Thursday, February 21, 2008
PIGS FLY ALERT!!! LAWRENCE YUN ADMITS TO HOUSING BUBBLE AND COLLAPSE, AND LOUSY NAR FORECASTS, AND CALLS SUBPRIME MORTAGES A "FOOLISH INVESTMENT"
No, this is not a HP April Fools joke, it's real. Yun still has his head up his rear, and is still putting out bulls*it forecasts, but I think he's trying to prepare the ground for his eventual and unavoidable resignation from the NAR, knowing he'll need to find new work after that.
You'll love the latest commentary from Yun - he tries to throw HousingPANIC under the bus, and even defends Alan Greenspan, saying he didn't cause the housing bubble. Unreal.
A simple question comes to mind - how much longer will the six-percenters keep paying their dues to the very organization doing them the most harm?
Here's the latest musings from the most discredited economist in the world, Lawrence Yun, writing for the most discredited organization in the world, the National Association of Realtors:
Back in 2001, in the aftermath of the internet stock bubble collapse and the September 11 terrorist attacks, Alan Greenspan — then the Fed chairman — made deep cuts in interest rates in order to stave off a possible economic recession. Many also blame Mr. Greenspan for having fueled the housing market bubble and subsequent collapse by keeping the rates too low for too long.
Though some in the blogosphere have figured Alan Greenspan as one of the key persons to blame for the current housing mess, I do not blame Mr. Greenspan. I believe there is plenty of blame to go around due to other factors.
It is also fine for people to point the finger at me. In a fast changing market conditions, I too have been off on my forecast. I knew that the boom was clearly unsustainable and I made the forecast in early 2007 that home prices were likely to experience a price decline on a national level for the first time since the Great Depression. The national median home price indeed fell by 1.4%. I believe I downgraded my forecast for ten or so straight months in 2007 as it was strongly pointed out to me. At the same time, the Blue Chip consensus forecast, comprised of about top 50 private forecasters, including forecasts by Merrill Lynch, Goldman Sachs, UCLA, and the like — had also downgraded the housing forecast by more than 20 straight months. Forecasting is never perfect. Forecasts are bound to be off but the forecaster's job is to make the best prognosis given the available information at the time. The readers should always view any forecast with caveat emptor.
Will we experience a re-emergence of a housing boom from the current easy money policy by the Fed? The answer is no because as Abraham Lincoln said — fool me once, shame on you. Fool me twice, shame on me. It will be impossible to part global capital providers' money with another foolish investment.