Wednesday, July 25, 2012

Why I Abandoned CNBC

At the height of the financial crisis in late 2008 I started watching Bloomberg TV, in large part due to its 24-hour coverage and the ability for me to monitor Asian and European markets.  I liked Bloomberg's hard news attitude, delivered in a calm, unbiased manner.  It made me realize how shrill and hyperbolic CNBC had become, and I've rarely switched back.  Erin Burnett's departure to CNN and Mark Haynes' passing cemented my decision.

YahooFinance recently started a partnership with CNBC, where CNBC is now YahooFinance's main news provider, so I now get a steady stream of CNBC headlines.  Here is a news article from yesterday that confirms to me that CNBC is more concerned with headlines than news.  The title of the article is "Home Prices:  Bottom or Bubble?"  Bubble?  Really?  Home prices have stopped their five- or six-year decline for a couple of months and CNBC is already calling it a bubble.  Give me a break. 

The article presents this data:
Nearly one third of the 167 markets Zillow tracks in this survey saw annual price gains from a year ago.
"After four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values," said Zillow Chief Economist Dr. Stan Humphries. "The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own."
And then there is this passage on the rebound on some of the markets hardest hit by the housing decline:
That has other analysts claiming that the overall surge in national prices is due to price bubbles in certain markets.
"Strong demand, particularly in areas of California, Arizona and Nevada, are pushing up home prices very quickly in the short-term. And because many of the home purchases in these areas are cash transactions, there appears to be less braking of prices by our current appraisal system than seen in other parts of the country," noted Thomas Popik, research director for Campbell Surveys and chief analyst for HousingPulse. "The trend raises the distinct possibility of housing price bubbles emerging in some of these hot housing markets." 
Las Vegas and Phoenix started their corrections sooner than other parts of the country and each saw more than a 50% peak-to-trough decline in home values.  Now that a good chunk of the distressed inventory in these markets has either burned off or is quickly being bought by institutional investors, a rise in prices is expected.  A rebound from such a steep decline is not a bubble. 

The article does end with some solid reporting on the mixed messages of recent housing price increases.   Read the article for yourself.  For me, I'll stick with Bloomberg TV for market and business news, and read CalcuatedRisk for housing market updates.

1 comment:

Dark Space said...

I try not to watch any news. Period. I'll read Bloomberg, but their headlines are still primarily about entertaining snippets of information or political agendas than actual useful news. They're light years better than CNN, MSNBC, CNBC, Fox, etc.

However, even then you still get some real numbskull articles out of Bloomberg too where they completely misinterpret a situation and then report on it as if it is cold hard facts.

I'm a huge fan of the news diet