THE ROLLER COASTER DECADE It is becoming increasingly apparent that we live in turbulent times: the see-sawing we are experiencing in markets (and life in

general) appear more acute and exaggerated these days, and I fear we have entered a decade of constant ups and downs.

With every bit of good news that emerges, so too does an equally impressive list of bad news. It seems every day the stock market escalates it is followed by a day where the market ‘plunges’. The press terms a 1% drop a ‘PLUNGE’: Is 1% really a plunge? Plunge is defined as ‘to descend abruptly or precipitously, as a cliff, road, etc.’….so does a 1% drop constitute a plunge? I think not. Yet this is our new reality: a world where a dramatic headline is much more important than a calm, accurate inventory of what is really going on.

Unfortunately, press headlines define people’s perception of reality as no-one seems to have the time or inclination to examine the substance of an issue anymore. One side says a balanced budget with austere cuts is critical to solving the world’s financial problems, yet the other side says doing so instead of continued stimulus will PLUNGE us into a third depression (Paul Krugman, New York Times). The same side that says legalizing un-documented immigrants is bad for the economy and the country, idolizes all of Ronald Reagan’s economic policies, even though Ronald Reagan legalized millions of illegal’s because he felt it was good for the economy. Unemployment figures improved, and the banking sector hired 6,800 people in the past 3 months. Warren Buffet says all his companies are hiring across the board. Then housing figures came in: sales dropped, yet pricing rose, and housing starts dropped, which was viewed as bad news by some and good news by others (lower inventories generally stabilize pricing and valuations).

Maybe if we eliminated the words PLUNGE and SOAR from our vocabulary, and watched the economy unwind from a more balanced perspective we could all benefit. We are emerging from the most serious recession of the past 100 years, yet we want double digit growth back over night. The recovery will be slow and rocky at times. A price will have to be paid for bad behaviour and policies. New technology will continue to change the landscape of employment.

Of course in these panicky, irrational times, great opportunity exists to buy the best real estate. With more choices, extremely low financing rates, and virtually no new great inventory, long term buyers will be rewarded…..but not in the next quarter: let’s leave that thinking to Wall Street.

And buckle up: it’s going to be a bumpy ride!

Leonard Steinberg (Editorial from LUXURYLETTER: