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Old 10-09-2008, 06:46 PM
191 posts, read 640,807 times
Reputation: 44



When you have the Morning Call (Lehigh Valley newspaper) printing article after article that uses local realtors as sources and using local economists who are on the payroll of the some realtors you have BIAS news. Being that most people trust and believe what they read or watch without ever getting the opposite side of the story, they become a herd of people not making rational decisions. I think had people around this area especially been given the true data on housing like the average price of housing values for a period of over 100 years http://graphics8.nytimes.com/images/...aph2.large.gifthat was created by independant economist with nothing too gain except telling the truth, would have not made such foolish decisions. If you're reading day after day that the lehigh economy is not having a housing bubble (except for the fact prices more than doubled in a few short years) the sheep will follow the herd.

This crisis will not be over and we will not begin to start to recover until housing values get back to historical numbers and that means values must drop back to pre 2000 levels. Facts are facts, beginning around 1996 prices of homes began to rise at 3-5% and incomes were not rising at even 1/2 of that. Take that and add in inflation (lehigh valley inflation is 2-3% higher than national which makes our situation even worse) and you have a major crisis that should have been reported. Instead the morning call decided to run articles that their biggest supplier of revenue told them too run which was false, misguided truths about housing & the economy. Now they are switching their tune and acting like nobody saw this coming.

ONE great puzzle about the recent housing bubble is why even most experts didn’t recognize the bubble as it was forming.
Alan Greenspan, a very serious student of the markets, didn’t see it, and, moreover, he didn’t see the stock market bubble of the 1990s, either. In his 2007 autobiography, “The Age of Turbulence: Adventures in a New World,” he talks at some length about his suspicions in the 1990s that there was irrational exuberance in the stock market. But in the end, he says, he just couldn’t figure it out: “I’d come to realize that we’d never be able to identify irrational exuberance with certainty, much less act on it, until after the fact.”

With the housing bubble, Mr. Greenspan didn’t seem to have any doubt: “I would tell audiences that we were facing not a bubble but a froth — lots of small local bubbles that never grew to a scale that could threaten the health of the overall economy.”
The failure to recognize the housing bubble is the core reason for the collapsing house of cards we are seeing in financial markets in the United States and around the world. If people do not see any risk, and see only the prospect of outsized investment returns, they will pursue those returns with disregard for the risks.
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Old 10-14-2008, 10:11 PM
191 posts, read 640,807 times
Reputation: 44
Sometimes the truth hurts.
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Old 10-15-2008, 05:00 AM
12,870 posts, read 29,509,143 times
Reputation: 7438
Sometimes the truth is boring.
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