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.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

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295 Responses to Weekend Open Discussion

  1. grim says:

    From the New York Times:

    Facing Default, Some Walk Out on New Homes

    When Raymond Zulueta went into default on his mortgage last year, he did what a lot of people do. He worried.

    In a declining housing market, he owed more than the house was worth, and his mortgage payments, even on an interest-only loan, had shot up to $2,600, more than he could afford. “I was terrified,” said Mr. Zulueta, who services automated teller machines for an armored car company in the San Francisco area.

    Then in January he learned about a new company in San Diego called You Walk Away that does just what its name says. For $995, it helps people walk away from their homes, ceding them to the banks in foreclosure.

    Last week he moved into a three-bedroom rental home for $1,200 a month, less than half the cost of his mortgage. The old house is now the lender’s problem. “They took the negativity out of my life,” Mr. Zulueta said of You Walk Away. “I was stressing over nothing.”

    You Walk Away is a small sign of broad changes in the way many Americans look at housing. In an era in which new types of loans allowed many home buyers to move in with little or no down payment, and to cash out any equity by refinancing, the meaning of homeownership and foreclosure have changed, economists and housing experts say.

    “I think I could make a case that some borrowers were ‘renting’ (with risk), rather than owning,” Nicolas P. Retsinas, director of the Joint Center for Housing Studies at Harvard University, said in an e-mail message.

    Carrie Newhouse, a real estate agent who also works as a loss mitigation consultant for mortgage lenders in Minneapolis-St. Paul, said she saw many homeowners who looked at foreclosure as a first option, preferable to dealing with their lender. “I’ve had people say to me, ‘My house isn’t worth what I owe, why should I continue to make payments on it?’ ” Mrs. Newhouse said.

    “You bought an adjustable rate mortgage and you’re mad the bank is adjusting the rate,” she said. “And sometimes the bank people who call these consumers aren’t really nice. Not that the bank has the responsibility to be your friend, but a lot are just so uncooperative.”

    The same sorts of loans that drove the real estate boom now change the nature of foreclosure, giving borrowers incentives to walk away, said Todd Sinai, an associate professor of real estate at the Wharton School of Business at the University of Pennsylvania.

    “There’s a whole lot of people who would’ve been stuck as renters without these exotic loan products,” Professor Sinai said. “Now it’s like they can do their renting from the bank, and if house values go up, they become the owner. If they go down, you have the choice to give the house back to the bank. You aren’t any worse off than renting, and you got a chance to do extremely well. If it’s heads I win, tails the bank loses, it’s worth the gamble.”

  2. grim says:

    From the Wall Street Journal:

    Borrowers Abandon
    Mortgages as Prices Drop
    By RUTH SIMON and SCOTT PATTERSON
    February 29, 2008; Page A3

    As home prices plummet, growing numbers of borrowers are winding up owing more on their homes than the homes are worth, raising concerns that a new group of homeowners — those who can afford to pay their mortgages but have decided not to — are starting to walk away from their homes.

    Typically borrowers who turn in their keys are those who have run into financial trouble or need to relocate but can’t sell their homes. But mortgage-industry executives and consumer counselors say they are starting to see people who aren’t in dire financial straits defaulting on their mortgages because they don’t want to pay for properties that have negative equity.

    Many are speculators who had planned to quickly flip the home, but others appear to be homeowners who had second thoughts about their purchase.

    “It may not be a big thing yet, and hopefully it won’t be,” says David Berson, chief economist for mortgage insurer PMI Mortgage Group Inc., of Walnut Creek, Calif. But if it turns out to be a significant trend, he says, it means that “delinquencies and defaults could be higher than the industry is estimating.”

    Some borrowers feel they have no good alternative. A tight credit market has made it tough for would-be sellers to find buyers or for borrowers looking to lower their mortgage costs to refinance.

    Other borrowers are walking away in frustration because they can’t arrange a workout with their lenders, says D.J. Enga, director of outreach services for Auriton Solutions, which counsels homeowners nationwide. Mr. Enga expects that 10% to 15% of the roughly 4,000 callers counseled this month by Auriton, of St. Paul, Minn., will walk away from their mortgages.

  3. grim says:

    From the Asbury Park Press:

    Asbury Park terminates Kushner as redeveloper

    Still smarting about a developers’ deal they say left them out of the loop, city officials have terminated Kushner Cos.’ rights as a redeveloper for Asbury Park.

    The action by the City Council Wednesday night also means city officials are not ready to give their approval to Kushner’s New Year’s Eve sale of its 91-unit Wesley Grove condominium project and land to Madison Marquette, the national real estate developer restoring and rebuilding the boardwalk buildings.

    It does not mean the city won’t approve the transfer to Madison Marquette, but officials said the deal was made without them until the last few days when they were lobbied hard to approve the transaction up through New Year’s Eve.

    The deal went through. The city never got a chance to be a player in that deal, to get any financial relief for the lost ratables. A rift was born.

    “Madison Marquette taking over may very well be a good thing,” said Councilman Ed Johnson today. “But Kushner had a contract, a commitment to the city that they attempted to walk away from. They made a commitment, made some financial representations to the city, and we’re asking them to keep their commitment.”

  4. grim says:

    From Reuters:

    Merrill to shut down subprime lending unit: report

    Merrill Lynch & Co Inc plans to wind down most of its First Franklin subprime mortgage lending unit, responding to continued deterioration in U.S. mortgage markets, business news channel CNBC reported Thursday.

    The move could result in the elimination of 400 to 500 jobs starting next week, CNBC reported. Merrill would keep First Franklin’s loan servicing business, which could perform well in the current mortgage and housing markets, CNBC said.

    Merrill, which ceased originating subprime mortgages on December 28, on Monday said it was “evaluating our continued involvement in this market.”

    The largest U.S. brokerage house bought First Franklin from Cleveland-based bank National City Corp in December 2006 for $1.3 billion, in a bid to expand in a business that had generated big profits for rivals like Lehman Brothers Holdings Inc.

    The deal closed just before the subprime mortgage market began to collapse.

  5. grim says:

    From Seeking Alpha:

    Jumbo Mortgage Risk Will Topple the Teetering GSEs

    When President Bush signed the Economic Stimulus Act into law making jumbo mortgages GSE insurable, he may have unwittingly pushed our GSEs, Fannie Mae (FNM) and Freddie Mac (FRE), already on tilt, over the edge. If you think we have a housing crisis now, wait until you see what the demise of the GSEs and subsequent secondary mortgage market would do.

  6. grim says:

    Short Subprime, Long Alt-A? From Bloomberg:

    Peloton Blames Wall Street Lending Crackdown for Fund Collapse

    Peloton Partners LLP, the London- based hedge fund manager being forced to liquidate a $1.8 billion asset-backed fund, said it’s a victim of Wall Street’s reduced lending.

    “Credit providers have been severely tightening terms without regard to the creditworthiness or track record of individual firms, which has compounded our difficulties and made it impossible to meet margin calls,” Peloton co-founders Ron Beller and Geoff Grant said in a letter yesterday to clients.

    Peloton joins Thornburg Mortgage Inc. and Sailfish Capital Partners LLC on the growing list of funds and companies that have had to sell securities or shut down after banks restricted how much they could borrow, or demanded more collateral as values of securities backed by mortgages slumped. The world’s biggest financial institutions are cutting off lines of credit to hedge funds after at least $163 billion of asset writedowns and market losses.

    Beller and Grant, who founded their firm in 2005, are seeking buyers for mortgage securities held by the ABS fund. The fund provided clients with an 87 percent return last year after the managers bet on a surge in delinquencies on loans to homeowners in the riskiest subprime category. Beller said in a Jan. 25 telephone interview that the firm bought securities backed by mortgages that are safer than subprime.

  7. grim says:

    From Bloomberg:

    Subprime Mess Highlights Need for Tough Rules: Michael R. Sesit

    The events of the past few months in global credit and other asset markets show that the world economy must be shielded from the actions of financiers and that bankers, insurers and money managers must be protected from themselves.

    Everyone mentions the need for lower interest rates and government aid to homeowners, but few advocate tougher regulation of the wholesale market. Like the 1980s U.S. savings-and-loan debacle, the Latin-debt crisis in the same decade and the technology bubble in the late 1990s, the U.S. mortgage mess offers more evidence that while deregulated markets are great at generating booms, their ability to clean up the aftermath of a bust is less impressive.

    U.S. and other financial regulators, under the auspices of the Bank for International Settlements, will have to come up with a common set of rules to avoid a repeat of the subprime meltdown.

    It should come as no surprise that economic growth and financial markets suffer when a major asset bubble, such as housing, bursts.

    Banks lent money to people they knew couldn’t repay it. Others repackaged mortgages as securities — known as collateralized debt obligations, or CDOs — and sold them to investors. That moved low-quality mortgage loans off the banks’ books and reduced the incentive to carefully examine borrowers’ ability to service their debts.

  8. grim says:

    From Newsday:

    Hiring inspectors growing as homesellers’ protection

    In this buyer’s market, a small but growing number of sellers is hiring inspectors, hoping to avoid any last-minute surprises that could derail closing the sale.

    A home inspection report obtained by a seller can be just as detailed as a buyer’s report or might include information on major items that could pose a problem for buyers.

    “This report gives the seller an opportunity to make necessary repairs so they don’t hold up the deal,” says Warren Cronacher, principal of Tauscher, Cronacher Professional Engineers, based in Rockville Centre.

    Most inspections locally still are conducted for the buyer. But in this slow market, sellers are looking for ways to help push the deal through and sometimes turn to an inspector to check out the house before listing it, local engineers and inspectors say.

  9. bairen says:

    Lots of bad news his morning.

    I wonder how many banks, brokerages, and hedge funds will go bust from not understanding 1) the basic concept that lending money to people with low credit scores when prices are at an all time high is not exactly a sound business plan and 2) pooling same lousy loans into mtg pools does not diminish the risk to the buyers of those pools.

    Proud and lucky to be a renter!

  10. grim says:

    From USA Today:

    More Americans using credit cards to stay afloat

    Seven years in the credit-counseling business didn’t prepare Ann Estes for the alarming trend she began noticing last fall: As her clients’ mortgage bills became unaffordable, a growing number of them began paying their credit card bills before — and sometimes instead of — their mortgages.

    “We’ve never seen anything like this,” says Estes, who counsels clients by phone from her office in Richmond, Va. “Their homes are at risk, and they know it. But people say, ‘I don’t want to let my credit cards go because that’s my cash flow.’ ”

    Across the nation, credit counselors are reporting the same trend. Credit bureau analyses of consumer payment data show that financially squeezed borrowers have begun paying their credit card and car bills before their mortgages. That’s a striking reversal from the norm, one that reflects rising desperation. It suggests that some people essentially have given up trying to stay current with their mortgages and instead are focused on using credit cards to squeak by.

    If the trend persists, many economists say, it could accelerate mortgage losses and further drag down the economy.

  11. bairen says:

    Last night I figured out that for every $1 in rent I’ve paid for the townhouse we are renting the list price of the same townhouse as dropped $2.75 to $3.00 over the last 10 months. I see that trend continuing for a long time. The listing prices have dropped 60 to 70k in 10 months, that’s about a 12 to 15% drop.

    Even with those price drops and interest rates around 6.25, it is still much cheaper to rent this place then to buy.

    This crash is just getting started.

  12. bairen says:

    If I were to leave NJ due to the high costs of living, where would I go?

    1) I would want to move some place warmer. That eliminates about 20 to 25 states.

    2) Did not take par in the housing bubble. There goes Florida,, parts of Nevada and Arizona, all of the West coast.

    3) Has good public schools. bye bye most of the south.

    4) Has a regional city with a decent downtown and family friendly activities.

    5) Did not vote for Huckabee.

    What’s left? I can only think of Round Rock/Austin Texas and maybe a few cities in New Mexico.

    Any other regional cities fit this criteria?

  13. grim says:

    Reposting this one, got lost in the mix..

    MONSTER REO in Randolph.

    6 Orchard Drive, Randolph NJ

    Purchased: 6/27/2003
    Purchase Price: $700,000

    MLS# 2491585
    4br/3ba
    Current Asking: $469,000
    DOM: 14
    As-is

    Current asking is 33% under the 2003 purchase price.

    Here are some recent sales on the street

    4 Orchard
    Sold 09/29/06 @ 745,000

    9 Orchard
    Sold 08/16/07 @ 685,000

  14. grim says:

    From Bloomberg:

    Financial Firms Face $600 Billion of Credit Losses, UBS Says

    Financial firms are likely to face at least $600 billion of losses from the financial crisis, UBS AG analysts said in a report today.

    Financial institutions have written down or lost about $160 billion so far. Losses from banks and brokers will make up more than half of the losses at $350 billion, according to estimates from UBS’s global banking team.

  15. grim says:

    bairen,

    San Antonio isn’t bad, seventh largest city in the US. USAA is headquartered there, if you’ve got an IN there, you’ll have it made.

  16. bairen says:

    Thanks for the tip grim. My sister lives in Round Rock and loves it. She says it’s like an affordable California (where she used to live). With most of the good stuff and only a bit of the bad stuff.

    We’re planning on visiting this summer. Hopefully we’ll be able to check out San Antonio too.

  17. njrebear says:

    Paulson favors a strong dollar.

  18. chicagofinance says:

    My colleague’s mother-in-law is having an estate sale in West Hampton. They are selling a property for $410,000. Three years ago it would have netting more in the $700,000 range. He said that the number of homes out there is tremendous. It is literally impossible to sell unless you shock the markert with your price.

  19. thatBIGwindow says:

    good schools = smarter kids

  20. BC Bob says:

    But if it turns out to be a significant trend, he says, it means that “delinquencies and defaults could be higher than the industry is estimating.”

    [2]

    Has to be wrong. This is not what the Blackbox indicates?

  21. Cindy says:

    Re: economics – National….Here’s how my district is handling the governor’s budget cutbacks…..
    from Fresno Bee – California…

    “Clovis Unified, faced with hefty budget cuts in the next school year, will hand out a one-time 1.5% bonus to employees this year in lieu of a regular raise.”

    “The Clovis Unified School District board approved the bonus on a 7-0 vote Wednesday. The bonus will cost the district $3.4 million, which it will pay for with surplus money from this year’s budget, already set aside for employee raises.”

    “The district will issue bonus checks for about 4,000 employees on March 31, with a teacher making an average of $59,000 receiving an $885 bonus.”

    “While employees would have preferred a regular raise that boosts the salary schedule, the one-time bonus was an acceptable alternative, said Dan Faria, a deisel mechanic for Clovis Unified and president of the district’s California School Employees Association chapter.”

    “The association represents maintenance, food service and many other nonteacher employees and is the only union representing Clovis Unified employees.”

    “Faria said the bonus “rewards employees for what they do,” but won’t mean additional salary costs next year, when severe budget cuts are expected for schools based on Gov. Schwarzenegger’s proposed budget.”

    Clovis Unified faces a loss of $8.7 million in 2008-2009 under the governor’s current plan.

    “Clovis Unified’s one-time salary increase pales compared to raises granted in neighboring Fresno Unified and Central Unified. The Fresno Unified School District approved an 8% raise in December for teachers, librarians, and speech therapists, with 5.5% of it retroactive to July 1, 2006, while the Central Unified School District approved a 3% increase for similar types of employees in August. Clovis last gave employees a raise in October 2006: a 6% increase.

  22. BC Bob says:

    “Lots of bad news his morning.”

    How do you think Japanese housewives feel? Is there enough sake available to sooth the pain?

  23. Clotpoll says:

    ChiFi (19)-

    Righto. It’s not enough to simply price well vs. direct competition; a seller must blow competitors out of the water in order to draw an offer.

    You can always identify a dynamic RE market when homes must be priced to trend, rather than priced to comp. In this down market- just like the upmarket of ’01-’05- there simply aren’t enough valid, timely comps against which to price.

    When the nominal withdrawn/expired ratio is well over 40% of all listings in many NJ markets, having the same price as your direct competition just means you run a huge chance of having your home expire as well.

  24. BC Bob says:

    “Last night I figured out that for every $1 in rent I’ve paid for the townhouse we are renting the list price of the same townhouse as dropped $2.75 to $3.00 over the last 10 months.”

    bairen,

    Now that’s a Blackbox.

  25. Clotpoll says:

    How many current NJ sellers can afford to assume a 40-50% chance that their homes will expire unsold?

  26. Clotpoll says:

    BC (23)-

    Ever do sake shots in the morning?

    Try it with Beluga chasers; lots of fun.

  27. Clotpoll says:

    BC (25)-

    Inputs known, outcome certain.

  28. Rob says:

    I can’t wait for “Resolution Trust Corp 2: The Bones of Fannie and Freddie”.

    I just hope nothing happens to Warren Buffett over the next couple years. He should be good for a few of his really pithy comments as he takes his pick from the GSE’s balance sheets.

  29. Willow says:

    bairen

    I have friends who are in the process of moving to the Austin area. What they found was that many of the developments around Austin are big houses built on small lots with the neighbors house a few feet away. They were ready to forget it and then the realtor showed them houses in the Dripping Springs area. The houses are on very large lots and from what I was told, the school district is good. They wound up buying a foreclosure (previous owners bought in December of 2006 for $50,000 more than they’re paying) in an unincorporated area in the Dripping Springs school district. The house is big, on four acres with a pool and hot tub. The taxes are higher than their expanded cape here on a 50 x 175 lot but there isn’t a state income tax in Texas so it is offset.

  30. Clotpoll says:

    Rob (29)-

    Buffett wouldn’t touch that shitpile in a century of Sundays.

  31. BC Bob says:

    chi [19],

    When I tripped onto this site, back in late 2005, I stated that we would see a minimum of 30-40% off within 5-7 years. Everybody, including the bears, thought I was hallucinating. I guess they were right. I would have never anticipated that I would seee this by 2008.

    This market will retrace all of the delusional gains that preceded it.

    Oh, by the way, Richard also called me arrogant, in 12/06, for owning gold. HMMM? Where is Richard these days?

  32. Confused In NJ says:

    My brother moved last year from Austin. Couldn’t handle the language barrier. Wanted an English speaking community.

  33. Clotpoll says:

    BC (32)-

    Reechard:

    1) Margined out? Maybe.

    2) Tapped out? Maybe.

    3) Living in a distressed market? Definitely.

  34. Orion says:

    Re (14)

    Heck, just call it a 1 trillion loss. What’s the point of revising the numbers up every week!?

  35. John says:

    Hey chicago finance, do you have any info on that house? Is it still for sale? That is something I would be interested. I checked http://www.mlsli.com and don’t see it.

    chicagofinance Says:
    February 29th, 2008 at 8:01 am
    My colleague’s mother-in-law is having an estate sale in West Hampton. They are selling a property for $410,000. Three years ago it would have netting more in the $700,000 range. He said that the number of homes out there is tremendous. It is literally impossible to sell unless you shock the markert with your price.

  36. BC Bob says:

    “Grim [JB?] numbers game”

    “Consumer spending unchanged for third time in four months, as January inflation all but erases gains in personal incomes.”

    http://www.marketwatch.com/news/story/consumer-spending-flat-january/story.aspx?guid=%7BDB15D4F4%2D306D%2D442B%2DB744%2D863C9051B59B%7D

  37. HEHEHE says:

    Note Fry’s comments re the XHB and Lehman half way down the page, I can’t wait to hear those shady pricks earnings:

    http://seekingalpha.com/article/66620-friday-outlook-playing-the-cards-you-re-dealt

  38. Jaw says:

    Grim @14,

    All is well…only $440 billion more to go. The worst is over.

  39. PGC says:

    #37 John

    I thought it was idiotic to buy RE in this market.

  40. Make Money says:

    HMMM? Where is Richard these days?

    He’s hanging out with Donald at the poor house drinking and talking about the good old days on Konnekt.

    Bob Toll is gonna joing them at the end of the year and blame sites like these and the media for the housing collapse.

  41. syncmaster says:

    Project plods along in New Brunswick
    Redevelopment plan stalls in final phase
    Friday, February 29, 2008
    BY NAWAL QAROONI
    Star-Ledger Staff

    The latest plans to build a strip mall, supermarket and hundreds of condominiums in the five-block stretch between Handy and Sandford streets in New Brunswick were unveiled more than two years ago, but the redevelopment project by Pis cat away-based Edgewood Properties has been moving slowly.

    The first phase of the plan — a Walgreens pharmacy in the northwestern corner of the redevelopment zone — was built in 2004. The second phase, to build 16,000 square feet of retail and a bank site, is nearly complete.

    But the last phase — creation of a major chain supermarket and 200 condominiums — has yet to start.

    Peter Rushing, director of marketing for Edgewood Properties, said he could not say when the supermarket would be built or what supermarket company would occupy the site.

  42. Pat says:

    Grim, here’s a follow-up to your question concerning status of public pensions:

    State and Local Government Retiree Benefits: Current Funded Status of Pension and Health Benefits
    GAO-08-223, January 29, 2008

    http://www.gao.gov/new.items/d08223.pdf

  43. RayC says:

    Just got this from the GSMLS listing that grim set up for me. and thanks again for that grim.

    PRICE REDUCED

    MLS#: 2402555

    OLP $1,229,000
    LP $650,000
    DOM 303

    5 BD 4 BTH New Construction in Scotch Plains.

    Finishing work needed – Outside is completed, inside “as is”.

  44. BC Bob says:

    PGC [41],

    It depends upon which boots he is wearing each day.

  45. Rich In NNJ says:

    Bob (45),

    And hat.
    Don’t forget hat.
    JB has one that makes him obnoxi… err, contrarian.

  46. gary says:

    BC Bob,

    30% to 40% by 2008? Are you referring to Florida, Southern Cal or both?

  47. BC Bob says:

    Rich [46],

    How about a helmet? I was wandering on WS this morning, looking to buy a crash helmet.

  48. BC Bob says:

    Gary [47],

    Back to the tape.

    30-40% off 2005 highs, in the metro area, within 5-7 years [from 2005]. Chi presented an example [#19], in today’s market.

  49. Rich In NNJ says:

    February Sales and Pending Sales (Under Contract) for Bergen County, like this past September, October, November, December and January are shaping up to the lowest since 1995.

    NJMLS data only goes back to 1995…

    Right now February Sales are down about 40% and Pending Sales are down about 30% compared to last year.
    Lucky it’s a leap year.

  50. BklynHawk says:

    44-
    Nice. Looks like a cut and run by the flipper. So, does it need $600,000 worth of work on the inside? That sounds like platinum fixtures and everything covered in Granite. Don’t know if you get your money back from comparables in the neighborhood.

  51. Kelly says:

    I just checked the mortgage records for #13 – the MONSTER REO in Randolph – 6 Orchard Drive.

    First Mortgage was for $560,000
    Second Mortgage was for $140,000 (same day of course)

    Another 100% financed foreclosure.

    On a side note – the original mortgage papers were lost for both transactions. The original mortgages were made by Long Beach Mortgage but they were filed by First American Title. (They could have learned something from that businessman down in Florida.)

    Another interesting note of the property – the buyer and the seller on the deed are listed on both mortgages.

    Final interesting property note – they have been having problems for years on this property – including unpaid taxes.

  52. Rich In NNJ says:

    Bob (48),

    Buy two.
    One for Gary since he seems to keep pounding his head against the wall.

  53. Secondary Market says:

    #15 In re: USAA

    I was lucky enough to “marry into” becoming a member of USAA and hold most of my finances there. Every program from checking/savings/mutual funds and mortgages are usually in the top 5 nationally vs other credit unions and banks. Along with great rates and performance the customer service is like non other. The reps are smart, patient, well trained and actually know what they are talking about. AND they all live in the United States.

  54. Clotpoll says:

    hawk (51)-

    Scotch Plains? That house could be bracketed by two 2-BR bungalows.

  55. HEHEHE says:

    Fantastic and just in time:

    New ETNs aim to double, short gold prices
    First products to leverage commodities; active ETFs move a step closer

    http://www.marketwatch.com/news/story/new-deutsche-bank-etns-provide/story.aspx?guid={74B66BFC-9A33-4AAA-B312-DE02DDA71842}

  56. Clotpoll says:

    FMT gets a nice morning haircut of 65%…

    Cue up the dirge.

  57. Clotpoll says:

    HE (56)-

    Can’t wait for bi’s call to double-short gold.

  58. 3b says:

    #32 BC Bob: Better having it hapeen quickly than dragging out for 5 to 7 years.

  59. BC Bob says:

    3b[59],

    I agree. I hope I’m wrong on the time frame.

  60. HEHEHE says:

    Where’s Bi been? Dodging creditors?

  61. John says:

    It is, but the Hamptons have a tendency to die first in the cycle. Last time I had a chance to buy out there dirt cheap was in 1991 when the cops and firemen bought houses in westhampton and hampton bays on a 1/2 acre in 1987-1990 with a pool with 5% down and dreamed of big rental income and home appreciation, well they all got slaughtered and lost their homes in 1991 and 1992, the rich in southampton rode it out and made a ton. I like to start checking out houses out there and when houses get to like 350K that
    are nice I will just write a check and buy one. If it is a great deal I would even buy sooner as I get a free rental this summer that would have cost me 25K.
    PGC Says:
    February 29th, 2008 at 9:10 am
    #37 John

    I thought it was idiotic to buy RE in this market.

  62. 3b says:

    #53 RichNNJ: If you get a chance, could you get me a sales history for njmls 2806064. Thanks a lot.

  63. Clotpoll says:

    Kelly (52)-

    Long Beach (now-defunct correspondent shitpile of WaMu) may have been crashing during that time. The title company probably recorded the mortgage because there was no one else able to do it.

    The unpaid tax problem probably got the full attention of the title insurer, who would’ve had to indemnify vs. that.

    The original mortgage papers are probably shredded and buried in a landfill.

  64. Make Money says:

    Take a look at this. Everything is red except GOLD. I love it.

    God Loves me!!!!

    http://www.marketwatch.com/tools/marketsummary/

  65. 3b says:

    #60 BC Bob: I do nto think it is going to be near as long as your time frame. Far too ugly out there right now, and its getting worse rapidly.

    On another topic, I am watching the muni auction market blow up (nver too return), and now the muni VRDN mnarket is in trouble. Never did I expect to see muni money amrket instruments implode.

    Way off topic, but I spent most of this week in the Madison and 50th street area, in meetings. Had not been to that are in some time.

    I was really surprised to see the retune of lots of Homeless people/beggars in that area.

  66. BC Bob says:

    “God Loves me!!!!”

    Make,

    God did not take a course in risk management. Just a thought, make sure you are locking in your gains.

  67. Kelly says:

    Just a thought…

    Law and Order should add another franchise – the L&O – Mortgage Fraud Unit. It would be very current and topical. Have the investigators track down bad brokers, liar loan owners, shady appraisers, etc. With all the news lately there would be alot to pick from. The gut wrenching drama could involve people leaving their foreclosed homes.

  68. Make Money says:

    God did not take a course in risk management. Just a thought, make sure you are locking in your gains.

    Risk management? I never knew how to manage risk. I’ve been on the right side of most if not all trades.

    Lock in gaines? Gold is the next mania!!! I had some work done and my electricians were talking about investing in commodities. I asked them What is commodities is it a stock? The short fat italian guy said ” No, it’s Gold and Silver my friend bought silver at 17 and it’s now almost 20. I’m buying 10K worth tomorrow” I smiled and said interesting.

    When taxicab drivers and strippers send gold to $5,000 an ounce then I’ll lock in gaines.

    The only thing left to do is to book a trip to Australia and New Zeland to visit my Gold.

  69. RayC says:

    Another PRICE REDUCED

    Scotch Plains
    MLS#: 2465192

    OLP $574,000
    LP $474,000
    DOM 90

    For what it’s worth, the “taxable value” for this house is $654,294 (it is in very good shape). I see that number in nj.com “by the numbers, and usually see a listing price that is somewhere near it, but lately have seen some below it, and this is significantly below it. This is somewhere between data and anecdata. I just need a spreadsheet and more houses…

  70. chicagofinance says:

    John Says:
    February 29th, 2008 at 8:46 am
    Hey chicago finance, do you have any info on that house? Is it still for sale? That is something I would be interested. I checked http://www.mlsli.com and don’t see it.

    JJ: I’ll see what I can find out. One thing I do know is that the estate is in chaos. It involves an Alzheimer’s patient, an illegal power-of-attorney, and a drug-addicted gambler with sticky fingers and was a floor trader on the NYMEX with his own account…..seriously f—ed up situation. I know the Brooklyn DA’s office got called in….all kinds of weird stuff….$1M house sold for $450K to a Chinatown Real Estate broker etc. etc.

  71. Rob says:

    Love the Law and Order idea. In the first episode they could bust a fake-bake ripoff artist named Angelo Morillo (any resemblance to persons living or dead being completely coincidental of course).

  72. jmacdaddio says:

    A piece on Boston’s efforts to stop abandonment over at housingdoom: http://housingdoom.com/2008/02/28/boston-abandon-a-home-and-pay/

    I enjoyed reading the earlier article about New Brunswick’s stalled rebirth. I’m looking forward to the finger-pointing and blame gaming once the rebirth of NJ cities (Asbury, Perth Amboy, Rahway, New Brunswick, Elizabeth, Trenton, etc.) grinds to a halt now that nobody can get a loan to buy an overpriced condo.

  73. Make Money says:

    http://www.marketwatch.com/tools/marketsummary/

    Paulson says enough of the nonsense, I’m bailing out no one. Period. Is he trying to impress his wife or something wuth all that macho talk?

  74. RayC says:

    55 Clotpoll

    I don’t know if it is bracketed, but it is on .43 acres. It is on a busier road, not sure of the location , but I think the real point is that new construction was priced at 1.229 million last year, just awaiting “your finishing touches”, and it didn’t sell, and now someone is trying to unload it at $650,000. Almost 50% off asking price? I am not saying it is a good deal, just that a McMansion in a good town failed.

  75. Al says:

    There was a rebirth in Elizabeth??
    Or Trenton??

  76. Sean says:

    re: Bernake’s testimony yesterday.

    Here is what I have been waiting for.

    Quote:

    “Separately, we are actively reviewing potentially unfair and deceptive practices by issuers of credit cards.

    Using the Board’s authority under the Federal Trade Commission Act we expect to issue proposed rules regarding these practices this spring. ”

    Where was the FED when the banks and mortgage companies and the rating agencies and the appraisers all colluded?

    Does anyone know where that financial terrorist Greenspan is right now?

    http://sg.news.yahoo.com/rtrs/20080227/tbs-gulf-currencies-greenspan-7318940.html

  77. Rich In NNJ says:

    3b,

    SLD $197,000 7/16/1992

    SLD $229,500 4/16/1998

    Listed 2/11/08
    Taxes: $8,119

  78. BC Bob says:

    “I had some work done and my electricians were talking about investing in commodities.”

    Make,

    Very troubling if you’re a bull/long, at least to me. Just a thought, late comers usually are wiped out. I’m hedged.

    All disclaimers.

  79. BC Bob says:

    Make,

    One other thought. When I say lock in gains, I don’t mean sell. Look at protection, especially if you have had large gains. Prudent?

  80. HEHEHE says:

    “Does anyone know where that financial terrorist Greenspan is right now?”

    Last I checked he’s in the Middle East, coincidence?

  81. 3b says:

    #79 Rich: Thanks very much.

  82. athos says:

    RayC (75)

    But that section of Scotch Plains has the power lines running through the back yards of most houses. Not very pretty or helpful when re-selling.

  83. Make Money says:

    Make,

    Very troubling if you’re a bull/long, at least to me. Just a thought, late comers usually are wiped out. I’m hedged.

    In the 70’s during the last gold mania, gold went up to where one ounce of gold bought you 1 share of DOW. Not to mention that gold doubled 24 times.

    Start hedging when we get to $5,000-$7,000 for an ounce of gold.

    enough said.

  84. Make Money says:

    Make,

    One other thought. When I say lock in gains, I don’t mean sell. Look at protection, especially if you have had large gains. Prudent

    BC,

    Don’t be scared to make money. It’s ok to double and triple your money. Concetration builds wealth and diversification preserves it. If we are right about inflation, recession, and continue to borrow, print, and spend there is only one place gold can go and that is up. Sell evrything you have and buy gold. Watch yourself retire in 6 years while evryone’s 401K becomes 41K.

    I retired on one bubble. If I’m right about this one then I’ll have enough money to run for the president of Kosovo.

  85. ithink-ithink says:

    this ought to end all discussion on living near/under powerlines

    http://gizmodo.com/361390/1301-florescent-bulbs-lit-solely-by-magnetic-fields

    … but then again, most folks have a microwave.

  86. BC Bob says:

    Make [86],

    Nothing else left for me to say. Just hire me when you are named Pres..

  87. kettle1 says:

    3B make,

    how do hedge against gold? besides diversification, are you set up to short it after a certain point?

  88. Sean says:

    Gold is not high at all.

    If you adjust Gold’s all time high based upon inflation, gold would need to break $1800 to really have an all time high.

  89. kettle1 says:

    As a financial layman myself, i agree with sean. I do think that gold/silver is beginning a bubblicious rise but it is just starting. Like housing, even after the general public caught onto flipping, there was still a window of opportunity. as always the tricky part is when to bail. Also consider that none of the near term economics support a reduced gold/silver price

    please note that i am clueless.

  90. John says:

    Great the messier the better, heck the house I bought the ex-wife had the husband making breakfast, lunch and dinner for her and her boyfriend and everytime he complained she file assult charges on him on a Friday night and had him in Jail for the weekend, day before open house they had an AX fight in the house, several doors axed in and a piece of the wall was missing at the open house, that is VALUE.
    chicagofinance Says:
    February 29th, 2008 at 10:41 am
    John Says:
    February 29th, 2008 at 8:46 am
    Hey chicago finance, do you have any info on that house? Is it still for sale? That is something I would be interested. I checked http://www.mlsli.com and don’t see it.

    JJ: I’ll see what I can find out. One thing I do know is that the estate is in chaos. It involves an Alzheimer’s patient, an illegal power-of-attorney, and a drug-addicted gambler with sticky fingers and was a floor trader on the NYMEX with his own account…..seriously f—ed up situation. I know the Brooklyn DA’s office got called in….all kinds of weird stuff….$1M house sold for $450K to a Chinatown Real Estate broker etc. etc.

  91. John says:

    If anyone wants in I am creating a new product called the TRIPLE-O, what it is will be Options on Options. Lets say you have a gold ETF and you buy options to magnify losses or gains by 100%, my options on options will allow you to buy the option on the option and magnify by the losses or gains by 1000%, now that will get the Japanese housewives to really day trade!!!!!

  92. rhymingrealtor says:

    Ever do sake shots in the morning?

    Try it with Beluga chasers; lots of fun.

    Clot,

    Did I ever tell you, you remind me of a twisted Frazier Crane? (;

    KL

  93. RayC says:

    # athos Says:
    February 29th, 2008 at 11:15 am

    RayC (75)

    But that section of Scotch Plains has the power lines running through the back yards of most houses. Not very pretty or helpful when re-selling.

    athos, the point is not that I am trying to sell this house, but that someone was trying to sell it for $1,229,000 and has had to reduce it to $650,000 to try to get rid of it. Do I think it was ever worth over a million? NO! But I was not causing prices to skyrocket 3-4 years ago by buying properties exactly like this. And now, apparently, no one else is either.

  94. skep-tic says:

    The people walking away from their houses are making the right choice. Breaking a contract is not a crime. When the cost of paying damages is less than performing, you should breach. This is what all of the PE shops are trying to do right now. Wall Street’s mistake was in assuming that the average person couldn’t figure this out as well. It is not that difficult of a concept and the banks should have realized it would come to this.

  95. kettle1 says:

    I think it is interesting that last fall no one would even wisper the word “recession” in public, but now its all the talk. But now there are a smatering of articles that are starting to whisper “depression”. just an observation

  96. Pat says:

    skep, don’t you think that’s naive? Cute, but naive.

    Of course they (we?) knew how it would turn out.

    Net gains will exceed net losses in the battle of the Titans. You can’t lose when the big guy is on your side, or IS your side.

  97. Rich In NNJ says:

    From MarketWatch:

    SUBPRIME TODAY

    AIG’s shares fall after firm loses $5.3 billion
    Wilbur Ross to invest up to $1 billion in Assured Guaranty
    MBIA expects loss payments of $700m-$800M for 2008
    Ambac bailout hits significant snag: report
    Royal Bank of Canada posts lower first-quarter net
    U.K. house prices fell 0.5% in February: Nationwide
    Fremont General to delay interest payments on debt
    Credit-default swap losses hurt Swiss Re’s net income
    Look under the banks’ hoods
    Borrowers abandon mortgages as prices drop
    Financial firms face $600 billion of losses, UBS says
    UniCredit denies market rumor of 5 bln euro loss

    Details at link above, Rich

  98. skep-tic says:

    Pat, I do think that the people doing the lending were naive. Maybe arrogant is a better word. Lending has been around for millenia. There is no alchemy possible in this business, yet the current crop of people practicing it convinced themselves otherwise. They relied on historic default rates without acknowledging how very different the loans they were making/selling were from the loans in their models.

  99. kettle1 says:

    grim,

    just got the followig error message, what does it mean???

    Not Acceptable
    An appropriate representation of the requested resource /blog/wp-comments-post.php could not be found on this server.

    Apache/1.3.37 Server at jamesbednar.net Port 80

  100. Rich In NNJ says:

    From Atlanta Business Chronicle:

    Federal Reserve CEO Lockhart: Housing markets need stabilization

    Federal Reserve Bank of Atlanta President and CEO Dennis P. Lockhart told the Atlanta Commerce Club on Friday the resolution of current financial market problems will need some stabilization of U.S. housing markets, but it’s hard to say when that stability will materialize.

    Lockhart said the subprime mortgage crisis is “contagious.”

    “The subprime mortgage crisis has not been isolated but is part of a highly integrated, complex and dynamic global financial system,” he said. “Subprime market problems have not been limited to what is, as I said, a relatively small market because they raised questions about the fundamental institutional, incentive, and practices framework of several modern markets.”

    Lockhart also addressed three questions he said are related to the past, present, and future of the subprime/financial markets story. How did problems in the relatively small asset class of subprime mortgage-backed securities morph into a much broader financial (system) stability problem? What is the broad state of risk to financial stability and more broadly the overall economy? And what will it take to return to stable conditions in the affected financial markets?

    The answers follow in his complete speech:

    Which you can find at the link above, Rich

  101. Rich In NNJ says:

    Moody’s continuing Ambac Fincl review for possible downgrade – MarketWatch
    Moody’s believes Ambac capital below the Aaa target level – MarketWatch

  102. kettle1 says:

    from Seeking Alpha

    http://tinyurl.com/yv947j

    There is a very goos chance that the deteriorating condition of the US dollar in global markets and due to forces such as above will mean the end of the US as a financial/military superpower. I make this statement based on a historical perspective. I cannot find 1 instance of an empire that has lost control of the financial markets ( relative to the empire , and for the US that means the greenback as the defacto global/petro currency) and still maintained its preeminence as a major power.
    As someone said yesterday; we may have won the cold war using capitalism, but it looks like it may destroy the US empire as well.

    if we follow in the USSR’s footsteps then what states break away from the union first, vermont, texas, california?

    From a historical perspective, this is a fascinating time to be living in.

  103. HEHEHE says:

    Kettle,

    Good book that came out a year or two ago called American Theocracy, pretty much lays out how we are going the path of the British, the Dutch, and the Spanish.

  104. BC Bob says:

    “if we follow in the USSR’s footsteps then what states break away from the union first, vermont, texas, california?”

    I’m confused. I thought NJ already has;

    The People’s Republic of NJ. No?

  105. Confused In NJ says:

    103.
    “In closing, let me provide a succinct answer to this panel’s central question, and that is, “Is the subprime crisis contagious?” In short, the answer is yes.

    “The subprime mortgage crisis has not been isolated but is part of a highly integrated, complex and dynamic global financial system. Subprime market problems have not been limited to what is, as I said, a relatively small market because they raised questions about the fundamental institutional, incentive, and practices framework of several modern markets.

    This also explains why Congree won’t make English the language of America. It’s been replaced by our Lawyers in Congress with Politically Correct Obtuse Legal Speak.

  106. kettle1 says:

    ChiFi

    Regarding yesterday about moving closer to work and gas price.

    Congrats on a reduced commute :)
    However, this is unlikely and currently unrealistic on a large scale. imagine if everyone tried to do that. you would immediately desert a large number of towns as most large employers are concentrated in a small area while the people are spread out. The ultimate consequence is that the majority of people live in a high density urban environment.

    all of that is possible, but not in the short term as our society ( infrastructure, economy etc) is not designed for that. ever since the 50’s our entire economy has been built around highways and cars. it would take decades to undue this and will take more then gas prices to do so because of the extensive changes required in most facets of scoiety

  107. skep-tic says:

    #105

    this is a fun game. Cali could easily function as a stand alone nation. So could Florida and Texas. The “sea of wealth” from D.C. to Boston would be SOL if the dollar collapsed.

  108. chicagofinance says:

    kettle1 Says:
    February 29th, 2008 at 11:52 am
    please note that i am clueless.

    ket: I don’t care what others’ investment picks are here…..if you don’t understand the fundamental dynamics…..do not mess around.

    There are some extreme opinions and strategies being posted here. If it is not readily apparent to you, then, I reiterate, you don’t understand the fundamental dynamics.

    If you have a healthy dose of prudence, then do whatever you want.

  109. kettle1 says:

    BC

    we may be PRONJ (peoples republic of NJ) but we are just a puppet state of the empire still. that doesnt count

    Comparison between U.S. states and countries nominal GDP
    http://tinyurl.com/wlrw8

  110. HEHEHE says:

    I am not telling anyone to invest anything in anything. Don’t be dumb like me.

  111. grim says:

    From MarketWatch:

    S&P may downgrade 1,887 classes of Alt-A mortgage securities

    Standard & Poor’s said on Friday that it may downgrade 1,887 classes of mortgage securities backed by so-called Alt-A home loans. The securities, made up of mortgages originated in 2006 and the first half of 2007, were put on CreditWatch with negative implications, the rating agency said. Alt-A loans were usually offered to more creditworthy borrowers than subprime mortgages, however, they required less information such as documents verifying home buyers’ incomes. There’s been a persistent increase in delinquencies on the loans underlying these securities, S&P said.

  112. bbd says:

    Clot (and others):

    I made an offer on a property. Believe it or not, the seller agent told us that there were two other offers on the property (the listing price was quite low, the agent said so as to create a bid situation). Later the agent asked us to improve our offer to be more competitive. We did, and was accepted.

    My question: how do I know whether the two other offers are genuine? Could the seller agent made them up? Would it be reasonable to ask her show us the offers?

    Thanks!

  113. kettle1 says:

    ChiFi 111

    very good point. Any thing i do with real money ( anything more then lunch money) is run by my financial adviser as i am not a professional in the field and readily acknowledge it.

    I will still occasionally voice my uneducated opinion and expect it to be taken as such.

    I also certainly understand (some) the risk and extreme aspect of some the strategies being discussed. I am entirely to conservative financially to try and play Make Money’s game of selling everything i have to buy gold.

    thanks for the warning though :)

  114. 3b says:

    #116 bbd: You don’t.

  115. grim says:

    bbd,

    Are you sure this isn’t buy a bit of buyer’s remorse? Would you back out if you found out otherwise? Do you even have that option (are you still in attorney review?).

    What if they told you the offers were verbal?

    You made the offer under the same set of circumstances, what changed?

  116. Make Money says:

    bbd,

    I guess you’ll never know.

    Anyway,

    Congrats.

  117. Ann says:

    bbd,

    If you’re out of attorney review, then don’t worry about the other offers. You’re under contract and it’s water under the bridge. You can still back out of the contract, but it won’t necessarily be easy, and you would want to talk to your lawyer about possible ramifications.

    If you still are in attorney review, where you can bail for any reason, then think long and hard about YOUR offer. Are you ok with the number? If you’re not, get out while you can.

    Don’t fret about the other two offers. Chances are they are not total fabrications, but eh, they may not great offer, in writing either. Probably somewhere in the middle. Multiple offers do happen, even in this crappy market. There is always the one house on the block that is the nicest one, or best value, that the few lone buyers out there want. We had multiple offers on our sell at the end of 07.

    Good luck!

  118. dreamtheaterr says:

    “Oh, by the way, Richard also called me arrogant, in 12/06, for owning gold. HMMM? Where is Richard these days?”

    BCBob, gold’s doubled in 9 quarters. I accumulated between $475-$490 in 2005 and kept my mouth shut since I use inferior products to gain exposure. I exited a fair amount last week, and am letting the balance ride.

    I’ve said it before – when one earns mostly in USD, but also spends in other currencies, you HAVE NO CHOICE but find avenues to generate non-USD denominated returns to keep USD returns positive in excess of actual inflation, not stated inflation. And just because one earns in USD and spends in USD does not mean they will not be affected by a weaker dollar. Travelling Asia will completely open an American investors eyes as to what is transpiring there economically.

    And I’m immensely grateful for all your contributions to this blog all this while… I’ve learned immensely from you.

  119. BC Bob says:

    Sean [91],

    I agree. It’s closer to $2,200. Believe me, I am as bullish as anyone, have been long since 2003. That said, some of the most vicious declines occur in bull markets. For example, look at this market in 5/06.

    I could give a crap if I just owned the physical. However, futures are a different animal. Not to be cognizant of short term technicals is foolish, at least to me.

  120. Make Money says:

    Nothing else left for me to say. Just hire me when you are named Pres..

    You promise to hire me if Gold, Silver, Euro and Swiss Franc Tank against the dollar?

  121. bbd says:

    Grim

    Appreciate your comment. Not remorse, the price is OK, just due diligence, and curious how much I can trust a realtor’s word (would it be illegal if she did lie?). She did say the two offers were in writing.

    Make Money: thanks! We like to wait longer to get a better deal but our relo package will expire soon…

  122. jill says:

    Ann
    what do you mean back out for any reason? I thought once your offer is accepted and under attorney review, there’s no backing out unless something comes up in the inspection. and you lose your deposit.
    thanks,
    jill

  123. Make Money says:

    BC #123,

    Now I see. Contact peter Schiff at Euro Pacific and they’ll show you how to own the actual physical Mint in Australia and New Zeland. They store it for free.

    their advise is comes with the 3% commision but it paid for itself in one week of appreciation.

    I’m not smart enough to play with futures and options.

  124. kettle1 says:

    appropriate picture i think

    http://tinyurl.com/2qpapf

  125. HEHEHE says:

    Vacant Homes in U.S. Climb to Most Since 1970s With Ghost Towns

    http://www.bloomberg.com/apps/news?pid=20601109&sid=au67GKPyS_Dg&refer=home

  126. Ed Sanders says:

    Re post 65:

    There’s a great typo on marketwatch right now. Russell 2000 is off by 90 percent.

  127. HEHEHE says:

    Give it time

  128. Ed Sanders says:

    Dang,

    corrected

  129. BC Bob says:

    make[126],

    Yeah, I am aware. However, having too much fun with leverage.

  130. 3b says:

    #126 Jill: You have 3 days to back out of a deal for any reason.

  131. kettle1 says:

    Fanne mae at work…

    HomeSaver Advance, an unsecured personal loan, is a new loss mitigation alternative available to approved Fannie Mae servicers for eligible borrowers designed to bring a delinquent loan current without a formal loan modification. It provides funds to cure arrearages of principal, interest, taxes, and insurance (PITI), as well as other advances and fees as listed in the Highlights section below. HomeSaver Advance is documented by a borrower-signed promissory note, payable over 15 years at a fixed rate of 5% with no payments or interest accrual for the first six months.

    theres more….
    http://tinyurl.com/ysy9yv

  132. Ed Sanders says:

    Getting back to the beginning of this thread, I think You Walk Away, and stories about it like the one in The Times are starting to have an impact.

    I am tangentially involved in the foreclosure/forbearance industry and I can tell you that the banks really haven’t been budging on workouts so far, despite the dog and pony shows like Hopenow and Project Lifeline.

    When I talk to our foreclosure counselors they are telling me that they are just starting to see some movement, but it is still a tooth and nail fight.

    Why am I not surprised that the people who couldn’t see they were creating a disaster can’t see that they are stuck in one?

    The crying to Washington is going to come out from behind closed doors any day now, and sadly, people who don’t deserve any help are going to get it.

  133. BC Bob says:

    dream [121],

    You don’t need to learn from anybody. You have your eye on the ball. If it pulls back 10%, consider it a gift.

    I can’t understand why there is not a march on DC, protesting the outright prostitution of our currency. They are pilfering our wallets, yet nobody seems to care. They will one day, when the stock market comes in spiraling downward. The pundits will blame in on the decline of the dollar. Why aren’t they addressing it now.

    All disclaimers.

  134. Mitchell says:

    #8 Grim thats a good point but as a buyer it also scares me.

    I have been wondering why we have been seeing lately these pre-inspected homes. While I think some are a good incentive its still best to get an inspection from someone who you choose not someone the home owner chooses or especially one a real estate agent recommends. We all know shady Real Estate agents will choose lenders, lawyers, and home inspectors they trust to give more favorable home results. The third parties get the extra business because they are doing the Realtor a favor. While a lot are legitimate I have heard many time of realtors that shun certain lawyers and home inspectors for telling the TRUTH instead of looking for volume from the Realtor.

    Always choose and hire your own home inspector. Always get an example of a report they are going to generate for you.

    I would prefer instead of pre-inspected which they should do anyway if they havent in a while to know if the home might be a problem to sell. Instead they offer an incentive or paying for your personal choice of inspector up to a certain amount. That shows more faith they aren’t trying to pull a fast one in the home they are selling.

    My last guy provided video, photo’s, and a lengthy report on disc, and proper solutions. He wasn’t high priced either and the equipment overhead wasn’t anything out of reach of any other inspector. The guy the buyer used back in NJ wasn’t bad either but no where near the level this guy we found when we were buying. He provided them a report on disc.

  135. Stu says:

    Kettle 1:

    Loan amount up to the lesser of $15,000 or 15% of the original UPB for delinquent PITI, escrow advances, and advances for attorney fees and costs and up to 6 months of unpaid HOA fees (12 months, where the HOA fee is paid once per year)

    Max of $15,000? How is this going to help? IMO, it will help less than 5% and doesn’t solve the underlying problem.

    People who can’t afford to make their payments today are not going to be able to make their payments tomorrow. A 6 month respite ain’t gonna help.

  136. Make Money says:

    BC 138,

    Somebody needs to be hung on the capitol hill steps for treason.

    When will Joe want to know why the price of the six pack doubled?

  137. BC Bob says:

    “When will Joe want to know why the price of the six pack doubled?”

    make,

    At the same time he realizes his 700K, 2005 purchase, is worth 450K.

  138. syncmaster says:

    London’s edge over New York eroded

    London is losing its status as the world’s leading financial centre and being overtaken by New York, according to a global survey of finance professionals.

    The collapse of Northern Rock and the proposed tax crackdown on non-domiciled residents are making the UK less attractive to overseas businesses, according to the City of London Corporation, which commissioned the survey.

    A separate survey, also commissioned by the City, said the UK … had become increasingly unpredictable and uncertain, complex and unnecessarily aggressive in its approach to taxpayers, it found.

  139. Stu says:

    It’s Friday…Anyone else’s tea leaves pointing to a 3% drop in the indexes by the close?

  140. Sean says:

    If you haven’t refresh your marketwatch page again.

    http://www.marketwatch.com/tools/marketsummary/

    How long before the Treasury/Mint decides to sell some Fort Knox Bullion?

  141. BC Bob says:

    he [142],

    What does this imply for our standard of living, going forward? YIKES.

  142. kettle1 says:

    137 BC Bob

    People are not rioting because (to channel clott for a moment)they have been well schooled by the public education system that they need not worry about such things, the ever benevolent and powerful federal government will protect them. I say a poll done recently and they asked if the dollar was backed by gold and what the federal reserve was. very few people new the answer to these questions.
    The people will not rise up until they lose their bread&Circus (i.e doritos&Britney)

  143. kettle1 says:

    a chart of the i nflation adjust gold prices since 1914…

    http://tinyurl.com/28ukyw

  144. HEHEHE says:

    Watch for some amazing announcement and crazy market swing re this say around 3:30 Ambac like last week ;) That happens again and I am saying it all truly is fixed

    http://www.cnbc.com/id/23409565

  145. chicagofinance says:

    BC Bob Says:
    February 29th, 2008 at 1:52 pm
    I can’t understand why there is not a march on DC, protesting the outright prostitution of our currency. The pundits will blame in on the decline of the dollar. Why aren’t they addressing it now.

    Bost: seriously…what’s the big deal?

  146. kettle1 says:

    I can vouch for the website so take with a grain of salt, but they various charts of inflation adjusted prices ( education, gold, corn etc)

    http://tinyurl.com/329zlz

  147. kettle1 says:

    I cant vouch for the website so take with a grain of salt, but they various charts of inflation adjusted prices ( education, gold, corn etc)

    http://tinyurl.com/329zlz

  148. kettle1 says:

    by the way, firefox just suggest “c1itorides” as the correct spelling for doritos

  149. Pat says:

    Bob, if you were negative net worth with average CC debt, would you be rioting?

  150. grim says:

    C’mon, it’s 2:35, where is my 400 point reversal?

  151. jcer says:

    bbd just out of curiosity what town is this in? Because I recently heard the same story.

  152. Make Money says:

    JB,

    Is this grim enough for you?

    Jim Rogers – who co-founded the now closed Quantum Fund with George Soros – told 750 global fund managers in Tokyo today that, America is “completely out of control”, there will be a 20-year bull market in commodities and that prices will be in turmoil.

    And he also warned that it “made sense” if global competition for resources ended in armed conflict.

    http://business.timesonline.co.uk/tol/business/economics/article3451136.ece

  153. kettle1 says:

    HEHEHE

    yeah gladiator sports!

  154. jmacdaddio says:

    People’s Republic of NJ? That’s a kind description. The cronyism and kleptocracy here make me think of Mobutu’s Zaire or Idi Amin’s Uganda, minus the bloodshed. NJ gov’t employees make as much or more than equivalent private sector workers, plus the benefits are amazing. When the state itself is the primary source of employment and wealth accumulation, it’s time to run.

  155. grim says:

    When the state itself is the primary source of employment

    Doesn’t this mean we’re communist? Da! Comrade!

  156. Stu says:

    “by the way, firefox just suggest “c1itorides” as the correct spelling for doritos”

    Oh yeah,

    Put ‘Stu’ in your document and see what it suggests!

  157. Al says:

    LOL – you are communist if you are state employye, and slave – if you are private employee :)

    Old expression – democracy is a dictatorship of Majority :)

  158. John says:

    I love it, my friend in Ho Ho Kus is following my advice for her open house this weekend. The ad and the weblisting is in mandarian. She should sell it quick. I sold my last place for 15K above asking with my mandarian ad quickly after I gave up on realtors and engiish ads.

    I was bitching and moaning at work that it is taking longer than expected to sell my last place when my asian co-worker was curious as she thought it was a good neighborhood. When I told her it was on the MLS and had an ad in the times she said “OHHHHH, I seeee problem, no one with money speaks english anymore so what good is an ad in English”. She tanslated my ad to Manadarian and we sold it a week later.

  159. kettle1 says:

    163,

    stu you stud

  160. Stu says:

    kettle1 Says: Stu you stud

    One has to be very careful not to hit the change button when the spell checker stops on Stu.

  161. 3b says:

    #165 Al: Democracy is a useless system, if people are uniformed, and uninvolved.

  162. 3b says:

    #139 BC Bob: Most Americans have no idea what you are talking about;even the so called well educated ones.

  163. grim says:

    God help us..

    Eighth graders get detentions for paying for lunch in pennies

    Twenty-nine eighth graders at a Hunterdon County school received two days detention after they paid for their $2 lunches with pennies, officials said.

  164. grim says:

    Since it appears that the penny isn’t legal tender anymore, do you think anyone would mind a small smelting operation in my garage?

  165. BC Bob says:

    “Bost: seriously…what’s the big deal?”

    Chi [151],

    If you are long commodities it’s a dream, keep it coming.

    How about overnight some major overseas firm misses their #, way off the mark. This is attributed to exchange rates. Their markets get pounded. We open up limit down, S&P, futures. Big deal? No, not if you’re short.

    Let’s forget about the markets. Foreign firms are forced to raise prices, to compensate for currency losses. We are paying thru the nose for imports. US firms, who should utilize this opportunity to grab market share, jump in and raise prices. After all, what US Corp executive cares about long term market share. The # 1 priority is quarterly results and their option packages. Now, inflation continues to rise. The herd have less discretionary purchasing power. Their wallets are being robbed blind by the silent killer, inflation. Troubling, no? Especially for an economy that is 70% consumer driven.

    Once inflation rears its ugly head, it’s becomes very difficult to bring under contol in the future. It’s not a matter of turning the switch on/off. It then becomes an undertaking for the likes of Tall Paul. Oh, by the way, my first mortgage was a 13.5% adjustable in 1985. Big deal in the future? Not to me, if gold is $2,200 by that time.

  166. Stu says:

    Gold…

    Understand it before you purchase it.

    That’s all I’m saying.

  167. Al says:

    it is sad that 8th graders in NJ are more involved i their life than adults population….

    And they are getting puniched??

    I smell lawsuit against school district.

  168. Make Money says:

    it is sad that 8th graders in NJ are more involved i their life than adults population….

    I agree and it’s gonna be them that will have to fix all the problems that we have created.

  169. kettle1 says:

    grim 172

    God help us..

    read the story, dont know where to start except to agree with you

  170. Al says:

    Let’s ask people for their opinion – what is more dangerous to the economy:

    Higher interest rates or 200$++/barrel oil by 2009?

  171. John says:

    Wow muni bonds are getting smoked for no reason. Bought some 2010 NY bonds today at 3.9% yield, that is almost 7% in the higher tax brackets, that is crazy yield spread next to the two year treasury. Me and Bill Gross are both buying so I am in good company.

    BTW I laugh very hard when you guys say you need to know gold to buy it, I did a detailed in dept three month revew of a precious metals trading desk and had lots of experts on board, first four weeks I thought I was catching on the next eight weeks every day I realized more and more how little I know. There are lots of macro, micro and hear mentality and double-dealing and insider info in the PMD markets, you guys no nothing. Plus it is a 24 hour market and tokyo and london have big PMD operations so when you get squeezed it might be 2am. I did love it when the traders just said stuff like dont worry it is a positive katango so let it ride!!!!

  172. Ann says:

    127 Jill

    While you are in attorney review, you can back out for any reason whatsoever as far as I know. If you’re a seller, you can back out if you get a better offer during that time, if you’re a buyer can back out if they get cold feet or find something else they like.

    Once you’re out of AR, then you’re out and under contract. Then you can only get out based on the contingencies, etc.

  173. kettle1 says:

    underwater or what???

    http://tinyurl.com/2bepor

  174. John says:

    Rates are crazy low for US Govt. 1.63 for a two year US Govt bond when there are two year munis at 3.63!!!! This is something you will tell your children about, it is shocking.

    Feb 29 3:22pm ET † Price Change Yield Yld Chng

    2 yr 100 22/32 +11/32 1.63 -0.19
    5 yr 101 6/32 +1 7/32 2.49 -0.18
    10 yr 99 28/32 +1 9/32 3.51 -0.15
    30 yr 99 14/32 +1 23/32 4.40 -0.11

  175. John says:

    HOLY JC, gotta go, PPT just called.

  176. kettle1 says:

    Al

    Oil is more of a long term threat, but the two, oil and interest rates are intertwined, so the effects of each are somewhat dependent on the other

  177. lisoosh says:

    Rental in Far Hills. One of the blurbs says “good for parties”. Heh.

  178. HEHEHE says:

    Explain to me why if you buy the GLD ETF you are in some sort of heightened danger? You can put a stop limit order in at a level you feel safe at just like a stock. While it doesn’t guarantee you the exact price you aren’t going to lose your shirt either.

  179. bbd says:

    Ann: it is always good to hear from you, thanks! Good luck with your purchase, and mine! I will still hang out here, may be not as much as before…Thanks Grim for a great service.

    By the way, mortgage rates dropped about 0.5% in the last few days, due to bond yield dropping in sync with stock market meltdown, still not as low as late January, but quite decent.

  180. BC Bob says:

    he [187],

    No different than a sell stop in IBM.

  181. John says:

    Most ETFs are single exchange listed products in the case of a exchange outage it will be frozen and you can watch the price drop like crazy while hte market is out. The underlying assets, gold, keep trading 24/7 so Japan and London have a major event it will open down 20% so you stop loss order is not as effective.

    HEHEHE Says:
    February 29th, 2008 at 3:29 pm
    Explain to me why if you buy the GLD ETF you are in some sort of heightened danger? You can put a stop limit order in at a level you feel safe at just like a stock. While it doesn’t guarantee you the exact price you aren’t going to lose your shirt either.

  182. Pat says:

    John, I’m glad you’re around.

    Question. I have a new, nasty and unemployed neighbor. Never before have I been unable to deal with garbage from neighbors.

    He stands in the front window (nude except for boxers) every night and waits for several of us working women to drive home and park along the front. Three of us who come home between 5 and 6:30 have noticed it.

    Once he’s sure each of us has seen him in turn, he yawns and stretches.

    My husband laughs and tells me to laugh and point at the guy. But I can’t laugh when I’m puking inside. Plus he might be psycho…believe me, I’m no model, so for him to do this he’s got to be sick.

    Advice? Should I put him on the bad neighbor website?

  183. Willow says:

    #171

    Isn’t it sad when the superintendent can’t speak English correctly.

    “The 8th graders at Readington Middle School were protesting a shortened lunch period on a half-day of school, and received detentions for slowing the cafeteria line and DISRESPECTING lunch aides, who had to count the 5,800 copper-plated coins, said Superintendent Jorden Schiff.”

    Disrespecting isn’t a real word. He could have said they were being disrespectful to the lunch aides. No wonder they were protesting.

    Sorry – a pet peeve of mine when an educator is ignorant of English grammar.

  184. BC Bob says:

    “Advice? Should I put him on the bad neighbor website?”

    Pat,

    No. Flash him.

  185. Make Money says:

    Advice? Should I put him on the bad neighbor website?

    Have your husband go kick his ass.

  186. njrebear says:

    John,
    4% on muni bond sounds interesting. Would you recommend any particular issuer?

  187. x-underwriter says:

    Pat,
    It’s a PA thing

  188. kettle1 says:

    Pat

    put a pair of nutcrackers in your purse and next time you see him, make eye contact, and pull out the nut crackers….

  189. Hehehe says:

    John,

    I am willing to take that risk.

  190. x-underwriter says:

    maybe tell him you want a cheesesteak wit’ and not a snack

  191. Jamey says:

    182:

    What a tacky dump.

  192. kettle1 says:

    BC Bob,

    buy that silo yet for all the grain you want to buy. hopefully you already filled it,

  193. Fiddy Cents on the Dollar says:

    kettle #182-

    Crappy Chateau, ain’t it….did you notice the photo in the Family Room? The formerly happily married couple cheek by jowl in a loving embrace??? I wonder who got that photo in the divorce settlement?

    Aren’t Realtors told not to leave the seller’s personal pictures in their advertising photos.

  194. Against The Grain says:

    “disrespecting” is a real word:

    http://dictionary.reference.com/browse/disrespecting

    sorry, just a pet peeve of mine.

  195. Grammar Rodeo Clown says:

    Wow, clash of the grammar prigs:

    “Disrespecting” is, at least according to the American Heritage, and other commonly-cited lexicons, is proper usage.

    Sucks, but it’s true. (Don’t get me started: I’m still not “over” the use of “flammable,” instead of “inflammable.” And “dependability” is just ad-speak that somehow wormed its way into proper discourse sometime around the advent of radio. Then there’s “Realtor,” another neologism.)

    Them gerunds. They’ll get you every time… Kinda like how those kids were “protesting.”

    But you’re free to go on “disbelieving…”

  196. chicagofinance says:

    Stu Says:
    February 29th, 2008 at 3:05 pm
    Gold… Understand it before you purchase it.
    That’s all I’m saying.

    F-yeah!

  197. Outofstater says:

    #191 You and your other neighbors should call the police, not 911, just the local precinct. Talk with the desk sergeant and let him know about this guy and ask his advice. If nothing else, you’ll be starting a file about this nut (no pun intended) case. The local precinct cops really do want to know what’s going on in the neighborhoods.

  198. chicagofinance says:

    BC Bob Says:
    February 29th, 2008 at 3:03 pm
    Chi [151],
    Let’s forget about the markets. Foreign firms are forced to raise prices, to compensate for currency losses. We are paying thru the nose for imports. US firms, who should utilize this opportunity to grab market share, jump in and raise prices. After all, what US Corp executive cares about long term market share. The # 1 priority is quarterly results and their option packages. Now, inflation continues to rise. The herd have less discretionary purchasing power. Their wallets are being robbed blind by the silent killer, inflation. Troubling, no? Especially for an economy that is 70% consumer driven.

    Bost: in the long-run, people adjust (I know, in the long run we’re all dead)….people like to b!tch and moan, but ultimately there is a limit to all price runs…..I ask you….isn’t 2008-2009 commodities looking quite a bit like 2005 real estate?…looking a bit like tech 1999? Oh no, it’s different this time…..

    Come on…..

  199. NJGator says:

    So here’s an interesting question (well, set of questions, actually), since I am still obsessed with property taxes and revaluations.

    Glen Ridge underwent a revaluation this year and preliminary assessments were posted on the web by the appraisal company. http://www.realtyappraisal.net/pdfs/GlenRidge2008.pdf

    Almost all of the assessments were not only below 2006 and 2007 sales (which should have been the basis of the valuation), but in almost every case I have knowledge of, the assessments were below 2005 and 2004 sales as well.

    Does this not look like a deliberate attempt to underassess properties to avoid defending appeals during a falling market?

    Is this even legal, as the valuation for the new assessment should have been 100% of fair market value as of Oct 1, 2007?

    What happens to their share of Essex County taxes if they are supposed to be at 100% of 2007 value, but are not?

    What standing does someone have to grieve their assessment, if they are under true market, but closer to true market than their neighbors and the town on average (Remember, during a revaluation year, everyone is supposed to be reset to 100%. You cannot grieve your assessment compared to other assessments, you can only grieve your assessment compared to fair market value)?

    From what I understand from friends that live in GR, they are not being offered access to their property record card before the informal meeting with the appraisal company (which is your last chance to get the assessment reduced before filing an appeal before the Essex County Board of Taxation). The posted data is also far less than ASI shared with Montclair homeowners during their revaluation process – our data included old assessments as well as breakdown of assessment between land and improvement valuations.

    Maybe I am just a cynic, but something seems very fishy to me.

  200. grim says:

    From MarketWatch:

    J.P. Morgan sees up to $450 mln home equity loss in Q1

    J.P. Morgan Chase said in a filing Friday that it expects continuing deterioration in housing prices to boost losses on its home equity loan portfolio to as much as $450 million in the first quarter. “Economic data released in early 2008, including continued declines in housing prices and increasing unemployment, indicate that losses will likely continue to rise in the home equity portfolio,” J.P. Morgan said in a 10k filing with the SEC. “Home equity losses for the first quarter of 2008 could be approximately $450 million and net charge-offs could potentially double from this level by the fourth quarter of 2008,” it added. The firm also said the net charge-off rate for its Card Services business could potentially increase to about 4.50% of managed loans in the first half of 2008 and to 5% by the end of 2008.

  201. John says:

    In healthy markets, New York-based JPMorgan Chase & Co. (JPM) will currently lend borrowers a mortgage equal to as much as 90% of a property’s value. For borrowers in states that have declining markets, however, the bank reduces that maximum, says Tom Kelly, a spokesman for the bank. JPMorgan then reduces that level even further for borrowers in the worst declining markets, Kelly says, though he declined to provide specifics.

    CitiMortgage, a wholesale lending operation of another large Wall Street Bank, Citigroup Inc. (C), maintains a list of “declining market areas” that red-flags dozens of counties in more than 10 states. Citi reduces the amount it will lend for properties in those counties “by at least 5%,” the document says.

  202. stu says:

    Go get them NJGator!

    Stick it to the (tax) man!

    Oh, and I fed the dog :P

  203. John says:

    If you are in NJ just go for a State GO or any bond backed by a revenue producing asset like bridge and tunnel or port or I hate to say things like schools and towns that can just raise taxes to pay. Avoid bonds that are to build things or little rinky dink fire departments or towns that could concievble go bankrupt.

    Something in a closed end fund like NXJ – NUVEEN NEW JERSEY DIVIDEND ADVANTAGE MUNICIPAL FUND $12.5 a share will pay in excess of 5.3% tax free, Mondays WSJ has the list of all closed end muni bond funds, or even a straight up NJ muni like this one. I give this bond just as an expample to show how disjointed the muni market is. Remember a govt bond that matures in 2011 is only like 1.8% and taxable The bond below is 3.5% and tax free, that is very unusual. The reason being is that companies like Thornberg are selling good colateral to meet margin calls. That is drving rates up in certain munis but has no bearing on default risk.

    The closed end auctions are toxic for now and longer dated munis past 2014 are risky as you are not being paid much extra to take on tons of inflation risk.
    NEW JERSEY ECONOMIC DEV AUTH REV REF REV 05.00000% 08/15/2011 BDS PUB SCHS SMALL PJ LN PROG SER. 200
    Basic Analytics
    Price (Ask) 104.740
    Yield to Worst (Ask) 3.526%

    njrebear Says:
    February 29th, 2008 at 3:41 pm
    John,
    4% on muni bond sounds interesting. Would you recommend any particular issuer?

  204. 3b says:

    #212 The closed end auctions, as well as the plain vanilla auctions are not onlyt oxic, they are dead.

    These instruments were sold a (I used to do sell these things), as cash equivalents.

    Sicne they had no put mechanism like VRDN’s, funds could nto purchase them, and so they were marketed to corps, (Best Buy for instance used to purchase massive amounts of these things), and very high net worth individuals.

    These thinsg were not supposed to fail, as everytime we had a balance left over (failed auction), the firm would stpe in ans take down the invntory.

    Not that the firms no longer do that, and these auctions ar fialing left and right, those biyers will never return.

  205. Punch My Ticket says:

    grim 172,

    Given your public profile, it would be very unwise.

    http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm

  206. Hehehe says:

    “Bost: in the long-run, people adjust (I know, in the long run we’re all dead)….people like to b!tch and moan, but ultimately there is a limit to all price runs…..I ask you….isn’t 2008-2009 commodities looking quite a bit like 2005 real estate?…looking a bit like tech 1999? Oh no, it’s different this time…..

    Come on…..”

    I will wholeheartedly agree it has all the makings of the beginnings of a bubble.

  207. BC Bob says:

    I ask you….isn’t 2008-2009 commodities looking quite a bit like 2005 real estate?…looking a bit like tech 1999?

    chi,

    I am certainly cognizant of this. I do agree with you short term, not long term. I do think that they are short term stretched. As a result, I have protection on all my futures positions and have bought close to the money puts against my cash positions. I don’t like the current press/vibe. There’s too much enthusiasm. I prefer to climb the wall of worry. I feel that the late comers will be taught a lesson that they can’t buy with tuition. Class time? Who knows, a week, a month, 3 months? Not my concern. I do know that class is coming. I’m actually looking foward to it.

    That said, we have been in a bear market for commodities for over 20 years. Historically bull markets, in commodities, last approx 60-70% of the duration of the preceding bear market. We are in year 7 of the current gold run. When these markets flip[no pun], they go much longer than most can imagine. They will not die until there is mass hysteria, although they will wipe out the ill prepared on retracements. It will probably end after 4-5 huge up gaps, islands. We are not close to a long term exhaustive top yet. When every taxi driver is buying and there are lines around the corner to get into coin shops, the bells and whistles will be going off.

    BB has communicated his hand, hard to believe that he is so fortright. As long as this is our agenda, these markets will act accordingly.

  208. Rich In NNJ says:

    From MarketWatch:

    Impact from credit crunch will be huge, study says

    The economic impact of the mortgage crisis and credit crunch will be huge, and it has barely begun, a new study prepared by several prominent economists and released Friday has concluded.

    “Feedback from the financial market turmoil to the real economy could be substantial,” it said. Unless they can quickly recapitalize, banks are likely to cut back their lending to consumers and businesses by more than $1 trillion, cutting economic growth by more than a percentage point over the next 12 months.


    The report estimates that the credit crunch is expected to push down growth by 1.3 percentage points over the next 12 months.

    Almost as alarming is the report’s conclusion that this crisis is unique in the annals of U.S. economic history but now may serve as the template for more crises to come.

    What is different this time is the amount of leverage. Bank balance sheets were forced to expand in the wake of the mortgage crisis, as off-balance-sheet investments were forced onto their books.

    This so-called “unwanted lending” is set to reduce bank loans to business and consumers.


    Banks have a choice to contract their balance sheets so that their capital on hand is sufficient, or else seek new capital from sovereign wealth funds or other investors.

    There is little chance that the economic environment will improve any time soon to avoid this choice, the study said.

    As of the end of January, banks had raised $75 billion in new capital and suffered $121 billion in losses.

    Time to trim

    The report urges banks to cut their dividends to preserve their existing capital. Central banks and governments should encourage this action across the globe so that there is no competitive disadvantage or stigma from the reduction.


    A worse-than-expected economic outlook would cause a downward revision to these estimates.

    A sharp decline in home prices could lead to many U.S. homeowners with negative equity, the report said.

    At the moment, 50 million households have mortgages. If home prices drop 15%, it would put 21% of these mortgages, or $2.6 trillion, underwater.


    At the forum, two top Fed officials — Boston Fed President Eric Rosengren and Fed Governor Frederic Mishkin — were asked to respond to the paper. Both said they agreed with the basic story.

  209. Punch My Ticket says:

    I bet you’ve never seen negative yields to maturity on a US government issue in your lifetime. Today is a red letter day.

    http://i29.tinypic.com/hwdgns.jpg

  210. Rich In NNJ says:

    3B (214),

    Someone very close to me who deals in these auction rate bonds is consulting with their attorney for fear of being sued.
    I don’t think he was stupid enough not to inform his clients that the bonds had limited liquidity (in the past they practically were liquid) but now that many can’t sell…
    I see these auction rate bond holders in the same light as subprime mortgage holders. They knew they weren’t investing in a money market fund or CD. Ya takes ya risks.

  211. scribe says:

    Pat, #191

    Could your local precinct send a police woman undercover to park a car?

    Does this meet the local standard for lewd behavior, etc.?

  212. SteveTheBrigadoonian says:

    #219 what does a negative yield indicate? That the coupons are worthless?

  213. BC Bob says:

    “Treasury Tells a Very Scary Story”

    “The department’s “citizen’s guide” to the U.S. government’s official financial report — so full of weaknesses it can’t be audited — sees a long-term “fiscal train wreck” from runaway entitlements.”

    http://www.cfo.com/article.cfm/10788101/c_10788433?f=home_todayinfinance

  214. Pat says:

    Thanks for the advice on my neighbor. There are some other issues with the guy, too. I guess it wouldn’t hurt to go chat with our boro’s dynamic donut duo.

    The other female neighbors have the same problem, and their husbands also laugh, but night after night, week after week, when you’re tired and just want to go home, it gets to be a dreaded event.

  215. BC Bob says:

    Pat,

    Put some BenGay in his jock strap.

  216. Punch My Ticket says:

    222 Brigadoonie

    That’s an inflation indexed Treasury. It means that enough people are scared enough about both inflation and credit risk that they are willing to get back less than they put in (in real USD) in return for shrugging off those risks.

  217. Jaw says:

    What are some of the cons of a house with well and septic? Is it something that should be avoided at all costs?

  218. lisoosh says:

    Pat, commiserations, it would bug me too.

    Suppose you should go the official route, although getting all the neighbourhood husbands to round up the guy, and have a “little friendly word” might be quicker and more effective. Sexist but true. I’m surprised somebody hasn’t gone all macho on him yet.

  219. Ann says:

    Pat,

    That’s totally perverted what that guy is doing. The problem with people with problems like this is that it can escalate. For now, that’s enough for him, but he’ll have to amp it up. I would call the cops and quickly. There has to be a law he is breaking.

    I knew of a situation like this in a neighborhood, the guy was a peeping tom but he kept amping it up, more and more, until he snuck into someone’s house and got caught doing it. He was a professional guy, worked in NYC, lost his job, his wife, name all over the paper, had to move away, everything.

  220. gary says:

    This is all I gotta see to really p*ss me the f*ck off. The f*cking nerve of some of these people.

    How do like this line: “No realtors please, unless you have a specific serious buyer in mind looking for a home in this neighborhood and price range.”

    Sure, chubby Mary, whatever you say. Yeah, the buyer is serious, the buyer would love to live in your neighborhood but the buyer dictates the f*cking price, not you. Get used to Alpo caserole, tubby, you’re gonna be eating it a while.

    http://newjersey.craigslist.org/rfs/591449571.html

  221. chicagofinance says:

    Punch My Ticket Says:
    February 29th, 2008 at 4:49 pm
    I bet you’ve never seen negative yields to maturity on a US government issue in your lifetime. Today is a red letter day.
    http://i29.tinypic.com/hwdgns.jpg

    pmt: come on, it’s a TIPS, there is an implied principal enhancement….you cheated….

  222. gary says:

    Hey tubby, the true market value of your home is around 640K. That’s my offer and it’s on the table for 48 hours, non-negotiable.

  223. Clotpoll says:

    BC-

    Look at post #70 in this thread. There’s the confirmation.

  224. Clotpoll says:

    Ray (76)-

    Good luck mortgaging a half-finished house in the current lending environment. :)

  225. Clotpoll says:

    make (87)-

    “…if I’m right about this one then I’ll have enough money to run for the president of Kosovo.”

    Be sure to budget plenty for your security detail.

  226. Clotpoll says:

    John (94)-

    “..the house I bought the ex-wife had the husband making breakfast, lunch and dinner for her and her boyfriend…”

    John, is your house The Vault?

  227. Clotpoll says:

    kl (96)-

    Twisted like a f-ing pretzel.

  228. Clotpoll says:

    bbd (117)-

    No, no, no and no. By the way, no.

    Congratulations.

  229. Clotpoll says:

    dream (123)-

    “…since I use inferior products to gain exposure…”

    You may have driven an Edsel, but it got you there.

    All that matters. Congrats.

  230. Essex says:

    230…Aren’t you the guy who goes to open houses and rants about the prices? Man alive. Get a life.

  231. Clotpoll says:

    HE (150)-

    “Cage fighting” slugs its way on to prime-time TV…”

    I propose Bergabe vs a wolverine.

  232. Clotpoll says:

    Wouldn’t you love seeing this warm, fuzzy creature enjoying a lunch of Bergabe femur?

    http://www.billybear4kids.com/animal/whose-toes/wolverine2.jpg

  233. Clotpoll says:

    grim (171)-

    A friend of mine is a parent of one of those kids.

    The lawsuit over this is going to break the township.

  234. gary says:

    Essex,

    If you have that much loot that these prices and the brass nuts tactics don’t affect you, then salute’. As for me, I’m not funding someone elses f*cking lifestyle or f*cking retirement.

  235. Clotpoll says:

    John (180)-

    Katango?

    Is that like contango?

    Was this trading desk on the subterranean level of the building it was in?

  236. Clotpoll says:

    Friday night…

    John must be in backwardation by now.

  237. Essex says:

    Buying a house is a big ticket item…not everyone can afford a place like that. I couldn’t.

  238. Clotpoll says:

    soosh (186)-

    “One of the blurbs says “good for parties”…

    Woo hoo. Break out the 40s and the ho’s.

  239. Clotpoll says:

    Punch (226)-

    TIPS are for wusses. They are the financial equivalent of playing dead.

  240. Steve says:

    Hi all,

    Well I’ve sorely missed my daily NJRE fix….due to a quite unexpected career turn. Several weeks ago, I was asked to depart my normal job, head over to our cap mkts division, and work on the trading desk for auction rate securities! (the FI floor is massive). I’m still there, can’t remember what my normal office even looks like-

    Trust me when I say this couldn’t be a more drastic departure from my daily role. The fact that firms are in such dire shape to ask folks like ME to become an instant “expert” on these things, dealing with hundreds of calls on a desk, it’s unreal…

    Besides being stunned and not too happy to be in the center of a maelstrom, what I’ve learned in terms of what I’ve seen/heard on the desk is simply scary and eye-opening. It’s no secret that I’ve been strongly in the camp of many more dark days days for the financials, but in my career I’ve never seen anything like it.

    A few anecdotes:

    First, on a granular level, there are whole desks just being shutdown on a wholesale basis- unreported but severe layoffs occuring amongst some of the most highly paid folks around (multi-million $ bonuses). More expected, more coming. I was shocked to have some of these guys coming up to me, asking detailed questions about my division (looking for exits) – when their bonuses were surely many multiples of mine. Many saying they didn’t expect to be there much longer.

    Anything, I mean anything, with any type of structure in it seems to be coming under suspicion and jettisoned, like a rolling wave…no matter what the underlying credit, and the monoline issuer problems are just accelerating things further.

    The ARS failures are ongoing and significant- tens of thousands of people thought they were literally as liquid as cash, and now they’re locked in- no liquidity, no downpayment, and no banks stepping up to make markets – just failures upon failures every day because the banks can’t/won’t take anything else onto their super toxic balance sheets. In effect, they’re saying f– you to their own bread-and-butter clients, it’s that bad. Many are muni-based, so you gotta figure these are not exactly their poor clientle receiving the shaft.

    LBOs, structured product, credit card delinquencies, some new off -balance sheet time bomb discovered… on and on. Yikes.

    Cap mkts sectors are getting slammed on a global basis- after y-o-y incredible growth, Asia for instance has simply fallen off a cliff. Finance guys saying even in Feb, they know no way anyone is making their numbers for the YEAR. Bonus? what bonus?!

    Spoke to some long time recruiter acquaintances who are heavy into financials as well as colleagues across the street, many have hiring freezes in full effect w/ no visiblity to lifting.

    All this can’t be good for our local economy or beyond… housing as has been said many times before, will become a footnote as this mess continues to expand in breath and depth–

  241. Steve says:

    breadth and depth, that is :)

  242. t c m says:

    pat,

    i totally agree with ann. i don’t think it’s a laughing matter, and i’m surprised that the husbands aren’t taking it more seriously. i bet when he gets bored with this flashing behavior, or he gets no more reaction, he’ll escalate. or, if you do react, he’ll get turned on, and escalate. either way, i’d at least notify the police. i don’t think they’re able to do anything (but who knows), but at least he’ll be on their radar screen – or maybe they can talk to him – it may scare him and stop him.

  243. Punch My Ticket says:

    chifi 231,

    you cheated

    If you’d been asked a month ago if a TIPS could go to a negative YTM, would you have said aye? Be honest now.

    Clot 249,

    financial equivalent of playing dead

    Heads playing dead, tails being dead. I keep running into people who appear to have come up tails.

  244. 3b says:

    #250 steve: As a former muni auction salesman and trader, I never thought I would see the day when these securities would fail in mass,

    And I was there for the launch of this product, back in the begining.

    As I have been saying this market is gone, it will not be coming back. Ironically it was one of the few real profit areas left in muni land.

    Firms will be closing their muni auction desks, and by the timw it is over I would expect that one of the big firms bags the muni business entirely.

    Many firms have been exiting the muni business for years. This is a perfect cover for more to exit.

  245. 3b says:

    #220 Rich They knew they weren’t investing in a money market fund or CD. Ya takes ya risks.

    Yeah, but they were told that they almost were, and prior to this mess, the last auction that dailed was years ago, and it was an isolated issue. It failed because of the deteoiration of the underlying corporate credit.

  246. Worried@Trio says:

    Hi all,

    I am in a situation where we need another week to secure our mortgage, but the developers at Trio (Palisades Park) have said “no”, to our request.

    Is the market not affecting the Palisades Park and the Gold Coast area, and the Trio condos in particular? Trio did discontinue the incentives (which we received), and may have buyers that other properties are not attracting. Thoughts or advise?

  247. 3b says:

    #256 The market is affecting everywhere. including Pal Park, and the so called gold coast.

    With all due repsect it sounds like you are having difficulty lining up financing,a nd perhaps you have spooked the developer.

  248. Clotpoll says:

    worried (256)-

    Tell em to shove it up their a$$. Is this extra week needed to obtain a clear-to-close, or is it to cement your mortgage commitment? I can’t tell from your post at what point you are in the deal.

    Of course, in either situation, you can agree…then take as much time as you need. The developer probably won’t lift a finger to force faster action on your end unless you really start to drag things out (which doesn’t seem to be your intent).

    A one-week delay these days for anything in the mortgage process is a nanosecond. There’s not a lender out there that can deliver anything on time. Just complete gridlock. You should’ve seen it in August & September.

  249. chicagofinance says:

    Steve Says:
    February 29th, 2008 at 8:08 pm
    Cap mkts sectors are getting slammed on a global basis- after y-o-y incredible growth, Asia for instance has simply fallen off a cliff. Finance guys saying even in Feb, they know no way anyone is making their numbers for the YEAR. Bonus? what bonus?!

    Steve: please elaborate on this description if possible….thank you for the color…

  250. bairen says:

    #244 Gary,

    Just say no to indentured inservitude!

    Proud to be a renter!!!

  251. BC Bob says:

    “First, on a granular level, there are whole desks just being shutdown on a wholesale basis- unreported but severe layoffs occuring amongst some of the most highly paid folks around (multi-million $ bonuses). More expected, more coming. I was shocked to have some of these guys coming up to me, asking detailed questions about my division (looking for exits) – when their bonuses were surely many multiples of mine. Many saying they didn’t expect to be there much longer.”

    Steve,

    Yes, when all is said and done, RE will be a step child compared to this mess.

    P.S.: Don’t tell Pret about the layoffs, he’ll ask for tons of documents supporting your claim. In addition to this, it may melt his blackbox.

  252. bairen says:

    I’m thinking about getting a t-shirt to wear to open houses this spring with

    WARNING in big yellow letters and
    a falling knife in the middle of one of those circles with a slash through it

    Not sure if the realtors would get it (except for Clot.) Even fewer would appreciate it.

  253. Worried@Trio says:

    3b:

    Thanks for the comment – we’re actually very close to securing a loan, and through a couple of reasons the process has gone on longer. The closing also has been pushed back from (the original date of) end of March to end of May as the building will not be ready to move in.

    Clotpoll:

    Thank you very much as well. We’re waiting to cement the commitment – and as it’s a second home the paperwork has to be tweaked.

    Now we liked everyone at Trio, very professionally run, and just beautifully built. And am I correct in assuming that we may have to pay more to “keep the rate green” as the closing date and the mortgage contingency date are more than 2 months apart?

  254. bairen says:

    #261 BC Bob,

    Fixed income is in a depression.

    At least 1/3 of the people I used to work with have been laid off or notified they are being laid off.

  255. Ann says:

    230 gary

    That’s a FSBO, right? That’s hilarious. I guess they don’t want any lowballs. “Let’s price it at 819 so we get 800.”

    I don’t know, if I was a realtor I would avoid that one like the plague. They sound like nightmares.

  256. bairen says:

    #265

    Offer them 480k and show up with a truck full of pennies.

    maybe there is hope for the future with those 8th graders.

  257. Confused In NJ says:

    It is interesting to see Obama, Clinton and McCain still vying for the open deck chairs, as the piano plays and the Titanic settles to the bottom.

  258. bairen says:

    Check out what this cook did to a steak

    Disgusting and stupid. wonder if he’s a former flipper?

    Steak A La Pube
    http://www.thesmokinggun.com/archive/years/2008/0228081steak1.html

  259. bairen says:

    #267 more like the 3 stooges fighting over a ham sandwich

  260. verypatientwife says:

    we are under contract. The seller (FSBO) had the septic inspection done in January and told us to save our $ since it was done. Gave us the report. We hired our own septic inspectors ($1200) and it failed. He didn’t even finish the full inspection b/c it failed from the beginning (ended up charging us $750). Waiting for the full home inspection report and we need to consult the attorney on monday. I would think that the seller would need to replace the septic – very costly expense. any thoughts/opinions.

  261. Theo says:

    Here’s a con to renting:

    apparently, my wife called in a request for some repairs in our apartment. On Thursday, she received a voicemail on her cell asking for permission for the workers to enter the apartment and do the work. My wife never responded. But the work was done, and as payment the workers seem to have helped themselves to my wife wedding and engagement rings…

    Any suggestions on what I can do? Wife is filing police report tomorrow, but I think we are gonna be SOL. How can you prove anything like this?

  262. bairen says:

    Buffet’s letter to shareholders is out

    http://www.berkshirehathaway.com/letters/2007ltr.pdf

  263. BC Bob says:

    bairen[264],

    Very troubling. Are you in FI?

  264. bruiser says:

    #268 Bairen

    That is why you never send food back when dining out. Anyone who has ever worked in food service can tell you that the food will [i]always[/i] come back worse the second time.

  265. bruiser says:

    darn italics tags

  266. Orion says:

    Steve (50)

    Keep those anecdotes coming. Very interesting read.

  267. gio says:

    Hi
    I read all the comments about prices going down, but do not see it at the Jersey shore. Waiting but no real decrease is it coming? I do not think so 300-425 price range has not really gone down. Any thoughts?

  268. Orion says:

    Third party rumor. I cannot confirm.

    A local retailer told me about one of his customers who’s employed at AIG. That employee said the reason for today’s AIG stock drop was due to fraud committed internally, and, that this news would never reach mainstream media.

    Has anyone else heard of this?

  269. bairen says:

    #273 BC Bob,

    I used to be. My wife was transferred overseas on an expat deal. I wound up doing inside sales on home equity loans. Then we had a baby and daycare for a baby in Sydney was $120 to $150 a day with a multi year waiting list! So I became a house hubby.

    We moved back to the US last year. Looked for work in fixed income and saw it was bad on its way to worse. Now I’m in communications while I watch this mess unwind.

    What about you BC? Are you in commodities?

  270. bairen says:

    #28o

    I viewed my job in
    Sydney as a paid vacation. But to pay for daycare, commuting, business wardrobe, lunch once a week at work was going to run me at least 40k a year after taxes. I was only netting abut 42k (damn hard to find a full time job on temp visitor visa in Australia) so I decided an extra $150 a month wasn’t worth it and I became a house hubby for the rest of our Sydney tour.

  271. ithink-think@hotmail.com says:

    #270 verypatientwife

    … haven’t dealt with septic but have avoided it.
    however, my wife & i have walked out on two deals. One had knob & tube wiring thru the entire house, and of course it was connected to the central AC, the subzero fridge, w/d, dw, yadda, yadda. We walked. Mostly because our home ins. would’ve said no or charged us way too much than it was worth. The seller was willing to comp us $500 & we said forget it. Someone else bought it $20k under us. We said you’re welcome other-seller.
    We were out $750.00 on a home inspection & our time.
    Not having our home roast or pay 30k with walls down rewiring: priceless.

    The second home (6 months later) the seller agreed to our bid on a Sunday & due to fax problems we signed anyway without a disclosure. On Monday they sent us the seller’s disclosure… encapuslated asbestos done by the previous owner, which was 15+ years ago. Again, we walked, this time without the inspector fee as we were in the initial 3 days.
    Cost: zilch.
    Not breathing in cancer: lifesaving.

    All I can say about septic is that we live in the DEP a.k.a. garden state… be careful what kind of manure you step in.

  272. ithink-think@hotmail.com says:

    FYI to all, if your seller wants asking, do the following IF:
    … there’s gas in the street & they have oil – convert.
    … there’s septic and/or well & there’s sewer/water in the street – convert.
    … if they don’t have a fireplace, tell them to put one in.

    get 3 quotes.

    otherwise walk & go 25-50% off a condo/townhome

  273. bairen says:

    One of my friends claims there’s a bunch of mcmansions in Middletown about to/ or already have been foreclosed on. Says a lot of Wall St traders who bought in middletown towards the top of the bubble in 04/05 and have never seen a bear market have been laid off since summer of 07. And they never saved since salaries and bonuses only go up.

    Anyone else hear this?

  274. ithink-think@hotmail.com says:

    *283* hmmm… wined & posting…
    tell the seller to do the above or tell them to snort coke off a fat clown’s belly while riding a wildabeast.

  275. Pat says:

    http://www.washingtonpost.com/wp-dyn/content/article/2008/02/28/AR2008022804457.html

    “The key is to expand the role of mortgage insurance and extend the reserving principle to the entire system.”

    How do you insure against bubbles?

  276. Pat says:

    I’m drinking a glass of Carmenere, assembling centerpieces for tables for a baby shower tomorrow, thinking about risk management and cost containment, and wondering if I should mention that the nude dude next door is now putting his glasses slowly on top of his head as I park my car.

    Bairen, was Australia a nice place?

  277. KareninCA says:

    Hi! this is a wonderful site. I’ve been following it for nearly a year (and now posting for the first time) – ever since my husband got a job offer from Rutgers. he desperately wanted to take it, since the relevant dept. is so good, but I ultimately vetoed the move since I don’t want to leave northern CA. I’m originally from eastern CT, and everyone in the northeast is so gloomy – including in NJ. Take some fish oil, folks, and get a sun lamp.
    Despite the fact that we’re staying in CA, this is such a great site that I keep reading it, for general info. so – one point and one question.
    to #277 gio – you are so right, that NJ shore houses are not going down in price (yet). the area that I had been looking in was Red Bank (plus Little Silver, Ocean Grove, and their ilk; fun towns). the same houses have been on the market since March 2007 – nothing seems to go away – nothing seems to drop in price – it’s like the whole market is in amber. occasionally something new is added, otherwise it would almost seem that the Weichert listings had sat untouched by realtor hands.
    question – who is losing money when all of these banks do write downs? I’m 44, and in economic messes of the past, you’d read articles about individual humans who had lost money. who are those people here? I have not seen a single article about one. Of course I’ve read a sufficiency of articles re people being foreclosed on or losing their financial industry jobs or being in debt. And I know that as the economy tanks, there will be more of that. But who are the *investors* here? are they all hiding from journalists? are they all sovereign funds, and not particular people? I realize this may be a silly question, but I’m really at a loss. Most people I know have retirement accts. and mutual funds – if there are lots of people who are heavily invested in these banks, and whose money is disappearing, why aren’t there any articles about them?

  278. Jaywalk says:

    Orion (278)

    I good friend works in facilities at AIG. She said the rumor she’s hearing is that Enron-like fraud has been uncovered.

  279. Jaywalk says:

    Should be A good friend…

  280. BklynHawk says:

    288/Pat-

    Does he look like the guy from the Microsoft Sync ad. “Blinds close…”?

    JM

  281. Tim says:

    Heres the stats from the craigslist house tubby:

    Close Where’s the Zestimate?
    County transactional data for this home is insufficient so we cannot calculate a Zestimate. But we are adding data all the time, so be sure to come back. Tax assessor’s value: $319,900 What’s this? Close Tax Assessor’s Value
    Depending on the jurisdiction where you live, this value could be the tax assessed, tax appraised, or market assessed value. This value comes from the taxing authority of the city, county or state where you live; this is not Zillow’s value. The

    Sold 07/12/2006: $779,950 *
    2007 Property Tax:

  282. baby says:

    Great website!! Keep up the good work!!

Comments are closed.