From the NY Times:

Lowball Offers on the Rise
Published: March 16, 2008

WHAT image does the term “lowballer” conjure up for you? A smirking bottom feeder in a bad suit? A fast-talking investor working the phone?

How about a couple of young newlyweds who have saved their wedding cash to put toward their first home?

James and Valentina Sbarra fit the last description, and they are relieved to be able to call themselves successful lowballers. Any nervousness they felt in making a stingy offer — lowballing is typically defined as offering less than 90 percent of a house’s asking price — fell away the minute they struck a deal on their two-bedroom raised ranch in Pawling, N.Y., in Dutchess County.

“We kind of took a gamble,” said Mr. Sbarra, a bank manager in Mount Kisco, N.Y. “But it worked out for us.”

Throughout the region, buyers of all stripes are feeling similarly empowered to bid low and keep their hopes high. The practice still fails more often than not, in that buyers are unlikely to get themselves a steal. But many sellers are swallowing hard and negotiating, because lowballing has become so common that, for better or worse, it’s part of the new norm in buying or selling a house.

The Sbarras gambled by offering $287,000 for their house, which was listed at a reasonable $329,000. In doing so, they risked angering the owner and ruining their prospects for negotiation.

“I think it’s worth $320, $325, and I gave them my opinion,” said Peter Bell, an owner of Balch Buyer’s Realty in Mamaroneck, N.Y., an agency that represents only buyers. “But they said, ‘We don’t want to go too high.’ So I said, ‘O.K., let me make the offer as strong as I can, and we’ll hope for the best.’ ”

Much to Mr. Bell’s delight, the owner responded with a counteroffer of $315,000, and the parties went back and forth until settling on a price of $300,000, the amount the Sbarras had set as their cutoff. The couple moved in last month.

“We would have been disappointed if it hadn’t worked out,” Mr. Sbarra said. “But it was a situation where we felt buyers had the upper hand.”

Tami Rapaport, a sales associate in the Tenafly, N.J., office of Coldwell Banker Residential, finds the same thing happening in Bergen County. “People are coming in with offers even 20 percent under,” she said. “People have no shame.”

To be sure, there is an aspect of lowballing that seeks to take advantage of other people’s desperation or misfortune. Some lowball bids are plain outlandish, never mind insulting.

Yet in a difficult real estate market like this one, advocates of the lowball approach say that, practiced respectfully and within the bounds of reason, it can also serve as a necessary reality check on overpriced properties. If some agents are reluctant to push stubborn sellers to lower their prices out of fear of losing the listing, a few disappointingly low offers will communicate the market’s message in the bluntest terms.

James Bednar has been tracking New Jersey lowballers on his blog, New Jersey Real Estate Report (available at njrereport.com) since mid-2006. Inspired by his own frustrations as a buyer, Mr. Bednar said he wanted to test the conventional wisdom that lowballing “was a waste of time — that it was futile to even attempt it.”

So, after obtaining a real estate license, which gives him access to multiple listing service data, he began periodically posting lists of sales with gaps of 10 percent or more between the original list price and the selling price.

At first, the conventional wisdom held up — only a tiny percentage of sales reflected accepted lowball offers. But as the market began to slide, the discounts deepened. His last “Lowball!” report, in January, used a 25 percent discount as the starting point, and he still turned up 55 sales in the previous month.

A real estate agent now himself, Mr. Bednar sees no shame in making a low offer on a property clearly priced well above the market. While even 5 percent below the asking price might be considered an unfair lowball on a reasonably priced home, on a property priced “horribly high,” he said, “20 percent might be just scratching the surface.”

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263 Responses to Lowball!

  1. grim says:

    From the Allentown Morning Call:

    The fine art of setting a price

    At the end of December, Lenny and Linda Mankowski listed their four-bedroom 2,700-square-foot stone and stucco home in Bushkill Township for $439,900 with Assist-2-Sell Realty in Bath.

    They had a small number of showings, but no offers.

    A little more than a month later, they lowered their price to $429,900, hoping to attract more potential buyers.

    ”We thought reducing it down a little would help us find a buyer faster,” Lenny says.

    The Mankowskis are discovering what a lot of sellers are: Like the market itself, the rules for pricing are changing.

    Some sellers are having a hard time accepting that it is a buyer’s market given that only a few years ago — perhaps even when they bought — buyers were outbidding one another for the most desirable properties and most homes were selling within a few weeks, if not days, of their listing.

    ”Sellers must know what is going on but are having a hard time letting go of their price,” Graff says.

    Evanko also finds that ”many homeowners are still living in the past and still thinking that the good old days are here and want to start at a higher price.”

    Real estate agents say that strategy may not hurt, but listings tend to generate the most activity when they are new, and sellers could be taking a risk by pricing too high, particularly in this market.

    If sellers start on the high side, they will know almost immediately whether they have made the right choice, Evanko says. ”If they’re not getting showings or offers, it will be obvious pretty quickly.”

    His rule-of-thumb is to price the home so that it will attract at least 15 potential buyers, Evanko says. ”Our goal is get 15 people,” he says. ”If you can get 15 people through a house, then we can generally get an offer on that property.”

    Flemming says that in today’s market, thanks to the Internet and home shows on television, buyers seem to have a pretty good idea of what a home is worth and what they would be willing to pay.

  2. grim says:

    From the Washington Post:

    N.Y. action to let the air out of inflated appraisals

    You’ve heard the charges: Real estate price declines under way around the country are partly the result of systemic over-valuations of homes — much at the behest of loan officers illegally influencing or threatening appraisers to “hit the number” needed to close the deal.

    But if an extraordinary legal settlement has its intended effect, that system will change radically. Some details:

    *Most lenders won’t be able to fund mortgages without guaranteeing that the underlying property valuations are free of influence or pressure and fully conform to a new national code for appraisals.

    *Appraisers and consumers will have complaint hot lines to report prohibited forms of interference by loan officers, realty agents and others.

    *Lenders with in-house appraisal staffs or financial interests in appraisal-management companies won’t be allowed to use valuations generated by them if they want to sell loans into the secondary mortgage market.

    *Mortgage brokers, who originate 50 to 60 percent of home loans, will be cut out of the appraiser selection process.

    *National oversight of home appraisals will be turned over to a new Independent Valuation Protection Institute that will monitor appraisals and automated valuations, receive and mediate complaints or forward them to federal and state regulators.

    These and other changes are in a settlement among the two congressionally chartered mortgage investors — Fannie Mae and Freddie Mac — the attorney general of New York, and the federal agency that oversees Fannie and Freddie.

  3. grim says:

    From the Ct. Record Journal:

    Conn. no longer dodges housing sag

    Buyers are holding out for lower prices, and sellers have to be realistic about prices – or wait, Barberino and other real estate professionals said.

    Buyers know housing prices haven’t hit rock bottom yet, but the days of Connecticut bucking the national housing market seem to have ended.

    Last week, financial tracker the Warren Group reported that January home prices statewide dropped by the largest percentage in 13 years. It also reported that the sales drop is the biggest in almost 20 years.

    “After a year of median prices that continued to creep up despite sales that were declining,” Connecticut’s housing market in January fell more in line with those in neighboring states,” Timothy Warren Jr. chief executive officer of the Warren Group, stated in a press release.

    Last fall, houses were staying on the market longer but the prices weren’t dropping. That has changed. For every 10 houses, there are only a few qualified buyers. Fairfield County has seen a significant decrease in sales and prices. It is also seeing a spike in foreclosures, meaning the national housing slowdown has impacted wealthy communities.

  4. grim says:

    From the Record:

    No end in sight for state debt

    New Jersey residents could face higher local taxes and smaller property tax rebates because the state needs more money to pay down debt, but that doesn’t mean Trenton lawmakers are ready to stop borrowing.

    Nearly $4 billion in new borrowing is being planned, and that amount doesn’t address the problem that will be created in 2011 when the state’s Transportation Trust Fund runs out of money.

    Governor Corzine is putting aside his unpopular plan to tackle the state’s heavy debt – a plan that relied on massive highway toll increases – so he can push the state’s latest budget. But he isn’t giving up on the goal.

    “To not deal with the debt is putting your head in the sand,” Corzine said at a recent meeting with The Record’s editorial board.

  5. grim says:

    Glen Rock Comp Killer

    6 Garvey Place, Glen Rock NJ

    Purchased: 6/17/2004
    Purchase Price: $520,000

    MLS# 2801414

    Sold: 3/14/2008
    Sale Price: $495,000
    REO – Deutsche Bank

  6. grim says:

    Maplewood Comp Killer

    368 Elmwood Ave, Maplewood NJ

    Purchased: 11/29/2006
    Purchase Price: $600,000

    MLS# 2418492

    Sold: 3/14/2008
    Sale Price: $580,000

  7. grim says:

    Lincoln Park Comp Killer,

    6 Robertson Way, Lincoln Park NJ

    Purchased: 7/13/2005
    Purchase Price: $317,000

    MLS# 2472404

    Sold: 3/14/2008
    Sale Price: $314,000

  8. grim says:

    Mount Olive Comp Killer

    3 Harwich Road, Flanders NJ

    Purchased: 2/9/2006
    Purchase Price: $395,000

    MLS# 2469313

    Sold: 3/13/2008
    Sale Price: $357,000

  9. grim says:

    Super West Milford Comp Killer

    14 Wenonah Court, West Milford NJ

    Purchased: 9/9/2005
    Purchase Price: $468,000

    MLS# 2459520

    Sold: 3/12/2008
    Sale Price: $300,000
    REO – DLJ Mortgage Capital

    Note: Also a nice Lowball! Last asking price from the bank was $369,900, so the accepted offer was 20% under last asking price. Who said you can’t lowball a bank?

  10. grim says:

    Bedminster Comp Killer

    37 High Pond Lane, Bedminster NJ

    Purchased: 5/31/2005
    Purchase Price: $409,000

    MLS# 2451994

    Sold: 2/29/2008 (late status change)
    Sale Price: $360,000

  11. grim says:

    Another Bedminster Comp Killer (2 for 2)

    7 Stone Edge Road, Bedminster NJ

    Purchased: 1/14/2005
    Purchase Price: $492,000

    MLS# 2472778

    Sold: 3/14/2008
    Sale Price: $480,000

  12. grim says:

    Bedminster townhomes look to be getting hit pretty hard.

    Two others went under contract, likely under purchase price.

    3 Mallard, purchased for $415,000 in 2005 went under contract with an asking price of $389,000. 44 Bentley was purchased for $261,000 in 2003, went under contract with an asking price of $269,000. I’ve got no reason to doubt that both will sell for under last asking.

  13. grim says:

    Here is a soon-to-be comp killer from Clifton.

    261 Riverwalk Way, Clifton NJ

    Purchased: 7/18/2006
    Purchase Price: $435,000

    MLS# 2473875

    Went under contract with an asking price of $419,000.

  14. grim says:

    Monster price cut in Essex Fells:

    32 Rensselaer Road, Essex Fells NJ

    Purchased: 7/26/2004
    Purchase Price: $1,800,000

    MLS# 2421427 (relist)
    Original List Price: $1,975,000
    Current Asking: $1,350,000
    Cumulative DOM: 496

  15. grim says:

    This must be a mortgage fraud or predatory lending case, I can’t believe it. This takes “short sale” to depths I’ve never before seen.

    15 Marie Place, Maplewood NJ

    Purchased: 11/22/2006
    Purchase Price: $535,000

    MLS# 2477228

    Current Asking: $229,190$299,190
    (Short Sale)

  16. grim says:

    Mendham soon-to-be comp killer

    5 Michael Road, Mendham (Brookside) NJ

    Purchased: 2/13/2006
    Purchase Price: $1,640,000

    MLS# 2484231

    Current Asking: $1,575,000

  17. cooper says:

    Grim #9: “Last asking price from the bank was $369,900, so the accepted offer was 20% under last asking price. Who said you can’t lowball a bank?” word on the street is (i took a short sale seminar) the loss mitigation dept at the bank will actually take 25%-35% off the amount owed on the property. Breakdown: regardless of the value of the property the bank will accept 1/3 less the mortgaged amount. Talk about a deal…

  18. Frank says:

    These low balls are still high balls, the tsunami from the West is coming East, you’ll see 50% off low balls like the one on 15 Marie Place, Maplewood NJ. This is not mortgage fraud, it’s just banks unloading their inventory. We see 50%+ off the 2006 appraisal everywhere in the West, it’s coming East. Take cover.

  19. Frank says:

    Any current Bear Sterns employees willing to sell their Hoboken condos are low ball prices let me know. Also I have jobs cutting grass, cleaning pool and the house.
    Mexicans at the 7Eleven are always looking for English speaking buddies to hand with.

  20. victorian says:

    “Flemming says that in today’s market, thanks to the Internet and home shows on television, buyers seem to have a pretty good idea of what a home is worth and what they would be willing to pay.”

    The key difference between all previous housing busts and this one is the Internet. The availability of information to buyers is unparalleled in history. If not for the internet and this amazing blog, I would have bought a house few months ago.
    This makes me think that the bottom for this market will be reached sooner than the last one, because buyers will force the sellers to drag their prices down much faster by performing a comp analysis on their own and staying away from overpriced houses.
    But, what is the fair price for a house now, knowing that house appreciation will follow the historic pattern(~1 % above inflation(?). Do we just calculate the 2000 price + 5% increase/per year?

  21. victorian says:

    #19 – Frank, not cool man.
    It is probably not the fault of the majority of the employees that they are in this situation. It is the million dollar bonus men at the top who leveraged the sH!t out of their holdings who should be working in the 7Elevens.
    I feel bad for the lower rungs of workers.

  22. grim says:


    Many here were under that same impression when the market peaked in 2005. While the assumption does seem plausable, it just hasn’t played out. While the dissemination of information might be faster during this cycle, it isn’t manifesting itself in the cycle playing out any quicker than the previous real estate crashes have.

    Those who were predicting a quick, steep decline were partially basing those predictions on this theory. Those who did were much too early, myself included.

  23. cooper says:

    #20 Victorian, I spoke to a 20 yr vet RE agent who made the very same viable point, everyones an expert today thanks to the internet. But how do we reach a bottom if the fed keeps pumping in money which validates the sellers unreasonably priced homes?

  24. Essex says:

    19…..Frank’s too dumb to even spell the firm’s name correctly- Typical dooshbag.

  25. MT says:

    Asking price 299,190? not 229,190?

  26. spam spam bacon spam says:


    I disagree about the rapid decline.

    Rose colored glasses and all that…

    Buyers see crappy tile, god-awful wallpaper, etc.

    Sellers see “I paid a lot for that tile job”, and “I spent weeks searching for my perfect wallpaper pattern..”

    I’m watching about 30 properties. Only *3* have dropped their prices in the last 3 months (yes, MONTHS) and only ONE has dropped more than a cursory 10K.

    Getting real is hard to do.

  27. grim says:


    Corrected, thanks.

  28. Orion says:

    Didn’t GS say a few weeks ago they had no writedowns?

    From Bloomberg:

    Goldman Sachs Poised to Write Down $3 Billion, Telegraph Says

    By Sarah Jones

    March 16 (Bloomberg) — Goldman Sachs Group Inc. will announce asset writedowns of about $3 billion this week, partly based on the declining value of its stake in Industrial & Commercial Bank of China Ltd., the Sunday Telegraph said, without citing anyone.

    The investment bank may report a decline in first-quarter earnings of about 50 percent, the newspaper said.

    Goldman will write down about $1.6 billion from its leveraged loans business and a further $1.1 billion from assets owned by the bank’s private equity arm, the Sunday Telegraph said.

    Shares of ICBC, which is held separately on Goldman’s balance sheet, have fallen by 12 percent in Hong Kong so far this year. Its stock also trades in Shanghai.

    Paul Kafka, a spokesman for Goldman Sachs in London, declined to comment when contacted by Bloomberg News.

    To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

    Last Updated: March 16, 2008 08:59 EDT

  29. All Hype says:

    Tami Rapaport, a sales associate in the Tenafly, N.J., office of Coldwell Banker Residential, finds the same thing happening in Bergen County. “People are coming in with offers even 20 percent under,” she said. “People have no shame.”

    Boo hoo lady, welcome to the new reality of real estate. You had no shame riding this wave all the way to the top and now that the pozi scheme is over, now you see the shame. What is POS you are.!!!

  30. Essex says:

    “people have no shame”

    I want that on a bumper sticker.

  31. lisoosh says:

    Remind me not to use Tami Rapoport as a buyers agent.

    Then again, maybe we should send her out for the day looking at cr@pshacks with Gary. LOVE to be a fly on the wall for that.

  32. grim says:

    Sellers listing homes at 20% over market price? Some people have no shame.

  33. spam spam bacon spam says:


    A friend with an alcoholic husband and HS dropout son went to several “flipping” seminars about 5-6 years ago.

    They came away enthused and promptly purchased (for no money down) 2 row homes in Phillipsburg (white man’s Newark) and proceeded to try to “rehab” them. The rehabs were coming along, albeit with several surprise! problems, like roofs, foundations, etc.

    I got updates along the way and although I, of course, wished her continued good luck, I have to admit I was jealous, as I had ZERO clue that these were purchased with NMD. Making my measly mortgage was work enough for me, I thought…It sure must be nice to have all that extra cash to throw around. Must be how the Donald got his start, I mused…

    Anyway, about the same time she started this new endeavor, a house came on the market. Now, I passed this house every week and had watched the house go from a “owned by an old person house in really poor condition” to a “house owned by ‘now dead’ old person’s kids who slapped up some paint and jammed a for sale sign in the weedy front lawn. The house was listed for about 700K.

    About 4 months into her new endeavor, my friend decided to abandon the rehab/flip idea and buy this CHERRY of a house. She “lowballed” it and got it (It sat 4 months in a white hot market) for about 650K.

    She told me “I got my million dollar home in one purchase, instead of having to get bit by bit by flipping”.

    That’s not the end of the story. OH NO.

    Another property came on the market about 2 years ago, just up the road. This too, was a total piece of crap that I wouldn’t entertain the idea of buying. Let’s just say knotty pine cabinets and kitchen has no windows because it is in the garage. Asking price? 460K. (People have no shame…)

    So along comes my friend and decides to buy IT to house her dropout son and 2 friends.

    She gets a HELOC on house #1 and tells me: “I was anxious, but then the mortgage company called today and said my house is worth EXACTLY 460K more than I owe on it, so I’m getting the loan!

    Closing #2.


  34. All Hype says:

    Poor Tami Rapaport never saw this coming. Wait till 2009 when the low balls hit 30-40%. She may need a shrink to get her thru the rough times. She may lose her job and actually have to do real work.

    A salty tear is running dowm my cheek just thinking about her situation….

  35. Ed Sanders says:

    This is too good:


    People’s ability to delude themselves is absolutely stunning, and apparently there are plenty of newspaper reporters who will help them in the effort.

    It, of course, ends with the line, “It’s a great time to buy, I don’t know how much longer it will last.”

  36. dinra says:

    MLS#: 2455507 in Mt. Olive

    bought (2006) for 536,000 approx

    LP ( around 6 months ago) : 489,000 approx

    LP ( around 2 months ago) : 449,000 approx

    buyers still waiting to hit 300,000 :-)

  37. bi says:

    to my surprice, the listings in central jersey haven’t increased dramatically after super bowl. for example, east brunswick has 445 and south brunswick has 308 listings in realtor.com, which is almost the same as last year.

  38. Frank says:

    Inventory in NJ up by a 1300 units this week, RE agents are working hard on listing them but not selling them. Hoboken is leading the way with 36 new listings. It looks like Wall St. layoffs are starting to take toll on NJ RE market. Sell while you can or you can forget those 2007 prices.

  39. Frank says:

    Inventory in NJ is up by 10% since the Super Bowl. That’s 8000 homes. That’s a lot homes.

  40. Laurie says:

    I read the lowball story yesterday with interest. I, too, say “what about the greedy owners who can’t see that even after their home sits on the market for a year they still only lower the price 10 k …that house is 100k over what it’s worth!!! Why can’t real estate agents get their clients to be more reasonable?? Yes, they want the listing but a listing that doesn’t sell sends just as bad a message about the agent as it does the house…I am talking about a particular home in my neighborhood that is sitting for a year now with the same agent, a few minor price changes and NO offers or even looks anymore. When it came on for 970k I couldn’t believe it and I guess no one else could either. The owners are origianl owners and the house looks like it…they probably bought for 120k and now they are all the way down to…900k…40 year old house, bad floor plan, no updates, shows badly…too crowded and cluttered…YIKES

  41. grim says:

    Oh well, it was nice being #1 while it lasted.

    From Reuters:

    Weak dollar costs U.S. economy its No. 1 spot

    The U.S. economy lost the title of “world’s biggest” to the euro zone this week as the value of the dollar slumped in currency markets.

    Taking the gross domestic product of both economies in 2007, the combined GDP of the 15 countries which use the euro overtook that of the United States when the European currency surged to a record high of more than $1.56 per euro.

    “The curious outcome of breaching this latest milestone is that the size of the euro zone’s annual output has now exceeded that of the U.S.,” the economics department of Goldman Sachs, the Wall Street investment bank, said in a note to clients.

  42. Sean says:

    Watch the foreign markets respond tonight to the Bear news.

  43. victorian says:

    Are we in a recession??

    Went to the Jersey Gardens mall yesterday. Dont want to offend anybody, but it is fair to say that the clientèle primarily ranges from middle class to the lower middle classes.
    Now, these guys should be feeling the recession most. But there was no evidence of that – throngs and throngs of people buying stuff.
    The American Consumer juggernaut rolls on.

  44. grim says:

    From the Record:

    Meadowlands independence movement

    Mayor Dennis Elwell wants the Meadowlands Commission to let his town go — arguing the regulatory body has outlived much of its usefulness in a municipality where it has planning and zoning jurisdiction over 88 percent of the land.

    Elwell requested the state act immediately to remove Secaucus from the commission’s 14-town roster, and address what he sees as an outdated tax-sharing formula.

    “The residents of Secaucus no longer want their tax dollars going to an agency with a record of such poor oversight,” he wrote in a March 6 letter to Governor Corzine.

    Elwell cited as an example the recent findings of a Corzine-ordered investigation into mismanagement of the EnCap project — a plan to convert Meadowlands landfills into a golf course and thousands of units of housing.

  45. victorian says:

    Low Dollar is good news!

    From Krugman-

    But the US is an “open economy” — we do a lot of trade with the rest of the world — and there’s another important channel for monetary policy: low interest rates tend to cause a low dollar, which is good for net exports.In fact, the decline in the non-oil trade deficit is one of the few bright spots in the US economic picture. So the second panel in the graphic doesn’t show a failure of policy — it shows the one area in which monetary policy is working! In fact, if a weak dollar wasn’t helping net exports, we’d be in much worse shape than we are.

    More at – http://krugman.blogs.nytimes.com/2008/03/15/good-news-on-the-dollar/

  46. NJGator says:

    Virtues of the Short Sale
    Joyce Dopkeen/The New York Times
    SIGN OF THE TIMES Although Westchester’s foreclosure numbers are relatively low, they are rising, following a national trend. Mortgage defaults in places like Miami have contributed to record-high numbers, the Mortgage Bankers Association says.

    Published: March 16, 2008
    IS it possible for a homeowner who owes $725,000 on a mortgage to sell a house for only $560,000 and still walk away happy, or at least relieved? The answer is yes, if the transaction is a short sale — defined as selling for less than the mortgage owed, in a deal with the lender to forgive the rest of the debt and head off a foreclosure.


  47. gary says:

    Dear Sellers,

    tick….. tick….. tick….. tick……

  48. BuyingH says:


    You used “crapshack”! Awesome, that’s my word… well, unless it was in use here before by someone else.


  49. Essex says:

    Buying stuff at the Jersey Gardens is a lot different than going to Short Hills Mall…..

  50. chicagofinance says:

    grim Says:
    March 16th, 2008 at 7:42 am
    Maplewood Comp Killer

    grim: most of those comp killers do not impress me…..

    I know there is friction costs, but still, less than 10% off a 2005/2006 inflated price is nothing.

    I guess you can make the ancillary point that someone purchased in 2005 & 2006 and is so quickly dumping into a weak market.

    Defend yourself here….

  51. chicagofinance says:

    Essex Says:
    March 16th, 2008 at 11:16 am
    Buying stuff at the Jersey Gardens is a lot different than going to Short Hills Mall…..

    Treat mall traffic the same as open house traffic. Look at transactions and the gross amount, not a bunch bored bodies milling around…..

  52. chicagofinance says:

    BTW – it took me about 90 minutes to read the Saturday WSJ…..

  53. grim says:


    No kidding.

    My wife got a pair of Dolce & Gabbana shoes for $52 bucks at the Neimann Marcus Last Call outlet.

    At Needless Markup in Short Hills, they would have sold for $595, they still had the original sticker on the box. Wife tells me they aren’t even an old style.

    That was the only item we purchased. Even taking into account the wide margin on luxury retail, I can’t believe that Neimann didn’t take a loss on that sale.

  54. grim says:

    I decided against buying new shoes, given the fact that we’re in a recession.

    I needed the extra cash to finish building the apple cart anyway.

  55. SAS says:

    Spitzer hooker case is nothing

    Let me tell ya, those Bear Sterns boys throw down so much cash on call girls, its crazy.

    Bear Sterns deserves everything they get.
    They have poisoned this market with there thug & mafia tactics long enough.


  56. pretorius says:

    Most US shopping malls are owned by publicly traded REITs, and most of these owners publish retailer sales stats in their annual 10-k reports. Looking at these stats is the best way to evaluate a mall’s performance.

    The sales productivity at Jersey Gardens was $506 per square foot in 2007, making it the most productive mall in Glimcher’s 22-mall portfolio. To put this in perspective, the median US mall generates sales per square foot in the high 300s, so Jersey Gardens – like most coastal malls – is a lot more successful than average.

    Glimcher also developed a very similar value-oriented project outside Kansas City called Great Mall of the Great Midwest. It cost $130 million to build, failed because the market sucks compared to New Jersey, and now this so-called Great Mall is worth a couple million bucks. Glimcher is trying to sell it. The buyer will probably demolish it and use the site as a parking lot.

    Meanwhile, Jersey Gardens is worth in the neighborhood of $500 million. This is a good illustration of why, across all property types, New Jersey real estate should be worth more than Midwest real estate.

    Higher incomes + high population density + higher concentration of economic activity + higher barriers to new supply = dramatically higher real estate values.

  57. grim says:


    What is important here is that these transactions display seller capitualation and a willingness to accept a loss. Something that many said would never happen. Why weren’t these properties taken off the market? Why didn’t the sellers stand pat on their prices?

    This isn’t simply an arithmetic exercise, it is a psychological one as well.

    I will tell you that while these repeat transactions look bad, comparable transactions look much worse.

    Take, for example, the 261 Riverwalk example above. The seller only took a very minor loss, assuming a sale at $419,000 (and a purchase of $435,000)

    However, what about these folks who purchased similar units (based on assessed value)?

    136 Riverwalk – $445,000
    137 Riverwalk – $460,000
    141 Riverwalk – $459,000
    203 Riverwalk – $455,000
    217 Riverwalk – $455,000
    265 Riverwalk – $444,000
    279 Riverwalk – $450,000
    271 Riverwalk – $455,000

    That one sale just set a new comp that will make it all but impossible for any of these people to sell near their purchase price.

    I would wager that this single sale probably put 5-10 owners in this development under water.

  58. Laurie says:

    Spam spam bacon spam…re: STORYTIME!!! So..don’t leave me hanging like a writers strike…what happenend to Ms AlAnon and her deadbeat son…you’ve got 2 mortgages and a rapidly deflating house mkt…I want more!!

  59. victorian says:

    #54 –
    So you are saying there will be negligible effect on mall spending?
    I would think that most of mall purchases are discretionary spending – except when you “need” to buy clothing. I find it hard to believe that people need to buy clothes every week.

    #51 – Chi
    I did take a look and most of the folks did have bags hanging from their hands.

  60. grim says:


    Kid up the street from me is trying to short-sale his house. He is underwater, and will likely be facing foreclosure in the next few months. There is no way anyone will pay anywhere near the peak price that he paid.

    He just purchased a brand new SUV.

    How do I interpret that?

  61. victorian says:

    #60 – God help America.

    The WSJ STILL Doesn’t Understand House Prices

    The WSJ told readers today that house prices rise in step with incomes. Is Rupert Murdoch trying to drive readers crazy in the middle of the worst housing crash since the Great Depression.

    Write this 1000 times: “house prices rise with inflation, not family income.” The point is simple. If my income goes up by 50 percent, I might be expected to buy a home that is 50 percent more expensive, I don’t expect to pay 50 percent more for the same home. As a theoretical matter, if house prices rise in step with income, you would get all sorts of strange implications, like non-housing wealth would continually fall as the country consumed ever more based on its housing wealth. You would also find an ever larger gap between house sale prices and rents, since rents have generally followed the overall rate of inflation.

    We can also look back over 45 years of government data and see that house prices rose at the same pace as overall inflation from the early 50s until the bubble took off in the mid-90s. We also have data compiled by Robert Shiller that shows that house prices just tracked the overall inflation rate for the hundred years from 1895 to 1995.

    So, the WSJ should stop repeating nonsense (someone might actually believe it). Say it again, “house prices rise with inflation, not family income.”

  62. dinra says:

    Paulson on CNN right now

  63. Cindy says:

    (57) Grim – OOHH – Comps…I get it. Aren’t they tightening up the rules on appraisals as well?

  64. njpatient says:

    Yes as to Rosenblum too.

  65. Ed Sanders says:

    Re post 41:

    A bit of an aside, and perhaps this is something that Chifi, SAS or BCBob could address, but I believe our falling behind the eurozone has implications for the World Bank and it’s HQ in NY. I believe the bank’s charter requires that its HQ be located in the world’s largest economy.

    They aren’t packing tomorrow, but that’s a big deal.

  66. RentinginNJ says:

    #36 Bi: “to my surprice, the listings in central jersey haven’t increased dramatically after super bowl.”

    Sellers didn’t want to be caught “pant-down” this year, so they listed early to beat the herd. Unfortunately for sellers, everyone had the same idea. In fact, in some ways, we didn’t really have much of a “winter break: this year, as sellers pushed right through the holidays.

    I agree though, many a seller will be in for a “surprise” when they don’t get their “sur-price” this year and instead must settle for a “sub-price”.

  67. BC Bob says:

    “Low Dollar is good news!”


    When you are paying $4.00 a gallon for unleaded this summer and it costs $8.00 a bushel to crap corn, please repeat this asinine statement.

  68. njpatient says:

    Frank 18

    “This is not mortgage fraud, it’s just banks unloading their inventory.”

    I buy that.

    The race to the bottom has begun with Carlyle unloading on the market.

    Sell your crap for $10 before you have to sell it for $2.

  69. njpatient says:

    20, 22, 23

    part of the issue is the very simple fact that a single home sale will usually take a couple of months even after a buyer is found. Information flow could be perfectly accurate and instantaneous and the market would still be slow to turn.

  70. njpatient says:

    “Goldman Sachs Poised to Write Down $3 Billion, Telegraph Says”

    That CAN’T be true! bi and S&P said there would be no more writedowns!!

  71. njpatient says:

    “lisoosh Says:
    March 16th, 2008 at 9:42 am
    Remind me not to use Tami Rapoport as a buyers agent.”

    I have actually taken to sending emails to agents who make statements like this.
    Lavinia Smerconish got one.

  72. Richie says:

    Every guy knows that the real low balls happen in the summer when it’s hot out.


  73. njrebear says:

    Job cuts next week.

    The deal will likely lead to massive layoffs at Bear as JP Morgan consolidates businesses. But Bear isnt alone.

    Sources tell CNBC that CS First Boston will be cutting jobs this week in its investment banking department and big cuts are looming at Merrill Lynch Merrill Lynch & Co Inc, where middle managers are bracing for cuts of 10 percent across the board. Also sources say Lehman Bothers Lehman Brothers Holdings will likely be in for turbulence given its own holdings of risky commercial real estate bonds.


  74. njrebear says:

    i meant this week.

  75. Frank says:

    Citi is cutting thousands starting Monday.

  76. BC Bob says:


    Since your forte is data mining, do you want to reach into the archives and bring up what I said regarding Bear, back in Sept? New blackbox forthcoming?

  77. Confused In NJ says:

    Gorda, CA Gas $5.20 Gallon plus free newspaper.

    James Willman seems to be a nice enough guy: polite, good-humored and hard-working, pumping gas seven days a week at the Amerigo Gas Station in the tiny Big Sur town of Gorda, about 35 miles north of Cambria.

    But at least once a day, Willman said, someone pulls in and starts cursing him.

    “They say all kinds of stuff—‘You ought to be shot,’ or ‘Where’s your mask?’ ” Willman said. “I’m like, ‘Hey, I just work here.’ ”

    The reason for consumer hostility is that the station is serving up what might be the costliest gas in the land.

    This week, as crude oil flirted with $110 a barrel and gasoline prices surged nationwide, a gallon of regular at Amerigo was going for $5.20.

    Premium was fetching an eye-popping $5.40 a gallon, though Willman said that included a free copy of a local newspaper. (The newspaper was free anyway.)

  78. sas says:

    “Citi is cutting thousands starting Monday”

    you have a link for that?
    know if any of those jobs are NYC jobs?


  79. Confused In NJ says:

    Governor Byrne & Kean Sunday Star Ledger Dialogue, sounds like this site:

    BYRNE: I talked to somebody recently who wants to move out of the state because he doesn’t want to keep working his tail off paying somebody’s huge pension.

    KEAN: I think we both feel that public employees are owed a decent pension. But when state employee benefits and pensions go way above what the rest of state residents can expect, it’s too much, and we can’t afford it.

    Too bad Corzine doesn’t see what these intelligent ex Governors see.

  80. yome says:

    How to Stop the Mortgage Crisis
    March 7, 2008; Page A15

    The potential collapse of house prices, accompanied by widespread mortgage defaults, is a major threat to the American economy. A voluntary loan-substitution program could reduce the number of defaults and dampen the decline in house prices — without violating contracts, bailing out lenders or borrowers, or increasing government spending.

    The unprecedented combination of rapid house-price increases, high loan-to-value (LTV) ratios, and securitized mortgages has made the current housing-related risk greater than anything we have seen since the 1930s. House prices exploded between 2000 and 2006, rising some 60% more than the level of rents. The inevitable decline since mid-2006 has reduced prices by 10%. Experts forecast an additional 15% to 20% decline to correct the excessive rise. The real danger is that prices could fall substantially further if there are widespread defaults and foreclosures.

    Irresponsible lending created new mortgages with LTV ratios of nearly 100%. By the end of 2006, the fall in prices caused 7% of mortgages to have LTV ratios above 100%. A further 20% of mortgages had LTV ratios over 80% and will shift to negative equity as prices decline.

    Most mortgages are no longer held by originating lenders, but are securitized and sold to investors world-wide. More significant, mortgages are used to create complex, asset-backed securities that are central to current credit-market problems. Investors no longer own specific mortgages, but only have rights to certain conditional payment streams. So generally, it is no longer possible to prevent foreclosures by negotiations between borrowers and lenders.

    The 1.8 million mortgages now in default have created substantial personal hardship. The 10% decline in house prices has cut household wealth by more than $2 trillion, reducing consumer spending and increasing the risk of a deep recession. Defaults also damage the capital of lending institutions, causing further declines in credit and economic activity.

    Rising unemployment during a downturn will force more homeowners to default, driving house prices lower. Since mortgages are generally “no recourse” loans, when there is a default the mortgage lender can only collect the value of the property. The lender does not have the right to seize other property (a car, a boat, money in the bank) or to put a lien on future wages. Thus, a homeowner with a mortgage that exceeds the value of his house has a strong incentive to default, even if he can afford to make the monthly payments.

    Optimists note that homeowners with negative equity have generally been reluctant to default in past years. That was sensible when house prices were rising. But with house prices falling, defaulting on the mortgage is the rational thing to do.

    Limiting the number of such defaults, and preventing the overshooting of price declines, requires a public policy to reduce the number of homeowners who will slide into negative equity. Since house prices still have further to fall, this can only be done by a reduction in the value of mortgages.

    None of the current mortgage-reduction proposals are satisfactory. Although bankers sometimes have the incentive to reduce mortgage-loan balances voluntarily in order to avoid a foreclosure, this is usually not possible because the syndication of mortgage loans means that there is generally not a single lender who can agree to the mortgage writedown.

    Proposals to force creditors to accept write-downs of interest or principal violate their contractual rights, reducing the future availability of mortgage credit and raising the relative interest rate on future mortgages. Reviving the depression-era Home Owners’ Loan Corporation would have the government use taxpayer money to pay off existing loans and become the largest mortgage lender in the country. This would require an enormous federal bureaucracy of appraisers and loan agents.

    If the government is to reduce significantly the number of future defaults, something fundamentally different is needed. Although there is no perfect plan, a program of federal mortgage-paydown loans to individuals, secured by future income rather than by a formal mortgage, could reduce the number of mortgages with high LTV ratios and cut future defaults.

    Here’s one way that such a program might work:

    The federal government would lend each participant 20% of that individual’s current mortgage, with a 15-year payback period and an adjustable interest rate based on what the government pays on two-year Treasury debt (now just 1.6%). The loan proceeds would immediately reduce the borrower’s primary mortgage, cutting interest and principal payments by 20%. Participation in the program would be voluntary and participants could prepay the government loan at any time.

    The legislation creating these loans would stipulate that the interest payments would be, like mortgage interest, tax deductible. Individuals who accept the government loan would be precluded from increasing the value of their existing mortgage debt. The legislation would also provide that the government must be repaid before any creditor other than the mortgage lenders.

    Although individuals who accept the loan would not be lowering their total debt, they would pay less in total interest. In exchange for that reduction in interest, they would decrease the amount of the debt that they can escape by defaulting on their mortgage. The debt to the government would still have to be paid, even if they default on their mortgage.

    Participation will therefore not be attractive to those whose mortgages that already exceed the value of their homes. But for the vast majority of other homeowners, the loan-substitution program would provide an attractive opportunity.

    Although home owners may recognize that the national average level of house prices has further to fall, they do not know what will happen to the price of their own home. They will participate if they prefer the certainty of an immediate and permanent reduction in their interest cost to the possible option of defaulting later if the price of their own home falls substantially.

    The loan-substitution program would decrease the number of homeowners who would come to have negative equity as house prices decline. That reduces the number of homeowners who will have an incentive to default, thereby limiting the risk of a downward spiral of house prices.

    Since individuals now have the right to prepay any part of their mortgage debt, the 20% reduction in the mortgage balance would not violate mortgage creditors’ rights. Creditors should welcome the mortgage paydowns, because they make the remaining mortgage debt more secure. The 20% repayments to creditors would also create a major source of funds that should stimulate all forms of lending.

    The simplest way to administer the new loans would be for the current mortgage servicer to collect on behalf of the government and remit those funds to Washington. There would be no need for a new government bureaucracy, for new appraisals, or for negotiations in bankruptcy. The program could be up and running within months after the legislation is passed.

    The government would fund these loans by issuing new two-year debt and rolling over the debt until the loans are fully repaid, thus eliminating any net cost to the government. The government loans would not add to the budget deficit or to the net debt of the nation. Gross government debt would rise by the amount of the new government lending, but this would be balanced by the asset value of those loans.

    The current possibility of widespread defaults is a cloud over all mortgage-backed securities, and over credit markets generally. The uncertainty about the future value of such asset-backed loans has been a primary reason credit markets have become dysfunctional. And without a flow of credit, the economy cannot expand.

    To lower the risk of a downward spiral of house prices and to revive the frozen credit markets, the government must move quickly to reduce the potential number of mortgage defaults. A loan substitution program may be the best way to achieve that.

    Mr. Feldstein, chairman of the Council of Economic Advisers under President Reagan, is a professor at Harvard and a member of The Wall Street Journal’s board of contributors

  81. ketttle1 says:

    BC bob

    when they make statements that a weak dollar is good, the conveniently leave off that this is good only if wages keep up with inflation…. They have not. I dont care if you double the price of milk if you are also going to double my salary.

    On another note, a personal theory(hypothesis) of mine is that wages ahve become disconnected from local inflation since most of the larger companies are now truly global corporations. Due to that the larger companies are no loner being driven by the local market as much as by the global market. the global market will generally work to drive salaries down.
    The smaller companies will want to be competitive to the larger ones and so will most likely be unresponsive to inflation as well.

  82. njrebear says:

    Paulson on CNN right now

    That’s one too many appearances for one day.

  83. ketttle1 says:

    re 82 yoma

    does anyone else see that what they are proposing is essentially indentured servitude????

  84. ketttle1 says:


    here you go, you can add this to your collection…..


  85. njpatient says:

    43 victorian

    Foot traffic/crowds at malls are in no way indicative of sale volume

  86. sas says:

    Is HOV going to declare bankruptcy? Mon?


  87. grim says:


    I can’t believe HOV is trying to sale/leaseback their model homes.


    “Calling all investors!”

  88. Confused In NJ says:

    85.ketttle1 Says:
    March 16th, 2008 at 2:47 pm
    re 82 yoma

    does anyone else see that what they are proposing is essentially indentured servitude????

    No different then the Indentured Servitude facing the Children stuck with the bill for Teachers Lifetime Gold Pension & Benefits.

  89. Frank says:

    I doubt it, in the earnings call last week they sounded like they will hold on for few more months. But please tell me it’s true, I have so many puts on this beast.

  90. Frank says:

    Maybe you watch CNN too much.

  91. sas says:

    Hey fellow bloggers..
    what do you all think of this RE search webpage?


    I am not familiar with it. If its like zillow, then its a dud.

    what say you?


  92. Frank says:


    “The value of Bear’s head office in a prime location on Madison Avenue, near JPMorgan’s offices, may account for a big portion of the eventual sale price.”

  93. spam spam bacon spam says:

    [58] laurie:

    LOL…I wish I had an update…I don’t see her as much.

    We had both been riding at the same trainer (horses) and I’m using a different trainer at the moment, although I’m friends with everyone and bump into her here and there…

    However, I can tell you she has taken to try training horses herself (NOT GOOD, SHE CAN HARDLY STAY ON…) and when she told me this (I just smiled…what can you do?) she followed it up with “Gotta do something to keep the money coming in”…


    How do you make a small fortune in horses?

    Start out with a large fortune.

    There’s no money in training horses. You make about $35-50 gross for about 1.5 hours of work, each time you do a session. And you can’t do it 7 days a week. It kills you and the horse.

    These financial problems fester a long time before they wipe you out. And unfortunately, everytime these find another cash infusion, they are awarded a reprieve of 6 months or a year. It’s unsustainable.

    Just like a drunk, it continues until it runs out of “sources”.

    They may be drinking vanilla extract, but they’re still hitting it.

  94. lisoosh says:

    UK talk about Great Depression


    “One UK economist warned that the world is now close to a 1930s-like Great Depression, while New York traders said they had never experienced such fear. The Fed’s emergency funding procedure was first used in the Depression and has rarely been used since.”

    “In the UK, Michael Taylor, a senior market strategist at Lombard, the economics consultancy, said on Friday night: “We have all been talking about a 1970s-style crisis but as each day goes by this looks more like the 1930s. No one has any clue as to where this is going to end; it’s a self-feeding disaster.” “

  95. Frank says:

    Bear bailout is illegal.

    “The Fed approved the deal between JPMorgan and Bear Stearns under Depression-era laws allowing it to do so under “unusual and exigent circumstances.” This provision, however, requires an affirmative vote of not less than 5 members of the board.

    At present, there are only five members on the board with two vacancies, but only four approved the measure because governor Frederic Mishkin was not present, according to the Federal Reserve.”


  96. ketttle1 says:

    frank 97,

    Do you think anyone is going to do anything or even acknowledge this issue?

  97. 3b says:

    Insulting out landish?

    Funny on the way up, the prices wer just the market , deal with it or move to a cheaper area was the response of the real estate bulls.

    Now on the way down, the prices that buyers are offering are insulting, even outlandish.

    Sellersand or realtors do you rea;ize we almost had financial armageddon this past Friday?

    Now we are IN (or will be vey soon) a severe recession. The party is over, accept it, move on, or at least take you house off the market.

  98. ketttle1 says:


    I image that very few people have any idea of what happened last week. maybe .1%?

  99. 3b says:

    #56 pret:dramatically higher real estate values.

    Tell that to Bear Stearns employees next week.

    You really are a peice of work young pret.

  100. chicagofinance says:

    Bear Stearns Closes in on Deal
    To Sell Itself to J.P. Morgan
    March 16, 2008 5:22 p.m.

  101. chicagofinance says:

    I had a meeting with a client is an MD at Citi. He said colleagues in the business over 30 years have never seen anything like this situation…..

  102. chicagofinance says:

    Just remember, this situation is just finance…we hope it doesn’t rip the rest of the economy down. That said, for NYC, this situation is as bad as it gets….I am taking an educated guess, but I think what happened is that we just dropped something heavy on our foot, and we are sitting in that split second before all of your synapses fire and you are in writhing pain…..we are oddly quiet for now…..

  103. chicagofinance says:

    Over the weekend, some Bear employees were hoping a foreign bank would emerge as the winning suitor, since that might mean fewer job cuts than by a domestic buyer. But those prospects dwindled, leaving J.P. Morgan in the prime position to acquire Bear.

  104. 3b says:

    #106 chgo: The job cuts are going to be massive. The profit center for Bear is their clearing business. Everything else that Bear has JP Morgan has. I do not see any other area of Bear that JP will have any real interest in.

  105. 3b says:

    #100 kettle: True. However I think that is likely to change,quickly.

    The demise of Bear is a huge event. I think people are fianlly going to get it. Even if they ado not want to get it, they will have no choice.

  106. Frank says:

    Spitzer would do something about this but he’s gone.

  107. rhymingrealtor says:

    Happy Selection Sunday !


  108. Pat says:


    Two men were sitting next to each other at Murphy’s Pub. After awhile, one guy looks at the other and says, “I can’t help but think, from listening to you, that you’re from Ireland .”

    The other guy responds proudly, “Yes, that I am!”

    The first guy says, “So am I! And where about
    from Ireland might you be?”

    The other guy answers, “I’m from Dublin , I am.”

    The first guy responds, “So am I!”

    “Mother Mary and begora. And what street did you live on in Dublin ?”

    The other guy says, “A lovely little area it was. I lived on McCleary Street in the old central part of town.”

    The first guy says, “Faith and it’s a small world. So did I! So did I! And to what school would you have been going?”

    The other guy answers, “Well now, I went to St. Mary’s, of course.”

    The first guy gets really excited and says, “And so did I. Tell me, what year did you graduate?”

    The other guy answers, “Well, now, let’s see. I
    graduated in 1964.”

    The first guy exclaims, “The Good Lord must be smiling down upon us! I can hardly believe our good luck at winding up in the same bar tonight. Can you believe it, I graduated from St. Mary’s in 1964 my own self!”

    About this time, Vicky walks into the bar, sits
    down and orders a beer.

    Brian, the bartender, walks over to Vicky, shaking his head and mutters, “It’s going to be a long night tonight.”

    Vicky asks, “Why do you say that, Brian?”

    “The Murphy twins are drunk again.”

  109. pretorius says:

    If thousands of Bear employees get fired because their company is bankrupt or a competitor buys it, then I was wrong about this company.

    But it will require a lot more than a Bear collapse to make NJ home prices experience a Las Vegas-style crash.

    I reiterate my forecast that NJ home prices, as judged by OFHEO and NAR, will be stagnant this year.

  110. rhymingrealtor says:


    I am floored that most people do not know/or think that was a significant event. With that thought I wonder if it is possible for anything bad to happen if nobody knows it’s happening??????


  111. Pat says:

    KL, if you have nothing – absolutely nothing -(but debt), this just means you notice a slight increase in your fees and interest rates, scratch your head, damn The Man, and shuffle into the living room with your Doritos.

  112. Frank says:

    Because of the Bear crash, NYC prices will drop a lot more than in Las Vegas because prices went up a lot more.

  113. bi says:

    tomorrow, dimon is going to greet bear shareholders including those friday bargain hunters. his first sentence would be “you guys have a nice hair cut!”

    “The Wall Street Journal reported that the sale price may be about $2.2 billion, less than $20 a share and about half of the firm’s $4.08 billion stock market value. ”


  114. bi says:

    91#, year-to-day, homebuilders are among strongest industrial groups. it is up 2.5%. in comparison, energy stocks are down 6% and financials are down 17% and s&p 500 down 11.5%

  115. 3b says:

    #111 pret: I reiterate my forecast that NJ home prices, as judged by OFHEO and NAR, will be stagnant this year.

    You are a delusional. pigheaded, naieve, or jsut plain dume, do not know.

    What more can I say. If you believe the demise of Bear on top of everything else that has transpired will somehow be a non event, then you are delusional.

    Do you undestand the reprerecusions for the rest of the economy in this area, when a firm the size of Bear goes under.

    Laz Vegas syle crash, who knows, but it is is real ugly, and never say never kid;that comes with age, experience,and having lived through a severe recession.

    Can you take your NAR/OFHEO charts and factor the demise of Bear into them?

    I feel for you kid; I really do.

  116. BC Bob says:

    “You are a delusional. pigheaded, naieve, or jsut plain dume, do not know.”


    Actually a combination, not necessarily in that order. This is the moron[Pret] that tried to tell us that Bear was increasing their hiring. He laughed when I stated that Bear jobs would be cut 30-50% or would be acquired by the likes of Merrill or JPM. He has reposted this, I’ll dig to find.

    I say naive, clueless, delusional and obstinate. Remember he also would recommend hedging physical RE with housing futures. That said, a great counter party for a trade.

  117. chicagofinance says:

    Given this little tidbit….lowball is an appropriate name to this title of this thread….NO TYPO

    J.P. Morgan to Buy Bear Stearns
    March 16, 2008 7:19 p.m.

    J.P. Morgan Chase agreed to buy Bear Stearns for $2 a share in a stock-swap transaction, people familiar with the matter say. J.P. Morgan will exchange 0.05473 shares of its common stock per one share of Bear Stearns stock. Both boards have approved the transaction.

  118. 1987 Condo Buyer says:


  119. Clotpoll says:

    patient (from last thread)-

    Ravenswood Zins- to varying degrees- all smell like nail polish. I can’t get past that acetone aroma enough to enjoy the wines.

    That’s a serious winemaking/cellar hygiene error.

  120. BC Bob says:


    The Drexel Burnham and It’s a Wonderful Life of 2008. The headquarters, Madison Ave, was said to be worth approx $12 a share.

    Does anybody actually think that this is the only cockroach? Time to dust off your history books?

  121. HEHEHE says:

    Talk about your f’ng lowballs, $2 a share for Bear Stearns?

    JP Morgan to buy Bear for $2 a share


  122. Clotpoll says:

    confused (80)-

    “Too bad Corzine doesn’t see what these intelligent ex Governors see.”

    Those ex-governors aren’t beholden to a constituency of bloodsuckers.

  123. BC Bob says:


    122 in moderation.

  124. HEHEHE says:

    so what does the Bear deal mean for the market tomorrow?

  125. BC Bob says:

    “The past week has been an incredibly difficult time for Bear Stearns,” said Bear Stearns Chief Executive Alan Schwartz in a statement. “This represents the best outcome for all of our constituencies based upon the current circumstances.”

    he [123],

    This is the best outcome, $2? On the flip side, what the worst possible outcome?

  126. 1987 Condo Buyer says:

    #126..I guess we could all owe Bear $10 a share..oops, maybe we do!

  127. HEHEHE says:

    I think Joe Lewis just had his shoe strings and belt taken away from him.

  128. Essex says:

    Hello……margin call anyone buy in at $27 Friday? good Lord

  129. Confused In NJ says:

    Interesting article in Friday Star Ledger talked about some electronics from China having Factory installed viruses. Hope we aren’t buying navigation or weapons systems from them. That makes Toy’s, Drug’s, Pet Food, and Electronics which are unsafe, so far. I doubt if Congress see’s a pattern.

  130. Clotpoll says:

    grim (12)-

    The Hills are getting blasted. Next stop for the PUC disaster train: Beaver Brook in Clinton Twp. The Northgate section features townhomes with a $332 monthly fee…with a $150/month assessment added on for “damage done to fireplaces when the rooves were re-shingled”. Allegedly, the roofers tossed debris down homeowners’ chimneys.

    Net result? Right now, you can be the owner of a $300,000 townhome with a $7,500 tax bill and over $500 in monthly fees.

    Good times.

  131. 3b says:

    #118 BC Bob: you are right I remember that. I guess you just have to shake your head, when it come to young pret. He can warm his hands by making a fire with his charts. 30 t0 50% layoffs, that was then. It will be more like 60 or 70%. The only real value perice left is Bear’s clearing operation.

    Well time to rest up. Long weekend, and one more day to go tomorrow!!

    Happy St. Patrick’s Day to you and yours!! And all on this site. Peace.

  132. BC Bob says:

    “so what does the Bear deal mean for the market tomorrow?”


    Well, it means Gold [April] is up $12, right now. I would imagine that the PPT was not watching the March Madness pairings. Who’s buying S&P futures right now?

  133. John says:

    JPMorgan acquires troubled Bear
    JPMorgan completes deal to acquire foundering Wall Street brokerage and stave off wider chaos in financial markets.

    It means common shareholders are getting screwed big time. Don’t think that is a plus.

  134. John says:

    The deal values Bear Stearns at $236 million, or just $2 a share – shares had closed at $30 on Friday, down 47% that day.

    WOW TWO BUCKS A SHARE!!!!!!!!!!!!!!!!!!

  135. Clotpoll says:

    BC (133)-

    “Who’s buying S&P futures right now?”

    Heh, heh, heh…

    Erin go Bragh!

  136. bi says:

    135#, too sad for bear employes: they owns 70-80% of BSC

  137. pretorius says:

    BC Bob, 3b,

    Yes, I rubbished the Bear predictions so the $2-per-share news forces me into a climbdown on this specific point.

    On that New Jersey real estate topic, I’ve gone on record with a point estimate of NJ home prices at the end of 2008. My forecast is OFHEO = 575 and NAR median price = $355,000.

    Can you remind us of your measurable forecasts?

  138. bi says:

    136#, amazingly s&p futures are down only 6 pts (0.5%) right now.

  139. BC Bob says:

    Jimmy Cayne can go s#ck on his bong. What goes around, comes around. That said, I feel very sorry for the rank and file.

  140. victorian says:

    #68 (BC Bob) –
    The “Low Dollar is good news” statement wasnt mine. It was Krugman’s. I guess what he was trying to say is that the weak dollar (right now) is possible saving us from total annihilation.

  141. bi says:

    after bear news came out, it shooting up.

  142. John says:

    Chase is going to slice and dice Bear till it hurts, Chase is next door to the headquarters and next door in netrotech, Jaimie is going to squeeze them bear boys till they pop.

  143. Confused In NJ says:

    What was Bear Sterns published Bonus Payout for 2007?

  144. BC Bob says:

    “Can you remind us of your measurable forecasts?”


    How many times do you need to hear it? 30-40% off peak in 5-7 years. Obviously, I was wrong, too conservative. I also stated that we would witness the biggest financial bust in our time. A meltdown is a much more troubling issue at this time, as compared to RE at 30-40% off 2005.

    Who do you think will be Bear # 2?

  145. ketttle1 says:

    Now i know i am one of the more pessimistic in the group, but as i looked over all of the recent news this weekend, and what has been happening over the last 6 months, I have come to the conclusion that i think we have a very high probability of heading into a situation similar to the 98 russian financial crisis. unfortunately i do not see us bouncing back in a matter of 2-3 yrs, as i do not see an analogous rescue for use like the rise in commodities saved the russians. We also do not have a general barter market among the middle and lower classes that could insulate people from a financial collapse.

    I wont write a book, but the basics are

    On August 13, 1998, the Russian stock, bond, and currency markets collapsed as a result of investor fears that the government would devalue the ruble, default on domestic debt, or both. Annual yields on ruble denominated bonds were more than 200 percent. The stock market had to be closed for 35 minutes as prices plummeted. When the market closed, it was down 65 percent with a small number of shares actually traded. From January to August the stock market had lost more than 75 percent of its value, 39 percent in the month of May alone.[5]

    Russia’s economy was operating to such a large extent on barter and other non-monetary instruments of exchange, the financial collapse had far less of an impact on many producers than it would had the economy been dependent on a banking system

  146. Mikeinwaiting says:

    Clot 131 That’s about 2500 hundred a month with 100k down.I don’t know this place but it better be the bomb.
    BS 70 to 2 bucks in a week whats the PPT going to pull out of its bag of tricks Monday to calm the markets.

  147. pretorius says:

    BC Bob,

    Thank you for reiterating your forecast, which it appears you’re now describing as conservative. So what is your fresh forecast? How do you think 2008 will end up?

    I have no idea who Bear #2 will be if there is a similar collapse.

  148. grim says:

    Bear Stearns, 2 bucks a share…


  149. grim says:

    Fed cuts the discount rate too.

    Happy Monday.

  150. grim says:

    From Dow Jones:

    Fed Cuts Discount Rate to 3.25%;
    Announces New Lending Facility

    NEW YORK — The U.S. Federal Reserve Sunday cut the Fed’s discount rate by a quarter point to 3.25% and announced a new lending facility designed “to improve the ability of primary dealers to provide financing to participants in securitization markets.”

    The interest charged in this lending facility will be at the discount rate, according to a statement from the Fed. The discount rate cut means it will only be a quarter point over the fed-funds rate of 3%.

    The Fed also is broadening the type of debt it will accept as collateral in the lending facility. The Fed said such loans can be collateralized by a broad range of investment-grade debt securities.

    The Fed said it took the measures “to bolster market liquidity and promote orderly market functioning,” according to a statement.

    The facility will begin on Monday — and the maximum period for such loans will be extended to 90 days from 30 days.

    The Fed also said in its statement that it approved the recently-announced financing arrangement announced by J.P. Morgan and Bear Stearns Cos.

  151. grim says:

    Fed has moved beyond deposit bottles and aluminum cans and has joined with a number of pawn shops across the nation. The window will now accept anything as collateral.

  152. grim says:

    From Bloomberg:

    Fed Cuts Discount Rate, Says Dealers May Borrow

    The Federal Reserve reduced the rate on direct loans to commercial banks by a quarter-point and said it will allow primary dealers to borrow at the rate in exchange for a “broad range” of investment-grade collateral.

    The central bank, in a statement today in Washington, also extended the maximum term of discount-window loans to 90 days from 30 days. The Fed approved the financing arrangement announced by JPMorgan Chase & Co. and Bear Stearns Cos. JPMorgan separately agreed to buy Bear Stearns for about $2 a share.

    Fed Chairman Ben S. Bernanke is stepping up efforts to keep strains in financial markets from spiraling into a full-blown meltdown. Last week the central bank agreed to emergency loans to a non-bank, Bear Stearns, for the first time since the 1960s. Fed officials also announced a program to swap $200 billion in Treasuries for debt including mortgage-backed securities.

    The Fed lowered the discount rate to 3.25 percent from 3.5 percent, narrowing the spread with the federal funds rate to a quarter point from a half point. From tomorrow, primary dealers will be able to borrow at the rate under a new lending facility, to be in place for at least six months, the Fed said.

    The actions are “designed to bolster market liquidity and promote orderly market functioning,” the Fed said. “Liquid, well-functioning markets are essential for the promotion of economic growth.”

    Investors expect the Fed to lower its benchmark rate by as much as a full percentage point, to 2 percent, when policy makers meet March 18. That would exceed the 0.75-point emergency reduction on Jan. 22, which is the largest cut since the overnight interbank lending rate became the main tool of monetary policy about two decades ago.

  153. grim says:

    From CNBC:

    JP Morgan Agrees to Buy Bear Stearns for $2 a Share

    JPMorgan Chase said Sunday it will acquire rival Bear Stearns in a deal valued at $236.2 million–or $2 a share–a stunning collapse for one of the world’s largest and most venerable investment banks.

    The last-minute buyout was aimed at averting a Bear Stearns bankruptcy and a spreading crisis of confidence in the global financial system.

    The Federal Reserve and the U.S. government swiftly approved the all-stock deal, showing the urgency of completing the deal before world markets opened.

    The Fed will provide special financing to JPMorgan Chase JPMorgan Chase & Co for the deal, JPMorgan Chase said. The central bank has agreed to fund up to $30 billion of Bear Stearns’ less liquid assets. Risky bets on securities tied to subprime mortgages–loans given to customers with poor credit history–crippled Bear Stearns, the nations’ fifth-largest investment bank.

  154. grim says:

    Like I said yesterday..

    grim Says:
    March 15th, 2008 at 8:39 am
    I’d love to know who was responsible for dubbing Bear Stearns “too big to fail”.

    Or did JP pull some strings to get the Fed to fund an LBO of Bear?

  155. BC Bob says:


    I asked you to post since you pulled this up, last week. Since you did not cooperate I had to dig. However, thanks for the reminder. I knew what I said but had no idea what month. Thanks for the heads up.

    “But judging by their actions Wall Street firms are optimistic about the outlook for their businesses and comfortable with current staff levels.” [Edit- Pret’s comment]

    1.BC Bob Says:
    September 25th, 2007 at 1:23 pm

    Oh really? If current conditions linger, I’m hearing 10-20% layoffs. Bear, as we know it, will not be the same. It’s either massive restructuring, 30-50% layoffs, or it will be bought by someone like Merrill or JP.

    [Edit, I would never have imagined at $2]

  156. bi says:

    in my view, cayne (former CEO of bear) made two serious mistakes: 1) refused to participate rescue of LTCM; 2) didn’t make effort to save its own 2 hedge funds. these makes people don’t want to do business with them.

  157. Clotpoll says:

    BC (146)-

    Word is, Lehman’s next.

  158. jmacdaddio says:

    I bet on Merrill Lynch to collapse next. I make that prediction based upon absolutely nothing whatsoever.

    Ket, read The Ingenuity Gap by Thomas Homer-Dixon. I apologize if I have already recommended it to you – messages here can get lost in the shuffle so I figure no harm done. He argues that human arrogance in dealing with complex systems and believing in technology as our savior will be disastrous. With respect to finance, we have centers of excellence worldwide (Wall St, The City, Singapore, etc.) where our best and brightest spend all day trading financial instruments that are too complicated for any one individual to understand. Homer-Dixon believes that an epic financial collapse will occur when a failure in one part of the system brings down other parts since no one individual or institution can fully understand the complexity of modern finance. We’re already starting to see student loans dry up because of housing – two seemingly unrelated items now tied together.

    I wonder if we’re starting to see the system failures begin.

  159. sas says:

    “JP Morgan to buy Bear for $2 a share ”

    ha ha…

    I don’t feel sorry for Bear at all.
    yes, I do feel for the rank and file employees, but hey…

    them the breaks.

    so long and goodnight Bear!

    Now, whom will be next of the chopping block?


  160. Clotpoll says:

    mike (148)-

    It is nice. It is not the bomb.

  161. BC Bob says:

    bi [143],

    The world markets are taking on the ppt right now. They are stuffing the ppt, at this point. Picture Motombo, waving his finger. Hopefully the ppt have more bullets tonight, that is of course if you’re long.

  162. ketttle1 says:

    is there much of anything else that the FED can do? they blatantly appear desperate now.

    -foreign economic commentaries are speculating on a US depression

    “Wall Street fears for next Great Depression” – theindependent

    Within 10 years we will be in a “hyper-inflationary great depression”. Is this the legacy of the Baby Boom generation? -from cnn/money

  163. JohnSS says:

    I have a “Suzy Etiquette” question:

    Would it be inappropriate to send Jimmy
    Cayne a case of $2 Buck Chuck??

  164. Clotpoll says:

    pret (149)-

    “So what is your fresh forecast?”

    Unbelievable. When you’re wearing a suit of shit, who cares what color your tie is?

  165. Clotpoll says:

    John (165)-

    Send him a dime bag of ganga.

  166. BC Bob says:

    Clot [159],

    That’s my bet.

  167. Clotpoll says:


    “The Fed also is broadening the type of debt it will accept as collateral in the lending facility.”

    Well, we were at deposit bottles and beer cans last week. I guess this week, it’s be handwritten IOU notes.

  168. BC Bob says:

    “is there much of anything else that the FED can do?”


    They can continue to bury John Q and drive gold to $2,500.

    All disclaimers, of course.

  169. Clotpoll says:

    mac (160)-

    “…Homer-Dixon believes that an epic financial collapse will occur when a failure in one part of the system brings down other parts since no one individual or institution can fully understand the complexity of modern finance.”

    When Buffett says he can’t figure it out, run for the bomb shelters.

  170. bi says:

    153#, bob, what ppt means?
    from spitzer to $2 bear, this march madness is beyond me. (even during the day today, the news was about $17 bear)

  171. Clotpoll says:

    BC (170)-

    That’d be OK with me.

  172. BC Bob says:


    S&P’s just went thru the Jan lows. They are approx 50 points off the night’s high. It is obvious, at least to me, that the ppt was buying on the open.

  173. ketttle1 says:


    you did recommend that before, i will add it to my list.

    I think we discussed this before, but network theory, which involves complex system has been used to analyse oil markets and financial markets. What it has show is that what triggers the downfall of the system, whether oil, finance or computers, is not one of the big players, but a smaller piece of the system. The systems are so complex that as the smaller components fail, the effects are magnified until the main players fall and the system crashes.


    my prediction is that we are currently seeing the magnification of a smaller component failing and the failure cascade has begun. the 2001 -2005 housing bubble has not been the cause of the failure, but the trigger, as for a complex system to fail you generally need a critical mass of systemic weaknesses (i.e consumer economy, negative savings, arcane finance instrument-MBS etc). Some of the biggest weaknesses have been the negative savings rate, our substantial and sustain trade deficit, the massively expensive Iraq war, and then the straw that broke the camels back… the housing bubble.

  174. Jim says:

    Has anyone noticed that futures are down almost 200 points?

    Another crazy day for stock market tomorrow, or just plain down.

  175. Clotpoll says:

    BC (174)-

    Let ’em buy all they want. Doesn’t matter now; the principle of inertia is fully engaged, and the PPT is not a greater or equal force than the people lined up on the short side.

    As you say, Mr. Market always wins.

  176. galgon says:

    Clot (132):

    Do you know why High Bridge taxes are almost double Clinton taxes? My wife and I saw a house in High Bridge today for $429900 with taxes of over $13000! That make a 2k monthly payment a 3k monthly payment. Similar houses in Clinton are in the 5-7K range.

    At this point we have basically written off High Bridge.

  177. ketttle1 says:

    no real point here, but here is the latest news from the 3 majors, cnn/fox/msnbc

    CNN Latest News
    • Three people missing after NYC crane collapse
    • Four FBI agents hurt in Pakistan bombing
    • SI: Draw lays out March Madness roadmap
    • Searchers find possible graves at Manson site
    • Dalai Lama: ‘Cultural genocide’ by China
    • U.N.: Glaciers shrinking at record rate
    • Ticker: Obama’s church lashes out at media
    • Rare tornado rips through Atlanta |
    • Horton hears ‘cha-ching’ at box office
    • Why tornadoes ‘sound like a freight train’
    • Spacewalkers resort to banging, pry bar
    • McCain takes campaign to Baghdad
    • Paris Hilton wants a new ‘BFF’
    • Victimized puppies find a home
    • Store cameras lead to fake $100 bill arrests
    • CNN Wire: Latest updates on top stories

    • Clinton Library Builder Disappears Amid Audit
    • New Evidence in Manson Slayings? |
    • Crews Search Crane Collapse Rubble |
    • Highway Patrol: 5 Killed in Burning Car in Ohio
    • Pope Issues Strong Appeal for Peace in Iraq
    • Astronauts Attach 11-Foot Arms to Robot
    • Atlanta Cleans Up After Killer Twister |
    • Poll: Sarkozy’s Party Trails Leftists Among French Voters
    • Paulson: Government Will Stabilize Markets
    • Report: U.S. Strikes Al Qaeda Safe House in Pakistan
    • Student Stops Out-of-Control Bus; Gets Detention
    • Iran Cracks Down on Magazines for Covering Celebrities
    • Alleged Naked Bandit Wreaks Havoc on Pa. Businesses
    • BBC Says 4 of Its Journalists Arrested in Ireland
    • Tapes: Pilots Possibly Asleep During Hawaiian Flights
    • UNC, Kansas, Memphis, UCLA Earn Top Seeds

    Feeling blue Newsweek: The primaries started as a celebration for Democrats. Now they can’t stand to sit together.
    Tickets to Big Dance punched (NCAA)
    JPMorgan buying out rival firm Bear Stearns
    ‘Cultural genocide’Dalai Lama condemns growing Chinese crackdown on Tibetan protesters.

  178. Clotpoll says:

    calgon take me away (177)-

    High Bridge has the same problem that all tiny, self-contained municipalities in NJ have: a small area of land that is completely built-out…so much so, that new ratables cannot be created. Yet, the costs of operating its own schools, courts, police, fire dept, etc cannot be contained.

    Don’t even think of buying there. In fact, under Corzine’s new plan, things are about to get even worse for small municipalities.

  179. Orion says:

    Many of Bear’s middle guys/gals had their 401K’s tied to Bears’ stock. Pray for them.

  180. Sybarite says:

    Haven’t read this, but some might find interesting:

    “Why We Are Still in the Early Innings of the
    Bursting of the Housing and Credit Bubbles –
    And the Implications for MBIA and Ambac”


  181. jmacdaddio says:

    Clot – I thought Buffett was known for repeating the same simple moves for decades: you know, look for undervalued companies, patiently research your equities before investing, etc.

    Oh, Ms. Zipper’s Quailbrook listing from a few weeks ago was reduced by 12 grand. So much for her phantom couple who were supposedly slobbering over the unit.

  182. reinvestor101 says:

    This shlt is crazy. Greenspan wouldn’t have let things get out of line as much as they have under Bernanke. I’d like to see Greenspan back at the helm. Happy days would be here again with Greenspan and the absence of negativity.

    While the Fed is at it, I call for them to expand this new facility to support home buying in certain markets. This could be sort of like an open market operation in the real estate markets. Perhaps they could accept homes as collateral and provide liguidity to real estate investors. Everything has to be on the table now.

    We got in this position due to negative thoughts and a lack of patriotism. As long as perceptions were positive, we really had no problems. The markets have been brought low by terrorists, not from the middle east, but born right here in America. Shorting stocks and lowballing real estate offers are the sorts of things this unpatriotic bunch does. I also have a problem with JP Morgan treating Bear Stearns like a penny stock. A 90%+ discount to book value? That is ridiculous and unamerican.

  183. Clotpoll says:

    On a side note, please feel free to ask me what communities in Hunterdon or Somerset are at risk for taxes going from stratospheric to outright disastrous.

    These are not places in which you want to purchase…at ANY price.

  184. ketttle1 says:

    how long before the PPT makes this announcement???

    “In the event of a sudden loss of cabin pressure, masks will descend from the ceiling. Stop screaming, grab the mask, and pull it over your face. If you have a small child traveling with you, secure your mask before assisting with theirs. If you are traveling with more than one small child, pick your favorite.”

  185. Sean says:

    There are not enough lifeboats and the other banks don’t want Bear’s garbage. It will probably cost many billions to unwind Bear’s positions.

    Many hedge funds are toast now, and many 401ks are going to take another huge hit.

    I will never pray for investment bankers, pray for the average Joe who is already down 20% and will lose allot more.

  186. Clotpoll says:

    mac (183)-

    Yeah. Slobber. Right.

    Iguana slobber.

  187. Sybarite says:


    Which Somerset towns are at biggest risk?

  188. Clotpoll says:

    Re (184)-

    “While the Fed is at it, I call for them to expand this new facility to support home buying in certain markets. This could be sort of like an open market operation in the real estate markets.”

    I get it now. ReTard is Barney Frank!

  189. jmacdaddio says:

    Buffett’s ideas are clearly way too archaic for this day and age is what I meant to say, with just a hint of sarcasm.

    Kettle – Good, I won’t recommend that book again. Our financial system is practically begging to collapse with all the stress we’ve introduced into it. Kinda like our planet.

  190. Clotpoll says:

    Syb (189)-

    Bound Brook, South Bound Broook, Manville, Rocky Hill, Somerville.

  191. Clotpoll says:

    ReTard (184)-

    “We got in this position due to negative thoughts and a lack of patriotism…”

    No, we got into this position due to people like you.

  192. Sybarite says:


    Yikes; Somerville’s taxes are already pretty awful.

  193. Clotpoll says:

    If anyone out there would like to make a gift of any brk.a shares, please direct them my way. Fractional shares would be gratefully accepted, too.

    After all, Buffett’s ideas are clearly way too archaic for the current economic environment.

    [sarcasm off]

  194. kettle1 says:

    Re taxes

    Nj taxes are suicidal. Then we have Mitch who recommends NC as a better option for us. Well then why not continue the logic and lets move to alaska. The federal gov pays you to live there!!!!!

  195. Clotpoll says:

    97 yen.

    That’s gonna leave a mark.

  196. alia says:

    i just checked, and berkshire shares are actually down. i’m surprised.

  197. Orion says:

    From Mish:

    Re: JP Morgan audio webcast

    The live audio webcast and presentation slides will be available on http://investor.shareholder.com/jpmorganchase/presentations.cfm under Investor Relations, Investor Presentations. A replay of the conference call will be available beginning at 11:00 p.m. (Eastern Time)on March 16, 2008, through midnight, Monday, March 31, 2008 (Eastern Time), at (888) 348-4629 (domestic) or (719) 884-8882 (international)with the access code 614424. The replay also will be available on http://www.jpmorganchase.com.

  198. All Hype says:

    ReTard (184):

    Dude, are you serious? We got into this mess by your buddy Greenspend and that criminal of a president. We have been over the reasons a million times but you do not seem to get it.

    Nothing and I mean NOTHING is going to stop this crash, so get used to it. Have fun sitting in your overpriced house for the next 20 years.

  199. All Hype says:

    I should have said, Dude-ette…

    Maybe we have a disgruntled RE agent among us?????


  200. Essex says:

    Yeah that’ll fix it…
    Fed acts Sunday to prevent global bank run Monday
    By Rex Nutting, MarketWatch
    Last update: 9:40 p.m. EDT March 16, 2008
    PrintPrint EmailE-mail Subscribe to RSSRSS DisableDisable Live Quotes
    WASHINGTON (MarketWatch) — Acting quickly to prevent a run on major global financial firms, the Federal Reserve cut its discount rate by a quarter percentage point to 3.25% and offered to lend money to a longer list of firms than ever before.

  201. Essex says:

    202…Nothing and I mean NOTHING is going to stop this crash, so get used to it. Have fun sitting in your overpriced house for the next 20 years.

    The people that can afford to sit in a home for twenty years are the lucky ones…they will be fine. Everyone else will live in tent villages.

  202. BC Bob says:

    “While the Fed is at it, I call for them to expand this new facility to support home buying in certain markets. This could be sort of like an open market operation in the real estate markets.”


    The fed has played this tune. How did it work out?

    Sure, repos for RE. String it out from overnite’s to 20 years. Dead man walking, Japan 1990-2006.

  203. CAIBC says:

    whats the fed up to – everytime, they think the stock market is going to tank, they either cut rates or loan billions? is Bernanke worried about his own portfolio? dont they realize that by doing this, we are going to loose a hold of our own currency? what is the fed thinking?

    i dont understand what is going on here..

  204. All Hype says:

    Essex (205):

    You are right my friend. This will get even uglier very soon.

  205. jmacdaddio says:

    Regarding the Bear employees’ 401k plans, didn’t they ever hear of Enron? How can anyone in this day and age keep their 401k plans tied to their employer’s fortunes? I don’t know if I can have sympathy. I’d like to, but I’m tired of it.

  206. CAIBC says:

    grim et all,

    since we have an idea of what is coming in the RE market, we should formalize ‘lowballing’

    can someone on this blog (maybe grim) come up with a good formula for a lowball? we should also change ‘lowball’ to something else ‘market representative price’ or something – ‘lowball’ just doesnt sound right especially to the sellers out there….

    and somehow we need to get the word out that ‘lowballing’ is the only way to offer a price now….

  207. chicagofinance says:

    Clotpoll Says:
    March 16th, 2008 at 8:39 pm
    (152)- “The Fed also is broadening the type of debt it will accept as collateral in the lending facility.” Well, we were at deposit bottles and beer cans last week. I guess this week, it’s be handwritten IOU notes.

    clot: I heard that JPMorgan is going to be allowed to post used urinal deodorizer tablets from bathrooms on the Bear trading floors, as long as they are less than 50% evaporated…..

  208. Sean says:

    PPT meets tomorrow, and investor confidence is in tatters. Bush has to be nervous, since the losses are not “contained” as promised. With a nervous President and a Fed Chairman with an itchy trigger finger all bets are off. What the markets needs right now is confidence and nobody believes more rate cuts will do that.

    I hope you all have advised family and friends especially those that are on 401k
    autopilot to make sure they are paying attention to these developing events.

  209. chicagofinance says:

    jmacdaddio Says:
    March 16th, 2008 at 9:49 pm
    Regarding the Bear employees’ 401k plans, didn’t they ever hear of Enron? How can anyone in this day and age keep their 401k plans tied to their employer’s fortunes? I don’t know if I can have sympathy. I’d like to, but I’m tired of it.

    jmac: I think a lot of it was an ESOP and also company match in the 401(k) was forced to BSC.

  210. galgon says:


    Thanks for the info. What are your thoughts on Clinton, Lebanon Boro and Readington? Is there any place in northern Hunterdon where we wont regret buying in a few years?

  211. galgon says:

    Nikkei Down 3.5%
    Dow Futures down 1.8%

  212. chicagofinance says:

    A Stake Through the Heart
    Bear’s Biggest Holders
    May Have Little Choice
    But to Cut Their Losses
    March 17, 2008

    British billionaire Joseph Lewis made his fortune gambling on currencies. His recent investment in Bear Stearns Cos. has turned out to be a disastrous bet.

    The elusive septuagenarian is one the biggest losers from the New York investment bank’s problems. In just a few months, he has paper losses of about $800 million on his roughly 9.6% stake in Bear, whose share price has cratered in recent days.

  213. Essex says:

    Lowball….Any offer presented to a seller that upsets them, but they accept it anyway.

  214. HEHEHE says:

    Who’s next?

    Jon Najarian was on Fast Money Friday saying upon a comparison of the stock performance and option activity over the past months that Merril’s stock was moving in something like an 80% correllation to the way Bear’s was before the sh*t hit the fan.

  215. RentinginNJ says:

    We got in this position due to negative thoughts and a lack of patriotism…The markets have been brought low by terrorists


    On Saturday, our President, George Bush said:

    Many young couples trying to buy their first home have been priced out of the market because of inflated prices,” the president said. “The market now is in the process of correcting itself, and delaying that correction would only prolong the problem.

    Is President Bush now on your housing terrorist watch list?

  216. HEHEHE says:


    See 129. I am sure if Joe has kids they are seeking to have him institutionalized after his Bear bet.

  217. Confused In NJ says:

    The coming Depression is necessary for our society to correct itself. Once the Depression is fully realized, Political Psycho Babble will be Passe, and people will have to grapple with and adjust to reality. Pseudo employment will disappear, to be replaced once again by real employment. Many people will be unhappy as the Goldilocks Fairy Tale Society unravels and the people discover the Emperor has no clothes. The Depression will Herald the end of the Fake Economy and the renewal of the Real Economy. There will be plenty of opportunity for people willing to actually work at something productive, in the New Economy. Economic Treason will once again be illegal.

  218. Essex says:

    Cramer….Last 3 Mad Money Appearances: Aug. 17, 2007 – BSC was featured in the featured stocks and rated Bullish at 117.41. Jan. 25, 2008 – BSC was featured in the featured stocks and rated Bullish at 87.03. Feb. 11, 2008 – BSC was featured in the lightning round and rated Bullish at 79.76…

  219. RentinginNJ says:

    Word is, Lehman’s next.

    I bet on Merrill Lynch to collapse next

    I’m in for Citi next.

  220. Orion says:

    “company match in the 401(k) was forced to BSC.”

    That’s correct.

  221. Firestorm says:

    pretorius Says:
    March 16th, 2008 at 11:55 am

    The sales productivity at Jersey Gardens was $506 per square foot in 2007, making it the most productive mall in Glimcher’s 22-mall portfolio. To put this in perspective, the median US mall generates sales per square foot in the high 300s, so Jersey Gardens – like most coastal malls – is a lot more successful than average.
    That’s why it’s called “garbage mall”. A lot of sh@t on sale that didn’t sell else where.
    And, yes, I believe it will be very successful during this downturn, like Walmart was during the last one. Why I know it – we are their supplier. 2003 was the best year for us.
    You are just loosing the point – the volume per foot doesn’t mean the profit.

  222. Orion says:

    Re: Lowballing

    Let’s not mince words here. A lowball is a lowball is a lowball. Keep the word true to its’ meaning. No PC sentences needed. I’m so fri**ng tired of PC gobblygook.

  223. jmacdaddio says:

    I can’t wait to see what James Howard Kunstler has to say tomorrow about Bear Stearns on his blog tomorrow. This guy brings negativity to a whole new level. He makes all of us here look upbeat and positive.

  224. pretorius says:

    Firestorm, what do you supply to the Jersey Gardens mall?

  225. Orion says:

    From Marketwatch:

    “The dollar was changing hands at 97.06 yen at 10:49 a.m. in Tokyo, rebounding from its session low of 96.59 yen”

  226. Firestorm says:

    RE: pretorius Says:
    March 16th, 2008 at 10:40 pm
    Firestorm, what do you supply to the Jersey Gardens mall?

    Nothing. We are a Walmart supplier.
    Have you ever been to the garbage mall?? Have you seen Elithabeth/Newark public over there? Even people from New York come there to get a “deal”
    Yes, it’s fine to get something at 50%-60% discount and 3% tax on, and belive me, I come there once in a while. $120 for a Rain Forest winter leather jacket is a steal. That’s what’s going to be for the next couple of years. Big looses for the big guys and profit for the discounters. Been there.

  227. Essex says:

    eh…a real downturn is going to mean even marshalls is empty. Trust me. You can only own so many pairs of jeans and crappy import leather coats…before eating become the priority.

  228. Essex says:

    and if you supply Walmart…they’ll just make it harder for ‘you’ to make a profit when things really get bad…it’s their M.O.

  229. Firestorm says:

    RE:Essex Says

    Believe me, they make it harder to survive for their suppliers every year. But bad year means more sales, and more profit. Last year was bad, – company-wide salary freeze (thankfuly not for me – i got 30% ) and not likley any bonus coming. This year sounds much more promising

  230. RentinginNJ says:

    Ex-Aide Claims 3-Way Sex With The Mcgreeveys

    TRENTON (AP) ― A former aide to ex-Gov. Jim McGreevey claims he had sexual trysts with McGreevey and his estranged wife before the governor took office.

    Theodore Pedersen, McGreevey’s former driver and traveling aide, detailed multiple trysts in interviews Sunday with The Star-Ledger of Newark and New York Post.

    Pedersen, a 29-year-old real estate developer, told the newspapers that the threesomes started in 1999 while McGreevey was mayor of Woodbridge and McGreevey and Dina were dating. He said they stopped when McGreevey was elected governor in 2001.

    He said he only had contact with Matos McGreevey during the trysts, and wasn’t sure whether McGreevey was gay.

    “In hindsight, there might have been light interest (in me),” Pedersen told The Ledger, “but it didn’t seem like he was gay. It did enhance their sexual relationship having me be a part of it.”


  231. Essex says:

    Night all…tomorrow should be one hell of a ride.

  232. Firestorm says:

    Stupid me, never was able to explain in one word. Even in Russian :(
    Firestorm Says:
    March 16th, 2008 at 10:58 pm
    RE:Essex Says

    Believe me, they make it harder to survive for their suppliers every year. But bad year for the economy means more sales for discounters, and more profit. Last year was bad for us, – company-wide salary freeze (thankfuly not for me – i got 30% ) and not likley any bonus coming. This year sounds much more promising -at least we are 25% up on the orders for the year

  233. njpatient says:

    98 ket


    Three Ts?

    3b may have to be 4b

    bi may have to be tri

    Reech may have to be Overreach

  234. njpatient says:

    226 Firestorm

    Success at that mall is dependent on failure elsewhere.

    Rising revenue is a negative indicator.

  235. njpatient says:

    Do your worst Bergabe. Running out of BBs in the BB gun.

  236. jmacdaddio says:

    My favorite passage from the Guardian piece:

    “In the longer term, lessons must be learnt from the turmoil. One is that you don’t solve the problems of a collapsing bubble by blowing up another, which is what Alan Greenspan did after the dotcom fiasco in 2001 – the most irresponsible behaviour of any central banker in living memory.”

  237. Orion says:

    Big investors losing big $ on Bear.

    From WSJ:


  238. RentinginNJ says:

    is there much of anything else that the FED can do?

    Actually, yes. They can step in and defend the dollar by not cutting rates on Tuesday.

    Really want to stimulate the economy? Stop runaway commodity prices. Don’t cut Tuesday and you will see gasoline, heating oil prices drop rather quickly. Food prices will follow. This will put money in people pockets.

    The cuts aren’t doing anything to reignite credit markets anyway.
    All a big rate cut will do is get you a one day rally in the stock market followed by sell off, as the sobering reality hits that rate cuts wont do anything.

  239. Firestorm says:

    RE:njpatient Says:

    Success at that mall is dependent on failure elsewhere.

    Rising revenue is a negative indicator
    Now you are arguing with yourself. Garbage mall is an unique mall – it’s like Walmart within close proximity to poor population in NJ and NY +3% tax. That why it get’s so much sales per feet. You’ve never been there, otherwise you wouldn’t be arguing. And it will do much better, since other people like grim and I will go there instead of short hills mall to pick up things that is 50% off the price

  240. njpatient says:

    246 firestorm

    I was agreeing with you.

  241. Cindy says:

    Patient (from the other thread)60th bday party had Shafer Relentless 99-03 (syrah blend), Twomey Merlot, Caymus Cab -03’s I think – all from a friend who frequently goes to Napa. I’d say try any of them when you are up that way. – early to the airport.

    Who knows what everyone will be talking about by the time I get back – who will be in business- etc. But for tonight..I sure enjoyed myself..

  242. njrebear says:

    Orion @ 244,
    Thanks for the losers ‘L’ list.

  243. RGB says:

    How bad is this going to get, and is there anything that can be done to stop it? I just heard a guy on CNBC reporting on Australia, and he said something along the lines of “it’s bad, credit is drying up, the banks are getting hit hard, people are going to be defaulting more on their mortgages, nothing can be done to stop this, but we are not as bad off as the U.S.”

    Are we really headed toward a depression? Should I start eating cold oatmeal and turn off the heat? Someone who has a better grasp of all this–calm my nerves please.

  244. njpatient says:

    Thanks Cindy
    Big fan of the Caymus. The other I am only somewhat familiar with; will have to circle back.

  245. njpatient says:

    “How bad is this going to get, and is there anything that can be done to stop it?”


    Sorry for the no nerve calming. I recommend chamomile tea

  246. Steve says:

    $2/share….even for Dimon, that’s as close to free as it gets (plus all the Fed guarantees they received etc.). Yikes.

    Clot, re: your Lehman comment- I was at lunch w/ an institutional FI mgr when the Bear news hit, we got back to their offices pronto…one of their senior PMs indicated, thankfully, they had no Bear exposure and then “No Lehman exposure, either.”

    He paused for a split second, then followed “Not that we think anything would be wrong with them-”

    I have no reason at all to doubt his sincerity (good guy/straight shooter), but obviously there was concern. In this environment, nothing is being taken for granted.

    I still can’t believe the Bear news, the speed with which this all unraveled is really unsettling.

    Cayne still playing his f–ing bridge game, not answering his phone, while all this was happening. Unreal.

  247. njpatient says:

    ‘Sokay, bear. None of those will be in NYC. At least not in Manhattan. At least, not in the financial district.

  248. njrebear says:

    Yeap. None on the East Coast. All of the 8000 layoffs will be in California.

  249. Randy says:

    the slow walk down of the American way of living to that resembling some 2.5 world countries ought to be interesting to watch… the greed and arrogance of the financial industry in this country is amazing… how long till we get some convictions? ‘Bubbles’ Greenspan has really done a number, his legacy is garbage and sh!tstained forever now.

  250. Randy says:

    SKF…SDS…SRS… buy and hold stocks!

  251. njpatient says:

    Kids today. Lazy!

  252. reinvestor101 says:

    This is not me. Probably some lady who admires me and decided to take my name. I’m am a full blooded American male.

    Sybarite Says:
    March 16th, 2008 at 9:26 pm
    Is REInvestor101 a chick???


  253. Clotpoll says:

    galg (214)-

    The places you mentioned are good. I’d be a bit leery of Readington, though, as the township is lawsuit-happy…and not afraid to tax its residents to pay for its appetite.

    BTW, Readington has a habit of losing the suits it initiates.

  254. kumar says:

    hi Grim,
    Can you please include the excel spread sheet for the month of february
    I am interested in seeing stats for morris , union and somerset counties


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