freedomCM_IHB
New member
hell, i'd buy today if i got a 30 year 0% loan from the Fed!
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NEW -> Contingent Buyer Assistance Program
I saw that report. IMO, this is the worst kind of academic bullshit. Rather than admit their methodology is completely flawed, they look at their valuation models and come to the conclusion that the market is undervalued.
When I read these reports, I keep thinking about this guy as its author:
We just passed a $700 billion bailout bill for banks in the hopes that they would use the money to start lending money. Yet there was no requirement that recipients of the money use it for the intended purpose.
You tell me if we are really this stupid (as a whole)...
Why do you dis us academics like that, dude?
Seriously, they aren't academics, they are "consultants" (was there ever a scarier word?)
I teed off on Global Insight elsewhere. My critique is similar:
There is at least one glaring error in Global Insight's method. A similar bit of stupidity turned up in some academic models, by professors who denied there was a bubble, in 2006.
"Our approach to determining fair value in the housing market is statistical in orientation. This
contrasts with financial asset valuation, where a vast body of theoretical and empirical literature
addresses the question of “intrinsic value.” Rather, our approach examines a particular historical period — Q1/1985 to Q3/2008 — and accepts that
house prices, on average, adhered to some normal relationship to underlying determinants during that time."
In other words: "We have ignored the epic bubble which is now deflating. Instead of adjusting our method, or throwing out bubble years from the data, we pretend that all years of history are equally valid in predicting fair value. Our analysts know this, and are subtlely telling you they know it. However, because our customers like the high fair value estimates currently being produced, we have left our method unchanged, and continue to get paid our consulting fees."
Note that the coauthor of the housing price forecasts is National City. How is that model working out for them? Over the last year their stock has lost over 90% of its value. They've agreed to be acquired. They are laying off thousands of employees.
I'm guessing that crap housing price models contributed to the problem.
That's what happens at or near a market bottom.
When I was reading through the academic literature while writing the book, I was astounded by all the academics who missed the real estate bubble. I read reports where some of these guys looked right at the data, stared right at a graph showing a massive bubble, and they concluded prices were supported by fundamentals.
I have no ax to grind. I just call them as I see them. The academics really missed this one. Reading Robert Shiller's paper tracing the debate between behavioral finance and efficient markets theory demonstrated how academics can spend decades on fool's errands to prove a theory that later turns out to be completely wrong. I suppose all human thought advances that way. The history of physics is no different.
Perhaps the series of bubbles we have just witnessed will totally discredit efficient markets theory. These bubbles are best explained by behavioral science which is probably why Robert Shiller was one of the few who foresaw it correctly.
Did you mean to post this over on the IHB The Movie thread?
Because if you did this is your own fault for screwing up my chance to be portrayed by Denzel!
Must be my Marketwatch screen shot huh?! It's scary even to me...
Although we do not encourage potty humor with our daughters, they would find that funny, and I would not be terribly concerned. I would just explain who NV is and they would nod their heads in sympathy. ;-P
Hat tip, Calculated Risk:
http://4.bp.blogspot.com/_pMscxxELHEg/ST56aCujpGI/AAAAAAAAD9E/X2APNzduoIQ/s320/LewisAutomakers.jpg
IrvineRenter_IHB
New member
ipoplaya said:
I saw that report. IMO, this is the worst kind of academic bullshit. Rather than admit their methodology is completely flawed, they look at their valuation models and come to the conclusion that the market is undervalued.
When I read these reports, I keep thinking about this guy as its author:
awgee said:
We just passed a $700 billion bailout bill for banks in the hopes that they would use the money to start lending money. Yet there was no requirement that recipients of the money use it for the intended purpose.
You tell me if we are really this stupid (as a whole)...
freedomCM_IHB
New member
IrvineRenter said:I saw that report. IMO, this is the worst kind of academic bullshit. Rather than admit their methodology is completely flawed, they look at their valuation models and come to the conclusion that the market is undervalued.
When I read these reports, I keep thinking about this guy as its author:
Why do you dis us academics like that, dude?
Seriously, they aren't academics, they are "consultants" (was there ever a scarier word?)
MalibuRenter_IHB
New member
IrvineRenter said:ipoplaya said:
I saw that report. IMO, this is the worst kind of academic bullshit. Rather than admit their methodology is completely flawed, they look at their valuation models and come to the conclusion that the market is undervalued.
When I read these reports, I keep thinking about this guy as its author:
I teed off on Global Insight elsewhere. My critique is similar:
There is at least one glaring error in Global Insight's method. A similar bit of stupidity turned up in some academic models, by professors who denied there was a bubble, in 2006.
"Our approach to determining fair value in the housing market is statistical in orientation. This
contrasts with financial asset valuation, where a vast body of theoretical and empirical literature
addresses the question of “intrinsic value.” Rather, our approach examines a particular historical period — Q1/1985 to Q3/2008 — and accepts that
house prices, on average, adhered to some normal relationship to underlying determinants during that time."
In other words: "We have ignored the epic bubble which is now deflating. Instead of adjusting our method, or throwing out bubble years from the data, we pretend that all years of history are equally valid in predicting fair value. Our analysts know this, and are subtlely telling you they know it. However, because our customers like the high fair value estimates currently being produced, we have left our method unchanged, and continue to get paid our consulting fees."
Note that the coauthor of the housing price forecasts is National City. How is that model working out for them? Over the last year their stock has lost over 90% of its value. They've agreed to be acquired. They are laying off thousands of employees.
I'm guessing that crap housing price models contributed to the problem.
no_vaseline_IHB
New member
http://www.mbaa.org/NewsandMedia/PressCenter/66626.htm
MBA says 10% of ALL that's ALL outstanding mortgages are either in foreclosure or past due.
I hate reposting stuff I find on CR, but given IR's blog topic today, I found it humourous.
MBA says 10% of ALL that's ALL outstanding mortgages are either in foreclosure or past due.
I hate reposting stuff I find on CR, but given IR's blog topic today, I found it humourous.
ipoplaya_IHB
New member
Boy it sucks to be in the staffing/consulting industry right now...
Anonymous_IHB
New member
ipoplaya_IHB
New member
skek said:
That's what happens at or near a market bottom.
IrvineRenter_IHB
New member
freedomCM said:
When I was reading through the academic literature while writing the book, I was astounded by all the academics who missed the real estate bubble. I read reports where some of these guys looked right at the data, stared right at a graph showing a massive bubble, and they concluded prices were supported by fundamentals.
I have no ax to grind. I just call them as I see them. The academics really missed this one. Reading Robert Shiller's paper tracing the debate between behavioral finance and efficient markets theory demonstrated how academics can spend decades on fool's errands to prove a theory that later turns out to be completely wrong. I suppose all human thought advances that way. The history of physics is no different.
Perhaps the series of bubbles we have just witnessed will totally discredit efficient markets theory. These bubbles are best explained by behavioral science which is probably why Robert Shiller was one of the few who foresaw it correctly.
awgee_IHB
New member
I have a favor to ask.
My young daughters are free to wander up to me and sit in my lap when I am reading here.
I do not think that some of the pics that are posted are images that you would want them to exposed to.
I ask that you refrain from posting images that you think may not be appropriate for young folks.
If your response is, "Don't blog while your children are around", I encourage them to be around a lot, so it would be quite restrictive. Staying off this site while they are around is definitely an option, but I am just asking a favor.
No recriminations, no judgements, just a favor.
My young daughters are free to wander up to me and sit in my lap when I am reading here.
I do not think that some of the pics that are posted are images that you would want them to exposed to.
I ask that you refrain from posting images that you think may not be appropriate for young folks.
If your response is, "Don't blog while your children are around", I encourage them to be around a lot, so it would be quite restrictive. Staying off this site while they are around is definitely an option, but I am just asking a favor.
No recriminations, no judgements, just a favor.
no_vaseline_IHB
New member
awgee said:
Did you mean to post this over on the IHB The Movie thread?
Because if you did this is your own fault for screwing up my chance to be portrayed by Denzel!
ipoplaya_IHB
New member
awgee said:
Must be my Marketwatch screen shot huh?! It's scary even to me...
awgee_IHB
New member
no_vaseline said:awgee said:
Did you mean to post this over on the IHB The Movie thread?
Because if you did this is your own fault for screwing up my chance to be portrayed by Denzel!
Although we do not encourage potty humor with our daughters, they would find that funny, and I would not be terribly concerned. I would just explain who NV is and they would nod their heads in sympathy. ;-P
usctrojanman29_IHB
New member
Or in bear market rallies.ipoplaya said:
graphrix_IHB
New member
So, you want to save the economy?
All you need is a keyboard and a few good ideas. Inside the influential new world of econobloggers.
This time, however, something strange happened. A sprawling network of experts in economics and finance began picking apart the Paulson plan - live, in public, on blogs. Despite the vitriol the bloggers dished out - "Why You Should Hate the Treasury Plan" was one of the more temperate postings - this wasn't a bunch of hacks howling from the sidelines. Their numbers included some of the nation's top academic economists, such as Paul Krugman, Nouriel Roubini, and Tyler Cowen, along with a host of financial-industry insiders who actually knew a great deal about credit default swaps, collateralized debt obligations, and all the other esoteric instruments at the heart of the crisis.
As the bailout plan unfolded, the bloggers offered historical context along with cutting critiques of the proposal. More important still, they offered counterproposals: direct capital injections into banks, for example, or direct purchases of mortgages. Many of their readers began badgering their senators and representatives to oppose the plan. A few weeks later, Congress rebuffed Paulson, sending shockwaves through global financial markets.
Though it's still unclear how much credit the blogs can take for shaping Washington's response to the crisis, it's already evident that policy makers charged with monitoring and fixing the markets are no longer operating alone. A fast-moving, highly informed economics blogosphere now tracks and critiques their every move. The result is that this may be the first national crisis to be hashed out by experts in full public view.
The blogs offer a rolling crash course in economics as authoritative as any textbook, but far more accessible. It's a conversation that's simultaneously esoteric and irreverent, combining technical discussions of liquidity traps and yield curves with profane putdowns and heckling headlines. In the process, the bloggers have helped to democratize policy making, throwing open the doors on the messy business of everything from declaring a recession to structuring the most expensive government bailout in history.
A nice hat tip to Tanta...
Calculated Risk quickly developed a cult following for its sophisticated analysis of economic data, for rapidly crunching numbers into readable graphs, and for the knowledgeable posts of Tanta, a guest blogger with razor-sharp prose and an almost limitless enthusiasm for exposing the inner workings of the mortgage industry. Tanta had worked as a mortgage banker, and the blog created an instant platform for this one thoughtful - and worried - insider. Today, her posts have become legendary as a prescient warning cry about the current financial meltdown.
Also see their field guide to financial blogs.
All you need is a keyboard and a few good ideas. Inside the influential new world of econobloggers.
This time, however, something strange happened. A sprawling network of experts in economics and finance began picking apart the Paulson plan - live, in public, on blogs. Despite the vitriol the bloggers dished out - "Why You Should Hate the Treasury Plan" was one of the more temperate postings - this wasn't a bunch of hacks howling from the sidelines. Their numbers included some of the nation's top academic economists, such as Paul Krugman, Nouriel Roubini, and Tyler Cowen, along with a host of financial-industry insiders who actually knew a great deal about credit default swaps, collateralized debt obligations, and all the other esoteric instruments at the heart of the crisis.
As the bailout plan unfolded, the bloggers offered historical context along with cutting critiques of the proposal. More important still, they offered counterproposals: direct capital injections into banks, for example, or direct purchases of mortgages. Many of their readers began badgering their senators and representatives to oppose the plan. A few weeks later, Congress rebuffed Paulson, sending shockwaves through global financial markets.
Though it's still unclear how much credit the blogs can take for shaping Washington's response to the crisis, it's already evident that policy makers charged with monitoring and fixing the markets are no longer operating alone. A fast-moving, highly informed economics blogosphere now tracks and critiques their every move. The result is that this may be the first national crisis to be hashed out by experts in full public view.
The blogs offer a rolling crash course in economics as authoritative as any textbook, but far more accessible. It's a conversation that's simultaneously esoteric and irreverent, combining technical discussions of liquidity traps and yield curves with profane putdowns and heckling headlines. In the process, the bloggers have helped to democratize policy making, throwing open the doors on the messy business of everything from declaring a recession to structuring the most expensive government bailout in history.
A nice hat tip to Tanta...
Calculated Risk quickly developed a cult following for its sophisticated analysis of economic data, for rapidly crunching numbers into readable graphs, and for the knowledgeable posts of Tanta, a guest blogger with razor-sharp prose and an almost limitless enthusiasm for exposing the inner workings of the mortgage industry. Tanta had worked as a mortgage banker, and the blog created an instant platform for this one thoughtful - and worried - insider. Today, her posts have become legendary as a prescient warning cry about the current financial meltdown.
Also see their field guide to financial blogs.
Major Schadenfreude_IHB
New member
A similar article can be written about housing blogs. If it weren't for the IHB and its ilk, how many more people would have bought houses they couldn't afford, thereby contributing to the present mess?
The democratization of information will hopefully prevent future economic calamities.
The democratization of information will hopefully prevent future economic calamities.
No_Such_Reality_IHB
New member
So this morning, I get up turn on the early show and they're talking about Bush potentially getting the Auto-bailout today.
At 7:05, A GM VP of Product Development said 'it'll be enough to get us through to next year when we can see what it will really take.'
Fools
At 7:05, A GM VP of Product Development said 'it'll be enough to get us through to next year when we can see what it will really take.'
Fools
caycifish_IHB
New member
No_Such_Reality said:
Hat tip, Calculated Risk:
http://4.bp.blogspot.com/_pMscxxELHEg/ST56aCujpGI/AAAAAAAAD9E/X2APNzduoIQ/s320/LewisAutomakers.jpg