Just let it crash?

From Bloomberg:

John Galt Plan Might Save U.S. Financial System: Caroline Baum

Let’s face it: The Federal Reserve must be scared to death as it watches the financial system unravel.

Unravel would appear to be the operative word as leverage proves to be as toxic on the way down as it was intoxicating on the way up.

By late last week, events seemed to be spinning out of control. Credit spreads were blowing out, with tax-exempt municipal bonds out-yielding Treasuries by a record and the spread between Fannie Mae mortgage-backed securities and government bonds hitting a 22-year high. Treasury bill yields were collapsing (further). The U.S. dollar was sinking like a stone. And commodity prices, in their lofty ascent, had all the makings of a market unhinged from the fundamentals, which, after all, is the definition of a bubble.

Mortgage foreclosures hit an all-time high in the fourth quarter of last year while homeowners’ equity, or the value of a home less the outstanding mortgage, sank to an all-time low of 47.9 percent.

This measure of owners’ equity has been declining since the Fed started collecting data in 1945. (This isn’t your father’s housing market.) More unusual was the drop in the value of household real estate in the fourth quarter, one of a handful of declines in the half-century life of the series.

Jobs are a different story. Statistically there isn’t much difference between a decline of 63,000 and a similar-sized increase. It’s the sign, and the trend, that matter. Private payrolls fell 101,000 last month, the third consecutive monthly decline.

What is to be done? The Fed has lowered its benchmark rate by 225 basis points since September, with another 75 basis points expected on March 18, based on the prices of fed funds futures. It introduced, and now enhanced, the TAF to address liquidity needs.

President George W. Bush and Congress worked together to pass a $168 billion fiscal stimulus package, including tax rebates for savings-short households and tax breaks for business. The pace of mortgage delinquencies and foreclosures is outpacing Treasury Secretary Hank Paulson’s ability to keep up with them.

Paulson said last week that the administration was looking at the mortgage-origination and securitization process, disclosure, regulatory and capital issues, and the rating companies. We can expect new proposals “in the weeks ahead,” he said.

Galt, the hero of Ayn Rand’s magnum opus “Atlas Shrugged,” stops the world by going on strike. He and the “men of the mind” literally withdraw from the world after watching their wealth confiscated by the looters (the government).

Toward the end of Rand’s 1,000-plus page novel (or polemic), the economy is in shambles. Desperate, the looters kidnap Galt and prod him to “tell us what to do.”

Galt refuses, or rather tells them “to get out of the way.”

You probably can sense where I’m going. Today’s economic and financial crisis would resolve itself more quickly and efficiently if the government got out of the way. Yes, there would be pain. Some banks would fail. Others would clamp down on credit to atone for the years of lax lending standards. Homeowners-in-name-only would become renters. Housing prices would fall until speculators found value.

That’s not going to happen. The bigger the mess, the more urgent the calls for a government solution, the more willing government is to oblige.

We want laissez-faire capitalism in good times and a government backstop against losses in bad times. It’s a tough way to run an economy.

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393 Responses to Just let it crash?

  1. grim says:

    From Reuters:

    Global subprime losses hit $215 billion: Japan’s FSA

    Subprime-related losses at global financial institutions have so far totaled as much as $215 billion, with about 55 percent of that coming from the United States, the head of Japan’s financial regulator said on Monday.

    Japan’s Financial Services Agency (FSA) estimates subprime-related losses at up to 22 trillion yen ($215 billion) globally, with about 12 trillion of that from the United States, FSA Chairman Takafumi Sato told reporters at a regular briefing.

    European losses totalled about 8 trillion, while Asia and Canada together accounted for about 1.4 trillion yen, Sato said.

  2. grim says:

    From the NY Times:

    The Face-Slap Theory

    Friday’s employment report — which was so weak that it had many economists declaring that we’re already in a recession — was bad news. But it was actually less disturbing than what’s going on in the financial markets.

    To understand the gravity of the situation, you have to know what the Fed did last summer, and again last fall.

    As late as August the favorite buzzword of financial officials was “contained”: problems in subprime mortgages, we were assured, wouldn’t spread to other financial markets or to the economy as a whole.

    Soon afterward, however, a full-fledged financial panic began. Investors pulled hundreds of billions of dollars out of asset-backed commercial paper, a little-known but important market that has taken over a lot of the work banks used to do. This de facto bank run sent shock waves through the financial system.

    The Fed responded by rushing money to banks, and markets partially calmed down, for a little while. But by December the panic was back.

    Again, the Fed responded by rushing money to banks, this time via a new arrangement called the Term Auction Facility. Again the markets calmed down, for a while.

    But again, the respite was only temporary. Last month another market you’ve never heard of, the $300 billion market for auction-rate securities (don’t ask), suffered the equivalent of a bank run. Last week two big financial companies announced that they had been unable to raise the cash demanded by their lenders. Even Fannie Mae and Freddie Mac, the giant government-sponsored mortgage agencies long regarded as safe places to put your money, are now having trouble attracting funds.

    One consequence of the crisis is that while the Fed has been cutting the interest rate it controls — the so-called Fed funds rate — the rates that matter most directly to the economy, including rates on mortgages and corporate bonds, have been rising. And that’s sure to worsen the economic downturn.

    The only way the Fed’s action could work is through the slap-in-the-face effect: by creating a pause in the selling frenzy, the Fed could give hysterical markets a chance to regain their sense of perspective. And to be fair, that has worked in the past.

    But slap-in-the-face only works if the market’s problems are mainly a matter of psychology. And given that the Fed has already slapped the market in the face twice, only to see the financial crisis come roaring back, that’s hard to believe.

    The third time could be the charm. But I doubt it. Soon, we’ll probably have to do something real about reducing the risks investors face.

    Nobody wants to put taxpayers on the hook for the financial industry’s follies; we can all hope that, in the end, a bailout won’t be necessary. But hope is not a plan.

  3. grim says:

    From Reuters:

    Banks Face ‘Systemic Margin Call,’ $325 Bln Hit-JPM

    Wall Street banks are facing a “systemic margin call” that may deplete banks of $325 billion of capital due to deteriorating subprime U.S. mortgages, JPMorgan Chase & Co, said in a report late on Friday.

    JPMorgan, which sent a default notice to Thornburg Mortgage Inc. after the lender missed a $28 million margin call, said more default notices and margin calls were likely. The Carlyle Group’s mortgage fund also failed to meet $37 million in margin calls this week.

    “A systemic credit crunch is underway, driven primarily by bank writedowns for subprime mortgages,” according to the report co-authored by analyst Christopher Flanagan. “We would characterize this situation as a systemic margin call.”

    The credit crisis that began about a year ago will likely intensify after Friday’s weak February U.S. employment report “that most definitely signals recession,” JPMorgan said.

    Indeed, corporate bond spreads widened to a new record on Friday, surpassing levels seen in October 2002 during a boom in bankruptcies following the dot-com crash. U.S. employers cut payrolls in February for a second consecutive month, slashing 63,000 jobs, the biggest monthly job decline in nearly five years, the U.S. Labor Department reported on Friday.

    “The weak February employment report points to an economy in recession,” JPMorgan said.

  4. grim says:

    From Bloomberg:

    Carlyle Capital Says Lenders May Force Further Sales

    Carlyle Group’s mortgage-bond fund said creditors may liquidate as much as $16 billion of securities unless the two sides reach agreement on debt repayments.

    The fund has asked lenders to refrain from further sales after they liquidated collateral securing $5 billion of debt, Carlyle Capital Corp. said in a statement today. The fund is meeting lenders to discuss more than $400 million of margin calls and is “evaluating all options,” the Guernsey, U.K.- based fund said.

    Carlyle’s fund used loans to buy about $22 billion of AAA rated mortgage debt issued by Fannie Mae and Freddie Mac, which the firm says have an “implied guarantee” from the U.S. government. Even those bonds have slumped following the collapse of the subprime-mortgage market.

    “Due to recent turmoil in the market for mortgage-backed securities, the company’s lenders have significantly reduced the amount they are willing to lend against the company’s portfolio of U.S. government agency AAA-rated residential mortgage-backed securities,” Carlyle Capital said.

  5. grim says:

    From MarketWatch:

    Carlyle Capital margin calls soar past $400 million

    Carlyle Capital said Monday that margin calls from its lenders soared past $400 million, leading it to request a standstill agreement to prevent any further forced sales of its investments.

    The highly leveraged mortgage-bond fund said certain lenders may have liquidated collateral securing $5 billion of debt and added it’s still in negotiations with the remaining lenders, who hold around $16 billion in securities. If a deal can’t be reached, some of these lenders may sell their securities as well, it warned.

    Since the end of February, lenders have been making margin calls — demanding more cash to cover losses as the value of the securities has fallen.

    On Thursday the fund said it had failed to make payments to four lenders and had received a default notice from one of them. On Friday it warned it had received another wave of margin calls, raising fears that forced asset sales could virtually wipe out its capital.

  6. roger says:

    Its an up and down cycle. There is always going to be something in the market that is overpriced. Think of the tech bubble, now this is the mortgage bubble. They POP. Ebb and Flow, ying and yang. We all knew it. Didn’t we? Housing prices were getting way out of hand. People who were making $40K/year were qualifying for homes that cost $500K. The market should balance out but not for a long time. Its still not quite the right time to buy a house. Let the correction happen. It was seriously needed.

  7. grim says:

    From Reuters:

    Fannie Mae May Fall More, Need Bailout – Barron’s

    Fannie Mae (FNM.N: Quote, Profile, Research), the largest U.S. home funding company, could face further declines in its already battered share price, and may soon need a government bailout, according to the latest issue of Barron’s.

    Shares of the government-sponsored enterprise have fallen 65 percent since last fall, amid a worsening U.S. housing crisis sparked by widespread availability of so-called subprime mortgages to borrowers with weak credit.

    Barron’s said the company, which lost $2.6 billion last year, has a balance sheet that appears loaded with “iffy” assets and understated liabilities that could leave the company ill-equipped to weather a serious financial crisis.

    Although the government would likely bail the company out in such a scenario, by honoring its debt and obligations, Fannie Mae shareholders “would likely suffer grievously in such a scenario,” the article said.

    A considerable portion of the company’s losses have come from “speculative forays into higher-yielding but riskier mortgage products like subprime, Alt-A (a category between subprime and prime in credit quality) and dicey mortgages requiring monthly payments of interest only or less,” Barron’s said.

  8. grim says:

    From Bloomberg:

    TIPS’ Yields Show Fed Has Lost Control of Inflation

    Bond investors have never been so sure that the Federal Reserve will lose control of inflation. They’re so convinced that they’re giving up yields just to buy debt securities that protect against rising consumer prices.

    The yield on the five-year Treasury Inflation-Protected Security due in 2012 has been negative since Feb. 29, ending last week at minus 0.16 percent. The notes, which were first sold in 1997, have never before traded below zero. Even so, firms from Deutsche Asset Management to Vanguard Group Inc., the second-biggest U.S. mutual fund company, say TIPS are a bargain.

    For the first time in a generation, money managers must come to grips with a central bank that’s more intent on spurring the economy than restraining price increases. With oil above $100 a barrel, gold approaching $1,000 an ounce and the dollar at a record low against the euro, TIPS show investors aren’t convinced Fed Chairman Ben S. Bernanke will be able to tame inflation once policy makers stop cutting interest rates.

    “The way TIPS are trading now, investors believe headline inflation will stay lofty and are willing to give up the real yield for that,” said Brian Brennan, a money manager who helps oversee $11 billion in fixed-income assets at T. Rowe Price Group Inc. based in Baltimore. Prices for the securities indicate “a real concern of a recession and high headline inflation,” he said.

  9. grim says:

    From the Record:

    New Australian owner slashes 60 jobs at Liberty Travel

    Five weeks after an Australian travel giant closed its purchase of Ramsey-based Liberty Travel, the company has announced layoffs.

    A Feb. 26 letter from Liberty Travel to the New Jersey Department of Labor and Workforce Development said the company was laying off 60 employees, mainly IT workers, in Ramsey and Mahwah.

    The workers were laid off last week and given 60 days’ severance, according to the letter, which was sent in compliance with the federal Worker Adjustment Retraining and Notification Act. It described the layoffs as the “result of a change in technology platforms and solutions.”

  10. grim says:

    From Newsday:

    Poll: Public doesn’t like Corzine budget plan

    Gov. Jon S. Corzine said the public expects government to live within its means, but a new poll finds 54 percent don’t like his recently unveiled plan to cut state spending by $2.7 billion to try to fix state finances.

    The Monmouth University/Gannett New Jersey Poll issued Monday found respondents more dissatisfied with this year’s budget than Corzine’s 2006 spending plan that proposed a sales tax increase.

    Corzine’s current $33 billion plan would include cuts in property tax rebates and state aid for hospitals, municipalities and state colleges and universities. It would also impose new health care fees for the poor and elderly and deny a funding increase for nonprofits serving the abused and disabled, among others.

    He also proposes eliminating the agriculture, commerce and personnel departments and cutting 3,000 state jobs through early retirement incentives and layoffs.

  11. bairen says:

    Wow. looks like

    1) Not much was learned from the collapse of Long Term Capital

    2) I think if FNMA needs a gov bailout Congress and the masses will want payback. I expect lots of perp walks from CEOs of mtg lenders down to loan officers as the whole smoke and mirrors mtg system gets investigated.

    3) New Jerseyans aren’t as sophisticated as some posters want us to believe when they compare NJ to other parts of the US or at the least are very selfish and short sighted.

    My fellow Jerseyans don’t realize that the state’s finances are still fixable at this point but if action isn’t taken soon this pyramid scheme is going to collapse under its own fiscally irresponsible weight sometime next decade. That would cause all kinds of taxes to sky rocket, speed the brain drain as professionals and businesses leave for greener pastures.

    Maybe we can all become Mitchell’s neighbors and have get togethers at his favorite coffee bar.

  12. Clotpoll says:

    Wanna know when we’re in a recession?

    When you see at least three pieces a week from the major wire services that reference Ayn Rand, Atlas Shrugged or John Galt.

  13. Clotpoll says:

    It is ironic that at one time, Alan Greenspan was a devotee of Ayn Rand.

  14. Essex says:

    Funny Clot…I read that this morning…I also ditched plans to rehab a bathroom….Oh well. This is a good time to ‘not’ go out on a limb financially.

  15. bairen says:

    Maybe we can start a virtual death pool for which bank, lender, builder, etc will go bust next?

  16. Clotpoll says:

    bairen (11)-

    “Maybe we can all become Mitchell’s neighbors and have get togethers at his favorite coffee bar.”

    Those girls at Mitchell’s coffee place are probably 5’2″, 175 lbs and consume a diet based on pork rinds and Cheerwine.

    The only thing that will fix this state is everything going to zero. When we’re at the point of insolvency and repudiation, the bitter medicine will be administered by our creditors.

  17. Essex says:

    When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantánamo and Abu Ghraib, the erosion of civil liberties. The damage done to the American economy does not make front-page headlines every day, but the repercussions will be felt beyond the lifetime of anyone reading this page.

    I can hear an irritated counterthrust already. The president has not driven the United States into a recession during his almost seven years in office. Unemployment stands at a respectable 4.6 percent. Well, fine. But the other side of the ledger groans with distress: a tax code that has become hideously biased in favor of the rich; a national debt that will probably have grown 70 percent by the time this president leaves Washington; a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris—or even the Yukon—becomes a venture in high finance.

    And it gets worse. After almost seven years of this president, the United States is less prepared than ever to face the future. We have not been educating enough engineers and scientists, people with the skills we will need to compete with China and India. We have not been investing in the kinds of basic research that made us the technological powerhouse of the late 20th century. And although the president now understands—or so he says—that we must begin to wean ourselves from oil and coal, we have on his watch become more deeply dependent on both.

    Up to now, the conventional wisdom has been that Herbert Hoover, whose policies aggravated the Great Depression, is the odds-on claimant for the mantle “worst president” when it comes to stewardship of the American economy. Once Franklin Roosevelt assumed office and reversed Hoover’s policies, the country began to recover. The economic effects of Bush’s presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America’s being displaced from its position as the world’s richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush.


  18. Clotpoll says:

    sx (17)-

    We have the gubmint we deserve.

    We, the sheeple.

  19. bairen says:

    #16 Clot,

    You’re so cynical, but realistic.

    I have noticed on my trips to Charlotte the further away from Chalotte, the larger people get. Kind of like how in our area the further away from Manhattan, the larger people are.

  20. Clotpoll says:

    I’m not cynical; I’m bitter.

  21. bairen says:

    #17 Essex,

    Come on, man GW’s been keeping us safe. Don’t you know that.

    He’s reduced the budget and number of inspectors because our vendors in China are so trustworthy.

    He prevented mad cow test kits be sold to processing plants, even though such kits would raise prices by a penny a pound.

    He’s protected us from drugs from Canada even though a lot of generics or the ingredients for drugs sold in the US come from China and India.

    He’s taking apart the Constitution since things like rights are so 18th century and he’s keeping us safe in the 21st century man.

    So what if you are more much more likely to die from food poisoning, medication errors or defects, or become sick, injured, or killed from faulty products then you are from a terrorist attack.

    Plus he’s guaranteed himself a place in history as probably being the worst president we’ve ever had. That’s quite impressive.

  22. bairen says:

    #20 My mistake. I’m actually cynical and bitter. I can multitask

  23. Ron says:


    Can you determine if there has been action (e.g. bids) on 4 Bonus Hill Drive, Scotch Plains?


  24. BC Bob says:

    “What is to be done?”

    Cut to 0, then bend down and kiss your #ss goodbye.

  25. Clotpoll says:

    Not to say I was around for Warren G. Harding or Calvin Coolidge, but it’s hard to believe Dubya isn’t the worst prez ever.

    I certainly hope somebody worse than Dubya isn’t elected during my lifetime. He had over a year of a completely unified country, willing to do whatever was needed…and all he could manage was to tell everyone to go shopping. Talk about squandered opportunity.

  26. cooper says:

    #21 bairen,
    how are you so funny at 6 in the morning? and you can multitask…
    P.S. i love the taste of lead in my toys

  27. HEHEHE says:

    Rather ironic the Bush/Congress stimulus plan – $600-1200 to each american to go to Wal-mart and buy more Chinese lead painted products. Sounds like a winner!

  28. Confused In NJ says:

    If GOD was President, this Country would still fail, because the same old hacks in Congress running things, only care about themselves. Congress is a collection of thieves, perverts, alcoholics, drug addicts, etc., making and enforcing laws, for the benefit of themselves, and screw the Sheeple.

  29. Confused In NJ says:

    As far as GWB, a number of his Domestic Misprograms like illegal aliens were supported by hacks like Teddy Kennedy & John McCain. Their is plenty of Treason to go around. The Donkey is in bed with the Elephant, and performing many acts of Treasonous Perversion.

  30. Clotpoll says:

    Confused (28)-

    Congress is a reflection of ourselves. It’s also an indictment of ourselves that we can’t manage to get interested enough to do something to fix things.

    We can, however, watch hours on end of NASCAR and American Idol.

  31. Sapiens says:

    Pass the popcorn, this is just getting started.

  32. 3b says:

    #11 barien; #3 New Jerseyans aren’t as sophisticated as some posters want us to believe when they compare NJ to other parts of the US or at the least are very selfish and short sighted.

    I have been saying this for years.If you have a a real contentious issue in your town, or when the BOE calls out its shock troops for a meeting, (if they feel they are being challenged) go to that meeting.

    You will be shocked, at the comments made, and the so called thought process of people.And I am in a supposedly sophisicated town etc.

    The overwhelming majortity of people in NJ (as with most Americans), are uninvolved and uninformed.

  33. 3b says:

    #17 Essex:There is no threat of America’s being displaced from its position as the world’s richest economy.

    We will see about that.

  34. thatBIGwindow says:

    Who is the president of NJEA? I think they should run for US president. Afterall, NJEA is all about educating our youth, right? Or maybe Bob Menendez should run. He would get the NJ pro-union vote.

  35. Sean says:

    Once I gave up the attempt to understand public policy from the “greater good” delusion, you know government by the people and for the people, and began to look at our policy leaders and politicans from the “rainmaker for my business buddies” view, their actions began to make a lot more sense.

    Don’t worry folks once grandpa McCain, or the bitch Hillary, or the leader of the 5th column Obama get the top job all will be well.

  36. 3b says:

    #34 tbw I forget her name at the moment. but she has an article/comments every Subday in teh Bergen Record.

    Her piece a couple fo weeks ago stated thet we should have continued tax increases to pay for education, the more the better.

    This will give our teachers all that they need, so that they can educate our children to be competitive in the 21st century.

  37. 3b says:

    #35 sean: Not to get into the whole political debate again on the election, but at the end of the day, Clinton, Obama, and, McCain.

    And I ask myself, this is it? This is all we have to choose from? This is the best the USA can offer?

    So at this point I do not much car who wins.

  38. thatBIGwindow says:

    #36 3b: Yes, giving teachers all they need to educate…like new luxury cars. Drive past the faculty lot in any Bergen County town and you will not see any beaters. Only new vehicles dominate those lots.

    Another crock on NJ teachers is the higher salaries they get for having their masters + additional credits. Give me a break, how does this really benefit us? You should become a teacher to make a difference, not become a billionaire.

  39. grim says:

    Can you determine if there has been action (e.g. bids) on 4 Bonus Hill Drive, Scotch Plains?

    Only if I call up the listing agent and ask.

  40. grim says:

    From MarketWatch:

    Goldman Sachs: cannot rule out intermeeting rate cut today

  41. mark says:

    #37 I agree. This is the best we got to throw at it. Part of the problem. Nobody
    wants the job. To much PC

  42. Clotpoll says:

    3b (37)-

    Politics as a calling for the “best and brightest” ended with JFK.

    Now, it’s a refuge for the connected and shiftless.

  43. Clotpoll says:


    I’m just hoping McCain can grind out a win, simply to ensure four years of gridlock.

    The best we can hope for are four-year intervals in which nothing can get done. Look what happens when you get a prez (either party) backed by a Congress that’s inclined to give him what he wants.

  44. mr potter says:


    The Kennedy family was quite connected and lets be honest – the only one in the entire family who earned any dough in the ‘private’ sector was JFK’s father who was a bootlegger. Not exactly above board.

  45. Clotpoll says:

    mr (44)-

    Did not mean to attach any cred to the overrated, overpraised Kennedy family. Meant to peg the time at which the cream of the crop decided politics isn’t a noble calling.

  46. Clotpoll says:

    Teddy Kennedy = tuna, marinated in Scotch

  47. Sean says:

    re: “best and brightest”

    GWB is Yale and Harvard educated. The man is no idiot, he only plays one on TV.

  48. mr potter says:

    #45 Clot

    For the record….I dont have anything against bootleggers :)

  49. Clotpoll says:

    Too bad he also portrays the prez of the US on TV, too.

  50. Clotpoll says:

    mr (48)-

    Make yer own, grow yer own…

  51. HEHEHE says:

    “I’m just hoping McCain can grind out a win, simply to ensure four years of gridlock.”

    That’s the best case scenario given the current situation.

  52. Ann says:

    njpatient, from the previous thread

    Ann said
    “I say come up with your best offer, tell your agent that’s it, then if they start talking about other bidders, phantom or otherwise, it doesn’t matter.”

    If it is a phantom bidder, then you’ve spent your last penny for no reason.


    I really don’t get this whole “phantom bidder” thing.

    If you’re buying, you should just come up with the number that you are willing to pay, make your offer and stick with it.

    If you’re not making a list offer, and are offering way less than list, then you really need to just make your best offer and stick with it. Regardless of “phantom bidders” or not, the sellers are going to counter so you need to come up with your absolute limit, whether you offer it all at first or not.

    It is possible there are other people interested in a given house, phantoms or not, but it shouldn’t affect your number.

  53. Cindy says:

    From Greenspan’s The Age of Turbulence..I know, it’s Greenspan – but this part seems relevant “There is a remedy for legislative excess: it’s called the presidential veto.” pg. 234

    Pg.235 “And indeed, not exercising veto power became a hallmark of the Bush presidency: for nearly six years in the White House, he did not throw out a single bill. This was without modern day precedent.”

    “Budget discipline gave up the ghost on September 30, 2002. That was the day Congress allowed America’s primary antideficit law to expire. The Budget Enforcement Act of 1990 had been a monument to congressional self-restraint.”
    (It imposed discretionary caps and pay-go rules.)

    “To my mind, Bush’s collaborate-don’t -confront approach was a major mistake – it cost the nation a check-and-balance mechanism essential to fiscal discipline.”

    My thought..
    Then there is the part D of Medicare…
    What was he thinking…As I understand it, part D is mandated to be met by general tax revenues.

    pg. 237 “Congress and the president viewed budgetary restraint as inhibiting the legislation they wanted. “Deficits don’t matter,” to my chagrin, became part of Republican rhetoric.”

    As stated,there appears to be plenty of blame to go around. Did Bush really never veto a spending bill or is this guy just full of it? If it is true, not very “Republican” of him.

  54. mr potter says:

    Ann, I agree that a buyer needs to figure out what they want to pay and stick with it. If you are going to bid that number, I would strongly suggest an expiration on the offer that is short. 48 or 72 hours. Even if there is no Phantom bidder, dont give them a vehicle to shop for a real bidder.

  55. Jamey says:

    13: No, it’s coincidence; Rand knew it was bullsh!t, too.

  56. BC Bob says:

    “JFK’s father who was a bootlegger.”

    potter [44],

    He also shorted, big, the market before the crash of 29.

  57. JLB says:

    #52 Ann: you are absolutely right. On ebay you can put in your maximum bid instead of going back and constantly upping your bid, well many are noticing that the sellers are artificially inflating the bidding to test the maximum bid. If you notice that the bidding goes to only .50 or 1.5 over your max. let it sit and 9 out 10 you will get a second chance offer to buy. Same with housing except you are in a great position if they are using a phantom bidder because your number can go down while they wipe the egg off of their face. Keep emotion (ego) out of negotiation and you always win!

  58. JLB says:

    #54 Potter: yep, not putting a deadline on an offer is like a sentence without a period, people just wait for you to continue and that is not the message you want to send to a seller.

  59. HEHEHE says:

    “grim Says:
    March 10th, 2008 at 8:17 am
    From MarketWatch:

    Goldman Sachs: cannot rule out intermeeting rate cut today”

    I saw that, how is this not pure market manipulation by them?

  60. 3b says:

    #43Clot: Depressing, but you are right, gridlock is probably the best we can hope for at this point.

    But it really pi–es me off, when we go around the world inssisting other countries be just like us.

  61. 3b says:

    347 Sean: You can be harvard/Yale educated, and still be an idiot.

    Believe me when I worked at goldman, the place was just dripping with Harvard and Yale people.

    Some were incredibly bright, and more importantly normal, others, you would just shake your head and say to yourself these clowns graduated from an Ivy League school?

    The Ivy Legaues cultivate and produce stupidity too.

  62. mr potter says:

    BC Bob….did not know that about JFK’s father….. slightly more respect……

  63. 3b says:

    #38 tbw: Oh very true. But to question and or challenge the BOE cannot be tolerated.

  64. Sean says:

    3b and other relax already and have more coffee, I was being facetious.

    To claify GWB is not stupid, He simply plays a smart guy on TV who runs the county.

  65. Ann says:

    54 re expiration dates

    I’m a fan of the expiration date too. There are buyers out there who will like a house more when they hear someone else has an offer in on it. Human nature. For myself, I just wanted to know the answer, yes or no, so I could get on with finding another house.

  66. SG says:

    OT: Any opinions on analysis that I did last week. See details at,


    If someone would like to add any Mutual Funds to the list, do let me know. Email me at skgala at gmail dot com.

  67. Jill says:

    Grim #9: And how difficult would it have been to cross-train Liberty Travel’s employees in whatever technology the new parent company uses? I would be very interested in knowing who is replacing these 60 employees.

  68. Punch My Ticket says:


    Overheard at a faculty meeting.

    “Is that a B sort of A, or a C sort of A?”

  69. Punch My Ticket says:

    SG [66],

    You missed my comment. #294 in the thread. Let me copy the piece that applied to you.

    Finally, to SG, I’m sorry but your pretty tables are not proof of anything. Jamil has already noted the survivorship bias. I will add that cherry picking a few dozen funds and not even comparing them to an appropriate benchmark in some cases is classic investment pornography. You might not know any better so I give you the benefit of the doubt but that is the same sort of sucker play pulled on rubes around the world every day of the week.

    Rather scathing, I admit. It’s not personal. Strictly business.

  70. dblko says:

    Went to an open-house on Sunday in White Plains (Westchester, NY). 600k range old 1930 tudor, with the typical lipstick on the pig makeup (fresh paint inside, granite counter, stainless steal). A lot of traffic of young families with kids, realtor on the mobile phone pretty much ignoring us: “sign in here. already got offer, you need to bring your offer quick”. We left after 2 minutes.

  71. njpatient says:

    52 Ann

    I’ll explain.
    If the maximum I’m willing to pay for a house is $100, but I think that I can get it for $80 (perhaps because I think $80 is its true value, or perhaps because I think no one else will pay more than $80, or any number of reasons), then I will offer $80, not $100, for the house.

    Now, let’s imagine that I’m the only person making an offer, but the seller pretends that there is another bidder who has topped me.

    Your advice is to offer $100, knowing that’s the max I’m willing to pay (“you really need to just make your _best_ offer”). IMO, you have just lit $20 on fire, because there was no other bidder and you could have had the house for $80.

  72. Punch My Ticket says:

    SG [66],

    Comment 294 in that thread.

  73. SG says:

    Does this indicate, Most Hedge Funds are better in both Up and Down market?


    Are they the best thing since Slice Bread?

  74. skep-tic says:

    theories on why GWB is so hated:

    1. scapegoat for frustration with the electoral college (mostly but not entirely as a result of 2000 election)

    2. hated by hippie baby boomers for rejecting his generation’s fashionable politics

    3. as a result of #2, annoited by the liberal elite as a symbol of everything that is wrong with hereditary privilege in America (notwithstanding the fact that the liberal elite enjoys the same privileges– e.g., legacy admissions to top schools, riding the family last name into political office, few legal impediments to maintaining multigenerational wealth, etc)

    4. due to #2 and #3, a convenient scapegoat for why various “oppressed” foreigners hate U.S. (notwithstanding the fact that these same people have always hated the U.S.)

  75. njpatient says:


    #5 – drove the country into a ditch?

  76. skep-tic says:


    exactly. so how do you avoid this situation? never get involved where there is another bidder? this would eliminate many of the best houses

  77. JLB says:

    #70 Patient: you lost the negotiation when you allowed someone else to bid you up. using your example, you bid 80 and then sit on it, you let them call your “bluff” and you sit with your bid of 80. You can always go higher later but the only way you go lower is if they refuse you and then come back to you. If you are willing to go to 100 before you even bid 80, you lose!

  78. Victorian says:


    Would you like another eight years of GW?

  79. njpatient says:

    75 skep
    If informed that “there is another bidder”, my last bid instantly becomes “best and final”, but I would tell the seller the following: don’t tell me there is another bidder; tell me the dollar figure at which you are now willing to sign and sell the house, and I’ll decide either yes or no.

  80. mr potter says:

    WOW – Lehman to lay off 5% of global workforce

  81. 3b says:

    #73 skeptic: None of those oints eman anything to me. I despise Bush becasue he is incompotent,and arrogant;no other painful reasoning is required to undestand just how much damage he has done to this country.

    Would Gore have been better in 2000, who knows at this point, but I certainly do not think he could have been any worse.

  82. Mikeinwaiting says:

    Lehman laying off 5% of its entire work force.Just reported CNBC.

  83. njpatient says:

    “If you are willing to go to 100 before you even bid 80, you lose!”
    I don’t understand what you’re saying. “you lost the negotiation when you allowed someone else to bid you up.” At what part of my example did I bid up? You are confusing me with Ann, perhaps.

  84. njpatient says:

    “Lehman laying off 5% of its entire work force.Just reported CNBC.”

    Any in NYC?

  85. skep-tic says:

    njpatient– Do you really think the U.S. is in a ditch? Yes, the economy is looking pretty bad compared to the recent past, but historically this is not a ditch. By the way, most of the structural financial problems the U.S. faces were put into place during FDR’s tenure or LBJ’s. Many generations of Americans have had the opportunity to solve these problems and chosen not to. At least Bush raised the issue of fixing entitlements, which no one else would do.

  86. 3b says:

    #69 I was iN whire Plains on Saturday,and it was a sea of for sale signs, block after block.

  87. skep-tic says:


    Njpatient– this sounds like a good approach

  88. njpatient says:

    OT (although perhaps relevant to a kitchen remodeling thread (as in, do they even _make_ filters for this?!?):

    “A vast array of pharmaceuticals — including antibiotics, anti-convulsants, mood stabilizers and sex hormones — have been found in the drinking water supplies of at least 41 million Americans, an Associated Press investigation shows.”

  89. 3b says:

    #84 skeptic; The couple of trillion or so we are paying in Iraq, would have went a long way to solving the entitlement crisis.

  90. JLB says:

    #78 patient: the problem with what you are proposing to tell the seller is that you are giving control of the dialoque to the seller and you always want control in a negotiation.
    As far as the bid up portion I did misread what you were saying and, in fact, I agree with you that you should bid the 80 and forget 100.

  91. skep-tic says:


    no, I wouldn’t like another 8 yrs of Bush in the White House, I just think the degree to which he takes blame for the general F’d up state of the world/nation is irrational

  92. BC Bob says:

    “The hedge-fund industry is reeling from its worst crisis in a decade as banks are now demanding more money pledged to support outstanding loans even when the investment is backed by the full faith and credit of the United States.”

    “If you have leverage, you’re stuffed,” said Alex Allen, chief investment officer of London-based Eddington Capital Management Ltd., which has $195 million invested in hedge funds for clients. He likens the crisis to a bank panic turned upside down with bankers, not depositors, concerned they won’t get their money back.”

    “The lending crackdown is the worst to hit the $1.9 trillion hedge-fund industry since Russia’s debt default in 1998 roiled global credit markets and required the U.S. Federal Reserve to pressure the securities industry to arrange a $3.6 billion bailout of Greenwich, Connecticut-based Long-Term Capital Management LP. Today, hedge funds are being forced to sell assets to meet banks’ margin calls, resulting in the dissolution of the funds.”


  93. HEHEHE says:

    “Mikeinwaiting Says:
    March 10th, 2008 at 9:40 am
    Lehman laying off 5% of its entire work force.Just reported CNBC.’

    All in California I am sure

  94. SG says:

    Jamil / Punch My Ticket / CF: Just read your inputs on previous thread. Well Thanks.

    I know this analysis probably does not prove anything and difference of opinions abound. So far, I have not been impressed with most prescribed Investing ideas, including DCA, Active Funds, Indexing, Diversification etc… It seems day trading is the way to go.

  95. skep-tic says:


    agree to a point. however, the cost (in dollars) of this war is a small part of the budger relative to prior wars and is totally dwarfed by entitlement spending

  96. njpatient says:

    84 skep
    yes – I do. We’re heading into difficult times as the boomers retire, and Bush has practically bankrupted the federal government. It’s not about the economy at a blip moment in time; it’s about the fact that my grandchildren, who haven’t been born yet, are already deep in debt because we’ve managed to practically TRIPLE the national debt in seven short years. All the other stuff (lots of war, lots of death, greater gap between rich and poor, declining real wages, rising real prices, massive short-term financial pain for most of society, no improvement at all in environmental stewardship, destruction of the American reputation on a worldwide basis, elimination of habeas corpus, advocacy of torture, rampant cronyism and looting) is secondary to me.
    I’m a social liberal, but I’m a fiscal conservative, and the level of fiscal irresponsibility has been absolutely breathtaking.

    I’ll try to leave it at that for politics today.

  97. jcer says:

    Skep-tic, GWB is very hated because…
    -War with Iraq, not really won, cost a fortune and achieved very little.
    -Osama Bin Laden, still on the loose probably could have gotten him if it wasn’t for Iraq.
    -US economy is collapsing under inflationary monetary policy motivated primarily by Iraq war spending.
    -Spend and spend Republican, what kind of conservative spends and spends with no tax revenue.
    -Voodoo economics to use his fathers term, lets see we are spending lots of money. What should we do? lets cut taxes?????
    -Very poor at responding to disasters, read Katrina.
    -Seems to populate his cabinet and positions with the insane, corrupt, or incompetent.
    -Has the creepiest vice president ever! Read the penguin from Batman.
    -When question typically does not have a good answer.
    -So bad on environmental issues the head of the EPA was ex governor of NJ actually resigned because the white house was intent on torpedoing any and all policies.
    -Finally it seems like the Beverly hillbillies are in the whitehouse and Jethro dun got elected president! Yee-Ha.

  98. njpatient says:

    89 JLB
    Fair enough.

  99. thatBIGwindow says:

    my wife and I went driving around on Sunday looking for Open Houses. We only found a few in the towns we were in and they were either

    1. New McConstruction
    2. Really big houses

  100. Mikeinwaiting says:

    HEHEHE 92 That’s all I have on it they did say it was world wide so who knows, but it is being done right now today.Where ever it is, so we will know how many & where soon enough.

  101. skep-tic says:

    not saying there are no legitimate reasons to dislike GWB, just that many people’s hatred of him goes beyond reason, similar to many Republican’s hatred of Clinton. I will now stop poking the hornets’ nest, however…

  102. 3b says:

    #98 tbw: Are you guys looking to move?

    By the way, my wife told me there were lots of Open houses in River Edge/Oradell on Sunday ( I was not around in town this weekend).

    The one condo project that was proposed frot he south end of River Edge has been pulled by the developer, I am sure it is only a matter of time before the second proposal is pulled.

    All the new condos (on KKR by the KOC) are still available for sale and or rent.

    And of course there is the condo/castle penthouse still for sale, asking price reduced to 1.1 million.

  103. HEHEHE says:


    Was joking, when confronted with layoff info that Pretorius dude always says they were in some other part of the country.

  104. thatBIGwindow says:

    3b: No, not moving, just killing time on a Sunday.

    No surprise, that 1700s “historic” house on KKR is reduced to $370,000. Front lawn is Kinderkamack Road, back yard is the wall of a condo. Who in their right mind would live there?

  105. lurkerA says:

    103 – tbw – i think the exact same thing every time I drive past that “historic” house on KKR. Even if the back didn’t back up to the condos, i still can’t imagine who would pay that amound of money to live there.

  106. thatBIGwindow says:

    It would be nice if it had actual property, wasnt on a busy street like KKR and actually had historic elements left to it. The whole interior was gutted by the builder. Nothing of character left. Maybe some old floor beams.

  107. par4156 says:

    OT – does anyone know the neighbourhood in Verona that’s north of the Monclair golf club, easdt of a park and south of Bloomfield ave? Is there a name for that area?

  108. par4156 says:

    “east” of a park…

  109. lurkerA says:

    106 – such a shame. and i completely agree with you – if the location was different, and the character was still there, it would be an entirely different house.

  110. chicagofinance says:

    If you ever want to vomit large chunks, take a drive on Monmouth 537 from Swimming River to Route 18. McDesecration of the earth……

  111. par4156 says:

    Re: #9. Interesting that sales associates haven’t been mentioned…yet. Liberty does seem to have a good balance with their sales and service model. The live person factor allows them to achieve a level of customization not available with the online only guys. Also, it’s hard to tap that “drive in” niche over a phone line from India or Costa Rica.

    Re: #10. This guy is between a rock and a hard place. The next governor will come along and reap the “benifits” of the pain that needs to be inflicted. Hopefully he or she won’t revert to the old ways and will continue to be realistic.

  112. 3b says:

    #103 tbw: The “historic” house has been cimpletely gutted, the only thing original is the facade.

    I heard through the grapevine (do nto know if it is true), that apparently some one messed up, and there may have been a way for the developer to raze the historic house, (which was his original plan).

    I am told the developer is now weighing possible legal challenges.

  113. Ann says:


    I see your point.

    I would still say, especially in a case like you’re describing, where you are “lowballing”, to come up with the best price you are really willing to pay and make it and never mind the other bidders, phantom or not. Or make the 80 offer. The sellers are going to counter anyway, so then go up as you wish up to the max of 100, as you wish.

    In other words, just act as you would anyway, whether or not there is another bidder or not, especially in a case of a lowball, because the seller is going to be counteroffering anyway.

    Now if it’s a lousy 5K and you really like the house, might be a different story.

  114. Stu says:

    David Seiders, the Chief Economist for the National Association of Home Builders, made the case this week that to save the U.S. economy from recession, we must first save the homebuilding industry. His organization is asking Congress for $15,000 tax breaks for new home buyers, in order to promote purchases.

  115. pretorius says:


    Just sent you a chart on US layoffs. Could you post it?

    It is important to put current layoff annoucements into historical perspective in light of intense blog focus on mainstream media reports on this topic.

  116. Essex says:

    38…..Another crock on NJ teachers is the higher salaries they get for having their masters + additional credits. Give me a break, how does this really benefit us? You should become a teacher to make a difference, not become a billionaire.


    My guess is that the fast route to riches is in the private sector, but what do I know…I only have my masters.

  117. Confused In NJ says:

    30.Clotpoll Says:
    March 10th, 2008 at 7:36 am
    Confused (28)-

    Congress is a reflection of ourselves. It’s also an indictment of ourselves that we can’t manage to get interested enough to do something to fix things.

    We can, however, watch hours on end of NASCAR and American Idol.

    Yoy unfortunately are correct. USA should be retitled USG (United Sodom & Gommorah). Our perverted society reflects all the values they held to be true. As you walk away, don’t look back, you’ll turn into a pillar of salt.

  118. Confused In NJ says:

    116. Essex

    I only garnered one Masters, but knew a fellow employee whose vocation was to collect them. He had six at last count and never did anything of value in his life. On paper though, resume was outstanding. Jack of all Masters, Master of none.

  119. chicagofinance says:

    HEHEHE Says:
    March 10th, 2008 at 9:47 am
    “Mikeinwaiting Says:
    March 10th, 2008 at 9:40 am
    Lehman laying off 5% of its entire work force.Just reported CNBC.’
    All in California I am sure

    This layoff is real-deal/eliminate-your-department/cut-muscle type of stuff…….

    pret: there is a decent shot that this will snowball……if you want to be treated like royalty, go to one of the top restaurants in NYC in lateApril – earlyMay…….

  120. Rich In NNJ says:

    From MarketWatch:


    MBIA: Fitch’s IFS ratings can cause serious volatility for company
    FBI probes Countrywide for possible fraud: report
    Carlyle Capital margin calls soar past $400 million
    Malls, offices may slump less steeply than homes
    Fannie Mae’s CEO visits Asia and Europe as worries grow
    Hedge funds reel from margin calls even on Treasurys
    TIPS’ yields show Fed has lost control of inflation
    German bank HSH puts IPO on ice after subprime hit
    Spitzer involved in securing Ambac aid

    Details to headlines at link above

  121. 1987 Condo Buyer says:

    #107..that may be the “AfterGlow” section…I think

  122. Stu says:

    XHB is down to 18.37.

    Didn’t bi say the homebuilders bottomed at 20? What’s another 10%?

    Country Fried is down to 4.41.

    Poor Bank of America.

    As for bets on the bank failures mentioned earlier. My money is solidly on Wamu.

    Just got back from 3 days of skiing in Lake Tahoe. On the drive from Reno to Tahoe through Carson City, could not help but notice how much available commercial real estate there was. Can’t remember the last time I saw this many chain restaurants boarded up.

    Should be an interesting Spring and Summer.

  123. Stu says:

    AfterGlow is East of the golf course.

    Maybe it is the Beforeglow section?

    Best part of that area is Verona Park and the best bagel shop around is over there.

  124. mneer1 says:

    This is a short sale in Nutley. Would appear to be a comp killer… Anybody able to pull additional listing data?

    MLS#: 2496288


  125. BC Bob says:

    Who was reporting that all was fine on WS, his 2 cents, from the front line last Friday?

    “Private-equity giant Blackstone Group reported a fourth-quarter loss before Monday’s opening bell as global funding for leveraged buyouts dried up as a result of what it called a “meltdown” in the credit markets”

    “As a result of the credit market turmoil in the second half of 2007, debt underwriting fell, while the backlog of pending private-equity-led deals piled up to record levels, Blackstone said in a news release. Falling home prices and the subprime crunch have roiled bond markets in recent months.”

    “The deal backlog, “coupled with other poor-performing fixed-income securities and rising credit losses, has materially hindered lenders’ willingness to fund new, large-sized acquisitions,” Blackstone said.”


  126. Cirrus says:

    Skeptic – went to listen to a talk at Columbia with the authors of this book:

    The Three Trillion Dollar War


    It’s done from an economics standpoint and you’ll see that you have a few misconceptions about the dollar cost of the war, the way it’s been financed and what we’ve forgone domestically to wage it.

  127. pretorius says:


    “there is a decent shot that this will snowball”

    People on this blog have been predicting massive layoffs for months, and so far layoffs have been mild in light of the size of this financial crisis.

    http://njrereport.com/index.php/2007/09/25/august-existing-home-sales/ (see posts in 30s for some examples of layoff expectations last fall)

    It is too early to conclude that the job market has escaped the worst of this economic slowdown.

    However, eventually people need to let go of incorrect calls and stop insisting these calls are correct but just haven’t happened yet.

  128. SG says:

    chicagofinance Says:
    March 10th, 2008 at 10:27 am
    If you ever want to vomit large chunks, take a drive on Monmouth 537 from Swimming River to Route 18. McDesecration of the earth……

    R u talking about these development?


    Well it was allowed, so we don’t distroy our Environment, by creating smaller houses on smaller lot.

  129. HEHEHE says:


    A good read for you, pay attention to the charts, you think there’s not going to massive layoffs you are more out of it than I even think you are:


  130. chicagofinance says:

    pret: I think I am accurate, but my timing was wrong…..SO I WAS WRONG

    I was thinking that the head chopping was going to happen in October…that was wrong.

    What is clear is that the need exists. The only thing stopping the banks at this juncture is the sheer effort it takes to ramp-up when needed and cost in lost opportunity when you are flat footed. If they view 2008 & 2009 and intractable garbage……they will be shopping on Delancy & Bowery, and I don’t mean for the lighting fixtures……

  131. chicagofinance says:

    Shail: I was think specifically Colts Neck…..you can’t even appreciate how disgusting these are….they are CASTLES….


  132. chicagofinance says:

    i think i spit back ..same

  133. Rich In NNJ says:

    Moody’s downgrades Bear Stearns Alt-A deals – MarketWatch

  134. Mitchell says:

    #11 bairen – I’d buy you a cup.

    My only thought is anyone willing to have the guts to undo the things the Democrats have done to NJ or will the next person elected just blame Corzine and live with his changes.

    Any Impeach Corzine bumper stickers going around like the Florio days?

  135. PGC says:

    #128 Pret

    I’m halfway to my Dow 9000 prediction. The M&A hurt is just starting. The big companies growth figures are going to dip. Unless they are sitting on boat loads of cash, they will not be buying growth.

  136. 3b says:

    #128 pret: People on this blog have been predicting massive layoffs for months, and so far layoffs have been mild in light of the size of this financial crisis.

    And if one follows through on your train of thought, one could argue that in light of the size of the financial crisis (your words), that those massive layoffs that those people have been predicting (like myself) will ultimately be proved right.

    I have history and experience on my side.

  137. x-underwriter says:

    To all of y’all thinking about moving in with Mitchell down in the Carolinas, be advised that this is still a very large part of the culture down there.

    Redneck Shop’ creates dispute in S.C.


  138. par4156 says:


  139. 3b says:

    #131 chgo: I too predicted and stand by my prediction of layoffs on the street, and elsewhere.

  140. Mitchell says:

    #138. LOL. No its not.

    Is that your only way to try and keep people in NJ is to try and convince people that its all trailers, prejudice, fat people, etc?

    If I use your methods of description then all of NJ looks like Newark airport. Trains, factories, smog, and huge economy stimulating ferris wheel coming soon.

    Anybody who moves out of NJ to anywhere else in the US be it TX, NC, SC, OH, NY, CT doesnt come back nor has any desire to come back.

  141. 3b says:

    #120 Rich: I know I am not supposed to bring up personal stories and hearsay,as some people think they mean nothing.

    But here goes. the guy who I rent my house from long time in the business, fixed income (foreighn bank) lost his job, as they are eliminating most of their U.S. fixed income operations (he has been there 30+ years, right out of college).

    Fortunately for him he had planned to retire in 18 months, but as he says it still hurts.

    Fortunately for me, it does nto change my rental situation;although he would love for me to buy it.

  142. pretorius says:


    Do you think 2007-2008 layoffs will exceed 2001-2002 layoffs?

    I think 2007-2008 will turn out to be more mild than 2001-2002 in terms of layoffs. The reason is we’re in a consumer slowdown caused by housing. In contrast, 2001-2002 was a corporate slowdown.

  143. Artemis says:

    #84 “At least Bush raised the issue of fixing entitlements, which no one else would do.”

    Skep-tic: Not sure which entitlements you are referring to, but welfare as an unlimited cash entitlement ended in August 1996 when Clinton was in office.

  144. SG says:

    CF: I am appalled at number of houses looking similar in size and lot. Similar things all over NJ, here is link to same distruction in B’water.


    I am speechless !!! I guess one needs King size ego to live in King size Castle.

  145. njpatient says:

    ” The M&A hurt is just starting. ”

    No – the M&A hurt started at the end of last summer. Big time.

  146. njpatient says:

    oil near $108

  147. Mitchell says:

    #148 Texas Oil Billionaire saying oil will hit $150 a barrel.

  148. BC Bob says:

    pret [144],

    Serious question. Are you totally clueless?

    Today, right now, there is a systemic margin call. There was not a whiff of this in 2001-2002. In addition to this, we have experienced a credit bust prior to the recession. When was the last time this transpired?

  149. chicagofinance says:

    pretorius Says:
    March 10th, 2008 at 11:58 am
    I think 2007-2008 will turn out to be more mild than 2001-2002 in terms of layoffs. The reason is we’re in a consumer slowdown caused by housing. In contrast, 2001-2002 was a corporate slowdown.

    pret: but consumers are 70% (or whatever) of spending….doesn’t that fly directly in the face of what you are saying…..this credit crunch is worse….I am not saying you are wrong, just mentioning countervailing arguments……

  150. par4156 says:


  151. Clotpoll says:

    3b (60)-

    “But it really pi–es me off, when we go around the world inssisting other countries be just like us.”

    Actually, we don’t have to say a word. Our monetary policy (or lack thereof) forces the rest of the world to be like us. We inflate, they inflate…everybody happy!

  152. make money says:

    Today, right now, there is a systemic margin call. There was not a whiff of this in 2001-2002. In addition to this, we have experienced a credit bust prior to the recession. When was the last time this transpired?

    You’re wasting your time my friend, this guy just doesn’t get it.

  153. Rich In NNJ says:


    Not only posters here disagree with you.

    From MarketWatch

    Lehman reportedly cutting 5% of staff

    To date, Lehman has already laid off about 3,800 staffers in 2008. And earlier this year, Morgan Stanley announced it would cut about 2,000 staffers throughout the firm.

    The news from Lehman is just the latest in what appears to be an accelerating pace of layoffs in the financial-services sector as the turbulent environment for stocks and bonds has largely stalled business.

    Hiring has slowed or seized up at many firms including Citigroup Inc., where job cuts covering 17,000 employees were announced last spring, and Lehman Brothers Holdings Inc.

    And more layoffs loom in many areas of investment banking in the wake of the ongoing credit crunch, particularly in businesses such as credit trading and structured products, analysts and job recruiters predict. See full story (link to full sroty in 2nd post)

  154. Rich In NNJ says:

    From MarketWatch (link mentioned in MW story above)

    Wall Street hiring machine goes idle
    After years of buildup, employment levels flatten and cuts loom

  155. 3b says:

    #144 pret: Oh I still belive layoffs will be much worse than 2001/02, as you know I do not consider that period a real recession.

    And we have real, truly serious systemic risk right now, which we did not have in 01/02 and much worse than the early 90’s, even with the S&L crisis we had than.

    Plus consumer debt in the early 90’s was nowhere near the problem it is today.

    In fact I argue that HELOC’s and home equity loans did not start to become common place until the mid to late 90’s.

    This recession has every indication of making the early 90’s recession look mild.

    If you are still of the belief that this is just a hi-cup in what is otherwise a sea of wealth, than I truly do believe you are delusional, and I do not mean to be insulting.

  156. Stu says:


    Doesn’t a corporate slowdown usually follow a consumer slowdown as there is a lag between the time consumers stop buying and the time earnings are reported? Similar to the way commercial real estate tanks after residential?

    People need patience.

    The housing ATM is now out of service. It is a fact that this personal line of borrowing opened up by Greenspan to stop the tech burst wounds from hemorrhaging further was responsible for much of the growth in the last five years. Where will the consumer get their credit fix now?
    It sure appears that the private sector will return to their pre-housing ATM size as earnings decrease to their former levels. To think otherwise requires some sort of economic stimulus besides hope. And from my perch, hope has faded. The latest sentiment numbers are dismal.

  157. 3b says:

    #53 Clot: True. I was speaking mofre of the democracy silliness, and our so called democratic system, and way of life etc.

  158. BC Bob says:


    With the additional 1,400, approx, cuts at Lehman, the total cuts, based on that article, are now close to 20% for 2008, at Lehman.

  159. Mitchell says:

    #158 Very good post 3b.

  160. Clotpoll says:

    skep (75)-

    Here’s another thing that kills me: sometimes, when a listing of mine draws multiple offers, my seller and I will decide not to tell anyone about the fact that we got more than one. Then, after all offers are submitted, my seller chooses the one that seems the best. That’s it…over.

    You wouldn’t believe the angry calls I get from the buyers who get beat out. The comments run from stupid to outright threatening (although a seller has every right to select an offer and reject others, without comment or reservation).

    Bottom line: buyers do not have any legal or ethical right to know about the existence of- or nature of- other offers. Disclosing too much (without obtaining the sellers’ prior consent) could actually put a seller’s agent in a position in which the seller could later claim that excessive disclosure was given that resulted in the seller’s obtaining a lower price than was possible.

    You takes your chances. I hate to say it, but demanding information on the nature/existence of other offers is simply asking a listing agent to hand you an advantage over the seller. Although I’m an advocate of telling all parties EVERYTHING about all the offers on the table, the game is rarely played that way.

    Ultimately, the existence of other offers is beside the point. The exercise of making offers should be about establishing an individual buyer’s valuation of a home. A buyer who sets a limit- and is comfortable with that limit- is also implicitly expressing that if another buyer values the property more, so be it.

    To say that I’ll offer x…but once you give me all kinds of (possibly) confidential info that might give me the idea that I can buy at x, minus $20,000…is disingenuous.

    Agents playing the “phantom offer” game are hacks. However, buyers have no right to get a free road map from Point A to Point B.

  161. JLB says:

    Is pret saying wall street layoffs will be less or total layoffs will be less?

  162. Clotpoll says:

    patient (78)-

    That might be a good way to smoke out a seller who doesn’t actually have other offers on the table.

    If, however, a seller does have other offers, he cannot be dictated to (pardon the dangling preposition).

  163. 3b says:

    #156 Rich: And if pret reads that articel, whe will ntoe soemthing that him and I have debated in the past.

    It is pret’s contention that after the technology bust, Wall St reight sized, in other words after the layoffs then, they did nto over hire in the last few years.

    It has always been my contention, that is BS, the street always over hires, and then it over fires.

    When the money is pouring in, they spend with abandon, when it is not, they cut to the point of just silliness.

    Some silliness I remember, all the daily fresh flowers were eliminated from all goldman reception areas.

    All stationary supplies were kept under lock and key, by the trading floor partner’s secreatry.
    She used to dole out pencils one or 2 at a time. One or 2 pencils, not boxes.

    Or my buddy at American Express, when they got rid of all the plants, so they would not have to pay to maintain them. They gave them away to employees.

    I went down with him on a Saturday with his mini-van, and picked up quite a few. I still have them.

  164. Clotpoll says:

    skep (84)-

    “At least Bush raised the issue of fixing entitlements, which no one else would do.”

    And look what Bush gave us…Medicare Part D: one of the best paydays the gubmint has ever given drug companies. Meanwhile, no senior citizen will enjoy any meaningful benefit.

    I’m no populist, but Bush/Cheney, et al are so transparent, I’m surprised they don’t disintegrate when they take a shower. These guys probably wouldn’t mind if we took old, sick people and put them on a canoe without a paddle when the tide’s going out.

  165. Clotpoll says:

    patient (87)-

    For my sake, can we please keep the anti-convulsants in the water? :)

  166. pretorius says:

    Rich in NNJ,

    Thanks for the links, but I don’t need to be reminded what the mainstream media is writing about.

    Using mainstream media articles and tidbits of anecdotal observations as the basis for a forecast can lead to wildly erroneous thoughts.

    It is important to step back and look at the broader picture in addition to reading the sensational, convenient stuff.

    “Layoff announcements not in recession territory” is not a headline you’ll find in the mainstream media.

    Please look at the chart I described in post 115 when grim posts it.

  167. HEHEHE says:


    Let me know if that happens again, I could use some plants.

  168. Clotpoll says:

    ChiFi (119)-

    Robuchon should be nice that time of year.

  169. Clotpoll says:

    Stu (123)-

    After Glow? OMG.

    I guess it has a better ring to it than, say, “Just Porked”.

  170. njpatient says:

    “For my sake, can we please keep the anti-convulsants in the water? :)”

    I was wondering if that would get a reaction.

    s*x whoremoans?


  171. Clotpoll says:

    Or the Jewish section, “Schtupped”.

  172. Clotpoll says:

    BC (126)-

    Perhaps Imus has already secured the pencil-in-a-tin-cup franchise for Wall St.

  173. Stu says:


    Too funny.

  174. 3b says:

    #169 pret: I do not undestand your logic. Does the fact that the MSM is reporting this mean it is not true?

    Either Lehman is laying off or they are not, simple as that.

    I am curious when housing was booming, did you have the same problem with the MSM, or were they just reporting what was happening at the time? Should we have looked at the broader picture than?

    Is it your belief that if the MSM reports good news, than they are just reporting the facts, but when bad news is reported that we are required to look at the broader picture?

    You are tortuing the argument, and yourself;not to mention us too.

  175. Clotpoll says:

    Corzine wants to pony up 20 MIL for a Florida election re-do?

    F(*& Florida. Hows about the guv write a check for 20 MIL to NJ?

  176. RayC says:


    The grass is not always greener on the other side of the Hudson.

    Spitzer linked to Prostitution Ring

  177. skep-tic says:


    “Bottom line: buyers do not have any legal or ethical right to know about the existence of- or nature of- other offers.”

    Clot– I completely agree. The problem arises where the agent/seller chooses to tell the buyer that there is another offer. If you are going to volunteer information, it should be truthful.

  178. $108.02 a barrel….

  179. PGC says:

    #147 njpatient

    I would say that we have just started. The LBO market has taken the initial hammering. and the banking side has had it’s share of the pain. The next step is the non bankning side. A lot of companys rely on buying companies and brands to add revenue and earnings.
    A good example would be the pharmas. A company like Merck needs to get access to credit, in order to aquire other companies for their product or research. If they can’t aquire then growth slows.

    They can’t use cash on hand as they need that to cover lawsuits.

  180. BC Bob says:

    Not anecdotal.

    Carlyle is a huge player in mortgage reits. It has used just $670 million of client $ to buy over $21 billion of Freddie and Fannie backed mortgage securities. Just one major problem, not programmed into their blackbox; WS wants its $ back.

    If the most politically connected, powerful p/e firm in the world is not immune, who is?

  181. pretorius says:


    I’m not disputing the accuracy of the info reported in the article.

    I’m pointing out that it is important to look at current layoff announcements from a different perspective.

    A better way to form a view of current US job cuts is to look at them in relation to the long-term trend. This reveals that 2008 layoff announcements in the US, while on a higher pace than last year, remain mild and are not even close to the numbers reported in 2001 and 2002.

    Measuring layoffs by counting the number of mainstream media articles on the topic is not the right way to do it. When housing was booming, there were few articles about layoffs, even though they were happening at a similar rate then as they are today.

    However, I acknowledge that financial services companies are cutting more people than they were during the housing boom years.

  182. mark says:

    How low can we go? not the market ,

  183. Ann says:

    163 Clotpoll

    We got multiple offers on our sell. We actually got an awesome one after we had started attorney review on another one. We ended up dumping the first buyer for the better offer.

    The first buyers had made an ok offer, 10K less than list (and list was already a great price), but the second buyer came in at list with more money down.

    The other buyers agent was so mad, saying just what you said, that the buyers who got dumped didn’t even get a chance to counteroffer. But why should they have a right to counteroffer? I assumed they made their best offer and we didn’t want it anymore.

    I also think that people shouldn’t go in with an offer that just a tiny bit off list price (like our first buyers did). The house was already priced right, as evidenced by the multiple offers. It was like they took the 10K off just because they thought they should get something off in this market. I’ve heard of this happening quite a bit, people losing 700K houses over 5 or 10K.

  184. njpatient says:

    “ALBANY – Gov. Eliot Spitzer has informed his most senior administration officials that he had been involved in a prostitution ring, an administration official said this morning.”

  185. njcoast says:

    #185 Mark- “How low can we go? not the market”

    Breaking news-Governor Spitzer involved in a prostitution ring. He has cancelled all of todays business. Film at 11.

  186. RayC says:


    I see your point, and in a market that is going up up up you eat the $10,000 if you want the house. If you can’t make an acceptable offer (because it was accepted!)below asking in this market, when can you? If you lose a house now over $10,000 you may have just saved yourself $50,000 as it goes down in value.

    The mentality that buyers have to acquiesce to seller’s mentality or go homeless is outdated. It should be back in vogue in 10 years or so.

  187. Punch My Ticket says:

    Clot [164],

    An interesting discussion of tactics.

    Last time we sold a house (Chicago in 2000), we had a fairly busy market but no real way to judge FMV because there weren’t many sales of houses like ours. Yeah, I know that sounds stupid, but there were some unique factors. House built just post-fire but very big for that age, southern end of what would commonly be called Lincoln Park but managed to keep a 312 area code when 773 was split off, that sort of thing. Coming up with comparables was a nightmare for us, the listing agent, and buyers.

    So we list the house, five possibles walk through the first day, and we have two offers at full list with no financing contingencies that evening.

    What to do?!?! Obviously we misread what the market would bear. Do we take the offer from the nice couple with the toddler that have rented two blocks away for a couple of years, or the offer from the trustafarian 23 year old know it all? Who knows what’s right?

    In the end, we figured that we must have been really wrong on asking, especially having two offers on day one, so what was the harm in telling our agent to go back to both possibles and tell them to make their best bid?

    The nice couple refused to raise, the trustafarian got another $15k from Ma and Pa. We sold at the higher price.

    If we had had only one offer, I think we would have just waited for a few more days to see what else came in. The offers had expiries on the order of a week so we didn’t feel rushed. But it never would have occurred to us to mess with the buyer’s head by hinting at phantoms. We knew that, at worst, we were getting out at full list, about 70% more than we had paid five years earlier (but we put a fair chunk into it), and we didn’t have to get out the Mr. Clean over and over and over.

    BTW, I still regret selling the house to the trustafarian. It was a great neighborhood, the couple would have been perfect, while the trustafarian ended up spending 80% of his next five years developing the desert outside Phoenix for Pa. I hope he stuck with it and has lost his shirt.

  188. Clotpoll says:

    3b (166)-

    You should start hitting nice-looking RE offices in your area. You can probably pick up plants and hot/cold water dispensers.

  189. BC Bob says:

    Speaking of jobs, how about total unemployment?

    The #’s from BLS or BS, whichever you prefer, indicate an unemployment rate of 4.8%. However, when you add up the marginally displaced, discouraged and those working part time, since full time employment is not avaiable, the unemployment rate almost doubles, 9.0% [Jan-08]


  190. njpatient says:

    182 PGC

    Admittedly its anecdata, but my firsthand experience is that deal volume slowed significantly beginning in August and has been on life-support since the new year.

  191. mark says:

    Corzine to make donation and start Spitzer
    defense fund. Clinton throws support behind it.

  192. njpatient says:

    you forgot David Vitter (IOKIYAR).

  193. mark says:

    Sharpton demands restitution and rebate

  194. njpatient says:

    186 Ann

    Did you catch my story about the woman who was offered $10K less than list, rejected it, and wound up selling 5 months later for $50K below list (and list was $299K)?

    It was on HDTV. A regular laugh-riot.

    Getting a List-minus-$10K offer rejected in this market is often a blessing for the buyer.

    “I also think that people shouldn’t go in with an offer that just a tiny bit off list price” – I find this statement downright odd.

  195. Stu says:

    Spitz vs. ManGravy

    Spitz is just way cooler!

  196. Confused In NJ says:

    Spitzer announcement is confusing, all Politicians are Prostitutes. But then again there is a difference, Spitzer didn’t allow them to smoke.

  197. Hehehe says:

    What do they mean Spitzer was involved? Was he a patron or was he running it?

  198. Clotpoll says:

    Ann (186)-

    “I also think that people shouldn’t go in with an offer that just a tiny bit off list price (like our first buyers did).”

    Just like the pitcher who always pitches well enough to lose, 3-2.

  199. Clotpoll says:

    HE (200)-

    He got the hookers to bail out AMBAC.

  200. Mike NJ says:


    Even for a properly priced house, most people will still try to get a few bucks off the list price. It is only human nature to do so (no one wants to pay MSRP on a car right).

    If what you say is true eBay would only have two rounds of bidding, your initial offer and another round to top it. The reality is that you want the best price for your RE, period. This is not to say that your initial bidder would have topped the other offer but now you don’t know and never will. Why not just say, I got an offer for full price, do you want to top?

    I guess I have a hang up on this because what I initially offer and what my final price is are two completely different things and are not related in any way. You could have played both bidders off on each other any maybe gotten a bit over asking. In your situation full disclosure would have only helped you since your second bidder was far from phantom. I say treat it like an eBay auction, one that is not over until the fat real estate lawyer sings.

    Just my 2 cents.

  201. BC Bob says:

    How long before another Cramer rant regarding his law school roommate, Spitzer?

  202. Hehehe says:

    The Post has a few more details, he’s probably not the only name that will come out of the woodwork:


  203. Clotpoll says:

    BC (192)-

    Anywhere to get that number with the silly birth/death assumptions ratcheted out?

  204. Confused In NJ says:

    Spitzer is getting McGreevy to defend him. He has practice leaving a Govenorship with no penalty after a sex scandal.

  205. Hehehe says:

    Did the PPT leak this to get the economy off the front pages? ;)

  206. Ann says:

    Mike NJ

    This is just my opinion, but let’s say a house that is roughly worth 700 to a buyer. And it’s listed at 700K, in other words, it’s priced right.

    I don’t see the sense, as a buyer, to go in with an offer of 690, a mere 1.5% off just because you think you should get something off of it, for whatever reason (the market sucks, human nature). Especially if you are really willing to pay 700K in the end anyway (in other words, that’s your secret limit).

    Now, if someone wants to go in with 690, because they really think that is all the house is worth, then that makes sense to me. But to go in with 690K under the first circumstance makes your offer weaker and there is a higher chance you could lose the house.

    To answer your question in the last paragraph, we did not want the first buyers at all after we got the second buyer (much higher dp), hence why we didn’t even give them a chance to counteroffer. We didn’t play the first buyer off on the second, because we didn’t want the first buyer anymore, so we didn’t want the second buyer to walk. He made a list price offer, with a great dp and a quick close.

  207. 3b says:

    #191 clot: How about one of those cool Keurig coffee/tea/hot water dispensers.

  208. njpatient says:

    “Spitzer is getting McGreevy to defend him. He has practice leaving a Govenorship with no penalty after a sex scandal.”

    He should ask Senator Vitter or Senator Craig for advice on how to stay in office with no penalty after a sex scandal.

  209. mark says:

    grasso buying drinks,,,, hurry little bit of a crowd

  210. 3b says:

    #209 Ann: I do not think that in this environment today, anybody has to worry about losing a house, plenty more to go around.

  211. JLB says:

    ‘Gasp’parino from CNBC just said that there must be some meat to the story (Spitzer and The Emperor’s New Clothes) as the NY Times went with it big, right? I’m sorry did he catch the big McCain reveal in NYT? And if he mentions his book one more time…

  212. Ann says:

    197 njpatient

    See my explanation above too, but if a buyer really thinks the house is only worth, let’s say 10K less, then yes, I think that is what they should go with on their offer and stick with it. But to take a mere 1-2% off just to do it, raises your chance of losing the house. Which is cool.

    Now, I’m all for going in and making offers that are 10% off or more if that’s what a buyer thinks the house is worth to them. In those cases, my gut says, come up with your best offer and stick with it because you’re already coming in low. JMO.

    I didn’t catch the story about the HDTV lady, but that sounds stupid and stubborn, but hey, her choice I guess!

  213. 3b says:

    #189 Ray C The mentality that buyers have to acquiesce to seller’s mentality or go homeless is outdated. It should be back in vogue in 10 years or so.

    Amen my brother.

  214. Ann says:

    213 3b

    Sure, in this environment, you can lose a house. There is always the one house that is the best value in a particular neighborhood and that will be the one the few buyers out there will want. But yes, there are plenty of other houses to go around, but they are not all equal to a specific buyer.

  215. Ann says:

    To clarify on my post 209:

    I think it’s absolutely fine to go in with 1.5% off on your offer, but it does increase your chance of losing the house.

  216. Hehehe says:

    I don’t think it would be as much of a story if he hadn’t been such a holier than thou camera hogging jerk when he was AG.

  217. PGC says:

    #193 njpatient

    I think we are agreement. Round 1 was the deals drying up. Round 2 is the corporate earnings contracting as there is no wood in the fire.

  218. Artemis says:


    I think the issue is that people usually don’t have a single price that they see as the house’s “value.” It is more of a range. And they would obviously like to pay less than pay more. Moreover, because they expect the seller to counter, they will offer even less and expect to meet somewhere in the middle.

    As for losing a house, I don’t think that is really a concern at these inventory levels. There is always another house that the buyer will like just as much if not more.

  219. 3b says:

    #184 pret: A better way to look at it, is to look at what happened in the past, compare it to how bad things are today,and then you will come to the conclusion that we are going to see large layoffs.

    Again at the risk of sounding like a broken record, if you believe that we re just in for a mild down turn, after all that has transpired, and all that is still unfolding, than I believe with all due respect, that you are delusional or in some type of deep denial.

    This delusion or denial is somehow coupled with real estate.

    If you accept that we are in deep trouble, than that will severely affect the value of real estate. To accept one, means to accept the other, and for whatever reason or reasons you cannot.

    I will go with history, common sense, and a deep appreciation of how wall st works.

  220. Clotpoll says:

    3b (210)-

    I’ve got one of those in my office. I like it more than my car.

  221. Mike NJ says:


    I do not disagree with you but most people see the list price as MSRP regardless of how correct the price is. Especially with all this talk of a housing crisis and such over the last two years. At the end of the day their money was still green, no? If a mtg company was about to loan them the money for the house (I assume a pre-qual was part of the offer) what does it matter? In the end it all hits your account the same way at closing, as a net credit.

  222. 3b says:

    #170 hehe: No problem, I got soem real nice ones;even came with the fancy pots too

  223. Clotpoll says:

    mark (212)-

    It was probably Grasso that set it up and dropped the dime.

    I would pay a lot of money to be watching Dick Grasso right now. My guess is, it’s time to break out the Krug and order a few torchons of foie gras (served cold, of course).

  224. JBJB says:

    It’s now being reported that Spitz will resign and be indicted!

  225. mark says:

    mcgreveeey will lead presss conference for
    spitzer. (knows how to do it_)

  226. njcoast says:


    Coffeecow.com for Keuric coffee/tea/hot chocolate- cheapest prices, largest selection and free shipping for orders over $75.00 and they arrive in 2 days.

  227. 3b says:

    #223 clot: That little blue light fascianates me ( I guess I am easily fascinated),and flipping the used coffee packet into the holding container is fun.

    I guess I am easily amused.

  228. Stu says:

    Indexes are flirting with ’05 prices. Shouldn’t be long before the mild recession calls become the mild depression calls.

    Forget consumer discretionary, perhaps soup might make a good investment. Especially the hard commodity…cans of it.

  229. Clotpoll says:

    3b (230)-

    Are you a shut-in? :)

  230. BC Bob says:

    Once again, why would anybody want to buy if they are selling?


  231. chicagofinance says:

    The only official quote so far from Spitzer’s office is “….the b!tch set me up…”

  232. jlx says:


    what would you have done if the second offer was at the same price, but with the better down payment?

    or if the second offer had been only 5k more but with same dp?

  233. njpatient says:

    “See my explanation above too, but if a buyer really thinks the house is only worth, let’s say 10K less, then yes, I think that is what they should go with on their offer and stick with it.”

    I disagree. If I can buy someething that I think is worth $700K for $690K, why would I buy it for $700K?

    I think much of this issue rests on your seeming belief that it’s still a seller’s market. It isn’t.

  234. 3b says:

    #232: Clot: Nah just love that thing.

  235. BubbleYum says:

    Hehehe Says:
    March 10th, 2008 at 1:40 pm
    What do they mean Spitzer was involved? Was he a patron or was he running it?

    I found the reports of him being “involved” rather confusing too–that almost makes it sounds like he was the ring’s pimp, or maybe even one of the high-priced hookers on his day off from the governer’s office. His personality leaves a lot to be desired, but I’ve always admired him professionally–too bad if he’s taken down by this. And even though he resembles a cobra, I’m sure he could have gotten a woman to sleep with him for free!

  236. 3b says:

    #229 njcoast I am going to check it out.

  237. njpatient says:

    “I would pay a lot of money to be watching Dick Grasso right now. My guess is, it’s time to break out the Krug and order a few torchons of foie gras (served cold, of course).”


  238. 3b says:

    #236 njpatient:I think much of this issue rests on your seeming belief that it’s still a seller’s market. It isn’t.


  239. Clotpoll says:

    patient (236)-

    “If I can buy something that I think is worth $700K for $690K, why would I buy it for $700K?”

    Because, if you’re using even modest leverage, there’s not enough difference in the payments to justify the risk of loss.

    I will now sit back and await the howls of the righteous.

  240. 3b says:

    #242 clot:Because, if you’re using even modest leverage, there’s not enough difference in the payments to justify the risk of loss.

    I agree with you, only if you truly want that particular house,and feel there will not find any thing better.

    My only point is that with all the inventory stagnating on the market, it is not really an issue any more.

  241. Clotpoll says:

    How can it be a buyer’s market when 3/4 of the buyers out there can’t buy, because they can’t sell their current home?

  242. chicagofinance says:

    Punch My Ticket Says:
    March 10th, 2008 at 1:30 pm

    Punch: I was in Chicago from 1995-1997, where did you live?

  243. chicagofinance says:

    clot: How come you don’t go “best-and-final”? It seems to be a ethical, respectful, and objective way to extract value from buyers. Educate me please……

  244. 3b says:

    #244 clot: It’s neither at this point.

  245. chicagofinance says:

    Regarding C: At least I’m on record telling my client to diversify at $27….

  246. RayC says:

    242 But Clot, what loss? Is not buying a house that you feel is depreciating a loss?

    There is a famous baseball quote I am about to butcher. A veteran pitcher (can’t remember who) was asked something like “How would you pitch to Hank Aaron” and he responded, “tell me what the score of the game is, what inning we are in, how many outs, how many men are on base…”

    $10,000 to lose out on a house on this market is not such a big deal if it is the first time you have made a bid. If it is the 10th house you are bidding on, you NEED to move, etc., then you are right, what’s an extra $60 a month? (on a 30 year loan, $21,600 in payments – what will that buy in 2038?)

  247. Escape from NJ says:

    Has the full story on Spitzer come out yet? I can’t see him on an Albany street corner smacking hoes like Dolemite.

  248. Punch My Ticket says:


    Around the corner from Second City.

  249. JLB says:

    Holy Crap, “Gasp”arino just said he thinks prostitution is a “victimless” crime and he thinks it should be legal…is he aware of the ties (organized crime, drugs, etc.) that are funded and intimately connected to that illegal trade? Wow, what an idiot….only bigger one at this hour is the NY Govenor who just destroyed his three daughters’ worlds.

  250. PeaceNow says:

    I despised Elliot Spitzer when he was AG of NY. So much so that I kept my NYC voter registration just to be able to go back and vote against him when he ran for governor (which I didn’t do in the end anyway, since it would’ve been a wasted trip). Always knew he was sleazy…

    But, on a real estate note, perhaps I’m totally off the wall here, but what difference does it make to the seller how big the buyer’s down payment is? All the money’s going to change hands at the closing table, so why care whether more of it’s coming from the bank or out of the buyer’s pocket? (This assumes that both buyers qualified for mortgages.)

  251. Clotpoll says:

    ChiFi (246)-

    Sometimes, that’s not a bad way to go. However, no single approach works in every situation.

    “Highest and best” can backfire, especially when all the offers on the table are not really in the range of the seller’s expectations. The offering parties could all- conceivably- raise their offers to a level that remains unacceptable to the seller (I had this happen more than once in my younger days). However, once you’ve called for “highest and best”, you have no more tactics at hand to lever the offer even higher.

    That’s why I tend to like to divulge all the particulars of each offer to each player. Talk about inciting fear of loss…and, it’s perfectly fair and equitable to all involved. Everybody knows everything.

    When all the cards are on the table, face up, the guy who tends to fight in fight/flee situations goes for the kill.

  252. Clotpoll says:

    I can’t hear any Spitzer news because all the mortgage people in my office are howling about the blown-out spreads.

    The wheels are coming off.

  253. JLB says:

    YUCK! Spitzer’s wife was standing next to him while he gave his statement…I just realized who the biggest idiot of the hour is…jeez, didn’t she see the McGreevy press conference?

  254. chicagofinance says:

    Punch My Ticket Says:
    March 10th, 2008 at 2:47 pm
    246, Around the corner from Second City.

    Old Town? I lived in Hyde Park and also 1100 W Wrightwood (I think it was technically Lincoln Park, but it in that quiet area north of DePaul).

  255. Clotpoll says:

    JLB (253)-

    “Gasp”arino just said he thinks prostitution is a “victimless” crime…”

    Funny, coming from a guy whom AMBAC just used as a pin cushion.

  256. 3b says:

    #254 peace; Bigger the down payment, more likely the deal will actually close.

  257. chicagofinance says:

    Clotpoll Says:
    March 10th, 2008 at 2:50 pm
    ChiFi (246)- That’s why I tend to like to divulge all the particulars of each offer to each player. Talk about inciting fear of loss…and, it’s perfectly fair and equitable to all involved. Everybody knows everything. When all the cards are on the table, face up, the guy who tends to fight in fight/flee situations goes for the kill.

    OK – I completely misunderstood what you were doing (maybe I did not read carefully enough). So, all information disclosed at all times in the instance of multiple offers. Why would anyone complain?

  258. jcer says:

    Clot#242 that thinking is what got realestate in trouble in the first place. Although maybe 10k is not very much money, even up to 50-75k is not a big deal on payments but when I go to sell it is important. It is like if all of the gas stations in your area decided to set gas price at $5 per gallon, it is not a lot of money but ethically it is dubious and very illegal. Please everyone try to remember listing price is just a starting point market price is either higher or lower. I remember the early 90’s offering 15-20% off listing prices and seeing the offer accepted, fast forward to 2005 you were seeing the opposite 10% over list was not uncommon. It is very important for people to pay what the market is dictating otherwise the seller and the realtor are defrauding the buyer PERIOD! Creating artificial market forces is WRONG and on wall street you would go to prison for doing such a thing.

  259. jam says:

    Someone was kind enough to come in my office and point out the price of C today. All I can say is @#$%$#@^!!!

  260. njpatient says:

    “How can it be a buyer’s market when 3/4 of the buyers out there can’t buy, because they can’t sell their current home?”

    But clot, the hypothetical from my perspective is what _I_ would do, not what the tapped out masses would do.

    “Because, if you’re using even modest leverage, there’s not enough difference in the payments to justify the risk of loss.”

    I don’t view it as much of a risk at all.
    3B, explain why:
    “My only point is that with all the inventory stagnating on the market, it is not really an issue any more.”
    Thanks, 3b.

  261. jlx says:

    254 peacenow

    dp is very important as is fico score…

    a friend of mine was able to buy a house for 440k after previous offers of 475k and 490k fell through because of financing… my friend put up 40% and had perfect credit, while those other offers had less than 20% down… i guess the seller didn’t want to have to wait several weeks to see another deal bust because of financing…

    the olp was over 500k and it was on the market for about 9 months…

    sure this is just one case, but it just shows you what desperate sellers may have to come to grips with in this market.

  262. njpatient says:

    ” So, all information disclosed at all times in the instance of multiple offers. Why would anyone complain?”

    I most certainly wouldn’t.

  263. Mitchell says:

    #236 Got to agree with njpatient.

    Its like saying because someone can afford to buy a car at sticker price they shouldn’t negotiate the price?

    Everything is negotiable.

    The biggest thing most people need to overcome to be a good negotiator is the ability to walk away from even a good deal.

  264. Clotpoll says:

    jcer (262)-

    Old saying (got it from BC):

    Don’t be a dick for a tick.

  265. njpatient says:

    “Has the full story on Spitzer come out yet?”

    I dunno, but I’ve read the complaint and it’s pretty much what you’d expect. Kind of a yawn.

  266. 3b says:

    #265 but it just shows you what desperate sellers may have to come to grips with in this market.

    it shows what desperate sellers WILL have to come to grips with in this market. And there will be bigger discounts than your friend got as we move forward into the Spring/Summer market.

  267. Clotpoll says:


    Always good to see Mitchell chime in, drawing analogies between selling cars and real estate.


  268. jam says:

    Prostitution is definately a victimless crime. Also, most major pimps pump this money back into the economy while also providing great benefits including health coverage for their employees. The tax revenue earned also helps to support our civic needs.

  269. Clotpoll says:

    I have to go work now, but my parting thought is that mispricing- in anything- is always most pervasive in dynamic markets.

    A market declining as rapidly as this one means that buyers must take more of the risk and responsibiity for identifying and purchasing at true value than in flatter, more stable selling environments. The reward is that mispriced housing is the stuff that should eventually go at the most buyer-favorable prices.

  270. Clotpoll says:

    Damn. Emperors’ Club VIP site crashed.

  271. Mitchell says:

    #271 I guess your willing to overpay your entire life.

    Yup were talking a mere 1% of 10K but really you should be smart enough that in 30 years were talking more like 30K. I see spending an extra 10K as losing 30K when talking real estate. But in you eyes you will equate getting another 30K in 30 years as a 20K profit despite you paid for it in interest all along.

  272. scribe says:

    Clot #256

    ” …all the mortgage people in my office are howling about the blown-out spreads.”

    So what happened to the spreads?

  273. Punch My Ticket says:

    Well, well, well, Eliot.

    On a wiretap arranging to have a woman transported across state lines for the purposes of prostitution. You would think a legendary prosecutor would have heard of the Mann Act.

    That puts the incorruptible crime fighter in a class with such luminaries as Charlie Chaplin, Chuck Berry, Frank Lloyd Wright, and of course …

    Charles Manson.


  274. njpatient says:

    “A market declining as rapidly as this one means that buyers must take more of the risk and responsibiity for identifying and purchasing at true value than in flatter, more stable selling environments.”

    Trudat. In an up market, sellers want to err high. In a down market, buyers want to err low.

  275. Ann says:


    “what would you have done if the second offer was at the same price, but with the better down payment?

    or if the second offer had been only 5k more but with same dp?”

    To answer your first question, we would have gone with the second offer. 5K more with same dp, we would have gone with the second offer.

    In general, my point is this, if you think a house is really worth 1 or 2% less than list, then certainly make that offer.

    What happened in our case, the first buyer offered a tiny bit less than list. All they did in the end was encourage the second buyer to get a move-on and make a offer. He made a quick offer, that night, and a better one. He might have made one anyway, but their offer played a role.

    Then it turned out they were willing to pay list anyway, since their agent reamed out our agent for not allowing them to counter offer.

    This exact same scenario happened to a friend of mine this fall, except she was the buyer and she was kicking herself in the butt when they lost the house because they really liked it.

    Personally, I would think twice before taking just 1-2% off on a house I really, really liked. But that’s just me.

  276. Punch My Ticket says:

    chifi [259],

    Old Town.

  277. ithink-ithink says:



    Lawmakers have been working on legislation to reform the FHA to modernize its standards so that they reflect changes to the housing market in the past 30 years. Among the changes on tap, lawmakers will:

    Permanently raise loan limits.

    Reduce down payment requirements.

    Make it easier for borrowers in high-cost loans to refinance.

  278. njpatient says:

    “Personally, I would think twice before taking just 1-2% off on a house I really, really liked. But that’s just me.”

    I guess that’s why people like you and Reechard buy, while others wait.

    Last summer I saw a house I really, really liked, and made an offer at 10% off. The seller was initially “offended”, but by a couple of weeks later came crawling back with multiple bidding-against-himself counter-offers at nearly 10% off. By then, I was no longer interested, and had realized how insane it would be to pay that amount for that house in this market.
    Thank _G*d_ my initial bid got rejected!

    I’ve seen dozens of houses I “really, really like”. I know that there’s no shortage of nice houses out there, sitting on the market forever because they’re overpriced. That’s why I’m completely comfortable walking away and letting the seller sit and stew for another 256 DOM.

  279. njpatient says:

    “Personally, I would think twice before taking just 1-2% off on a house I really, really liked. But that’s just me.”

    You do begin to sound more and more like Reech.

  280. jlx says:

    279 ann

    what i should have said was, what if the second offer was only 5k or 1k more with the same dp (as the first offer)?

    basically, what i guess i’m trying to point out is that the amount of the down payment played an integral part in you accepting that offer… it was just an added bonus that you got that 10k more…

    but what if you decided to go back to the first offer and then they decided to beat the second offer by 20k? would you be willing to take the higher risk offer for 20k?

    your situation was a no-brainer as it was less risk and more money… not all cases are so clear cut…

    but congrats nonetheless.

  281. Essex says:

    272……..only victim is dat Ass…….Booyah!

  282. Hehehe says:

    Dealbreaker on Spitzer, the comments are classic, the DungeonMaster one almost made me pee my pants:


  283. Essex says:

    On Topic>>>>>>>>>>>>>SHE’S A BRICK HOOOOOOOOOOOOUSE!

  284. BC Bob says:

    “Personally, I would think twice before taking just 1-2% off on a house I really, really liked. But that’s just me.”

    I agree, if I could purchase gap insurance on the house.

  285. Sean says:

    Ho Humm, who will save Ambac now? It’s Down 23% already!

  286. chicagofinance says:

    grim: I guess your moderation monitor needs to be updated…. clot posted “Spitzer” “howling” “blown out” and “spreads”…..

  287. ithink-ithink says:

    Of particular interest to those at or under 10k population.


  288. chicagofinance says:

    Wikipedia is already updated for Spitzer…..

  289. chicagofinance says:

    grim: is your friggin website still on standard time or is it CDT?

  290. Confused In NJ says:

    Hillary is choosing Spitzer for V.P. based upon Bill’s recommendation.

  291. Ann says:

    284 jlx

    Yes, the higher dp was a huge factor in dumping the first buyers. 20K more than the second offer? That would have been 20K above list. Their down payment was on the low end though, and the second buyer was on the high end (40%). Don’t know!

  292. Ann says:


    Whose Reech? And why should I care? That’s just me.

  293. Ann says:


    For your info, the house we bought we got for 10% off list. So whatever, not like we run around giving list price to everyone.

    And, we made even lower bids on other houses that got rejected.

    I’m just questioning the old “cut 1 or 2% off just because I should” strategy. People can do whatever they want and it can save a bit of money, but you can lose a house you really like that way too, and in the end, over not over much money.

    Glad you are happy about your decision not to buy.

  294. Artemis says:

    Ann – but what about the seller who lost a BUYER over a mere 1 or 2%? There are a lot more houses to buy than buyers to buy them. The seller is the one taking the bigger risk.

  295. Ann says:

    And,njpatient, not sure where you are looking, were looking, but I don’t care what kind of market it is, Bergen County does not have a lot of nice houses.

    So if a buyer finds one that could actually work for them, AND is priced within 1 or 2% of what they are willing to pay for it (since most are overpriced by 10% at least), it could very well be silly to put in an offer 1/2% lower “just because.”

  296. Confused In NJ says:

    The New York Times story, published on its Web site earlier today, said Spitzer was caught on a federal wiretap planning to meet a prostitute in Washington after arranging for her to travel from New York. The Times, citing a person briefed on the federal investigation, said an individual identified in an affidavit as “Client 9,” who met with a woman in the Mayflower Hotel in Washington, was Spitzer.

    Client 9 paid $4,300 for an appointment that began on Feb. 13 and ended at 12:02 a.m. the next day, according to the affidavit.

    Mann Act

    The incident was a violation of the Mann Act, which makes human trafficking and prostitution across state lines a federal crime, according to the complaint.

    Looks like Spitzer did a boo boo flying her from NY to DC in violation of Mann Act.

  297. pretorius says:


    Did you take any steps to verify the the buyers’ downpayment amounts?

    When I was negotiating the price of my current place, I wrote “20% downpayment” in my offer letter and backed it up with a checking account statement that showed I really had the $. I assumed that the seller might grow more willing to consider my lowball offer when he saw this documentation.

  298. Ann says:


    For 1 or 2%, a seller would be stupid not to take an offer like that, for sure.

    And you’re right, the seller is taking a bigger risk by turning down an offer that is 1 or 2% lower. BUT, the buyer also takes a risk that their offer, which is now super easy to beat, can be used to drum up other interest.

    I do think that in a given neighborhood or town, there is always the house that the few buyers out there will want. And the rest will be crap. Especially in NNJ.

  299. Ann says:



    Yes, we asked for a verification of assets (checking account statement) before accepting the second offer with the high dp and dumping the other buyers.

  300. gary says:

    I just saw a piece on the news stating that average gas prices in NJ are now at $3.01 per gallon and heading higher. Thank goodness we live in prestigous northern NJ or else we’d really be feeling the pinch, yes?

  301. gary says:


    BTW, that realtor called me twice in the past two weeks regarding that house we went to see for a 2nd time. Both times my wife answered because I wasn’t home. The first time my wife said she’d have me call. I didn’t. The 2nd time, my wife did talk to the realtor and told her that the house is too high and that we’d wait.

    The realtor didn’t even ask what we’d offer but my wife did sort of let her know it would be substantially less than the 2005 price the seller is currently expecting.

    We’ll see if the realtor gives us another call. If not….. NEXT!

  302. Confused In NJ says:

    Rowland/McGreevy/Spitzer, three for three.

  303. Confused In NJ says:

    Ex ATT President Randall Tobias, the deputy secretary of state responsible for U.S. Foreign Assistance and administrator of the U.S. Agency for International Development (USAID), abruptly resigned yesterday after he was asked about an upscale escort service allegedly involved in prostitution.

  304. SG says:

    Absurdity of owning a house in NJ.

    MLS: 2493298
    Asking: $399,000
    Taxes: $9361

    Assuming you have 5 year (long term horizon).
    Property Tax: $46,805
    Interest portion: $92,887

    Hence per month just Tax and Insurance $2,328 per month ($139,692/60mo). One can rent that place easily for $2,000.

    How can one justify $10K in taxes for property worth only $400K? That is actually asking price, I am sure closing price would be even lower.

  305. Punch My Ticket says:


    Read all the pages. Too bad they didn’t get the page with “Kristen” on it. I would have liked to see how many diamonds in her rating.

    I especially liked this.

    Gift Certificates Available Upon Request.

    I’m sure Eliot was just using that gift certificate he got during the holidays before it expired. IOW he’s not a lecher, just thrifty.

  306. Confused In NJ says:

    At least the sex sting proved that Donkey’s & Elephants can get along after hours.

  307. JLB says:

    Why does it seem there are more democrat men politicians that have loose morals than the republicans (granted there are a few lame ducks there too, i.e. craig). Is there a connection between loose morals and the democratic party? Do republicans lend integrity to the office they serve?

  308. Pat says:

    Wow. Late to the plate today, but who in high heaven is making sure Spitzer ain’t a playa over the next month?

    My guess is that the O team is a lot tougher than I thought. Ten points for ripping the flesh off the throat while shaking the corpse.

    No, I’m not missing the elephant. The M team is just too obvious.

  309. 3b says:

    #311 McCain cheated on his first wife, Rudy married 3 times 1st time to his first cousin, cheated on second wife.

    Both Republicans.

  310. Artemis says:

    #311 “Why does it seem there are more democrat men politicians that have loose morals than the republicans (granted there are a few lame ducks there too, i.e. craig). Is there a connection between loose morals and the democratic party? Do republicans lend integrity to the office they serve?”

    This is just a sampling from The Republican Wife Cheating Hall of Fame:

    Rep. Henry Hyde
    Mike Bowers
    Newt Gingrich
    Bob Dole
    Former Rep. Bob Dornan
    John Linder
    Ronald Reagan
    William Cohen
    Guy Millner
    Rush Limbaugh
    Mitch Skandalakis
    Michael Deaver hookers…
    John Warner
    Bill Randall
    Bill McCartney
    Rep. Dan Burton Rep. Bob Barr
    Rudolph Giuliani
    Sen. Strom Thurmond
    Gilbert Davis
    Bob Packwood
    Gov. Kirk Fordice
    Beverly Russell
    Marv Albert

  311. 3b says:

    #299 Ann:Bergen County does not have a lot of nice houses.

    That is a very broad statement, and generalization. Does not have a lot of nice houses as comapred to where?

  312. njpatient says:

    “Why does it seem there are more democrat men politicians that have loose morals than the republicans ”

    It doesn’t seem that way to me, JLB. Right now there are two sitting Republican senators who got nailed in prostitution stings and aren’t resigning (Vitter and Craig), and just about every Republican presidential candidate had a slimy past when it comes to affairs and divorces (remember, the Mormon was the only one with one wife, not so for Giuliani, McCain, Thompson, Gingrich) and that’s before we get into the Henry Hydes and Helen Chenoweth’s of the world.

    It doesn’t take but 30 seconds to come up with two dozen names on either side.

  313. njpatient says:

    314 Artemis

    Need to add Vitter and Craig, both still in the Senate to that list (and both hookermongers).

  314. Artemis says:

    #317 – NJPatient – of course. I said it was just a sampling…

  315. JLB says:

    yeah but the prostitution thing while being a gov. and the young intern while being a president and the gay affair with the guy you appointed to homeland security while being a govenor thing, just not the same as simply cheating,divorcing,remarrying, right?

  316. Artemis says:

    #319: I doubt their wives see a big difference.

  317. JLB says:

    yeah but the fbi does,right?

  318. Confused In NJ says:

    The Hooker Dems & Reps are all Clinton wannabees. Only he defiled the Oval Office in the Oval Office.

  319. Ann says:

    315 3b

    Bergen County is a rough housing market as a buyer if you’re not a bazillionaire. Compared to lots of places, including other places in NJ.

  320. Ann says:

    311 JLB

    What about that Republican who was hitting on the pages who were in HIGH SCHOOL?

  321. Ann says:


    You’re doing them a favor, giving feedback! They’ll be back!

  322. Artemis says:

    #321 – I didn’t know the FBI was the last word in moral judgment. Your post specifically spoke to “loose morals.”

  323. Confused In NJ says:

    Barney Frank and the Male Prostitute – 1989
    The era of sour feelings on Capitol Hill continued after House Speaker James. C. Wright’s resignation and the smear campaign against his successor, Thomas S. Foley. In a third blockbuster scandal, Massachusetts Democratic Rep. Barney Frank admitted a lengthy relationship with a male hooker who ran a bisexual prostitution service out of Frank’s apartment.

    The story was broken by the conservative Washington Times newspaper, which trumpeted every juicy morsel with front-page hype. Though Frank was apparently ignorant of some of the prostitute’s activities, his indiscretion was so great that his standing in Congress was greatly damaged and a House reprimand passed overwhelmingly in July 1990. His home district in Massachusetts was more forgiving, reelecting him easily the following November.

  324. JLB says:

    326: I guess you are right now that you mention it I should have said why does it seem that democrats violate their oath to the people that elect them by breaking the law or giving undue influence more than republicans?

  325. shuky says:


    please could you give some history of

    MLSID# 2414887 ?

    thanks a lot

  326. Sybarite says:


    Post #311 officially makes you a troll.

  327. Artemis says:

    #326 – not sure your math is correct anyway. I would guess that it’s roughly 50-50. Do you have any concrete statistics supporting your hypothesis?

  328. njpatient says:

    Sybarite – whereas 328 makes him a clown.

  329. Artemis says:

    Meant #328

  330. JLB says:

    #330: no really, I am not trolling, I am just wondering if there is some truth in that or if it even matters to other people that are talking about the issue. Is there a difference in the way democrats and republicans view public office, or not? Do morals or oaths matter more to one party than the other? Very relevant as the spitzer news just came to light today and the presidential election is this year.

  331. JBJB says:

    Artemis that list is a bit weak. Rush Limbaugh is not a politician. Marv Albert?

  332. JLB says:

    #332 Patient: whenever someone disagrees you tend to resort to personal attacks, calm down and learn to discuss issues without assuming everyone needs to be put in their place.
    #333 Artemis: I’m not sure how it is 50-50 as I am not talking about politicians who cheat on their wives (although, morally that is wrong) but I am talking about politicians who violate their constituency.

  333. Artemis says:

    I said republicans, not exclusively politicians. Ignore those if you want, but JLB seemed to imply that Republicans were morally superior. This list took me all of 1 minute to find and it was only the first half. Like I said, if you have stats that prove his theory, be my guest.

  334. njpatient says:

    “Is there a difference in the way democrats and republicans view public office, or not?”

    334 JLB
    given the way the republicans governed from 2001-2006, I’d say the major difference is that republicans are far better at looting the public till – have you not been paying attention to the rampant crony capitalism and outright lawlessness exhibited these past 7 years?

  335. njpatient says:

    “Rush Limbaugh is not a politician”

    Larf – yeah, can’t imagine how he’d show up on a list of republicans with moral/legal problems….
    /sarcasm off/

  336. Artemis says:

    #336 – “I am not talking about politicians who cheat on their wives (although, morally that is wrong) but I am talking about politicians who violate their constituency.”

    Could you clarify what specifically you mean by this?

  337. Sean says:

    Folks are arguing about who is more deviant the republicans or democrats? Kind of a moot argument don’t you think?

    Perhaps the FBI will catch McCain, Hillary and Obama in a threesome and people will be so outraged they will elect Ron Paul.

    I can’t wait to see Saturday night live this weekend. There should be at least one Spitzer skit.

    “Ninety percent of the politicians give the other ten percent a bad reputation.” Henry Kissinger

  338. JLB says:

    #338: debating policy, governing, etc. is a separate issue as that would be subjective but I am speaking about breaking the law or giving organized crime (or foreign countries) access to influencing your policy making.

  339. Sybarite says:


    As much as I hate to feed trolls, I’ll add this: you are trolling, when you posit such statements as you have in posts 311 and others, without a shred of proof and when you know there is no possible way to objectively discuss the topic.

    Why don’t you set up a double-blind study, and then report back the results? I’ll bet you’ll find morality is independent of political affiliation.

    That’s the only morsel you’ll get from me.

  340. JBJB says:

    It appears that it wasn’t even the whores that did him in, it was of course the money trail. This is what happens when you combine a measly prick with a God Complex. From ABC:

    The federal investigation of a New York prostitution ring was triggered by Gov. Eliot Spitzer’s suspicious money transfers, initially leading agents to believe Spitzer was hiding bribes, according to federal officials…

    Client 9 … is alleged to have paid for the woman’s train tickets, cab fare, mini bar and room service, travel time and hotel.

    The suspicious financial activity was initially reported by a bank to the IRS which, under direction from the Justice Department, brought [in] the FBI’s Public Corruption Squad.

    “We had no interest at all in the prostitution ring until the thing with Spitzer led us to learn about it,” said one Justice Department official.

    Spitzer, who made his name by bringing high-profile cases against many of New York’s financial giants, is likely to be prosecuted under a relatively obscure statute called “structuring,” according to a Justice Department official.

    Structuring involves creating a series of financial movements designed to obscure the true purpose of the payments.

  341. JLB says:

    #343: wow, do you read? I admitted to you I had worded my question wrong and clarified my question. What is it that you can’t allow other people to have different thoughts and not feel threatened, I was simply opening a discussion and not trying to personally attack anyone. It seems you just can’t take an opposing viewpoint or even one that proposes a question that frightens you, so sorry, life must be hard with that mentality. The question is about politicians that we elect, not about you.

  342. JBJB says:


    Of course no party has a lock on dirtbags. Say what you will about Rush, he is not a politician, he can do/say whatever he wants.

  343. njpatient says:

    Aside from Vitter and Craig, both of whom were busted for soliciting prostitution and remain proud Republican Senators today, we can also add to Artemis’s list Republican Representatives Mark Foley (R – NAMBLA), Bob Allen, Ed Schrock, Henry Hyde, Helen Chenoweth, Richard Curtis, Republican moralist Bill Bennett, Young Republicans Chairman Glenn Murphy, and gay prostitute to the stars Jeff Gannon.
    Then, for good measure, look up these names, all of whom are Republicans who are have been convicted of or indicted for federal crimes, or are currently named targets of an FBI investigation:

    Pleaded Guilty
    Richard Berglund
    Duke Cunningham
    Mitchell Wade
    Thomas Kontogiannis
    John Michael
    Robert Fromm
    Jack Abramoff
    Italia Federici
    J. Steven Griles
    Will Heaton
    Adam Kidan
    Bob Ney
    Tony Rudy
    Michael Scanlon
    Roger Stillwell
    Neil Volz
    Mark Zachares
    Claude Allen
    Larry Craig
    Lester Crawford
    Shaun Hansen
    Vernon Jackson
    Chuck McGee
    Brent Pfeffer
    Allen Raymond

    David Safavian
    Brent Wilkes
    Scooter Libby
    James Tobin

    Tom Delay
    William Jefferson
    Bernard Kerik
    Kyle “Dusty” Foggo

    Under Investigation
    John Doolittle
    Tom Feeney
    Jerry Lewis
    Don Young

  344. Confused In NJ says:

    David A. Paterson (born May 20, 1954) is an American politician and the current Lieutenant Governor of New York. He is the first African American and legally blind person to hold this position. He was selected as running mate by New York Attorney General and Democratic Party nominee Eliot Spitzer in the 2006 New York gubernatorial election.

  345. njpatient says:

    Now let’s add Senator Stevens, who is a target of an FBI investigation for influence peddling in Alaska (along with his son, state rep Stevens).

    Illinois rep. Ryan?
    Bush Campaign Chairman Tom Noe, in whose coin collection the Republican governor decided to invest the state pension fund?
    Representative Bob Ney of Ohio who just pleaded guilty of corruption?

  346. Confused In NJ says:

    347. Doesn’t change the point made that dirt bags are across all parties.

  347. Confused In NJ says:

    Here then is the list of former Democratic members of Congress who were convicted or pleaded guilty to major offenses between 1992 and 1999:

    Nick Mavroules, Massachusetts Democrat: tax evasion, accepting illegal gratuity (1992).
    Albert Bustamante, Texas Democrat: racketeering (1993).
    Carroll Hubbard, Kentucky Democrat: fraud and corruption (1994).
    Carl Perkins, Kentucky Democrat: fraud (1994).
    Charlie Rose, North Carolina Democrat: financial-disclosure irregularities (1994).
    Larry Smith, Florida Democrat: tax evasion (1994).
    Walter Fauntroy, District of Columbia Democrat: financial-disclosure misdemeanor (1995).
    Gerald Kleczka, Wisconsin Democrat: arrested for DWI (1995 and 1990); convicted DWI (1987).
    Mel Reynolds, Illinois Democrat: sexual misconduct (1995).
    Walter Tucker, California Democrat: extortion (1995).
    Charles Wilson, Texas Democrat: paid $90,000 fine to Federal Election Commission (1995).
    Joe Kolter, Pennsylvania Democrat: fraud and conspiracy (1996).
    Dan Rostenkowski, Illinois Democrat: mail fraud (1996).
    Mary Rose Oakar, Ohio Democrat: financial-disclosure irregularities (1998).
    Austin J. Murphy, Pennsylvania Democrat: vote fraud (1999).
    As Mark Twain said, Congress is the American Criminal Class.

  348. Confused In NJ says:

    We can play the who is worse game all night but;

    As Mark Twain said, Congress is the American Criminal Class.

  349. njpatient says:

    350 confused
    agreed – that was my point.
    (although to tweak you, I’ll point out that my list only goes back to 2002)

  350. lisoosh says:

    Hey Patient – you forgot Bob Livingston.

    And of course, everybodies favorite – Tom Delay.

  351. njpatient says:

    DeLay is listed under the heading “indicted”
    But you’re right – how could I forget Packwood?

  352. njpatient says:

    DeLay is listed under the heading “indicted”
    But you’re right – how could I forget Packwood? (Oops – I mean Livingston)

  353. Essex says:

    So the man had a little sex with a pro….not something I do on my limited budget…but you know…Maybe Silda….well maybe she lost interest. It happens.

  354. Confused In NJ says:

    353.njpatient Says:
    March 10th, 2008 at 7:59 pm
    350 confused
    agreed – that was my point.
    (although to tweak you, I’ll point out that my list only goes back to 2002)

    My list was 1992-1999 actual convictions. I purposely avoided later data so as not to upset people. But rest assured, I am Independent and would be happy to execute all Congressional Criminals regardless of Party, Gender, Race, Religion, Perversion, etc. Illicit acts with men, woman, children, dead bodies or chickens would all be dealth with harshly.

  355. Clotpoll says:

    ChiFi (248)-

    They’ll be lucky if C sees $27 again in their lifetimes.

  356. Confused In NJ says:


    Crime is Crime. Mann Act, Money Laundering, etc. Situational Ethics are not valid.

  357. suziehomemaker says:

    Hello Everyone, have not posted in a while, but I check in every day. Yesterday, went to a couple of open houses, saw one t/house which caught mt eye, 8 yrs, old, bought for $260, good condition, not too many high end upgrades, asking $399, honestly, what would be a good offer, I am thinking $350, any thoughts? Also met a realtor at another o/house, told me he still felt the market has a ways to go, more or less told me not to be afraid to lowball, OH, how the market has changed ///.

  358. Clotpoll says:

    Ray (249)-

    “Is not buying a house that you feel is depreciating a loss?”

    No. A housing purchase isn’t marked-to-market on a daily basis. There’s no daily closing price on your house. The only time in RE that you know whether you have loss or gain is when you sell it.

    Although it could be a loss…if you plan on flipping it within a ridiculously-short period of time.

  359. Clotpoll says:

    Peas (254)-

    In a down market, a bigger DP is more of a binder that the seller could end up obtaining as liquidated damages, should the buyer breach the contract.

    Breach of contract is rampant these days.

  360. Clotpoll says:

    Mitchell (275)-

    Thanks for the 5th grade math refresher. BTW, your straw man argument- masquerading as legitimate assumption- is utterly wrong. Please show me anyone these days who owns a house for 30 years or makes 360 mortgage payments. Anywhere. Ever.

    Those who are dicks for ticks never grasp the concept of diminishing returns. The focus always stays glued on the amount paid…never on the relationship between amount paid and benefit obtained.

    Thanks for confirming for us that your mind cannot simultaneously hold two thoughts at once.

  361. Artemis says:

    #363 – Clot – are you suggesting that people put their entire down payment in escrow during the contract period? I can’t imagine why any buyer would do that in this market.

  362. Sassy says:

    Hmmm…. $4300 for “kristen” for two hours? i think I’ve spotted the next “bubble”!

  363. Clotpoll says:

    scribe (276)-

    Getting wider. Daily.

    Every day, the 10 yr drops. Every day, mortgage sheets have the same prices. And, when the FFR gets whacked down to 2.5%, mortgage rates will still be where they are right now.

    Today was also the first day borrowers started complaining about rates not coming down. A lot of originators have told borrowers awaiting closings not to lock, anticipating better pricing. Now, those borrowers are watching the 10 yields plummet, but mortgage rates don’t budge. They don’t understand that, and they get pi**ed at the originator, because they think he’s running a game on them.

  364. Clotpoll says:

    think (281)-

    You left out two:

    – turn FHA into a backdoor conduit for the same bad-credit, garbage underwriting that helped bring on this whole mess in the first place.

    – turn FHA (and GSEs) into midnight bankruptcy/bailout vehicles two years’ hence, when the spotlight is off real estate.

  365. Clotpoll says:

    patient (283)-

    Low blow. If I remember, Ann had a killer relo package that was set to expire if not exercised.

    Points, prepaids, closing costs and moving assistance are part of the whole buy package. Again, to ignore those benefits and be a dick for a tick is foolish.

    That’s why every market holds opportunity for somebody.

  366. Clotpoll says:

    syb (330)-

    Also, an idiot.

  367. PeaceNow says:

    well, have to respond to a couple of things here.

    #272—re: prostitution. You’ve been watching way too many cable dramas if you believe that sex workers get health insurance from their pimps. And do you really believe that pimps pay their fair share of taxes, or pump many of the profits into legitimate businesses that do pay taxes? If you do, you’re very, very naive.

    And, I guess, just cause I’m in the mood…Ann, Ann, Ann: weren’t you ready to walk away from the house you bought over $1500 in repairs? Though you never disclosed the price, wouldn’t that amount fall into the 1-2% range?

  368. JBJB says:

    Jucier and Jucier, now up at the NYT:

    referring to Little Spitz:

    In a wiretapped conversation after the encounter, the prostitute, Kristen, called her booker to inform her that the session went well, and that she did not find the client “difficult,” as other prostitutes apparently had, according to the affidavit.

    The booker responds that he, in an apparent reference to Client 9, sometimes asks the women “to do things that, like, you might not think were safe.”

    What could that mean? Condom less sex? Asphyxiation?

  369. chicagofinance says:

    JBJB Says:
    March 10th, 2008 at 9:48 pm
    The booker responds that he, in an apparent reference to Client 9, sometimes asks the women “to do things that, like, you might not think were safe.”

    JBJB: I thought it meant “..don’t cross Gordon…..he’ll crush you….”

  370. Clotpoll says:

    art (366)-

    Not necessarily. However, it behooves the seller’s agent to get as much escrowed as possible, as soon as it’s possible.

    A buyer who puts $1,000 down and promises to bring a bundle of cash to closing is, IMO, a person to be suspected these days.

    That measly $1,000 is flat-out nothing more than a call option.

  371. Clotpoll says:

    Chi (374)-

    “…Client 9, sometimes asks the women “to do things that, like, you might not think were safe.”

    Like, er…violating the Mann Act?

  372. Clotpoll says:

    “…she did not find the client “difficult,”

    Is she a hooker, or a dog trainer?

    Please, don’t answer that.

  373. chicagofinance says:

    got some video from the FX desk with Bost…..


  374. njpatient says:

    “Low blow. If I remember, Ann had a killer relo package that was set to expire if not exercised.”

    I did not remember that. I retract my low blow.

  375. Steve says:

    At brunch this weekend with a number of traders from another shop, good guys, unfortunately I was at the other end of table… I caught a few details about visitors from Quantico wreaking havoc w/ neighbors on their floor. Expected major client defections, desks to be shut down. Sounded pretty brutal.

    Just googled and confirmed the rumors from a few weeks back (guess I’d missed it).

    Also just got a corporate notice from counsel instructing firmwide, all ARS docs to be preserved. Hmmm wonder why that might be…

    Time for the lawyers to make their next killing. Too bad they’ll have plenty of raw meat before they even start –

  376. Essex says:

    Spitzer to Madam……”I’ve always wanted to snort Coke off a Hookers Ass”…….

  377. njpatient says:

    He always asks if she Spitzer…

  378. njpatient says:


  379. WickedOrange says:

    For Single-Family Builders, Going Vertical Carries Risk

    NEW YORK -(Dow Jones)- Two single-family home builders who decided to “go vertical” are about to find out if they are late to the nation’s condominium party.

    Toll Brothers Inc. (TOL), famous for its sprawling McMansions, has 10 buildings 12 stories or higher under construction, with eight more on the drawing board. Hovnanian Enterprises Inc. (HOV) is building its first high-rise tower, the 48-story77 Hudson in Jersey City, N.J., which should be finished next fall.

    The projects were planned before the housing bubble burst. Now, several of the buildings will hit the market during the longest and deepest housing downturn in decades and enter a lending environment that is becoming particularly hostile to condos.


  380. njpatient says:

    Maybe my joke was in poor …. taste.

  381. Steve says:

    I walk by that HOV building every day. And I wonder, what those folks touted in the local news for paying “the most ever per sq foot” for their unbuilt penthouse – surrounded by parking lots and office buildings – must be thinking, right about now.

    Oh, and the other tower in the HOV complex, which is slated to be all rentals…hmmm

  382. mkfinancial says:

    Here’s an email from a disillusioned realtor (names omitted, spelling mistakes are actual )…

    “Prospective Buyer, I could accomodate you on the weekend providing the listing agent allows.As we speak both early Sat. or Sun. morning are good for me.I would like to try to put a firm time in place because my weekend fills quick.Regarding the guts—-they appeared in respectable shape but not very recent. I’ll try to find out more.Keep in mind this home is getting a lot of attention and because of that we don’t want to wait too long. Don’t be affraid to get in asap and then again on Sat. or Sun.I’ll wait to hear.Thanks Foolish Realtor”

    By way of context….the house was falling apart, kids had spray painted graffiti on the bedroom walls, there was trash on the floors and doors hanging off hinges. My wife was so repulsed that she refused to let the kids in the home for fear they may catch a disease.

    All this for $499k. What a steal!

  383. Essex says:

    I just surfed the high end web site on NY Times front page for Townhouses and Condos in NYC….amazing how many $13M properties are under contract. There is still major wealth in NYC….and amazing properties for sale there.

  384. bruiser says:

    The booker responds that he, in an apparent reference to Client 9, sometimes asks the women “to do things that, like, you might not think were safe.”

    Not safe, like “don’t cross the streams” not safe?

  385. bruiser says:

    The booker responds that he, in an apparent reference to Client 9, sometimes asks the women “to do things that, like, you might not think were safe.”

    Not safe, like “don’t cross the streams” not safe?

  386. njrebear says:


    Can you please post this article? Thanks!


    Grim Reaper of Jobs Stalks the Street

  387. me says:

    Is Spitzer a superdelegate?

  388. Hobokenite says:


    I was just going to post that.

    Surely Pret will be along to dismiss this any minute now.

Comments are closed.