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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: joseffy who wrote (305778)	5/26/2011 10:30:10 AM
From: Jim McMannis	Read Replies (2) \| Respond to of 306849

Urgent Request to The New York Times: Please Stick to Reporting when it comes to Housing Issues capitalismwithoutfailure.com Yesterday's New York Times contained an editorial entitled As Housing Goes, So Goes the Economy. I like the New York Times. I read it most days. But the New York Times editorial page is becoming as problematic as the Wall Street Journal editorial page. Here is the statement upon which the entire piece is based: "Since the problems in housing are not self-curing, a government fix is in order." One "problem" in housing is that it became hugely overbid because of ridiculously loose lending standards and rock-bottom interest rates held artificially low for an extended period of time. Of course, that is not the "problem" the author is concerned about. The author's concern is that prices are again beginning to fall to a market-determined level. That is not a "problem", New York Times. That is the market "self-curing". That is price discovery. The housing market must be permitted to find market-based prices. The government in a free-market economy is not supposed to be deciding what prices should be. Market participants are supposed to be doing risk assessments of their own. If potential buyers think prices are too high, they can rent. That is the price mechanism. Is the New York Times concerned that bank insolvency may once again be exposed? That is not going to happen. We went from mark-to-market accounting to mark-to-fiction accounting to avoid such exposure. While that is obviously problematic, now that we have such accounting in place, the banks are well-insulated. Is the New York Times aware of how much lobby money is being directed to politicians to push for government intervention to prop up prices? The last thing we need is specious reasoning printed in authoritative media to encourage this kind of bad behavior. It is time to re-introduce a modicum of capitalism back into our economy. If you stick to what you do best, NYT, maybe we can start inching in that direction