I am intrigued by Lawrence Yun. He even has his own Lawrence Yun Watch site, following his predecessor’s own “Watch” site. If only because watching him painstaking try to regain the credibility that was squandered by David Lereah is a monumental task.
I have written about him several times, at least once positively!
If you had the chance to ask him one question – what would it be? Here are some I would like to ask –
– Where does he (really) see the housing market going?
– What’s it like to step into the role filled by someone so widely and effectively denounced and ridiculed?
– What was the first thing that went through his head when he was offered the job of Chief NAR Economist?
– What (really) should be done about the economy?
– What does he think about NAR’s advertising campaign?
– What does he think NAR should be doing?
*Note to AC – hit me up next time you see me online, please.
As much as I used to rag on the guy, I have to say that Yun is no worse than most other economists. A year ago, the vast majority of economists (including the head of the Federal Reserve) were insisting that the housing issues were limited to subprime borrowers and that the issue was contained. It was a false sense of confidence and they all were wrong.
With the rate at which things have spiraled in the market over the last few weeks, I think the direction of the housing market has become a moot point. Either the combination of financial institutions, the government and investors can come up with a way to prevent a meltdown of the financial system or we’re headed for a very severe recession – the likes of which we haven’t seen in decades. In the latter case, property values are going to be under pressure for a very long time and the NAR’s statements on housing become even less relevant than they already are.
We’ve seen a series of unprecedented actions by central banks over the last 10 days or so. That ought to tell you how serious of a mess this could potentially become. Dozens of banks are teetering on the brink of failure (read today’s news about Bear Stearns, for example.)
Short Seller has made a few very good points. I’m especially interested in the Fed’s interventions in the last several weeks to forestall the collapse of several investment banks and hedge funds. The Fed has now dedicated $400 billion of its assets — about half of its total funds — to what in effect is a hidden bank bailout. It has stated a new policy that this money is available to banks at the Fed’s “discount window”, and that the Fed will accept the banks’ bad mortgage paper as collateral. Via this policy, we now have the Fed taking on a chunk of banks’ existing mortgage default risk. Oy.
I’m in favor of this, b/c I think a series of bank failures can have some really awful consequences. But of course the Fed’s strategies raise some long-term concerns. The Fed is lending $400 billion of public money to a bunch of banks which made really horrible decisions in their assessment of the proper pricing and risk modeling of mortgage-backed securities. While the housing bubble lasted, the banks made a pile of money from their “can’t-lose” business in mortgage securitization, as did the hedge funds and i-banks who fed off the business. But now that the entire model has exploded they’re shifting onto the rest of us more and more of their losses. Ain’t capitalism wonderful?
Lawrence was just promoted from “acting” Chief Economist to the the “real” Chief Economist at NAR. Not bad for a guy who was just hired as a junior analyis less than 2 years ago. He puts on a pretty good presentation. I think we should invite him to drive down from DC to put on a local presentation. Then, folks could ask him whatever question you want. Lereah came down once and I’m sure Yun would.
this site is right on. i realize that chief economist, lawrence yun needs to paint a bright picture, but being wrong about the state of economy year after year. i’m kinda tired of seeing his prediction, its not even close. he sees nominal price of house bottom out by the middle of this year. “I think he said the same thing last year.”
truth may hurt but it sure would be nice to hear it.