“The debate is shifting from whether it is a downturn to how long and how deep it will be”

From Bloomberg:

Slowdown in U.S. Will Be Deeper, Recovery Weaker, Survey Shows

The economic slowdown in the U.S. will be deeper and the recovery weaker than previously forecast, according to a Bloomberg News monthly survey.

The world’s largest economy will grow at an annual rate of 0.3 percent from January through June, a half point less than projected in February, according to the median estimate of 62 economists polled from March 3 to March 10.

Rising fuel prices, shrinking payrolls and falling home values will weaken consumer spending and blunt the impact of tax rebates that start going out in May. The Federal Reserve, struggling to offset the credit crunch and housing contraction, will cut the benchmark interest rate by another percentage point and keep it at 2 percent through December, the survey predicts.

“We’re now more pessimistic about the pace of recovery into 2009,” said Richard Berner, co-head of global economics at Morgan Stanley in New York. “We now see the Fed pursuing a slightly more accommodative path for monetary policy than just a week ago.”

The odds of a recession over the next 12 months were pegged at 50 percent, the same as in the February survey, according to the median estimate of 42 economists that responded to the question.

“The debate is shifting from whether it is a downturn to how long and how deep it will be,” said Kurt Karl, chief U.S. economist at Swiss Re in New York. “We have a 55 percent probability of recession. Now it looks like it’s starting in the current quarter.”

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274 Responses to “The debate is shifting from whether it is a downturn to how long and how deep it will be”

  1. grim says:

    Thanks Rice, higher rates are exactly what we need.

    From the Record:

    Lawmaker tells lenders to be patient with homeowners

    New state proposals would require lenders to wait six months and pay a fee before foreclosing on certain homeowners who are in default, state Sen. Ronald Rice said Monday.

    The proposed moratorium and $2,000-per-foreclosure fee to be introduced today in Trenton by Rice of Newark and Assemblywoman Bonnie Watson-Coleman of Trenton is aimed at slowing the pace of foreclosures and keeping people from losing their houses.

    “We have to do something to protect homeowners who may be qualified to stay in their homes,” Rice said in a phone interview.

    The rate of new foreclosures in New Jersey hit a record high in the fourth quarter, according to the Mortgage Bankers Association. Nationwide, new foreclosure filings and the total number of homes in the process of foreclosure were at record levels in the fourth quarter, the group said.

    Consumer advocates estimate 13,500 to 16,000 New Jersey homeowners with riskier, higher-cost loans will lose their homes this year. In many instances, homeowners started out with low teaser rates that shot up after two or three years to rates they couldn’t afford. In a down housing market with falling home values, cash-strapped borrowers are finding it difficult to refinance or sell to pay off their over-burdensome debt.

    The majority of the expected foreclosures will likely involve homes financed with subprime, adjustable-rate mortgages, said Phyllis Salowe-Kaye, executive director of consumer watchdog New Jersey Citizen Action, a leading advocate of the legislation that would amend exist- ing laws on foreclosures. The Housing and Community Development Network of New Jersey and New Jersey Institute for Social Justice are other main supporters.

    The impact fees would be used to establish a fund for foreclosure-prevention counseling and payment catch-up loans. The proponents say the fees would raise $27 million to $33 million in the first year. The fund would be overseen by the state Department of Community Affairs.

  2. grim says:

    From the AP:

    NJ gas prices reach $3 a gallon

    New Jersey drivers are feeling pain at the pump.

    According to AAA, the state’s average gas price hit $3 a gallon today, the Associated Press reported.

    Still, New Jersey is better off than other states. AAA says New Jersey’s average price is the lowest in the country; The national average is $3.22 a gallon.

    At this time last year, Garden State residents were paying an average of $2.42 a gallon for regular.

  3. grim says:

    From the WSJ

    Toll Warns of Risk Tied to Ventures
    March 11, 2008

    Home builder Toll Brothers Inc. warned that it could suffer “significant” losses if its joint-venture partners don’t honor their obligations to certain development projects amid the housing downturn.

    The company disclosed the warning in a filing with the Securities and Exchange Commission yesterday, but Toll officials wouldn’t elaborate on which joint ventures might be in trouble, citing confidentiality reasons.

    “We have had a number of partners who have had visible financial stress,” said Toll’s chief financial officer, Joel Rassman. “But that’s all I can disclose.”

    During the housing boom, builders often entered into joint-venture deals to share the cost of buying expensive land. The ventures typically allowed the builders to keep such highly leveraged land off their balance sheets.

    Toll’s disclosure comes as investors worry about the lack of disclosure of joint-venture deals and the liabilities they could pose to home builders. If partners fail, builders like Toll could be on the hook for additional equity contributions and loan obligations.

    As home and land values fall, banks are starting to require more builders to contribute more equity to troubled real-estate developments, including joint ventures.

    “We believe these JVs are under a lot of stress,” says Buck Horne, an analyst at Raymond James & Associates. “That’s why you are seeing these disclosures.”

  4. grim says:

    From the Record:

    Passaic County facing severe foreclosure crisis

    As the housing crisis and credit debacle continue to depress the national economy, lending data show the real estate collapse is especially severe in Passaic County, where foreclosures have more than tripled from this time last year.

    January of this year saw 714 foreclosure filings in Passaic County, compared with 227 reported for the same period in 2007.

    Those new filings represent just a fraction of the total number of homeowners in the foreclosure process. More than 3,200 Passaic County homes are in danger of foreclosure, according to data compiled by RealtyTrac, a California company that tracks foreclosures around the country. Statewide, nearly 2 percent of all homes were in the process of foreclosure during the last quarter of 2007, the highest rate since the first quarter of 2002.

    The sluggish housing market has left some local homeowners with few options as they fall behind on their mortgage payments. Paterson homeowner Maria Dominguez said she was in a panic after receiving a notice of default on her mortgage. She slipped and fell at the factory where she worked and has been out of work for three months. She now owes close to $8,000. “I don’t see how to get out of it,” she said in Spanish. Dominguez shares her house with three adult children, three grandchildren and her 65-year-old mother.

    In Passaic County, the early 2008 foreclosure filings were concentrated in Paterson, where 378 filings were reported. Clifton reported 82, and the city of Passaic saw 87. A foreclosure can end in several ways. If the homeowner cannot pay off the default amount or sell the property within a grace period, either the bank can take over the house or it can be sold at auction.

  5. grim says:

    From the WSJ:

    Grim Reaper of Jobs Stalks the Street
    Layoffs as High as 20% Are Predicted
    As the Banking Downturn Widens;
    Self-Reinforcing Cycle of Risk-Taking
    March 11, 2008

    The banker résumés are streaming into Wall Street recruiting company Options Group. On average, 100 are arriving each day. Three of them will lead to jobs.

    While Wall Street’s chief executive officers talk calmly about “normal attrition,” the people in the trenches know the score. Big, painful firings are coming their way. Lehman Brothers Holdings cut 5% of its employees yesterday. That’s just the start. Many privately say industry layoffs will be worse than in the 2001-2002 down cycle. Others are already invoking the bloodlettings of the early 1990s.

    The irony is that the process reinforces the cycles the Street is trying to prevent. An investment banker fearful of being fired in a downturn will furiously harvest cash when times are good. That creates dangerous incentives along the way, as bankers focus on short-term profits, neglecting long-term risks.

    Meantime, the industry is going to eat itself. Top Wall Street executives foresee layoffs of as high as 20% for Wall Street, which employs about 210,000 in New York state alone. If layoffs are that severe, job rolls would plunge to mid-’90s levels. “I’ve never seen so many résumés come to me at any time in my life,” adds Options CEO Michael Karp.

  6. grim says:


    Here is the PDF you asked to be posted:


  7. grim says:

    From the WSJ:

    Loan Data Focus of Probe
    Countrywide Files May Have Included Dubious Information
    March 11, 2008; Page A3

    WASHINGTON — Federal investigators probing the business practices of Countrywide Financial Corp. are trying to figure out what Countrywide knew — or in some cases didn’t know — about the incomes and assets of thousands of its borrowers.

    The investigators are finding that Countrywide’s loan documents often were marked by dubious or erroneous information about its mortgage clients, according to people involved in the matter. The company packaged many of those mortgages into securities and sold them to investors, raising the additional question of whether Countrywide understated the risks such investments carried.

    Countrywide, long the No. 1 mortgage company in the U.S. in terms of dollar value of loan originations, also was considered among the most aggressive in finding ways to make home loans to consumers whose qualifications couldn’t be proved or seemed questionable, mortgage industry executives and analysts said. The Federal Bureau of Investigation has begun looking into its practices in pursuing such business, according to people close to the matter.

    “When you securitize a pool of loans, you vouch for the quality of those loans,” said mortgage-fraud expert Constance Wilson of software firm Interthinx Inc. “So they may be saying that if in fact Countrywide was aware of any [borrower] misrepresentation, then they couldn’t represent and warrant the quality of those securities.”

    Banking analyst Bert Ely of Ely & Associates said dubious mortgage underwriting apparently was widespread. “If Countrywide’s got a problem, everybody’s got a problem,” he said. Like other subprime lenders, Countrywide had an elaborate process for documenting a borrower’s income and assets. But some of its underwriting products required borrowers to provide little to no documentation of their creditworthiness. As the market heated up between 2003 and 2006 and standards loosened, the use of these products increased.

  8. bairen says:

    #2 NJ has the cheapest gas in the US! Saving $100 a year in gas certainly offsets our high property, sales, and income tax plus the price of houses. I feel so gassed over this.

  9. Ron says:

    How much, either in amount or percentage of downpayment, should the initial deposit and additional 10-day amounts be when buying a house? It’s been too long since we sold our house to remember. Thanks in advance.

  10. Rich In NNJ says:

    SLD 68 CHRISTIE ST $852,000 9/15/2005

    SLD 68 CHRISTIE ST $797,500 3/6/2008

    Bogota (REO – Mort Amt: $336,000)
    SLD 43 WALNUT AVE $423,000 2/20/2005

    SLD 43 WALNUT AVE $350,000 3/7/2008

    Upper Saddle River
    SLD 8 UNION AVE $1,150,000 7/2/2004

    SLD 48 UNION AVE $985,000 3/6/2008

    Teaneck (REO – Mort Amt: $296,000)
    SLD 1278 BEAUMONT AVE $370,000 2/4/2005

    SLD 1278 BEAUMONT AVE $370,000 2/4/2005

    Park Ridge (Completely gutted: added new ½ bath, new kit w/granite, new roof, windows, siding, heat w/added Cent A/C)
    SLD 46 RIDGE AVE $370,000 3/17/2006

    SLD 46 RIDGE AVE $390,000 3/1/2008

    Englewood (REO – Mort Amt: $288,000)
    SLD 322 LAFAYETTE PL $235,000 11/18/2003

    SLD 322 LAFAYETTE PL $215,000 3/5/2008

  11. SG says:

    Young Dems are right about Middletown housing

    The Courier, March 6
    Young Democrats in the Bayshore, and specifically in Middletown, are concerned about their futures, and that means housing too.

    According to Monmouth County Bayshore Young Democrats President Matthew Morehead and Brookdale Community College Democratic Club President John Swift, Middletown should reconsider its practice of sending affordable housing out of the township.

    Since the 1990s, Middletown has spent about $12.1 million in regional contract agreements, which relieves Middletown of affordable housing quotas within the municipality. The $12.1 million figure covers 649 affordable housing units that should have been constructed in Middletown.

    Middletown Mayor Gerard Scharfenberger has defended the practice. Essentially, my impression of the argument is that Middletown is trying not to welcome those people who might want to live in town and earn livings that would meet affordable housing figures.

    Middletown is in the Council on Affordable Housing’s (COAH’s) Region 4. According to the 2007 regional income limits established by COAH, a one-person household in Monmouth County is considered “median” at $57,432, “moderate” at $45,946, “low” at $28,716, and finally “very low” at $17,230.

    Many economists have asserted this nation is in a Recession. In the Bayshore, business is incredibly bad overall. Mom-and-pop stores are struggling to make ends meet.

    Why should the futures of working people, who are perhaps not millionaires, be legislated by township powerbrokers from Navesink River Road?

    COAH does not advocate placing crack dealers, or felons in communities. What is being discussed here is not ‘undesirable.’ The discussion is about ordinary working Americans, who happen to not be rich.

    Further, young graduates or couples should have the option of moving into Middletown if they wish. The township is not a private entity and should cease conducting itself as such.

  12. bairen says:

    #3 Toll might be in trouble. What a shame.

    (sarcasm off)

    I wonder what happened to mgmt’s prediction that kids would live with their parents till 40 like in Europe because of the cost of housing? If I remember correctly same mgmt was exercising lots of stock options around that time.

  13. SG says:

    Hovnanian’s Net Loss Widens

    Hovnanian Enterprises Inc.’s fiscal first-quarter net loss widened as the company recorded $94 million in write-downs, reflecting the steep decline in home prices over the past several months.

    The family-controlled Red Bank, N.J., home builder, which has suffered from the slide in the housing industry, said the write-downs for the quarter ended Jan. 31 consist of $74 million in land impairments, a $16 million write-off of predevelopment costs and deposits on land it had an option to buy, and $4 million from write-downs at its unconsolidated joint ventures.

    “Market conditions remain challenging across many of our markets,” Chief Executive Ara Hovnanian said. “We continue to focus on reducing our inventories, maximizing cash flow and shrinking our overhead to ensure that we properly manage the difficult market conditions we currently face.”

    Hovnanian’s home-building margin before interest expense dropped to 6.7% from 18%. The company said margins were hammered by the delivery of 306 homes in Florida where the gross margin was “only 2%.”

    The average price of homes sold in the quarter fell 15% from a year earlier, while home deliveries rose 5.7%. The number of contracts signed fell 41% to 1,511, while the cancellation rate rose to 38% from 36% a year earlier. The cancellation rate was 40% in the previous quarter.

    Home prices have fallen sharply since the onset of what has become a broad-based liquidity crisis. The S&P/Case-Shiller national home-price index for the fourth quarter fell 8.9% from a year earlier. Hovnanian went so far as to cut its prices as much as 30% for one September weekend to spur sales.

    All three major credit-rating agencies have cut Hovnanian’s ratings since the beginning of the year. In January, Moody’s Investors Service said it expects the company’s “operating and credit metrics will continue to deteriorate.”

    The company has said it expects the next two years to be tough, with the end of 2008 “the turning point.”

  14. SG says:

    Mortgage lenders see more borrowers give up

    On the front lines in the mortgage foreclosure crisis, lender and loan servicer Dennis Lauria says his deepest losses are from borrowers who owe more than their homes are worth and simply mail in the keys, rather than try to work out a new payment plan.

    “I can’t get you to pay if you’ve got no skin in the game,” says Lauria, senior vice president of Popular Mortgage Servicing in Cherry Hill, N.J., who says 14% of his customers with subprime loans — high-interest loans given to people with poor credit ratings — are in default.

    Nearly 3 million homeowners were behind on their mortgages at the end of last year, the Mortgage Bankers Association (MBA) said last week. An additional 1 million-plus borrowers were at risk of imminent foreclosure. The number of foreclosures is likely to set records throughout the year and poses an increasing risk to the housing market, the financial markets and the economy.

    Nationwide, more than half the borrowers who lose their homes through foreclosure never answered their lenders’ calls or letters, according to Freddie Mac. And an MBA analysis found that 23% of loans in foreclosure last fall were to homeowners who had no contact with their lenders, and that an additional 18% were to absentee owners.

    The numbers help explain why it’s so difficult to reverse the trends of rising foreclosures and falling property values. Even some homeowners who can afford to pay their mortgages are defaulting, Lauria says, because their house might have lost 30% of its value, and they figure it will be a long time before it’s worth what they paid for it.

    “They say, ‘If I play my cards right, I can live here free for 12 months, maybe longer’ ” before the lender can foreclose, Lauria says. “Our challenge isn’t contacting the borrower. I can talk to them, but they stick their tongue out at me.”

    Hundreds of thousands of distressed homeowners are reaching out for help. The Homeownership Preservation Foundation, part of the Hope Now Alliance, fields more than 4,000 calls daily to its toll-free hotline (888-995-HOPE). But about 1 in 4 callers don’t want credit counseling, the foundation says. Many simply want financial relief.

  15. SG says:

    From above article,

    As home prices fall from coast to coast, 8.8 million homeowners will have mortgage balances equal to or greater than the value of their property by the end of the month, Moody’s Economy.com. predicts.

    That could come as a shock to consumers who thought property values would always rise, and it helps explain the attitudes lenders are seeing among their troubled customers, Goodman says.

    “If you buy a car and it depreciates,” Goodman says, “you don’t expect the automobile dealer to write off your loan. There’s a sense of entitlement (among homeowners) that is just unbelievable.”

    Goodman, whose firm specializes in home equity credit lines, says the main reasons people took out the loans were for home improvement, debt consolidation and medical expenses. But he estimates that about 20% used the cash to go on vacation or buy a new car.

  16. SG says:

    Company rethinking its plans to redevelop swath of Pennsauken

    PENNSAUKEN, N.J. – The future’s in doubt for a huge redevelopment plan in one southern New Jersey community.

    Pennsauken township solicitor David Luthman says the developer Cherokee Investment Partners may leave the city’s riverfront.

    As part of a 2004 plan with a $1 billion price tag, the company was to create a golf course, 2,600 units of housing and retail space. It’s already relinquished its rights to develop Petty’s Island and one commercial area in Pennsauken.

    The company has already given up on a $1 billion project in nearby Camden.

    Now, Luthman said, the company is rethinking all its New Jersey projects after a harsh report last month from the state Inspector General’s Office found severe problems in Cherokee subsidiary Encap Golf Holdings’ work to build golf courses in the Meadwolands.

  17. SG says:

    Ready for its economic close-up

    By Noelle Reeve

    Within the next decade or so, Southeastern New Jersey could fulfill its promise and become a driving economic force for the Garden State.

    The fundamentals look good. Predictions are that the populations of Atlantic, Cape May, Cumberland and Ocean Counties will increase by more than 35 percent. Job-growth projections are also strong; casinos are expanding, and the area’s miles of fine coastline give it one of the highest-yielding fishing industries on the East Coast.

    The housing market is of particular concern. According to the development authority, only a third of casino workers live in Atlantic City. With jobs expected to grow by 40,000 a year, more workers would commute into Atlantic City from less-expensive suburbs, possibly causing traffic and air pollution to worsen. Clearly, increased greenhouse gas emissions are unacceptable in a state with 127 miles of shoreline, all of which remains extremely vulnerable to rising sea levels.

    Other concerns have to do with infrastructure, including water and energy. But again, industry officials are decidedly forward-looking. Consider the Atlantic County Utilities Authority: it is powered by a landfill gas-to-energy plant; boasts the largest biodiesel fleet in New Jersey; has one of the state’s largest solar installations; and is pursuing two wastewater reuse pilot projects. Also, Atlantic City Electric Co. is investing in innovative technologies – such as “smart meters” – to help customers reduce their energy use and protect the environment.

    If officials in Southeastern New Jersey continue to think strategically and act regionally, the region may realize the too-often-deferred dream for smart growth, at least in one important part of the Garden State.

  18. thatBIGwindow says:

    Both my wifes car and mine only take Premium fuel :(

  19. bairen says:

    Today, like yesterday has lots of bad news. However yesterday we found out that

    1) There are pharmaceuticals in our drinking water. (I can now explain my man b00bs)

    2) The gov of NY may have an alias and may pay to hang out with some lady friends. I haven’t laughed that hard at a news story in a long time.

    The Romans knew 2,000 years ago bread and circuses were the keys to maintaining power. While the cost of bread is going up, at least our circuses are still free.

  20. bairen says:

    #17 I would rather live in North Carolina then South Jersey. At least NC is pretty and has a lot of family friendly activities.

    All the local roads look the same in South Jersey. Straight and lined with pine trees, new mcmansions or tear owns. Plus there appears to be a significant shortage of dentists judging by the numbers of missing teeth of the heavily tattooed pineys.

  21. grim says:

    From CNN/Money:

    Six months after the first rate cut

    Despite five interest rate cuts in the past six months, Wall Street has remained impervious to the Federal Reserve’s wooing, with investors taking a “thanks, but…” attitude to Ben Bernanke & Co.’s attempt to recharge the economy and stock market.

    Since September, the central bank has lowered its federal funds rate, a key overnight bank lending rate, to 3% from 5.25%. This included a 75 basis point emergency cut in January. There are 100 basis points in one percentage point.

    Federal Reserve policy-makers will meet again on March 18 and are expected to cut rates by at least another 50 basis points, to 2.5%. Coincidentally, the Fed’s next meeting also marks the six-month anniversary of the first cut in this easing cycle.

  22. grim says:

    Vineland/Millville always manages to get itself onto the annual “most affordable place to live” lists.

  23. hughesrep says:


    I have to believe that project is dead. New condos and townhomes are sitting dead in and around Cherry Hill.

    Of the 220+ units in the initial phase at the old Garden State Race Track in Cherry Hill I think only about 20 have sold. That was supposed to be a big project with 220 townhomes, 600 condos and 1500 apartments. They haven’t built anything new in months.

    The only new projects that are active in the NJ suburbs of Philly are apartments.

    I wonder if Toll is worried about his buddy Orleans? Word on the street among some subcontractors is that it is real tough to get paid by them.

  24. grim says:

    Hovnanian is hard up for cash. Period.

    MLS# 2488196 – 77 Quarry, West Paterson NJ

    They are trying to sale/leaseback one of their model homes in their West Paterson Four Seasons communities.

    A 2 year sale/leaseback on a model?

    They are pitching these deals to investors.

  25. thatBIGwindow says:

    Secacus is considered one of the best places to live. Close to NYC, low taxes, good public services (swim club, fitness club, state of the art library)

    Not to mention, it is the nicest town in Hudson County.

    I wouldnt want to live there though because it is technically an island and if there is an accident on route 3 you are stuck in Secaucus. It has happened to me a few times being stuck there.

  26. HEHEHE says:

    Hmmmmm, WSJ or Pre and his black box, hmmmm.

  27. bairen says:

    #24 Hov is doing the same for a 55 + community in South Jersey between Little Egg Harbor and Smithville. Can’t remember the name of the development.

    They want you to buy theirmodle homes and lease them back from you.

    Sounds like a cash flow possible margin call problem for them.

  28. BC Bob says:

    “Top Wall Street executives foresee layoffs of as high as 20% for Wall Street, which employs about 210,000 in New York state alone.”

    From post # 5.


    You want to do some data mining and pull up what I said back in Sept.? Yeah, I know anecdotal. I’m still waiting for your report from 85 Broad.

  29. Clotpoll says:

    Need cash?

    Drill for oil on Ara’s head.

  30. Clotpoll says:

    Wow! Yesterday was a red-letter day. Good times.

    What fun will come our way today?

    The Visigoths are at the gates.

  31. Confused In NJ says:

    Gasoline hit $109/barrel.

  32. Frank says:

    $633,185 for a 2 Bed, 2.5 Bath 2,281 Sq. Ft. in West Paterson Boro, NJ 07424. What a steal. I guess Ara did not noticed that the bubble has busted already. I guess I should call Ara and give him the message.

  33. BC Bob says:

    Client 9 was preparing for his testimony to Congress the night of his romp. I’m not sure if I heard the report correctly. Testimony regarding bond insurance or bondage insurance?

    Any truth to the rumor that Bellichek has a tape of this?

  34. HEHEHE says:

    Please tell me Bellichek is Client 10?

  35. BC Bob says:


    Fed, 35, in moderation?

  36. BC Bob says:

    “Fed to Auction as Much as $200 Bln in Treasuries, Boosts Swaps”


  37. HEHEHE says:

    Is that the “Keep Bear Stearns Out of Bankruptcy Plan?”

  38. BC Bob says:



  39. Clotpoll says:

    At 7:08, I ask where the fun will come from today.

    At 7:40, I get my answer: all windows wide open; will accept handwritten IOU notes, Hefty bags full of toxic waste and anything else upon which an I-bank can stamp the word “collateral”. Canada, England, continent now fully-lured into the race to the bottom.

    To what window may I bring my own bag of poop?

    Brother, can you spare a dime?

  40. 3b says:

    #5 grim: While Wall Street’s chief executive officers talk calmly about “normal attrition,” the people in the trenches know the score.

    Thi is what have been trying to stress to young pret, the people in the trenches, the people that have been in the trencehes know the score;its as simple as that.

  41. 3b says:

    #6 grim: Why bother posting it, there will be huge revisions to make to that lovely graph.

  42. Clotpoll says:

    Methinks it’s time to pick up a little more SDS.

    The junkie’s gonna feel some real pain when today’s hit of smack wears off.

    I’ll report in later today when the mortgage price sheets hit my office. My first thought is that the alleged “reliquidation” of the mortgage markets is not going to dribble down to John Q. Just more blown-out spreads…

  43. 3b says:

    #28 BC Bob: You and I have tried, but young pret is in complete denial. You have to have been in the trenches a while.

  44. Al says:

    BC Bob Says:
    March 11th, 2008 at 7:42 am
    “Fed to Auction as Much as $200 Bln in Treasuries, Boosts Swaps”

    The loans may be secured by collateral including agency and private mortgage- backed securities, the Fed said.

    So far it is baiout for lenders and banks.

    Will it change into bailout for borrowers?? who knows, right now it is just seems that high inflation wil do that for the goverment..

    Welcome to the 10$/gallon gasoline and milk!

    Bailout is here…

  45. Al says:

    the only question – will 200 billions be enough – but nothing stops fed from giving away more…

  46. Clotpoll says:

    I cannot edit down the list of stuff I want to short now. FNM and FRE look especially juicy. They’re both off like rockets on this joke of a Fed action.

    All disclaimers.

  47. njpatient says:

    “Grim Reaper of Jobs Stalks the StreetLayoffs as High as 20% Are Predicted”

    That CAN’T be true! Pretorius said there would be no serious layoffs on the Street!

  48. Clotpoll says:

    Al (45)-

    You and me ain’t gonna see a penny. Unless we take the other side of the action. :)

  49. chicagofinance says:

    grim: If you do not take this crap website off EST/CDT, I will hit you over the head with an index fund…

  50. 3b says:

    #47 njpatient: I tried to educate the young lad but alas I failed.

    He is like doubting Thomas the Apostle.

  51. pretorius says:

    “BC Bob Says:
    March 11th, 2008 at 7:05 am
    ‘Top Wall Street executives foresee layoffs of as high as 20% for Wall Street, which employs about 210,000 in New York state alone.’

    From post # 5.


    You want to do some data mining and pull up what I said back in Sept.? Yeah, I know anecdotal. I’m still waiting for your report from 85 Broad.”

    BC Bob,

    Check out the layoffs data in post 6. The reason I asked Bednar to post the actual layoff data is because it is important that we look at actual data (even if it doesn’t conform to our thesis) instead of relying on sensational tidbits plucked from mainstream media articles.

  52. njpatient says:

    “To what window may I bring my own bag of poop?”
    It’s funny because it’s true.

  53. BC Bob says:

    Non Agency accepted. Dig up your worthless dot com stocks, they are next. Don’t buy gap insurance, your auto’s depreciation will also be covered.

    “Since the coordinated actions taken in December 2007, the G-10 central banks have continued to work together closely and to consult regularly on liquidity pressures in funding markets. Pressures in some of these markets have recently increased again. We all continue to work together and will take appropriate steps to address those liquidity pressures.”

    “To that end, today the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing specific measures.”

    “Under this new Term Securities Lending Facility (TSLF), the Federal Reserve will lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days (rather than overnight, as in the existing program) by a pledge of other securities, including federal agency debt, federal agency residential-mortgage-backed securities (MBS), and non-agency AAA/Aaa-rated private-label residential MBS.”


  54. 3b says:

    #51 pret: Dude? It is from the Wall St Journal, I know it is now owned by Murdoch, but do you not believe that it has any credibility at all?

    Plucked you say? Dude the WSJ is closely connected with “the :street”, and their sources are legit. It is a simple as that.

    The layoff’s are coming. Do you have to be beaten over the head before you realize that, or do you need to actually lose your job before you believe.

    I have ssen this before Dude, just becasue it did not occur in Oct, does not mean it will not happen.

    There is no way we could have happen all that has happened angd not have layoffs. Do yourself a favor,and please stop deluding yourself.

    Spend a few more years in the trenches, then we can talk.

  55. Clotpoll says:

    3b (50)-

    More like a deaf and blind man standing on the MetroNorth tracks at 8 AM.

  56. syncmaster says:

    Developer downsizes housing project
    Poor market a factor in Highland Park

    Dornoch Management officials have told the Highland Park Redevelopment Agency that initial plans to construct 66 condominiums in two buildings would be scaled down to between 33 and 35 condominiums. The project, on Raritan Avenue between South Second and South Third avenues, would still include a 14,200-square-foot community arts building.

    “The change reflects the market place and market conditions today,” said Steve Nolan, chairman of the redevelopment agency.

    “It isn’t just that there aren’t buyers and sellers of homes, but it is also the unavailability of capital to finance the projects that is caus ing a real problem,” said Landis, a developer of commercial real estate.

  57. Clotpoll says:

    BC (53)-

    Like the last hit before entering rehab.

  58. njpatient says:

    53 BC

    Is that $200B full recourse to the banks, or backed solely by clot’s metaphorical bag of poop?

  59. grim says:


    Sorry about that.

  60. Clotpoll says:

    patient (58)-

    D’ya think the Federal Reserve has a margin desk?

    Even if they did, it’s hard to believe they don’t fully understand they’re lending pearls against poop.

  61. BC Bob says:

    It’s just a swap of s*it. Subprime dollars for subprime loans.

  62. njpatient says:

    “I have ssen this before Dude, just becasue it did not occur in Oct, does not mean it will not happen.”

    3b, don’t be ridiculous! The fact that it didn’t happen in October is proof that it will _never_ happen!

  63. pretorius says:


    Do you think 2008 layoffs will spike to the 2001-2002 level shown in the chart in post 6?

  64. Clotpoll says:

    Stuck in my head now…probably for the day:


  65. RentininNJ says:

    401(k)s tapped to save homes
    By Christine Dugas, USA TODAY

    Struggling to save their homes from foreclosure, more Americans are raiding their 401(k) retirement accounts to pay their bills — and getting slammed with taxes and penalties in the process, according to retirement plan administrators.

    This is happening even as borrowing from 401(k) accounts remains fairly flat. Fewer still are borrowing from 401(k) plans to buy homes. By contrast, new figures from plan administrators show the number of 401(k) “hardship withdrawals” is up in early 2008 compared with the same period last year.

    The main reason? The need to stave off foreclosure or eviction.

    Consider Tamara Campbell, who raided her 401(k) after her husband was laid off from his job as an occupational technician, and they fell behind on their mortgage for several months. “If I hadn’t done that, we would have been foreclosed on last year,” says Campbell, who lives in a Denver suburb.

    Such hardship withdrawals began rising last year and, by January this year, had exceeded January 2007 levels. During the first month of the year, as the economic slowdown tightened pressure on mortgage holders, hardship withdrawals rose 23%

    Merrill Lynch found that the primary reason for the rise in hardship withdrawals was to prevent foreclosure or eviction, based on its sampling of applications filed in January.

    Likewise, in the first month of the year, compared with January 2007, Great-West Retirement Services saw a 20% increase in hardship withdrawals to save a home. And Principal Financial (PFG) reports that in January it received 245 calls from participants who inquired about 401(k) withdrawals to prevent a foreclosure or eviction, up dramatically from 45 similar calls it received in January 2007.

    For workers, the consequences can be severe. About 85% of employers bar employees from making 401(k) contributions for six months after taking a hardship withdrawal, says Pamela Hess, director of retirement research at Hewitt Associates. (HEW) Worse, employees who pull money out of tax-deferred 401(k) plans before age 591/2 generally must pay a 10% penalty on top of the taxes owed.

  66. Stu says:

    Today’s Fed decision might be a blessing for some of your underwater investments. I might put in a sell at or near the market close on my last few long positions.

    BTW, the Fed was already planning two 50 million auctions for this month already. What does a doubling of the amount really mean?

    I see it as an admission by the FED that we are pretty screwed. Surprisingly, they will still not admit the likelihood of runaway inflation or even an economic recession.

    If the past 6 months are any indicator, I doubt this latest fed move will have any long term impact on the inevitable recession/depression.

    The Fed has had numerous auctions between January and now already and it has not helped the liquidity issue at all. For those holding commodities, things should get interesting.

    Volatility should be fun to watch as well.

  67. Stu says:


    Just checked out your PDF.

    I would give it some more time before we all jump to conclusions.

    I also would not trust any of the recent data that the Bush administration releases. Time and time again, they have lied.

  68. HEHEHE says:

    “Stu Says:
    March 11th, 2008 at 9:35 am
    Today’s Fed decision might be a blessing for some of your underwater investments. I might put in a sell at or near the market close on my last few long positions.”

    Truer words have never been spoken

  69. startingover inNJ says:

    If anyone has access to TReND, I am curious what happened to #5160147 in Lawrenceville. Thanks.

  70. RentininNJ says:

    Do you think 2008 layoffs will spike to the 2001-2002 level shown in the chart in post 6?…

    I don’t know if they will or won’t, but I have to wonder how much the so called “jobless recovery” from the last recession plays into the lower number of layoff announcements this time. Many of those jobs lost in the last recession were manufacturing jobs. Those jobs never came back. They were replaced with retail, health care and government jobs. The lower income for the retail and health care jobs were subsidized with home price appreciation.

    So, one could argue that we have fewer “good” jobs to lose this time around. Also, many of the construction jobs created were under the table & therefore won’t show up in the layoff statistics. If Walmart starts laying off, then you might see a spike in the chart.

  71. pretorius says:

    “Stu Says:
    March 11th, 2008 at 9:39 am

    Just checked out your PDF.

    I would give it some more time before we all jump to conclusions.

    I also would not trust any of the recent data that the Bush administration releases. Time and time again, they have lied.”


    I think you’re being excessively skeptical of the data.

    Rejecting data that doesn’t conform to one’s view by tying it to the “Bush admistration” or other hated group suggests that a person is in denial, espcially when the person fails to produce alternative data on the topic.

    The data doesn’t come from the Bush administration anyway. It has been tallied by an independent consulting firm that focuses on macroeconomic issues.

  72. make money says:

    It’s just a swap of s*it. Subprime dollars for subprime loans.

    yes sir. By this time next year the Albanian Lek will be worth more than the Bergabe Dollar.

    Sad to say but if we continue this path for the rest of the year then my friends borrow as many US dollars as possible. Buy than home in Aspen and Saddle River as in 5 yrs we will all be earning a million a year and $1.5 million dollar home will be a POS cape in Jersey city.

    Inflation is like a fire once it starts and grows it’s virtually impossible to stop it. Burn baby Burn.

    Get out of the US Dollar immediately!!!!!!!!!

  73. kettle1 says:

    i wonder if the population as a group is going to learn anything from this mess by the time it gets sorted out over the next several years (decade+????). Or will the government coolaide be the stronger force?

  74. 3b says:

    #63 pret: I think they will be much higher. You know my position, we can not have had what has transpired over the last few years, which has now blown up, without severe economic consequences. And those consequences of course include large layoffs.

  75. Stu says:


    That is really not my point. I recognized the source of the data. I also understand quite well how easy it is to manipulate data to meet ones propagandist desires.

    My ‘real’ point is that you are trying to compare apples with oranges. It is not set in stone that massive layoffs precede recessions since it occurred prior to the 2003 downturn. There are so many other variables that might affect how layoffs will occur in this downturn. Just look at inflation and energy costs. Quite honestly, I am surprised at how well things have held up so far. Whenever I witness these unusual trends, like how long it took the housing bubble to burst, I use it to my financial advantage. No one can catch the top or bottom with regularity. All you need to do is switch sides within 1/3rd of each and you will be better off than most. The fact that unemployment numbers have not spiked can be read in so many ways. Perhaps this downturn will be so long and drawn out that what appeared as an upside down ‘V’ in your chart maybe an elongated upside down ‘U’ this time. Especially if the recession/depression is long and drawn out.

  76. Rich In NNJ says:

    From MarketWatch


    Fed expanding securities lending program
    Carlyle shares drop sharply as trading resumes
    Citigroup committed to inject $1 bln in six hedge funds: New York Times
    Hovnanian CEO can’t call housing bottom yet
    Thornburg updates financial report, boosts charge
    MFA Mortgage sees 1st-period net 18 cents, cuts debt ratio
    Countrywide files may have included dubious information

    Details to headlines at link above

  77. grim says:

    From Bloomberg:

    Moody’s, S&P Defer Cuts on AAA Subprime, Hiding Loss

    Even after downgrading almost 10,000 subprime-mortgage bonds, Standard & Poor’s and Moody’s Investors Service haven’t cut the ones that matter most: AAA securities that are the mainstays of bank and insurance company investments.

    None of the 80 AAA securities in ABX indexes that track subprime bonds meet the criteria S&P had even before it toughened ratings standards in February, according to data compiled by Bloomberg. A bond sold by Deutsche Bank AG in May 2006 is AAA at both companies even though 43 percent of the underlying mortgages are delinquent.

    Sticking to the rules would strip at least $120 billion in bonds of their AAA status, extending the pain of a mortgage crisis that’s triggered $188 billion in writedowns for the world’s largest financial firms. AAA debt fell as low as 61 cents on the dollar after record home foreclosures and a decline to AA may push the value of the debt to 26 cents, according to Credit Suisse Group.

    “The fact that they’ve kept those ratings where they are is laughable,” said Kyle Bass, chief executive officer of Hayman Capital Partners, a Dallas-based hedge fund that made $500 million last year betting lower-rated subprime-mortgage bonds would decline in value. “Downgrades of AAA and AA bonds are imminent, and they’re going to be significant.”

  78. thatBIGwindow says:

    So how is the Clifton market doing?

  79. thatBIGwindow says:

    MLS# 2748534 doesnt look too bad. Only 259k

  80. Rich In NNJ says:

    “The fact that they’ve kept those ratings where they are is laughable,”

    More like criminal to me.

  81. thatBIGwindow says:

    Oh nevermind, it is a duplex…

  82. njpatient says:

    “80. Rich In NNJ Says: March 11th, 2008 at 10:22 am
    “The fact that they’ve kept those ratings where they are is laughable,”
    More like criminal to me.”

    Yes – seems like self-evident conspiracy to commit fraud.

  83. Bloodbath in Winter 2007 says:

    Anyone on the Wachovia conf call? Buddy just told me that their head economist said that the dollar WILL REBOUND later this year and pick up strength in 2009.

    Don’t have the reasons why he said this, but thought I would put it out there. Curious to see if precious metals takes a hit today or not.

  84. Ready to Buy says:

    #76 Rich In NNJ

    “Fed expanding securities lending program”

    How will this effect mortgage rates?

  85. make money says:

    “Fed expanding securities lending program”

    How will this effect mortgage rates?

    It won’t.

  86. grim says:

    Good news, I heard from my buddy at the Fed that the window has started to accept deposit bottles and beer cans as collateral.

  87. JLB says:

    NY Daily News front page, “HO NO!”

  88. 3b says:

    #83 blood; The dollar rebounding this year is wishful thinking.

  89. grim says:

    How will this effect mortgage rates?

    While it might provide some benefit to lenders facing liquidity issues, it will do nothing to remedy the solvency problems plaguing most other lenders. The real question is whether those who benefit from such action will pass those savings on to the customer. My guess? No.

  90. Stu says:

    From Crossing Wall Street:

    The Credit Crisis Subtext of the Spitzer Story

    I think this might be ironic, and not the Alanis kind either:

    The members decided that even though Client 9 had a credit of $400 to $500 with the ring, they wouldn’t let him keep the appointment until his latest deposit arrived. Client 9 made the calls himself.

    On Feb. 13, according to the affidavit, Client 9 made a hotel reservation in D.C. under his name and left a key for a woman named “Kristen.”

    Client 9 was eventually told his deposit had arrived and “Kristen” was on her way from New York. Client 9 responded, “Great, OK, wonderful.”

    Client 9 discussed with the prostitution ring a way for him to have credit stored up so that he wouldn’t have to worry about sending in a deposit in the future.

    Then they discussed a way for “Kristen” to get his hotel room key once she arrived.

    “Kristen” was sent to room 871, which Client 9 was leaving ajar; Client 9 wanted to be reminded of what she looked like and was told “American, petite, very pretty brunette, five feet five inches, and 105 pounds.”

    Was Spitzer done in by tougher credit standards? If only some banks were as prudent as whorehouses.

  91. JLB says:

    #89: actually this move is based on other lending institutions (investment banks) and is a way of “back-ending” the market. It will help non-banks to “husband capital.”

  92. njpatient says:

    “Good news, I heard from my buddy at the Fed that the window has started to accept deposit bottles and beer cans as collateral.”

    Can I get a 10 cent loan on a 5 cent can?

  93. BC Bob says:

    “If only some banks were as prudent as whorehouses.”

    Stu [90],


  94. njpatient says:

    Great line, Stu.

    Next question – if the whorehouses knew they could put bad ARs to the fed, could we make $5K whores available to blue collar workers during boom years?

  95. Victorian says:

    Why didnt the CEO hearings held last Friday make front page news, and not discussed widely either?
    I watched them on CSPAN and one Republican actually exhorted the youth of today to learn from these guys!! Dont these guys know that there are cameras in the room?

    Not to make it sound political, but there was clear party based divide – with the Dems on the hunt, and the Republicans hellbent on making it seem like nothing’s wrong.

    Countrywide actually paid Mozillo to hire his own compensation consultant who recommended (surprise, surprise) higher wages and bonuses than CountryWide’s own consultant.

    How far till we hit the morality bottom?

  96. Pat says:


    Sorry if Buffet’s letter was posted already. I’m trying to keep up.

  97. BC Bob says:

    “Not to make it sound political, but there was clear party based divide”

    Victorian [95],

    You sound surprised?

  98. shuky says:

    please could you give some history of

    MLSID# 2414887 ?

    thanks a lot

  99. njpatient says:

    “Not to make it sound political, but there was clear party based divide – with the Dems on the hunt, and the Republicans hellbent on making it seem like nothing’s wrong. ”

    Are you talking about the CEO pay hearings or the Clemens hearings? ;)

  100. grim says:

    Buffett quotes the bubble prayer in his letter, fantastic..


  101. grim says:


    Looks like an estate sale.

    OLP: $825,000
    LP: $699,000
    DOM: 277

    Taxes: $24,698

  102. Mikeinwaiting says:

    Victorian 95 I watched them also.It was great to see the orange man get grilled by the Dems.As a Republican I was not happy with my guys.Some of the Dems were over the top playing to their voters, but at least they went after them on some good points.
    Better than wasting time on who took steroids in baseball!Are gov at work.

  103. 3b says:

    #101 grim Taxes: $24,698!!!! Where??

  104. grim says:

    West Orange

  105. grim says:

    Tax Exodus

    West Orange Inventory
    Feb 2005 – 246
    Feb 2006 – 271
    Feb 2007 – 379
    Feb 2008 – 403

  106. Wag says:

    Grim (105) – I wonder if Corzine & Co. are seeing what you so clearly are point out? God help us all if this does not stop.

  107. JLB says:

    “The swirling cacophony of financial markets, regulators, monetary policy, legislators, and other interested parties — all touting different ideas and helping to roil the credit markets — is enough to make you want to retreat from the market, if for nothing else than to get a moment of quiet, cogent thought.”
    read the whole analysis at http://www.hsh.com/trends.html

  108. Stu says:


    Any chance of you providing the same Tax Exodus information for Montclair?

  109. Victorian says:

    #97 BC BOB-
    I was surprised that they still fail to realize that the average Joe feels cheated by these guys, the same Joe they are supposed to represent, and then have the gall to clearly work against their interest on television.

    Can the people get away from dialing IDOL 8 long enough to see this?

  110. wannabe prestigous gary says:

    Can someone with access to the top secret vault of coveted listings which will never be accessible to the public even when h*ll freezes over give me the history on this one?

    MLS ID# 2747139

    Thank you!

  111. Realist says:

    Have any of you realtors out there ever heard of a “realty kernometer?” My in-laws received a mailing from a realty co. where they touted the kernographer as a measure of the real estate market. 100=”hot” 0=”cold” Apparently the kernographer in Bergen County is at 49.3.

    It sounds so scientific – it must be true :)

  112. 3b says:

    #104 grim: Insane!!

  113. skep-tic says:


    predictions for economic growth based on the Atlantic fishing industry?! Somebody should ask the people of Maine how that’s worked out for them recently

  114. Mikeinwaiting says:

    Grim 101 24+ taxes Yea sure lets run out & buy that!

  115. Stu says:

    Is there such a thing as an anal kernometer? That sounds especially accurate.

  116. jam says:

    The Kernometer

    The ‘Kernometer’ is our objective measure of the health of the residential real estate market in Northwest Bergen County, New Jersey, and the bordering Passaic County towns. The index is like a temperature gauge, with a reading of 100 meaning the market is red hot and 0 indicating an ice cold market. The Kernometer sits at 49 right now, with the recent low of 35 having been reached in July of 2006. It may surprise you that this index is not lower, given the news about the plunging markets in Florida and California. Our northern New Jersey market is healthier than those, and at a maximum, we believe we have only 11 months left before prices start to rise again.

  117. jam says:

    check it out at Kernandrogers.com

  118. 3b says:

    #116 We believe we have only 11 months left before prices start to rise again.

    Fairy tales can come true, it can happen to you, if you are a realtor.

  119. BC Bob says:

    “Have any of you realtors out there ever heard of a “realty kernometer?”

    I’m sure Client 9 has recently experienced this.

  120. Stu says:

    Also from the creators of the Kernometer:


    20 years worth of data on both home prices and the actual number of houses for sale yields a very interesting chart. An inverse correlation between the two emerges, and we believe the relationship is solid. Rising inventory starting in both 1987 and 2005 foretold the end of each of the great Bull markets in real estate that we have enjoyed since the 80’s. Moderating inventory starting in 1991 signaled the end of the 1987-1991 terrible market, and resulted in a market where home prices crept upward ever so slightly. Then, the low inventory that prevailed from 1998-2005 paved the way for our most recent Bull market. So, then, we have an ever-turning Real Estate Carousel of sorts. The three phases, in order, are Bull market, Bear market and the slightly rising market we call an Inchworm market. The bear market of 1987 lasted about 3.5 years, but was characterized by a staggering number of houses for sale – figures that dwarf our current inventory. We are slightly over 2 years into the current Bear market, but with inventory that holds 500 fewer homes for sale than the early 90’s. Today’s modest inventory should result in a Bear Market that is shorter than last time’s 3.5 years. Here, in the Northwest corner of Bergen County, New Jersey, we could morph into an Inchworm market within the next quarter. Let’s watch the inventory numbers.

    This guy should apply for the FED chairman position after Bergabe retires. “Inchworm Market?” That’s even better than the goldilocks economy. The problem is that what they are really experiencing is the Pooh market?

  121. skep-tic says:


    “I don’t know if they will or won’t, but I have to wonder how much the so called “jobless recovery” from the last recession plays into the lower number of layoff announcements this time. Many of those jobs lost in the last recession were manufacturing jobs. Those jobs never came back.”

    There was an article on this in the WSJ a few weeks back. Productivity gains were better than expectations for the post dot com bubble period. The reason is that companies were squeezing more work out of their existing employees rather than hire as many new ones as in the past. The article’s conclusion was that layoffs this time would not be as severe due to the fact that many companies are already operating at close to bare bones levels.

  122. HEHEHE says:


    Looks like many people took your advice and dumped their longs. Could be just the noon swoon but if there’s not an end of the day rally this latest Fed move is DOA.

  123. 3b says:

    #120 Stu: So we are only 500 homes away from the inventory high of the last down real estate market?

    And its only early March, the Spring buying/selling season has not even started in earnest yet.

    Seems to me we could hit that 500 number in a matter of a few weeks, perhaps less.

  124. Stu says:

    Gold and TIPS pricing is laughing at Ben and Co.

    Depression still on track folks.

    Mister we could use a man like Barrack Obama again!

  125. skep-tic says:

    from the WSJ Wealth Report blog:

    “According to a survey by Russ Alan Prince, president of Connecticut-based wealth-research firm Prince & Associates, in his book “The Sky’s The Limit,” a sizable percentage of the super wealthy use escorts. He surveyed 661 people who owned private jets. It found that 34% of males and 20% of females had paid for sex.”


  126. Al says:

    absurdity of taxes in NJ:

    Taxes: $24,698


    If this house would be 100K I might buy it. When will we see effect of huge taxes on prices???

  127. Wag says:

    Al (126) When the mass exodous is beginning to wind down, taxes will have to follow? Who really knows.

  128. Al says:

    Wag Says:
    March 11th, 2008 at 12:17 pm
    Al (126) When the mass exodous is beginning to wind down, taxes will have to follow? Who really knows.

    If mass exodous is starting – less revenue in taxes – will we see taxes forced auctions??

    If bank owns a property with 24K taxes for 2 years… it is 50K hit. what will bank do?

    But again there are a lot of rich people in NJ, right?

  129. ledward says:

    well, rent goes up and down depending on the market. How comes tax never in down turn at all?

  130. grim says:

    How comes tax never in down turn at all?

    Because a prerequisite for this would be to cut spending and budgets.

    Clearly an impossibility in this state.

  131. Al says:

    We can not sacrifice quality of our schools!!!

    Or Police Protection…

    Or our great municipal/state/county govermental services.

    So shut up and pay thouse taxes. (Or move)

    It seems that I will be moving in a 6 month to a year period. I will not have my job in NJ anymore. Here goes buying a house here.

  132. Shore Guy says:

    # 45 “the only question – will 200 billions be enough – but nothing stops fed from giving away more…”

    So, at what point does this ignite inflation?

  133. kettle1 says:


    taxes (i.e gov spending) will not go down until the state becomes bankrupt and the net exodus of the tax base becomes undeniable. To get taxes/spending under control would require a drastic reduction in the size of state and local government and this will never happen. A perfect example is how everyone wants towns to merge to reduce costs but heaven forbid if your town is one of those proposed to merge, its a horrible idea then.

  134. kettle1 says:


    the correct question is….

    At what point point does this ignite hyperinflation, or worse yet deflation

  135. Al says:

    To post 134 : How does diving away money ignite deflation????

    Regarding inflation: check your grocery bill, gas reciept, medical bills..

    Inflation has being creeoping up for tha last 5 years.

    Just not on cheap chineese goods – but now chineese items will jump 20% this year.

    This is my prediction.

  136. kettle1 says:

    non fudged economic stas for March

    M3 approx 17%
    GDP approx -2%
    CPI approx 12%

    Gov #’s (i.e fudged)
    GDP approx 3%
    CPI approx 4%

  137. Shore Guy says:

    We found a decent beachfront house in NC. Not too nig (1500 ft. sq.) not grand (much like what used to dot the shore in Bay Head and Mantaloking)just a nice beach house. We are cool with the price BUT discovered that the thing has NO insulation. Does anyone have any experience withvarious blown-in insulation products (especially in a humid environment)? We like the place but don’t want to live a long-distance nightmare. The inside walls are natural wood finished bright (as befits a nautical environment) and I am not eager to go drillling and patching them, although access from outside (cedar shake) could be possible.

    I would appreciate any input.

  138. Shore Guy says:

    big that is

  139. kettle1 says:


    I agree we have been inflating at about greater then 10% for almost a year now as per the M3 #’s.

  140. Al says:

    Well my grocery reciepts are at about 8-9% for the last eyar and at about 6-7% for they year before that.

    Same store, same produce. I am costco member and I have kept ALL of my reciepts for that last 6 years…… my produce basket inflation is very easy traceble.

  141. Essex says:


    I caught an episode of this old house where they were in New Orleans restoring a place and part of the rebuild included blown in insulation. They said that is was amazing for humid areas because it actually was porous and allowed moisture to move through the insulation as opposed to collecting inside it and causing mold.

  142. kettle1 says:

    shore guy,

    I have some experience with icynene. This is an expanding foam that is sprayed into the walls and could work well for you. I have also heard goos things about “aircrete” but do not have any personal experience with it. icynene is expensive but seems to be a good product from my experience and from the research i did.

  143. njpatient says:

    141 essex

    Saw the same one, I think.

  144. Sean says:

    Here is a This Old House video on how to retrofit insulation, by removing shinges on the outside to fill up the space between the studs, they are using blown in Cellulose Insulation.


  145. Shore Guy says:

    Thanks all. I can’t help but thinking that cellulose would be asking for trouble. Is icynene a “relative” of the spray can insulation?

    What was your experience with respect to time to do the job, disruption, cost?

  146. Mitchell says:

    Try before you buy a home. Thought this was an Interesting item. Found on TLC’s website.

    Are you looking to buy your next home? Do you want to know what it’s like to live in a home BEFORE you sign that mortgage? For the first time in America, you can try out a house before you buy it!

    You tell us what you’re looking for in a new home, and our experts will match you up with hot properties in the location you’re considering. Then you get to choose two houses to “road test”– to actually live in each home overnight to see if one is the perfect fit for your budget and lifestyle. Cook in the kitchen, test out the shower, find out if the neighbors are loud, and see if it really does have enough closet space!

    “Real Estate Road Test” will help you decide if a house is your dream home, before you make an offer.

    At this time, we are only looking for applicants who are living in THE NEW YORK TRI-STATE AREA (New York, New Jersey, Connecticut, Philadelphia) and are looking for a new house in the New York tri-state area.

    Apply now! http://www.bbcnyc.com/age10.htm

  147. Shore Guy says:

    # 146 A week or month would be ideal.

  148. Pat says:

    Mitchell…now that show would be really great if they combined it with a couple of others.

    “Real Estate Road Test with the Osbournes”
    “High Speed Chases on Real Estate Road Test”
    “Dog Chapman comes for dinner at your Real Estate Road Test”
    “Forensic Real Estate Road Test: Mite finder”

  149. Essex says:

    146……eh….sounds like they are running out of ideas for new shows…..zzzzzzzzz

  150. Mike NJ says:


    You need to take some advice from Spitzer and live a little bit. First things first, shred those receipts and free yourself.

  151. Mitchell says:

    #147 Yea its a pretty neat idea.

    Of course the people who would do this are ones who would probably have the best neighbors and houses.

    I cant see problem houses or neighborhoods doing this because they don’t want you to know why they might be moving.

  152. Sean says:

    If you haven’t seen this one, Spitzer’s yearbook page from High School.


  153. Shore Guy says:

    # 106 “Wag Says:
    Grim (105) – I wonder if Corzine & Co. are seeing what you so clearly are point out? God help us all if this does not stop.”

    Watch out when rich liberals have control over public policy. I have no problem with working-class liberals in power, as they are just as afraid of high taxes as the rest of us. The wealthy ones (Kennedys, Corzine, et al.) dont feel the impact of their taxing decisions the way the rest of the society does, AND they are oh so eager to expand programs to help (not that I disagree with the desire) without regard to how it affects the people in the vast middle.

  154. Mitchell says:

    #148 I like this one.
    “Forensic Real Estate Road Test: Mite finder”

    #149 I guess the house flipping shows are getting canceled soon. I did like that they did some follow up to later episodes where you found out some had to move into the home because they couldn’t sell it for the profits they hoped and others profits were no better than the ones that were 200K vs 1 Million. Little profits.

    I could see the show picking up some real losers that move in but wont move out and they need to hire a lawyer. Might be worth a watch if it materializes.

  155. kettle1 says:


    I recently helped my BIL rebuild/expand his house ( took down almost everything except 3 walls). We used icynene for insulation. Cost was about 2-3X the cost of cellulose. I dont remember the exact numbers but all of the quotes we had were in that ball park.
    Our case would be a little different then yours, as there was no sheetrock to work around. But the icynene system supposedly works well in your situation to. They punch a small hole into the wall an insert the wand and then pump the foam in. The foam is similar in action tot he spray can foam (expands to 100X its original volume). It is dry in about 24 hrs and leaves a slight odor for about 2 or 3 days. The work seems to go pretty fast. The main risk in your situation is if the wall is overfilled the pressure from the foam expanding can cause the drywall/paneling to blowout. This system would poabably cause the least disruption since application could probably be done from the exterior.
    Actual time should be quick, as they fill one section of wall then move to the next. you would have to contact a local dealer to get a better idea.
    Icynene forms an airtight seal, so the idea is that while it is more expensive, it “should” reduce your overall utility requirement since it will closeout infiltration. It also supposedly does not support any sort of mold or bacterial growth, does not support combustion and does not off gas VOC’s.

    Its expensive stuff, but so far It seems to be working as advertised at my BIL’s house, and the install guy was good. Do your own comparison, the cost may not be worth it to you.

  156. Shore Guy says:

    #86 grim Says:
    March 11th, 2008 at 10:43 am
    “Good news, I heard from my buddy at the Fed that the window has started to accept deposit bottles and beer cans as collateral.”

    Maybe those flip-top necklaces that I made in the ’70s will now have value.

  157. Shore Guy says:

    # 156 Thank you, Ket.

  158. Shore Guy says:

    # 125 ““According to a survey by Russ Alan Prince, president of Connecticut-based wealth-research firm Prince & Associates, in his book “The Sky’s The Limit,” a sizable percentage of the super wealthy use escorts. He surveyed 661 people who owned private jets. It found that 34% of males and 20% of females had paid for sex.””

    When they factored in dinners, concerts, trips to Bermuda, etc, the number went to 100%?

  159. Shore Guy says:

    # 134 Indeed, you are correct. I edited it to “inflation” to avoid sounding alarmist.

  160. Stu says:

    The name of Spitzer’s whore was just released…She goes by the alias Hilary C.

  161. kettle1 says:

    regarding spitzer

    You would think the US public was comprised of 5th grade boys. people have sex! who cares. I wish i had the income to support 5K/hr hookers (courtesans)!

    Yes he does look bad because part of his platform was taking down escort services and what not. but outside of that aspect people need to get over it

  162. Sean says:

    People will get over it just fine Kettle1, the question is will Elliot get over on it?

  163. Shore Guy says:

    # 162 I suspect Silda will get over it once she has his gonads in a jar on the top shelf of the cabinet over the washer.

  164. Sean says:

    NJ Gov’t is inefficient, and added 10,000 workers to the state workforce from 2000-2006.


  165. skep-tic says:


    the really shocking thing about that survey is that 20% of women paid for it

  166. jam says:

    [162] It’s not that he had sex. He was involved in criminal activity. Prostitution, violation of the Mann Act, and of course all the activity that is financed by the money prostitution generates.
    The American people got over Clinton and Lewinski, the facts are different this time. The People should care about what their governor does. Unfortunately the People care more about did Clemens and the rest of MLB use steroids.

  167. BC Bob says:

    “people have sex! who cares.”

    kettle [162],

    I guess you’re right, why should his wife/children care?

  168. BubbleYum says:

    Shore Guy Says:
    March 11th, 2008 at 1:34 pm

    Watch out when rich liberals have control over public policy. I have no problem with working-class liberals in power, as they are just as afraid of high taxes as the rest of us. The wealthy ones (Kennedys, Corzine, et al.) dont feel the impact of their taxing decisions the way the rest of the society does, AND they are oh so eager to expand programs to help (not that I disagree with the desire) without regard to how it affects the people in the vast middle.

    Yeah, unlike all of these “working class” conservatives who have been so very abstemious in their taxing and spending programs. **rolling eyes**

  169. Mikeinwaiting says:

    Jam 168 In Europe this would be a none issue the Mann Act is to stop white slavery
    this is not the case here.I’m more worried about the activity my tax dollars generate in Trenton.Now that’s a crime.

  170. Stu says:


    Check out page 19 and 21 of: http://nj.gov/treasury/pensions/epbam/exhibits/ann-rpts/2005/cpfpf.pdf

    If I were a fireman or policeman entering the force or who is more than ten years away from retirement, I would seriously make sure I was funding my IRAs to the max.

    There is no way these seriously underfunded pensions are going to be paid. Not unless Bergabe chooses to bail THEM out as well.

    What a friggin mess.

    I knew these things were underfunded, but now they are even going lose value from a declining market. What a friggin mess.

  171. Wag says:

    Stu (172)- I am no actuary, but look at the formulas contained within that link. The numbers are staggering. And you are absolutely correct, the possibility of the pensions being paid out is slim. Fun times.

  172. par4156 says:

    re #101…it’s on over 2 acres though….

  173. Hehehe says:

    market is rocking

  174. Stu says:

    market is rocking

    Increased my bond exposure in my 401K to 80% at close today. Waiting for the opportunity for weeks. Should have done it a month ago.

  175. Clotpoll says:

    Realist (111)-

    Sorry I missed your post.

    I was in the bathroom, squeezing out a kernometer.

  176. kettle1 says:

    maybe i have an unusual point of view. spitzers extracurricular activities are certainly a private issue for his family ( i’m sure his wife has some strong opinions on the matter in private). But lets put things in perspective. Most of our recent presidents have admitted to using illegal substances from marijuana to cocaine. This didnt stop them from taking office. What he did was indeed illegal and certainly has political impact (negative for sure) by in my opinion is blown out of proportion in the public light.

  177. njpatient says:

    “It’s not that he had sex. He was involved in criminal activity. Prostitution, violation of the Mann Act[…] Unfortunately the People care more about did Clemens and the rest of MLB use steroids.”

    jam – I don’t understand. Steroids are illegal too. What’s the difference?

    Spitzer can rot – you’ve all watched a client pee on him on your teevee this morning, so my vested interest goes the other way, but in terms of how bad the crime is, I don’t think steroid use is less big a deal than prostitution. I’ve heard friends tell me their 16 year old thinks he needs to do steroids because everyone else on his high school baseball team does, and he’s being left behind. Haven’t heard that about the same kids needing to go to the $5K hookers (cue execrable story by John!).

  178. kettle1 says:

    the mann act hey? i doubt a %k?hr call girl counts as a slave trade. This girl is probably in the top 5+ percent of earners. I wonder how she reports the income? is it a cash business?

  179. kettle1 says:

    nj patient

    Haven’t heard that about the same kids needing to go to the $5K hookers (cue execrable story by John!).

    apparently you havent heard what the teenage boys from pingy do for fun on the weekends!

  180. njpatient says:

    171 mike
    “Jam 168 In Europe this would be a none issue the Mann Act is to stop white slavery”

    That’s why its real name is The United States White-Slave Traffic Act of 1910. Some of it’s prohibitions are so broad as to to be worthless: among other things, it bans the transportation of females (note, not males) across state lines for “immoral purposes.” Any of you who ever drove home your college girlfriend have violated the Mann Act, and if you think I’m kidding, you should read the story of Elizabeth Smart.

  181. Clotpoll says:

    Stu (120)-

    “So, then, we have an ever-turning Real Estate Carousel of sorts.”

    Wow. Precisely the image I was looking for.

  182. njpatient says:

    181 kettle
    “pingry” (typo?)
    Do tell.

  183. RayC says:

    Sex is the sell in the Spitzer saga, but the bigger issue is blackmail. What would he (or anyone) agree to do to prevent this from getting out?

    Actually, now that its out, he’s kinda blackmail proof. He should stay.

  184. njpatient says:

    185 Ray

    Agree. That’s why Bush should have admitted the cocaine use.

  185. kettle1 says:



    This school has serious big money floating around ( atleast when i occasionally traveled in such circles). Lets just say that coke and a few high priced ladies of the night were not unheard of amongst the older boys when the parents decided to galavant about europe and leave Jr home to his own devices.

  186. njpatient says:

    187 ket
    Friend’s on the board. I will have to ask him about this.

  187. kettle1 says:

    i was friends with a guy who got busted in such a situation when the classic ‘parents home early’ occurred. I cant say it is or was a common occurance. But i would be surprised if it was an isolated incident

  188. Mitchell says:

    I’m pretty sure Spitzer wife knew he was a pimp and probably messed around. She might have been a call girl herself.

  189. kettle1 says:

    On a different topic….

    “Struggling to save their homes from foreclosure, more Americans are raiding their 401(k) retirement accounts to pay their bills — and getting slammed with taxes and penalties in the process, according to retirement plan administrators. . . .”

    on what planet does this make any sense? This seems like a very stupid financial decision to me. is there ever a sound financial reason to do this???

  190. Hehehe says:

    Personally I think they should just make it legal, regulate and tax the hell out of it. Heck if they did that we might not have as large a budget problem. Only reason stuff like that is illegal in this country anyway is because Europe sent all the loonier bible thumpers packing to America 500 years ago

  191. Everything's 'boken says:

    shore guy
    You are correct to worry, whichever method. The problem is moisture. Insulation moves the location where the dew point is reached inside the wall.
    I have seen paint pop, mold, and walls rotted from inside out on houses some years after insulation retrofit.

  192. kettle1 says:


    along the same lines

    The Budgetary Implications of Marijuana Prohibition

    June 2005

    Jeffrey A. Miron
    Visiting Professor of Economics
    Harvard University
    Cambridge, MA 02138

    The Marijuana Policy Project provided funding for the research discussed in this report. Daniel Egan provided excellent research assistance.
    Executive Summary

    * Government prohibition of marijuana is the subject of ongoing debate.

    * One issue in this debate is the effect of marijuana prohibition on government budgets. Prohibition entails direct enforcement costs and prevents taxation of marijuana production and sale.

    * This report examines the budgetary implications of legalizing marijuana – taxing and regulating it like other goods – in all fifty states and at the federal level.

    * The report estimates that legalizing marijuana would save $7.7 billion per year in government expenditure on enforcement of prohibition. $5.3 billion of this savings would accrue to state and local governments, while $2.4 billion would accrue to the federal government.

    * The report also estimates that marijuana legalization would yield tax revenue of $2.4 billion annually if marijuana were taxed like all other goods and $6.2 billion annually if marijuana were taxed at rates comparable to those on alcohol and tobacco.

    * Whether marijuana legalization is a desirable policy depends on many factors other than the budgetary impacts discussed here. But these impacts should be included in a rational debate about marijuana policy.

  193. bewm says:

    Given an MLS number, is it possible for a REALTOR(R)(TM)(C) to pull what kind of financing the current owner has? IOW, would I be able to find out if they have a 5/1 ARM which is about to reset… so I could take that into considering when putting in an offer?


  194. skep-tic says:

    really hard to believe that some people don’t think a governor’s repeatedly hiring prostitutes is a big deal.

    these people were the definition of organized crime. how much money did spitzer pay them over the years? where did the money go? what other more serious criminal activity might it have furthered? what favors might these people have sought by giving their services to such high profile people who if caught would certainly jeopardize their enterprise?

    this episode simply exposes Spitzer’s complete lack of judgment and self-control. it speaks volumes

  195. kettle1 says:


    not to be pedantic, but what about all your tax money that goes to the CIS/NSA secret wars, illegal spying, CIA drug flights…..

  196. kettle1 says:


    you asked how inflation can lead to deflation. Here is an example


  197. kettle1 says:


    I would suggest that at least money going to the call girls stimulates the economy. they get the money then go spend it buying stuff in the US, not buying off foreign governments!

  198. Mike NJ says:


    It happens every day and we all know it. The point I think is that he was one person in public while he obviously was not that person in private. If he was some run of the mill politician or maybe that putz Corzine for example, I don’t think he would lose his post. But because he was and is an absolute ball buster of epic proportions everyone (and I mean everyone) is enjoying watching him eat a sh*t sandwich. I could care less about the moral implications of his actions. What I care about is that as Governor of the great state of New York, he practice what he preaches. He just knocked McGreevy off the pedestal for fool of the millennium. I still have faith that Corzine has the stupidity to one-up Spitzer. Anyone dumb enough to not wear his (or her) seat belt while going 80+ mph while weaving through traffic is a solid candiate for the Darwin award in my opinion.

  199. Sean says:

    Here is a nice little write up on his marriage. I would say his wife is crushed and humiliated. What are the odds Spitzer’s wife leaves him, she defintely could find a job and she would not be single to too long.

    How long before his daughters act out after being teased relentlessly at Horace Mann High school?

    How long before his two dog’s run away?


  200. Stu says:

    “they get the money then go spend it buying stuff in the US, not buying off foreign governments!”

    So what you’re saying is that rather than receive a stimulus check, we should all get gift cards to the local brothel.

    Morals anyone?

  201. skep-tic says:

    Kettle– who knows how much of that money that girl actually saw? who knows whether or not she and and the other women really have a choice about these exchanges once they become entangled with this organization? Contracts which can’t be enforeced by courts are enforced by violence. That is the problem with prostitution– not sex per se. As a former AG/DA, Spitzer is well aware of this, which makes his crime particularly reprehensible. I’m sure there are other areas of gov’t where equally if not more reprehensible things occur, but it doesn’t make what he has done OK.

  202. 3b says:

    #203 skeptic: Agreed it is reprehensible, and inexcuseable.

  203. Kettle1 says:

    skeptic, stu

    just playing devils advocate. While i think most drugs and prostitiution should be regulated activities not illegal ones, i am not suggesting we hand out gift cards to brothels as opposed to stimulus checks. That would really piss my wife off

  204. Theo says:

    Re: 172

    Seems the solution to NJ’s budget problems is to default on all gov pensions. Let’s start first with all those who moved to NC.

  205. Jamey says:


    Spitzer was into watersports?! This I did not know.

  206. chicagofinance says:

    skep-tic Says:
    March 11th, 2008 at 3:42 pm
    really hard to believe that some people don’t think a governor’s repeatedly hiring prostitutes is a big deal.

    these people were the definition of organized crime. how much money did spitzer pay them over the years? where did the money go? what other more serious criminal activity might it have furthered? what favors might these people have sought by giving their services to such high profile people who if caught would certainly jeopardize their enterprise?

    this episode simply exposes Spitzer’s complete lack of judgment and self-control. it speaks volumes

    skep: I agree with these points. However, you don’t go far enough. The issue with Spitzer is the hypocrisy. It is Ted Haggard-type stuff. Spitzer was the avenger, relentless, and unaplogetic. It is now apparent that the viciousness of his attacks as NYAG were a personal form of compensating for his desultory innards.

  207. Kettle1 says:


    Is me paying a consenting adult for sex any less moral then me paying a consenting adult for a massage? i recieve physical pleasure either way. I have paid for said pleasure in both cases. the abuse and criminal aspect of drugs and prostitution comes into play when they forced into the black market

  208. skep-tic says:


    Kettle–I figured that was your point. I don’t want to come off as too sanctimonious myself (Spitzer style)– I actually agree with much of what you’re saying

  209. New in NJ says:

    This is certainly not my original thought, but it does have the ring of truth:

    Almost nobody needs to pay for sex. The money is all about paying the escort to go away when it’s over.

    And I’m sure that’s the same whether the client is a man or a woman.

  210. skep-tic says:

    “the abuse and criminal aspect of drugs and prostitution comes into play when they forced into the black market”

    I think gambling is a good example of turning a formerly illegal and widely considered immoral activity into a reasonably well regulated, socially tolerable activity

  211. chicagofinance says:
  212. Hehehe says:

    Amen. It’s the hypocrisy and his complete lack of sympathy when he was on the other end of the prosecution.

  213. Kettle1 says:

    I read a survey that suggested that 65%+ of men had used an escort by the time they are 30.

    Oh and from a biological point of view prostitiution and promiscuity makes more sense for me then it does for women. men can TECHNICALLY have a number of children limited only by his ‘access’ to women. So for men the best reproduction strategy for pasing on genetics is “the more the merrier”. For women having achild is a very large physical burden that can alsi be a health risk. Due to this it makes more sense for women to be highly selective inwho they choose to mate with. Womans reproductive strateghic is “quality not quantity”.

    This is not my idea, read it in Nature a while back. Oh and human females tend to find a good father first, then go fond the genetic donor. i.e 1 in 10 people do not have the daddy they think they have

  214. Outofstater says:

    Spitzer: Whether or not one views his actions as moral or not, the fact remains that for as long as he engaged in that activity he and by extension, the State of New York, were vulnerable to blackmail. The same can be said for President Clinton. Clinton’s actions were even more egregious because they put our national security at risk.

  215. Shore Guy says:

    # 205

    It is ok. Wives and husbands each get a gift card.

  216. Kettle1 says:

    correction to 215…

    Oh and from a biological point of view prostitiution and promiscuity makes more sense for men then it does for women. men

  217. Shore Guy says:

    Speaking of Spitzer and the sting, I read that “Tanya Hollander” was one of the people at the agency. Is she related to Xavier perchance?

  218. Kettle1 says:

    by the way, i agree with hehe 214, i am not really defending spitzer

  219. BC Bob says:


    “Attorney General Spitzer said today that 18 people associated with popular “escort services” operating in New York City, Long Island, Westchester and New Jersey have been indicted for promoting prostitution and related charges.”

    “The indictments by a Staten Island Grand Jury follow a lengthy investigation of the escort services, which authorities believed were really a front for a massive prostitution ring.”

    “This was a sophisticated and lucrative operation with a multi-tiered management structure,” Spitzer said. “It was, however, nothing more than a prostitution ring, and now its owners and operators will be held accountable.”


  220. nj terp says:


    The sad part is most of these people probably financed the purchase of the home with a 401k loan. I’ve seen this happen, 401k loan to buy the home….hardship withdrawal to aviod foreclosure on it.

  221. Shore Guy says:

    # 220 “and now its owners and operators will be held accountable”

    We should have noticed he said nothing about the demand side. I guess he was a closet supply-sider. David Stockman would be pleased.

  222. RayC says:

    # njpatient Says:
    March 11th, 2008 at 3:27 pm

    185 Ray

    Agree. That’s why Bush should have admitted the cocaine use.


    Can’t admit what you don’t remember. Although GW didn’t invent that defense, he borrowed it from the Kennedy’s (Ted and Skakel).

  223. chicagofinance says:

    FWIW: Whatever happened in the market after 1PM today looks like one big-a55ed short-covering……

  224. Al says:

    New in NJ Says:
    March 11th, 2008 at 4:13 pm
    This is certainly not my original thought, but it does have the ring of truth:
    Almost nobody needs to pay for sex. The money is all about paying the escort to go away when it’s over.
    And I’m sure that’s the same whether the client is a man or a woman.

    Al lot of people are saying that USA need to legalize prostitution and drug$…

    this way taxes will be paid and major!!! source of funding for organized crime and terrorists will be cut-off.

    Ironically I believe that drug$ cartels would fight legalization of drugs to the tee.

    Just think – one Pharm company can come up with a lot purer and cheaper drug$ and you can’t beat higher volume production facilities.

    Also WOMEN HATE WHEN I SAY THIS :) – when MAN date – how much money and time are wasted to get laid – I would not be surprized if in the long run even at 1K+/hour escorts are cheaper.

    So lets legalize drugs and prostotution – next bubble will be in Drug$ and Brothel$:)

    (covers and looking for the first women to start throwing stones – also man-prostitution should be legalized as well.
    P.S. Night clubs will disappear. Only Brothel$ will remain.)

  225. Kettle1 says:

    Stu 202

    this idea actual fits into the whole Bread&Circus concept quit neatly, that would be a lot of circus

  226. Kettle1 says:


    the ending of the War On Drugs (TM) could cut the size of law enforcement organizations in half on a ntional basis. This is why law enforcement will always fight any sort of legitimization of the activites tooth and nail. Its the money stupid ( not direct at anyone inpaticular)

  227. ithink-ithink says:

    jb please delete #229.

  228. Confused In NJ says:

    CHICAGO – At least one in four teenage girls nationwide has a sexually transmitted disease, or more than 3 million teens, according to the first study of its kind in this age group.

    A virus that causes cervical cancer is by far the most common sexually transmitted infection in teen girls aged 14 to 19, while the highest overall prevalence is among black girls — nearly half the blacks studied had at least one STD. That rate compared with 20 percent among both whites and Mexican-American teens, the study from the federal Centers for Disease Control and Prevention found

  229. HEHEHE says:

    Yeah, delete it, ithink was too slow to the trigger!

  230. par4156 says:

    Re from link at #165 –
    “Propelled by the hiring (as well as higher-than-average government pay and fat benefits)”

    higher than average pay should only happen when the cost of living is higher than average…it’s ridiculous how this could happen in NJ!

    Overweight is more “journalistically astute” than “fat”….come on nypost….the NY Times will catch up to you soon…

  231. Essex says:

    225…….yeah AL…unless you married a very attractive and successful woman. Which I did. Your post is moronic.

  232. PeaceNow says:

    ShoreGuy, re: insulation. I had cellulose blown into my 100+ yr. old house a couple of years ago. Seems to work very well, most noticeably in the summer. They did it from the inside because of the age of the house; whole process took a day. My only caveat—and I’m not a builder—would be with any firestops in your walls, which would inhibit filling them completely. This wasn’t a problem for me, with good ol’ balloon-frame Victorian construction.

  233. make money says:

    I don’t see the big deal about Spitzer. All this does is prove he actually is not an angel.

    This is the worlds oldest profession. He paid good money for the service. He didn’t physically abuse the women. Whats sex got to do with being a governor? or an accountant? or a trader? or a RE broker/agent? If Clot paid $1,000 per hour for sex does that mean he’s not capable of being the financial professional that he is?

    Should his RE license be revoked? If he’s capabable of helping you buy a home and negotiate 50K cheaper would you not use him?

    He’s personal life and his wife is noone’s business. If NYS residents have a problem then they can vote him out.

    I think the US citizens need to get head out of their ass and look at the bigger problems at hand. He did an awesome job as a DA and is doing a decent job as a governor.

    leave him alone.

  234. Essex says:

    Spitzer is a dumbf*ck….buh bye. Not partisan here…Clinton was also a moron…that’s why his wife will never win the big office.

  235. Essex says:

    P.S. We aren’t paying these guys to have mistresses and wh*res. They are public servants and need to have some standards. Screw Spitzer. One mistake is one thing, but the guy is deep into it.

  236. grim says:

    All hail the BFTC (Barney Frank Trust Corp).

    Rep. Frank seeks $10 billion to buy foreclosed properties

    A top House lawmaker will introduce legislation soon to address the jump in foreclosures. Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said Tuesday his bill would provide $10 billion to state and local governments to buy foreclosed properties to prevent neighborhood blight. The bill would also strongly urge lenders to recognize their losses from sour mortgages and would extend federal refinancing efforts. Frank’s bill would compete with many other proposals being floated on Capitol Hill to address the housing meltdown.

  237. skep-tic says:


    Mary Ann looks pretty good for someone who’s almost 70.

  238. skep-tic says:


    if the gov’t is going to start buying up houses, you know there are going to be some sweet deals when they resell them.

  239. make money says:

    at a $,1000 per hour I think he’s the victim!!!!

  240. Mitchell says:

    #240 she kept well

    I remember seeing Jeanie from I dream of Jeanie and wow.

    Raquel Welsh I think got better with age.

  241. grim says:

    if the gov’t is going to start buying up houses, you know there are going to be some sweet deals when they resell them.

    Just like last time?

  242. Wag says:

    Grim (239) – Number seem ‘low’ to anyone else. If you gonna go, go big Barney…

  243. make money says:

    10 billion is like a drop in the water. it’s $5,000 per house for the 2 million foreclosures out there today.

    This and everything else on the hill is a joke. .

  244. grim says:

    RTC faces $1 billion tidal wave of Southland sales – Resolution Trust Corp
    LA Business Journal
    October 5th, 1992

    In one of the largest selling waves since the savings and loan crisis began, the Resolution Trust Corp. plans to auction off more than $1 billion worth of non-performing loans and foreclosed real estate which were held by failed Southern California savings and loans, including HomeFed Inc.

    HomeFed sold $600 million worth of foreclosed-on real estate, which is commonly called Real Estate Owned (REO), last month and plans to auction off another $150 million of its REO portfolio next month.

    In addition, a West Los Angeles-based auction firm plans to sell real estate assets with a book value of $700 million of 35 failed California institutions in sealed bid auctions in November and December.

  245. grim says:

    S. & L. Crisis Muddies Market Outlook
    New York Times
    November 18th, 1990

    THE fallout of the savings and loan bailout, only beginning to be felt in the housing markets of New York, New Jersey and Connecticut, will become more evident next year as Federal regulators hasten their efforts to sell single-family homes, co-ops and condominiums that have been seized from failed lending institutions.

    Some New York area analysts fear that the number of properties inventoried and slated for sale by the Federal government so far may just be the tip of the iceberg. Frederick J. Mehlman, head of the New York State Attorney General’s real estate finance bureau, which has been investigating widespread defaults by the sponsors of cooperative and condominium buildings, said he knew of 500 apartments that had already fallen under control of the Resolution Trust Corporation, although fewer than 20 have so far been offered for sale by the Federal agency.

    Any Government real estate sales in New York, New Jersey and Connecticut will take place in a market glutted by for-sale signs, in part because dozens of thrifts and commercial banks that remain solvent are themselves trying to sell off foreclosed properties.

    Although no precise count is available, bankers and real estate executives say there are several hundred foreclosed homes on the market in each of the three states.

  246. Confused In NJ says:

    236. Make Money

    His plan to give Illegals Drivers Licenses, alone, should have been grounds for impeachment. And saying I’m sorry after one of them blows up a NY Landmark wouldn’t have cut it. He is both egotistical and stupid, Princeton & Harvard not withstanding. The American Indians in NYS must love this, he’s been hounding them into Poverty.

  247. Essex says:

    He’s Done confused. And I am sure that many liberals are completely at a loss for words on this one. I for one decided they ALL are corrupt a long time ago.

  248. scribe says:

    Make, #236

    Spitzer was a prosecutor who went after prostitution rings. World’s biggest hypocrite.

    LA Times is reporting he arranged prostitutes with this ring 7 to 8 times. Not a one-time slip-up.

    And a lot of his “prosecutions” were dubious and over the line. He relied more on bullying and the media to force settlements.
    When he actually had to litigate, his record wasn’t so great.

  249. Confused In NJ says:

    As Henry Kissinger once said, “Power is the ultimate aphrodisiac.” When people become “drunk with power,” they feel untouchable, unstoppable, and all-powerful. This experience is enhanced by the fact that others react more deferentially to those with power. But this does not go both ways.

    When it comes to relating to other people, powerful persons have proven themselves worse at judging others’ reactions than your average Joe. Research has further found them less able to accurately read others’ verbal and facial cues. They also tend to be oblivious to what others think, and more likely to misjudge the impression they’re making on others. With this, we can start to comprehend why the powerful aren’t too worried about what the rest of us think about anything, including their “quality” time with call girls.

    On one final note, another thing to consider is that people who are naturally selfish become even more so with power. Power changes people. This is why many inevitably fall from grace.

  250. Rich In NNJ says:

    From MarketWatch

    Fed action may have targeted Bear Stearns
    Higher borrowing costs may dent prime brokerage, advisory businesses

    “This morning’s announcement by the Fed helps the brokers and their fixed-income hedge fund clients who were struggling with funding,” Brad Hintz, an analyst at Bernstein Research, wrote in a note to investors.

    The Fed’s move may help Bear in particular, according to Dick Bove, an analyst at Punk Ziegel & Co.
    Bear’s stock dropped 11% on Monday on concern that its borrowing costs are rising. For a brokerage firm, which relies on steady access to financing, such disruptions can restrain its businesses and leave it at a disadvantage to financially stronger rivals.

    “The Federal Reserve’s actions today may have been strongly influenced by Bear Stearns’ problem,” Bove wrote in a note to clients.

    Following the central bank’s efforts, Bear shares climbed 1.5% to $63.28 during afternoon trading on Tuesday. Gains by several other financial-services stocks were even more dramatic.

    Bear built a business focused on originating mortgages and re-packaging them into mortgage-backed securities and collateralized debt obligations, reaping profits from the whole real-estate financing process, Bove explained.

    But when the subprime-fueled mortgage crisis hit last year, “Bear did not get out of the way fast enough,” the analyst wrote. “Consequently, its balance sheet, its business operations, and its reputation were all hurt badly. One key result of this is that the firm’s borrowing costs rose sharply according to reports.”

  251. njpatient says:

    I missed this – White House press secretary Perino on Friday:
    MS. PERINO: “Wendell, I’m under strict instructions, and have been from the beginning, to not talk about the dollar, and I’m not going to get fired to satisfy your question.”

  252. njpatient says:

    comments lost in the ether?

  253. njpatient says:

    MS. PERINO: “Wendell, I’m under strict instructions, and have been from the beginning, to not talk about the dollar, and I’m not going to get fired to satisfy your question.”

  254. rhymingrealtor says:


    I agree Maryanne looks good for almost 69, I’m thinking maybe I’ll try it. It can’t hurt!


  255. njpatient says:

    …eerie silence…

  256. victorian says:

    #257 –
    LOL! its been a bad day for the bears.
    Looks there a few bad days ahead before its bear time again. The Fed has thrown a slider.

  257. njpatient says:

    I dunno, victorian. I’d give it one more up day at most, before we start circling the drain yet again.

  258. kettle1 says:

    3 AM Call…
    The phone rings. Hillary Rodham Clinton picks it up.


    “Hillary, it’s Silda Wall Spitzer. Sorry to call so late. Eliot’s still not home. Based on your experience, what should I do?”

  259. victorian says:

    adding to the active vs passive investment debate – interesting points on interfluidity:

    “Sure, active investors as a class must earn less than passive investors as a class, if passive investors make the same investments in aggregate and pay lower fees. But it does not the follow that active investors, as a class, would have done better had they been passive investors. Why not? Because investors as a whole, including passive investors, would have earned poorer returns without smart active investors setting market prices. If active investors, as a class, accepted the logic that investment expenditures are just costs, all would become passive investors, and the composition of the aggregate portfolio would reflect nothing but noise. My conjecture is that this would impact long-term returns, adversely.

    So active investors, as a class, do better than they otherwise would have by bearing the high cost of active investment, even though in doing so they must endure the indignity of being outperformed on average by those who free-ride off their work! It is perverse, under these circumstances, to accuse active investors of squandering $100B, and recommend that we all move to index funds. On the contrary, it is passive investors who ought be discouraged. Passive investors pay none of the costs of generating good investment decisions, but enjoy the benefits by free-riding on the work of others. Their copycatting reduces compensation to those who have earned returns by performing or underwriting informational work. Passive investing also introduces feedback effects and noise into asset prices, rendering the work of active investors more costly and less effective. (See, e.g. information cascades — ht Mark Thoma — and this interesting model of bubbles and crashes — ht jck of Alea — for ways that copying others’ investment decisions as reflected in price moves can lead to instability and error in markets.)

    The world of money management is full of shysters and charlatans who’ll take “active investment” fees and do nothing useful with them, sure. But part of that headline $100B “cost” funds real information work, without which markets would devolve entirely to lotteries. Advising people to buy index funds rather than select investments is akin to advising people not to vote, since the cost of voting far exceeds any individual benefit. Those who don’t vote get the same government everyone else does, but at lower cost! A citizenry that takes this reasoning to its logical extreme will get the government it deserves. An investor class that flocks to index funds may soon have the stock market it deserves.”

    More at – http://www.interfluidity.com/posts/1205101710.shtml

  260. kettle1 says:

    Derivatives the new ‘ticking bomb’
    Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen

    ARROYO GRANDE, Calif. (MarketWatch) — “Charlie and I believe Berkshire should be a fortress of financial strength” wrote Warren Buffett. That was five years before the subprime-credit meltdown.
    “We try to be alert to any sort of mega-catastrophe risk, and that posture may make us unduly appreciative about the burgeoning quantities of long-term derivatives contracts and the massive amount of uncollateralized receivables that are growing alongside. In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

    That warning was in Buffett’s 2002 letter to Berkshire shareholders. He saw a future that many others chose to ignore. The Iraq war build-up was at a fever-pitch. The imagery of WMDs and a mushroom cloud fresh in his mind.
    Also fresh on Buffett’s mind: His acquisition of General Re four years earlier, about the time the Long-Term Capital Management hedge fund almost killed the global monetary system. How? This is crucial: LTCM nearly killed the system with a relatively small $5 billion trading loss. Peanuts compared with the hundreds of billions of dollars of subprime-credit write-offs now making Wall Street’s big shots look like amateurs.
    Buffett tried to sell off Gen Re’s derivatives group. No buyers. Unwinding it was costly, but led to his warning that derivatives are a “financial weapon of mass destruction.” That was 2002.
    Derivatives bubble explodes five times bigger in five years
    Wall Street didn’t listen to Buffett. Derivatives grew into a massive bubble, from about $100 trillion to $516 trillion by 2007. The new derivatives bubble was fueled by five key economic and political trends:

    Sarbanes-Oxley increased corporate disclosures and government oversight
    Federal Reserve’s cheap money policies created the subprime-housing boom
    War budgets burdened the U.S. Treasury and future entitlements programs
    Trade deficits with China and others destroyed the value of the U.S. dollar
    Oil and commodity rich nations demanding equity payments rather than debt

    In short, despite Buffett’s clear warnings, a massive new derivatives bubble is driving the domestic and global economies, a bubble that continues growing today parallel with the subprime-credit meltdown triggering a bear-recession.
    Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world’s clearinghouse for central banks in Basel, Switzerland. The BIS is like the cashier’s window at a racetrack or casino, where you’d place a bet or cash in chips, except on a massive scale: BIS is where the U.S. settles trade imbalances with Saudi Arabia for all that oil we guzzle and gives China IOUs for the tainted drugs and lead-based toys we buy.
    To grasp how significant this five-fold bubble increase is, let’s put that $516 trillion in the context of some other domestic and international monetary data:

    U.S. annual gross domestic product is about $15 trillion
    U.S. money supply is also about $15 trillion
    Current proposed U.S. federal budget is $3 trillion
    U.S. government’s maximum legal debt is $9 trillion
    U.S. mutual fund companies manage about $12 trillion
    World’s GDPs for all nations is approximately $50 trillion
    Unfunded Social Security and Medicare benefits $50 trillion to $65 trillion
    Total value of the world’s real estate is estimated at about $75 trillion
    Total value of world’s stock and bond markets is more than $100 trillion
    BIS valuation of world’s derivatives back in 2002 was about $100 trillion
    BIS 2007 valuation of the world’s derivatives is now a whopping $516 trillion

    Moreover, the folks at BIS tell me their estimate of $516 trillion only includes “transactions in which a major private dealer (bank) is involved on at least one side of the transaction,” but doesn’t include private deals between two “non-reporting entities.” They did, however, add that their reporting central banks estimate that the coverage of the survey is around 95% on average.
    Also, keep in mind that while the $516 trillion “notional” value (maximum in case of a meltdown) of the deals is a good measure of the market’s size, the 2007 BIS study notes that the $11 trillion “gross market values provides a more accurate measure of the scale of financial risk transfer taking place in derivatives markets.”
    Bubbles, domino effects and the ‘bad 2%’
    However, while that may be true as far as the parties to an individual deal, there are broader risks to the world’s economies. Remember back in 1998 when LTCM’s little $5 billion loss nearly brought down the world’s banking system. That “domino effect” is now repeating many times over, straining the world’s monetary, economic and political system as the subprime housing mess metastasizes, taking the U.S. stock market and the world economy down with it.
    This cascading “domino effect” was brilliantly described in “The $300 Trillion Time Bomb: If Buffett can’t figure out derivatives, can anybody?” published early last year in Portfolio magazine, a couple months before the subprime meltdown. Columnist Jesse Eisinger’s $300 trillion figure came from an earlier study of the derivatives market as it was growing from $100 trillion to $516 trillion over five years. Eisinger concluded:
    “There’s nothing intrinsically scary about derivatives, except when the bad 2% blow up.” Unfortunately, that “bad 2%” did blow up a few months afterwards, even as Bernanke and Paulson were assuring America that the subprime mess was “contained.”
    Bottom line: Little things leverage a heck of a big wallop. It only takes a little spark from a “bad 2% deal” to ignite this $516 trillion weapon of mass destruction. Think of this entire unregulated derivatives market like an unsecured, unpredictable nuclear bomb in a Pakistan stockpile. It’s only a matter of time.
    World’s newest and biggest ‘black market’
    The fact is, derivatives have become the world’s biggest “black market,” exceeding the illicit traffic in stuff like arms, drugs, alcohol, gambling, cigarettes, stolen art and pirated movies. Why? Because like all black markets, derivatives are a perfect way of getting rich while avoiding taxes and government regulations. And in today’s slowdown, plus a volatile global market, Wall Street knows derivatives remain a lucrative business.
    Recently Pimco’s bond fund king Bill Gross said “What we are witnessing is essentially the breakdown of our modern-day banking system, a complex of leveraged lending so hard to understand that Federal Reserve Chairman Ben Bernanke required a face-to-face refresher course from hedge fund managers in mid-August.” In short, not only Warren Buffett, but Bond King Bill Gross, our Fed Chairman Ben Bernanke, the Treasury Secretary Henry Paulson and the rest of America’s leaders can’t “figure out” the world’s $516 trillion derivatives.
    Why? Gross says we are creating a new “shadow banking system.” Derivatives are now not just risk management tools. As Gross and others see it, the real problem is that derivatives are now a new way of creating money outside the normal central bank liquidity rules. How? Because they’re private contracts between two companies or institutions.
    BIS is primarily a records-keeper, a toothless tiger that merely collects data giving a legitimacy and false sense of security to this chaotic “shadow banking system” that has become the world’s biggest “black market.”
    That’s crucial, folks. Why? Because central banks require reserves like stock brokers require margins, something backing up the transaction. Derivatives don’t. They’re not “real money.” They’re paper promises closer to “Monopoly” money than real U.S. dollars.
    And it takes place outside normal business channels, out there in the “free market.” That’s the wonderful world of derivatives, and it’s creating a massive bubble that could soon implode.
    Comments? Yes, we want to hear your thoughts. Tell us what you think about derivatives: as “financial weapons of mass destruction;” as a “shadow banking system;” as a “black market;” as the next big bubble dangerously exposing us to that unpredictable “bad 2%.

  261. profuscious says:

    #260 Kettle


    #261 Victorian

    this is pure sophistry

    “Advising people to buy index funds rather than select investments is akin to advising people not to vote, since the cost of voting far exceeds any individual benefit. Those who don’t vote get the same government everyone else does, but at lower cost!”

  262. kettle1 says:


    tht wasnt mine, found it on the web

  263. victorian says:

    Another one from the web:

    The Vatican has proposed to bless the FED’s collateral paper with a triple cross.

  264. njpatient says:

    264 pro
    Yes – it is. I got that precise lecture from an economics prof at Wharton.
    In the category of “knowledge that is worthless despite being true.”

  265. Clotpoll says:

    vic (265)-

    “The Vatican has proposed to bless the FED’s collateral paper with a triple cross.”

    Even though one could argue all that shaky paper represents the ultimate double-cross.

  266. chicagofinance says:

    vic: interesting discussion….BTW the French study on the face seems to be more a quantification of friction costs (such short cuts are woefully inadequate and full of holes). He should stick to collaborating with Fama or be doomed to mediocrity.

  267. victorian says:

    #268 – chi:

    I did not understand anything after “interesting discussion” :). Please excuse my ignorance, would you mind elaborating or point me towards more resources?

    Guys, I was a financial ignoramus (still am, but not totally clueless) before i started reading this blog and the comments.
    Chi, 3B, Stu, Clot, Patient – am deeply indebted.
    Clot – am a fan!!

  268. galgon says:

    My wife and I went out for our first look at open houses this weekend. Of the 6 houses we went to 3 were vacant. Sign in sheets had no more than 4 people on them.

    This one we went to just before 4pm. We were the only people to show up all day. The house is the size of a trailer with 10 feet on either side before you hit another trailer size home. The driveway for the house runs right in front of the neighbors front door Price JUST REDUCED from 280000 to 260000. The agent made it extremely clear that they were considering all offers. Top it off with 5500 in taxes. There is another open house this weekend for anyone who loves dark purple carpet. DOM 132.

    Another gem we went to was this:
    JUST REDUCED to 379000 from 399000. Nothing in this house has been updated in 30 years including the paint. Most likely an estate sale but the realtor did not know off hand.
    DOM 233.

  269. Steve says:

    Back on the ARS desk today (hopefully that’s it); I heard there were huge cheers on the floor yesterday as news broke.

    No question he f—ed up, should and will be taken to task for the pathetic lapse in judgement and hypocrisy.

    But, I also feel like the Street deserved plenty of what they got last go-round, and the SEC didn’t so much as lift their little finger to challenge the criminals in the bulge bracket white-shoe establishment.

    No regulators minding the store again, and go figure, 5 years later we have another- much bigger – mess on our hands.

Comments are closed.