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Over the years, during the tech stock bubble and housing bubble, the mainstream media (aka MSM) took a lot of heat from iTulip and many other alternative finance and economics web sites for poor coverage of the economy and finance. The MSM are accused of bias in favor of the financial services and real estate industries. The MSM missed the opportunity in the 2003 to 2006 period to warn borrowers to not take out risky loans and to batten down the hatches, decreasing debt and increasing savings, in preparation for a post housing bubble recession visible from over a year away and now in progress. MSM reporters and editors appear to be under pressure from publishers to cover these stories in a manner that maximizes reader complacency. One is left wondering if this result is intentional.
The truth is more complicated. The MSM are about reporting news as it happens and are in competition with each other to cover what is going on now not what might go on in the future. There is no particular context other than perhaps and ideological or other filter of news interpretation. This is what makes iTulip different. Whereas the MSM is stuck in a 19th century model of covering events as they occur, iTulip can cover events in the context of its framework: Risk Pollution, Ka-Poom Theory, the Frankenstein Economy, and so on. Where the MSM reports seemingly random events, iTulip can use events both to determine patterns of development and change and also to feed back into our understanding of how the economy and financial system works. iTulip is always building on the past and evolving whereas the institutions of the MSM are static structures. This puts an inherent limitation on what the MSM can do.
We operate on the principle that most reporters indeed want to help their readers and want to cover what is really going on but don't always have access to sources who can help them understand often complex issues. So our approach is to do our best to help them. One way is to provide iTulipers as sources with expertise in finance and economics. The New York Times story from the cover of today's business section is a perfect example. It is written by an iTulip reader and has not one or two but three iTulip members as sources.
We are honored to have so many qualified experts among our members who are also generous with their time to advance the level of quality reporting in the MSM.
The Affluent, Too, Couldn’t Resist Adjustable Rates (free registration required)
March 20, 2008 (Jane Birnbaum - New York Times)
These are not lower- and middle-income borrowers, but more affluent consumers with annual incomes of $100,000 or more who are increasingly being ensnared in the home mortgage crisis.
People in all income categories “are facing the shock of new payments that can be twice as much as previous ones,” said Susan M. Wachter, professor of business and a real estate specialist at the Wharton School of the University of Pennsylvania.
Nor will falling interest rates help most of these homeowners, as their low initial payments skyrocket and the worth of their homes erodes, said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America. more... (free registration required)
March 20, 2008 (Jane Birnbaum - New York Times)
Today’s ARMs were “designed to fail, so you have to refinance,” Ms. Wachter said. “It shouldn’t be surprising that values go up and down in this kind of situation. And when you most need to refinance you can’t — the crux of the crunch.”
They took out adjustable-rate mortgages at the peak of the housing bubble to buy homes they would otherwise not be able to afford. Or they refinanced existing mortgages to take cash out. And now, two or three years later, the day of reckoning is here.These are not lower- and middle-income borrowers, but more affluent consumers with annual incomes of $100,000 or more who are increasingly being ensnared in the home mortgage crisis.
People in all income categories “are facing the shock of new payments that can be twice as much as previous ones,” said Susan M. Wachter, professor of business and a real estate specialist at the Wharton School of the University of Pennsylvania.
Nor will falling interest rates help most of these homeowners, as their low initial payments skyrocket and the worth of their homes erodes, said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America. more... (free registration required)
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