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

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?   Continue reading “Don’t Ask a Journalist to Explain Real Estate Economics to You, Part I”

Quote of the Day: Ezra Klein

America is burdened with “an anti-business president,” moans The Weekly Standard.

…corporate profits hit $1.37 trillion in the first quarter — an all-time high. Businesses are sitting on about $2 trillion in cash reserves. Business spending jumped 20 percent last quarter, and is up by 13 percent against 2009. The Obama administration has dropped taxes for small businesses and big ones alike.

Maybe the president could be anti-me for a while. I could use the money.

— Ezra Klein (Newsweek)

We’ve Only Just Begun

A lot of readers want to know what I think about the financial regulation bill that Congress passed. Unfortunately, I’ve been too busy traveling to read it or keep up with this week’s commentary. I’ll address it in more detail in the coming weeks and months. For now, the best I can do is repost the two most important columns I’ve written during the regulation debate with a brief follow-up on whether this bill addresses those issues.   Continue reading “We’ve Only Just Begun”

It’s the Same Old Song…and It Sucks.

First, an apology: I’m not very good at this whole blogging thing. I’m the kind of writer who likes to go into a cocoon for several days and reappear with a finished work. I get absorbed in my work, and it’s hard to force myself to post something everyday. Some writers find it easier to pour out their thoughts in-the-moment and collect it all into a coherent work later. So I’m back, but no promises about how long it’ll last.

Second, an observation: In the time I’ve been avoiding this blog and the news, nothing has changed. Legislators and economists are still arguing over fiscal stimulus, the financial regulation bill looks pretty much the same as it did a month ago (or two months ago, for that matter), investors are still worried about European debt, and Afghanistan is still a complete mess. I used to think the world would pass me by if I stopped paying attention for a few weeks, but I’ve come to realize that real change is rare—and the bulk of what we spend our time worrying about is the same things over and over.   Continue reading “It’s the Same Old Song…and It Sucks.”