“We’re going to be in for a rough ride”

From USA Today:

Housing woes have domino effect

If you haven’t yet felt the impact of the nation’s credit crisis, just wait. Chances are, you won’t have to wait long.

So far, the turmoil may feel a bit remote for average people: Failed mortgage lenders. Gargantuan write-downs by banks. Foreclosures for people who couldn’t really afford the mortgages they got.

What about the rest of us? Are we in danger? No one knows for sure, but quite likely, yes.

As the credit crisis seeps into farther-flung corners of the economy, more of us will find it harder — and costlier — to borrow money. The value of the funds in our retirement accounts could shrink. People with subpar credit will likely find it more difficult to qualify for auto and home-equity loans. Even consumers who make the cut may need higher credit scores and more documentation.

With loans harder to get, people will hesitate to buy cars, boats and other big-ticket items. The gravest fear? That weak consumer spending — along with surging energy prices, a long housing slump and sluggish job growth — will plunge the economy into a recession.

Even if a recession doesn’t occur, “We’re going to be in for a rough ride,” says Robert Kuttner, a senior fellow at Demos, a New York policy organization. “With job creation slowing down, credit standards being tightened and housing values not going up anymore, the consumer is under pressure to tighten his or her belt.”

Tighter credit and falling home prices top the reasons why the economy could slip into a recession, according to 50 economists surveyed in late October and early November by the National Association for Business Economics.

Most economists still don’t foresee a recession. But the risk of a downturn is growing with each bout of bleak news. About 18% of economists who responded to NABE’s survey put the probability of a recession starting within the next 12 months at 50% or greater. That’s up sharply from the 11% of economists who said so in August.

A recession would inflict pain on a majority of Americans as unemployment rose and the stock market sank further. In a recession, “Investors have to be prepared to absorb a 20%-plus decline in the value of their portfolios,” says Ed Yardeni, president of Yardeni Research, an investment research firm in Great Neck, N.Y.

The initial low rates on adjustable-rate mortgages are resetting to higher rates. And with housing prices in many markets falling, overextended buyers can’t refinance. Delinquencies and foreclosures are rising. Banks and other investors holding downgraded securities tied to risky mortgages are writing down their values billions of dollars at a time.

Each week brings fresh evidence of how the credit crisis is causing damage. Last week, for example, the stock market fell after Goldman Sachs downgraded the nation’s largest bank, Citigroup, to a sell. Goldman said the bank would likely have to write down $15 billion over the next two quarters, mainly because of its exposure to risky mortgage securities.

And darker days probably lie ahead: Mortgage-related losses industrywide are likely to mount through 2009 and further bruise financial institutions, says Mark Zandi, chief economist at Moody’s Economy.com.

Such losses eat away at banks’ capital reserves. That means they can’t lend as much money. Goldman Sachs analysts predict that, overall, banks’ exposure to risky mortgages could reduce the credit available to consumers and businesses by a staggering $2 trillion.

Consumers who pulled money out of their homes as the market soared in recent years will also be in for a shock as home prices fall during the worst real estate recession since the Great Depression.

Kuttner says he believes that consumers’ recent “reliance on home equity and credit card loans isn’t because middle-income people are going on shopping sprees, but because wages are squeezed.”

Home-equity withdrawals accounted for up to $324 billion a year in consumer spending from 2004 to 2006, according to estimates from Federal Reserve economist James Kennedy, based on a paper he wrote with former Fed chairman Alan Greenspan. These withdrawals and related consumer spending plunged in the first half of this year as the housing market weakened, according to updated estimates from Kennedy.

Pain isn’t restricted to struggling homeowners

This real estate recession is the worst since the Great Depression, affecting almost every part of the housing market, from construction to lending. A turnaround is not expected until the second half of next year and the financial aftershocks from rising foreclosures will be felt for at least another six years.

The confidence level of home builders remains at a 22-year low, and the National Association of Home Builders repeated last week that it doesn’t expect the decline in new home construction to bottom out until the second half of next year.

“Builders do not see any significant change in housing market conditions as compared to last month,” NAHB chief economist David Seiders said in a statement, and special sales incentives are having limited success in attracting home shoppers.

D.R. Horton, the second-largest home builder, said last week that 48% of buyers canceled their contracts in the July to September quarter, and that housing market conditions continued to decline in that period.

But the pain is not being felt evenly across the country. Home prices fell in 17 states during the last year, but most states “continue to have stable home values,” and a half dozen others even showed moderate price growth, according to an analysis of repeat sales last week by First American LoanPerformance.

Worst hit were California, Nevada, Arizona, Louisiana and Florida, where prices declined 5% to 10%.

Almost 16% of homeowners who bought in the past two years owe more on their mortgages than their properties are worth, Zillow.com says.

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288 Responses to “We’re going to be in for a rough ride”

  1. grim says:

    Money must be getting tight over at khov..

    Montvale won’t cut builder’s collateral

    The Borough Council has denied a request by developer K. Hovnanian for a performance-bond reduction to $1 million from $6.1 million for the Valley View town-house complex on Craig Road.

    The developer maintained that work on the 128-unit development was nearly completed, so it asked for the return of most of the bond money it put up as collateral to ensure the project’s completion.

    But the council tabled the developer’s request until Tuesday’s council meeting, citing concerns that the work was incomplete.

    “There were just too many open questions about how much of the work had been done and still needs to be done,” Councilman James Kimball said. “If they default on their obligations to do certain work, then the borough may have to complete it. The bond is security so the borough won’t have to hit taxpayers for it.”

  2. grim says:

    From Bloomberg:

    Home Sales May Drop, Durable Orders Stall: U.S. Economy Preview

    U.S. home sales fell in October to the lowest in at least eight years and business spending stalled as the real-estate slump rippled through the economy, economists said before reports this week.

    Total purchases of new and existing homes fell 1 percent to an annual pace of 5.75 million, according to the median estimate of economists surveyed by Bloomberg News. Orders for long- lasting goods were little changed following the biggest back-to- back declines in at least 15 years, a separate report may show.

    The housing recession will persist into 2008 as banks tighten lending rules, foreclosures rise and prospective buyers wait for further price declines, economists said. Business and consumer spending are likely to cool this quarter, leading to a deceleration in growth.

    “The reports could paint a soft picture at the start of the fourth quarter,” said Jonathan Basile, an economist at Credit Suisse Holdings Inc. in New York. “The fundamentals in the housing sector are still weak with regards to demand and supply. On the manufacturing side, things aren’t overly optimistic either.”

    The National Association of Realtors is scheduled to report sales of existing homes on Nov. 28. Economists in the survey estimate that resales fell to a 5 million annual rate last month, the lowest level since comparable records began in 1999.

    New-home sales, due from the Commerce Department a day later, slipped to a 750,000 pace, according to the survey median. Purchases were at an 11-year low 735,000 rate in August.

    Existing-home sales account for about 85 percent of the market, and purchases of new homes make up the rest.

  3. grim says:

    From the FT:

    Wake up to the dangers of a deepening crisis

    Three months ago it was reasonable to expect that the subprime credit crisis would be a financially significant event but not one that would threaten the overall pattern of economic growth. This is still a possible outcome but no longer the preponderant probability.

    Even if necessary changes in policy are implemented, the odds now favour a US recession that slows growth significantly on a global basis. Without stronger policy responses than have been observed to date, moreover, there is the risk that the adverse impacts will be felt for the rest of this decade and beyond.

  4. grim says:

    From the New York Daily News:

    Two women arrested for posing as apt. buyers, then swiping luxury goods

    They posed as wealthy apartment buyers, but turned out to be an upscale version of Thelma and Louise who pilfered diamonds and furs from luxury Manhattan pads.

    Jessica Joyner, 39, and Jennifer Jones, 33, who both live in swanky upper East Side digs, were nabbed after being chased from an open house they were allegedly attempting to rip off, cops said Sunday.

    The devious duo, who look more like preppies than perps, were charged with petty larceny, grand larceny and criminal possession of stolen property, and were to be arraigned today.

    They are accused of taking handbags, a Tiffany clock, earrings, diamond rings, clothes, a wallet, a Coach backpack and even a fur coat.

    The pair hit ritzy apartments on both the East and West sides of Manhattan, ripping off at least five high-end addresses.

  5. BC Bob says:

    “Schroders, one of the UK’s leading managers of commercial property investments, yesterday wiped 12.5 per cent off the value of units in its flagship £2bn fund, amid growing fears of a collapse in the sector.”

    “The company also warned that investors in the fund might have to wait longer than usual to withdraw their money because of a serious downturn in the market. William Hill, Schroders’ head of property, said: “The market has moved and there is nothing to be gained by us putting our heads in the sand and pretending otherwise.”

    http://news.independent.co.uk/business/news/article3196343.ece

  6. grim says:

    Can I play bi today?

    grim Says:
    September 18th, 2007 at 2:58 pm

    Dollar carry trade anyone?

    jb

    From Bloomberg:

    Dollar Displaces Yen, Franc as Carry Trade Favorite

    Using the dollar to pay for purchases of currencies with higher yields is proving to be the most profitable trade in the foreign-exchange market.

    A basket of currencies including the British pound, Brazilian real and Hungarian forint financed with dollars returned 17 percent this year, compared with 9 percent when funded in yen and 7 percent in Swiss francs, according to data compiled by Bloomberg. Falling U.S. interest rates and increasing volatility in the yen and franc are making the trade even more appealing.

    “With the dollar giving the appearance of being in free fall, it increases the attractiveness of using the currency to fund investments,” said Avinash Persaud, chairman of London- based Intelligence Capital Ltd., which advises hedge funds that manage more than $89 billion. “That process will only add more fuel to the decline.”

    (Disclaimer: That wasn’t a prediction, it was a joke. Who’da thunk, eh?)

  7. John says:

    Countrywide Financial Corp. (CFC:US) climbed 34 cents, or 3.5 percent, to $9.99 in trading before the official open of U.S. exchanges. The Federal Home Loan Bank in Atlanta, a quasigovernmental housing finance company, helped keep the biggest U.S. home lender in business since mid-August with loans the company couldn’t get elsewhere, the Wall Street Journal said.

  8. Shore Guy says:

    Here is a pretty useful collection of databases for those who are into data analysis:

    http://www.nj.com/news/bythenumbers/

  9. BC Bob says:

    “(Disclaimer: That wasn’t a prediction, it was a joke. Who’da thunk, eh?)”

    JB [6],

    I thought that was a prediction. You hit the nail on the head, whether it was a joke or a prediction.

  10. pretorius says:

    Shore Guy,

    That is one of my favorite websites.

    I looked up Hoboken in the home sales database.

    Thru first 6 months of 2007, sales up 7% and prices up 4% compared to same period last year.

  11. grim says:

    CNBC talking about layoffs at C?

  12. grim says:

    You know, I was almost regretting not taking that consulting gig I was offered at C late last year.

    From Reuters:

    Citigroup planning major job cuts – CNBC

    Citigroup, the No. 1 U.S. bank by assets, is planning major job cuts over the coming months, CNBC television reported on Monday.

    CNBC said that no exact number had yet been set, though some jobs were already being eliminated. It estimated that the cuts could total anywhere between 17,000 and 45,000.

  13. AL says:

    With more and more talk about bail-out and increasing pressure on banks I am almost tempted to buy house at double of what I can really afford, do not make a single payment, park my money at family member/friend account and after loan goes far into foreclosure require 2-3% rate from lender on my loan – stating that there was no way I coud afford it from the beginning – and it is lenders fault – if worse come to worse – I will live rent free for 6-10 month, and since i have a little baby may be I will be able to freeze FK for a while by going to court.

    Do you think this is considered a fraud??

  14. AL says:

    Ohh and I will not lie on mortgage documents… – they will give me this high loan – Ive being offered it few times. (neg arm 3 year loan)

  15. AL says:

    and also – can the banks go after your personal assets upon foreclosing on your house in NJ??? Anybody??

  16. grim says:

    Al,

    Fraud for property/housing.

  17. grim says:

    From Bloomberg:

    HSBC May Need $12 Billion for Bad Debts, Goldman Says

    HSBC Holdings Plc, Europe’s biggest bank by market value, may have to set aside a further $12 billion for U.S. subprime bad debts as customer defaults spread, analysts at Goldman Sachs Group Inc. said.

    “The problem for HSBC now is the prospect of mounting non- performing loans and substantial losses for Household extending all the way into 2008,” analysts led by Roy Ramos in Hong Kong wrote in a note to investors dated Nov. 24. They lowered the rating on the stock to “sell’ from “neutral.”

    HSBC bought U.S. subprime lender Household International Inc. for $15.5 billion in 2003.

    The bank said today it will bail out two structured investment vehicles, taking on $45 billion of assets to avoid a fire sale of bond holdings.

  18. grim says:

    Al,

    You do make an interesting point. Will all of the chatter about loan workouts, rate reductions, even loan forgiveness encourage moral hazard?

    I don’t think it is entirely unlikely that someone will stop paying their mortgage (or pay less and late) in an attempt to gain some of these benefits.

    What is at stake here? A hit to their FICO? I’m guessing there are a good portion of subprime borrowers with low enough FICOs to give this a shot.

    These kinds of bailouts will most certainly lead to moral hazard. The question is, to what extent?

    Sorry to use you as a psychological indicator Al, but your post has made it very clear that rewarding risky behavior is going to encourage it.

  19. Shore Guy says:

    Is anyone aware of sites, similar to NJ by the numbers, for other states? I especially found interesting the subprime overlay. It helps identify areas that are likely to implode.

  20. Sean says:

    Personal assests under a certain amount $1,000 are exempt. NJ also has a Homestead provision.

    The biggest issue would be you may be foreced to pay it all back since the laws were changed in 2005. There is now a means test for Chapter 7 bankrupcy which would erase your debt. The bar is quite low.

    To file for Chapter 7 bankruptcy, which if approved by a judge, erases debts entirely after certain assets are forfeited. But those with income above the state’s median income who can pay at least $6,000 over five years — $100 a month — would be forced into Chapter 13, where a judge would order a repayment plan.

  21. Shore Guy says:

    # 14 “Do you think this is considered a fraud??”

    God help us all, yes I do think it is fraud. Of course, if convicted, one could expect several more months of free rent, food too; although one may not have a choice as to roommate or shower companion(s). Still, the experience gained making license plates can’t be matched on a resume.

  22. bi says:

    After reading so much glooming and dooming on this board, I am trying to do different things for holiday gifts under $100. Please advise which of the following is better:

    1) 5 gallons of premium gasoline;
    2) 5 pounds of frozen FDA approved organism chicken legs;
    3) Certificates of 1 share of GLD;
    4) Gift certificate dominated by GBP and issued by BP.

  23. grim says:

    Shore,

    Keep in mind two things, that dataset doesn’t include the very risky Alt-A loans and it does include lower-risk fixed-rate subprime.

    Default rates on fixed-rate subprime loans aren’t skyrocketting like their ARM counterparts. Their default rates are actually more similar to fixed-rate prime than subprime ARM.

    Also, the mid/high-FICO borrower who took out a No-doc/NINA loan that got bucketted as Alt-A isn’t included. This may also include the neg-ams, options, IOs, teasers, etc.

    The problem is not “subprime”. We’re seeing it manifest itself first in “subprime” because that is where the marginal borrowers are.

  24. Richie says:

    5) One pant leg from a $300 pair of jeans. Next year they can get the other half, the year after they can get the waistline.

  25. Shore Guy says:

    #23 “organism chicken legs”????????

    Isn’t a chicken the only organism that has chicken legs? Organic, maybe?

    Of course, I did once see a sign advertising “Orgasmic chicken.” Curious as I was, I did not even ask.

  26. BC Bob says:

    bi [23],

    How about add #5.

    Go to Port Newark and pick up a cargo container. Best fo all it’s free. Now go buy me 1 share of GLD, you’ll even have approx $18 left over.

  27. gary says:

    Al,

    What you propose is not fraud at all. It is now the accepted method to gaining wealth in America.

  28. Shore Guy says:

    Grim,

    Do you find that alt-A loans are used more often in areas that also have a higer number of sub-prime mortgages, or is there no relationship?

  29. AL says:

    TO post #19 – Excactly my point – I do not really care for my FICO score – they are very high, but it does nto matter to me right now.

    I probably will nto do it simply because I do not believe that 20-30K are worth it – for all the pain it will bring. However if big bail-out will become a law – such as freeze rates and convert ARMs into fixed rate loans below market 30 years rate – I will do it in a heartbit.

    Also reading another post about lady who used 30K home equity to pay off her Lexus –

    Why don’t take her lexus away from her??? The moment she is late with her mortgage payments???

    Bailout and work-arounds will encourage people not to pay their mortgages. Period.

    Banks which do work-arounds are effectivelly allowing so called “home owners” to STEAL from their respective shareholders…

    TO post #20 – Darn you, low median income state of NJ!!!!!

  30. grim says:

    bi,

    For kids? Get them 1/10th or 1/20th oz. gold coins. Tell them it is “pirate treasure”. Buy online in bulk to keep costs low (avoid tax, cut shipping).

  31. rhymingrealtor says:

    Shore Guy,

    To add to Grim’s post #24, I went to that website and typed in the town that I work and live in. There were 20 sales, I printed out and checked each one. It would seem that the prices are very high, however checking the list 11 of the 20 were 2,3 or 4 family dwellings, 9 could not be found at all but of those 9 I know of 2 that were not sales but re-fi’s and both are not worth today what they were re-fied for.I assume a good part of the remaining 7 were also re-fi’s I have personally noticed that re-fi’s were even more inflated for appraisal than sales.
    Thats info from ground zero.
    KL

  32. grim says:

    Shore,

    Here is a good primer on Alt-A. It touches on why Alt-A is so difficult to define.

    http://www.securitization.net/pdf/nomura_journey_060303.pdf

    The bulk of the Alt-A mortgage options were used as “affordability” products. Where were they used most commonly? In areas where borrowers had high FICO scores, but couldn’t afford to purchase using conforming loans. Where is this? Your guess is as good as mine. But I’ll wager a guess anyway and say it’s probably not in the same places that subprime was common.

  33. Sapiens says:

    Off topic, yet highly relevant:

    The End of America, presentation by Naomi Wolf.

    A highly informative and descriptive presentation about our present socio-political environment.

    http://www.youtube.com/watch?v=RjALf12PAWc

  34. kettle1 says:

    BC Bob, I am actually in the market for a container. i have quotes for 2K for a used container, including drop off. How do you get them for free?m (if you are serious)

  35. Sapiens says:

    oops, it’s Noami not Naomi, mea culpa.

  36. kettle1 says:

    Need some help. Lost my bookmarks file (long story) and cant remember the name of the website similar to zillow that list homes for sale. (not realtorDotcom) Does anyone know what site i am talking about? thanks

  37. BC Bob says:

    kettle [34],

    I recall reading that Port Newark was offering them for free. However, that was a few months ago. There may have been a run on them.

  38. John says:

    SHORT SALE FEVER – So awhile back I said when the Hamptons get hit we will be entering the begining of the bottom of the U of the downturn. Last RE downturn in the tristate area first came the Hamptons, (can’t hold on to summer home in bankruptcy), then tony surburban neighborhoods and then park ave coops.

    Up till now it was crap box builder homes and shit neighborhoods that were getting slaughtered. Well I got three short sales in Hamtons today, one is a brand new 2005 custom built home already in the tanker and the other two are recent sales with home improvement loans out the wazoo. This is a good sign. Means we have only a year or two to bottom. Can’t wait to see the short hills and gramercy park foreclosures come Feb 08!!!!

  39. kettle1 says:

    From Financial Times


    ““Our entire banking system is a complete disaster,” he wrote. “In my opinion, nearly every major bank would be insolvent if they marked their assets to market.” He also said he would be putting some of his own profits into gold and other precious metals.”

  40. grim says:

    News about layoffs is interesting, although not entirely applicable to our area. The juicy bit comes at the bottom..

    From Reuters:

    JPMorgan to cut about 100 subprime jobs

    JPMorgan Chase & Co Inc plans to cut about 100 subprime mortgage jobs in California amid falling U.S. housing prices and tighter lending standards.

    JPMorgan said it has reduced subprime originations and operations staff because of home price weakness and tighter credit standards. About 40 percent of JPMorgan’s 2006 subprime originations would not be approved under today’s standards, the bank said in a statement.

    The bank has discontinued, for example, all subprime home equity loans. JPMorgan has said that it expects to originate about $1 billion subprime loans per month.

  41. grim says:

    From Bloomberg:

    Homebuilders drop after Citigroup says rally unlikely

    Lennar Corp. and Centex Corp. led a decline in homebuilders after Citi Investment Research said U.S. real estate prices may continue to weaken.

    Prices of new homes have dropped and those of previously owned homes have “far to fall,” analysts including Stephen Kim wrote in a note to clients.

    “The recent deterioration in the broader indices and increased recessionary concerns reduce the likelihood of a near-term rally in the homebuilders,” Kim said.

    Homebuilder shares would need positive news on subprime mortgages in order to recover and “it is unlikely that the market will have sufficient information in this regard to warrant a relief rally” until at least the second quarter of next year.

  42. kettle1 says:

    oops the link to the article

    1000% hedge fund wins subprime bet

    By James Mackintosh in London
    Published: November 25 2007 22:20 | Last updated: November 25 2007 22:20

    http://www.ft.com/cms/s/0/7b6160be-9b80-11dc-8aad-0000779fd2ac.html

  43. njrebear says:

    Investor Optimism Falls to 2-Year Low on Economic Concern: UBS

    http://www.bloomberg.com/apps/news?pid=20601087&sid=awccZzjZzOUE&refer=home

    The U.S. economy is slowing or in a recession, according to 79 percent of the UBS survey’s respondents, up from 68 percent in October. Thirty percent of those surveyed said they plan to spend less during this holiday shopping season than last year.

  44. Shore Guy says:

    Grim,

    Does the HMDA require banks to identify Alt-A loans as such?

    Shore

  45. lisoosh says:

    Grim, #19 –
    “I don’t think it is entirely unlikely that someone will stop paying their mortgage (or pay less and late) in an attempt to gain some of these benefits.
    ..
    Sorry to use you as a psychological indicator Al, but your post has made it very clear that rewarding risky behavior is going to encourage it.”

    Funny you should mention it, but on the seller boards I was tracking, the sentiment for those in trouble was that their potential bancruptcies would be treated more leniently because they would be part of the whole “subprime crisis”. In effect, having more people in trouble removes the stigma and is making MORE people cavalier about the prospect of FC/BK or any other measure. They don’t believe they will suffer too much in terms of long term consequences.

  46. BC Bob says:

    “The number of postponed initial public offerings in the US and Europe has reached record levels this quarter, with 10 times as many being put on hold in the past six weeks than in all of the final three months of last year, according to data provider Thomson Financial.”

    “A total of 82 initial public offerings, 67 in the US and 15 in Europe, have been pulled as companies are reluctant to face turbulent equities markets. Only eight, two in Europe and six in the US, were shelved in last year’s fourth quarter.”

    http://www.financialnews-us.com/?page=ushome&contentid=2349256833

  47. pretorius says:

    Grim 40,

    It is important to highlight that the JP Morgan people getting fired work in Southern California.

    This where the largest subprime lenders are HQed. Orange County today is like Silicon Valley in 2001.

    Just got the employment data for the top 23 MSAs. Only two metros have lost jobs this year – Detroit and Orange County.

    Orange County is still a great place to live and it will recover. Same can’t be said about Detroit though.

  48. chicagofinance says:

    pretorius Says:
    November 26th, 2007 at 8:52 am
    Shore Guy,That is one of my favorite websites.
    I looked up Hoboken in the home sales database.
    Thru first 6 months of 2007, sales up 7% and prices up 4% compared to same period last year.

    pret: ya’ think that repeats…..also mix?

    Past performance is no indication of future results……

  49. chicagofinance says:

    lots o’ Maxwell flips in there no?

  50. grim says:

    Shore,

    I’m no expert on the HMDA disclosure requirements, but I don’t believe the type of loan is disclosed (prime, subprime, alt-a). What is disclosed is the rate spread, which allows you to determine high/low cost loans. Some folks use that data to make assumptions on the prime (lower rate) to subprime (higher rate) ratio.

    Tanta over at CR has a gift for deciphering this sort of thing, you may enjoy these pieces:

    http://calculatedrisk.blogspot.com/2007/10/hmda-data-on-high-priced-loans.html

    http://calculatedrisk.blogspot.com/2007/09/nerdfest-2006-hmda-data-analysis-is.html

  51. lisoosh says:

    For your listening pleasure:

    British spoof song about the LAST housing crash (80’s) to the tune of Madness:

    http://www.youtube.com/watch?v=2t8YTvdYXws

    Our house, in the middle of the slump
    Our house, no one wants to buy this dump

    Our house, in the middle of the boom
    Our house, it was worth a small fortune

    Our house, didn’t work out like we planned
    Our house, prices dropped by fifty grand

    Our house, threw us out and changed the locks
    Our house, it is now a cardboard box!

    Background info: Spitting Image was a UK satire show using puppets of the headliners of the time. Thatcher was PM, Reagan was in power, the cold war still ongoing.
    Worth a perusal in YouTube to anyone interested. Loved this stuff growing up.

  52. x-underwriter says:

    grim Says:
    November 26th, 2007 at 10:17 am
    News about layoffs is interesting, although not entirely applicable to our area. The juicy bit comes at the bottom..

    JPM just laid off about 70 people in retail subprime operations in Woodcliff Lake, NJ a few weeks ago. This represents “most” of the production staff.

  53. Sean says:

    re: (33)

    Sapiens, I disagree this is not relevant to this discussion on Real Estate in NJ but since you brought it up.

    The end of America? Naomi Wolf is no less nutty than Ann Coulter since she is is just another a political hack for hire.

    She is a feminist activist who believes that men are the oppressor class, women are the victim class, and women are consequently entitled to take over the oppressor role, at least for the next few thousand years! LOL!

    She also has stated that the 3rd Reich blueprint is now imprinted on our society. Does that not sound familiar? It is just another spin on if you are not with us you are against us mentality. Wonderful way of thinking, if you are not a libertarian then you are a Nazi.

    Another thing, the terrorist watch lists are necessary, it is the implementation of them by hiring incompetents that creates the issues at the airports.

    She espouses almost hippie like “real freedom”, but cannot even define what that is, we need a “democracy law” what the hell is that?
    This person is a Rhoades scholar and Yale graduate and I cannot hear anything from her but common rhetoric with no real substance on how to better run
    this country.

    If the libertarians want Ron Paul to have any real shot they need to move quickly and get this person off of their campaign. Hillary Clinton wisely
    kept her off of her campaign and the libertarians should do the same.

  54. Aaron says:

    citi cuts are going to gut the NY/NJ job market.

  55. Orion says:

    Black Friday & Cyber Monday:

    It is just astounding to me how materialistic this culture has become. Watching people trample over each other to enter retailer is, imho, outright disgusting. Like watching a hot dog eating contest.
    70% of GDP based on consumerism is absurd.
    U.S. is one humongous hot dog eating country.
    I wish it was 70% GDP from manufacturing.
    I wish.

  56. scribe says:

    kettle, #36

    Trulia.com?

  57. BubbleYum says:

    lisoosh Says:

    . . . on the seller boards I was tracking, the sentiment for those in trouble was that their potential bancruptcies would be treated more leniently because they would be part of the whole “subprime crisis”. In effect, having more people in trouble removes the stigma and is making MORE people cavalier about the prospect of FC/BK or any other measure. They don’t believe they will suffer too much in terms of long term consequences.
    ________________________________________________

    Then they don’t have a very good understanding of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. I could see some separate bailout of subprime borrowers, but it’s not going to be under our current bankruptcy laws.

  58. Sapiens says:

    Sean[53]

    Clearly you didn’t watch the presentation; if you did, then you fail to understand her reasoning.

    For a basic and fundamental edification in the subject matter, I suggest you begin here with this tome:

    http://www.context.org/ICLIB/IC07/Schmoklr.htm

  59. gary says:

    Orion [55],

    Big, fat, stupid, drunken, ignorant morons force fed Dreamworks and Disney/Pixar scrap, Big Macs and video games. That’s what we’ve become. I do remember when families went on Sunday drives and played a board game together after dinner. If I’m being old-fashioned and disconnected then I’ll take it every time.

  60. kettle1 says:

    #56 thats it, thanks :)

  61. John says:

    Why do I feel like having a hotdog for lunch?

    Orion Says:
    November 26th, 2007 at 10:58 am
    Black Friday & Cyber Monday:

    It is just astounding to me how materialistic this culture has become. Watching people trample over each other to enter retailer is, imho, outright disgusting. Like watching a hot dog eating contest.
    70% of GDP based on consumerism is absurd.
    U.S. is one humongous hot dog eating country.
    I wish it was 70% GDP from manufacturing.
    I wish.

  62. stuw6 says:

    My Recession Recipe

    The housing ATM financed $310 billion/yr worth of personal consumption from ’04 to ’06.

    Can our economy absorb a 310 billion a year drop in consumerism? That amounts to over $1,000 worth of spending per U.S. resident or nearly $3 per day (if you want to look at it in a different way).

    Then factor in oil prices that are 30% higher in real terms and wages that are not keeping up with the rate of inflation (which is increasing). Sprinkle in some diminishing value of the dollar as well as your home value down 30%.

    Cook all ingredients for 2 to 3 quarters.

    Yield: Major recession.

    How can you argue with this?

  63. Ed Sanders says:

    Apologies if this was addressed earlier, but just wanted to note something about Post #1:

    Grim,

    There’s nothing really unusual about that. I’ve been to plenty of Council meetings where a developer sought the release of a performance bond before the town was ready to say yes.

    I’m not saying you’re wrong, but that such a request and a denial aren’t unusual so it’s impossible to say what it might mean.

  64. njrebear says:

    Wall St bonuses to separate haves, have-lots

    http://biz.yahoo.com/rb/071121/wallstreet_bonuses.html?.v=3&.pf=career-work

    …Beneath the surface, though, individuals will see everything from increased payouts to pink slips.

  65. grim says:

    From MarketWatch:

    Citigroup in planning process to be more cost effective

    Citigroup Inc. said on Monday that it’s in a planning process to become more efficient and cost effective. The move is designed to position Citi’s businesses “in line with economic realities” and comes in anticipation of a new chief executive at the financial-services giant, spokesman Michael Hanretta said in a statement. CNBC reported earlier on Monday that Citi may cut up to 45,000 staff. But Hanretta said any reports on specific numbers “are not factual.”

  66. vj says:

    Maybe it’s already posted earlier.

    Feds’ budget tricks hide trillions in debt

    http://articles.moneycentral.msn.com/News/FedsBudgetTricksHideTrillionsInDebt.aspx?page=all

    Every year, tens or even hundreds of billions of dollars are quietly added to the national debt — on top of the deficits that we hear about. What’s going on here? …

  67. commanderbobnj says:

    grim,
    Could you please check-out my #65 post; It is stuck in “awaiting moderation” !?—–Thanx

  68. SG says:

    On NYTimes, By ROBERT J. SHILLER

    A Time for Bold Thinking on Housing

    WE have to consider the possibility that the housing price downturn will eventually be as big as that of the last truly big decline, from 1925 to 1933, when prices fell by a total of 30 percent.

    As of this August, domestic home prices were already down 5 percent from their peak 14 months earlier, according to the S.& P./Case-Shiller Composite Home Price Index, and prices were falling at a faster rate in the months leading up to August. (Updated data will appear on Tuesday.)

    The article need registration on website.

  69. John says:

    Dead Cat Bounce. A few on this board have been optomistic as of late claiming the blue chip NJ towns will have a good spring – ain’t happening.

    Foreclosures and short sales are popping up everywhere and resets will be in full trottle in 2008. The largest foreclosure realtor on Long Island said today he is doubling staff to handle the 2008 tidal wave. My foreclosure realtor gets watch lists from the banks of homes that appear to be headed down the path of a bank approved sale. The people in the blue chip towns are trying their best to hold on unlike the poorer neighborhoods where people walk away quicker. But 401K loans and credit card loans won’t help much when you have a neg am, balloon or a 3/27 loan with a teaser rate.

    Bottom line, your mtg payment is around 6K a month, you have 100K negative equity in the house and that mcmansion is burning almost $4 dollar a gallon heating oil while your taxes are pushing 20K, it is a deep hole to dig out of. Banks are pretty flexible right now on short sales and any attorney with a lick of common sense would have his client go that route.

    This in turn will wreck the comps and the rest of the have to sell people, divorce, death, retired, relocated will have to accept the new prices and finally the nuts holding out for 2005/2006 prices will then capitulate. Watch out North Bergen – 2008 will be fun year, hey at least you can grieve your assessed value of your house come year end.

    There may be a long bottom and houses will eventually go back up. But when we do hit bottom is it 1, 2, 3, 4, 5+ before homes start rising at a rate higher than inflation again, who knows.

    Two big questions, when will we hit bottom and when will we rise again. Hitting bottom may not be the excitment that get people buying again. We hit bottom in NYC coops in 1992 and it was not untill 1999 that they started to take off again.

  70. bi says:

    71#, john, hampton is like a premier jersey shore. the characteristic is different from commuting towns such as short hills and summit. for now, i don’t see any sign of deppreciation in these nj commuting towns.

  71. dreamtheaterr says:

    Remember BoA said CFC was cheap at $19 in mid Sep. Fast forward 2 months and their investment has halved.

  72. 3b says:

    #19 grim: maybe the whole bailout issue should be factored into the equation, when people are considering bids/low balls.

    Potential buyers need an additional price discount, as a premium against market manipualtion, in the form of rate cuts or other bailouts etc.

  73. grim says:

    bi,

    777 Springfield Ave, Apt 8
    Sold: 11/20/2007
    Sale Price: $399,000

    Comps
    Apt 16
    Sold: 4/2006
    Sale Price: $420,000

    Apt 21
    Sold: 4/2005
    Sale Price: $430,000

    Apt 20
    Sold: 3/2005
    Sale Price: $406,000

  74. Shore Guy says:

    I take it from GS, RE folks here, and the pronouncements of former Fed officials, etc, that in the NJ area we can be looking at 30+% drops over around 3 years. If we consider this in a climate with 3% inflation, it is an easy 40% loss in value that current owners will be facing. Given the carrying costs current owners will have during that period (not even considering the time value of the money if it were invested elsewhere) someone who sells in 3 years, rather than today, will likely take a pretty good hit (notwithstanding some localized strength here and there).

    Ifone buys today, one can expect to be the one taking that hit. So, why whould anyone who does not need to move and who has good credit and ready access to downpayment and closing cost cash begin negotiations above 55% of asking price right now? In fact, if things get rougher, eventhat might be overpaying.

    Thoughts?

  75. kettle1 says:

    From VJ’s articles linked above

    When the imaginary interest payments are included, Social Security and Medicare are running at a tranquilizing surplus (that $181.5 billion mentioned earlier). But measure actual cash, and the surplus disappears.

    In 2005, for instance, the Social Security Disability Income program started to run at a cash loss. 2007 is the first year that Medicare Part A (the hospital insurance program) benefits exceeded income.

    The same thing will happen to the Social Security retirement-income program in six to nine years, depending on which of the trustees’ estimates you use. During the same period, the expenses of Medicare Part B and Part D, which are paid out of general tax revenue, will rise rapidly.

    Despite this, the Social Security Administration writes workers every year advising them that the program will have a problem 34 years from now, not six or nine years. In fact, the real problem is already here. It will be a big-time problem in less than a decade.

    This article touches on a landmine that i think has the potential to seriously damage the recovery of the current housing mess and the recession that we are just entering.
    The Boomers officially started moving onto the SocSec rolls this past year. They will be moving onto the rolls in full force over the next 5-10 yrs. As the Boomer retirement accelerates tax revenues will drop and government obligations will be called due ( yay increasing taxes and decreasing tax base!). Nj alone is in the hole for something like 10 BILLION dollars of unfunded benefits, but this will be a truly national issue. This is the 800 pound gorilla in the room that no one wants to talk about. We would most likely be either into recovery or starting to recover right at the point when the fiscal impact of the boomers really starts to hit. This has the potential to make any recovery lackluster at best and could potentially undue any recovery.

  76. Rich In NNJ says:

    From MarketWatch:

    SUBPRIME TODAY 11/26

    HSBC to provide $35 billion in funding to SIVs
    Freddie Mac, Fannie Mae cut to neutral at UBS
    Virgin Group named preferred Northern Rock bidder
    Spreads on Japanese credit defaults narrow as banks’ subprime becomes clearer
    TD Ameritrade,Schwab still interested in E-Trade assets
    E*Trade Sale May Hinge On Mortgage Portfolio
    1000% hedge fund wins subprime bet
    Citigroup Feels Heat To Modify Mortgages
    Where Countrywide Chief Is Finding a Life Preserver

    Links to above stories located here.

  77. Sapiens says:

    BOB[66] Says:

    “Exactly, WE GOT ‘HIT’ on 9-11—–The primary PURPOSE of our government [Mr. Sapiens] is to PROTECT ‘US’from enemies both INTERNAL and EXTERNAL !!—–GET IT ???

    BOB”

    Wrong, the job of our government is not to protect us. It is instituted to keep order so we may enjoy our Liberty.

    The government is not your Mom and Pop, they are your peers that need to be kept in check so they don’t end up enslaving you.

    -Sapiens

  78. #77 – kettle1 – This is the 800 pound gorilla in the room that no one wants to talk about.
    Absolutely. No one has wanted to talk seriously about what to do for a very long time now. I was re-reading Thompson’s The Great Shark Hunt, and was surprised to see that it was a minor campaign issue in `72.
    I don’t think your scenario is too far out of line either. Its about what I fear will happen, perhaps slightly magnified by decreasing immigration as China and India get wealthier.

  79. schlivo says:

    #71
    “when will we hit bottom and when will we rise again.”

    Since JB called the top of the market almost spot on, I’ll wait for him to call the bottom of the market.

  80. schlivo says:

    #71
    “when will we hit bottom and when will we rise again.”

    Since JB called the top of the market almost spot on, I’d wait for him to call the bottom of the market.

  81. zieba says:

    HSBC bails out two funds by injecting $45B (with a B) of own assets into the funds.
    Nice!

    http://biz.yahoo.com/ap/071126/britain_hsbc.html

  82. grim says:

    From the WSJ:

    Schumer’s Letter on FHLB Loans
    November 26, 2007 2:10 p.m.
    Sen. Charles Schumer, a New York Democrat, urged regulators to examine potential risks posed by a sharp increase in lending by the Federal Home Loan Bank of Atlanta to Countrywide Financial Corp., the nation’s biggest mortgage lender. The following is his letter to regulators.

    November 26, 2007

    Ronald A. Rosenfeld
    Chairman
    Federal Housing Finance Board
    1625 Eye Street NW
    Washington, DC 20006

    Dear Chairman Rosenfeld:

    I write to express my serious concern over the lending practices of the Federal Home Loan Bank of Atlanta, specifically in regard to the significant volume of advances made to Countrywide Bank. I am concerned that the loans being pledged by Countrywide to secure these advances may pose a risk to the safety and soundness of the FHLB system as a whole. I urge you to conduct a careful review of FHLB Atlanta’s collateral evaluation policies, as well as Countrywide’s pledged collateral, in an effort to determine the risk that Countrywide’s collateral poses to the FHLB system. During the current market crisis, it is important that the FHLB system perform its critical mission safely without imposing additional risks on an already strained market.

    According to the most recent SEC filings, FHLB Atlanta had made $51.1 billion in advances to Countrywide Bank, representing 37 percent of the Bank’s total outstanding advances as of September 30, 2007 and far exceeding advances made to the next largest borrower. Countrywide had pledged $62.4 billion of mortgages as collateral for the FHLB advances, representing 78 percent of its total mortgage loans held for investment at the bank.

    I find these numbers alarming as reports continue to emerge about how Countrywide’s reckless and predatory lending practices were a leading contributor to today’s foreclosure crisis. Moreover, it is my understanding that Countrywide’s loans held for investment at the bank have been far from immune from the credit deterioration that has resulted from unsound lending.

    Countrywide reportedly held $27 billion of “pay option ARMs” as of September 30, 2007, accounting for over one-third of the loans held for investment by the bank. Countrywide’s option ARMs were (and may still be) often underwritten with less than full documentation – according to UBS Warburg data prepared for the Wall Street Journal, 91 percent of Countrywide’s option ARMs underwritten in 2006 were “low doc.” It has been reported that delinquencies on Countrywide’s pay option ARMS are skyrocketing, jumping nearly 75 percent in the last quarter.

    Given this rapid deterioration in the credit quality of Countrywide’s option ARMs, I urge you to conduct a review of the loans that are being held as collateral for FHLB advances in an effort to determine if FHLB Atlanta has adequate collateral to secure these advances. I would also like an explanation of how any second lien mortgages during a time of property price declines could be viewed as adequate collateral for large FHLB advances.

    Furthermore, I believe that you should consider preventing any further or continuing overnight advances based on collateral that does not meet the joint financial regulators’ guidance on nontraditional and subprime mortgage products (e.g., Interagency Guidance on Nontraditional Mortgage Product Risks and joint Statement on Subprime Mortgage Lending). This quarter, Countrywide reported that 89 percent of their 2006 originations of pay option ARMs did not conform to the joint regulators’ guidance, which increases the likelihood that Countrywide is pledging loans deemed predatory by the regulators as collateral for FHLB advances. Importantly, Fannie Mae and Freddie Mac’s safety and soundness regulator has specifically prohibited any new direct or indirect investment in loans that do not meet this guidance. As the mortgage crisis threatens to get worse from here, it is critical that the FHFB do the same.

  83. John says:

    Saying Hamptons is like a premier jersey shore town is like saying Atlantic City is just like Vegas!!

    BC to me is just another of many locations for professionals to live in. Harrision, Manhasset, Greenwich etc are all better in my book. In a weak market BC will get hit. The bank foreclosure web sites have finally been listing premier jersey towns and short sales are sometimes difficult to detect. The premier town near me has had no price decreases only cause people are holding out for their price and sometimes they find someone who feels they must live in that town. Meanwhile inventories are piling up and the game of chicken will come to an ugly end.

    bi Says:
    November 26th, 2007 at 12:42 pm
    71#, john, hampton is like a premier jersey shore. the characteristic is different from commuting towns such as short hills and summit. for now, i don’t see any sign of deppreciation in these nj commuting towns.

  84. cnjrenter says:

    can someone get me info on the following gsmls property? Address, LP, etc.

    gsmls# 2460471

    thanks in advance

  85. grim says:

    cnj,

    16 Timberhill

    MLS# 2100492
    Listed: 9/2/2005
    OLP: $729,900
    LP: $649,900
    DOM: 182
    Expired

    MLS# 2256101
    Listed: 3/12/2006
    OLP/LP: $649,000
    DOM: 183
    Expired

    MLS# 2428012
    Listed: 7/20/2007
    OLP/LP: $560,000
    DOM: 14
    Withdrawn

    MLS# 2460471
    Listed: 11/6/2007
    OLP/LP: $539,900
    DOM: 20

    Not sure if this one was forclosed and currently owned by Wells.

    Was purchased for $466k in 2004.

  86. grim says:

    Yessir (ma’am?), it was a foreclosure/REO.
    You can find the details at the Wells REO site..

    http://www.pasreo.com/reo/

  87. bi says:

    FYI: 10 year treasury yield down to 3.85%.

  88. njpatient says:

    Kettle and tosh, if I were making a list of pressing national concerns, I’d put Social Security somewhere down around 200.

  89. bi says:

    91#, what is at the top of your list? housing slump?

  90. grim says:

    bi,

    I’m proud that you can come back here and say that you were wrong on your forecast.

    Kudos bi

    We can’t be right all the time..

  91. syncmaster says:

    109 Forest Drive 08854

    Sep 2005 bought (new construction) for 318.9k
    Sold recently (don’t have exact date) for 340k (source:http://www.aboutourtown.com/towns/pi/realestate/pi_real_index.htm)

    That’s 21% more. Did the buyer pay too much?

  92. chicagofinance says:

    Regarding: Today…techs and financials…..phucker!!!!!

  93. spyder says:

    can someone get me info on the following NJMLS property? Address, LP, etc.

    NJMLS # 2640319

    thank you,

    by the way excellent website Grim

  94. cnjrenter says:

    wow!!! 729K to 539K.

    Thanks grim.

  95. grim says:

    spy,

    163 Lozier

    Listed: 10/13/2006
    OLP: $999,000
    Current LP: $899,900
    DOM: 410

  96. bi says:

    94#, your math is wrong. it does not end up 21% more from 319K to 340K.

  97. syncmaster says:

    Umm yeah. My math was wrong. My bad *embarrassed*

  98. njpatient says:

    bi: “91#, what is at the top of your list? housing slump?”

    No – generalized assault on the Constitution goes there.

  99. grim says:

    From the AP:

    Fieldstone Mortgage Unit Files Ch 11

    A housing lender acquired nine months ago by Credit-Based Asset Servicing and Securitization LLC has sought bankruptcy protection, highlighting the growing toll of the subprime-mortgage crisis.

    Fieldstone Mortgage Co., which originated $5.5 billion in mortgages last year, filed for Chapter 11 protection in U.S. Bankruptcy Court in Baltimore on Friday. The company said it has little cash to finance its operations and would be forced to shut down unless it’s allowed to borrow $3.8 million from Credit-Based Asset Servicing and Securitization, or C-Bass.

    “Without immediate access to a post-petition financing facility, the debtor will be unable to operate as a going concern,” said Fieldstone, which didn’t provide a detailed accounting of its assets and liabilities. The Columbia, Md.-based company said only that it had more than $100 million in liabilities and less than $100 million in assets.

  100. Jamey says:

    (101)

    Wow, NJPatient, you’re two-for-two today!

  101. John says:

    ON top of basking ridge, Wells Fargo has foreclosures in Morristown, Maplewood, Glenn Rock, Hasbrouk Heights.

    http://www.pasreo.com/reo/consumerSvlt/nav/ConsumerNavL1.jsp/requestPage/consumer/PropertySearch.jsp

  102. 101 – njpatient – For me the Soc Sec mess and the trampling of the Constitution are inter-related.

  103. RayC says:

    Could someone find the address for this property?

    MLS ID# 2457378

    Thanks.

  104. mikeinwaiting says:

    CNBC Charlie G. Citi group to cut 30 to 45
    thousand jobs.Train towns,bergen cty watch out.

  105. stuw6 says:

    104 John:

    None in Montclair…yet.

  106. kettle1 says:

    NJ paitent,

    The US is similar to a person with an HIV infection. HIV is not what kills you, its the secondary infections. While SS may not be the 31 issue facing the country it is one of many that are just adding another straw on the camels back. I personally think that the 2 most important issues facoing the country are the disregard for the constituion ( iagree with you) , but the horrendous financial condition that our country is in is nearly as perilous. A bankrupt country experiencing hyper inflation can have the greatest constitution ever written, but if the population is homeless and starving it doesn’t mean that much. really the core issue behind both of these things is a combination of apathy and education. The general public has fallen for the bread and circus hook line and sinker.

  107. stuw6 says:

    Wow…look at DHI? Then look at SRS ;)

  108. grim says:

    stuw6,

    That site only lists Wells Fargo REO properties. Not other lenders..

    RealtyTrac has 20 Montclair REOs listed.

  109. njrebear says:

    LOL @ Stu 110

  110. njpatient says:

    109 kettle

    I understand what you’re saying, but as currently constituted, SS is solvent through 2042. On the list of purely economic issues that could bankrupt the country, even then it’s low on the list.

    But I do think economic strength is extremely important. Without it, military strength is short lived.

  111. njrebear says:

    from #84
    Furthermore, I believe that you should consider preventing any further or continuing overnight advances based on collateral that does not meet the joint financial regulators’ guidance on nontraditional and subprime mortgage products

    Wow!

  112. John says:

    Why the heck would SS bankrupt country?

    First of all SS disability and widow and orphan protection was not originally part of SS and can be canceled, secondly they can just keep raising the retirement age. Heck they can make retirement 75. We did not have SS for most of the history of the US. We will go back to having aged parents living with their grown sons and daughters. Big Deal.

  113. grim says:

    #114 – Cutting off the methadone..

  114. bi says:

    now it is official: S&P YTD return -1%. Chifi, your clients are taking money out?

  115. RayC says:

    To the Real Estate Professionals –

    I have a question about Certificate of Occupancy. I generally only see this mentioned on a property in need of some repair, as in “buyer responsible for CO”. Does this mean that they have already identified problems and lost a CO? Or is a new CO required with every sale? Thanks.

  116. pretorius says:

    Chicagofinance featured in apartment ad

    https://post.craigslist.org/manage/489786069/apvqw

  117. njpatient says:

    119

    WTF?

  118. John says:

    CO stands for Caucasions Only and is a racist real estate term. Not to be confused with the building terminology which stands for Cash Only which is what the building inspector wants in order to give you that permit for your illegal deck.

    Funny CO story, not for seller, the house I bought had an illegal bathroom, enclosed porch and deck. Seller agreed in his contract to pay all costs associated with obtaining outstanding COs and put money into escrow. The dope did not specify the Bathroom, encolsed porch and deck COs. So after closing I get the building inspector at my house and it turns out that two owners ago that guy actually raised the roof on the house and put an illegal second story deck and the person I bought it from missed that when he bought. Well since he said all COs in contract he paid for all of them. He need a better lawyer.

  119. John says:

    Chase Assumptions
    Conforming loan amounts of $215,000 to $417,000
    Single family residence
    Down payment of 20% or more

    And for this you get 5.75 30 year loan. Times have changed.

  120. this couldn't have been posted by grim says:

    MarketWatch Headline of the Day ™

    Dick’s Sporting Goods to buy Chick’s Sporting for $40 mln

  121. chicagofinance says:

    bi Says:
    November 26th, 2007 at 4:13 pm
    now it is official: S&P YTD return -1%. Chifi, your clients are taking money out?

    huh? They are applauding…..

  122. RayC says:

    NY Post will report “Chicks With Dicks Sporting”

  123. scribe says:

    #119

    Chi,

    Charge ’em a licensing fee for the use of your good name :)

  124. HEHEHE says:

    Re 119,

    Hey Pretard,

    Did your buddy at Kannekt send that to you?

  125. pretorius says:

    Yeah I found that on Kannekt. Thought chifi might want to know about it. I posted the link than enables anybody to change the ad, so maybe chifi can go in and delete references to himself.

  126. pretorius says:

    Today was worst day for US REITs in more than 10 years. Down 5.33%.

  127. chicagofinance says:

    Donald Duck is the one responsible.

  128. bi says:

    129#, what index do you look at? i look at commercial REITs index IYR. it is down less than 4%. it was worse in 2004 spring.

  129. rhymingrealtor says:

    RayC

    Most towns ( although not all ) require CO at each sale. Some ( most towns ) require very little except they do check for outstanding permits, and also check prior CO where notes are made regarding bathrooms, decks, etc. So you may be buying a house that will cost you 75.00 for CO inspection and you’ll need some smoke alarms, a fire extinguisher, and some handrails. Usually though when the buyer is required to obtain CO the house is in disrepair and will fail for many things. In that case if the price is right you would apply for temporary CO to close and take care of the repairs yourself.

    I think I covered your question?

    KL

  130. pretorius says:

    Bi,

    Price-only version of the MSCI U.S. REIT Index (RMZ)

  131. BC Bob says:

    bi Says:
    November 26th, 2007 at 4:13 pm
    now it is official: S&P YTD return -1%. Chifi, your clients are taking money out?

    [117],

    Why do you assume that everybody is long?

  132. bi says:

    132#, pret. thanks.

    today is an interesting day: techs, pharmas and utilities are doing well today. even gold mining and oil stocks got killed.

    with decreasing rates and increasing stock volatility, i will not be surprised that more people will put their money to hard assets.

  133. bi says:

    133#, most people are long espcially those who need advisors

  134. dreamtheaterr says:

    “i will not be surprised that more people will put their money to hard assets.”

    Wear a helmet and go mining?

  135. grim says:

    Big Sparta Comp Killer..

    15 Maxie, Sparta NJ

    Purchased: 1/5/2004
    Purchase Price: $652,000

    MLS# 2448609
    OLP/LP: $699,000 (Relisted, was at $799k)

    Sale Date: 11/26/2007
    Sale Price: $620,000 (5% below 2004 price, 22% under OLP)

    Loss over 4 years: $62,000 (10%)

  136. scribe says:

    RayC,

    When we sold my parents’ house, before the closing, the township did an inspection.

    My brother had to take care of a few minor things: Install a new smoke/carbon monoxide detector (previously, the house had ADT); and cement up a drain for an old shower in the basement (such basement showers are now illegal).

  137. BOOOOOOOYAAAAAAAAHHHHHHHH says:

    House prices are sliding down the steep slope.

    Just like in early 1990’s sales dried up eventhough prices slid lower and lower.

    Grubbers better run for the exits real fast if they want to even sell their house at 25% off prices.
    The grubbers have their hand on the eject button, but it will be broken when they push it.

    BOOOOOOOYAAAAAAAAAAA

    Bob!

  138. 3b says:

    #140 Welcome back BOOOOOOYAAAAAAAAAAA!!!

  139. 3b says:

    #134 bi: Put their money to hard assets as in real estate, why would they possibly want to do that in this environment? You are delusional!!

  140. BOOOOOOOYAAAAAAAAHHHHHHHH says:

    Can you feel the pain?

    Things ain’t so bad!

    Home buyers from 2003- 2004 are only losing alittle money now.

    Wait ’til Feb – march. hehehehehee

    BOOOOOOOOOYAAAAAAAAAHHHHHHHHHH

    Bob

  141. BC Bob says:

    “133#, most people are long”

    bi,

    Why?

  142. chicagofinance says:

    grim: I think I figured out how you banished our favorite Alpine moron…..

  143. bi says:

    143#, most people put their money on mutual funds, 401K and etc. these vehicles are traditionally go long …

  144. schabadoo says:

    favorite wannabeAlpine moron

  145. Orion says:

    Booooyaaahhh #139

    Where you been? Buying RE?

    John #62

    The best hot dogs ever, at Callahan’s, Fort Lee (if it’s still there)

  146. njpatient says:

    144 – chi
    assume you can’t spill the beans…?

  147. njpatient says:

    boooooooooooyah – mighty good to see you.

  148. njpatient says:

    bi – let me get this straight: folks who go long are folks who need advisers and this is mostly true because folks who go long are folks who are in 401(k)s and the like?

    You would advise folks to stay out of their 401(k)???

  149. grim says:

    Chi,

    When a user tries to post using multiple aliases in a short period of time (2 hours) their alias, IP (actually the first 3 octets), and email address used will get put in the moderation blacklist.

    I don’t run the plugin often because it has a nasty side-effect of inadvertently blocking big chunks of users that are behind a firewall or NAT, or use DCHP providers (where two differnet users are misidentified as a single offender).

    I usually clear out the IP ranges, but I leave the (bogus) emails and user names.

  150. njpatient says:

    Fella doesn’t want to bail out Ben Bernanke and the Big Banks (rockin’ to the SIV hits):
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aKwTA9pi2OZg&refer=home

    “Nov. 26 (Bloomberg) — Bank of America Corp., the nation’s second-largest bank, will lead efforts by Citigroup Inc. and JPMorgan Chase & Co. to convince smaller competitors to help finance an $80 billion bailout of short-term debt markets.
    [….]
    Loomis Sayles & Co. declined to invest after receiving one of 16 invitations for a meeting earlier this month with current Fed Chairman Ben Bernanke, said Daniel Fuss, who oversees $22 billion as chief investment officer at the Boston-based firm.
    […]
    “It’s so nice to get a personal invitation to go to Washington and have a one-hour visit with Ben Bernanke,” said Fuss, who decided participating wasn’t worth the risk to his firm. “Oh, boy, did I feel important for about 27 seconds, and then you smell a rat.” “

  151. Clotpoll says:

    bi (135)-

    “i will not be surprised that more people will put their money to hard assets.”

    I would like to put a hard asset upside your head.

  152. dreamtheaterr says:

    Loomis Sayles caters to mostly institutional investors. Their track record in fixed income speaks for itself and there is no need for them to partake in this SIV nonsense and risk scrutiny from their investors.

  153. Everything's 'boken says:

    ‘Wrong, the job of our government is not to protect us. It is instituted to keep order so we may enjoy our Liberty.’

    If so, why is defense in the preamble before liberty?

  154. Clotpoll says:

    nj (153)-

    Loomis says ixnay to the SIV scam?

    They’re a first-rate outfit. What the heck is in it for them by participating in this charade?

  155. Frank says:

    #13,
    Citigroup to layoff 45K.

    Goodbye NYC housing market, goodbye Gold Coast housing market, get ready for %50 discount on Westfield properties.

  156. rhymingrealtor says:

    Well, I think I am cutting off my methadone right now. Disconnecting the computer, yes I did it the other day but I put it on another table for easy access, to disconnect for tommorow.
    Rich, I’ll let you know about the floor, thanks for the poster who worked in flooring, I did not get your email, but if Jim will forward I will get back to you after it’s done.

    Ohhh this is hard……… Hate to have no acess…)-:

    KL

  157. Stu says:

    Throw in the Chinese market collapse into my earlier major recession recipe and watch out below.

    Reuters 11/23/07
    Earnings illusion threatens Chinese market: Wei Gu

    http://tinyurl.com/25pjrn

  158. RayC says:

    132 KL – Yes you did – Thanks.

  159. grim says:

    RayC,

    2457378 – 125 Passaic Ave

    It is currently in Attorney Review.

  160. RayC says:

    162 Thanks Grim. Ooh, its right across from a cemetery, my wife would have loved that. Halloween is her favorite holiday.

  161. BC Bob says:

    Stu [160],

    The Shanghai Composite is approx 20% off its highs. Granted the move up has been tremendous and this decline has only retraced a samll part of the advance. However, no solace for those long over 5,000.

    http://www.findata.co.nz/markets/Quote.aspx?e=INDEX&s=SSEC

  162. Stu says:

    What I find most interesting BC Bob (although not all that crazy about technical analysis) is the volume drop off. Look at the five year chart.

    http://www.findata.co.nz/markets/Quote.aspx?e=INDEX&s=SSEC

    The volume hasn’t been this low, for a long time. The chart is also classic bubble. The average Chinese worker makes 1/30th of the average American worker, yet their market is pricing in a P/E multiple of around 50. Our markets tend to float between 15 and 20. For the Chinese multiple to make sense, it essentially means that their earnings would need to increase at an unreal (to put it mildly) speed to justify their price. I just don’t see it happening. Especially considering how much they export to us. The weaker dollar and impending major recession is really going to put a damper in their earnings over the next couple of years. There are a lot of poor people over there in China and they are far from being self sustaining, at least at their current level of income. It’s hard to buy a flat screen TV when you only earn $2,000 a year.

  163. njpatient says:

    Eddy Curry can’t rebound none too good.

  164. njpatient says:

    “If so, why is defense in the preamble before liberty?”

    Because liberty had already been established in importance in the Declaration of Independence. They didn’t want folks top think that defense was completely irrelevant.

  165. njpatient says:

    Grim, what got 167 moderated, “diddly”?

  166. Clotpoll says:

    Ray (163)-

    “Ooh, its right across from a cemetery…”

    Quiet neighbors.

  167. Everything's 'boken says:

    ‘Because liberty had already been established in importance in the Declaration of Independence’

    Actually, the DOI was little thought of then. It was not really considered an important document until the 1790s, after the Constitution was adopted in 1787.

  168. Clotpoll says:

    patient (166)-

    Yeah, but he looks like he could take Kobayashi in a pork-rind eating contest.

  169. dreamtheaterr says:

    Am tempted to chime in with my perspective on emerging market equities, having been there and done that a bit. The key ingredient is liquidity. A rising tide lifts everyone, but imagine the folks recently long…not a pretty feeling.

    I am assuming there is a lot of volume as the novices (read the guys rushing to recently open brokerage accounts) buy and are the ones eventually holding the bag. When there is a rush to exits, liquidity completely dries up because there isn’t any buying depth, compared to what we have in the US or Europe.

    Foreign institutional investors trade blocks of shares and the shares open with huge gaps down. There are just not enough buyers because people will be in shock over a 10-15% abrupt haircut and hold out for a rebound. These people have no experience in experiencing a correction, or buying based on what a PEG ratio is (oh yeah, it’s a measurement of booze), since all they have seen is stupendous appreciation in their shares. And there just aren’t enough folks short this market who are willing to cover their positions. Sure, the government will then come out and ban short selling, etc but all that is damage control.

    This transpired big time in India during the dotcoN crash, and the seeds are sown for this to replicate in China. The big money has been made; it’s a matter of time before we see who is left holding the bag.

  170. chicagofinance says:

    WSJ
    Abu Dhabi Invests $7.5 Billion in Citigroup
    By ROBIN SIDEL
    November 26, 2007 10:33 p.m.

    Citigroup Inc., seeking to restore investor confidence amid massive losses due in credit markets and a lack of permanent leadership, is receiving a $7.5 billion capital infusion from the investment arm of the Abu Dhabi government.

    The investment by the Abu Dhabi Investment Authority will help rebuild Citigroup’s capital levels, which have been eroded by a credit crunch that began in the summer. Citigroup Chief Executive Officer and Chairman Charles Prince resigned earlier this month after the bank, which had already written off billions of dollars, said it was facing as much as $11 billion more in losses.

    Citigroup announced the transaction Monday night.

  171. chicagofinance says:

    %uck me…..

    In exchange for its investment, ADIA will receive convertible stock in Citigroup yielding 11% annually. The shares are required to be converted into common stock at a conversion price of between $31.83 and $37.24 a share over a period of time between March 2010 and September 2011. The investment, which came together in about a week, is expected to close within the next several days.

  172. njpatient says:

    Jeebus

  173. njpatient says:

    What I’ve learned tonight: can’t say “c+cktail” or “c+ckles” (and probably not “c+cky” or “c+cksure,” for that matter) on this blog.
    Grim, your mother would be proud.

  174. commanderbobnj says:

    BOB[#66] Says:

    “Exactly, WE GOT ‘HIT’ on 9-11—–The primary PURPOSE of our government [Mr. Sapiens] is to PROTECT ‘US’from enemies both INTERNAL and EXTERNAL !!—–GET IT ???

    BOB”

    Sapiens replies (#79)
    “…Wrong, the job of our government is not to protect us. It is instituted to keep order so we may enjoy our Liberty.

    The government is not your Mom and Pop, they are your peers that need to be kept in check so they don’t end up enslaving you.

    -Sapiens..”

    —————-Commanderbobnj sez:
    It’s interesting Sapiens, how you can twist the need to defend our nation in order to accommodate the asinine rantings of a punk left-wing POS yenta that you obviously worship….

    As for liberty—That can continue to exist in our lives as long as we have a super-strong internal defense as well as a #1 armed force.
    The scum-baggs that strap bombs to their ugly bodies in order to attempt to destroy our western culture way of life are way more dangerous than any IMAGINED loss of American Freedoms

    BOB

  175. SAS says:

    The Federal Reserve.
    “Monopoly Men”
    http://tinyurl.com/yro6lm

    SAS

  176. njpatient says:

    Hey commanderbob

    What does “yenta” mean?

  177. Shore Guy says:

    this couldn’t have been posted by grim Says:
    November 26th, 2007 at 4:38 pm
    MarketWatch Headline of the Day ™

    Dick’s Sporting Goods to buy Chick’s Sporting for $40 mln

    Will the new chain be Dicks n Chicks?

  178. Shore Guy says:

    dreamtheaterr Says:
    November 26th, 2007 at 5:21 pm
    “i will not be surprised that more people will put their money to hard assets.”

    Wear a helmet and go mining?

    Dream,

    I for one am going with CDs — Starting with Springsteen.

  179. Shore Guy says:

    njpatient Says:
    November 26th, 2007 at 11:49 pm
    Hey commanderbob

    What does “yenta” mean?

    It is a woman who is into gossip, sticking herself into ouher people’s business, and, in general, being a pain in the buttocks. A meddler. Think the neighbor on the old Bewitched TV series. I suppose it could be applied to a male as well, but I have not seen it used that way.

  180. otis wildflower says:

    Yentas also tend to have that Fran Drescher voice and laugh, enough to peel paint at 20 meters.. Unfortunately most yentas don’t have the bod to make up for it :p

    I wonder if someone should license the CondoFlip(tm) PanicButton(tm)?

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