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Fear Fuels Current Market Conditions

BOCA RATON, FL-Calling this an investors strike, Peter Linneman expects the picket line to last another three to six months.

By Melissa Kress | Updated on January 20, 2008

BOCA RATON, FL-Four things have converged to lead us to where we are today in the capital markets, and the number one event is the battle between fear and greed, explained Peter Linneman, principal of Linneman Associates, at National Multi Housing Council’s annual conference Friday.

“In the battle between fear and greed, we forget that fear wins some of the time,” Linneman said, “and it is winning right now.” He added that greed triumphs 75% of the time.

Related to this, he said, we tend to forget there is a fundamental mismatch between assets and liability in the market. Assets are long-lived, compared to liabilities, which are short lived, Linneman added. “As long as greed is winning the mismatch is not a problem.”

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