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Bubble, Bubble, the
Market’s Not in Trouble
BusinessWeek calms down rhetoric as real
estate boom continues in first quarter, though media continue to
worry about a housing bubble.
By Ken Shepherd
Business & Media Institute
April 3, 2006
The current issue of BusinessWeek
conceded what the Business & Media Institute has said all along: fears of
the “housing bubble” and its imminent burst have long been
overblown.
“No one can predict with certainty which way home prices will go in
the next year or so. Over the past several years almost everyone who
has tried to forecast the direction of the housing market has been
wrong,” noted the April 10 edition.
Yet BusinessWeek and other media outlets have been forecasting a
bursting bubble for five years, according to a study by theBusiness & Media Institute.
As BMI recorded in its Nov. 30, 2005,
Media Myth,
a Sept. 3, 2001, BusinessWeek editorial “warned about a ‘double
bubble’ and told its readers, ‘A housing bubble may be developing –
right behind the Nasdaq bubble.’”
The same day, “Forbes magazine warned its readers about the
consequences of home equity values starting ‘to wobble,’ while
stating, ‘There are ominous signs that this is about to happen.’”
As the economy has steadily improved over the past few years, the
media’s coverage has skewed towards pessimism, portraying the
economy’s growth as fragile and tied tightly to success in the real
estate sector.
On the April 3, 2006, “American Morning,” CNN’s Miles O’Brien
quipped, “God bless the bubble,” reacting to a report showing a
14-percent gain in real estate stocks as the S&P 500 index achieved
its best first quarter in seven years.
Yet the S&P also reported that most sectors of the market grew, with
telecommunications, transportation, and technology growing by double
digits while energy, commercial services, and capital goods grew by
more than 7.5 percent.
The Business & Media Institute has previously
documented the media’s longstanding
anticipation
of a housing market
crash.
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