On Sunday, I expressed the wish that The Miami Herald would focus on Homestead foreclosures. Little did I know that on Monday the story would be printed, taking up the front and back page of the A section. This review of the Herald story goes under the cautionary note: "be careful what you wish for". Yesterday, I took the Herald editors to task for failing to get its statistics correct. If there was ever a Freudian slip in the newspaper business, it would be the example of the Herald mixing up the facts on foreclosure data.
"Homestead deals with boom aftermath" (October 19, 2009) provides further evidence along this line. In the 1450 word story, it is not until we are at word 1200 or so that daylight shines: "Miami-Dade Property Appraiser Pedro Garcia said property values declined because developers had created a false market during the boom, which led to overvalued properties." Bingo.
"Developers had created a false market during the boom": why does the Herald bury the lead? This is the point Eyeonmiami has focused on, for years. Another word for false market? Fraud. The Miami Herald still refuses to let this fact be the lead in the story where it is most apparent: Homestead, FL-- foreclosure capital of the United States.
The Growth Machine-- still intact and idling in neutral-- called suburban sprawl in places like Homestead "what the market wants". They dismissed critics as elitist, as "I've got mine'ers", and-- in the case of Steve Shiver-- "environmental terrorists". Sprawl wasn't what the market wanted. It was what shed the highest fees, commissions, and pay-outs for the chain of profit from the production home builders, to Wall Street derivatives traders, lawyers, bankers, and even the lowly county commissioner who benefits from insider deals on home lots in West Kendall. The victims: taxpayers, our quality of life, and environmental resources like wetlands and watersheds.
It is a shame that the Herald tells its Homestead story by burying the most salient fact, requiring bloggers to parse out the difference. The housing market crash is not a blameless exercise. The economic misery pushing the US economy into the worst crisis since the Great Depression is not some inevitable consequence of ebullient markets. On the weekend I wrote, "Too bad the Herald won't get into it, for readers. They might start with the travesty of Homestead; the bankers, and insider cronyism, and ethnic/racial politics that obscured so much fraud and corruption. It is just a suggestion, maybe the next cold front will blow it onto the front pages of The Miami Herald."
It didn't happen yesterday. There is still time for the Herald to get it right.
12 comments:
ENRON taught us nothing. Why are the creators of the false market being protected by politicians and investigations? Let's get some closer scrutiny on these people and sharpen laws to prevent a future fraud market.
Ever feel like the whole system is a big pozni scheme? Well, that's cause it is. And Hope and Change are doing their best to blow the bubble back up.
This country... The United State is in big trouble.
http://www.businessinsider.com/20-year-old-buys-home-with-183000-fha-loan-and-just-35-down-2009-10
http://www.upi.com/Real-Estate/2009/10/08/Data-Confirms-Government-Dominated-the-US-Mortgage-Business-Last-Year/5051255008489/
http://www.nytimes.com/2009/10/09/business/09fha.html?scp=1&sq=fha%20percent%20total%20mortgages&st=cse
The FHA will explode, like Fanny and Freddie. And there ain't a gawd darn thing any of us can do about it. Because this isn't a democracy. This isn't a republic. This here, in the USA, is a dysfunctional oligopoly. And it breaks my heart to write that.
90% of the wealth is held by the top 1%. Only violence on a revolutionary scale can fix this.
So it goes. Feudalism 2.0.
Once again, EOM is completely off base. Developers did not create a false market. In fact, even with 11% unemployment, there is a lot of demand for what got built. Once houses and condos are accurately priced, they fly off the shelves. For example, 1060 Brickell just sold out at $200/sf, and 500 Brickell was reduced to a similar price and now has fewer than 30 units left. The same is true for foreclosed homes: once they work their way through the court, they sell like hotcakes. The false market was the CREDIT market, not the "growth machine." And the CREDIT market is based in NYC and London, not our local governments. Easy CREDIT is what allowed house prices to get bid up to crazy levels.
Dear commenter, are you saying that the Florida developers/LBA/Lobbyists were NOT up in DC banging the doors of HUD and Fannie Mae and Freddie Mac and teaming up with the banking industry to persuade the Fed and the White House and everyone in between to relax banking rules and to encourage historically low interest rates. Come on. Your "explanation" would never hold up in jury trial. Do you really think we just fell of the hay wagon?
2nd anon, did you read the article? Pedro Garcia MD County Appraiser said it. The developers and their acolytes try to explain what an ELECTED COUNTY OFFICIAL says, these unscrupulous hacks are PRICELESS, how's that for a FALSE MARKET?
For last anon - And the government faked the moon landing and placed explosives in the World Trade Center, too, right?
You have this absurd construct about the power of so-called insiders that does not exist in real life. Can a person lobby for special treatment in some cases? Yes. Does lobbying work the way you think it does? No way.
The county commission, no matter how corruptly competent, cannot create a national housing market that overheats. The housing bubble, as anon 2 correctly notes, was caused by a runaway credit market, amplified by unscrupulous lenders and abetted by individuals who saw an opportunity to game the system.
The houses were just the latest in a long line of available investment vehicles that were hijacked. Next up: green technology.
That's the part that most people don't get: The Commission, whatever you think of them, saw only a tiny fraction of these developments as zoning cases. Most properties were already endowed with certain development rights. These remained on paper until they took off like weeds pumped up on the Miracle Grow of insane lending practices and the monitization of mortgages.
You needed to get down to Homestead during this man made self immolation.Lawyers for developers ran the meetings and the commission sat there and would ask the planning people to reduce parking spaces and qualify storm water runoff ponds as "greenspace", aww shucks guys it was beautiful to watch. This is Florida 49 out of 50 in education, but give us a cement block, rebar and stucco, toss in a few greedy mortgage brokers, some crooked appraisers fanning the flames and poof wake up to the bad dream. FALSE MARKET was created by all participants including government, who did exactly as the developers demanded. If they didn't well they didn't get reelected.
I remember a time when I thought it couldn't be that bad (the corruption, cronyism, insider dealings). It's that bad.
Barf. The corruption in government makes me want to Barf.
All this crud makes me long for the days of vanilla wafers, fruit punch and weirdly comforting smell of pencil shavings in elementary school. At least those things were consistent and hopefully, representing a good time of life.
And that tasty white glue!
The housing bubble, as anon 2 correctly notes, was caused by a runaway credit market, amplified by unscrupulous lenders and abetted by individuals who saw an opportunity to game the system.
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