While reading a well written analysis of the "real estate bubble", I could not help but think of the current housing recession metaphorically.
First off, I believe most everything that is reported today is over hyped. It is the Achilles heal of instant information. We have not yet learned as a society to take a "chill pill" when the barrage of data floods our emails, blog readers, and news sources.
The Rule of 7 in Economics, Politics, Marketing
There is an old tried and true rule in marketing that 7 exposures to a relevant message will get one to take action. I believe that this occurs in economic news or any news that we are exposed to on a day to day basis.
I have always thought it common sense that the largest economic buildup and, the largest growth of housing ownership ever would make as big a splash if not more when it recedes. But there is always more hype around a 200 pound weight loss than a 200 pound weight gain.
In body buildings hey day many of the guys approach to fast muscle growth was lifting big and eating big. Thus they would not only pack on the muscle, but as they packed on the beef, they also packed on the the fat. So when they would enter competition, they would have to lose the fat and subsequently they would lose some, if not much of the muscle as they "ripped up" for the event.
Others believed that a more sensible approach was to measure out the intake of food to fuel growth while minimizing fat. Thus, they had little fat to lose prior to competing. This approach makes for much harder growth on the way up, but less muscle loss on the way down.
As an economy we are somewhere metaphorically in the middle. We had one hell of a ride up, does it not make sense the ride down will be just as, if not more exciting?
This is all just another way of saying negative news sells, and of course we all buy it.
Yesterday, I got another major foreclosure report in at least 3 or 4 emails. It was everywhere. But I had to work to find that despite a soaring foreign oil bill and another record deficit with China, the overall U.S. trade deficit declined in 2007 after setting records for five consecutive years.
Given the media choice what has "Brittany done today" or the "housing bubble are we in a recession choice". I think even they get sick of Brittany and focus on the economy.
Yes we tend to babble on about it to!
Posted by: Port Orange Property | February 21, 2008 at 09:29 AM