I was reading the business section of my local newspaper the other day. There was a big headline “Home Sales Decline”. Wow! News to me…and to you, too, I’m sure!
A smaller headline told us “Mortgage rates remain unchanged”. Good news, but not surprising. In fact, neither of these tidbits was a surprise to most people living within reach of almost any media outlet for the last year or two.
Other news filled the page, but what caught my eye was the box next the big headline, with a contrasting color behind the text to make it stand out, that stated “Exec evokes Depression”. Speaking at an investment conference in New York, Wells Fargo President, John Stumpf was quoted as saying that the current real estate conditions are the worst he has experienced during his 30-year career.
In a classic example of engaging mouth while forgetting to put brain in gear, Stumpf went on to say, “We have not seen a nationwide decline in housing like this since the Great Depression”. While I understand Mr. Stumpf’s desire to make a point about the current state of the real estate market, there is no comparison between economic conditions that caused the Great Depression and current economic conditions. Trying to compare the real estate market then to what is going on now ignores the context within which those events took place. What Mr. Stumpf and I each know about what went on during the Depression was learned from our elders, our education, reading…in other words, second hand knowledge. Furthermore, Mr. Stumpf’s 30-year career did not even begin until nearly 30 years after the Great Depression. The fallout from the current travails of the real estate market will have one set of results similar to those found in the Depression…many owners will lose their houses. The reasons for these loses are vastly different from what happened in the Depression. Nevertheless, the headline writer made it appear to the casual reader that we may be in store for another Great Depression.
It is a shame that the popular media, which must sell its product in order to survive and which has always used eye-catching headlines and shallow reporting in order to inform (entertain?) its audience had its job made easier by the thoughtless comments that Mr. Stumpf provided.
Mr. Stumph has a lot to learn about speaking to the press. The following quote taken from that article made me wonder if Mr. Stumpf’s next career would be as a stand-up comedian.
“Stumpf said he didn’t even know about some of the exotic mortgage investments that enticed other banks until he read about them in the newspaper.
“‘It’s interesting that the industry has invented new ways to loose money when the old ways seemed to work just fine,’ Stumpf said”
Tags: business, real estate
