Many people who believe in the magazine cover contrary indicator used this cover as evidence that there was no housing bubble. Of course, they ignored the Time cover from a week earlier.
The problem with using The Economist as a magazine cover contrary indicator is that The Economist is usually contrarian to begin with. (Their 1998 cover predicting that oil prices would keep falling is a glaring exception.)
During the late 1990s, The Economist correctly and repeatedly warned that stocks were experiencing a bubble. Likewise, during this decade it correctly and repeatedly warned that housing was experiencing a bubble. If anything, The Economist tends to warn too early, while most publications tend to warn too late.
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http://tinyurl.com/424oaw
ReplyDeleteSoft? You betcha. In recession? Quite possibly. And a crisis in the financial markets has rattled nerves for months now. But so far, the economy is holding up better than it did during the last two recessions in 1990 and 2001. Employers haven't shed as many jobs, the unemployment rate is still relatively low, and gross domestic product has kept rising. Things are nowhere near as bad as they were in the Great Depression, or even during the severe recession of 1982-83. The last time consumers were this miserable, in May 1980, the jobless rate was 7.5 percent and inflation was 14.4 percent. Now those numbers are 5.5 percent and 4.2 percent respectively.
This paradox has created a unique challenge for those guiding the economy, who worry that Americans' pessimistic views will become a self-fulfilling prophecy . Two-thirds of the economy is consumer spending. So if peoples' negative outlook leads them to cut their spending, a steeper downturn could still happen.
This has left economists trying to figure out why Americans' perceptions are so much more negative than the data analysts use to measure how things are going.
Could it be the proliferation of "doom and gloom" blogs put up by people who think they'd have something to gain if the economy went sour? (They wouldn't, but that is another story altogether.) Never before have those with an interest in seeing things go south had the same easy access to the media as those with an interest in seeing things go north, and the means and proven experience to get them that access.
Before the advent of blogs, only people and institutions with proven records could pass the barriers of entry to broadcast their views to a wide audience. Now, anyone can hang up their shingle and proclaim themselves an expert in whatever. The general public which is still used to only getting "vetted" news from the media, is just as apt to believe these self-proclaimed experts as they are the real experts ... at least for now.
Back then, no one wanted to believe it. People were more interested in what hacks like Lereah had to say. Well, who's laughing now?
ReplyDeleteWow! Has that been three years! I actually have 2 copies of that issue. Eveyone here at work thought I was so negative saying that the housing boom was a bubble. I actually had a few people give me props for the warning. Actually it is real bad to see all the foreclosures but 90% of them could have been prevented with 99'/2000 lending standards. So now we all have to pay for the downturn...
ReplyDeleteJohn in CenCal
Lance-
ReplyDeletethese self-proclaimed experts predicted housing would go down
the MSM accepted experts said housing would never go down
Who is right now, and who has been right for over a year now.
Footnote: I thought Lance stated at one time he didn't want to use tinyurl, claiming it must be some sort of spam type program,
my, how times have changed....
They (or bubble meter) should do an article on the Fed setting lending standards. It was the Fed that orchestrated this whole thing entirely. Check it out.
ReplyDeleteI am going to wait for all the knife catchers to get massive holes in their hands before I buy. Rant off.
Support S.2958
David
Lance,
ReplyDeletedo yourself a favor and crawl back under the bridge. Everyone knows trolls eat shit and talk it too.
We get it, we get it. We caused it. We created the credit crisis through some uneducated blogging. We made hedge funds implode. We made housing unaffordable.
Christ, for once in your godforsaken life, can you realize when it's a smart time to STFU?
You lost, go lick your wounds now. You're seriously harshing everyone's mellow.
Chuck Ponzi
lance must be one of those kids that believed in the tooth fairy and santa clause until he was about 15 years old
ReplyDeleteAnonymous said...
ReplyDelete"lance must be one of those kids that believed in the tooth fairy and santa clause until he was about 15 years old"
Let's see, BHs believe that this wasn't a normal market with the normal permanent appreciation that comes with a boom AND they believe that as a result of a "bursting bubble" that everything including the desirable properties that they want to buy will suddenly (someday) drop in price to close-to-nothing so that they can have their cake and eat it too. It sure sounds like there's at least one someone out there believing in fairy tales ... and it isn't me.
Pot, kettle, black.