Posts filed under “Financial Press”

Read it here first: Illogical Home Sellers

David Leonhardt has a terrific column in yesterday’s NYT that hits upon many of our favorite themes:

Real Estate sellers (like other humans) are often irrational;

Price "Anchoring" occurs with many investors;

Here’s what we wrote back in September 2007:

"Prices have slipped, but not nearly enough to eliminate the inventory. This has lead the usually cheerleading folks over at the N.A.R. to yet again lower their forecast for 2007 existing-home sales for the seventh-straight month. The real estate agent trade group is now predicting a drop of 8.6 percent in home sales versus last year. And, they expect new-home sales will fall a whopping 24% to 801,000 this year, and to 741,000 next year.

Prices have failed to come down enough to jump start more activity. Sellers have been stubbornly sticking to their imagined top tick prices of 2005.  Thus, Supply remains high, and if we believe the NAR or OFHEO, prices have slipped only slightly. Econ 101 informs us that until prices fall appreciably, the inventory situation will not improve.

There is a psychological component to all this: It very much reminds me of the investors who when having missed selling Amazon at $400 and Yahoo at $200 and EMC at $80 and Cisco at $60, refused to take 10% less. So they ended up riding the stocks all the way to multi year lows.

Speaking of the NAR, we continue to note their counterproductive cheerleading. Over a year ago, we noted a group of Palm Beach Real Estate agents blamed the NAR for putting unrealistic expectations in the minds of sellers:

"A growing number of Realtors in Florida are frustrated with the state and
national Realtors groups’ efforts to ‘spin’ the market as one that is
strengthening and where home prices are stabilizing.

"Many (though probably not yet most) Realtors are frustrated by customers who
continue to list their homes at price levels that are ‘unrealistic,’ and as a
result, sales volumes – and thus commissions – continue to remain depressed.

"While Realtors have noted to customers that many home builders in Florida
have slashed new-home prices in order to move bloated inventories, many home
sellers are still holding off, hoping – along with FAR and NAR – that prices
will start moving back up soon."

0326bizleonhardt

courtesy of NYT

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Previously:
Real Estate Inventory Still Building   http://bigpicture.typepad.com/comments/2007/09/real-estate-inv.html

Quote of the day: Realtors Get Real  http://bigpicture.typepad.com/comments/2007/03/quote_of_the_da_1.html

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Source:
Be It Ever So Illogical: Homeowners Who Won’t Cut the Price
DAVID LEONHARDT
NYT, March 26, 2008
http://www.nytimes.com/2008/03/26/business/26leonhardt.html

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See also:
How Easily Can Your Brain Be Fooled?    http://bigpicture.typepad.com/comments/2007/01/how_can_your_br.html

The Psychology Behind Common Investor Mistakes   http://bigpicture.typepad.com/comments/2005/07/the_psychology_.html

Category: Financial Press, Psychology, Real Estate

Out of Pocket Most of Today

Category: Financial Press

Bloomberg vs CNBC Video: Bleccch

Cnbc_logo_2
Yesterday, I noted how pokey and bug laden the videos are on CNBC.com, saying "I sure wish CNBC would get hip to embeddable flash media, like
BrightCove. The klunky old windows media players crash all the time. (I
don’t understand why they went with this 10 year old technology)."

Turns out there is an even worse Video feed from a major news organization than CNBC.com: Its Bloomberg.com/news/av/

At least CNBC — crash-prone, buggy, ugly and slow — will play on a Mac.

The Bloomberg video — also  crash-prone, buggy, ugly and slow — is Windows only! I can play the video, but not the audio, on a Safari or Firefox browser for OSX.

And speaking of bugs, Bloomberg is the one of that odd collection of web based video that can’t/won’t be captured by a screen grab on a Windows machine. That means that any Bloomberg video you see here (like this one) is the result of watching and coding it on a Dell in the office, than grabbing the (silent audio) video part on the Mac at home, and combining the two.

Don’t you want people promoting your brand and your content?

Its not like Bloomie doesn’t know what embeddable flash is — if you go to this page, their promotional video is not WMP — its flash based! No loading delay, no glitches, just straight up video.

Bloomberg_logo

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Hey Bloomberg.com & CNBC.com:

You folks are paying for the shooting, editing, storing, hosting and bandwidth usage of all this video. I assume you actually want people to see it — to sell subscriptions, to roll adverts, to brand your product.  You are spending all of this money for a product that sends people  running in the opposite direction. 

Every time I post a video from either of your sites, I get email telling me it crashed their browser, or even worse their computer. It is slow, ugly and to be blunt, unprofessional.  Your online video product is in fact damaging your brands. (CNN/Money’s video auto roll is another bit of annoyance, but we’ll save that for another day).

Of all the major  Financial media that run video, only WSJ and NYT seem to have gotten it right.

Um, its 2008. Can we get with program?  The embeddable flash video is circa 2006. Can you find it
in your business models to only be 2 years — not 10 — behind the
technological adoption curve?

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Category: Financial Press, Television, Video, Web/Tech

Who Is Surprised by Economic Data? (part II)

Category: Economy, Financial Press

The Economist on Wall Street

Category: Credit, Derivatives, Financial Press

How Counter-Productive is Realtor Association Spin?

One of themes we’ve looked at over the years is the spin that some trade groups put out on top of their data releases. Some Trade Associations, like the ATA tonnage index, or the Home Builders Index, simply put out the straight dope — an unvarnished, unblinking look at their industries, so their members can…Read More

Category: Data Analysis, Financial Press, Real Estate

Fox Business Gunning for James Cramer

Category: Financial Press

Easter Linkfest

Okay, its Easter, and I know many readers have other things to do — but since this was such a topsy turvy week, with so much going on, I thought we needed to do at least post an abbreviated linkfest:


Hotnot_20080321
Day by day, the week gave credence to the belief that markets have no memory: Down 150 most of Monday, only to close up 21, then up 420 on Tuesday, off nearly 293 on Wednesday, and finally tacking on 261 on Thursday!

The gains were due primarily in belief that the Fed has the credit crisis under control, as interest rates came down, and commodities prices finally cracked.

Indeed, the Commodities were at the back of the pack this month, free-falling 8.6%, as Gold tumbled 7.9%, and Oil  plummeted 6.3%.

Somewhat surprisingly, the European and Emerging market stocks got hit also, falling 2.4 and 4.3% respectively. In the US, the gainers were Nasdaq (+2.1%), Russell2000 (+2.8%), S&P500 (+3.2%), and Dow Industrials (+3.4%). The big winner were REIT stocks, up 7.9%. 

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In the coming week, we Existing Home Sales on Monday, followed by Durable Goods Orders and New Home Sales on Wednesday. Thursday brings the final Q4 2007 GDP, which now seems like it was years ago.  On Friday, we get Personal Income and Outlays, and Consumer Sentiment.

Enough Ben Steinery! On with the linkfest:


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Category: Financial Press

USA’s Top Forecaster: NAR Chief Economist Lawrence Yun

Category: Financial Press, Real Estate

“Don’t Remove Your Money From Bear!”

Category: Financial Press, Psychology, Trading