Wednesday, July 15, 2009

"Blue Horseshoe Loves Anacott Steel"

There are days I like to pick up three or four newspapers and put my feet up in the backyard and simply read.

Today was one of those days. And it is amazing to see the similarity in news articles sometimes.

You can understand it for a major event, but it never ceases to amaze me when I see it for something like real estate.

Don't get me wrong, I understand what is happening. About 10 years ago I got a major lesson in 'public communications' when I took on a cause I cared about. I found it fascinating to watch the intimate behind-the-scenes moves that a major government bureaucracy undertook as it artfully managed both the press and their political masters.

And I was a quick study. The reality is that most reporters are lazy. Once you recognize this, and you tailor your information to spoon feed those journalists you develop a successful relationship with, PR truly becomes a game.

Almost weekly a comment was made here, a phone call there, and suddenly what I said today would appear in tomorrow's newspapers written by someone else.

It is truly an artform.

And that's what public relations has become... an artform.

The problem comes when you tread that very fine line between artful public relations and machiavellian manipulation.

Yesterday I posted an article on David Lereah. For those who do not know, David Lehreah was the chief economist for the US National Association of Realtors. David was the consumate machiavellian PR hack who did more than issue rosy forecasts. He regularly trumpeted the infallibility of housing as an investment. In countless interviews, on TV and in even in his fateful 2005 book, "Are You Missing the Real Estate Boom?", Lereah tirelessly pumped the housing market.

Lereah was so successful at prodding wary consumers into committing to making housing purchases that Time Magazine named him as one of the '25 People to Blame for the Financial Crisis'.

A dubious distinction to be sure.

But as one of the 'blog dogs' posted in response to yesterday's post... this is old news.

What makes him relevent, tho, is his forthright acknowledgement as a corporate shill on the part of the Real Estate Industy. Under the guise as a 'market economist', Lereah pumped the Industy as any other high pressure salesman would in many other fields.

Understand... he promoted a product (real estate), as a salesman, hidden under the guise of a fancy title (chief economist). And in doing so he dangerously treaded that fine line between promotion and deception.

It's important you understand this.

Because what is happening in Real Estate in British Columbia and Canada now is no different from what was going on in the United States in 2007.

A mere year after the US real estate market had begun a spectacular downward slide, Lereah pulled out all the stops as he manipulated the national media to promote the idea that "it appears we have established a bottom" to the real estate crash. And this was done in a desperate attempt to restore 'consumer confidence' and halt the downward slide.

A great many Americans dived into the housing market as they blindly followed the advice of Lereah and the National Association of Realtors... and in doing so, those Americans committed a catastrophic financial mistake.

Picking up the Globe and Mail newspaper today, I read headlines trumpeting a "Phoenix-like rise' in the real estate market. The Industry is giddy and proclaiming that "in Canada, buyers are back, sales are surging, and prices are edging up."

"Canada appears to have skirted the clutches of a lengthy, painful downturn. We can quibble about how stong and early the recovery will be, but the worst is over", says Michael Gregory, a senior economist at BMO Nesbitt Burns.

It isn't.

Faithful readers know I have written about this phenonmenon often.

In a desperate attempt to prevent a repeat of the US experience, the Canadian government has thrown massive fiscal stimulus and ultralow interest rates at the Canadian economy in a desperate attempt to supercharge real estate and forestall the collapse of values... a domino that would devestate the Canadian economy.

And lo-and-behold, a year after the start of the collapse in Canada, Canadian economists are making the exact same claims as the famous David Lereah was just over one year into their collapse.

You will recall it started back in February when Canadian R/E Industry shills started putting out stories on how first time buyers were diving into the market to take advantage of historic low interest rates - and how their peers were being 'left behind'.

Phone calls were make and virtually the same, identical stories were appearing in newspapers in Vancouver, Calary, Edmonton, Winnipeg, Toronto and Montreal, but tailored to profile individual couples in each market.

Each newspaper came out with these stories on almost the same day.

It has been a highly organized and coordinated campaign specifically targeted to manipulate 'consumer confidence' and it is being done with a level of skill that would have made Gordon Gekko (from the movie Wall Street) proud.

I can almost hear the phone call now... "Blue Horseshoe loves Vancouver Real Estate."


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  1. Despite my comment the other day, I agree with your post 100%. I just feel that the real estate industry is going to self promote regardless of what is happening out there, that is just a given.

    How would we ever stop the self serving from serving themselves first and the most all the time?

  2. An example today of our self serving BC Liberal gov't on


    Provincial civil servants will no longer be able to post anonymously on their public service intranet's comments board - even though they expressly told the government they wanted to keep that option. In an email sent to bureaucrats on Wednesday and obtained by Public Eye, the government explained eliminating anonymous comments "should result in fewer negative comments," ensuring the forum is "a positive tool for sharing ideas, observations and constructive dialogue."

    According to the email, the message board was also becoming "dominated" by a "small number of anonymous posters" - creating "the perception among readers of a vigorous debate, while in fact in many cases it is actually a discussion among a smallish group of individuals."