All his arguments are based on what he thinks “should be”. All of our arguments have been based on what “is”.
We correctly identified how overstretched the markets are, we correctly identified each of the elements that contributed to those distortions, we correctly identified the risks each of those elements posed to the whole, and (so far) our projections about how it would unravel have been coming true. We literally wrote the list and as these events unfold its as if the market is going down our list and checking each box off in the sequence they were originally forecasted. The only thing we couldn’t know for sure was timing, which is why many of us characterized our projections on timing as guesswork.
Strage how he doesn’t apparently attribute any of the increase to media spin but he wants to lay the majority of the blame for the decline on the spin.
The facts remain:
– People haven’t been paying their mortgages in sufficient numbers to cause the foreclosure rate to skyrocket.
– Those foreclosures have caused massive losses in the secondary market because of the way the salesmen packaged them into derivatives.
– The losses in the secondary market have caused a number of lenders to go down and has forced investors to withdraw from those derivatives as best they can.
– All of these elements are contributing to tightening of underwriting of mortgages, reducing options, and increasing pricing on financings – all of these elements reduce purchasing power thus putting more pressure on an alreadyt weakening pricing structure.
– He’s whining about job growth but he neglects to consider the composition of the job market and how its degrading away from the high-paying jobs necessary to pay mortgages.
– The media’s reporting of these elements absolutely does have an effect on buyers – it makes them more informed. They are using this information to make decisions, including the decision to withdraw from the market or to lowball their bids.
Inasmuch as Mr. Chamberlain works in the media, I should think he’d go a little easier on his peers who, after all, are just reporting the news. Reporting that the hedge funds are going bust and mortgage lenders are going out of business is not spin – it’s fact.
Here’s another fact – Mr. Chamberlain was 100% wrong about the 2006 market being strong and we were 100% right about it being fundamentally weak. He’s wrong about it coming back after another mere 5% frop and we’re 100% right about it taking a long time before it reverses. Time will bear all this out, just as it has for the things we projected that have already transpired.
He’s not in the driver’s seat right now, and if he continues to ignore the realities in front of him he’s going to lose the remaining 17 readers who apparently still think he has credibility.
