Competing Housing Market Predictions (Surprise!)
Well, that didn’t take long. No sooner did Barron’s jump into the housing market debate with a bullish call over the weekend, then another pundit weighed in with this rebuttal: “Why Barron’s Housing Cover is So Terribly Wrong,” on a blog called “The Big Picture.” Here’s the link:
http://bigpicture.typepad.com/comments/2008/07/barrons-cover-g.html
The author, Barry Ritholz, attempts to take apart the Barron’s piece (by Jonathan Laing) in a point-by-point rebuttal, many well-taken. However, perhaps his most damning argument is a recitation of Laing’s recent track record — in a word, terrible. Almost every one of Laing’s recent stocks picks — AIG, GM, MBIA, Sears — has been a disappointment if not a disaster.
That doesn’t necessarily mean that Laing’s wrong now. In fact, Ritholz never really addresses Laing’s main point(s): that the rot in the credit and housing markets is both relatively recent and superficial; most of it’s already been removed; and once that process is complete, things will rebound surprisingly quickly.
Presumably, at least they agree on one thing: the number to watch is the trend in delinquencies.
