September 26, 2011 2:59 PM
The beauty of a free market system is that eventually all players are held accountable. Argue with the facts one might, but the market is a cruel task master and will prove you wrong. Unless facts change and you are right. Now, I would have thought Jim Cramer of all people would know this. He issued his call in 2009 that the bottom of the housing market was in. He claimed in early 2011 that he was correct about his call, and claimed he deserved apologies from people who criticized him for his prediction. I argued otherwise. In a published challenge at the beginning of this year, I offered to buy him a Philly Cheese Steak Sandwich if I was wrong. I also promised to publicly admit my misguidedness, in an article, and give credit to Mr. Cramer for being right. So where do the market facts stand for each of us today? Consider that the other day I heard him complaining because he cannot qualify for a refinance. Is this an admission that the housing recovery he claimed was in progress last year, has not materialized? Sounds like it to me! Mr. Cramer can now see what my mantra has been for a while. We don’t have enough qualified home buyers to take on the massive inventory this country has. Nor do we have enough people like Mr. Jim Cramer to take advantage of the low-interest rates to refinance. Mr Cramer saw what happened to Jerry Yang of Yahoo when he made a bad call by saying no to Microsoft’s 47 Billion dollar offer. More recently, The CEO of Netflix , Reed Hastings, issued a much more rapid Mea Culpa when his strategy backfired.
Can Mr Cramer admit he was wrong too? Will he eat his words while I eat my Philly Cheese Steak Sandwich? But, that was a gentleman’s bet I made. And I realize Mr Cramer had a bad week. He had the frustration of being denied a loan like so many other Americans these days. The Philadelphia Eagles had a crushing defeat by the New York Giants. There is no glory in kicking a man when he’s down. I will go ahead and buy my own Philly Cheese Steak Sandwich. And wish Mr Cramer and us all a better year in 2012!
Logan Mohtashami is a senior loan officer at his family owned mortgage company, AMC Lending Group, which has been providing mortgages services for California residents since 1988
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