Columnist: CNBC and WSJ miss what's going on with housing
Nashua Telegraph columnist Tony Paradiso writes on Sunday that coverage this past week on CNBC and in The Wall Street Journal has failed to understand the intricacies of data about the U.S. housing market.
Paradiso wrote, “So next time someone calls you stupid, take it as a compliment.
“And if you buy that rationale, CNBC wants you as a viewer. In the face of less than stellar housing data, the ‘bulls will run forever’ propaganda remained in full force.
“Not to pick solely on CNBC, the Wall Street Journal was also guilty of buying into the bull hype. In an article titled ‘Housing Decline Sparks Slowdown in Construction,’ the first line read: ‘The unexpectedly rapid decline of the nationâ€™s housing market . . .’
“Unexpected? They must have been referring to CNBCâ€™s viewers.”
Later, he wrote, “Immediately after the housing number was announced, CNBC propped up its perfunctory economic expert to assess the impact.
“The expert stated that since housing prices were up 50 percent over the last five years, a 10 percent decline left a 40 percent gain. The conclusion: Donâ€™t worry; be happy.
“After I stopped shouting expletives, I proceeded to explain to the TV what an idiot the expert was for not grasping simple math.
“A $100,000 house that increases in value by 50 percent is worth $150,000. If the value of that house declines 10 percent, itâ€™s worth $135,000.
“Last I checked, a $35,000 gain on a $100,000 house equals 35 not 40 percent. Subtracting the decrease from the increase yields an incorrect answer because the decline occurs on the higher value.”
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