by 26 Sep 2009

A Retired Bull? No… Just a Liar in Economist’s Clothing.

I’m still not entirely sure why they call someone who thinks a given market’s prospect’s are bleak a “bear”. It’s not because “bears get slaughtered,” that’s “pigs” that get slaughtered… or maybe “hogs,” I don’t really know, or care to know, frankly. I find Wall Street’s apparent preoccupation with bestiality distasteful, and not surprising in the least. But I do think that I just figured out why they call people who are optimistic about a market’s future a “bull”. It’s because what they have to say is BS, and they’re too polite to add and spell-out the conjunctive ‘s’ word that would make the term a synonym for “fertilizer”.

At least that’s what I learned this month when I came across what the retired National Association of Realtors (“NAR”) Chief Economist, David Lereah had to say in an interview with Donna Rosato, a senior writer for Money Magazine, earlier this year. Lereah was a famous “bull” while working for the NAR, or another way to phrase that might be that he was famous for promulgating the ‘B’ in BS while employed by the organization, whose membership is made up of Realtors® throughout all 50 states.

Now, when you hear the Chief Economist at the NAR say that what’s coming up in the housing market is nothing but roses, you listen with some healthy amount of skepticism. But Lereah did a lot more than just issue rosy forecasts. He referred to housing as an infallible investment in interviews on television and in print, and then wrote a book, “Are You Missing the Real Estate Boom?" in 2005. As late as inJanuary 2007, he made the statement: "It appears we have established a bottom." Yes, he’s a real bottom all right.

Boy-o-boy that sure is going the long way around the barn just to describe what’s really going on here: David Lereah is a liar. I’m sure that, since he’s left the NAR and is now a “private consultant,” he wants us to believe that he’s a retired liar, but can one “retire” from lying? At best, I tend to think of someone who claims to have stopped lying as being a “recovering liar”. Lying just isn’t something you can “retire” from, is it? How would anyone know the actual date of your supposed retirement, for example?

“So-in-so claims to have retired from his career spent lying on March 3rd.” See what I mean?

Here’s how Mr. Lereah responded to Rosato’s question: “Were you wrong to be so “bullish”?

“I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right in line with most forecasts. The difference was that I put a positive spin on it. It was easy to do during boom times, harder when times weren't good.”

What is the world does that mean? 

If I find out this guy is a parent, I’m making a note never to work with his offspring should I, or anyone I know, run across him, her, or them in the future. I’m not saying that they’ll grow up with the propensity to lie just like Dad, but let’s just say that the widespread proximity of fallen apples to their trees makes me apprehensive. (In the event that Mrs. Lereah is reading this, and the children are still young, smack Dave across the face and get the heck out of there, would be my best advice.)

In his response to Rosato’s question, Lereah provides us with a window through which we can see the workings of a distorted mind. He clearly believes that his job, as the NAR’s Chief Economist, was to say whatever would promote housing. But David, the reason organizations hire a Chief Economist is not to sell product, it’s to give the organization insight and credibility in its forecasts of the future. With a Chief Economist, it’s not just a guess, it’s a guess made by an economist.

And when that Chief Economist lies all the time, it does the reverse. (I felt I needed to clarify that for David, specifically.) And that’s bad, David. Not good. Bad. Maybe I should be trying to communicate with you in your own language: Bullish, in which the word for “bad” is pronounced: “Buy”.

The point is, we need to trust again and the National Association of Realtors lying about the state of the housing market is a big problem because it puts Realtors on the long list of other groups we can’t trust anymore. 

“It was easy to do during boom times, harder when times weren't good.”

Oh was it, Davey-boy? Harder for who… and in what way? Does it depend on the definition of “harder,” Dave-O?

Rosato went on to ask for Lereah’s response tothe NAR's latest forecast that calls for a slight increase in home prices next year, and he said the following:

“My views are quite different now. I'm pretty bearish and have been for the past year and a half. Home prices will continue to drop. I think we'll see a very modest recovery in sales activity in 2009. But we've still got excess inventories, a bad economy and a credit crunch that will push prices down further, another 5% to 10% more. It'll take a long time to get back to the peak prices we saw in many markets.”

No, Dave… I’d say you’re still full of BS… you’re just slightly less willing to say ridiculous things. And as to your replacement at the NAR… well, nice hire over there guys. Are you trying to become irrelevant?

Rosato’s last question for Lereah was predictable, but nonetheless telling. She asked if he had any regrets and he replied:

I would not have done anything different. But I was a public spokesman writing about housing having a good future. I was wrong. I have to take responsibility for that.”

You wouldn’t have done anything differently? Amazing. Given the chance, you’d just be wrong again. You’re a real jackass, Lereah, you know that? But, at least you said that you have to take responsibility for what you did as Chief Economist for the NAR, so I guess that’s all we can ask for…

So… everyone that lost money as a result of David Lereah’s admitted negligence, please send invoices to him directly. I’m sure he’ll reimburse you promptly. After all, he’s a man of his word.  

I couldn’t find a physical address, but his Website is Yes, it’s true… this guy is still employed. Here’s what his new Website says…

David A. Lereah, president of Reecon Advisors, is a recognized economic expert in the real estate and financial services industries. Dr. Lereah and his research staff were responsible for creating two of the nation’s most powerful real estate indicators-the Mortgage Bankers Association’s Weekly Mortgage Application Indexes and the National Association of Realtor’s Pending Home Sales Index. Dr. Lereah was Senior Vice President and Chief Economist of the National Association of Realtors where he served as the association’s spokesman on the U.S. economy, the housing and real estate markets as well as other economic and policy issues affecting the real estate industry in the U.S. and abroad. He directed the Association’s Research Division, the Regulatory and Industry Relations Division, the Real Estate Services Group and Strategic Planning activities for the Association. Prior to NAR, he was Chief Economist for the Mortgage Bankers Association of America and… Aarrgghhhh!

Oh dear Lord… Who’s driving the bus in this country? 

If you want to be misled as to where things are headed, visit Lereah or the mortgage bankers frequently… I’m confident you’ll be homeless in no time.

Martin Andelman is a staff writer for The Niche Report. He also writes an almost daily column on called Mandelman Matters. Email him at He also publishes a Monthly Museletter and you can follow “Mandelman” on Twitter.



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