[woodrow]

If you disagree with me, start your own thread.

 

I agree with most of your analysis, and disagree with some.  Does that mean I'm allowed to post the agreeable comments here, but I must start my own seperate thread on the aspects of your post that I disagree with?

[woodrow]

sdbear – I disagree.  If the analyst credited with this quote "expected" 1.46M loans to default, I suspect he would have used that term.  He did not, and instead used the term "at risk".

19% of these loans will not default.  We all know that.  To spin an analyst's quote from "at risk" to "expected" is a dramatic and substantive change.  PS may very well have inferred that the author of the quote meant "expected", but that is an incorrect comprehension of the quote in question, in my opinion, and obviously in the opinion of others.

 

[woodrow]

PS – Forgive my rudeness.  Perhaps my language was a bit hostile and that led to your hypersensitivity.  That being said, you are not beyond reproach, and deserve to be called out when you mislead, just like everyone else.  You title was misleading, and evidence of your bias.  Twisting the quote was unnecessary; it was bearish enough without your spin.

Example:  There are ~ 125k US soldiers in Iraq, and no one would question that they are at risk of dying each and every day due to their physical presence in the most dangerous area on earth.  Does that mean that we expect all 125k US soldiers to die?  

Example:   I have 50k in stocks that are at risk of being lost every day.  Does that mean that I expect to lose the entire 50k each day the market opens?

Again, I apologize if you took my comments personally, and I will tone down the rhetoric when replying to your posts in the future now that I am aware of your sensitivity.  But until you demonstrate that you understand the difference between the concepts of at risk and expected, your credibility is greatly diminished in my eyes.  Risk and expectation are fundamental terms that are extremely important when discussing economics, which is why Jim, sduuuude, and I all took your blunder seriously.  They are not synonymous and can not be used interchangedly. 

 

[woodrow]

We pound on Lereah because he is misrepresenting the facts.

That's EXACTLY why a few of us called you out last night PS. You were misrepresenting facts!

"1.46 million loans at risk" does NOT equal "1.46 million defaults expected".

Sorry, but your title and analysis was very misleading. When called on it, you refused to acknowledge your error and instead became very thin skinned. I AGREE with 90% of your analysis PS, but you become far too defensive when challenged. If someone points out an error in your analysis, it's nothing personal, just constructive criticism.

Finally, it's okay for you to call analysts "liars" and run posters away from this board, but when you're called to task on an obvious error, you start threads asking not to be picked on? Can't have it both way, Mrs. 🙂

[woodrow]

Perry – I thought we were here to discuss what’s REALLY going on in the market, to get away from the spinmiesters? If we’re going to do the same thing but on the opposite side, how are we any different? I’ll call out spin where ever I see it, from the RE bulls or the RE bears.

Full disclosure – I too am a bear renting until I believe the market has stabilized. I just prefer to stick to facts, figures, and analysis while avoiding putting words into the mouths of authors. The author in that Times article does not “expect” all of those loans to default, he only stated that they are “at risk”. PS’s spin is misleading, and evidence of her myopia.

[woodrow]

PS – You’re using the wrong terminology. “Risk” does not mean “expected”. Not even close. You are not comprehending the idea the author is trying to get across, and it’s quite amusing.

[woodrow]

I agree with NCJim – the title is very misleading and shows how extremely biased PS is in her analysis. I enjoy PS and her posts, but her credibility is questionable at best – she’s become such a cheerleader for the crash that she’s spinning the news to make things appear even worse than they really are.

Stick to accurately reporting and interpreting the facts PS – you’re great when you’re not spinning!

[woodrow]

Good post PS. I agree with most of your predicitions, and believe the ARM resets in ’07 and ’08 along with the availablity of information will make this downturn steeper and quicker than any in history. I think that the internet tools now available to buyers/sellers is helping to accelerate market changes as sellers can now monitor their competition on a daily basis, and buyers can watch sellers fight it out via reductions/incentives unlike ever before.

In the 90s, you had to talk to your realtor to get this information, and he/she had to do a lot of leg work to gather the data and keep it up to date. Now, it’s a simple click of the mouse, and boom, anyone following a local market or zip code via Ziprealty can get daily reports with their own eyes.

It’s facinating to watch this unfold. The historical disconnect between buyers/sellers and current market information is eroding, and we’re seeing the market be much more reactive. It’s still a slow process, but we’re seeing an industry change before our very eyes.

[woodrow]

I enjoy PS’s analysis and predicitions – it makes the forum a better read.

That being said, her analysis isn’t any different from David Lereah’s (she’s simply a cheerleader on the opposite end of the spectrum) when she doesn’t base her analysis on hard data. If there is a flaw in her “witty” style, it’s that she sometimes makes wild guesses at data that is relatively easily researched, and her guesses are usually in error in favor of the argument she’s making, showing her inherent bias.

Keep up the good work PS – you’re a valuable member of this community. You should expect to be held to a higher standard than Lereah; after all he’s being paid large sums of money for his biased opinion. And no one that I know of takes him seriously – you don’t want to suffer the same fate.

[woodrow]

What’s the average price of a home in the US, ~ 240k? How in the world do you come up with the average mortgage being 400k?

I’m a bear, but I think it hurts your argument(s) when you use unrealistic numbers. Everyone with a reseting ARM will not be hit with “rate shock”. While a significant number will no doubt be in trouble/forclosure/bankruptcy, your analysis suggesting that every single household with a reseting ARM will face rate shock is absurd. There are plenty of people who are well aware of their loan responsibilities and will be in position to make their new payments with ease.

Again, I’m a bear (my wife and I rent) but I think your analysis is far, far better when you’re being realistic. Saying the average mortgage is 400k and that 7.5M people are going to experience “rate shock” is sloppy and unbecoming of someone with your analytic and writing skills. In my opinion, of course.

[woodrow]

PS – your assumption that each loan “averages 400k” is way, way, way off base. The average mortgage is probably half that. Not everyone lives in San Diego.

Love your posts, but after reading you for awhile, it seems that your mistakes always happen to support your side of the argument. I like it better when you stick to the facts and leave assumptions out of it.

[woodrow]

PS – I thought that you believed the median price was a lagging indicator that was at the very least a year behind? Now you’re using the fact that the median has only recently gone negative to support an argument that “this is just the beginning”?

IMO, we should be able to pinpoint the beginning of this slowdown/downturn when monthly listings began to dramatically overshadow sales. My guess is that began in the spring/summer of ’05, and we’re now just getting to the free fall period. The ARM resets in ’07 and ’08 will lengthen the fall, and by ’09 San Diego will return to a market with a semblence of normalcy. If I had to take a guess, I’d put the over/under at a 35% fall from November 2005’s high before we reach the bottom in fall/winter of ’08.

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