Interesting Slate.com article on OC Housing

NEW -> Contingent Buyer Assistance Program
Thanks for informing all of us about this. Being mentioned on Slate.com is absolutely fantastic! Hopefully we'll get some more regular readers and members in the forums.
 
That was a great write up. I used to check out slate more often but I haven't been recently so thanks for pointing that one out. I also recommend reading his article on <a href="http://www.slate.com/id/2160973/">bottom calling</a>. He also has a book <a href="http://www.amazon.com/Pop-Why-Bubbles-Great-Economy/dp/0061151548">Pop!: Why financial bubbles are great for the economy.</a>
 
Lansner is linking it to his <a href="http://blogs.ocregister.com/lansner/archives/2007/07/the_real_morons_o_1.html">blog</a>. Interesting how he selects the paragraph that doesn't mention IHB.
 
He probably doesn't want to mention us because we get more traffic than he does.





I don't see his blog as being relevant any longer. It is just bulls in denial being rude to bears who like to argue. It does nothing to convince anybody of anything as far as I can tell.
 
Congratulations on the mention! This is great blog that deserves the recognition and hopefully increased readership!





It's not surprising that Lansner didn't include the mention of IHB on his blog. I agree with Irvine Renter about what has happened to Lansner's blog. I used to post there when he first started blogging, but stopped because he would edit my comments. He allows the bulls to deride the bears and himself chastises the bears for being too hard on the bulls. It is ridiculous. Most of the early bear posters (Sunset Beach Guy, Zach's Mom, etc) seem to have stopped routinely posting there (although I don't really read it that much anymore). There are still a few bears who make good points, but mostly they are just arguing as Irvine Renter says.
 
I don't think Lansner's blog is pro-bull or pro-bear. It's about as market neutral as you're going to get. Sure the interviewees have opinions, but Lansner doesn't do long op-ed pieces, he leaves that to the commenters. The main problem is the delay between commenting and when your comment actually shows up in the comments section.
 
<em>"The main problem is the delay between commenting and when your comment actually shows up in the comments section. "</em>





I agree this is the main problem with the Lasner's blog. With the association with the OC Register it had a built-in readership. It is unfortunate the blog has deteriorated.
 
<p>I agree on all counts. The comment lags and editing keep the discussion vibrancy tamped down.</p>

<p>He obviously still gets some good data nuggets since he is The Register, but I think folks are looking for a more lively, interactive discussion. Like the ones found here.</p>

<p>SCHB</p>
 
<p>I still post on Lansner's blog but a lot less than I used to. Sometimes I just need to vent when I read a ridiculous comment. So I am one of those who bites on the bait and yells at the bulls. The only name calling I do is LZingMoney for EZMoney because he can be an @ss and lately he has been worse. Stage 2 syndrome is starting. The censorship and the day long lag is beyond annoying. I talked to Matt Padilla before he went instant and he was excited but he said Lansner would never go instant. It wouldn't matter anyway because everyone there is more concerned with making their point than the actual content and that includes myself. </p>

<p>I think I am partly attached to the history of Lansner's blog and the debates such as those between Pat Veling and sunsetbeachguy (I'm surprised he hasn't been on the forums). They even reconciled it the latest Pat Veling post and Pat conceded that it wasn' all blue skys and green arrows in the market right now. Whatever happened to firefighter Nick? Here are some gems from him:</p>

<p>"I just bought my first house in Nov. 05. I paid over 600K for it and I put 20% down. So my mortgage is around 500K. I can afford my payment. I would be willing to bet in Vegas that I'm pretty typical of the average homeowner in OC. I think this idea of people being over extended, etc. is a lot of hype. Every homeowner I know is able to make their payment and even if they did a firs and a second to buy, they can still afford their home. </p>

<p>You're assuming that everyone in this county bought recently. No way. Most people in OC, yes most, have mortgages less than 300K."</p>

<p>"So, this idea of people in OC making 80K a year with a mortgage equal to the median price of a home I think is moot. So you probaby don't need to worry about all these bankruptcies and foreclosures."</p>

<p>"Here's the bottom line. Houses keep going up in value despite certain people saying there's some disasterous crash coming. So either buy or don't buy. Each day you wait, the more expensive housing becomes. </p>

<p>What I really suspect is happening here is there's one or two people who are bitter about not being able to afford a house and then using this board to vent their frustrations. I don't really believe there's so many of you just genuinely concerned about people and are here trying to prophisize and warn us all of the impending doomsday. Because the basic arguement I see put forth is this: "I can't afford to buy a house in OC so that must mean prices are going to come down to a level that makes it affordable for me, all you people who bought a house already ha ha ha." There's no real facts being used here."</p>

<p>Ah the good ole days when Lansner actually participated.</p>
 
graphix,





I just finished reading two books on trader psychology, and I may write an analysis post on the psychology of market denial. Comments like the one you quoted above and some of the others I read are clearly denial based.





The basic premise is this: once people have taken a position in a financial market, they lose the capacity to objectively view what the market is telling them. Every data point which confirms their position is accepted, and any data point which fails to confirm their market bias is ignored. These people literally do not perceive the conflicting market data.





The process of selective perception continues until the reality of market action causes a painful "forced awareness" where the stress of maintaining their denial becomes stronger than the mechanisms which keep the denial in place. This usually occurs after they have lost a great deal of money. This is the primary reason traders will fail to close a position when it hits their stoploss or remove a profit target sale when they think it can still move further in their favor. Both of those habits lead to losses.





This phenomenon of market denial and selective perception is fascinating to me. Partly because I have had to learn to overcome it in my own evolution as a trader, and partly because it is so obvious to anyone who is not afflicted with a needs-based market bias.





I am bearish on the housing market, but I am not a bear. I perceive the action of the market and the forces which impact future pricing as pointing to a price decline. I am not a permabear who selectively filters market information to reinforce a pre-conceived notion, I am a neutral market observer who is unimpeded by having a position which would cause be to have a data perception bias. I believe this is why my analysis posts have resonated with so many and angered so many bulls: denial is hard to maintain in the face of objective analysis of facts.
 
<p>Graphrix said:</p>

<p><em>" Lansner is linking it to his </em><a href="http://blogs.ocregister.com/lansner/archives/2007/07/the_real_morons_o_1.html"><em>blog</em></a><em>. Interesting how he selects the paragraph that doesn't mention IHB."</em></p>

<p>Several IHB pluggers persisted in the comments and to his credit, Jon didn't knock them down. I think IHB ended up well-represented.</p>

<p>SCHB</p>
 
<p>IR,</p>

<p>I am looking forward to hearing your trader psychology analysis. I believe the same group of people trade both securities and real estate; however, alternatively.</p>

<p>As for your bearish position, I would hope you can position your mind to be objective as I found it's not easy to do in general. I must admit, IMO, some of your analyisis is somewhat subjective, and nearly sounded manipulating in nature. Example: the property 11 Soltice. This property went through a series of purchased at inflated price, 0% financing, early default, rent skimming, and foreclosure. And I did not see you highlighting these key points. </p>
 
<em>"This property went through a series of purchased at inflated price, 0% financing, early default, rent skimming, and foreclosure. And I did not see you highlighting these key points."</em>





I have no knowledge of these events, and even if I did, it would not have changed anything. The house was purchased for a price from a homebuilder, and now it is being advertised with an offering price way, way below the purchase price. Those are facts. The circumstances which created this situation are irrelevant. If we were in a strong real estate market, situations like this would have been invisible because it wouldn't take such a drastic price reduction to get the seller out of trouble.





That is like saying the huge spike in foreclosures which are about to crush the market was an unusual outside event which could not have been anticipated. I think we have documented the reasons for the coming foreclosure tsunami in great detail. Claiming special circumstances is not valid.





People want information. We provide that information. We also provide our interpretation of that information, and we allow others to share their interpretations as well. I think many realtors are so used to living in a world of positive spin that they have come to believe that is a neutral market interpretation. It is not.





Do we spin the information the other way to counterbalance realtor spin? That is up to our readers to decide. For the last year, realtor spin has been far more detached from reality than what we have been saying here, but then again, that is my opinion and interpretation. People are free to disagree.





<em>


"I believe the same group of people trade both securities and real estate; however, alternatively."</em>





I have seen this as well. It is classic bubble behavior of the general public chasing after big returns. It is why they will both end up the same way: a painful disaster. If you didn't see this post, you should check it out: <a title="Permanent Link to The Nature of Market Reversals" rel="bookmark" href="http://www.irvinehousingblog.com/2007/07/21/the-nature-of-market-reversals/" linkindex="7" set="yes">The Nature of Market Reversals.</a>
 
<em>>>As for your bearish position, I would hope you can position your mind to be objective as I found it's not easy to do in general. I must admit, IMO, some of your analyisis is somewhat subjective, and nearly sounded manipulating in nature. Example: the property 11 Soltice. This property went through a series of purchased at inflated price, 0% financing, early default, rent skimming, and foreclosure. And I did not see you highlighting these key points.</em>





When you have inside info, you should post them in comments. That way the info is there and you can feel like it's represented and the reader can make up his/her mind as to its relevance and impact.
 
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