Weekend Open Discussion

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

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318 Responses to Weekend Open Discussion

  1. James Bednar says:

    From Bloomberg:

    S&P Names Sharma President Amid Ratings Criticism

    Standard & Poor’s named Deven Sharma to replace Kathleen Corbet as president after lawmakers and investors criticized the credit rating company for failing to judge the risks of securities backed by subprime mortgages.

    McGraw-Hill Cos., the parent of Standard & Poor’s, said in a statement yesterday that Corbet, 47, resigned to spend more time with her family. Her exit isn’t related to the current credit- market turmoil, Steven Weiss, a New York-based spokesman for the company, said in an interview. Sharma, 51, is executive vice president of investment services and global sales.

    S&P and Moody’s Investors Service failed to downgrade bonds backed by loans to borrowers with poor credit until July, when some had already lost more than 50 cents on the dollar. McGraw- Hill shares have dropped 26 percent this year on concern that the rout in the credit markets may crimp new debt sales, and U.S. Senate Banking Committee Chairman Christopher Dodd said yesterday credit rating companies must explain why they assigned “AAA ratings to securities that never deserved them.”

  2. James Bednar says:

    From Bloomberg:

    Lone Star Cuts Offer for Accredited to $214 Million

    Lone Star Funds cut its takeover offer for Accredited Home Lenders Holding Co. by 44 percent to $214 million, after the subprime mortgage company fired 60 percent of its workers and stopped making new loans.

    Lone Star offered $8.50 a share yesterday to defuse a legal scuffle that followed its attempt to back out of an earlier acquisition agreement with San Diego-based Accredited.

    Dallas-based Lone Star initially offered to buy Accredited on June 4 for $15.10 a share, or $400 million. About a month later, the investment group tried to scrap the deal, citing “the drastic deterioration” of Accredited’s financial condition, according to a legal complaint.

    “I wouldn’t blame Lone Star for trying to get a cheaper deal given what’s going on in the U.S. subprime market,” said Hugh Young, who helps manage $50 billion at Aberdeen Asset Management Asia Ltd. in Singapore. “Fundamentals of the U.S. housing market weren’t really there in the first place. The buyers of assets related to the industry just realize that.”

  3. James Bednar says:

    From the Boston Globe:

    Nobel laureate warns of long US downturn

    The United States could face a prolonged economic downturn because of its subprime mortgage woes, but is unlikely to plunge into a recession, Nobel economics laureate Joseph Stiglitz said yesterday.

    Rising defaults on US subprime mortgages have increased risks to the economy, with a worsening housing slump, credit problems, and turbulence in global financial markets, said Stiglitz, a former World Bank chief economist in Malaysia to attend a conference.

    Some 1.7 million Americans may lose their homes due to foreclosures and bankruptcy this year, piling further pressure on house prices, he said. Wages have stagnated although the US gross domestic product was some 20 percent higher now than six years ago, he said.

    “Mortgage payments are going up, house prices coming down, incomes are stagnating. It’s not a pretty picture. So the dynamics could unravel more and where it stops, we can’t be sure,” Stiglitz told reporters on the sidelines of the conference.

    “We don’t know how well the [US Federal Reserve] will respond. The lack of transparency means we don’t know how deep the problem is. The most likely outcome is that it will be a rather prolonged slowdown but not a recession.”

    Stiglitz said the credit crunch was a “totally predictable disaster” due to President Bush’s economic policies to cut taxes for the rich even as the Fed reduced interest rates, which encouraged people to borrow more than they could afford.

  4. James Bednar says:

    From the New York Times:

    Bush Will Offer Relief for Some on Home Loans

    President Bush, in his first response to families hit by the subprime mortgage crisis, plans to announce several steps Friday to help Americans who have credit problems meet the rising cost of their housing loans, administration officials said Thursday.

    The officials said Mr. Bush would call for the Federal Housing Administration to change its federal mortgage insurance program in a way that would let an additional 80,000 homeowners with spotty credit records sign up, beyond the 160,000 likely to use it this year and next.

    The administration is offering his plan, which will include what one official called jawboning of lenders to persuade them not to foreclose on some borrowers, at a time of growing attacks on Mr. Bush from Democrats who say he has remained on the sidelines amid increasing anxiety over whether millions of Americans could end up losing their homes. Other elements of the plan would need legislative action, requiring Mr. Bush to win over the Democratic leadership in Congress.

    Administration officials, who asked not to be identified, briefed a handful of news organizations on the proposals to be announced by Mr. Bush at an appearance in the White House Rose Garden on Friday morning.

    The main objective of the package, one senior official said, is not to affect the stock markets but to help low-income homeowners, many of them concentrated in certain neighborhoods in several distressed areas of the country, such as Ohio and Michigan.

    “The primary focus is to help individuals who have an opportunity to stay in their homes to stay in their homes,” this official said. “The subprime mortgage situation is having a crushing effect on a lot of communities right now.”

    Despite the assertion that affecting the markets is not the goal, one administration official said Thursday evening that concern about Wall Street’s reaction did affect the timing of the briefing. He said there was a fear that if the White House announced in the morning that Mr. Bush would be making an announcement on housing, there could be confusion as buyers and sellers of mortgage securities guessed what the announcement would be.

  5. James Bednar says:

    I’m surprised that these kinds of pieces are becoming so commonplace:

    Tips for bidding on a foreclosed house

  6. James Bednar says:

    No doubt the “Bush Bailout” will be the talk of the day.

    Bush to Outline Aid to Mortgage Holders

    Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump.

    The president on Friday was to talk about several initiatives and reforms to help homeowners with risky mortgages keep their homes, a senior administration official said Thursday. Bush also was to discuss efforts to prevent these kinds of problems from arising in the future.

    The official said Bush will direct Treasury Secretary Henry Paulson and Housing Secretary Alphonso Jackson to work on an initiative to help troubled mortgage holders get services and products they need to keep them from defaulting on their loans. The official spoke on condition of anonymity to discuss details of the initiatives ahead of the presidential event.

    Bush also planned to:

    — Urge Congress to pass Federal Housing Administration overhaul legislation that would give the FHA more flexibility in assisting mortgage holders with subprime mortgages.

    — Pledge to work with Congress to reform the tax code to help troubled borrowers rework their loans.

    — Call for rigorously enforcing predatory lending laws and strengthening lending practices.

    Foreclosure and late payments have spiked, especially for so-called subprime borrowers with blemished credit histories or low incomes. Higher interest rates and weak home values have made it impossible for some to pay or to keep up with their monthly mortgage payments. Some overstretched homeowners can’t afford to refinance or even sell their home.

  7. Clotpoll says:

    Grim (4)-

    What does FHA do when the deadbeats who refi via these “helping hands” programs go belly-up again?

    One silver lining: the FHA foreclosure program, run through regional liquidators- and featuring a streamlined online bidding process- is outstanding.

    One concern: the MPI (FHA equivalent of PMI) will rise only .7%- from 1.5% to 2.2% of the face amount- for high-risk refi borrowers. Sounds like the gubmint can’t price risk, either.

  8. sas says:

    This is such a crock of crap:
    “Bush to Outline Aid to Mortgage Holders”

    No bailouts!

    sas

  9. James Bednar says:

    From what I’ve been able to garner from the newswires, it doesn’t seem like a bailout at all.

    Really, it seems like he is trying to shift subprime towards FHA, something that should have been done from the start. Subprime is ripe for abuse and predatory lending. FHA, given the proper tools, could possibly manage subprime lending quite effectively.

    It seems clear that raising GSE portfolio limits and conforming loan limits (aside from the yearly adjustment) is out of the question. A prudent move. A year back, GSE portfolio risks were the talk of the day, now we want to pile on the worst kinds of risk? No thanks. Same goes for a jump in the conforming loan limits. The conforming loan limits are high enough to cover a large portion of the properties in the midwest, yet the foreclosure rates are skyrocketting there. The problem is that these folks can’t even afford a conforming loan at market rates. It could also be argued that the increase in conforming loan limit is a gift to the “rich”. Think about it, at 20% down we’re talking half a million dollars. Across most of the country, it is rich people that buy half a million dollar homes, not middle class, and certainly not the poor. I have a feeling Bush will avoid pushing for an increased conforming loan limit.

    Jawboning? It’s free, go ahead and use it. However, if they do, I suggest that they use it to strike fear in the hearts of subprime loan brokers across the nation.

    jb

  10. James Bednar says:

    The thing that has me really worried is the 1099 debt forgiveness plan. This kind of thing has a funny way of backfiring completely.

    This will absolutely increase the number of short-sales and “jingle mail” across the country. Given that these folks have little or no equity to lose by walking away, we’ll be eliminating the last barrier that is keeping them in their homes.

    jb

  11. njrebear says:

    Mr. Bush is instructing Treasury Secretary Henry Paulson to look into the subprime problem, figure out what happened and determine whether any regulatory or policy changes are needed to prevent a recurrence.

    Paulson – nothing to see here. Move on people.

  12. thatBIGwindow says:

    Let me refer back to my Rich Dad, Poor Dad book for advise.

  13. Bloodbath in Winter 2007 says:

    I just saw the front page story at USA Today and my heart sank.

    http://www.usatoday.com/money/economy/housing/2007-08-30-fha-subprime_N.htm?loc=interstitialskip

    I’m sorry, but this is complete BS.

    To qualify for the new benefit, homeowners would have to prove they paid their loan on time before it reset to a higher rate and must have at least 3% equity in the home.

    I’m just wondering .. do you think anyone who bought in 2005/2006 has 3% equity? While 3% is nothing … it’s going to be interested to judge who has 3% as opposed to 4 or 5%.

    The one saving grace is that it doesn’t appear as if ANYONE with a jumbo mortgage (the idiots who put no money down on a 500k house) will get bailed out:

    Under current rules, the maximum loan the FHA can guarantee is $202,000 in most states and up to $362,000 in high-cost states such as California and New York.

    Thoughts, JB?

  14. Bloodbath in Winter 2007 says:

    Oops, i posted too soon:

    he officials said Bush will also call on Congress to pass his proposal to reform the FHA, in part by raising those loan limits to $262,000 in most states and $417,000 in pricier areas. The officials spoke on condition of anonymity because they weren’t authorized to speak on the record.

  15. James Bednar says:

    From the WSJ piece on the main page:

    The change is intended to help borrowers who are at least 90 days behind in payments but still living in their homes avoid foreclosure; the guarantees help homeowners by allowing them to refinance at more favorable rates.

    If you are facing an ARM reset, and have a 90 day late on your credit report, you have little chance of being able to refinance into a lower rate loan right now. In fact, you’ll likely be offered something in the double digits. Combine this with a high LTV, high DTI, and perhaps even a low fico? No chance.

    jb

  16. AntiTrump says:

    The latest issue of Fortune magazine has a some very interesting articles on the current credit crisis. It also has a bunch of opinions/notes from a number of veteran investors about the credit crisis. Highly recommended reading if you can catch a break between the NAR propaganda.

  17. James Bednar says:

    I just hope Bush doesn’t try to say “negative amortization”.

    jb

  18. Bloodbath in Winter 2007 says:

    Is Congress smart enough to block Bush’s plan? Do they have a history of stepping in to help/block such situations?

  19. BC Bob says:

    Offer 2X what they paid for their McMansion. Tear it down and plant wheat. There’s a bull market somewhere. Oh, that yellow metal just sits and does nothing. No printing, no schemes, no manipulation, no bailouts.

  20. thatBIGwindow says:

    Tear it down and plant wheat.

    I wonder if you can use money for an open space grant…

  21. x-underwriter says:

    FHA isn’t going to issue any mortgages where borrowers don’t actually make enough income to qualify. Also, they aren’t going to bail any properties that are underwater. That elliminates 99% of the people who are at risk of foreclosing.
    All they’re doing is loosening the credit history standards

  22. njrebear says:

    I think JB has got it right. There is actually nothing big in the news other than the government taking at the most 80K more houses off the market from an inventory of 5 mil+.

  23. Rob says:

    5 bucks says it comes out something like amert-zashun.

  24. James Bednar says:

    We’ve got the homeless, and we’ve got the jobless. Let’s put the jobless to work buildin’ homes for the homeless.

    Problem solved.

    jb

  25. BC Bob says:

    It’s just a major stroke job. Late breaking news, Bush’s press conference will be moved from the Rose Garden to New Orleans.

  26. James Bednar says:

    I’m more interested in the proposed regulation he is going to suggest.

    jb

  27. James Bednar says:

    Who cares about Bush, what happened to Edward Cahill?

    Barlays ex-CDO chief vanishes

    Edward Cahill, formerly Barclays Capital’s head of European collateralized debt obligations, has gone missing, published reports said.

    Mr. Cahill resigned from his post last Thursday InvestmentNews, Aug. 24 and has not been seen by families or friends since, according to the Daily Mail.

    His disappearance, following the collapse of the CDOs, recalled trader Nick Leeson, who fled Britain’s Barings Bank after losing 830 million pounds ($1.67 billion) of the firm’s money, The Sun reported.

    The loss led to Barings’ collapse.

  28. x-underwriter says:

    God, the world is so retarded

    NEW YORK (Reuters) – Shares of No. 1 U.S. mortgage lender Countrywide Financial Corp rose before the opening bell on Friday as investors bet President Bush would present a plan to help subprime mortgage borrowers who can’t make their loan payments

    http://www.reuters.com/article/hotStocksNews/idUSN3122668720070831

  29. Richie says:

    I just hope Bush doesn’t try to say “negative amortization”.

    jb

    I don’t think Bush is capable of pronouncing any word with more then 3 syllables, so he’s stuck at “negative”.

  30. Sean says:

    Bush is just trying to steal some fire from the Democrats before Congress gets back to work. See poor people Rebublicans do care about you too!

    Forget Iraq, Forget the illegals aliens and expect the housing market to be their numero uno issue in the next session and leading up to the elections.

  31. James Bednar says:

    Interesting comments from Shiller:

    ‘America is facing housing crisis and UK could be next’

    One of the main speakers at today’s annual central bankers’ symposium in Jackson Hole, Wyoming, will tell his audience that there may be an American housing crisis to match any in history – and that Britain and Canada are likely to follow suit.

    Robert Shiller, Economics Professor at Yale University, told The Times: “People are so accustomed to rising house prices, they do not believe it when someone tells them it will come to an end . . . What we have may be the makings of an economic crisis. We may be at a unique point in world history, like 1929, but this time it would be the housing market. Prices are still going up in Canada and the UK, but the US may lead the way.”

  32. BC Bob says:

    JB [27],

    They’re tapping the BOE for short term funding like a fraternity tapping a keg. No liquidity problems though. Just some “strange” problems in their clearing department. HMMNNNN.

  33. Bloodbath in Winter 2007 says:

    NJ re: Bear … you say 80k houses out of 5 million … but will the story be different in NJ?

    It’s unreal people would buy countrywide stock … hope they sell by noon …

  34. James Bednar says:

    BC,

    From MarketWatch:

    Barclays to provide $1.6 bln funding for Cairn

    U.K. banking group Barclays on Friday said it will provide emergency financing to bail out a $1.6 billion structured investment vehicle after the collapse of the short-term debt market left the vehicle unable to secure funding elsewhere.

    The SIV — Cairn High Grade Funding — invests mainly in prime and subprime U.S. residential mortgages and previously raised financing by issuing commercial paper, a type of short-term debt that needs to be replaced every two or three months.

  35. BC Bob says:

    [31],

    “U.K. lenders responsible for 12 percent of the nation’s mortgages are tightening standards for loans on house purchases, withdrawing offers and raising the cost for borrowers with less than perfect credit. ”

    “Merrill Lynch & Co.’s Mortgages Plc unit said yesterday that it raised its interest rates. Northern Rock Plc, the Newcastle upon Tyne building society that had 8.4 percent of the market last year, and Residential Capital Corp.’s GMAC-RFC unit, with a 3.5 percent share, said they stopped some offers and lifted costs for others. Deutsche Bank AG did the same, while two lenders backed by Investec Plc have stopped all subprime loans.”

    http://www.bloomberg.com/apps/news?pid=20601109&sid=aLHJ4TKSRS90&refer=home

  36. Latourk says:

    One Mortgage Lender, at Least, Is Hiring .IndyMac Bancorp said it had hired more than 600 former employees of the American Home Mortgage Investment Corporation and might hire 250 more.

    IndyMac will also assume the leases on more than 90 offices where the employees worked.
    http://www.nytimes.com/2007/08/29/business/29lend.html?ex=1346040000&en=695c6b07cdf16387&ei=5090&partner=rssuserland&emc=rss
    Dow up over 100 pts ,Bush bailing out homeowners,…the world is OK again ! rate cut on the way

  37. James Bednar says:

    Cahill, head of Barclays CDO ops, resigns.

    A week later…

    Barclays bails out a $3.2b SIV-lite and restructures it into a CDO.

  38. James Bednar says:

    From MarketWatch:

    U.S. July core inflation up 0.1% vs. 0.2% expected

    U.S. core PCE price index up 1.9% in past year

    U.S. July personal incomes up 0.5% vs. 0.4% expected

    U.S. July consumer spending up 0.4% vs. 0.3% expected

    U.S. July inflation-adjusted spending up 0.3%

    U.S. July real disposable incomes up 0.5%, most since Feb

  39. BC Bob says:

    Bring back Nick Leeson. It will certainly be an entertaining day. The dog days of August?

  40. James Bednar says:

    From Bloomberg:

    U.S. July Personal Spending Rises 0.4%; Core Prices Up 0.1%

    Consumer spending in the U.S. rose more than forecast in July and inflation cooled, a signal the economy was sound at the start of the third quarter before credit markets deteriorated.

    The 0.4 percent rise in spending followed a 0.2 percent increase in June that was bigger than initially estimated, the Commerce Department said today in Washington. The Federal Reserve’s preferred measure of inflation rose less than forecast.

    Incomes rose 0.5 percent in July, the most in four months, after increasing 0.4 percent in June, today’s report also showed. Income was forecast to rise 0.3 percent after the 0.4 percent gain first reported, according to the Bloomberg News survey median.

    Economists forecast spending would rise 0.3 percent, after an originally reported 0.1 percent increase in June, according to the median of 80 estimates in the Bloomberg survey.

    The report’s price gauge tied to spending patterns and excluding food and energy costs, the Fed’s preferred measure, rose 0.1 percent in July, less than the 0.2 percent gain projected by economists surveyed. It was up 1.9 percent from July 2006.

  41. njrebear says:

    blood bath @ 33,

    IMO, this action should have no effect on NNJ homes as most are priced over 400K.

  42. chicagofinance says:

    James Bednar Says:
    August 31st, 2007 at 8:20 am
    Who cares about Bush, what happened to Edward Cahill?

    Barlays ex-CDO chief vanishes

    grim: doh! doh! doh!!! DOH!!!!!!

  43. chicagofinance says:

    Richie Says:
    August 31st, 2007 at 8:23 am
    I just hope Bush doesn’t try to say “negative amortization”.jb

    “neg-tive atomization”

  44. scribe says:

    From the WSJ:

    Inflation Stays in Fed Comfort Zone
    As U.S. Income, Spending Accelerate
    By JEFF BATER
    August 31, 2007 8:43 a.m.

    WASHINGTON — The income of Americans and their spending both accelerated during July, a positive sign for the economy, while a key gauge of inflation remained within the Federal Reserve’s zone of comfort.

    A price index for personal consumption expenditures rose 0.1% in July compared to the prior month. The index increased by 0.2% in June. The PCE price index excluding food and energy, or core PCE, rose 0.1%, after increasing during June by 0.2%.

    Compared with a year earlier, the PCE price index climbed 2.1% in July. The year-over-year climb in June was 2.3%. The PCE price index excluding food and energy, year over year, rose 1.9% in July and 1.9% in June.

    The Federal Reserve watches the year-over-year PCE price index excluding food and energy closely for signs of problematic inflation. The central bank’s preferred range for this core gauge is considered to be 1.0% to 2.0%.

    Personal income rose at a seasonally adjusted rate of 0.5% compared to the month before, the Commerce Department said Friday. Income increased 0.4% in June, which was unrevised.

    July personal consumption grew by 0.4% compared to the month before. Spending increased 0.2% in June; originally, spending for that month was seen 0.1% higher.

    The gains in income and spending both exceeded expectations of Wall Street at the beginning of the second half of 2007, just weeks before financial markets were rocked by anxieties over credit availability. The median forecasts of 22 economists surveyed by Dow Jones Newswires were a 0.4% increase in personal income during July and a 0.3% rise in consumer spending.

    Disposable personal income — income after taxes — climbed by 0.6% after rising 0.4% in June.

    http://online.wsj.com/article/SB118856286558814592.html?mod=hps_us_whats_news

  45. stuw6 says:

    I wouldn’t get to concerned about the Bush plan to help subprime losers. The more I read about how his plan works, the less I’m concerned about it looking like a bailout. At best it’s a little window dressing attempting to cover a large broken window. IMO, there will be few subprime mortgage holders who will be able to afford any payment larger than their current teaser rate. If they couldn’t afford a conforming mortgage in the first place, it is unlikely that they will be able to afford it now. And 3% equity will probably be hard to find as well, considering the number of I/O loans.

    Are we sure Mr. Rove left the white house? This plan has his fingerprints all over it.

  46. scribe says:

    From Page One of the WSJ:

    Investors Default
    On Outsize Share
    Of Home Loans
    By MICHAEL CORKERY and JAMES R. HAGERTY
    August 31, 2007; Page A1

    Investors played a big role in pumping up home prices during the housing boom. Now, they account for an outsize proportion of loan defaults, mortgage bankers and builders say.

    A survey by the Mortgage Bankers Association found that mortgages on properties that aren’t occupied by the owner — mostly investment homes — account for between 21% and 32% of the defaults on prime-quality home loans in Arizona, California, Florida and Nevada, states where overdue payments are mounting fast.

    Defaults were high on both prime and subprime loans, those made to borrowers with shaky credit histories.

    The four states were among the favorites of speculators during the housing boom. When the market was hot, many speculators bought homes hoping to flip them for a quick profit. But now that home prices have turned lower, that strategy is backfiring.

    As a result, some investors have “simply walked away from their mortgages,” said Doug Duncan, chief economist of the MBA, echoing recent comments from executives of Countrywide Financial Corp., the nation’s largest mortgage lender.

    http://online.wsj.com/article/SB118851838516214091.html?mod=hps_us_whats_news

  47. scribe says:

    Also from the WSJ:

    Vulture Funds
    Start Circling
    Credit Markets
    Move on Distressed Debt
    Could Signal Recovery
    Might Be Long, Slow
    By CRAIG KARMIN
    August 31, 2007; Page C1

    Jeffrey Gundlach, chief investment officer for TCW Group, thinks the turmoil that started with subprime loans and spread throughout other debt markets is going to get worse. He is launching a giant distressed-debt fund aimed at seizing on the turmoil.
    [Jeff Gundlach]

    The development, along with other similar funds being started, could be an early signal that credit markets are beginning a potentially long process of adjustment to the unrest of the past few months.

    Fresh money seeking out investments in mortgage securities could help to clear these markets, which have been highly illiquid and plagued by uncertainty as mortgage delinquencies rise.

    Mr. Gundlach’s TCW Special Mortgage Credits Fund is dedicated to mortgage-related securities, including asset-backed securities, commercial and residential mortgages, and other distressed loans. The $1.56 billion fund, which stopped accepting investors this week, was offered to existing institutional clients and employees of TCW, a Los Angeles money manager overseeing $161 billion in investments. TCW is a unit of French bank Société Générale SA and parent of Trust Co. of the West.

    “The fact that there’s someone else on the other side of the market is very helpful at times like this,” said Alan Ruskin, chief international strategist at RBS Greenwich Capital, a Greenwich, Conn., unit of Royal Bank of Scotland Group PLC.

    Other firms, including Ellington Management Group LLC in Greenwich and Marathon Asset Management LLC in New York, also are raising money for vulture funds, according to people familiar with the matter. Neither firm responded to calls seeking comment. All these funds aim to buy assets on the cheap after widespread selloffs that have knocked down prices on healthier securities, too.

    “There’s the potential that some debt goes to levels of epic cheapness because of the size and complexity,” said Mr. Gundlach. “Even if you’re just throwing darts, you know you’re not buying high.”

    These funds face considerable potential risks. If markets remain depressed and illiquid longer than they anticipate, these funds could find themselves sitting on investments that fall further. Most will be focusing on investments tied to the $2.3 trillion of subprime and Alt-A mortgages, a category between prime and subprime, where some of the biggest bargains, and riskiest plays, can be found.

    Many investors made bundles of money investing in real estate after the market turned down in the late 1980s and early 1990s. Institutional investors were especially active in buying distressed assets from the Resolution Trust Corp., a government body created to unwind failed savings-and-loan institutions.

    http://online.wsj.com/article/SB118851686774914046.html

  48. Pete Olinsky says:

    Am I to assume that if you didn’t buy last month you missed the absolute bottom ?

  49. scribe says:

    From marketwatch:

    INDICATIONS
    U.S. stock futures up before Bernanke, Bush speeches

    By Steve Goldstein, MarketWatch
    Last Update: 8:37 AM ET Aug 31, 2007

    LONDON (MarketWatch) – U.S. stock market futures climbed Friday on hopes that housing woes may be alleviated both by interest-rate and legislative policy, as markets looked ahead to key speeches from Federal Reserve Chairman Ben Bernanke and President Bush.
    S&P 500 futures rose 15.4 points at 1,477.00 and Nasdaq 100 futures gained 17.25 points at 1,992.00. Dow industrial futures climbed 101 points.

    International stocks also were stronger, notably in Tokyo where the Nikkei 225 rose 2.6%. The FTSE 100 rose 1% in London.
    The speech from Bernanke, due at 10 a.m. Eastern from Jackson Hole, Wyo., could give him the opportunity to tip his hand at an interest-rate cut – or, as many believe, not.

    Many economists think Bernanke will try to find some way to be supportive of financial markets without promising a cut in the federal funds rate, which still stands at 5.25%. The financial futures markets expect one or possibly two rate cuts by the end of September.

    The speech from Bush, due at 11:10 a.m., will offer fewer surprises after leaks appeared in The Washington Post and The Wall Street Journal, citing senior administration officials.

    http://www.marketwatch.com/news/story/us-stock-futures-up-before/story.aspx?guid=%7b5FA94A95-ECA8-4A8F-9302-FCB09C61DB93%7d&print=true&dist=printTop

  50. AntiTrump says:

    #27 JB Says:
    “Who cares about Bush, what happened to Edward Cahill?”

    Eduard shouldn’t have sold those CDOs to Frank “Big Frank” Lastorino. Now he’s probably sleeping with the fishes.

  51. James Bednar says:

    I just hope Bush doesn’t scare the hell out of foreign investors.

    They’ve been flapping their lips about how subprime is contained, a minor problem, not big enough to impact the economy.

    Only to be followed by an address from the Rose Garden?

    Doesn’t this legitimize the fact that we do have a subprime crisis? Doesn’t this make Paulson and crew look like.. well.. liars? Or worse, incompetent?

    jb

  52. Can’t afford in BC says:

    i dont think that the issue is the no money down 500K house that these high risk people bought…the real issue is that the house they bought shouldnt have been 500K but more like 350K! its the quick rise in prices that caused these buyers to take out these loans to afford a home that they probably could have afforded using a traditional mrtg given the price was 350K…we need to get the prices back to normal again otherwise, the american consumer is getting smarter to realize that the ‘american dream’ of homeownership is just like the stock market with its ups and downs and voilatility.
    i am guessing that the last few cycles of RE bubbles have been getting increasingly riskier right? this time, the prices shot up so fast that it was a type of risk that was never seen before! unless the prices come down drastically, there will be no buyers, without buyers, there will be no RE, without RE there is no ‘american dream’!!!!

    CAIBC

  53. scribe says:

    also from marketwatch:

    THE FED

    Bernanke under pressure to tip his hand
    Fed chief wants to be cautious about signaling rate cuts

    By Greg Robb, MarketWatch
    Last Update: 6:54 PM ET Aug 30, 2007

    JACKSON HOLE, Wyo. (MarketWatch) — The mountains of Wyoming are beautiful, but dangerous. You never know when you’ll run into a bear or blunder into a boiling hot spring.

    Those are the perils Federal Reserve Chairman Ben Bernanke faces during this weekend’s Fed retreat in the Grand Tetons: He could find himself in hot water if he fails to reassure skittish financial markets that the Fed will act to rescue the economy before the credit crunch gets worse. But he doesn’t want to feed the bears, either.
    Bernanke will walk a fine line during his speech on Friday to open the Fed conference on housing and the economy. He’ll want to appear in touch with the market turmoil while at the same time maintaining Fed flexibility and independence, according to Fed watchers.

    The topic of the conference couldn’t be timelier: Housing, housing finance and the economy. “He would probably lose credibility among many market participants if he avoided talking about the near term outlook and risks in his speech,” economists for UBS said.

    The message the market wants to hear, apparently, is that the Fed will cut the federal funds target rate at the meeting in less than three weeks.

    But many Fed watchers say investors are bound to be disappointed when Bernanke speaks at 10 a.m. Eastern.

    ‘It is unlikely that Bernanke would use his remarks to deliver a meaningful policy message.’
    — Brian Sack, former Fed economist and vice president of Macroeconomic Advisers
    “There is the possibility that it’s going to be a dud,” said Brian Sack, a former Fed economist and now vice president at Macroeconomic Advisers LLC. “It is unlikely that Bernanke would use his remarks to deliver a meaningful policy message.

    Many economists think Bernanke will try to find some way to be supportive of financial markets without promising a cut in the federal funds rate, which still stands at 5.25%. The financial futures markets expect one or possibly two rate cuts by the end of September.

    The Federal Open Market Committee has signaled that a rate cut is possible, but not certain.

    “This is a tricky balancing act,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics. “If Mr. Bernanke sounds hawkish, he runs the risk of inducing further chaos in the markets as expectations of easing are unwound. He will not want to appear too dovish, however, in case the markets start to discount even more easing.”
    Robert Brusca, chief economist at FAO Economics, said Bernanke would tell the markets: “We’ve gotten through a rough patch; we know there are problems out there. We’re still here.”

    But Bernanke will try not to be too positive because that would be taken by the market that the Fed doesn’t intend to do any more. “And I think that is the kind of sound he doesn’t want to make at this time,” Brusca said.

    Wall Street has been on pins and needles all week in anticipation of Bernanke’s remarks.
    Economists are becoming more convinced every day that the fallout from the subprime mortgage woes and subsequent credit crunch and financial market turmoil will force the Fed to cut interest rates at its next meeting on Sept. 18.

    They just don’t think Bernanke is prepared to signal this publicly because he doesn’t yet have the economic data in hand that the turmoil in financial markets is impacting the real economy.

    Another factor arguing against any signal from Bernanke is that he has made clear that he intends to make important policy statements through formal channels, not in nods and winks to reporters or even in speeches.

    “Under Bernanke, there is a preference for clear, official channels of communication. Speeches aren’t the vehicle for expressing committee-wide views,” Sack said. This policy was in evidence on Aug. 17 when the FOMC put out a rare intermeeting statement updating its views on the financial turmoil.
    After saying only 10 days earlier that inflation was its top concern, the FOMC reversed course on Aug. 17 and said that downside risks to growth had risen sharply and the central bank “is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.” Read Fed statement.
    “The Fed’s views were updated in its intermeeting statement. To come out now, in between that statement and Sept. 18, and modify that message further might not be helpful,” Sack said.

    Sack said the statement was designed to buy the FOMC time to wait until Sept. 18 to consider whether to cut rates.

    Sack forecasts that the FOMC will cut rates by a quarter percentage point to 5% at the meeting.

    Jim Glassman, economist at JP Morgan/Chase, expects the Fed to cut by a half a percentage point to 4.75% at the Sept. 18 meeting. Glassman said the wider credit spreads already point to slower economic growth in coming quarters.

    Many economists said the market misread the minutes of the Aug. 7 meeting released Tuesday. Stock markets fell after the minutes were released on disappointment that the Fed was not closer to cutting rates.

    “If that is really the case, the financial markets are a tough audience to please. It is hard to imagine how these minutes could have been more supportive,” said Lou Crandall, chief economist at Wrightson ICAP LLC.

    Fed officials said that a rate cut may be necessary to the extent that the turmoil in financial markets “could have an adverse effect on growth prospects.”

    The formal topic of this year’s symposium in Jackson Hole will be housing and monetary policy. The retreat is attended by many Fed officials, foreign central bankers and Fed watchers.

    The housing sector is expected to experience another downturn over the next several months.

    In the minutes of their Aug. 7 meeting, Fed officials said “developments in the mortgage markets…suggested that the adjustment in the housing sector could well prove to be both deeper and more prolonged than had seemed likely earlier this year.”

    Doug Duncan, chief economist at the Mortgage Bankers Association, said, as a result of the current market turmoil, the housing market won’t hit bottom until the third quarter of 2008.

    “You’ve seen the decline in consumer confidence. You’ve seen credit spreads across lots of markets widen, which increases the cost of debt. All of these things mean slower economic growth.” Duncan said.

    “The major contributor is the failure of housing” he said. End of Story

  54. BC Bob says:

    “Am I to assume that if you didn’t buy last month you missed the absolute bottom ?”

    [48],

    You can assume what you want regarding other’s positions. I learned a long time ago, don’t worry what you don’t have on, that can’t hurt you.

  55. James Bednar says:

    I don’t understand something here. When we’re talking about the “American Dream”, is homeownership the goal? Or is the goal price appreciation?

    To me, these goals are at best, competing, at worst, completely mutually incompatible.

    Greater appreciation means fewer can afford homes in the future, thus lower homeownership rates.

    However, if prices fall, and stay low, affordability rises, and more people would buy homes. The homeownership rate would rise.

    So, which is it?

    jb

  56. PGC says:

    #39 BC Bob.

    Nick Leeson is doing quite well for himeself. He just got appointed CEO of a soccer club on the west of Ireland. The team are doing well and the clubs financials are sound.

    http://news.yahoo.com/s/afp/20070828/en_afp/fblirlleeson

  57. BC Bob says:

    “I just hope Bush doesn’t scare the hell out of foreign investors.”

    JB,

    Exactly. In the midst of all this, I don’t hear anybody talking about our dollar.

  58. James Bednar says:

    Talk, don’t need to talk, look at Oil, Gold, and Treasurys this morning.

    jb

  59. CAIBC says:

    to continue with my thought…

    to fuel this recent run up, we needed the money! we packaged these loans so well that even the conservative Japanese bought into it and is now paying….thats why i think the foreign markets will have to settle first before there is any type of repair in our markets..after all that is said and done we can start talking about RE again! remember the money has to flow from the Japanese investor to these high risk loans to the banks/brokers to the home buyer! now the buyer cant pay it back the effect is felt all the way back to the foreign investors! when you sit down and think about it, its pretty simple, everyone was betting on the homeowner (mostly the middle class of america) to pay up so that the rest of the world could make money! well, guess what, the scam is up and middle class isnt going to put up with this anymore…unfortunately, the middle class is learing this the hard way!

  60. BC Bob says:

    JB [58],

    In addition to this what is there to say? It’s just a subprime currency to the rest of the world.

  61. RentinginNJ says:

    Is Congress smart enough to block Bush’s plan? Do they have a history of stepping in to help/block such situations?

    …and throw hard working American families, who were tricked into an adjustable rate mortgages out into the street? The MSM has decided that people who took mortgages they can’t repay are victims.

    If anything, the Dems will criticize the Bush plan for not going far enough.

    The best you can hope for is deadlock, finger pointing and jawboning.

  62. pesche says:

    do not short the housing stocks today

  63. pesche says:

    and get the rally hats out(sideways)

  64. daniel says:

    #26

    ya gotta be kiddin’ me. BUSH is going to make a proposal?????? ALL of wall street players trying to figure a way out and can’t…..hedge/equity funds getting smoked, world class economists across the globe stymied, but the male cheerleader from yale can give us the solution.

    give me an effin’ break. please. he’ll be scaring the hell out of investors just by virtue of the prospect of his involvement. midas touch in reverse.

  65. lisoosh says:

    OT –
    Mentioned to hubby that a neighbour is moving to Arizona. His response:

    “Everyone I know is leaving”.

  66. CAIBC says:

    jb,

    good question…my answer to that is – its homeownership that the goal and not the immediate appreciation…i think homeownership comes with some appreciation (by this i mean appreciation in line with the economy and income levels)
    in my case, (i am sure i will get many comments to this) as my family grows, the apartment i am living in isnt going to be big enough to hold the entire household so i will look to move something bigger…if i can afford a home (obviously based on my income) i will go out and buy a home and in return pay myself for shelter instead of someone else…after the household has grown up, kids married (hopefully out of the house!) and now an empty nest….i go to sell my house…i probably wont get what i paid for it (i mean the cost of house + all the interest i paid to some bank!) but i get back more that i would have if i rented!
    the problem with the recent run up was that the homes were being treated like stocks, buying and selling (flipping) to make a profit! except there is no actaul profit like a company make to raise the value of their stocks!

  67. CAIBC says:

    lisoosh, did your neighbor sell his house already?

  68. BC Bob says:

    Daniel [64],

    Yeah, I was comforted when we were alerted that the administration was monitoring the credit crunch, approx 10 days ago. Probably easier to jump.

  69. stuw6 says:

    [62] pesche Says:

    do not short the housing stocks today.

    Yeah, I expect to get crushed today, but the window covering will soon reveal the broken glass behind it. This looks strictly like a psychological move on Bush’s part to me.

  70. CAIBC says:

    this Bush plan is ridiculous..he should just ackowledge the problem and let is work its way out…
    we all know how his last big plan worked out…we are now in the middle of an all out guerilla type civil war and our young men and women are tasked with being the police (we are more like target practice for them now!)

  71. bergenbuyer says:

    #55
    JB,

    The “goal” is to live the best life possible and for most people that means having as much $ as possible to buy cars, go on vacation, buy a $5K swingset, etc.

    Due to the recent run-up in homes prices, many viewed this as the easiest way to get rich quick. You can act like a mini-LBO and with no money down leverage yourself to buy as much as possible, in an appreciating environment, the bigger you buy the bigger your profit, unfortunately it works in the opposite direction too.

    The American Dream is not homeownership but being rich and having things. Owning a home was a way to get those things as you could leverage it. Now we’re going to see that homeownership is not a dream, but it will be the American Nightmare for some.

  72. Frank says:

    Do you think Bush refinanced the White House with an ARM and his rate is about to reset?

  73. versity says:

    The Bush “plan” is a meaningless photo-op.

    “Mission Accomplished”

  74. Richard says:

    what ever happened to taking responsibility for your own actions? if you took out a toxic loan it’s your a**. now those who didn’t do something stupid will have to pay for those who did. unreal.

  75. njpatient says:

    “5 bucks says it comes out something like amert-zashun.”

    Thanks, Rob, but I’d like to keep my 5 bucks.

  76. RentinginNJ says:

    Mentioned to hubby that a neighbour is moving to Arizona. His response:

    “Everyone I know is leaving”.

    I was talking with the girl cutting my hair the other day. Her husband works at a bank in Jersey City & supposedly does well. Their families are both from very haughty desirable BC towns.

    It was her last day of work. After struggling trying to buy a house here (not even a top-tier town), she and her husband decided to move to Texas.

    She said, “One “very good” (his) and one “regular” (hers) income just isn’t good enough in NJ”.

  77. Rich In NNJ says:

    They’ve been flapping their lips about how subprime is contained, a minor problem, not big enough to impact the economy.

    ….
    Doesn’t this legitimize the fact that we do have a subprime crisis? Doesn’t this make Paulson and crew look like.. well.. liars? Or worse, incompetent?

    These were my exact first thoughts this morning.

    A political move to match the Democrats or was a “point” passed where the administration could no longer say that the housing market would have no effect on the economy?

  78. James Bednar says:

    Close friends of ours moved down to San Antonio about two years ago. They were certainly the pioneers of their clan, as two families have already followed. Even more are in the planning stages, aside from both sets of parents, who have already made it clear they are moving down when they retire.

    jb

  79. njpatient says:

    #48

    No.

  80. njpatient says:

    simple answers to simple questions.

  81. njpatient says:

    #51 jb
    completely agree that this is capitulation and acknowledgment of a crisis.

  82. bi says:

    i was called idiot on this board, or more formally, intellectual dysentery. but you have to be qualified to do so. here is your qualifiation exam question: you are given 8 balls with exactly same look but one of them contains a golden key for a mcmansion in alpine. you are also given a balance but you cannot put on anything other than these 8 balls. on average, repeat on average, what is the best way to find that ball with the golden key?

  83. chicagofinance says:

    Economic Conference in Jackson Hole.

    Shouldn’t Senator Larry Craig be there?

  84. syncmaster says:

    From BusinessWeek’s Hot Property blog:

    For a deep dive into the differences between S&P/Case-Shiller and OFHEO, check out this OFHEO document from June.

  85. versity says:

    4 balls on each side, then 2 and 2 from the side that was heavier, than 1 and 1 from side that was heavier?

    Then sell immediately and move to san antonio.

    Craig already came and went.

  86. HEHEHE says:

    The Board of Governors of the Federal Reserve System has released the following speech:

    Speech by Chairman Ben S. Bernanke
    Housing, Housing Finance, and Monetary Policy

    http://www.federalreserve.gov/boarddocs/speeches/2007/20070831/default.htm

  87. RentinginNJ says:

    Remarks by Chairman Ben S. Bernanke
    At the Federal Reserve Bank of Kansas City’s Economic Symposium, Jackson Hole, Wyoming
    August 31, 2007
    Housing, Housing Finance, and Monetary Policy

    http://www.federalreserve.gov/boarddocs/speeches/2007/20070831/default.htm

  88. HEHEHE says:

    I win

  89. t c m says:

    #64 –

    daniel –

    i think you’re giving the hedge/equity funds, and all these so called “world class economists” too much credit. aren’t these some of the same people who fueled this whole thing?

  90. pesche says:

    bush has offered compassion to the downtrodden.

  91. bi says:

    85#, this is the most stupid answer i got. you are not qualified.

  92. chicagofinance says:

    bipolar…my best quick guess without checking it….

    put 6 on the balance [3 on each end] and hold two off

    Probability of correctly identifying
    [33 1/3% x .375] + [33% 1/3 x .375] + [50% x .25] = 37.5% chance of identifying correct ball.

    I am not saying I am right, but the correct way to figure this out would be in this style and some iteration.

  93. versity says:

    bi, you are clearly an intellectual powerhouse. i am not worthy.

  94. chicagofinance says:

    Oh you get more than one chance…..touche…ya got me!

  95. t c m says:

    bi-

    i would use a ouija board

  96. bi says:

    92#, this is one of typical answers from wall street interview. you can do it in 3 steps max. but on average it is not the best way.

  97. chicagofinance says:

    I sure may of you have heard this one, so if you have, don’t answer, but if you figure it out from scatch…go ahead.

    What is greater than God,
    more evil than the devil,
    the poor have it,
    the rich want it,
    and if you eat it, you’ll die?

  98. chicagofinance says:

    moderate

  99. BC Bob says:

    “U.S. lawmakers’ plane fired upon while leaving Iraq”

    http://www.cnn.com/2007/WORLD/meast/08/31/iraq.main/index.html

  100. lisoosh says:

    “CAIBC Says:
    August 31st, 2007 at 9:27 am
    lisoosh, did your neighbor sell his house already?”

    Rents -they are semi-retired. Free and clear to do whatever they want. The joys of not being tied to a house!
    Many others I know are planning on selling (they have bought in Florida and NC). I TOLD them to do it last year.

  101. Richard says:

    been talking to the guy who is the broker for the house posted yesterday from craigslist in mountainside. i asked why is the cost you ask + taxes almost double the cost of what you want for rent? he said the builder is in no rush to sell and is willing to offer a 1 year lease with a 1 year renewal. only way he’d sell is if he got a very attractive offer. i guess that means asking price or anything near it! i think this will play out more with new construction for those builders that have healthy books and staying power. they don’t want to be in the rental business but at the same time they won’t be giving houses away.

  102. chicagofinance says:

    bi…..I just realized the puzzle answer was not disclosed? So I guess I can continue?

  103. t c m says:

    richard –

    that means he considers anything other than a “very attractive offer” giving it away.

    he made a financial blunder, and now he wants to find someone else willing and able to make a bigger blunder. anything short of that is giving it away?

  104. RentinginNJ says:

    I would shake each ball until I hear one rattle

    I would then copy the key. I would keep the original gold key as a hedge against inflation and mail the copy back to the bank. I don’t want to pay NJ property taxes on a McMansion.

  105. HEHEHE says:

    Who cares about Bush, what happened to Edward Cahill?

    Barlays ex-CDO chief vanishes

    grim: doh! doh! doh!!! DOH!!!!!!

    I thought he “retired”

  106. Home Seller says:

    #55

    JB, if your talking about a typical household, its homeownership of course.

  107. chicagofinance says:

    continuing?

    If balance…”balances” then take two balls off and place on balance 100% chance of identification in two steps.

    If balance veers in either direction, then take the three balls from heavier side and place two on balance. If balance veers to either side, 100% identification in two steps. If balance levels, then ball held off is 100% chance.

    All iterations, identified in two steps.

  108. chicagofinance says:

    I should have wrote above “…the two balls originally taken off should be placed on the balance…”

  109. bi says:

    101#, here is my answer: take 2 balls and put one on each side. if one is heavier, you get it; otherwirse, take another 2, continue until you get it. i will give you 15 minutes more to figure it out why this simple and stupid way is the best way on average (key word: on average).

  110. versity says:

    chicago, that’s got to be it.

  111. njpatient says:

    #55 jb
    “I don’t understand something here. When we’re talking about the “American Dream”, is homeownership the goal? Or is the goal price appreciation?”

    You speak rhetorically, of course, but it’s certainly true that the powers that be seem to think that it’s price appreciation. And they’re horribly mistaken.

  112. AntiTrump says:

    “It is not the responsibility of the Federal Reserve — nor would it be appropriate — to protect lenders and investors from the consequences of their financial decisions,” Bernanke said. “But developments in financial markets can have broad economic effects felt by many outside the markets, and the Federal Reserve must take those effects into account when determining policy.”

    Sweeeeeeeet

    This is good news. I think he will make a better Fed Governor than Greenspan.

  113. AntiTrump says:

    This is from Bernanke’s speech at Jackson Hole.

  114. David says:

    Does asking brainteaser questions at a job interview help identify brilliance, or does it primarily identify those who have interviewed for so long they’ve heard all the brainteasers already?

  115. bergenbuyer says:

    #82 bi-
    I’d call Suzanne, she researched it and is all knowing.

  116. scribe says:

    from marketwatch:

    August 31, 2007
    What Bernanke Didn’t Say — and What he Did

    Lost in the noise of “will he or won’t he” surrounding Fed Chief Ben Bernanke’s speech was what he didn’t say: He said NOTHING about creating new types of mortgages that could help bail out or help jump-start the mortgage market, as he did in a letter to Sen. Charles Schumer, per my post earlier this week. The speech, however, did have a wonderful professorial history of the mortgage markets and how we got where we are. Also, for what it’s worth: I believe he was as noncommittal as Greenspan and really did little more than say the obvious: We’ll do what we have to do if we have to do it.

    The beat goes on…

  117. njpatient says:

    “U.S. lawmakers’ plane fired upon while leaving Iraq”

    maybe this is the “signs of progress” I’ve been hearing about for four years.

  118. njpatient says:

    LOL @ Renting 103

  119. 3b says:

    #76 Rent She said, “One “very good” (his) and one “regular” (hers) income just isn’t good enough in NJ”.

    It will be. Too bas she could not hang around a little longer.

    There is only one way prices are going, and that is DOWN!

  120. RentinginNJ says:

    i will give you 15 minutes more to figure it out why this simple and stupid way is the best way on average (key word: on average).

    On average, you will get the answer in 2.5 moves, as opposed to the other way, you will always get the answer in 3 moves

  121. James Bednar says:

    From MarketWatch:

    Bush: Government has ‘limited role’ to aid mortgage woes

    Bush urges lenders to help borrowers adjust mortgages

    Bush: Financial markets in period of transition

    Bush: Economy strong enough ‘to weather turbulence’

  122. James Bednar says:

    Bush: Regulators will track down dishonest lenders

    Bush: Administration launching foreclosure avoidance program

  123. scribe says:

    Renting, #87

    I didn’t read the entire text of the speech yet.

    But this caught my eye:

    Between 1890 and 1930, the number of housing units in the United States grew from about 10 million to about 30 million; the pace of homebuilding was particularly brisk during the economic boom of the 1920s.

    Remarkably, this rapid expansion of the housing stock took place despite limited sources of mortgage financing and typical lending terms that were far less attractive than those to which we are accustomed today.

    **Required down payments, usually about half of the home’s purchase price, excluded many households from the market. Also, by comparison with today’s standards, the duration of mortgage loans was short, usually ten years or less.**

    A “balloon” payment at the end of the loan often created problems for borrowers.2

    High interest rates on loans reflected the illiquidity and the essentially unhedgeable interest rate risk and default risk associated with mortgages. Nationwide, the average spread between mortgage rates and high-grade corporate bond yields during the 1920s was about 200 basis points, compared with about 50 basis points on average since the mid-1980s. The absence of a national capital market also produced significant regional disparities in borrowing costs. Hard as it may be to conceive today, rates on mortgage loans before World War I were at times as much as 2 to 4 percentage points higher in some parts of the country than in others, and even in 1930, regional differences in rates could be more than a full percentage point.

    The history is interesting. Apparently, there’s a lot of that in this speech.

  124. Bubble Disciple says:

    Frank #72:
    LOL!!!!!

  125. njpatient says:

    “Bush: Regulators will track down dishonest lenders”

    Dead or alive?

    Like Osama?

  126. njpatient says:

    Hmmm.

    Bush’s entire net worth is held in T-bills.

  127. 3b says:

    #3 JB “The United States could face a prolonged economic downturn because of its subprime mortgage woes, but is unlikely to plunge into a recession, Nobel economics laureate Joseph Stiglitz said yesterday.”

    What is the difference between a prolonged economic downturn and a recession?

  128. RJL says:

    Answer to balls problem:
    Chi started in the right direction, and probably already posted the answer in the time it takes me to write this:

    Hold 2 balls aside.

    If the 3:3 left balance, test the 2 and get answer in 2 tries. 0.25 chance x 2 tries.

    If the 3:3 don’t balance, take heavier 3 and add 1 from the 2 set aside. If the heavier side is the one you added to, you have the answer (the other ball). .375 x2 tries. If, not you need to test other side .375 x 3 tries.

    0.25 x 2 + .375 x2 + .375 x 3 = 2.375 tries on average, which is better than the 3 straightforward 3 tries.

    RJL

  129. bergenbuyer says:

    What is the difference between a prolonged economic downturn and a recession?

    Part of the problem is the lack of complete agreement of what a “recession” is. Simple definition, if GDP drops for 2 consecutive Qtr’s it’s a recession.

    You’d have to ask Stiglitz what his def of an economic downturn is.

  130. daniel says:

    #122 jb

    he’s gonna “smoke ’em out” jb. all them damn broker evil doers, makin’ life tough on real ‘merkans.

    in addition, he’s launching the “no f/b left behind” program, complete with faith based vouchers to take to your next subprime lender.

  131. HEHEHE says:

    “What is the difference between a prolonged economic downturn and a recession?”

    I read that piece and thought the same thing. All these people are saying the same cr*p. Things are going to get worse but they should be okay. Huh?

  132. dvd says:

    Too many vacant homes in Monroe, NJ
    What are you going to do sellers?

    Realtors are really changing their tones. Spoke with a realtor yesterday from ReMax and he was willing to go to the seller with a 15% lowball offer. These homes are all in the mid $800K and a recent comp from 2006 (last time a home sold on that street) was in low $700K RANGE(PER STARLEDGER DATATABASE).

    Market is very really stalled in North Brunswick (renaissance community). Everythig was just flying off the market this last year. Not any more.

    Go Helicopter BEN!!!

    Great blog!!

  133. njpatient says:

    Can everyone please stop playing with bi’s balls?!?

  134. James Bednar says:

    From Bloomberg:

    Bush Pledges Help for Subprime Borrowers, Rejects `Bailout’

    President George W. Bush today pledged to help people with risky subprime mortgages keep their homes and tighten safeguards against predatory lending, while rejecting a bailout for “speculators.”

    “I plan to help homeowners, the government’s got a role to play,” Bush said. “But it’s not the government’s job to bail out speculators or those who made the decision to buy a home they couldn’t afford.”

  135. mifune says:

    JB – Robert Schiller is presenting a pretty interesting paper on the housing downturn today. I can’t find a link to it on the web but you might want to keep an eye open.
    I’ll post it if I can find it.

  136. bi says:

    comrades, here is an interesting forecasting question: will President Putin’s successor be a bald person or have a lot of hair?

  137. RJL says:

    #107 Chi “If balance…”balances” then take two balls off and place on balance 100% chance of identification in two steps.

    If balance veers in either direction, then take the three balls from heavier side and place two on balance. If balance veers to either side, 100% identification in two steps. If balance levels, then ball held off is 100% chance.

    All iterations, identified in two steps”

    Ah, yes, this is the right answer. Very elegant.

    But I come in second, ahead of bi’s answer, which if you do the math comes to 0.25 x 1 +0.25 x2 +0.25 x 3 + 0.25 x 4 = average 2.5 steps.

  138. Rob says:

    Re: the “Bush plan”. Guys, don’t hate the player, hate the game. Populist pandering is the name of the game on both sides of the aisle these days. Both national parties have taken to heart Lenin’s advice to grind the bourgeoisie between the “millstones of taxation and inflation”. When 65% of the population lives paycheck to paycheck there’s always the need for Uncle Sam to step in and lend a “helping” hand.

    The American Dream has been redefined to mean living in a cool house, driving a cool car, drooling in front of a flat screen HDTV, and loading up to the eyeballs with debt to do it. Those people about to lose their homes are model Americans, and it’s our patriotic duty to help them.

  139. bergenbuyer says:

    #132dvd- Spoke with a realtor yesterday from ReMax and he was willing to go to the seller with a 15% lowball offer.

    A realtor HAS to present all offers and any realtor that doesn’t present an offer is an a.s, it’s not the relators decision of what price to accept.

  140. bi says:

    136#, the answer is: if the guy can sustain for more than 4 years, he must be a person having a lot of hair. why?

    Lenin: bold
    Stalin: a lot of hair
    Khrushchev: bald
    Breznev: a lof of hair
    Gorbachev: bald
    Yeltsin: a lof of hair
    Putin: bald
    Next head: a lot of hair

  141. njpatient says:

    bi – a prospective buyer enters the the narrow front gate of the a property. Before doing anything else, he walks 200 yards south, and then 200 yards west. It’s a sizeable property, but he concludes as he walks the 200 yards north back to the front gate that it’s not worth anything and he’s not interested.

    What color is the lawn?

  142. syncmaster says:

    bi #136,

    comrades, here is an interesting forecasting question: will President Putin’s successor be a bald person or have a lot of hair?

    That’s your idea of an interesting question? Lame.

  143. syncmaster says:

    njpatient #141,

    ROFLMAO.

  144. Rob says:

    The answer: red on white. The buyer was eaten by a polar bear.

  145. ADA says:

    CF:

    Nothing?
    although I dont you can say the rich want nothing.

  146. biluva says:

    hi bi!
    is it netflix? anyway, what is the problem if 1 ball is heavier than other one? don’t worry.

    thanks!

  147. angryman says:

    Corzine looks to get more (illegal) immigrants on the dole of public handouts

    http://www.city-journal.org/html/eon2007-08-29sm.html

  148. Richard says:

    >>Bernanke says Fed will do what’s needed

    course he will. big pockets daddy will take care of his children.

  149. biluva says:

    comrades, here is an interesting forecasting question: will President Putin’s successor be a bald person or have a lot of hair?


    bi #140,
    now i see why you are such awesome forecaster, comrade.

  150. rhymingrealtor says:

    I am not a brain teaser type, the only answer I came up with for Bi’s # 85 is: Due to the alpine reference I now know for sure bi is Ducky.

    KL

  151. bi says:

    maybe it is already posted. but here is a link to bernanke speech:
    http://www.federalreserve.gov/boarddocs/speeches/2007/20070831/default.htm

  152. chicagofinance says:

    ADA Says:
    August 31st, 2007 at 12:18 pm
    CF:Nothing?
    although I dont you can say the rich want nothing.

    ADA: want for?

  153. Bloodbath in Winter 2007 says:

    CF – I haven’t scrolled down to look at other answers, but my guess is NOTHING.

    All seem to work, except for ‘rich want it.’ Because they want everything.

    Anyway, that’s my guess. Checked in with the wife and that’s what we’re going with.

  154. SysAdmin says:

    #82

    The sure way of doing is 2 steps.

    Step 1 : 3 & 3
    If both are equal, try the left out and the heavier side is the one you want.

    If the 3 & 3 are unequal, set aside the 3 that is heavier and measure 2 of the 3. The side that is heavier has the key. If in step 2, they measure equal the 3rd left out has the key.

    I know how to do from 12 in 3 steps :-)

  155. ADA says:

    ohh got it. I guess they want for nothing but want alot.

  156. James Bednar says:

    Benny Boy, Bush, much ado about nothing.

    Did they get together last night to compare notes?

    jb

  157. James Bednar says:

    It is not the responsibility of the Federal Reserve–nor would it be appropriate–to protect lenders and investors from the consequences of their financial decisions.
    – Ben S. Bernanke, August 31, 2007

    We’ve got a role, the government has got a role to play — but it is limited. A federal bailout of lenders would only encourage a recurrence of the problem. It’s not the government’s job to bail out speculators, or those who made the decision to buy a home they knew they could never afford.
    – George W. Bush, August 31, 2007

  158. bi says:

    as i said here before, President Bush is a man of great wisdom but often seemd slowwitted. he just defused the time bomb in last 11 hours.

  159. dreamtheaterr says:

    Hey, why are some complaining?

    The stock market is up today now that Mr. Perpetual Holiday, CEO of the US spoke on future earnings guidance.

    Think of the ‘wealth effect’ created today for you. Now go and spend some money at the mall this weekend and feel good about yourselves…. life is too short.

  160. Clotpoll says:

    Grim (4)-

    “The main objective of the package, one senior official said, is not to affect the stock markets but to help low-income homeowners, many of them concentrated in certain neighborhoods in several distressed areas of the country, such as Ohio and Michigan.”

    Hmmm…aren’t Ohio and Michigan key electoral swing states?

    Look for the Dems to swoop in after Labor Day and up the ante on this pander-du-jour.

  161. bergenbuyer says:

    Lehman economist Drew Matus take on Bernanke’s speech: We should not expect a rate cut, but don’t rule one out if things get worse by the next meeting.

    Matus still expects a 25 bps cut in Sept followed by another 25 cut in Oct.

  162. stuw6 says:

    “he just defused the time bomb in last 11 hours”

    Defused the time bomb? nah…he just hit the snooze button. Both Bush and Bi are lame Ducks!

  163. Clotpoll says:

    BC (19)-

    My helmet’s on, my pickax is sharpened, and I’m heading into the hole for double-shifts.

  164. James Bednar says:

    Well, it’s 1:12pm on August 31st.

    I don’t think anyone will mind if I officially close the Summer real estate season a bit early, for the holiday.

    Good bye market, see you again in the Spring.

    jb

  165. gary says:

    And tomorrow is September 1st which means…. Hey, what does it mean again?

  166. syncmaster says:

    gary #166,

    One day closer to the end of the tunnel.

  167. BC Bob says:

    “And tomorrow is September 1st which means…. Hey, what does it mean again?”

    Gary,

    College F-Ball Game Day, ESPN.

  168. James Bednar says:

    Gary,

    http://njrereport.com/images/jul07_salesinv.gif

    September is when the little red line falls off a cliff.

    jb

  169. BC Bob says:

    Clot [164],

    Gotta love this nonsense. Creates many opportunities.

  170. njhomehunt says:

    JB,

    It would be great if you could post the Lowball report over the weekend.

    Thx

  171. dreamtheaterr says:

    Any bets that JB might need to start his sales graph referred to in #169 at sub-1000 after this winter?

  172. stucco says:

    Hi:
    Im looking at a house that looks like it is stucco. I am not sure if it is the fake kind or real kind, but Im sure it is a wood frame behind since there was a renovation 1999. and the old house was definetly not stucco. I have heard moisture is a big problem for stucco, either the fake kind and the real kind. has anyone had experience with those?

  173. Clotpoll says:

    Grim (122)-

    Bush: Paulson out, Casey Serin in.

  174. Clotpoll says:

    Grim (169)-

    Spring of what? ’09?

  175. BC Bob says:

    Dream,

    It will take out the March support, going back to 2004. I would not take the other side of your sub 1000 bet.

  176. Clotpoll says:

    stuck (173)-

    Tap the “stucco”. If it sounds hollow, it is EIFS, a stucco-type cladding. This stuff- especially older installations- is prone to severe wicking of mositure and can wreak havoc on a house, as it can draw moisture into the frame and rot it from the inside out (sound tasty so far?).

    Newer EIFS systems claim to have improved water repelling and channeling systems that eliminate some of the old problems. I cannot attest to that claim one way or the other.

    Google “EIFS”, and you’ll get reams of info.

  177. James Bednar says:

    Surprising comments from Mayor Bloomberg:

    Bloomberg: Mortgage Mess Not All Industry’s Fault

    The way the mayor sees it, the blame shouldn’t all rest on the mortgage industry, which has been cast as the unscrupulous villain in this saga for preying on people who, in Bloomberg’s opinion, perhaps shouldn’t have sought mortgages in the first place.

    “What happened here is a bunch of people who didn’t really have the wherewithal to get mortgages got mortgages,” Bloomberg said. “Now if they didn’t have access to those mortgages, the elected officials would scream, ‘You are discriminating against them.’ Some of them lied about their incomes. They say, ‘Oh but the salesman convinced them to do it.’ OK, but you live a world where you put your signature down, you are supposed to know what you are signing and you have to take responsibility…A bunch of people got mortgages they really couldn’t afford and all of a sudden, one day, interest rates kicked up a bit and this started cascading down and everyone said, ‘Oh my goodness look at all these people that can’t pay.'”

    That said, Bloomberg noted, if the market collapses and the economy slides, New York will get hurt.

    Contrary to popular belief, given its continued high real estate prices, the city is “not immune to this,” he said, adding: “We will get hurt less, I think, then the rest of the country. But make no mistake about it, it’s not good for America and it’s not good for New York.”

  178. Clotpoll says:

    Bloomberg could never get elected prez. Too damn blunt.

  179. sas says:

    I wrote my Senators.
    Now, its your turn

    http://patrick.net/housing/contrib/nobailout.html

    SAS

  180. sas says:

    Good to hear Bloomberg hit the nail on the head with this one.

    But his idea of taxing to go into midtown is crazy

    sas

  181. Essex says:

    Departures are nothing new — point of fact, when I lived in Chicago it was increasingly difficult to achieve my goals…the mass exodus of corporate headquarters made the place less than desirable imho….at least in NJ I have what I need — and I happen to really like it. Once retirement kicks in…no way….will want low taxes then.

  182. Essex says:

    Bloomberg too damn….New Yawk….won’t play in Peoria. imho

  183. BklynHawk says:

    sas#181-
    I’m curious as to why you don’t like his Bloomberg’s plan.
    JM

  184. njpatient says:

    #151 rhyming
    “Due to the alpine reference I now know for sure bi is Ducky. ”

    Agree
    That and the schizophrenic posts.

  185. Clotpoll says:

    (159)-

    Yep, he’s a regular Jack Bauer.

  186. njpatient says:

    “Mr. Perpetual Holiday”
    lol @ dream

  187. sas says:

    # 184

    too hard on small buisnesses and local truckers.

    These guys are not making that much money to begin with, and this makes it worse.

    I don’t really see it curtailing traffic.

    I think investment, and modernize the subways might be a better way to go, but that will never happen.

    SAS

  188. sas says:

    which reminds me, if anyone wants to smoke a punch cigar on me…. I’ll be at the tab drivers pep rally next week.

    No, I am not a cab driver, but I don’t like the GPS idea neither.

    Its just a sweetheart deal for a select few and the GPS company…. I think its sprint nextel.

    sas

  189. sas says:

    I mean…
    the cab drivers pep rally.

    SAS

  190. 3b says:

    #129 Simple definition, if GDP drops for 2 consecutive Qtr’s it’s a recession.

    Which would equal prolonged economic downturn, or longer?

  191. sas says:

    son a gun…!!

    My coffee cup says “Made in West Germany”

    where the heck did I get this? How long have I had it?

    yikes.

    SAS

  192. thatBIGwindow says:

    #173: My entire house is made out of brick/stucco, built in 1925. No moisture problems, although under the front porch I find lots of dead pill bugs :(

    The presence of them indicates a moisture problem because they are not insects, they are isopods related to the shrimp family. They breathe through gills which is why you find them in moist areas. They curl up in a ball when they sleep to retain moisture.

    But other than that, no problems for me.

  193. Essex says:

    #191….depends on how far down they ‘revise’…

  194. HEHEHE says:

    Banks set to cut 10-15% of staff as markets take toll on revenues
    By Lina Saigol, European M&A Correspondent

    Published: August 31 2007 03:00 | Last updated: August 31 2007 03:00

    Investment banks are set to cut 10-15 per cent of their staff across the board as turmoil in the markets takes its toll on revenues.

    The bulk of cuts are expected in structured credit and leveraged finance, though recruitment experts said other investment banking areas could be affected.

    http://www.ft.com/cms/s/0/17e170ce-575b-11dc-9a3a-0000779fd2ac.html

  195. sas says:

    What is Bernake going to do when people can’t cash in their equity to support there lifestyle, and not contributing to consumption?

    Bernake… the ball is already rolling down the hill.

    SAS

  196. x-underwriter says:

    prolonged economic downturn = 5 months and 29 days.
    As soon as the economic slump hits six months, then they’ll say recession.
    It gives them almost six extra months to blabber on like we’re not in a recession yet

  197. PGC says:

    It’s nearly 2:30PM.
    Is the 5:30PM exodus getting ready to leave early for the long weekend.

  198. HEHEHE says:

    Well it appears that the administration has done the full-court press before the long Labor Day weekend. Which begs the question, how bad is this Fall going to be?

  199. lisoosh says:

    I like Bloomburg.
    This country desparately needs someone who tells it like it is.

  200. Rich In NNJ says:

    Ridgewood
    SLD 331 WINDSOR TER $875,000 6/30/2006

    SLD 331 WINDSOR TER $812,000 8/30/2007

    Glen Rock
    SLD JEROME AVE $520,000 11/7/2005

    ACT JEROME AVE $549,000 5/13/2007
    PCH JEROME AVE $539,000 7/24/2007
    PCH JEROME AVE $529,000 8/31/2007
    tick, tick, tick…

    Upper Saddle River
    SLD ALLEY LN $840,000 6/19/2006

    ACT VALLEY LN $946,000 6/7/2007
    PCH VALLEY LN $899,900 8/31/2007
    tick, tick, tick…

  201. x-underwriter says:

    lisoosh Says:
    August 31st, 2007 at 2:25 pm
    I like Bloomburg.
    This country desparately needs someone who tells it like it is.

    I totally agree. I’d rather get told the straight ugly truth than get sugar coated all the time

  202. bi says:

    171#,
    with bush bailing out arm/subprime holders, ben dropping cash from helicopter, and corzine liberating illegals, my sense is very soon you will can compile a highball list.

  203. sas says:

    the 4 C’s of credit:

    1) Credit history- Did you do what u say u will do?

    2)Capacity- Do u have the capacity to pay off loan?

    3)Character- Will u handle your loan commitments?

    4)Collateral- Is collateral sufficient, in case of.. whatever….

    Alot of people are barking up the wrong tree, if one meets the 4 C’s, any bank will give you a loan, even Pavlov’s dog.

    Don’t believe all you hear in the news and from the talking heads about “credit drying up”

    SAS

  204. READ MY LIPS: CUT YOUR GRUBBING HOUSE PRICES FAST says:

    READ MY LIPS: BETTER PANIC GRUBBING GRUBBERS

    1ST TIMERS WITH AN ATTITUDE GOING TO SLASH AND BURN ASKING PRICES. SO START CLICING AND CHOPPING PRICES IN BIG CHUNKS OR RIDE IT DOWN.

    Just like the feller i knew who bought in 1988 a NYC Co-op. Within 5 years the co-op shack wad down 50%. That’s right grubbers 50% in NYC lalalaland. He broke even around 2000 and sold in 2002 for a small profit.

    12 years to get your entitlement price. Give it up. better get back to work and start earning your retirement as opposed to saddling 1st timers with your over priced shack.

    Bleed’em dry.

    bababababababa

  205. BC Bob says:

    “with bush bailing out arm/subprime holders, ben dropping cash from helicopter,my sense is very soon you will can compile a highball list.”

    [203],

    Euro, Aussie, Pound and Loonie?

  206. curiousd says:

    “Newer EIFS systems claim to have improved water repelling and channeling systems that eliminate some of the old problems. I cannot attest to that claim one way or the other.”

    The new stuff (and the old) both work well. The problem is not the technology but the quality of installations…as with most things… the details count…with EIFS more than most. IF done correctly not only does the stuff last damn-near forever, it is incredibly insulative (energy bill improvements over 30% are not uncommon).

    So, the question becomes more who did the installation than what is the stuff.

  207. kettle1 says:

    Regarding NYC

    I forget where i found it, but i recently read a proposal for closing a large portion of lower Manhattan to vehicular traffic. Some portions would allow no traffic at all except for commercial traffic in the evening, while other parts would only allow mass transit, cabs and commercial traffic. I think the general concept is a good one.

  208. READ MY LIPS: CUT YOUR GRUBBING HOUSE PRICES FAST says:

    How are the peasants doing today?
    How is that dried friskies tasting?
    baaaaaawahahahahahaha

  209. lisoosh says:

    Was in the city data forums and came across this. All quotes are one desparate sellers spelling mistakes are authors.

    I dedicate this to all the bulls out there.

    “- Please help!!! Trying to sell our home in Little Egg Harbor, HAVE to sell our home actually. It has been up for about a month with no calls!!!! We lowered our price 10k, held one open house. Please if any one has any advice to offer on what we can do or what my realtor can do, let me know. I beleive we are really fair in price at 289K 3 bedrooms 2 baths, remodeled pretty much everwhere, new deck & landscaping. Only 12 yrs old in a area called Osborne Island near all waterfront homes & bay.
    PLEASE HELP
    Thanks

    – So by the sounds of it, the price is too high??
    UHHH This stinks.

    – We are just crazy becasue we already bought our next house, we had no idea the market was thisbad. And even now we will msot likely owe once this home sells. I jsut cant stand it….. Getting very upset…..”

  210. READ MY LIPS: CUT YOUR GRUBBING HOUSE PRICES FAST says:

    “- Please help!!! Trying to sell our home in Little Egg Harbor, HAVE to sell our home actually. It has been up for about a month with no calls!!!! We lowered our price 10k, held one open house. Please if any one has any advice to offer on what we can do or what my realtor can do, let me know. I beleive we are really fair in price at 289K 3 bedrooms 2 baths, remodeled pretty much everwhere, new deck & landscaping. Only 12 yrs old in a area called Osborne Island near all waterfront homes & bay.
    PLEASE HELP
    Thanks

    Yeah just another “I ain’t going to give it away” Grubber.

  211. x-underwriter says:

    “with bush bailing out arm/subprime holders

    Dude, get a clue about the lending business before you make statements like these

  212. READ MY LIPS: CUT YOUR GRUBBING HOUSE PRICES FAST says:

    It S&^%$S being kicked and stomped around.
    eeehhh friskie eaters?
    Just think about how badly you treated buyers and especially first timers.
    It is payback time now.

  213. Essex says:

    – We are just crazy becasue we already bought our next house, we had no idea the market was thisbad. And even now we will msot likely owe once this home sells. I jsut cant stand it….. Getting very upset…..”

    ++++++++++++++++++++++++++++++++++++++++++

    this is not greed, but absolute stupidity — which is a bad market will kick your butt. Shame some people don’t read the papers or blogs

  214. Essex says:

    Grubbing is code for …. I don’t have any money, but wish someone would ‘let me have their property’?

  215. READ MY LIPS: CUT YOUR GRUBBING HOUSE PRICES FAST says:

    Do not trust a friskie eater with one of your most important buys. Do your homework and pay alot less. House Prices went up much faster than incomes. Common sense says houses are unaffordable and to pricey.

    Got it.

    GOT IT!

  216. Essex says:

    READ MY LIPS: CUT YOUR GRUBBING HOUSE PRICES FAST Says:
    August 31st, 2007 at 2:58 pm
    It S&^%$S being kicked and stomped around.
    eeehhh friskie eaters?
    Just think about how badly you treated buyers and especially first timers.
    It is payback time now.

    ++++++++++++++++++++++++++++++++++

    This is the trifecta here, anger and bitterness….if the deal is not working for you walk away….simple. It’s called business.

  217. READ MY LIPS: CUT YOUR GRUBBING HOUSE PRICES FAST says:

    essex want a milkbone?

  218. Clotpoll says:

    (218) Booyah-

    “essex want a milkbone?”

    The best post here…ever!

  219. BC Bob says:

    “essex want a milkbone?”

    BOOOYAAAA I just lost it. Good to see the condoshacks are back.

    Not too many remember 1990. Properties were being flipped back to lenders like they were to delusional buyers in 2005,2006. Jobs were cut all over and marriages were shattered. Not a pleasant time.

  220. stuw6 says:

    Motley Fool:
    Bush’s Housing Bailout: Bad Idea

    http://njrereport.com/index.php/2007/08/31/weekend-open-discussion-78/#comments

    I haven’t left work early like the rest of America ;)

  221. RentinginNJ says:

    We are just crazy becasue we already bought our next house, we had no idea the market was thisbad. And even now we will msot likely owe once this home sells. I jsut cant stand it….. Getting very upset…..”

    I hear stories like this a lot. Trade-up buyers often tend to be less in tune with the market, because they are also sellers, believing they are sitting on a goldmine.

    They have already banked the value of their existing house, and bought the next house, before they even put their house on the market.

  222. njpatient says:

    “Any bets that JB might need to start his sales graph referred to in #169 at sub-1000 after this winter?”

    Dream – we should figure out where the over-under is. I’m going to put my money on $800.

    Anyone else?

  223. sas says:

    Gold jumped on Bush’s & Bernake’s words today.

    $700 gold anytime soon? maybe.

    Gold.. when it moves up…the fear is starting to set in..

    SAS

  224. lisoosh says:

    Lots of sellers asking 25% more than their neighbours because of “recessed lighting, granite counters, stainless steel everything, multiple fireplaces, extra super duper landscaping with specially tiled driveways, imported stone edging, and a little built in dwarf to welcome you home” .

    HGTVitis.

  225. njpatient says:

    good to see you as always, Booya!

  226. RentinginNJ says:

    Motley Fool:
    Bush’s Housing Bailout: Bad Idea

    Thanks for the link

    From the article:

    In other words, these are exactly the people who should lose their money. Take this admission from a New Jersey speculator quoted in that Wall Street Journal story:

    Sazzad Khandakar, 43 years old, an information-technology manager and father of three in Monroe Township, N.J., is among the nation’s distressed home investors. In early 2005, he bought a $410,000 condominium and a $390,000 newly built single-family home, both in Orlando, Fla. ‘Everybody around me bought an investment home in Florida,” Mr. Khandakar said. “Florida was all over the news; my friends were doing it…. I didn’t want to miss out.’

    While NJ wasn’t a speculator’s haven due to tighter supply, already high prices and high property taxes that a teaser ARM can’t help with, I wonder how common stories like this are. How many NJ folks cashed out their NJ home equity to buy condos in Florida (like Californians playing RE tycoon in Arizona)?

    What effect will this have on NJ?

  227. njpatient says:

    “I haven’t left work early like the rest of America ;)”

    office emptied out about 2pm….

    [echo…echo…]

  228. njpatient says:

    Lock in those gains!!!!!

  229. BC Bob says:

    SAS [225],

    Hopefully the B’s will continue their rhetoric on a weekly basis.

  230. njrebear says:

    from CR:
    Lehman says over the next four quarters the national Case-Shiller index to fall 10%.

  231. Ed Sanders says:

    Re post 53 and 55:

    Scribe,

    I can’t imagine why people would be looking for information on a fed funds rate cut, the cut has already occurred.

    The rate has topped 5% three times in the last three weeks, and one of those was by just 3 basis points.

    JB,

    I think the “American Dream,” of homeownership used to be about security, both financial and personal (i.e. the king of your castle). I have no idea what it is supposed to be about now.

  232. Rich In NNJ says:

    Wyckoff
    SLD 347 ORCHARD RD $1,445,000 12/29/2005

    ACT 347 ORCHARD RD $1,590,000 4/2/2007
    PCH 347 ORCHARD RD $1,490,000 6/3/2007
    PCH 347 ORCHARD RD $1,450,000 6/21/2007
    U/C 347 ORCHARD RD $1,450,000 8/3/2007
    SLD 347 ORCHARD RD $1,350,000 8/31/2007

  233. Rich In NNJ says:

    Anyone else’s rent cost them $47,500/year?

  234. lisoosh says:

    Renting – I think there was a lot more speculation at the shore than many realize.

  235. BC Bob says:

    lisoosh [236],

    I agree. It seems like there are more empty houses, in Belmar, than fannies on the beach.

  236. James Bednar says:

    Re: 347 Orchard

    Would I be off if I estimated the loss at roughly $175,000 over two years (transaction costs included).

    jb

  237. Bloodbath in Winter 2007 says:

    Rich, keep the good stuff coming.

    Really, really curious to see if the Troll’s asking has been lowered. Haven’t seen that guy in awhile … any idea why he was banned?

  238. Sean says:

    Did someone say 15% job cuts in the finance industry?

    It is time to revamp the old pink slip game.

    http://www.killercartoons.com/pinkslippanic.html

  239. BC Bob says:

    Ben B on May 17;

    “Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited.”

    “Importantly, we see no serious broader spillover to banks or thrift institutions from the problems in the subprime market; troubled lenders, for the most part, have not been institutions with federally insured deposits.”

  240. James Bednar says:

    Hats off to Rob Gebeloff for making a number of interesting datasets and statistics available at the NJ.com site.

    Just came across this blog posting, we’ve talked about brain drain before, so I’ll bring it up again.

    Is the NJ Brain Drain Growing?

    The College Board’s issued its annual report on SAT scores this week, and as expected, much of the reaction pertained to student performance.

    One of our education writers suggested to me that there was also a demographic angle. And he was correct.

    White the College Board reported sending more scores to Rutgers, the percentage of scores going to Rutgers has dropped more than 4 percentage points. In other words, more students are considering Rutgers than before, but these students are also considering a much greater number of alternatives.

    Meanwhile, like so many homeowners fleeing high property taxes, New Jersey students are increasingly sending scores to Pennsylvania schools.

  241. justbought says:

    Should start with
    SLD 347 ORCHARD RD $827,000 3/4/2005

    for full picture!

    Wyckoff
    SLD 347 ORCHARD RD $1,445,000 12/29/2005

    ACT 347 ORCHARD RD $1,590,000 4/2/2007
    PCH 347 ORCHARD RD $1,490,000 6/3/2007
    PCH 347 ORCHARD RD $1,450,000 6/21/2007
    U/C 347 ORCHARD RD $1,450,000 8/3/2007
    SLD 347 ORCHARD RD $1,350,000 8/31/2007

  242. chicagofinance says:

    If you own any of these Janus funds, be careful. Including this link is not an endorsement of, or warning against, any of the funds named. However, you should be monitoring performance, as the track records of the funds may now be considered obsolete.

    http://www.bloomberg.com/apps/news?pid=20601014&sid=aYfSX8PIGfN4&refer=funds

  243. lisoosh says:

    “Just Reduced Again! This is the last week to buy!”

    -Seen on a forsalebyowner entry.

    Actually a pretty nice house, and not unreasonably priced, but the notice makes it sound like a car on a lot. What happens if no-one buys this week? He changes his life plans? House is removed forever?

  244. chicagofinance says:

    Clotpoll Says:
    August 31st, 2007 at 3:29 pm
    (218) Booyah- “essex want a milkbone?”
    The best post here…ever!

    clot: It is really hard to top “Read My Lips You Schmuck”. However, given how rarely Booya ever directly addresses anyone here, I think I am pursuaded to concur.

  245. Bloodbath in Winter 2007 says:

    ustbought Says:
    August 31st, 2007 at 4:57 pm

    Should start with
    SLD 347 ORCHARD RD $827,000 3/4/2005

    for full picture!

    Wyckoff
    SLD 347 ORCHARD RD $1,445,000 12/29/2005

    ACT 347 ORCHARD RD $1,590,000 4/2/2007
    PCH 347 ORCHARD RD $1,490,000 6/3/2007
    PCH 347 ORCHARD RD $1,450,000 6/21/2007
    U/C 347 ORCHARD RD $1,450,000 8/3/2007
    SLD 347 ORCHARD RD $1,350,000 8/31/2007

    What could they have POSSIBLY added to this house to ask for DOUBLE what they paid? That may be the most absurd listing ever posted here. Are you POSITIVE that’s what it sold for?

    Maybe they added an acre or two and an infinity pool and another bedroom.

  246. justbought says:

    RE 82 bi’s balls. He did not say the ball with the key was heavier or lighter than the others. If you dont know that how many steps do you need to find the key?

  247. James Bednar says:

    What could they have POSSIBLY added to this house to ask for DOUBLE what they paid? That may be the most absurd listing ever posted here. Are you POSITIVE that’s what it sold for?

    Not a teardown, but judging from the pictures there was an extensive remodel. Not saying there was $600k worth of work done, but they did quite a bit of work.

    jb

  248. chicagofinance says:

    Bost & clot:

    Do you remember all the noise you were reporting last weekend?…..behold……..

    WSJ
    Unusual Trading on S&P 500 May Be Just a Banking Move
    By YVONNE BALL
    August 31, 2007; Page C6

    It’s been a volatile few months on the stock market, but some options traders may believe there’s worse to come.

    That is what the surprisingly high number of deep in-the-money options on the S&P 500-stock index may lead some observers to believe. But at least one observer said it is merely a complex trading strategy.

    The open interest in the September 700 S&P 500 puts stands at more than 118,200 after almost doubling last week, when more than 60,000 of these puts traded.

    The heavy volume suggests some traders are expecting such a calamity that the S&P 500-stock index — which yesterday fell 6.12 points to 1457.64 — will lose more than half of its value by Sept. 21, the date these options expire.

    But Jon Najarian at OptionMonster.com said that isn’t so. Instead, the trading is part of complex strategy called a “box spread,” which in this case serves more of a banking function.

    “A trader wants to borrow money and negotiates a rate to borrow money from the crowd. They negotiate the rate and then put on a box in the S&P 500 options,” Mr. Najarian said.

    A box spread is a four-way trade where there is a call spread married with a put spread, thus creating four sides of the so-called box, Mr. Najarian explained.

    He said the S&P 500 was chosen because these particular options can’t be exercised early. The in-the-money options turn to cash only on the expiration day.

    He said the trade here is the purchase of September 700 calls and the sale of the same number of September 1,200 calls. This is followed by the purchase of September 1,200 puts and the sale of the September 700 puts.

    “This would be an example of a 500-point box. At expiration, this box will be worth 500 come hell or high water,” Mr. Najarian said.

    He said the box spread seen in the S&P 500 reflects the billions of dollars regularly loaned on trading floors between people who have excess cash in their accounts and those who want to finance their obligations at less than what the banks are charging.

    “On the floor of the [Chicago Board Options Exchange], hundreds of millions of dollars of such trades happen every day,” Mr. Najarian said.

  249. rhymingrealtor says:

    “””I agree. It seems like there are more empty houses, in Belmar, than fannies on the beach.””

    Check realtor.com for wildwood! There is about 2400 properties for sale total population around 14,000 Belmar has pop of 10,000 and around 450 properties for sale. Mind Blowing …

  250. Essex says:

    Laurel Avenue — West Orange…older/large scale home went up for sale about the time they start and have now completed two upscale mcmansion type homes two doors down. The laurel avenue place just went under contract…would be curious to know what the details of that sale were…..

  251. lisoosh says:

    Chicagofinance Says:
    (218) Booyah- “essex want a milkbone?”
    The best post here…ever!

    “clot: It is really hard to top “Read My Lips You Schmuck”. However, given how rarely Booya ever directly addresses anyone here, I think I am pursuaded to concur.”

    Agree on first place. For second I would nominate
    “Even the Titanic had a Band”. (or was it At Least?)

  252. James Bednar says:

    Box spread eh? That’ll make my flight to Omaha on 9/11 a bit less tense.

    jb

  253. BC Bob says:

    Chi [251],

    I wasn’t reporting noise. I was simply asking a question.

    Najarian does not address the huge put [sep] action, way out of the money, on the DJ Eurostoxx 50 nor the same on the Nikkei 225 Index. I don’t believe these were box spreads. However, I am checking.

  254. lisoosh says:

    Whoever went on City Data to talk to the Egg Harbor woman under “Happyrenterfornow” (you know who you are), she left this response:

    “I origianally posted this awhile ago when we were first on the market, adn we have drastically reduced the price. I am not stupid i know how much worse it is getting every day & it stinks for us. Maybe i mentioned before we bought high just a few years ago. I have no greed to check at the door either. But i agree with what you are saying I know it is going to get worse and I have heard okay things about the fall market (my house is not one that a big family would probably by anyway). But the winter will be the pits and if we do not sell before then it will be rough.
    Thanks for the advice.”

  255. Essex says:

    Whoever went on City Data to talk to the Egg Harbor woman under “Happyrenterfornow” (you know who you are), she left this response:

    +++++++++++++++++++++++++++++++++++++++++++

    the Germans have a word for taking pleasure in the misfortune of others…Schadenfreude.

  256. Essex says:

    From wiki:

    Another phrase with a meaning similar to Schadenfreude is “morose delectation” (“delectatio morosa” in Latin), meaning “the habit of dwelling with enjoyment on evil thoughts”.[2] The medieval church taught morose delectation is a sin.[3][4] French writer Pierre Klossowski (1905-2001) maintained that the appeal of sadism is morose delectation

  257. sas says:

    “taking pleasure in the misfortune of others”

    yup, I am the first to admit I do and I’m damn proud. I love to see people get the rug pulled out from them.

    SAS

  258. Clotpoll says:

    sas (225)-

    Gold $700? How about $1,000…

  259. Clotpoll says:

    ChiFi (251)-

    Whatever it is, that’s a boatload of options activity…and it’s not confident activity. That’s a lot of very tentative longs looking to insure on the cheap.

    And what other institution could’ve- or would’ve- generated that volume, at that time?

    BAC?

  260. lisoosh says:

    “the Germans have a word for taking pleasure in the misfortune of others…Schadenfreude.”

    He wasn’t taking pleasure in her misfortune. He gave her damn good,realistic advice so that she could get out of the hole she dug for herself.

    Better than cheerleading people into the poorhouse.

  261. Kim says:

    I heard three interesting real estate-related stories today.

    1. A house down the street from me has been on the market for over a year and was finally under contract for months. Just heard today that days before closing, the deal fell through. Don’t know the details, but since the “under contract” sign was up for a while I’m figuring the buyers had trouble getting financing. Meanwhile the buyers are all packed up and ready to move into their new home.
    2. A bunch of stay-at-home mothers I work with are talking about getting jobs, saying they needed to help with their housing bills.
    3. A friend of mine, who is usually good with her money, has been telling me she’s in over her head with credit cards, even charging groceries. She didn’t tell me the dollar amount but said her husband doesn’t know about it since she pays the bills.

    I can’t believe how quickly this whole thing is unraveling!!!

  262. Kim says:

    I meant “the sellers” are all packed up and ready to move into their new home. Sorry should have proofread!!

  263. CAIBC says:

    kim,
    whats wrong with charging groceries? i do it all the time! actually, i just about charge everything i can – including cable bill, phone bill – now if only pseg would allow to pay utilities with a charge card…i accumulate so many points that i get to pick out a luxury item (this year it may be a BOSE Wave radio) for free at the end of the year!
    does anyone see a downside to charging everything on a credit card?
    oh by the way, its always paid off in full every month

    comments?

  264. Clotpoll says:

    Kim (264)-

    I think we can all toss in a few anecdotes like this. The question is: are our unmeasured anecdotal experiences statistically significant when measured vs. the world outside our blog community?

    I also see people in my community- whom I know well- absolutely pulling down monster bucks right now, too.

  265. Kim says:

    I sometime charge my groceries on my Amex… which I pay off every month. However, my friend was saying that she’s charging groceries on her credit card… which she’s NOT paying in full every month. She’s probably paying not much more than the minimum. She also told me she charged her son’s $4K swing set on there too and that it’s “adding up.”

    Clot (267) – good point. However, I live in a -middle class town where everyone seems to live above their means… and now it’s starting to show some cracks. I would not expect to see much of this in Millburn or Short Hills.

  266. Essex says:

    Unfortunately Monster Bucks are often required to pay monster bills….my daughter’s pre-school tuition is equal to the cost of a decent private university….*ugh*….but I gotta say it is worth it to see her thrive.

  267. CAIBC says:

    kim,
    4k swing set? whatever happened to going to the local park where the swing set is free! what is this world coming to? i take my little one to the park all the time and she loves it! also gets to interact with all the other little ones at the park..living above your means always comes back to haunt you!
    what does your friend do when the card reaches the limit and you cant charge anymore???? i hope they have a high limit on their cards!
    that must be such a stressful life they lead!!!
    CAIBC

  268. t c m says:

    how can someone drowing in bills pay $4000 for a swingset! the woman is a fool.

  269. dreamtheaterr says:

    A fair number folks were using HEWs to pay down/off credit card debt. But their spending habits didn’t change. Now that institutions are charging higher rates or outright rejecting HEWs, these credit card balances are ballooning higher and cannot be paid off that easily due to the housing ATM running dry.

    At the same time, I am guessing ARM adjustments are making some people tap credit card limits (cash advance perhaps?) to make their mortgage payments. The day of reckoning for the reckless spenders are fast approaching.

    Just go to prosper.com and see the kind of loans some debtors are requesting to pay off their credit card balances.

  270. PGC says:

    Forget the 4K Swing set We are collecting all the Littte Tyke outdoor furniture from the side of the street as the grandmas and grandpas clear out the garages for the open houses.

  271. njrebear says:

    On Bloomberg – Some dude from NCR stammering all over claims the government needs to do more. Used R word several times. Claims several counties across the country are in red because of lower revenues.

  272. njrebear says:

    “taking pleasure in the misfortune of others”

    I just looked at myself in the mirror .. no guilt on me :)

  273. jmacdaddio says:

    On charging…. I now charge almost everything and pay it off when the bill arrives. I came across an article in Mens Health which described tightwad vs. spendthrift behavior. For tightwads, parting with money is a painful experience, so it’s better to charge it then deal with it in one big lump. Spendthrifts need to form a connection between acquiring something and forking over cash, so they should stick to cash or bank cards.

    Today one of my colleagues told us about some friends of hers who recently purchased a million dollar house despite having “regular people” jobs, i.e. not doctors, lawyers, or rappers. Another colleague who is leaving town said the buyers of her house were making a hissy fit over the lack of sprinklers in the backyard … when did a sprinkler system become standard equipment?

  274. Rich In NNJ says:

    justbought Says:
    August 31st, 2007 at 4:57 pm
    Should start with
    SLD 347 ORCHARD RD $827,000 3/4/2005

    for full picture!

    4 bed 2.5 bath

    Wyckoff
    SLD 347 ORCHARD RD $1,445,000 12/29/2005

    ACT 347 ORCHARD RD $1,590,000 4/2/2007
    PCH 347 ORCHARD RD $1,490,000 6/3/2007
    PCH 347 ORCHARD RD $1,450,000 6/21/2007
    U/C 347 ORCHARD RD $1,450,000 8/3/2007
    SLD 347 ORCHARD RD $1,350,000 8/31/2007

    You’re right, here’s some more info.

    5 bed 3.5 bath

    ANOTHER “DELUCCIA” PROPERTY! TOTALLY RENOVATED AND EXPANDED! BEAUTIFULLY APPOINTED. OFFERS EVERYTHING YOU DESIRE….GOURMET KITCHEN WITH ALL TOP OF THE LINE APPLIANCES…SUB ZERO,VIKING COMMERICAL STOVE, MEILE DISHWASHER, GRANITE COUNTERTOPS, HARDWOOD FLOORS AND RECESSED LIGHTS THRU-OUT. EXPANSIVE MASTER BEDROOM SUITE WITH LUXURIOUS BATH, PLENTY TO CLOSETS, WINDOW SEATS,ETC. GREAT FAMILY ROOM WITH WALLS OF GLASS OVERLOOKING THE REAR GROUNDS. NEW SEPTIC, ALARM SYSTEM, BUD VACUUM SYSTEM, SPRINKLER SYSTEM.

    None the less, 12/29/05 buyer bought and lost.
    Complete picture.
    Period.

  275. BC Bob says:

    I have finally been invited to voice my opinion regarding consumer confidence. Did anybody ever wonder how the govt tallies up these #’s? Well today, I received a letter from the U of M, requesting my input regarding how recent changes in economic conditions have affected the public and what economic changes I forsee in the future. BOOOOYAAAA. I will have a field day. WARNING. If you trade this # watch out. The # may come in lower than the street anticipates. Hopefully my response will not be equally weighted.

    By the way, the letter also included a $5 bill as a token of their appreciation. My first question will be how many newly printed $5 bills are sent out on a monthly basis. Who is paying for all these $5 bills. Also, I will ask if I can exchange this $5 bill for a gold coin.

  276. dreamtheaterr says:

    On the topic of charging everything to credit card and paying it off in full, I believe one will spend less if dealing strictly in cash. My guess is that the mere habit of whipping out plastic subconsciously gets people to spend more. So even though there is the convenience of using plastic and getting those rewards, you’re doing it at a ‘price’ so to speak.

    Nothing hurts more than watching cold hard cash escape your wallet. Carrying a credit card balance at those ridiculous interest rates is financial haemorrhaging at its worst.

  277. sas says:

    “Gold $700? How about $1,000…”

    Yup, you will see that in your lifetime.
    along with another major terrorist attack on US soil.

    sas

  278. njrebear says:

    Bob,
    The stock market is going up. The fed chief and our president have said they will do whatever it takes. Unemployment is low and the downturn is subprime specific.

    The economy is doing just great. We probably need to increase interest rates. Housing is just 6% og GDP!

  279. Essex says:

    Pleasure in negatives is a slippery slope….you make your proverbial bed and lie in it I suppose.

  280. Bloodbath in Winter 2007 says:

    Chalk up another person who charges everything.

    Two solid cards for points/rewards are AMEX and the Visa Marriott card. We actually stayed for six nights for free in the Caribbean at a Marriott (it was the second or third best rated hotel on the island) thanks to their points system.

    And on the honeymoon, we got to rent a pretty sweet Wrangler for three days on Maui free thanks to the AMex points.

    Definitely like to use the CC, but also make sure to pay it off every month.

  281. sas says:

    I’m totally against this.

    “Court: Mexican trucks program to proceed”
    http://tinyurl.com/yqbyof

    sas

  282. BC Bob says:

    282,

    Federal budget deficit, state budget defecit, municipal budget deficit, greatest explosion of debt ever [as a % of income], current account deficit, dollar, approx $400 tillion of derivatives, approx %50 trillion of credit default swaps, explosion of money supply. After I discuss this, with the U of M, then I’ll start to get into the more severe problems.

    I didn’t make this bed, nor do I lie in it. You either get sucked into this charade or step back and venture elsewhere.

  283. RentinginNJ says:

    Definitely like to use the CC, but also make sure to pay it off every month.

    I’m what the credit card industry refers to as a “deadbeat”. I pay my bill every month before any interest accrues and I collect lots of free airline miles in the process.

  284. Stu says:

    I’ve been playing the deadbeat game for years. If your credit is good, you can get a 5% cash back card good on groceries, gas and drug store purchases. For everything else, I use an NCL cruise line cc which gives me 3% back. Both cards have annual limits so my wife has opened accounts from the same cc agencies as well. We usually end up with about $1,500 towards a cruise and about $600 back in cash annually. I pay for everything I can with my CC and carry no balances ever. Have been doing this for 10 years and have awesome credit scores from doing so. You really have nothing to lose and everything to gain if you have the control to not spend above your budget.

  285. Salty Steve says:

    This is a pseudo-advertisment for the AMEX-blue cash card, but I always pay my credit card off in full every month (and everything I buy I try to charge to it).

    Anyways, why do I do this, because I get up to 1.5% or something like 6% off the cost of my purchase after annual purchases total $6500.

    In conclusion, if you pay your CC bills in full every month it’s probably worth comparing the card you use to the amex blue-cash card. The only other card i’ve heard that compares is the disney reward card. Anyone know of a card better then these two? (again I only care about CC cards for people who actually balance their budget and pay their bills in full every month)

    peace-out (September at the jersey shore is the best kept secret amongst the locals!)

  286. sas says:

    forget cc cards.

    I use cold hard jack… aka cash.

    I don’t need to be tracked, especially by the IRS, if you know what I mean ; )

    life is good.
    SAS

  287. chicagofinance says:

    #1 Hold on…..someone came on the board and told their story and some of you people slammed her. Don’t be such LODs. You make us look like a bunch of Milkbone eaters. She knows she whiffed. She doesn’t need you to stomp on her.

    #2 I just told a client TO USE THEIR CREDITC CARDS. They paid for everyhting in cash and couldn’t manage to track their spending. I suggested that they bear witness to themselves through a complete accounting of their spending.

  288. Salty Steve says:

    I do agree with you there… that whole “tracking” thing freaks me out.

    When I get a case of the freakies, I break out the Jacksons!

  289. chicagofinance says:

    I am an Amex Starwood [i.e. Optima] dude. I guess it helps when you are Platinum as well. The benefits are SICK! Since they were rated the best offer from about 2001-2005, I’m sure someone has surpassed them by now. If you do any kind of travelling at all for work or pleasure, it really pays.

    Best is when Atlantic City is completely sold out of cheap rooms on a Saturday night. You can pull a room for low points and then get the platinum upgrade to the corner Suite…….

  290. chicagofinance says:

    OK…I’ve been staring at this story all day, but I’ve finally has enough scotch to lose my circumspection and will now post the link…..great title

    Designer Vag!na Surgery Is Dangerous, Ineffective at $5,500, Doctors Say
    http://www.bloomberg.com/apps/news?pid=20601093&sid=a.BO3Rf2ICjs&refer=home

  291. jmacdaddio says:

    In my case using credit cards has led to less monthly spending. I pay close attention to how much I’ve spent on each of my two cards (Driver’s Edge MC and Amex Blue). I am obsessive-compulsive with Quicken, and I have a spreadsheet that forecasts my personal finances about three months out.

    It is entirely possible to overspend without credit cards, and whether someone overspends has to do with their financial sense and not with the plastic in their wallet.

  292. dreamtheaterr says:

    Regarding credit cards, I am a deadbeat, and average 2% cash back using a combo of 3 credit cards from MBNA and Sh1t1bank. I have an AMEX that I use only for electronic purchases (extended warranty and theft protection) in case I get robbed while walking out of the store.

    I don’t like being tracked….. I avoid EZPass.

  293. sas says:

    Does that mean you are stepping out on your marriage or relationships, and don’t want to get caught in the act?

    he he…. just kidding.

    sas

  294. chicagofinance says:

    dreamtheaterr Says:
    August 31st, 2007 at 11:01 pm
    I don’t like being tracked….. I avoid EZPass.

    yan: I still remember driving across the Ohio Pike from the Eastgate to Westgate which on the mileage markers is 241 miles. I remember getting a frown from the toll taker when they chastised me that my Eastgate ticket was time stamped only 2 hours and 45 minutes earlier.

  295. dreamtheaterr says:

    He he, actually wife gave me the idea……KGB style. Hmmm, I think I gotta wring a confession out of her now :)

  296. chicagofinance says:

    Still it is better than warm breast milk and cognac.

  297. chicagofinance says:

    …but not as good as a Punch or a Brazilian hooker…

  298. chicagofinance says:

    WSJ
    Wall Street Bonus Picture: Rich Instead of Very Rich
    By JOSÉE ROSE September 1, 2007

    Hold that Porsche? The Wall Street bonus picture is bleaker, by Street standards at least.

    While the summer may have started with the long-term bonus outlook for Wall Street seemingly strong, it’s ending with bankers and traders expecting lower bonuses, or even layoffs.

    It’s still early to be getting a firm read, but given the subprime crisis, credit crunch and market unrest, the early talk is of lower payouts for the first time in five years, especially in fields related to fixed income, hedge funds and alternative investments. (Many people in Wall Street jobs get most of their compensation through their bonus, not the base pay.)

    Six Digits, but …

    A report by New York consulting firm Options Group said Wall Street bonuses are expected to drop about 5% for 2007. The average Wall Street bonus in 2006 was $137,580, according to the New York state comptroller’s office, up 15.2% from $119,390 in 2005.

    That isn’t just a downer for Wall Street professionals but might also be a drag on New York’s hot real-estate market. The New York housing market is propped up by young Wall Street employees doling out millions of dollars for condos and luxury homes, thanks to their hefty bonuses.

    “Lower fixed-income profit results will drag overall bonuses lower since they’ve generated at the global banks such a significant percentage of overall revenue in recent quarters,” said the Options Group report.

    Combined net income — the key figure for determining bonuses — of Goldman Sachs Group Inc., Bear Stearns Cos., Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Morgan Stanley was more than $30 billion at the end of fiscal 2006, which ended at different brokerage firms in November or December of that year. At the end of their fiscal first half of 2007, the firms’ combined net income was more than $18 billion.

    Options Group also said one out of three people in mortgage-related industries could lose their jobs if business doesn’t pick up by year end.

    Passing on the House?

    This time last year, executives were pricing luxury houses and cars in anticipation of bumper payouts.

    “People were shopping their bonus money early, but now when we talk to the brokers, they’re saying it’s not the same level of interest from strictly a bonus standpoint,” said Greg Heym, chief economist with New York luxury real-estate firm Brown Harris Stevens.

    One of the most brutal bonus years came after the 1998 crisis of the Long-Term Capital Management hedge fund. Bonuses were slashed by more than 20%. Hank Higdon, a managing partner at executive-search firm Higdon Partners, said this year the problem isn’t as contained mainly to the U.S. and risk is spread around the world.

    Others say the real impact might be felt next year.

    “While the end of [2007] may have negative news such as hiring being cut, bonuses are still going to be pretty good because bonuses are always looking backwards,” said Alan Johnson, a compensation consultant at Johnson Associates Inc., a New York executive-search firm. “Virtually everyone believes 2008 is going to be a much tougher year.”

  299. still_looking says:

    help? address for 2402622? thanks in advance.

    sl

  300. still_looking says:

    oh— forgot! it’s a gsmls #

  301. James Bednar says:

    93 Frog Hollow

  302. still_looking says:

    thank you jb!

    sl

  303. John says:

    I am interested in Morris County and was wondering what percentage off the listing price should be bid for a single family home???

  304. marco100 says:

    To John

    306

    There is no set percentage below list price that you should bid when bidding on a house. That is because the list price frequently has no rational relationship to the house’s actual market value.

    You have to objectively determine what the house is worth, which is not done by looking at “list price.” It is done by looking at recent comps. However, this is a declining market. It’s a buyer’s not a seller’s market. Therefore, the comps may be somewhat irrelevant, and you may be able to offer substantially less than the comps.

    You will also have to get the measure of the seller’s desperation. Also important is your own situation: how hard of a bargain are you in a position to drive? If you don’t get your price, are you prepared to wait for the next bargain opportunity?

    If you have a realtor, undoubtedly they will try to con you into paying as close to list as possible, simply so that they can collect a commission as soon as possible. Be very wary about listening to any realtor.

    In sum, there is no set percentage off the list price that you bid. Do not worry about offending the seller. Drive the hardest bargain that you can. If your offer is too low, and negotiations fail, move on to the next one.

  305. Outofstater says:

    I know you guys all love NJ and you’re just a short train ride to the city but for everyday quality of life, you might want to look south. Atlanta has a good economy with jobs that pay enough to afford a nice lifestyle because the cost of living is so low. I cringe when you guys talk about starter $500K POS Capes. You can get a center entrance two story with 5 bedrooms, 3 full baths, finished basement, sunroom, fireplaces in the LR and MBR on a 3/4acre wooded lot in a “swim-tennis community” for about $300K. $350 or $400K will get you a nice new home on a golf course. And, believe it or not, the schools are good. Plus, if your child graduates HS with a 3.0, she gets free tuition,fees and books at any state college or university in the state, including Georgia Tech and UGA, courtesy of the lottery. No income limits. One funny thing, it’s not too common to hear a Southern accent around here because almost everyone is from someplace else.

  306. sas says:

    marco100.

    I think that was a good post w/ solid advice, but I frown on this part:

    “It’s a buyer’s not a seller’s market”

    In my estimation, we are not at this point yet. I think sellers still have the upperhand thanks to the past few years, not the last few months. But, yes, the tides are turning.

    I’ve said all along on these boards, (perhaps someone can vouch for me?)
    that 07 is the year of the lamb.

    No, not silence of the lambs ; )

    but a lamb market is where it is really neither a buyers or a sellers. For a buyer things are flat, slow price declines, and increaseing inventory. For a seller, what you buy today…. you will underwater tomorrow.

    Basically, we have a Mexican standoff, and the odds/fundamentals favor the buyers. But I think more so in 08 and beyond will we start seeing a true buyers market and sellers will be hanging themselves in their closests or ending up in divorce courts.

    Thats just my peso worth of input.

    Now, back to my Blue Mountain Coffee.

    SAS

  307. Stu says:

    Another great CC card that also requires excellent credit is the Citi Platinum Amex

    https://www.citicards.com/cards/wv/cardDetail.do?screenID=927

    You get 3 free passes into the airport club lounges each year and the $99 annual fee is waved for the first year. Like the old Citi Dividend Cards, you get 5% on groceries, gas and drugstore purchases. 3% on everything else. You don’t get cash back w/ this one, but you get Thank You points which can be used for gift cards to more places than you can shake a stick at.

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    I also do Upromise.

    For all the frugal hints you could ever want see Fatwallet.com and evreward.com

  308. Clotpoll says:

    Marco (307)-

    “It’s a buyer’s not a seller’s market.”

    “If you have a realtor, undoubtedly they will try to con you into paying as close to list as possible, simply so that they can collect a commission as soon as possible. Be very wary about listening to any realtor.”

    Do you have any other empty platitudes or hare-brained assumptions you’d like to share with us?

    Do you measure all doctors against the ones who operate on the wrong body part?

    How about advising our friend to interview around and find a good agent? That way, the comps provided will be accurate and the advice will be reliable. Any buyer in this environment who tolerates shoddy work or pressure tactics has only himself- not the agent- to blame.

  309. Pat says:

    SAS, I agree.

    If you notice, very few posters here have been discussing the houses they’ve gone to view. Because few waste time on purpose. We’re at the point that buyers are not even looking.

    Economic folks feel what you’ve said….instinctively.

    Last year, we had posters making fun of what they saw at open houses. The tide turns when we start to see posters discussing what they could make of something they saw in a house. “I could really do XXX with that basement.”

  310. Rich In NNJ says:

    Still Looking,

    FYI: 240 Paramus Road is still Under Contract.

  311. rhymingrealtor says:

    Out-of-stater

    What towns, regions would you reccomend in Georgia? Is that where you are currently? for those of us who entertain the idea of getting out of NJ just the idea is overwhelming.

    KL

  312. David says:

    I like the new “One Card” from Amex. 1% of all purchases go into a savings account (yield is about 5% right now). And no annual fee.

  313. lisoosh says:

    SAS/Pat

    Agree with it not being a buyers or sellers market. It doesn’t suit the sellers, but listing prices are too high to bother with. I haven’t looked at anything this year, it is a complete waste of my time and I don’t want to get some sweaty seller excited by the attention.

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