Monday, December 8, 2008
Since I arrived in Estonia, I have been trying to "educate" myself and be updated on the economic, political and social news. It is I think something necessary as a foreigner being granted a residence permit. Unfortunately there are not so many sources in information in English: The Baltic Times (not free) and BBN mainly. The latest gives a lot of information on different fields and is contantly updated with daily news. However I often question the credibility of such an Internet paper. So far I had no been too critical regarding that aspect but today is really too much!
1/ As you may know the country is in a deep real estate crisis and here is the title of one of today's articles: "Real estate market in Tallinn shows life signs" !? (I put the link but they really don't deserve it!).
Firstly, such a statement is a lie but one could wonder why. The answer is easy. Instead of being good journalists and looking for data and answers from objective sources, they go where it is easy to get the information. Why make some complicated research when one can ask Tõnis Rüütel, the CEO of Estonian Real Estate Companies’ Union? He will obviously give the most objective information about the real estate market (irony).
Secondly, as a consequence of the first point, the content is full of crap and shows how educated these writers are. Statements such as " many people don’t buy the apartment for living, but try to make a risk-free investment" (quoting another paper!!). Since when real estate is a risk-free investment? Prices of real estate have just plunged and they are trying to tell us that it is risk-free... People think if they start saying that we should buy, then we will. Please wake up, it smells like paid advertising. Which real estate company paid for that crap advertising?
2/Second laugh of the day "Most Estonians don’t yet feel that prices are falling". Oh but why? Maybe because prices are not falling...Again what are they doing here, triyng to reflate the economy by taking some isolated figures and not showing a real picture. If we take a closer look at the article, we are told that in November prices dropper by 0.3%. OK, that is an average of all the prices and it was mainly influenced by price of fuel and real estate (respectively down by 10.3 and 5.5%). I also really like that one, "price of TV sets was down 0.8%". But wait, do I buy fuel, flats/houses and TV sets every day ? NO.
So what does it mean? It means that most of the prices of common consuming products have increased. This is what people buy everyday and this is why nobody notices anything. Then one could argue that the figures also lack of source. Where do the figures come from. Thay say "price of petfood fell 1.7%" when personnally I noticed the opposite. The prices of two products I usually buy for the cat went up by about 10%. And I will take concrete examples: pack of 4 whiskas and pack of 4 kitekat both increased by EEK 2/3. Most of the beers and juices increased.
Of course, 0.3% of inflation in November is better than the "usual" 5 to 10% BUT please BBN stop telling us that we haven't seen a drop in prices because there is none. That figure is only the consequence of collapsing petrol prices and the drop in prices a pure product of your imagination.