Business journalists and the housing bubble

Marek Fuchs, The Business Press Maven at TheStreet.com, takes a look at the housing bubble in his Sunday column and how the media has continued to prop it up.

Wrote Fuchs: “Having justified the bubble for so long, the business media never simply walks away. What always comes, instead, are a series of articles about how the worst of the damage has already been done and that it’s no big deal, just part of the natural course of things — a flesh wound. Moreover, that there are safe havens amid the carnage or that there are actual bargains! The reasoning is formulaic and often heavy on buzzwords, jargon and quotes from people who have a reason to tout the lunacy back into existence.

“Examples have been chronic in print and on television so let me touch upon a few so you’ll know what to recognize. After all, this is not a market to jump back into. The demographic push of baby boomers buying homes coinciding with the taming of inflation (and thus interest rates) over the past generation has been enormous. With baby boomers starting to downsize and inflation and interest rates trends, at best, in flux, this is a market that could very well not perform better than inflation over the next generation.

“A key element to making the argument that there has been no true shift in the market is to deny the very fact that prices are starting to drop. This was done recently, in all its vacuous glory, by Samuel Lieber, the president of Alpine Mutual Funds, while speaking on CNBC. He sounded like a local real estate agent, trying to convince a young couple that they were not buying into a ‘down’ market but an ‘adjusting’ one.

Read more here.