The business media can be overly negative. They can be overly positive, too. The consistency comes in the "overly" part: The business media is always overreacting, floating their sad little way between cartoonish extremes.
Worse, in their overreaction, they miss important things, such as initial possible signs of a turn -- or, at least, a bottom-- in a market. We saw a prime example of that over the weekend in coverage of the housing crisis.
On Sunday, the
ran an overwhelmingly negative article about the intractability of the crisis, ignoring the first signs of stability we've seen in two years, which came to light on Friday. The headline: "
First, notice the typical business media bias -- not a liberal or conservative bias but one toward the broader notion that government action determines everything when it comes to large economic issues.
Rather than analyzing what the government is promising, we should concentrate on that moment when buyers seem to be dipping their toes back into the market. The
Sunday article was outdated from the start. It makes comparisons to a year ago and to last quarter, but even though it's about as long as a wire service article can be, it seems there was still not enough space to address Friday's events. Take a look at the first few paragraphs:
"Each day from July through September, more than 2,700 Americans lost their homes in foreclosure.
"That number, up from 1,200 a day a year ago, is a sign that the mortgage industry and government programs have done little to help troubled homeowners.
"The mortgage market's troubles have proved to be far more serious and intractable than most in government or the private sector had predicted a year ago.
"'We are behind the curve. We are falling behind,' Sheila Bair, head of the Federal Deposit Insurance Corp. told a Senate hearing Thursday. "There has been some progress, but it's not been enough, and we need to act. And we need to act quickly, and we need to act dramatically to have more wide-scale, systematic (loan) modifications....'
"More than 4 million homeowners with a mortgage were at least one month behind on their payments at the end of June, according to the latest data from the Mortgage Bankers Association, and a record 500,000 had entered the foreclosure process.So why is the foreclosure crisis so hard to fix?"
With apologies to those who see the fix coming only through government action, let's take a look at Friday's existing-home sales numbers, which for the first time show a at least a hint of a near-term bottom to the housing market. The numbers were up, in large part because of sales of foreclosed homes, particularly in the nation's most-troubled regions. This is the first sign we've seen that, thanks to lower prices, there is a creeping level of demand. That's new demand, and it's new buyers starting to come into the housing market at lower levels, providing stability.
If you're even considering buying
, the one thing you're going to want to see is some evidence that a fair number of buyers are giving stability and support to the housing market at lower prices. You'd think that might at least bear mentioning in a long "think piece" about the housing market.
There is actual evidence that buyers are catching the proverbial falling knife. Look at this
Existing-home sales jump to 13-month high: Sales show first year-on-year gain in nearly three years
And don't miss this, as the
Associated Press did: "Distressed sales -- such as short sales or foreclosures -- represent about 35% to 40% of total sales nationwide, the NAR said, and as many as half of the homes sold in California, Nevada and other former bubble regions. Foreclosed homes sold at auction are not included in the sales figures."
In the end, taking a step back from falling knives, just remember how "overly" the business media tend to be. When the housing market was rising, the business media were constantly blowing trumpets, blind to all else. Now that that the housing market is not as rosy, those trumpets are more likely to be playing taps.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
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