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Economists are morons

By Michael Pinter

Mortgage and Lending with First Meridian Mortgage

December 24, 2008 01:44 AM

I've written a lot about how I can't believe how the same imbeciles who said that everything was great in 2006 AND who said that the housing slump would only last until the third quarter of 2008, are now saying that the ecomnomy will pick up in the second half of next year. It is amazing how no one has the guts to speak the truth and they all (with a few exceptions) basically say what everyone wants to hear.

Let's reiterate:

1) The economic mess started with the housing bubble bursting.

2) Housing, besides being the reason that many of the financial companies are going down (because of their mortgage related securities becoming illiquid) is also a tremendous part of the econmoy unto itself.Construction spending and jobs, furniture and the hundreds of housing related service industries are all in a funk. Think about the millions of vacant homes that are not buying furniture, stuff from Home Depot, cleaning their carpet, etc.

3) The economy probably can't rebound until housing stabilizes.

4) HOUSING CAN"T STABILIZE UNTIL THE MILLIONS OF HOMES IN FORECLOSURE GET THROUGH THE LEGAL SYSTEM AND GET SOLD!

5) It will take at least until the end of 2010, and probably until 2011 for this to happen.

I hope I'm wrong, but I think I'm right.

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Mark MacKenzie

Phoenix, AZ

Michael,

God bless you.

I have been thinking and saying the same thing.

It's almost as if these economists and cable networks are trying to use a Jedi mind trick on Americans.

Jim Cramer and Larry Kudlow are two of the worst.

How in the world can the economy recover when the real estate market is going to be devistated for the next 5-6 years. There are simply too many foreclosures coming down the pipe. Credit Suisse is estimating 8.1 million over the next four years.

Dec 24, 2008 01:53 AM

Brian Griffis

Realty Choice - Springfield, MO

Economists are not sorcerers. No one can predict what actually will actually happen, ceteris paribus lol. All economic models are just that, models, and can be wrong. But, we still need economists to predict, so that we at least have an idea of where things are headed. Otherwise, we are just throwing darts.

Dec 24, 2008 02:00 AM

Michael Pinter

First Meridian Mortgage - Brooklyn, NY

Mark,

What I have been thinking is that 1) The general historic direction of the markets is up and 2) Most people have some of their own money invested and deep down want it to be worth more as soon as possible.

Psycology is very powerful, even when it flies in the face of reality. Thanks for the comment. Feel free to subscribe to my blog.

Michael Pinter

Dec 24, 2008 02:04 AM

Michael Pinter

First Meridian Mortgage - Brooklyn, NY

Brian,

With all due respect to economics, it is the only "science" where someone can be wrong much more than they are right and still be considered an expert in their field. None of them know anything more than you or I do about the future, yet they all make ridculous predictions that all seem to be close to each other. If I heard more than two of them that had any guts whatsoever to make a call taht differs greatly from consensus, maybe I would have more respect for them.

Michael Pinter

Dec 24, 2008 02:07 AM

Pat Champion

John Roberts Realty - Eustis, FL

Call the "CHAMPION" for all your real estate needs

I'm with you no one can predict the future-hopefully next year will be a successful year. Stay positive and focused for the year ahead.

Dec 24, 2008 02:20 AM

Michael Pinter

First Meridian Mortgage - Brooklyn, NY

Pat,

Thanks for the comment. I am positive. I believe anyone can do well and prosper in any econmic environment. I just think it is a shame that people have no guts to say what is so clear.

Michael Pinter

Dec 24, 2008 02:31 AM

real estate real estate

Providence, RI

Michael, you are right. I want to add one more thing. All hired economists are morons. Many of them either do not know stuff or they are hired to tell lies. That is why we need to real posts from Paul Krugman who thinks freely and speak freely.

It is sad that in this free world, many people cannot speak freely.

Dec 24, 2008 07:23 AM

Mark MacKenzie

Phoenix, AZ

Michael,

I agree with your two points.

It almost comes down to denial.

I am sure people thought in November of 1929, after the market crashed, that they had hit a "bottom" too - only that it would be 25 years until the market fully returned to the highs.

I don't think we are heading for 25% unemployment, but this is going to be a long couple of years.

Dec 25, 2008 12:27 AM

Mark MacKenzie

Phoenix, AZ

Huiting: Great comment about hired comments. Follow the money.

I disagree with your comment about not being able to speak freely in a free world. Economists can say what they want, but it may not be in their financial best interests to do so depending on who they are employed by.

Which is yet naother reason why the AR forum is great.

Dec 25, 2008 12:29 AM

Mark MacKenzie

Phoenix, AZ

Michael,

The other thing I get a kick out of is these Wall St. "techincal analyists" that can predict where the market is going, where the bottom is, etc.

There are no technicals for what is happening right now.

There is no road map for a real estate depression or for a Lehman Brothers failing and an AIG sucking money out of the government.

Dec 25, 2008 12:33 AM

Michael Pinter

First Meridian Mortgage - Brooklyn, NY

Mark,

Thanks for the comment again. You are 100% correct. We are in unprecedented times. Technical analysis is worthless right now.

Michael Pinter

Dec 26, 2008 12:30 AM

Michael Pinter

First Meridian Mortgage - Brooklyn, NY

Huiting,

Thanks for the comment. I appreciate the support. Feel free to subscribe to my blog.

Michael Pinter

Dec 26, 2008 12:44 AM

Brian Griffis

Realty Choice - Springfield, MO

One has to consider the sources. Most economists are hired by who? The government employs the vast majority of them either directly or indirectly. Do you really think it's in their best interest to say the sky is falling and things are going south? Is that that way to keep your job and your bosses happy? No way, just like inflation numbers are always suspect, economic growth numbers have to be taken with a grain of salt as well. Think about the sources.

Dec 27, 2008 12:57 AM

Jay Markanich

Jay Markanich Real Estate Inspections, LLC - Bristow, VA

Home Inspector - servicing all Northern Virginia

Michael - it's been said that if we put 100 economists in a room and discuss a current economic topic, we would hear 99 different opinions. It's got to be true...

Dec 27, 2008 08:54 PM

Michael Pinter

First Meridian Mortgage - Brooklyn, NY

Brian,

I agree with you comepletely. Can we really expect an honest opinion for the chief economist of Toll Brothers. The absurdity of it all is almost comical. Thanks for ths comment. Feel free to subscribe to my blog.

Michael Pinter

Dec 28, 2008 11:33 PM

Michael Pinter

First Meridian Mortgage - Brooklyn, NY

Jay,

I couldn't agree more. What is even funnier is that if a bunch of them decide something ("the economy will start its recovery in the second half of 2009")the rest will start to follow. Sort of like trained monkeys.Thanks for ths comment. Feel free to subscribe to my blog.

Michael Pinter

Dec 28, 2008 11:35 PM