Mosca: Two former Bear Stearns managers were recently indicted and arrested in the first criminal prosecution stemming from the collapse of the sub-prime mortgage market. If financial professionals are being held to such a high level of accountability, then should the media be held to similar levels of responsibility? Do sensational headlines and those scrolling messages you see going across the TV of doom, do those equate to similar deceitful practices?
Irvine: Absolutely in this case. The media is not necessarily practicing what they preach to others. The media loves to come across as the one and true authority on everything and anything. They do want you to trust them implicitly for what they say and they do, but there are lots of holes in what they do.
Mosca: Do you see a difference between two men allegedly inflating numbers for personal profit and entire news corporations deflating real estate values for revenue generating purposes?
Evans: I would not say that there is a conspiracy necessarily but the financial press, let's put it that way, supports Wall Street. They understand Wall Street better than Main Street. Real estate is Main Street; stocks are Wall Street. They don't understand how real estate works and so what they do is they report numbers from indexes that may have another agenda. I wouldn't say that they necessarily carry the same culpability as these Bear Stearns executives or others that were involved in the inflation of real estate for speculative purposes but they certainly sat on their hands and did not report the numbers as quickly as they could have.
Irvine: There have been studies in the past that show when it came to the press in general; they are not very pro business. Do they have an agenda in terms of trying to push down real estate? I'm not so sure about that except I do feel that they love negative news and it just feeds on itself. I didn't see them doing a whole lot of questioning as things were going up as fast, but every time something crashes they are on it like white on rice and they can't make enough of this. It was a big scheme and really changes public perception about how things are operating.
Mosca: While there is no denying that soaring gas and food prices and a stock market that just endured its worst June performance since the Great Depression are draining consumer confidence, there is also no denying that there are real estate markets and investments in this country that are performing extremely well. The concern is the media's preoccupation with reporting the negative news about real estate, and not the positive numbers.
Irvine: That happens in general on Wall Street, too. When the market's down, they make a huge deal about how much the market has fallen, and we go into bear market territory. We get images of 1929. Yet, there are plenty of companies, plenty of stocks that are doing quite well.
Evans: The bottom line is that no matter what market you're talking about -- stocks, real estate – there's always good news for one side of the transaction and bad news for the other. Sometimes, there is good news for both. When prices are falling, that's good for buyers and that's what makes markets stabilize and go up again. Investors should be celebrating right now because there are good markets that are adding jobs, like Dallas. Dallas has added more jobs than any other metro in the country. As far as economic health goes, it's on the upswing yet real estate has been softer for the last couple of months because people are scared. That's very unusual. That never happens. In good markets investors can make out really well right now.
Mosca: In this age of the Internet we were told that a new level of journalistic integrity is on its way or is already here. I feel that just the opposite has occurred. The 'Net has very few professional journalists in relation to the number of content providers that exist online and we're even seeing hackers and data manipulators getting into Web sites and changing and attempting to change history. Is there hope for more journalistic integrity and accountability or are we just too focused on profit and profit centers?
Irvine: You have a good point about the expansion of the Internet and what it does to integrity. We love the 'Net here at AIM to a certain extent, but it has been very disruptive to our print publication so we've had to learn to adapt to the Internet to try to get our information out where we have far more visitors, viewers, etc. reading our material online. The problem is now that even though I post a blog to our site and we encourage others to do so, there really isn't a good check and balance in the blogging world. Anybody can hang their hat and call themselves journalists. I don't even know the definition of journalists in today's world. It has just been stretched. With the Internet, in five seconds your reputation could be destroyed. The best thing you can do is to be educated. Use different sources, read all that you can and obviously if you're still confused or need help, visit our Web site [www.aim.org] and we can help you learn a little bit more about how the media slices and dices things.
Evans: What we're seeing is Fahrenheit 451 where people are sharing information because they can in new virtual environments and ignoring the sources that are more knowledgeable and based on research and fact-finding. The Internet allows everyone to voice their opinion and they do. Sometimes those opinions come with an agenda. If you can actually see a name and contact information and other ways to verify the data, links to reports and so forth, those are going to be more verifiable than just someone who is hiding behind an avatar and a made up name.
Mosca: Frank Sibley who is the senior vice president of communications for the National Association of Realtors was talking about a psychological block to buying a home or to purchase investment real estate right now because of this negative media coverage. Whenever someone from the NAR tries to explain the market, investors take a skeptical approach. I know my friends at the NAR deal with this on a regular basis. If there is one Association in this country that can work consumer into their name it could be the Realtor Association because they almost do as much for the consumer that they do for their Realtor Association members.
Evans: That's exactly right. We owe a lot of our homeowner benefits to work that the NAR has done on Capitol Hill. When FHA loan limits get raised, that is largely due to lobbying the NAR has done. They have done so many things. Every year, for example, somebody on Capitol Hill tries to get rid of the mortgage interest rate deduction. NAR has managed to keep that tax deduction in place despite efforts to get rid of it. They are very pro consumer.
Mosca: The government is not the answer; they are too consumed with Janet Jackson's anatomy or Howard Stern to correct this situation. Any last thoughts?
Evans: In this country we're lucky to have freedom of information but along with that comes responsibility. I'm afraid it's really going to be on the shoulders of the consumer to sort out the information that they look at. Right now is an excellent time to improve your vantage point no matter where you live.
Posts
No comments:
Post a Comment