Trading 8s » Barry Ritholtz

Quote of the Day: Barry Ritholtz

Anthony W. Orlando — Sat, 15 Jan 2011 23:39:01 +0000

Those viral animated bears may be clever, but they sure suck at math.

– Barry Ritholtz (Fusion IQ)

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Don’t Ask a Journalist to Explain Real Estate Economics to You, Part I

Anthony W. Orlando — Mon, 23 Aug 2010 19:56:38 +0000

No offense to David Streitfeld, but I won’t be asking him to manage my investments anytime soon.

Streitfeld, a New York Times reporter, declares, “Real Estate’s Gold Rush Seems Gone for Good.” He interviewed several economists who warned that “home ownership will never again yield rewards like those enjoyed in the second half of the 20th century” — or, at least, that’s the conclusion he drew from the interviews.

Streitfeld asked all the right people. Dean Baker told him, “People shouldn’t look at a home as a way to make money because it won’t.” Robert Shiller said, “People think it’s a law of nature” that home prices must go up, but it isn’t. Barry Ritholtz warned, “People shouldn’t be holding their breath waiting for it to happen again.”

All three of those guys predicted the housing crash. They know what they’re talking about…but does Streitfeld?

I’m wondering what Streitfeld will report when prices go up again. Will he conclude he was wrong and buy real estate, or does he understand how housing bubbles work?

I don’t mean to pick on Streitfeld. He did a good reporting job, just not good enough for the average reader to prepare themselves for the next bubble.

Prices will go up again. Not today. Not tomorrow. Not this year. Maybe not for a long time. But another housing bubble will happen.

The way I know is because real estate has been cyclical for at least the last century. Contrary to what Streitfeld says, it’s not a new phenomenon. A real estate bubble preceded the stock market bubble of the late 1920s, and many economic historians believe it’s the combination of the two that caused the Great Depression.

Streitfeld’s article makes it sound like we went through a phase — growing pains, if you will — and it’s over now. It’s not. It’ll happen again…and it’ll implode again.

When homeowners and investors take leave of their senses again — as they have over and over and over and over in economic history — I hope Streitfeld writes about what Baker, Shiller, and Ritholtz really meant: Real estate doesn’t appreciate (in real terms) over the long run. Don’t get caught up in the next “gold rush.”

Update: Ritholtz makes roughly the same point in a different way: “I was surprised when he mentioned I was one of the more bullish housing analysts he spoke with! My answer to that was the time to be an über-bear on Housing (or anything, really) is before the collapse — not afterwards.”

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Best of the Month: March 2010

Anthony W. Orlando — Sun, 09 May 2010 15:16:10 +0000

10. What Makes Chechen Women So Dangerous? — Robert A. Pape, Lindsey O’Rourke, & Jenna McDermit, Lady Gaga vs. the Occupation — Thomas Hegghammer, and Hating Us for our Degeneracy — Daniel Larison
9. Study: Two-Thirds of Boys in Afghan Jails Are Brutalized — Gareth Porter, Iraqi Children’s Growth Stunted by War — BBC News, Night Raids Belie McChrystal’s New Image — Gareth Porter, and Gen. McChrystal: We’ve Shot “an Amazing Number of People” Who Were Not Threats — Justin Elliott
8. Taking Sides — John Mearsheimer and Top Ten Reasons East Jerusalem Does Not Belong to Jewish-Israelis — Juan Cole
7. 10 Questions for Finance Reformers — Barry Ritholtz and The Lone Star Secret — Alyssa Katz
6. Cultural Change Is Key to Bank Reform — Justin Fox, Greeks, Romans, and Financial Reform — Paul Krugman, and The Source of Global Trade Imbalances — Johanna Mollerstrom
5. As Things Get Worse in Pakistan, the Optimism Continues to Soar — Robert Fisk, Pakistan to America: What Have You Done for Us Lately? — Arif Rafiq, Into the Terrifying World of Pakistan’s “Disappeared” — Robert Fisk, and Don’t Forget India — Nikolas K. Gvosdev
4. The Arab Tomorrow — David B. Ottaway, Once Again, a Nation Walks Through Fire to Give the West Its “Democracy” — Robert Fisk, The Oil Curse — Christopher Dickey, The Political Resource Curse — Fernanda Brollo, Tommaso Nannicini, Roberto Perotti, & Guido Tabellini, and The Political Limits to Globalization — Daron Acemoglu & Pierre Yared
3. Fiscal Policies in “Normal” and “Abnormal” Recessions — Paul De Grauwe
2. How to Combat Modern Slavery — Kevin Bales
1. “The Evil Scourge of Terrorism”: Reality, Construction, Remedy — Noam Chomsky and A Curious History of the CIA — Jane Mayer
BONUS: Setting Congress’s Sights on Next Target — Anthony W. Orlando

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Best of the Week: March 28 – April 3, 2010

Anthony W. Orlando — Wed, 05 May 2010 13:07:52 +0000

We will return to the “Top 10″ format because the feedback didn’t suggest much value-add from the “Top 15″. If you wish us to return to the “Top 15″ at any time in the future, please don’t hesitate to leave a comment on the site or email us. — AWO

10. Why Celibacy Should Be Abolished — Hans Küng
9. EIA: New Offshore Drilling Will Lower Gas Prices in 2030 a Few Pennies a Gallon — Joseph Romm, Risk Is Clear in Drilling; Payoff Isn’t — John M. Broder & Clifford Krauss, Grounded Ship: 3km Oil Spill on Great Barrier Reef — Marissa Calligeros, and What the Frack? — David Biello
8. Here We WMD Again — Scott Ritter, The United States, Iran, and the Middle East’s New “Cold War” — Flynt Leverett & Hillary Mann Leverett, and “Reporting” on Iran Should Seem Familiar — Glenn Greenwald
7. Is the Health Care Law Unconstitutional? — Jack M. Balkin, Randy Barnett, Abbe R. Gluck, David B. Rivkin, Lee A. Casey, & James F. Blumstein, Individual Mandate Penalties Are Adequate — Austin Frakt, Is “ObamaCare” Destroying Wealth? — Uwe E. Reinhardt, and Economy Will Get a Boost from Health Care Overhaul — Mitchell Schnurman
6. The Income Rollercoaster — Karen Dynan and High Income Disparity Leads to Low Savings Rates — Yves Smith
5. What Makes Chechen Women So Dangerous? — Robert A. Pape, Lindsey O’Rourke, & Jenna McDermit, Lady Gaga vs. the Occupation — Thomas Hegghammer, and Hating Us For Our Degeneracy — Daniel Larison
4. Study: Two-Thirds of Boys in Afghan Jails Are Brutalized — Gareth Porter, Iraqi Children’s Growth Stunted by War, Says Study — BBC News, Pacified Populations — Kathy Kelly, Night Raids Belie McChrystal’s New Image — Gareth Porter, and Gen. McChrystal: We’ve Shot “an Amazing Number of People” Who Were Not Threats — Justin Elliott
3. 10 Questions for Finance Reformers — Barry Ritholtz and The Lone Star Secret — Alyssa Katz
2. Fiscal Policies in “Normal” and “Abnormal” Recessions — Paul De Grauwe
1. How to Combat Modern Slavery — Kevin Bales
BONUS: Power Tools — Steven Strogatz

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Best of the Month: January 2010

Anthony W. Orlando — Sat, 27 Feb 2010 01:01:21 +0000

10. PANIC!!! — Jonathan Chait, What Will Make People Trust Government Again? — John Sides, and A Formula for Futility — Ronald Brownstein
9. Iran, the Competition Over Eurasian Natural Gas, and the Revival of Classical Diplomacy in the 21st Century — Flynt Leverett & Hillary Mann Leverett
8. If It’s That Warm, How Come It’s So Damned Cold? — James Hansen, Reto Ruedy, Makiko Sato, & Ken Lo
7. A Bank Levy Will Not Stop the Doomsday Cycle — Peter Boone & Simon Johnson, Engineering Financial Stability — Robert J. Shiller, Who Bears the Costs of Post-Crisis Recovery? — Barry Ritholtz, and A Bomb Squad for Wall Street — William D. Cohan
6. What Toronto Can Teach New York and London — Chrystia Freeland, The Little-Known Reason Why Investment Banks Got Too Big, Too Greedy, Too Risky, and Too Powerful — Daniel Gross, and For Wall Street, Tough Talk, but Weak Reforms — William D. Cohan
5. The Tree-Lined Bunkers That Could Change the Face of the Middle East — Robert Fisk
4. Obama’s Secret Prisons — Anand Gopal & Tom Engelhardt
3. Nothing to Fear — John R. Bowen
2. A Deal with the Taliban? — Ahmed Rashid
1. The Year Climate Science Caught Up with What Top Scientists Have Been Saying Privately for Years — Joseph Romm
BONUS: What Isn’t the Weatherman Telling You? — Anthony W. Orlando

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