Podcast Summary
Leveraging local insights and global expertise for real estate investing: As we move forward, remember the lessons learned from the past subprime crisis and apply them to make informed real estate investing decisions.
Principal Asset Management, as a real estate manager, leverages a comprehensive 360-degree perspective, combining local insights and global expertise across public and private equity and debt markets. Their teams identify compelling investing opportunities by applying local insights and global perspectives. The recent Federal Reserve's interest rate hike marks the end of an era tied to the financial crisis and its aftermath, and as we move forward, it's essential to remember the lessons learned from the past. The film "The Big Short" serves as a nostalgic reminder of the subprime crisis, highlighting hedge fund managers like Michael Burry and Steve Iseman who profited from predicting the housing finance collapse. However, it's important to acknowledge that not only hedge fund managers but also journalists, like those in our early careers, played a crucial role in warning about the impending crisis. As we enter a new chapter, we must carry forward the knowledge gained from the past to make informed decisions.
Financial bloggers like Calculated Risk predicted the 2008 housing crisis: Financial bloggers, such as Calculated Risk, provided crucial insights and data during the 2008 housing crisis, helping to predict the impending collapse.
During the 2008 housing crisis, there were influential financial bloggers, such as Calculated Risk, who predicted the impending collapse. Calculated Risk, founded by Bill McBride, was one of the first sites to provide detailed economic data and warnings about the unsustainable state of the US housing market. McBride's co-blogger, Doris Dungey, who went by the pen name Tanta, was an insider in the mortgage industry and her insights were highly regarded. Sadly, Dungey passed away in 2008, but her impact on understanding the housing market during that time cannot be overstated. McBride's continued work on Calculated Risk has provided valuable insights on the housing market recovery as well. When watching "The Big Short," remember that there were bloggers, like Calculated Risk, who were making similar predictions at the same time as the movie's characters.
From mortgage professional to financial blogger and whistleblower: Tanta, a mortgage expert, transformed into a financial writer and whistleblower, exposing the mortgage industry's complexities and risks leading to the housing market bubble.
The blogger known as Tanta, whose real name is Doris Dungy, transformed from a mortgage professional into a renowned financial writer and whistleblower by uncovering the intricacies of the mortgage industry during the housing market bubble. Bill, an economics blogger, met Tanta online when she corrected his mortgage-related details on the blog. When Tanta was diagnosed with stage 4 ovarian cancer in late 2005, she began writing for the blog, focusing on the mortgage industry's ins and outs. Together, they provided a comprehensive perspective on the housing market, with Bill covering it from an economic standpoint and Tanta from the industry's technical aspects. Tanta clarified why lenders issued loans that borrowers couldn't repay, explaining how the industry had shifted from evaluating credit, capacity, and collateral to solely focusing on credit. Tanta's insightful blog posts, such as "The Complete Uber Nerd," shed light on the housing market's complexities and highlighted the risks that led to the bubble.
Blogger Tanta's Influence on Understanding the Subprime Crisis: During the mid-2000s, a blogger named Tanta, who wrote under a pseudonym, gained influence by providing detailed explanations of complex mortgage issues. She revealed concerns about risk concentration from regulators, but their appointees blocked any attempts to address it, highlighting the importance of speaking out and understanding complex issues.
During the mid-2000s, a blogger known as Tanta, who wrote under a pseudonym out of fear for her career in the mortgage industry, gained significant influence by providing detailed, often humorous explanations of complex mortgage-related issues. Her dedication to understanding the intricacies of mortgage servicing and insurance, even when tedious, resonated with readers. However, her revelations about the regulatory response to the mounting risks in the housing market were shocking. Tanta reported on-the-record conversations with regulators expressing concerns about risk concentration, but off-the-record, they admitted their appointees were blocking any attempts to address the situation. This shows that despite the popular narrative, there were people who saw the subprime crisis coming long before it became a widespread issue. Tanta's blog, written under a pseudonym, demonstrates the power of detailed analysis and the importance of not being afraid to challenge the status quo.
Tanta's Influence on Financial Blogging: During the early days of financial blogging, Tanta's expertise and knowledge brought recognition and credibility to bloggers, leading to major media outlets acknowledging and crediting their work.
During the early days of financial blogging, Tanta, a prominent blogger, played a pivotal role in bringing expertise and knowledge to the table. She was recognized by esteemed figures like Paul Krugman and mentioned in Federal Reserve papers. Tanta's blog was a valuable source for journalists, who would often credit her work without mentioning the blog's name. This practice led to a significant shift, with major media outlets acknowledging and crediting bloggers for their contributions. Tanta's influence extended beyond the blogosphere, as hedge fund managers and industry professionals sought her insights. The blogging scene of that era was a game-changer, with bloggers getting ahead of traditional media and bringing experts to the forefront. However, the downside is that now, even garbage sites get credited in the media, and the industry has seen a proliferation of both quality and subpar content. Nonetheless, Tanta's impact on financial blogging was undeniable, and her influence on journalists and industry professionals was significant.
Identifying Potential Real Estate Bubbles: Regulators remind lenders to maintain underwriting standards and avoid excessive risk concentration to prevent another commercial real estate crisis. Rapid increases in lending and decreasing underwriting standards are key indicators of potential bubbles.
Regulators and financial industry professionals are generally aware of potential financial risks, but their ability to take action can be hindered by political pressures. To avoid another commercial real estate crisis, regulators are reminding lenders to maintain underwriting standards and avoid excessive risk concentration. When identifying potential bubbles, rapid increases in lending and decreasing underwriting standards are key indicators. Tanta's teachings emphasized the importance of analyzing industry fundamentals and watching for speculative behavior. These lessons continue to guide my analysis of the economy and housing market today. I don't currently see indications of a bubble based on these factors.
Perspectives and Unsung Heroes in Financial Crises: Understanding situations from different angles and the contributions of unsung heroes can provide valuable insights in financial crises.
Learning from the discussion between Bill McBride and Tracy Alloway is the importance of looking at situations from different perspectives and the role of unsung heroes in financial crises. Bill McBride shared how his colleague Tanta's ability to look at things from various angles helped them understand the housing market better. Tanta's insights were instrumental in predicting which mortgage companies and banks would go under, but their goal was not to profit from it like "The Big Short" portrays. Instead, they were just trying to sell their analysis. This discussion brought back nostalgic memories for both Bill and Tracy, who started their financial journalism careers around that time. Tracy emphasized that the media often overlooks the contributions of individuals like Bill and Tanta, who provide valuable insights but don't always receive recognition. The discussion also highlighted the evolution of journalism, with traditional media now more likely to acknowledge and credit new media sources for breaking news.
The Influence of Financial Bloggers: Financial bloggers shape the financial narrative beyond their audience, impacting public perception and market movements.
Learning from this episode of Odd Lots is the influence of financial bloggers and how they shape the financial narrative beyond just their immediate audience. This was a surprising revelation for the hosts, and it highlights the power of digital media in shaping public perception and driving market movements. Additionally, the hosts promoted several other Bloomberg podcasts that provide valuable insights into various aspects of business, finance, and the global economy. These include Benchmark, Deal of the Week, and the new Money Stuff podcast, which brings Matt Levine's popular finance newsletter to life. Furthermore, the hosts ended the episode with a playful advertisement for Popeyes' new honey lemon pepper wings, encouraging listeners to try something new and tasty. Overall, this episode of Odd Lots provided valuable insights into the role of financial bloggers and the importance of staying informed about various aspects of the financial world. It also showcased Bloomberg's growing suite of original podcasts that cater to different interests and provide unique perspectives on various topics.
