by HARM follow (0)
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Well, when all is said and done, you can't fool the middle class.
And you can't fool the "market."
Patrick and Ben evince the genius of common sense wedded to superior intellect, minus a hidden agenda.
Nice work, gentlemen.
Hey, and if the whole Hari Seldon angle doesn't put you on edge, imagine what could happen if a "Housing Mule" shows up! Imagine someone with the power to mentally manipulate real estate prices all over the galaxy at will.
Think about it... 8O
The Mule's power is a lot more limited. He can only create the power of undying loyalty by personally modifying a person. -- Much like Suzanne's *research* for future FBs.
HARM,
For David Lereah and other realtors--it's obvious that their job creates a huge conflict of interest (per your Upton Sinclair quote).
But beyond them I take part of your question quite literally. For so many economists like Greenspan and and other university academics whose career and lifestyle are secure bubble or no, the conflict of interest is not so clear.
I am not as cynical as some who believe Greenspan knew there was a bubble and didn't care. Rather, I believe he and many others truly believed prices were sustainable.
Finding the reasons these economists kept their head in the sand (ulterior motives or not) interests me greatly.
Boston Transplant,
I agree that the "ivory tower"/academic bubble syndrome can be very real, as others have already discussed. Even so, I seriously doubt that one of the Chief Bubble Architects: Greenspan himself, was somehow unaware of the effects his actions were having on the RE market. Remember how he was publicly pimping option-ARMs after he slashed Fed Funds rate to 1%? Coincidence? Hardly...
I would also argue that AG was not a truly disinterested academic with no conflict of interest. Rather, he was an old supply-side political hack who had a vested interest in pleasing his political masters in order to keep his job (whomever they happened to be at the time --Dems or Republicans). Not to mention all those lucrative private sector engagements he wanted for post-retirement.
OTH, I'm sure there were plenty of self-deluded academics who managed to convince themselves of a New Paradigm, just as many had during the first tech bubble.
Greenspan praising ARMS did confuse me. I don't have a good explanation for it.
Your theory could be correct, but in my opinion he was already too rich and secure for keeping his job to be his sole motivation. At that point in one's career, I think "being right" becomes important...
If applying common sense to an obviously distorted market is genius, then they are geniuses!
Now, this house is still for sale! The cheapest (and smallest) 5 bedroom in Pac. Heights. I do see that there is a seismic disclosure. I wouldn't think there would be one in that location.
http://tinyurl.com/2hbwus
For the record, I think Ben and Patrick are very talented, smart and courageous no-BS kind of guys. However, it doesn't take a psychic or super-genius to see that 1 + 1 does not = 11.
The idea that all the so-called "experts" that the press constantly trotted out as credible sources --with no challenges whatsoever-- could somehow have been oblivious to the bubble up til now just strains belief... to say the least.
OT, did you see this news on Bernanke's remarks?
He's putting pressure on Freddie and Fannie to bailout the subprime loans. I was just discussing this with a couple of coworkers yesterday and this is the worst that I thought could happen. Yet somehow I already "knew" it would.
I am just so discouraged that Ben might still be able to prolong the bubble.
http://tinyurl.com/3xsblp
The Federal Reserve Board believes that the GSEs' investment portfolios should be firmly anchored to a measurable public purpose, such as the promotion of affordable housing," Bernanke said in remarks prepared for delivery to the convention.
Together, Fannie Mae and Freddie Mac hold about $1.4 trillion in investment portfolios.
The Fed chief said purchases by Fannie and Freddie of highly rated mortgages and their own mortgage-backed securities are unlikely to promote affordable housing.
On the other hand, he said, purchases by the companies of affordable housing products "might add significant liquidity to the secondary markets for such assets, thereby reducing costs and increasing credit availability to prospective home purchasers."
@SFWoman,
"In the land of the blind, the one-eyed man is king."
--Erasmus
"it doesn’t take a psychic or super-genius to see that 1 + 1 does not = 11."
I can't wait for DS's take down of that Eurocentric assertion!
SFWoman,
That 5 bdrm condo could fit into Peter P's dream bathroom.
It's a very funny listing -- I particularly liked the "Add a garage???" suggestion.
Patrick and Ben have special triple-wound DNA with 3 times the genetic material and intelligence and other as yet undiscovered powers. People like David Lereah and Alan Greenspan, with their mere single winding of DNA never stood a chance... How can they possibly compete with that, even with higher degrees in economics and spending all day watching markets?
You jokers. Everybody knows that 1+1 = 10. You need 1+1+1 to get 11.
In the land of the blind the one eyed man will have his eye put out by the jealous leaders who cannot see.
Cycle excesses are standard and very foreseeable. The cycle repeats again and again. There is nothing remarkable in recognizing this. The genius is in getting the timing right - very right, and doing something to benefit from it.
The true geniuses are those who saw the bubble coming, bought property at the right time before the run-up at low prices, and then sold at the top.
Would it cause an uproar if I suggested that an infinite amount of bears, typing on an infinite amount of blogs, would eventually reach the conclusion of a liquidity bubble? Because let's face it, although it looks like the long slide has begun, in a year we could see that this was all some minor hiccup in the Bay Area economy.
I choose to believe that Patrick and Ben applied common sense about bubbles to Bay Area home prices. But maybe that's because I agree with them. :)
Comments 1 - 21 of 179 Next » Last » Search these comments
As the rolling bubble crash gathers steam, and even formerly hostile MSM sources now reluctantly admit the bubble --and its bursting-- is undeniably real, one question remains: how did people like Patrick Killelea and Ben Jones correctly predict all this so accurately beforehand?
Nearly two years ago, Ben and Patrick founded their now-famous blogs, dedicated to the national housing bubble. They boldly predicted its demise as "inevitable" long, long before most industry experts would even admit the bubble even existed. Now events are unfolding almost like clockwork, almost exactly as predicted:
My questions: how could such seemingly average Joes ever predict such events when the brightest, most highly paid industry experts could not? I mean, David Lereah went from "no bubble" to "correction's over" in like 30 seconds flat! If the danger signs were so obvious, then why didn't we hear about them beforehand from the NAR... the Fed... Wall Street? It's not as if these frequently quoted (and rarely challenged) "industry experts" could possibly have known about this mess beforehand, but just kept it to themselves for some reason. Like, that's just conspiratorial, tinfoil-hat wing-nuttery, right?
So, if the only way to perceive an asset/credit bubble is after-the-fact (as Sir Alan Greenspan has asserted), then how could Ben and Patrick possibly have known about it that far back? Are they psychic? Are these guys prescient modern-day Nostradamus-es? Or, are they financial super-wizards --real-life Hari Seldons-- who can accurately predict the future with mathematical precision, but posing as regular guys? If the housing bubble was so impossible to predict, even with access to the very best market data and cutting-edge computing power (as the experts insist it was), then how could two ordinary working-class stiffs manage to pull off such a feat by themselves?
Should we be concerned that Patrick and Ben are some form of genetically mutated super-geniuses hiding in plain sight?? How else could they possibly have foreseen the unforeseeable?
Spooky, isn't it? :roll:
Discuss, enjoy...
HARM
#housing