst?
Wed Jul 27 2005 Real estate market a gamble
Wed Jul 27 2005 Fed Chief Warns of Housing Market Risks
Wed Jul 27 2005 'Workout' to Prevent House Foreclosures
Tue Jul 26 2005 Class action lawsuit against Pulte seeks more than $10 million in damages
Tue Jul 26 2005 Home Sour Home
Tue Jul 26 2005 Robert Kiyosaki has turned bearish on the boom he helped create
Tue Jul 26 2005 House won't sell? Some cancel and relist
Tue Jul 26 2005 Train Wreck of the Week
Tue Jul 26 2005 The Pin That Bursts The Housing Bubble

Notice a trend?

Well to be fair the articles are all about a crash. Type in 'no housing bubble' or real estate keeps going up or something and you will read as many about the market getting stronger.

Gabby
I googled "no housing bubble" and "real estate boom" and there were a few articles about the still strong market. But several still popped up with the bear pov. I think that the perception that there is a bubble is taking on steam. You are right that not very long ago you would find as many pro-housing articles as you would find about the bubble. But I think that the media tends to follow whatever the latest trend is, and lately it seems to be on the bubble end of the argument.

I agree Sacto. People tend to like doom and gloom news more anyway don't they? Nothing like watching a lot of news to feel like the world is going to end. I'm heard of therapists having to ban people from keeping up with news if they are depressed.

I do agree there are so many more articles on the impending bubble than there have been.

I think the media is creating a self fulfilling prophecy... in addition to all of the factors contributing to a bursting bubble, the more the media reports on it, the more people are rushing to put their home on the market, thus flooding the market with available homes and creating a nice buyer's environment.

I was in SF the day of the earthquake but made it home to SJ just as it hit, my husband drove across the bridge earlier - wasn't it strange how the whole area experienced PTSD (post traumatic stress disorder) right afterwards and then housing just sort of took a nosedive... for the next 10 years. Ouch

Gabby

I have heard it said that people think the world we live in is actually far more dangerous than it really is. This is due to the news they see only focusing on the bad. I only took one class in broadcast journalism in school (not really my cup of tea), and I remember we were told to use language that had the most impact. For example, don't say someone was killed if you could use the word "murder."

The news media really is all about ratings and circulation. Unfortunately, good news doesn't sell as well as bad.

Kerrie

Good point! I think the news coverage will have a big impact. The more stories we see on TV that say the housing market is in a slump the more people will rush to dump their properties.

Astrid

It just goes to show that perception is everything doesn't it? I'll be glad when it is widely perceived that the housing market it going down.

Against the Gods: The Remarkable Story of Risk is a good read.

I love thinking about risks. Just hate taking them. But I do try to take calculated risks if the expected rewards justify them.