Cover Story: Bubble Bath of Doom!

The tone of this cacophony of housing stories varies widely. Money says that while prices "look nuts . . . the roof isn't going to fall in," and your home "is still a great investment." But the London-based Economist, taking a global view, calls housing "the biggest bubble in history," adding: "Prepare for the economic pain when it pops."

Of course, some have been sounding these warnings for years. "What if Housing Crashed?" Forbes asked in a Sept. 3, 2001, cover story. That same week, Business Week observed: "A housing bubble may be developing -- right behind the Nasdaq bubble." Last September, it was Fortune's turn: "Is the Housing Boom Over?" In April, Business Week said that "2005 looks to be the year that housing finally cools off."

But low mortgage rates have kept things hot. Besides, as Time's cover story noted -- along with five-year jumps in single-family home prices of 135 percent in the Los Angeles area, 117 percent in Las Vegas and 108 percent in Washington -- "who wants to listen to buzz-kill talk? Just as during the 1990s' stock frenzy, the idea that 'everybody's getting rich' echoes in a vast media chamber."

Eventually, the naysayers will be proved right and the rocket ship will run out of fuel. In the meantime, hundreds of thousands of people have made small fortunes by ignoring the media's warnings.

Another Jayson Blair?

The Sacramento Bee seems to have had a serial fabricator on its hands.

An internal investigation into 171 columns by Diana Griego Erwin was unable to verify the existence of 43 people she identified by name in her columns. Erwin resigned in May after she was unable to show that a bartender and others in four recent columns were not figments of her imagination. Executive Editor Rick Rodriguez apologized in a note to readers. "It's something I've been beating myself up over and wondering if we should have caught it earlier," he said in an interview. "The columns have a lot of detail. A reporter is generally going to be trusted by an editor. We're talking about named people where, in many cases, she said she'd been to their home and described their homes in great detail. You don't generally ask 'Did you make this person up?' "

The 12-year staffer denied doing anything wrong but has declined to answer further questions from the paper. Rodriguez says "I still don't have a clue" about Erwin's motivation but she appeared to feel burned out from writing three columns a week.

The Bee reported that many of Erwin's columns were essays "about a singular person who faces a challenge and surmounts it," often reflecting themes, such as wildfires or school shootings, taken from the headlines.

"Some are people with last names so unusual they don't appear anywhere in the United States," the Bee said. "For example, a column that ran May 13, 1997, described Victor Budriyev, a Russian immigrant who lost his sweetheart to the bright lights of Los Angeles. The Bee could find no Victor Budriyev in the United States, nor a single citation for 'Budriyev' in all of the massive Google search engine.

"Some don't show up where they should: Donald Burton, a 'barber' who is not on the state's list of licensed barbers. Margaret Brown, a 'retired teacher' who is not on the rolls of the teachers retirement system. Others are described as longtime homeowners whose names do not appear on property records for their communities."

This was, of course, a failure of Bee editors as well. Rodriguez told his paper that Erwin enjoyed an elevated status at the paper, in part because she was part of a Denver Post team that had won a Pulitzer in 1986. "With a high-profile columnist, especially with the credentials present in this case, it is not first nature or even second nature to ask them if the person they're writing about actually exists," he said.