“The numbers for us continue to rise”

From the Trenton Times:

Singing the mortgage blues

Otis Boone describes his housing problem as “a funny situation,” but stories like his have become common in Mercer County and around the country.

In August 2005 he and his wife moved out of Trenton and got a zero-down loan on a newly built home on Saratoga Avenue in Ewing Township. Boone, who worked in the shipping department at a train manufacturer, hurt his back the following year, went on disability and saw his income cut in half.

He couldn’t keep up with the mortgage payments of $1,900 per month, plus taxes and other expenses, as well as the prospect of even higher payments when his adjustable rate mortgage resets, he said.

Putting the place up for sale brought no offers, so last August the couple moved out of their home, which remains unoccupied, and moved into an apartment in Hamilton.

“At the time when I wasn’t making the payments, something like this never happened to me before,” said Boone, 59. “I wanted to get an apartment before my credit really got bad. I don’t know where I can get the money unless I get a miracle.”

As years of unrealistic subprime loans collide with job losses, personal misfortune and the slumping housing market, hundreds of Mercer County residents face similar crises. The number of county properties entering foreclosure hit a recent peak in January, and mortgage counselors who try to help people keep their homes say they see no end in sight.

The county had 180 foreclosure filings in January, according to records kept by County Clerk Paula Sollami-Covello. The number fell slightly to 167 in February and remained relatively high in March, with 145 filings received through Tuesday.

In March 2007 the county had a similarly high 176 filings, while the figures were lower through much of last year. Banks and mortgage companies file foreclosures when homeowners fall behind in their mortgage payments, but most do not result in people losing their homes.

Tracking the number of foreclosed homes is difficult because some of the filings include more than one property. But records maintained by private real estate companies, and the experience of counselors, confirm that owners keep falling behind on their payments at high rates.

“The numbers for us continue to rise,” said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, whose Trenton office has been overwhelmed with homeowners seeking help. “We’re at overcapacity and we see nothing letting up.”

RealtyTrac, a California company that has its own system for tracking foreclosures, reported a recent high of 452 filings in September in Mercer County and 349 in October. Last month the company reported 216 foreclosures.

New Jersey as a whole had 5,598 foreclosures in February, the highest figure in at least a year, according to RealtyTrac.

This entry was posted in Economics, Housing Bubble, New Jersey Real Estate. Bookmark the permalink.

267 Responses to “The numbers for us continue to rise”

  1. grim says:

    From the WSJ:

    Paulson Plan Begins Battle Over How to Police Market
    Amid Crisis, a Bid To Shuffle Powers; Fast Fixes Unlikely
    By DAMIAN PALETTA, GREG IP and MICHAEL M. PHILLIPS
    March 31, 2008; Page A1

    The Bush administration’s plan to remodel the patchwork system of U.S. financial regulation, built piecemeal since the Civil War, is the biggest salvo in what will be a long-running debate about the role of government in financial markets.

    In a sweeping proposal circulated over the weekend, Treasury Secretary Henry Paulson slaughtered a number of Washington’s sacred cows, proposing to merge or eliminate institutions of long standing including the Securities and Exchange Commission, and to create a controversial new role of supercop for the Federal Reserve. Mr. Paulson will formally outline the plan — originally undertaken last spring to streamline bureaucracy, not respond to the current credit crisis — on Monday.

    In an interview, Mr. Paulson said the regulatory system is broken, a growing sentiment in recent months in Washington as each of the nation’s financial watchdogs failed in a different way to prevent the foreclosure crisis and credit-market turmoil from spreading. “We need regulation, but if we have it, it should be just structured in a way that it has some way of being more effective,” he said. “Everywhere I look, I see the plumbing hasn’t changed to meet the realities.”

    Little is likely to happen this year, amid the fierce presidential and congressional election races, even on fixes that Treasury has designated as short-term items. That means a new Congress and president will determine the ultimate shape of any regulatory overhaul.

    But the battle lines were already forming over the weekend, and they stem from both ideology and turf.

  2. SG says:

    President Bush visits Freehold
    Video by Thomas Costello

    President Bush toured a Freehold credit processing company.

    http://www.c-n.com/apps/pbcs.dll/section?category=video

  3. SG says:


    US plans finance system overhaul

    The US Treasury is set to reveal its blueprint for the biggest overhaul of regulation of the financial sector since the 1930s.

    The plans are expected to propose giving sweeping powers to the Federal Reserve – enabling it to tackle the kind of turmoil that is currently hitting financial markets.

    Under the proposals, the Fed would become “market stability regulator” – allowing it to examine the books of any financial institution deemed to potentially threaten the stability of the financial system.

    It is also expected that the overhaul will see a new organisation set up to take over the role of the five separate banking regulators.

    A body to regulate business conduct and consumer protection is also likely to be proposed.

    Among other measures expected is the creation of a commission to establish stricter criteria for firms involved in the mortgage market.

    The review into the sector began early in 2007 after the financial services industry complained that over-regulation from Washington meant US firms were not as globally competitive as they could be.

  4. grim says:

    From MarketWatch:

    Euro-zone March inflation rise exceeds expectations

    Consumer price inflation in the euro-zone rose at 3.5% annual pace in March, Eurostat reported Monday, accelerating from the 3.2% rate seen in February and exceeding market expectations for a reading of 3.3%. Consumer inflation remains well above the European Central Bank’s medium-term cap of 2%.

  5. SG says:

    NYTimes RE section,


    That 6% Is Getting Harder to Earn

    THE EXTRA MILE Joan Goldberg, a broker at Brown Harris Stevens in Brooklyn Heights, plants flowers and buys trash cans to make her listings look as appealing as possible.

  6. SG says:


    10,000 finance job cuts forecast

    At least 10,000 jobs could be lost in the UK’s financial services industry during the next three months, according to a forecast by the CBI.

    Conditions in the financial sector – which includes banks, building societies and insurance companies – have not improved since the credit crunch began six months ago, Mr McCafferty said.

    “Some have suggested it’s the worst financial crisis since the Second World War,” he added.

    “I think one of the key characteristics is that it will go on for quite some time to come.”

    The financial crisis, which began after banks made huge losses on investments backed by US mortgages, has caused chaos on US and global markets.

    Well, NYC is different though.

  7. SG says:

    Wrote too soon,


    Job cuts shake Wall Street nerves

    By Dumeetha Luthra
    BBC News, New York

    Wall street is in crisis.

    The economy may not officially be in recession, but at this point that just seems like semantics.

    The US’s fifth largest investment bank; Bear Stearns has had to be bailed out.

    Lehman Brothers and Citigroup – New York’s financial royalty – are slashing jobs.

    In Manhattan alone they have cut 5,000 and more layoffs are expected.

    And as the big bucks go, so does the big spending.

    The city is already feeling the bite.

  8. grim says:

    From Bloomberg:

    New York City Real Estate Market Slows as Wall Street Cuts Jobs

    New York City’s residential real estate market is showing the first signs of fallout as U.S. banks and securities firms cut the most jobs in seven years.

    Manhattan apartment sales fell in January and February from a year earlier and new properties came to the market at the fastest pace since at least 2000, according to data from New York-based real estate appraiser Miller Samuel Inc. Transactions slid 6.4 percent to 3,250, while the number of condominiums, co- operatives and townhouses for sale at the end of last month climbed to 6,225, 15 percent more than at the start of the year.

    Declining sales indicate that the nation’s most expensive urban property market may founder this year as Wall Street retrenches, said Miller Samuel President Jonathan Miller in an interview. Financial companies have taken at least $208 billion in asset and mortgage-related writedowns. They’ve cut 34,000 jobs in the past nine months with more to come from the takeover of Bear Stearns Cos.

    “It’s very much of a concern because while the share of jobs being lost is relatively small, the income effect is large,” said Marisa Di Natale, senior economist at Moody’s Economy.com, based in West Chester, Pennsylvania. “Wall Street bonuses and salaries in particular have been propping up the Manhattan real estate market.”

  9. Clotpoll says:

    SG (5)-

    I’ve never found it easier to get the 6% (or the 8-10% I ask for short sales).

    Any seller with half a brain- who turns on the news once in a while- understands that getting the kind of honest advice that will lead to a decent sale is more than worth it these days.

    In my area, over 40% of all listings end up withdrawn or expired. Withdrawn and expired are two things most sellers cannot afford to have happen anymore.

  10. Pat says:

    http://www2.tbo.com/content/2008/mar/31/na-miami-firm-strikes-gold-with-mortgage-crisis/?news-nationworld

    “It’s the equivalent of a body cavity search, but for home loans.”

    Ba-bye, paperpushers.

  11. serenity now says:

    Can anyone tell me of all the homes
    nationwide , how many have mortgages
    and of those homes what percentage
    are currently in foreclosure?
    Just trying to get a sense of the
    big picture.

  12. Salty Steve says:

    Does anyone know when the last assessment was done in Livingston?

    Also, any idea when the next assessment may happen?

    …looking at homes here there all assessed at like 50 grand…

    thanks for the help

  13. mark says:

    I did a walk thru yesterday in the khov
    complex in w.paterson. they had an open house at 18 Garnet dr. listed at 486k.

    Are they kidding , it was an endunit overlooking rt.46.

    It was also listed with Century 21.
    They are also trying peddle these joints as Little Falls.

    I think the place i saw is worth maybe 350 at best. Oh, by the way taxes: 8400.

    I’ll take a pass

  14. BC Bob says:

    I tried to tell pret, about 6 months ago, that this would be just one of the many areas of major job cuts on the street. His response was that this was simply ancecdotal.

    I certainly would not want to be sitting, looking to sell, in an overpriced, overbought, depreciating condo on the mold coast.

    “Mergers and acquisitions bankers suffered a 35 percent drop in fees during the first quarter, just weeks after cashing bonuses from a record year.”

    “Advisory fees fell to about $8.7 billion from $13.4 billion in the first three months of 2007, data compiled by analysts at New York-based Freeman & Co. show. Executives at Lehman Brothers Holdings Inc. and Bank of America Corp. predicted in December that takeovers would decline about 20 percent this year.”

    “As recently as three months ago, we thought we had seen the worst and it was going to begin to get slowly better,” said Eduardo Mestre, 59, the former head of Citigroup Inc.’s investment banking unit and now vice chairman of New York-based advisory firm Evercore Partners Inc. “It only got worse.”

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

  15. syncmaster says:

    Fed eyes Nordic-style nationalisation of US banks

    By Ambrose Evans-Pritchard, International Business Editor
    Last Updated: 12:13am BST 31/03/2008

    The US Federal Reserve is examining the Nordic bank nationalisations of the 1990s as a possible interim solution to the US financial crisis.

    The Fed has been criticised for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers.

    A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region’s economy to its knees.

    While the responses varied in each Nordic country, there a was major effort to avoid the sort of “moral hazard” that has bedevilled efforts by the Fed and the Bank of England in trying to stabilise their banking systems.

    Norway ensured that shareholders of insolvent lenders received nothing and the senior management was entirely purged. Two of the country’s top four banks – Christiania Bank and Fokus – were seized by force majeure.

  16. Clotpoll says:

    mark (14)-

    I’d humbly submit that with taxes of $8,400- and a location overlooking Rt. 46- these places are worthless.

    Any property whose taxes are at, or near, 10K whose real values are south of 400K is illustrative of a housing expense equation that simply does not work. I wonder if HOV would be better served by suspending sales and simply renting these places out. I don’t know that area, but I’d guess they could charge a decent buck on a rental there.

  17. BC Bob says:

    [1],

    So the play requires more puppets, more strings to pull. How effective has the SEC been? Very quiet, no?

    Now Hank will be watching over the entire zoo. Well not exactly, Goldman will be perched right along side Hank. Can’t we just hire Nurse Rached?

  18. BC Bob says:

    he[18],

    Insulting to the rat?

  19. HEHEHE says:

    Who knew they liked Hockey Beer?

  20. Clotpoll says:

    In my neck of the woods, some of the smaller towns, such as High Bridge, are starved for new ratables. And, no new ratables are forthcoming, since the towns are simply built-out.

    You can find find multiple examples of what I’d call “basic” housing in these towns that feature asking prices of around 400K and tax bills in excess of 10K. The one unifying feature of all these properties is that sales are so few and far between, it’s virtually impossible to value them.

    When the sales do pick up on this type of home, I fear the valuations will not be high…

  21. x-underwriter says:

    Don’t worry, the government is going to take care of us. HUD will solve all the housing problems. Oh wait……

    WASHINGTON (Reuters) – The U.S. housing secretary will resign Monday morning under pressure after accusations of improper allocation of federal contracts, the Wall Street Journal reported in its Monday edition.

    http://news.yahoo.com/s/nm/20080331/bs_nm/usa_economy_housing_dc

  22. mark says:

    #17 Worthless. probably right after i think about it.

    w.paterson,clifton, Khov has a problem,

    get this, the salesman tried to explain that the bigger units were sold out into 2010. Probaly because they may have haulted building.

  23. Clotpoll says:

    BC (19)-

    Nurse Ratched? Hell, Dr. Frankenstein (Bergabe) can’t piece this cadaver back together.

    Multiple electric shocks to the patient…patient does not respond.

  24. Clotpoll says:

    mark (24)-

    Of the “bigger” units, watch to see how many actually close title.

  25. Mikeinwaiting says:

    http://www.youtube.com/watch?v=fJuNgBkloFE
    This would be funny if it wasn’t so pathetic. Yes are schools are working.

  26. Mikeinwaiting says:

    mark I thought the units in W Paterson were adult com. over looking beautiful RTE 46.

  27. Salty Steve says:

    This weeks real estate transfers in Morris county…
    http://www.dailyrecord.com/apps/pbcs.dll/article?AID=/20080331/UPDATES01/303310001

    what’s always interesting to me is the new constructions in Morristown selling like hotcakes for 700k+ (110 South Street)

  28. thatBIGwindow says:

    I want to retire there!

  29. chicagofinance says:

    grim Says:
    March 31st, 2008 at 7:16 am
    From Bloomberg: New York City Real Estate Market Slows as Wall Street Cuts Jobs

    Declining sales indicate that the nation’s
    “It’s very much of a concern because while the share of jobs being lost is relatively small, the income effect is large,” said Marisa Di Natale, senior economist at Moody’s Economy.com, based in West Chester, Pennsylvania. “Wall Street bonuses and salaries in particular have been propping up the Manhattan real estate market.”

    LIES. DAM(N) LIES. STATISTICS….

  30. chicagofinance says:

    grim & clot: the thing about the moose still applies……sorry

  31. chicagofinance says:

    BC Bob Says:
    March 31st, 2008 at 7:48 am
    I tried to tell pret, about 6 months ago, that this would be just one of the many areas of major job cuts on the street. His response was that this was simply ancecdotal.

    Bost: you are delusional….next you will tell me you are a gold bull….YOU FOOL

  32. chicagofinance says:

    Clotpoll Says:
    March 31st, 2008 at 7:56 am
    mark (14)- I’d humbly submit that with taxes of $8,400- and a location overlooking Rt. 46- these places are worthless.

    clot: does “submit” rhyme with “government”?

    BTW – since when are you humble about anything? 4 1’s eh?

  33. Clotpoll says:

    Think we’ve got problems? Think again:

    http://www.guardian.co.uk/world/2008/mar/31/zimbabwe3

    “The delay in official results of Zimbabwe’s presidential vote today fuelled international fears that Robert Mugabe was resorting to electoral fraud to hang on to power.

    The EU and Britain urged Zimbabwe’s electoral officials to publish final results of the vote as quickly as possible to “avoid unnecessary speculation”.

    An EU spokesman, John Clancy, said Zimbabwe’s electoral commission needed to show its “independence” amid claims by the opposition that they have defeated Mugabe in parliamentary and presidential elections.”

  34. njpatient says:

    “In Manhattan alone they have cut 5,000 and more layoffs are expected.
    And as the big bucks go, so does the big spending.
    The city is already feeling the bite.”

    That CAN’T be true!! Pretorius, remind me why…

  35. Clotpoll says:

    Chi (34)-

    I’m humble now. Kansas is not going to be an easy game. A big positive is that at least those guys don’t hate Roy…no revenge factor.

  36. Clotpoll says:

    patient (36)-

    It’s a sea of cabbage?

  37. John says:

    http://www.maltzauctions.com/auction_detail.php?ID=381071

    New Jersey single family home on 45 acres, bankruptcy auction

    Lots and lots of land cheap!!

  38. me says:

    clot, #25

    Um. . . In my neck of the wooods we call that “Dead.”

    sl

  39. Clotpoll says:

    sl (40)-

    Impaled, I presume.

  40. 3b says:

    #15 BC Bob: His response was that this was simply ancecdotal.

    yes that was his response. However, if our young pret had any real understanding of Wall Street, he would know that in many cases the ancecdotal stuff is where the real information comes from on the street.

  41. Outofstater says:

    #2 “credit processing company” Why did I instantly think of a slaughterhouse where sausage is made?
    PS: I’ve got Kansas to take it all.

  42. BC Bob says:

    3b [42],

    His ignorance is not a resulrt of his age.

  43. BC Bob says:

    that’s result.

  44. 3b says:

    #43 BC True: it is a result of his arrogance.

  45. Confused In NJ says:

    It will be interesting to see if Chatham, New Providence & Berkeley Height ever realize the Market has dropped. The Local Tax Authorities are still showing increases estimated values for 2007. Must be based upon a couple of houses which sold.

  46. John says:

    Thornburg Mortgage Inc. (TMA, $1.65, $0.17, 11.5%) said late Friday that it has received another extension through Monday to raise $948 million in new capital as part of a financing agreement with a group of lenders. The Santa Fe, N.M. real estate investment trust had already received a one-day extension of the deadline to Friday.

    I smell the vultures? How much do you guys think that 45 acres of NJ land will sell for? It has a small three bedroom house on a plot that would fit a mansion. Kinda weird.

  47. NJGator says:

    46 – the assessments were done when the market was higher. the towns don’t reassess every year. It is up to the individual homeowner to appeal their assessment if they feel that the market value of their home has dropped.

  48. 3b says:

    #46 confused:The Local Tax Authorities are still showing increases estimated values for 2007. Must be based upon a couple of houses which sold.

    The local tax authorities are in mnay cases clueless.

    Shocking as it sounds, only now are people actually waking up and realizing that sll is not well with the housing market; among other things.

  49. me@work says:

    A little help?

    I have a friend who bought 2.5 yrs ago and hates his house. His wife loves it but agreed to tear down and rebuild. He got ridiculous estimates (not even close to reasonable for him.)

    Should he wait/sell, stay teardown/rebuild, or any other opinions.

    He seems really down about it. He tells me the cost is 2- 2.5x what he wanted to spend.

    Any ideas?

    sl

  50. John says:

    53% of all HOMEOWNERS Have NO MORTGAGE .. none….

  51. BklynHawk says:

    #37 Clot-
    Looking forward to the game on Saturday. Partly because one of your fellow Tar Heels loved rubbing it in my face when Roy went to UNC. Because, he explained that Roy always wanted to go back to NC because it was a much better place to coach.

    I don’t know. He seemed pretty happy to be in Lawrence,KS when I saw him around. Part of his morning jog every day was a stop by the James Naismith gravestone.

    Two great teams with coaches who have a bit of history, as well. It should be a fun game to watch in any case.

    JM

  52. Stu says:

    Don Harrold has an interesting diatribe this morning (sorry for the length)…

    “Super Monday”

    Good morning,

    CNBC has a catch-phrase for every occasion. Today, with the “first quarter” a disaster and in the rear-view mirror, it’s time to look ahead. And, what better way to close one quarter on positive note than to give the last day a name:

    “Super Monday”.

    And, it’s not just “Super” because the quarter ends today. No, it’s “Super” because we get to hear Henry “Hank” Paulson (Mr. Secretary, to you and me) our Treasury Secretary (Goldman Sachs alum? You don’t say?) argue that it’s time to give the federal reserve some “sweeping new powers”.

    Now, say, that is SUPER.

    However, before I discuss that, there is one message you’ve not heard, yet. And, you certainly won’t hear it today. A phrase. A selection of words chosen to evoke action.

    One small phrase. A phrase with many iterations, for sure, but one phrase that could change the course of our economy.

    The phrase you have not heard is:

    “Pay down your debt, save money, and, live within your means.”

    Look at your own life. Look around you. Look at all the junk you have piled up in closets, sitting on shelves, collecting dust under your bed.

    Imagine your life without that extra car payment. What would you be able to afford now if you had not spent that extra $5 a day on fast food for the last 5 years? Think of the debt you would not have if you did keep your kids in “new clothes” every year.

    What about the trumped-up “holidays” that are used as excuses to get you to “buy” (I’ll deal with this “buy” concept in a moment) stuff? Christmas, birthdays, Valentine’s day, Memorial Day (etc), are all used by corporate America to take more money out of your pocket.

    Who is behind this cash grab?

    It starts at the very top. Remember September 11, 2001? Maybe you do. (yes, that was sarcasm)

    I bet, though, you don’t remember what President Bush said in his State of the Union speech on January 29, 2002:

    “The way out of this recession, the way to create jobs, is to grow the economy by encouraging investment in factories and equipment, and by speeding up tax relief so people have more money to spend. For the sake of American workers, let’s pass a stimulus package.” Source: WhiteHouse.gov

    The “way out of this recession” is to find a way to get people to spend more money. For the “sake of American workers?”

    Those word were chosen by the Bush Administration with great care. Those words, as Rush Limbaugh famously notes, MEAN THINGS.

    Think of it this way: You are told that spending money is the solution to a problem CAUSED BY SPENDING TOO MUCH MONEY.

    Here we are today, at another critical juncture in a history that’s just too long in the tooth, now. I feel it. I feel the times are coming where we’ll sadly remember what could have been.

    I’m just so very tired of the bullshit, double speak, misdirection, misinformation, and, outright deception.

    Just very tired.

    But, not tired enough yet to stop.

    Do you wonder why I’m telling you all this? Do you wonder where I’m going with it all?

    This is not an out-of-the-blue essay on the rampant consumerism in America. Nor is this a moratorium on spending “per se”. This is something else.

    You see, today, Henry Paulson, the United States Treasury Secretary, will announce the need for MORE powers for the federal reserve. Powers that the New York Times says will allow the fed to use “SWAT teams” to raid investment firms, hedge funds, and other “financial institutions” they (the fed) deem “a threat” to the “overall stability” of the economy.

    This comes at a time when our “overall stability” ain’t so stable.

    So, this new plan will seem – to the unthinking masses (who, really, couldn’t even tell you the difference between Hank Paulson and Hank Aaron) – as a wonderful new way to bring more “stability” back to THEIR lives.

    However, the only way to get more “stability” is for you to get out from under the crushing, shoulder-breaking, load of debt.

    That’s what this is all about.

    If you – and other tapped-out Americans – began to view yourself as PATRIOTS, as AMERICANS, and, HUMANS instead of rat-faced, junk-horders called, “the consumer” you could avoide the pain of any future “recessions”.

    The truth is that the current “crisis” was constructed by a group of people who’s only goal is ENSURE that YOU are financially enslaved. This group includes: the federal reserve, banks, and, “corporate America”.

    Think I’m wrong? Okay, then answer these questions and come to your own conclusion:

    1) Who was it that told people to sink their money into all those “dot com” stocks from 1998 to 2000?

    2) Who was it that raised interest rates during that entire market mania, thereby, making it “more attractive” to invest in stocks than “real estate”?

    3) Who was it that then began to drop interest rates for 3 years? And, who was it that began to promote this notion that “every American” should be a “home owner”?

    4) Who also began to promote these “risky” loans, and, practice “predatory lending practices”?

    5) Who was it that argued you should be buying stocks at “all time highs” in 2006 and 2007, ALL THE WAY TO THE TOP?

    6) Who was it that said when they lower interest rates, the market will go higher, and that you should just keep on buying, and keep on holding those stocks you bought at “all time highs”?

    7) Who was it that said we would not have a “recession” and that the US economy was just fine and that people should just keep on spending?

    8) Who was it that said it was GOOD that we had shipped our manufacturing jobs overseas?

    9) Who was it that said that investing in gold, silver, and, other precious metals was silly, and, that the only “asset class” with “long term value” was stocks and REAL ESTATE?

    10) Who was it that said it was a GOOD thing that the dollar continued to get hammered day after day?

    11) Who opened up the coffers of our tax base to BAILOUT banks, mortgage companies, and, investment firms?

    12) Who is it that pacified America with a $600 welfare check to be – SPENT – and to help “stimulate” our economy? This money, by the way is OUR MONEY. The federal reserve and the Treasury Department are only GIVING BACK a tiny fraction of what was stolen in the first place… With the hopes that you will…

    SPEND IT. Put it BACK in the pocket of CORPORATE AMERICA.

    And, WHO IS TELLING YOU NOW THAT WE NEED TO GIVE MORE POWER TO THE FOLKS THAT WERE BEHIND ALL THIS IN THE FIRST PLACE?

    Henry Paulson. Ben Bernanke. George Bush.

    Henry Paulson (Investment Banks). Ben Bernanke (Deposit Banks and our entire economy). George Bush (a complicit federal government).

    All those investment firms that promoted the “dot com” bubble? Why, they are being bailed out by YOUR TAX MONEY now. All those banks that made “risky” loans?
    Hey, they get bailed out, too! The administration who presided over this “mess”? Heck, they’re about to give even more control to the federal reserve!

    And, you get a welfare check for $600.

    Look, you have kids that depend on you. And, maybe not even your OWN. Stand up today and choose to change your life. Hold your children close and feel the trust they have in you. It’s time for you to do what’s right. It’s time for you to say, “ENOUGH”.

    You need to contact your congressman. You need to cut up your credit cards. You need to stop spending money TODAY. You need to get your financial house in order NOW.

    You will lose the immediate gratification that comes from spending money you don’t have, but, you’ll gain the long term freedom our founding fathers died to place at your feet.

    You see, the only way all this works today is if YOU continue to buy the lie that YOU MUST KEEP SPENDING MONEY YOU DON’T HAVE. As long as you continue to do that there will be, by design, “CREDIT CRUNCHES” and financial “crisis”.
    Because, the money just cannot be spent if you don’t have it…

    …because you already spent it…

    Thus, when you see Hank Paulson argue today that the federal reserve needs “sweeping new powers” look around you. Think of what you did to put yourself and your family in the position you are in where you even give a damn about these new “sweeping powers”.

    I think about it every day.

    Sincerely,
    Don Harrold

  53. Mike NJ says:

    #50

    Construction material prices are still through the roof. It very well may cost your friend more to build his dream house than to just buy the already built version of it. Yes it may not be totally new but these homes were built when construction material prices were waaaaay lower. Make sure your friend does the proper analysis of what he would build and then compare it to current asking prices for similar homes. If he is within 20-30% of his rebuild cost then he should wait it out IMO. There are many costs that your friend may not consider like renting a second home while the primary is rebuilt, moving and storage costs, etc.

  54. Bru says:

    This is for Gary, regarding his question in the previous thread about getting a Wii …

    Get to Toys R Us on a Sunday morning (obviously, not in Bergen County) between one and two hours before opening, and take your place outside the store. About 30 minutes before opening, staff will (hopefully) give you a number.

    It worked for me last month; I arrived at the North Bergen store one hour before opening and already there were 18 people in front of me. Thankfully, they had 100 units in stock.

  55. thatBIGwindow says:

    I think those “Feed the Pig” commercials are a good idea to get people into saving…but just as the housing psychology has changed, the perception of saving money as “trendy” and “cool” will definately get people to save and live within their means.

  56. Hehehe says:

    Lehman Bros. Scammed for $355 Million by Two Dishonest Employees

    http://www.bloggernews.net/114833

  57. RentininNJ says:

    Went to look at some open houses yesterday. It was my first open house tour of the new spring selling season. Most places, as expected, had light turnout, with mostly nosy neighbors on the sign-in sheets.

    The biggest change I saw was in the attitudes of the agents at the open houses. Any trace of smug was gone. If fact, they seemed a bit beaten down. They freely admitted that buyers are now in the driver’s seat and the market is not healthy. While some claimed to have offers, they seemed indifferent to these, as the offers were either ultra-lowballs or made by unqualified buyers. When I told them I had an 800 FICO and 20% down, their eyes lit up. They were more interested in representing me as a client than selling the house.

    Three years ago they wouldn’t even talk to you unless you walked in the door pre-qualified and were prepared to make an offer. Even last year, they copped an attitude when I asked about a softening market and falling prices; “well, get over it, maybe in Florida or Nevada, but that just won’t happen here”. Or, “the high end of the market is slow, but houses in your price range are selling very quickly”.

    We actually saw a place we liked yesterday. A 4 br bi-level in excellent condition on a nice quiet street in upper Passaic County. I think we could get it for a reasonable price. The problem is the taxes; $9,200 for a middle class home in a very middle class town with pretty average schools. These will be over 10k within 2 years. SO, I think we will pass for now. Although, It is nice to see decent places beginning to fall within our range.

  58. Clotpoll says:

    sl (50)-

    Unless he has prior general contracting experience and expertise (sounds like he doesn’t), he should put himself into a straitjacket until the urge to tear down/build new passes.

  59. Hehehe says:

    Homeowners Trash Their Homes
    Before Handing Over the Keys

    http://www.realestatejournal.com/buysell/markettrends/20080331-phillips.html

  60. me says:

    thanks, Mike and Clot,

    I will past the word on…

    sl

  61. Rich In NNJ says:

    From The Record

    N.J. banks at less risk

    The FDIC is adding 115 workers as it braces for an increase in bank failures in a weakened U.S. economy, but New Jersey officials and federal statistics say the state’s banks are healthier than most.


    Capital reserves at many banks have been depleted to one degree or another after the bursting last year of the housing bubble, and government officials are saying it is very likely that insolvencies will rise this year.

    “There will be an uptick in failures,” said Andrew Gray, an FDIC spokesman.


    The FDIC said in late February that 76 banks were on its confidential list of banks at risk of failing, up 52 percent from a year earlier. It was the biggest increase since the S&L crisis in the late ’80s and early ’90s.

    Still, that’s a historically small number, Gray said. “In 1990, close to 1,500 were on the list,” he said.

    More specific information on banks currently at risk is kept confidential by the government to prevent runs on the banks.


    According to the latest FDIC statistics, New Jersey-based institutions are generally healthier than those in the nation as a whole. As of Dec. 31, New Jersey’s commercial banks had a combined capital-to-risk-weighted-assets ratio of 13.04 percent, compared with 12.23 percent nationwide. The capital-to-risk-weighted-assets ratio is a key indicator of financial soundness. Savings institutions based in the state had a capital–to-risk-weighted-assets ratio of 22.14 percent, versus 16.8 percent nationwide.

    “I think the New Jersey banks came into this period with strong balance sheets after record growth from 2000 through 2006” said John McWeeney Jr., chief executive of the New Jersey Bankers Association. He said he has heard of no New Jersey banks in danger of failing.

    Earnings and loan demand are down, he said adding that “there is pressure but nothing too severe yet.”

    “If we are in a recession, the questions are how deep will it be, and how long will it go on?”

  62. Clotpoll says:

    Stu (53)-

    Word.

  63. Hehehe says:

    Couple of Good Congressional Reports, find out what the yahoo’s on the hill are reading as they plan to screw things up even more:

    CRS Report: Averting Financial Crisis

    http://assets.opencrs.com/rpts/RL34412_20080321.pdf

    CRS: Government Interventions in Financial Markets: Economic and Historic Analysis of Subprime Mortgage Options

    http://assets.opencrs.com/rpts/RL34423_20080325.pdf

  64. Hehehe says:

    Grim Please Unmoderate

  65. Rich In NNJ says:

    From The Record

    First-time buyers flex muscles


    So it’s a very good time to be a first-time home buyer. And homeowners are happy to get offers from first-timers, because they don’t carry the baggage of unsold homes.

    One Paramus homeowner, who asked not to be named because her deal hasn’t closed, said she put her home on the market for $479,000 in mid-February after scrupulously preparing it for sale. She had three offers on the house between the Sunday open house and the following Tuesday.

    “One of the people made an offer contingent on selling her house, so we didn’t take that,” said the homeowner. “The other two offers were first-time home buyers. The couple buying the house are now living in an apartment.”

  66. John says:

    Friend in Ho Ho Kus had an open house Sat and Sun this weekend, she had a person selling cable services, Jehova witness and two realtors show up. Not one person looking to buy a house. She actually called the owner of another open house after her’s ended to ask him if anyone showed up at his. He said only the two realtors that came to her house. Not a single person. Wow, 50 degree sunny spring day in Ho Ho Kus and two houses priced fairly reasonable at $610 and $640 could not get one single customer between the two of them. The buyers are on complete strike and no longer are even kicking the tires. Of the two realtors who showed up one actualy said they have no customer currently looking for a home and the other said she had one potential couple looking and she prromised that customer to the other open house already and the couple never showed up.

  67. bi says:

    22#, clot, with this third round COAH, new ratables might not be good enough to cover new schooling cost by afforable housing units, whcih can bring in little property tax if any.

    “New ratios are 1 affordable unit among 5 units and 1 affordable unit for every 16 jobs (previously ratios were 1 among 9 units and 1 for every 25 jobs)”

  68. Rich In NNJ says:

    John (67),

    Probably because both homes have been on the market for about a year and everyone has already seen them.

  69. bi says:

    i don’t know why you guys have to attach pret to feel good. even in this market, people who can bring money to the table has nothing to worry about. as pointed by bloomberg news a few days ago, some bear brokers have already started at another morgan. i believe pret is doing and will do much better than most people here.

  70. scribe says:

    from the LA Times:

    Overhaul of U.S. financial regulatory system proposed

    [snip]

    “In broad outlines, we agree with large parts of Secretary Paulson’s plan,” said Sen. Charles E. Schumer (D-N.Y.), a member of the Senate leadership who is also chairman of Congress’ Joint Economic Committee. “He is on the money when he calls for a more unified regulatory structure, although we would prefer a single regulator to the three he proposes.”

    Schumer also complained that the administration proposal did not appear to address the full spectrum of complex new financial securities, including so-called collateralized debt obligations, or CDOs, which repackage assets such as mortgages for sale to investors.

    Losses on such securities have cost Wall Street firms billions of dollars and made them and other institutions reluctant to lend money. That in turn has fueled the credit crunch that is squeezing the economy.

    “Very complex financial instruments have evolved in recent years, like CDOs and credit-default swaps, which pose potential problems in terms of systemic risk,” Schumer said. “The Treasury Department should address these issues as well.”

    —-

    Isn’t that one of the key issues?

    Aren’t derivatives an unregulated, over-the-counter market?

    I still don’t understand how Bear ended up with a 32-to-1 ratio of leverage to assets. But the big securities firms all seem to have that kind of http://www.latimes.com/business/la-fi-treasury29mar29,1,6243265.storyratio, to one extent or another.

  71. BC Bob says:

    “some bear brokers have already started at another morgan.”

    bi [71],

    Can you address the back office, fixed income trading and IT positions at Bear?

  72. BubbleYum says:

    Any history available on NJMLS #2809266? Thanks in advance!

  73. Clotpoll says:

    BC (73)-

    “Can you address the back office, fixed income trading and IT positions at Bear?”

    Some days you’re the bat…some days you’re the ball.

  74. njpatient says:

    71 bi

    The financial status of the poster is irrelevant to the question of whether he or she is making reasonable points.

    That pretorius is (or isn’t) fabulously wealthy and bullet proof isn’t relevent to whether his predictions of Manhattan’s immunity to job loss and New Jersey’s immunity to falling real estate prices are wrong.

    You could be the Sultan of Brunei, for all I know, but you still said that oil would fall to $40 and there would be no more writedowns.

    Just … wow.

  75. Pat says:

    My 89-year old mother-in-law told me yesterday that if she was still a taxpayer, she’d be pretty goshdarn upset (transl.= livid) if she’d been working and saving, and then had to pay extra taxes for the next 20 years because some idiot got to live in a nice, new house for free with no risk during that period.

    As I was filling in her “Stimulus Payment” a.k.a. dummy 1040, she also asked me what I thought about X bank.

    She’s thinking about moving her money!

    Grandma ain’t no dummy, and she hasn’t forgotten the depression. Poor in Nebraska, always a saver.

    Here’s some new slogans for the ever-more-powerful Fed:

    “Save, Save, Save, Slave!”

    “Eat Squirrel and Save.”

  76. chicagofinance says:

    Pat – SILENCE or I will attach to you.

  77. njpatient says:

    Fed up

  78. Pat says:

    Attach away. I got nothing you can find.

  79. njpatient says:

    When Klingon’s Attach

  80. bi says:

    73#, bob,
    back office: with more computerized trade processing, the positions in this area will always be in danger.
    FI trading: it will be gone if making no money even in good days.
    IT: outsourcing is still the trend. but if you are closed to business, your skills will still be in good demand from other banks and hedge funds.

  81. njpatient says:

    82 bi

    Let’s be clear, bi. You are claiming, like pretorious, that the current mess will not result in appreciable job losses for Wall Street?

  82. ledward says:

    #59, RentinNJ. If tax is the only problem to stop you buying, you might not get chance to buy in next 5 years. How could tax issue be improved in short term?!!

  83. Shore Guy says:

    I was driving last evening and heard an interview on the radio with a researcher who looks at the psychology of selling. His recent research is in the area of real estate pricing. I will look to find a link but in the meantime, here is a synopsis of his findings: In a rising real estate market, sellers price homes about 13% above where they think they will sell; in a declining market, sellers price homes about 30% (yes THIRTY) above where they think they will sell.

  84. Clotpoll says:

    Har! Paulson immediately fields question about regulation of “slice-and-dice” securitization.

    Thinks capital rules and disclosure rules should be imposed by regulator when they spot “overly complex” financial operations.

    Barn door open, horses gone.

  85. bi says:

    84#, wall street operates in cycle, now it is reducing jobs and a few months (years) from now it will hire pople crazing again.
    when LTCM blew up, everybody thought hedge funds were over. but you know the rest of the story.

  86. njpatient says:

    88 bi
    Who thought hedge funds were over? You?
    So now you’re saying you DO think there will be appreciable Wall Street job losses?
    Maybe you should go sit in a room alone and interview yourself for a bit in order to determine what you think.

  87. Rich In NNJ says:

    BY (74),

    NJMLS 2809266 is for rent (not sale) and the only history shows it was rented in 2003 for $2,000

  88. Clotpoll says:

    patient (84)-

    Perhaps bi sees I-bankers selling pencils in the subway or running a Sabrett stand as equivalent re-employment.

    Better yet, they’ll be self-employed in a small business: thie biggest generator of growth in our burgeoning economy!

    Sheesh.

  89. kettle1 says:

    Stu, 53

    That pretty much nailed it!

  90. BubbleYum says:

    Thanks Rich @ 90–good to know.

  91. Clotpoll says:

    (88)-

    You just can’t make up stuff this good:

    “..a few months (years) from now it will hire pople crazing again.”

  92. Clotpoll says:

    patient (89)-

    “Maybe you should go sit in a room alone and interview yourself for a bit in order to determine what you think.”

    I think this is a pretty good working definition of schizophrenia.

  93. njpatient says:

    94 clot

    Perhaps “pople crazing” is a Mel Gibson reference.

  94. Clotpoll says:

    patient (96)-

    90s = “wilding”

    00s = “crazing”

  95. Shore Guy says:

    Here it is:

    All Things Considered, March 30, 2008 · The usual economic truism — as demand goes down, the prices go down— doesn’t seem to apply in the current troubled housing market. Many homeowners prefer not to sell their home than to take a penny less than their inflated asking price.

    Hersh Shefrin, professor of behavioral finance at Santa Clara University, breaks down the economic conundrum for Andrea Seabrook.

    http://www.npr.org/templates/story/story.php?storyId=89225406

  96. John says:

    One was brand new, first weekend and had a picture ad in Bergen record and second house went on the market Palm Sunday. Doesn’t matter no one is buying.

    Rich In NNJ Says:
    March 31st, 2008 at 10:14 am
    John (67),

    Probably because both homes have been on the market for about a year and everyone has already seen them.

  97. Shore Guy says:

    The White House has started throwing bodies overboard. Perhaps a bit of premptive scape goating in case things get much worse?

    http://www.nytimes.com/2008/03/31/washington/31cnd-jackson.html?hp

    WASHINGTON — Housing Secretary Alphonso R. Jackson resigned his post on Monday, removing a key player from the Bush administration team dealing with the financial crisis set off by the slump in the housing market and the problems with subprime mortgage lending.

    [snip]

  98. chicagofinance says:

    Clotpoll Says:
    March 31st, 2008 at 10:59 am
    patient (96)-
    90s = “wilding”
    00s = “crazing”

    Moose man: wilding was 80’s…..

  99. Shore Guy says:

    Has anyone had a chance to listen to the radio clip?

  100. kettle1 says:

    71 Bi

    The attack on Bi is not about him personally. Its about his continued insistence that there will be no/minimal layoffs on wall street. His statements are obviously incorrect to everyone now. Admit you were wrong and move on. Its the refusal to acknowledge an incorrect call that is drawing the “attacks”

  101. AntiTrump says:

    Someone emailed me this. Thought I’ll share it with he readers if they haven’t seen it:
    ___________________________________________

    Once there was a little island country. The land of this country was the
    tiny island itself. The total money in circulation was 2 dollar as there
    were only two pieces of 1 dollar coins circulating around.

    1) There were 3 citizens living on this island country. A owned the land. B
    and C each owned 1 dollar.

    2) B decided to purchase the land from A for 1 dollar. So, A and C now each
    own 1 dollar while B owned a piece of land that is worth 1 dollar.

    The net asset of the country = 3 dollar.

    3) C thought that since there is only one piece of land in the country and
    land is non produceable asset, its value must definitely go up. So, he
    borrowed 1 dollar from A and together with his own 1 dollar, he bought the
    land from B for 2 dollar.

    A has a loan to C of 1 dollar, so his net asset is 1 dollar.

    B sold his land and got 2 dollar, so his net asset is 2 dollar.

    C owned the piece of land worth 2 dollar but with his 1 dollar debt to A,
    his net asset is 1 dollar.

    The net asset of the country = 4 dollar.

    4) A saw that the land he once owned has risen in value. He regretted
    selling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollar
    from B and and acquired the land back from C for 3 dollar. The payment is by
    2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan to
    C.
    As a result, A now owned a piece of land that is worth 3 dollar. But since
    he owed B 2 dollar, his net asset is 1 dollar.

    B loaned 2 dollar to A. So his net asset is 2 dollar.

    C now has the 2 coins. His net asset is also 2 dollar.

    The net asset of the country = 5 dollar. A bubble is building up.

    (5) B saw that the value of land kept rising. He also wanted to own the
    land. So he bought the land from A for 4 dollar. The payment is by borrowing
    2 dollar from C and cancellation of his 2 dollar loan to A.

    As a result, A has got his debt cleared and he got the 2 coins. His net
    asset is 2 dollar.

    B owned a piece of land that is worth 4 dollar but since he has a debt of 2
    dollar with C, his net Asset is 2 dollar.

    C loaned 2 dollar to B, so his net asset is 2 dollar.

    The net asset of the country = 6 dollar. Even though, the country has only
    one piece of land and 2 Dollar in circulation.

    (6) Everybody has made money and everybody felt happy and prosperous.

    (7) One day an evil wind blowed. An evil thought came to C’s mind. “Hey,
    what if the land price stop going up, how could B repay my loan. There is
    only 2 dollar in circulation, I think after all the land that B owns is
    worth at most 1 dollar only.”

    A also thought the same.

    (8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollar
    coins, his net asset is 2 dollar. B owed C 2 dollar and the land he owned
    which he thought worth 4 dollar is now 1 dollar. His net asset become -1
    dollar.

    C has a loan of 2 dollar to B. But it is a bad debt. Although his net asset
    is still 2 dollar, his Heart is palpitating.

    The net asset of the country = 3 dollar again.

    Who has stolen the 3 dollar from the country ?
    Of course, before the bubble burst B thought his land worth 4 dollar.
    Actually, right before the collapse, the net asset of the country was 6
    dollar in paper. his net asset is still 2 dollar, his heart is palpitating.

    The net asset of the country = 3 dollar again.

    (9) B had no choice but to declare bankruptcy. C as to relinquish his 2
    dollar bad debt to B but in return he acquired the land which is worth 1
    dollar now.

    A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net asset
    is 0 dollar. ( B lost everything ) C got no choice but end up with a land
    worth only 1 dollar (C lost one dollar) The net asset of the country = 3
    dollar.

    ************* ****End of the story******* ********* ********* ***

    There is however a redistribution of wealth.

    A is the winner, B is the loser, C is lucky that he is spared.

    A few points worth noting –

    (1) When a bubble is building up, the debt of individual in a country to one
    another is also building up.

    (2) This story of the island is a close system whereby there is no other
    country and hence no foreign debt. The worth of the asset can only be
    calculated using the island’s own currency. Hence, there is no net loss.

    (3) An overdamped system is assumed when the bubble burst, meaning the
    land’s value did not go down to below 1 dollar.

    (4) When the bubble burst, the fellow with cash is the winner. The fellows
    having the land or extending loan to others are the loser. The asset could
    shrink or in worst case, they go bankrupt.

    (5) If there is another citizen D either holding a dollar or another piece
    of land but refrain to take part in the game. At the end of the day, he will
    neither win nor lose. But he will see the value of his money or land go up
    and down like a see saw.

    (6) When the bubble was in the growing phase, everybody made money.

    (7) If you are smart and know that you are living in a growing bubble, it is
    worthwhile to borrow money (like A ) and take part in the game. But you must
    know when you should change everything back to cash.

    (8) Instead of land, the above applies to stocks as well.

    (9) The actual worth of land or stocks depend largely on psychology.

  102. chicagofinance says:

    2008 Tax Trivia:

    From what I hear, individuals who receive social security were automatically mailed a form 1040-A by the IRS to ensure that they recieved their stimulus payment, if eligible.

    Many recipients think they need to fill it out and return it.

    If they are working with a tax preparer and that person (or their agent) subsequently attempts to file their 1040, it will get rejected, because the person already filed a tax return for 2007.

    Just FYI.

  103. BC Bob says:

    From # 83,

    “Tinker Bell financial market”

    Gotta love this one.

  104. chicagofinance says:

    kettle1 Says:
    March 31st, 2008 at 11:15 am

    ket: pant up, you are being attached.

  105. Shore Guy says:

    “Tinker Bell financial market”

    Must make for an INTERESTING dress code.

  106. BC Bob says:

    What about Bear in Whipperny?

  107. mark says:

    whats the going rate on the sale of a home. 4/5/6 % commission? and length of the listing?

  108. lostinny says:

    Bi
    What should we attach Pret to? A cross, ropes hanging from the back of a pickup truck, a dunk tank?

  109. bi says:

    110#, mark, i made a recent sale and purchase. sale side: i paid 4.5% commission, purchase side: the seller paid 5%. my listing was about 30 days in length

  110. Shore Guy says:

    Does anyone see any brokers looking to reduce the share of commissions shared with agents?

  111. RentininNJ says:

    ledward Says:
    March 31st, 2008 at 10:45 am

    #59, RentinNJ. If tax is the only problem to stop you buying, you might not get chance to buy in next 5 years. How could tax issue be improved in short term?!!

    While taxes are a problem everywhere in NJ, $9,200 in taxes for a middle class home in a Passaic County blue collar town with very average schools is excessive even by NJ standards and not commensurate with the benefits. If I’m paying those kind of taxes on a typical house, I at least want good schools.

    The simplest way to address the tax issue as a first time buyer is to buy somewhere where the taxes are a bit more reasonable.

    I don’t expect the tax situation to improve anytime soon, but when you are starting that high as your baseline, even small percentage increases can mean big bucks.

  112. IVV says:

    102:

    I listened to Prof. Shefrin. (I love the folks out there; I got my Finance MBA there.)

    Basically, the idea is that our psychology gets in the way of a rational market. We are averse to accepting losses. So, a homeowner looking to sell in a market in which there is risk that the owner will have to realize a loss inflates the asking price. By doing this, the owner hopes that the magical buyer who is willing to pay at least the price that prevents a loss will come forward.

    Under normal market conditions, the premium asked for is typically around 12% above expected market conditions. However, in a down market, that premium jumps to 33%.

    In the end, there aren’t enough magical buyers to meet the inflated prices. People who don’t have to sell hold onto their properties (preventing the realization of the loss and the resulting psychological pain), and those who must sell…simply lose out.

  113. RentininNJ says:

    “..a few months (years) from now it will hire pople crazing again.”

    But in the mean time they be selling opples and bonono’s from a fruit cart.

  114. chicagofinance says:

    OT Delgado:
    Scouts now says he should retire immediately. He is projected at topping out with .230 15HRs. None of those stats will be clutch…

  115. scribe says:

    from the WSJ:

    Proposed Rules Bring Cheers, Fears
    Some on Wall Street
    Expect Simplification;
    Others, Greater Burdens

    By RANDALL SMITH, SUSANNE CRAIG AND ROBIN SIDEL

    March 31, 2008; Page C1

    [snip]

    The biggest concern for the big investment banks is their new relationship with the Fed. Since it began lending to securities firms two weeks ago, the Fed has demanded extensive information about the firms’ financial condition, which the firms have been supplying, a Wall Street executive said. The securities firms have little objection to continuing to provide this information if they can keep access to the borrowing window.

    But they are worried that the Fed and other regulators may seek to impose more stringent capital requirements to avoid a repeat of the Bear meltdown, the same person said. That would reduce Wall Street’s borrowing, which is both the driver of its profits and the source of its biggest risks. Wall Street firms typically borrow $25 for every $1 of capital they hold. That ratio resembles the debt-to-asset holdings of some of the very types of investment funds, such as Carlyle Capital Corp., that collapsed from just a slight decline in the value of their mortgage assets.

    Securities firms are expected to fight hard against this. They will say it could force them to raise the cost of products and services they supply to corporate clients, such as fuel-oil hedges. They will also say that unlike banks, securities firms don’t use federally insured customer deposits to fund their operations.

    Another argument Wall Street firms raise against stricter capital requirements is that Bear’s problem wasn’t as much a lack of capital as a lack of liquidity, which arose as that firm’s trading partners pulled away.

    On the other hand, the liquidity ills arose from concerns that about one-third of Bear’s assets were mortgages, which had suffered valuation declines.

    Few in the financial industry expect new rules to get approved anytime soon, but they praised Mr. Paulson for starting the process. “If nothing else,” added Mr. Hermance of Hudson City, “it gets everybody in the same room. We always work best after the problem has come.”

    http://online.wsj.com/article/SB120692086730275531.html?mod=hps_us_whats_news

  116. Frank says:

    #68,
    “Ho Ho Kus and two houses priced fairly reasonable at $610 and $640”
    Try pricing these homes are $300K and they will sell.

  117. Grandma says:

    Hey there, “Just FYI.” Thanks for making sure I get taken care of properly.

    I’m a tough old bird. There’s a lot of young ‘uns always trying to tell me to do things and to watch out for stuff.

    They sometimes need to be sure to check to make sure they’re not stepping all over each other and doing stuff twice.

  118. skep-tic says:

    how monumentally dumb was the Bear bailout?

    1. paved the way for a boatload of new regs on securities firms

    2. emboldened demand for bailout of “homeowners” (now beginning to look inevitable)

    3. delayed the day of reckoning for pricing of illiquid assets, ensuring continued financial gridlock

    why isn’t anyone publicly calling for Bernanke to resign?

  119. skep-tic says:

    saw some discussion over the weekend about waiting until houses are 2.0-2.5 times income to buy. Historic multiple in NYC area is 4.0x median income. This would still be a major discount to current prices

  120. Ann says:

    86 pricing

    Or they could just price where they think they will sell and actually sell their houses. That 33% number sounds high, but I would say 20% is probably the overpricing going on at first.

  121. thatBIGwindow says:

    I love the old timers. I can identify with them much better than my generation or the boomers.
    My grandfather was quite skilled and built his own house on land he bought. Didnt believe in banks, kept his money in his socks and in hidden compartments he built into his house (depression era survivor)

    He would even (gasp) make his own car repairs.

  122. #121 – What good are any of these regulations to begin with? The administration proposing them has only a few months left and no chance of getting any of this in place before they’re gone.

    Why turn over regulatory authority to the Fed? Alright, this is a somewhat rhetorical question as I suspect I know exactly why they want the Fed as the regulator.

    Why no talk about re-instating Glass-Steagal? Yeah, Obama mentioned last week. Why no public outcry though?

    why isn’t anyone publicly calling for Bernanke to resign?
    Good question.

  123. twob says:

    epstein redevelopment in morristown just called… theyre scheduling appointments now… sales office opening this weekend

    1br mid to high 400s…

    crazy

  124. Jill says:

    Anyone have any thoughts about where the condo market in the Mahwah/Ramsey area is going? I accompanied a friend to open houses yesterday, looking at 2br/2ba condos in some of the larger communities (Society Hill, Cambridge Heights, Timber Valley (?), etc.). You’d think that for $350K and up you’d get a place with an updated kitchen, but you’d be wrong. She’d like to find something where the disruption has already been done, but I suspect these are in the $450K range now, which is nuts for a condo.

    Any thoughts?

  125. skep-tic says:

    Glass-Steagal always seemed to me nonsensical. Don’t you want the firms underwriting securities offering to have large balance sheets (like the commercial banks) rather than thin balance sheets?

  126. #128 – But if the securities go belly up this then exposes the commercial side and people loose their savings.

  127. njpatient says:

    124 tbw

    My brother, who is in his 30s, has never had his car repaired by anyone but himself.
    He also built his own house.
    And brews his own beer.
    And grows his own vegetables.

    The old-timers haven’t cornered the market on those skills.

  128. Ann says:

    127 Jill

    I don’t know about the condo market, but Mahwah and Ramsey are crazy expensive. The good thing about Mahwah is the taxes are very reasonable, unlike Ramsey. Plus, there is a much better selection in terms of numbers, as you’ve already seen.

    Lots of them are about 20 years old, getting to that point where they need a little updating, but I would be willing to take on a little sprucing-up renovation like that for a better price, rather than pay for someone else’s granite.

    I would say somewhere between 300-350 for a 2 br, 1000 sf+ condo that might need renovations is reasonable right now. They’ve gone higher, close to 400 near peak, so if you got one that wasn’t renovated for 325K, that would be a good deal. Just my opinion.

  129. Ann says:

    131

    Actually, just looked at Realtor, I’d say, not renovated, closer to 300 would be reasonable. There’s a lot for sale, wow.

  130. Rich In NNJ says:

    John (99),

    Never mind. I see that they were off the market for some time and now back on.

    2730799 HOHKS $535,000 S/L HOLLYWOOD AVE
    2740828 HOHKS $575,000 S/L ADDISON PL
    2810152 HOHKS $609,000 COL BLAUVELT AVE
    2811896 HOHKS $624,500 COL RACETRACK RD
    2808108 HOHKS $639,900 B/L STONE RIDGE LN
    2801393 HOHKS $689,000 S/L W SADDLE RIVER RD

    2810152
    ACT BLAUVELT AVE $739,999 4/19/2007
    PCH BLAUVELT AVE $739,999 4/20/2007
    PCH BLAUVELT AVE $719,000 5/1/2007
    PCH BLAUVELT AVE $699,000 5/14/2007
    W-U BLAUVELT AVE $699,000 6/12/2007
    Re-list
    ACT BLAUVELT AVE $679,000 6/12/2007
    PCH BLAUVELT AVE $639,900 6/16/2007
    W-C BLAUVELT AVE $639,900 7/26/2007

    ACT BLAUVELT AVE $609,000 3/12/2008

    2808108
    ACT STONE RIDGE LN $724,000 3/7/2007
    PCH STONE RIDGE LN $719,000 3/7/2007
    PCH STONE RIDGE LN $699,000 5/24/2007
    EXT STONE RIDGE LN $699,000 7/23/2007
    PCH STONE RIDGE LN $649,000 9/4/2007
    EXT STONE RIDGE LN $649,000 9/4/2007
    EXP STONE RIDGE LN $649,000 11/3/2007

    ACT STONE RIDGE LN $639,900 2/28/2008

  131. make money says:

    Under the Paulson plan, … the Fed would retain … authority to write consumer-protection rules on things such as credit-card disclosures and the terms of high-cost mortgages …”

    What is the purpose of the United States Congress if private parties like the Federal Reserve or public agencies like the SEC, write rules?

    Do our beloved Members of Congress legislate no longer?

    What is their job now? The People’s Shopper?

    Members of Congress party hard on taxpayers’ cash — attending their many orgies in Washington.

    The only time any of the members shows up on the floor of the House or Senate happens when they must vote for a spending bill.

    No Constitutional Authority exists for any agency, public or private, to write law (establish rules) to which Americans must submit.

    This folks, is why our USA is crumbling

  132. make money says:

    Under the Paulson plan, … the Fed would retain … authority to write consumer-protection rules on things such as credit-card disclosures and the terms of high-cost mortgages …”

    What is the purpose of the United States Congress if private parties like the Federal Reserve or public agencies like the SEC, write rules?

    Do our beloved Members of Congress legislate no longer?

    What is their job now? The People’s Shopper?

    Members of Congress party hard on taxpayers’ cash — attending their many orgies in Washington.

    The only time any of the members shows up on the floor of the House or Senate happens when they must vote for a spending bill.

    No Constitutional Authority exists for any agency, public or private, to write law (establish rules) to which Americans must submit.

    This folks, is why our USA and it’s currency is crumbling.

  133. rhymingrealtor says:

    Chifi,

    My sister is disabled and recieves SSI, she got the 1040 form in the mail, I filled it out for her and mailed. She does’nt file normally, should she not have now?

    Thanks
    KL

  134. ledward says:

    #114,RentinNJ,”The simplest way to address the tax issue as a first time buyer is to buy somewhere where the taxes are a bit more reasonable.”

    Could anyone list the names of reasonable towns?

  135. Stu says:

    Could anyone list the names of reasonable towns?

    Clifton, Cedar Grove, Cranford.

  136. kettle1 says:

    stu ledward,

    Could anyone list the names of reasonable towns?

    Outside the state of NJ….

  137. bi says:

    136#, whippany, cedar knolls, east handover, cranbury, harding, alpine,…

  138. bi says:

    139#, i also heard the tax in englewood cliff is reasonable

  139. 3b says:

    #73 BC Bob: And Bear’s entire Municipal Bond Department, and probably most of their Fixed incoem Department, and many secreatries Admins etc.
    When it is all over probably 70% or more of Bear’s employyees will be gone.

  140. 3b says:

    #67 Rich You gotta love the Record. Another article in there yesterday about low ballers, and how some realtor in Ft Lee goes back to 2004 prices to determine the true historical value of a house.

    Never mind the lenders are only going back no more than 6 motnhs, and from what I have heard, in many cases no more than 3 months.

  141. BC Bob says:

    “Defaults on privately insured U.S. mortgages rose 38 percent in February for the 14th straight month as record U.S. foreclosures forced the industry to reimburse lenders for more bad loans”

    “The new data show the housing slump that sapped economic growth and brought some credit markets to a near halt may be getting deeper. The U.S. lost jobs for a third month in March, economists estimated, as homeowners cut back spending amid the declining value of their properties. The tightening job and credit markets made it harder for consumers to pay their debts.”

    http://www.bloomberg.com/apps/news?pid=20601087&sid=auvU0BeVBp38&refer=home

  142. Frank says:

    Goldman just cut their entire mortgage trading desk.

  143. John says:

    Go back to 1/1/01 price and if it is a dumpy low appreciation neighborhood figure in 3% annual appreciation and for a good neighborhood 5% annual appreciation. That is how much the house should be worth, too bad it isn’t what it is priced at.

  144. 3b says:

    #144 Frank: is that confirmed?

  145. schabadoo says:

    Was that a Duck siting at the end of the weekend thread?

  146. Secondary Market says:

    UPenn PHD: Atlantic City Housing Stock 64% overvalued.

    Great information on Philly Housing Numbers, see page 28 for above stat.

    http://www.goppelt.net/phpi/phpi4q07.pdf

  147. Mike NJ says:

    #144 Frank

    I don’t see this happening. Can you send us a link or something?

    3B,

    My initial guess was 75% so I am right with you on the Bear numbers. From what I heard many are being told April 15th is their last day. They are being paid double until then IF they stay and then of course they would get their package (pretty good numbers considering is the word). My guys on the street tell me that if you are a Bear employee and you are still employed by mid to end of May then you are now a JPM employee.

  148. Confused In NJ says:

    Good reason to consider either a 10 Year Mortgage or Mortgage Life Insurance.

    Study: Cell Phones Could Be More Dangerous Than Cigarettes

    Last Edited: Monday, 31 Mar 2008, 12:13 PM CDT
    Created: Monday, 31 Mar 2008, 9:43 AM CDT

    03/31/2008 —
    A study by an award-winning cancer expert shows that cell phone use could kill more people than smoking, it is reported.

    According to the U.K.’s Independent newspaper, the study, headed by Dr. Vini Khurana, shows that there is a growing body of evidence that using handsets for 10 years or more can double the risk of brain cancer.

    Khurana — one of the world’s top neurosurgeons — based his assessment on the fact that three billion people now use the phones worldwide. That is three times higher than people who smoke. Smoking kills some five million globally each year.

    He warned that people should avoid using handsets whenever possible and called on the phone industry to make them safer. France and Germany have already warned against the use of mobile phones, especially by children, it is reported.

    The study is said to be the most damning indictment of cell phone use. According to the Independent, cancers take at least 10 years to develop, which has influenced earlier cancer studies showing relative safety when using cell phones.

  149. ricky_nu says:

    Frank – #144

    Is this news online anywhere?

  150. RentininNJ says:

    Could anyone list the names of reasonable towns?

    Passaic and Essex Counties tend to be pretty bad. Both have big cities that suck up money. Morris County trends to be better with the taxes. While Morris County has Dover and areas of Morristown, but these don’t compare to Paterson and Passaic in terms of being money pits.

    I looked at 2 identical bi-levels yesterday. 1 in Wanaque (Passaic) and 1 in Pequannock (Morris). Same size, layout & amount of property. The property taxes in Wanaque were $1,200 higher.

  151. ledward says:

    #152, RentinNJ, for what reason you could not choose Pequannock one?

  152. Hehehe says:

    Excellent Piece from Minyanville:

    Who Will Be Next Bear?

    http://www.minyanville.com/articles/MER-jpm-bac-LEH-BSC-fre/index/a/16480

  153. chicagofinance says:

    For those who think my indexing rants are just blowing smoke up your posteriors…..I actually am not a bs artist…..

    PIMCO Launches Fundamental Advantage Funds
    PIMCO Fundamental Advantage Tax Efficient PFAEX and PIMCO Fundamental Advantage Total Return PFATX are heading your way.

    The latest from the fixed-income giant are market-neutral funds that invest for appreciation in the Enhanced RAFI 1000 Index (tracking the 1,000-largest U.S. stocks), while shorting the S&P 500. The tax-efficient version backstops its design with investments in municipal bonds, while the total-return version buys taxable equivalents. PIMCO offers these funds to take advantage of what it views as inherent flaws in market-cap-weighted indexes such as the S&P 500.

    According to the funds’ prospectuses, such indexes overweight stocks that are already overvalued and underweight ones that are too cheap. By shorting the S&P 500 and investing proceeds (and/or underlying fund assets) in the RAFI index–which PIMCO believes offers more-efficient stock weightings based on measures such as cash flows, book value, and dividends–PIMCO plans to take advantage of such inefficiencies. The bond portion of each portfolio will help give the funds a market-neutral feel. Time will tell whether these complicated strategies meet their objectives. But the bigger question is whether everyday retail investors really need funds with such strategies

  154. John says:

    RE 150, they get paid double after April 15th. My friends department got their 60 day warn act notice already. On April 15th they told them that Aprile 15th is the last day they have to report to work, the other 10% who stay past April 15th would get double pay until they are no longer needed. No employee in that department will be offered a job at Chase. My friend said he is very happy with the severence. The reason for the double pay is that they are letting the employees go after 30 days of the required 60 warn notice act miniminun notice. The employees starting April 15th will still count as regular full time employees even though they don’t have to report to work for the remainder of the 60 days so it is very nice the people who report to work get the double pay. After warn act pay expires they get severence and unemployment, sweet deal I am jealous. Summer off to boot.

  155. kettle1 says:

    this is for you 3b

    http://online.wsj.com/article/SB120696728099076923.html

    Farmers are expected to plant 86 million acres of corn this year, the government predicted Monday, down 8% from 2007, when the amount of corn planted was the highest since World War II. The decreased supply could drive corn prices even higher — a cost for food producers that could be passed on to consumers….

    As corn-fueled ethanol production keeps growing, corn used for ethanol will make up more than 30% of the corn crop by next year, up from 14% in 2006…

    Already corn stocks at the end of this year’s marketing year, which ends the last day of August, are projected to be the lowest in decades at 542 million bushels, says Joe Victor, a grains analyst at brokerage firm Allendale Inc. That is equivalent to about 28 days of corn. In 2005, the grain cupboards had about 70 days of corn. “We’re living on the edge of a knife,” Mr. Victor recently told a group of investors at the Chicago Board of Trade. “There is no room for error.”

  156. Mitchell says:

    Eh.

    Have you Bought in 2005?

    Walk away now and rent. Accumulate your 2010 down payment and start over with a significantly less mortgage. Quite possibly on the same home you walked away from. Just put it under the wife’s name.

    You know that in 2011/2012 were going to read about a few home owners who did this exact thing.

    Why cant I be less responsible like a good portion of American people? Maybe I will ask for my FEMA trailer. 4% mistake rate. Those are good odds nearly a 1 in 20 chance of getting approved for something one doesn’t deserve.

  157. RentininNJ says:

    #152, RentinNJ, for what reason you could not choose Pequannock one?

    I probably would go for Pequannock. Wanaque is a little farther “out there”, so prices have fallen farther. Pequannock is still fairly pricy. This, however, will be fixed by just waiting a little longer. I plan on getting serious in the fall.

  158. Stu says:

    ChiFi:

    I have been following the indexing/poorweighting debate for about 6 months now. I too agree that it has some validity. It’s a bit of a hot topic in investment club circles currently. I will wait a while to see the results of this strategy in both the new Pimco fund and in some passive portfolios that I am tracking.

    The market is so cyclical both vertically and horizontally (company size vs. sector) that at any given time period, it seems a different number of strategies would work best.

    Unfortunately, if you keep changing strategies, you stand to lose when the prior strategy starts working properly again.

    Woe is me!

  159. schabadoo says:

    27 Mikeinwaiting
    This would be funny if it wasn’t so pathetic. Yes are schools are working.

    Ummmmm…

  160. Stu says:

    Noticed that too schabadoo.

  161. lostinny says:

    161, 162
    The schools just didn’t work for him.

  162. 3b says:

    #158 Mitchell: You know that in 2011/2012 were going to read about a few home owners who did this exact thing.

    People will not have to wait near that long (2011/12)

  163. Mitchell says:

    #157 Nice Corn Pressuring Prices. I love it.

    Amateurs buy gold. Pro’s buy the farm.

    This is going to be a great year. ;)

  164. Mitchell says:

    #164 3b Your absolutely right but it probably wont be until 2011/12 that its on dateline’s series of “To Catch a Chapter 11/13 Mortgage Fraud”

  165. Herring123 says:

    The increase in popularity of indexing has no doubt caused growth in the marketing of pseudo-index or enhanced-index funds, ie funds that employ an active strategy or employ leverage with respect to an index, respectively, in an attempt to beat said index.

    It is likely that typical retail investors do not need such funds. My *understanding* is that “enhanced” index funds take on more risk, and have been hit harder than “normal” index funds over the past few months. I’d imagine that as with other active strategies, some pseudo-index funds will beat the index but a majority will fail, and it’s tough to pick (ahead of time) which ones will succeed, so given the increased expense of such funds, more people are probably better off with a plain vanilla index fund.

    Thus, this particular rant seems to be directed not at indexing itself as a legitimate strategy, but at companies that “hijack” the word “index” to use it as a marketing tool for active funds.

  166. chicagofinance says:

    Herring123 Says:
    March 31st, 2008 at 2:49 pm
    I’d imagine that as with other active strategies, some pseudo-index funds will beat the index but a majority will fail, and it’s tough to pick (ahead of time) which ones will succeed, so given the increased expense of such funds, more people are probably better off with a plain vanilla index fund.

    Herring: interesting…..what is your opinion based on?

  167. Mikeinwaiting says:

    O boy the grammar police are out in force.
    Yes it is our.I will try to get to the next GTG.
    Then we shall see what kind of debaters you
    folks are.I’m sure we can find something to disagree on.
    Some are very brave over the net.
    lostinny- That is a very astute obervation as you have never met me.You can tell that by a grammar error.Man your good.

  168. Sean says:

    Fun times down in Washington DC.

    Senator Harry Reid is calling for a procedural vote in the Senate tommorow to revive the forclosure prevention bill.

    This bill would let judges erase some of the mortgage debt of homeowners in bankruptcy, a contentious proposal backed by homeowner advocates but opposed by bankers.

    It would also devote more federal money to fixing abandoned properties and funding debt counseling, as well as give hard-hit homebuilders a tax break.

    The White House has threatened to veto the bill, calling it too costly and a bailout for lenders and speculators.

    Reid said recent months have shown the Bush administration’s hands-off approach to markets “simply doesn’t work.” The Nevada Democrat said the Paulson plan “is certainly a step in the right direction.”

    But he added, “Anything he’s talking about doing will impact the future … We feel the White House should direct their attention to what needs to be done now, not what needs to be done in the future.”

    http://www.reuters.com/article/politicsNews/idUSWBT00867620080331?pageNumber=2&virtualBrandChannel=0

  169. Herring123 says:

    My opinion is based on the conventional wisdom at diehards.org, which is supported by academic papers in the site’s reference library, available at: http://www.diehards.org/forum/viewforum.php?f=4

  170. Sybarite says:

    Mikeinwaiting Says:
    March 31st, 2008 at 3:09 pm

    Man your good.

  171. njpatient says:

    170 mike
    “You can tell that by a grammar error.Man your good.”
    meh – lost was just having some fun, mike. humor! ‘salright.
    And yes – you should come to the next GTG – people come across very differently in speech than in print.

  172. Grandma says:

    Come on, Mike, it’s just funny that you’re busting on schooling and burst out with the are/our thing and the your/you’re thing.

    Which, by the way, are (our) mistakes that are much easier to make in a forum like this.

    Emotion, the need we feel to communicate with others we know are there (their), and the importance of the subject matter all pump our (are) grammar into a more verbal and fluid form than your (you’re) typical written word, in which we don’t usually visualize the person we’re (were) “talking” to.

  173. Shore Guy says:

    One more reason not to pay the mortgage?

    from abovethelaw.com

    T]wo men pursuing a lawsuit in federal court in Hawaii…. think a giant particle accelerator that will begin smashing protons together outside Geneva this summer might produce a black hole or something else that will spell the end of the Earth — and maybe the universe.
    Scientists say that is very unlikely — though they have done some checking just to make sure.

  174. make money says:

    http://www.bloomberg.com/apps/news?pid=20601103&sid=ahgWx1z6LFxE&refer=usa

    Please don’t let BI or Pret read that Manhattan prices and sales decline due to Wall Street Job Cuts. Yikes.

    Last shoe always falls last.

  175. Outofstater says:

    #105 ChiFi – Thanks for the info. My mom received a packet with the 1040A forms enclosed and she was instructed to write “Stimulus Payment” on the top of the form she submits. I thought she received the packet because she hasn’t been required to file a return for years. In fact, it was something of a blow when the IRS said, never mind, you don’t make enough to file.

  176. Mikeinwaiting says:

    njp 174 Not a problem for me,I don’t nit pick other peoples stuff so sometimes I strike back.Ideas are open season & it is sometimes good to debate, but that petty crap is beneath me.

  177. Stu says:

    ChiFi:

    Just read through the PFATX Pros. Noticed, Mr. Gross himself is managing it. I also noticed the fees are about 1% and some sucker like me must go through a broker to buy it. $5 million minimum.

    I will be watching it closely though. From what I understand, it will probably do well in the current market, but will most likely underperform during a bull market. Will wait for an ETF or retail fund. Shouldn’t be long now!

    I do see it as a very interesting way to diversify though.

  178. schabadoo says:

    Mikeinwaiting

    Basic grammar mistakes while belittling people’s intelligence is gold.

    Plank. Eye. All that.

  179. pretorius says:

    Make money,

    Did you read the article?

    “Property prices are continuing to rise, for now. They gained almost 14 percent to a median of $850,000 in the first two months of this year”

    The journo did managed to discover some price declines – but they were asking prices, not resales in which the most recent transaction closed at a lower price than the previous transaction.

    New York apartment prices clearly can’t carry on rising when the local economy is weak. But I doubt that Manhattan apartment prices will crash back to early 2000s levels.

    If they do, then maybe I’ll be able to afford a nice place in Manhattan.

  180. Herring123 says:

    I don’t understand the point of market-neutral funds for typical investors. If you want to reduce risk in a portfolio, isn’t it much easier (and cheaper, with an expense ratio of >1%) to simply raise your bond allocation?

  181. Hehehe says:

    More than $20B in developments dead or at risk of never seeing light of day

    http://www.nydailynews.com/news/2008/03/31/2008-03-31_more_than_20b_in_developments_dead_or_at-2.html

  182. Clotpoll says:

    make (176)-

    That’s quite something you stumbled upon there. Thanks a ton.

    BTW, leasing/shorting gold is just one of the PPT’s dirty tricks. The other is just taking our physical reserves of gold (think Fort Knox), putting on a boat and shipping it to places like…er, China.

    Literally.

    The wheels are coming off. In fact, they are coming off in slow motion.

  183. Stu says:

    Hehehe:

    “More than $20B in developments dead or at risk of never seeing light of day”

    Does that mean we’ll get to keep the Nets?

  184. MS says:

    #136 “reasonable towns?”

    Cedar Grove has low, low property taxes compared to other towns,perhaps the lowest in Essex County.
    I think there is a lot of volunteerism in town (rescue squad, fire department) and that helps. Also, it has a “penny pinching mentality” re taxes.

  185. Hehehe says:

    I don’t know if keeping the Nets would be a good thing or a bad thing.

  186. Mikeinwaiting says:

    Renting Watch Pequannock flood zones all over the place.

  187. Clotpoll says:

    Stu (186)-

    What are these Nets? I wasn’t aware the fisheries industry was in trouble here.

  188. serenity now says:

    For the Realtors and Lawyers on board here…
    If during the inspection phase of a contract
    a large defect is revealed in the integrity
    of a home and the contract deal falls apart,
    is the owner legally obligated to fix the
    problem before relisting the house?
    Or can thay just list it in the seller’s disclosure? What happens if they choose to
    ignore the problem and just relist the home?
    Thanks in advance.
    I happen to be on the buying end of such a situation.

  189. chicagofinance says:

    Stu Says:
    March 31st, 2008 at 3:35 pm
    ChiFi: Just read through the PFATX Pros. Noticed, Mr. Gross himself is managing it. I also noticed the fees are about 1% and some sucker like me must go through a broker to buy it. $5 million minimum. I will be watching it closely though. From what I understand, it will probably do well in the current market, but will most likely underperform during a bull market. Will wait for an ETF or retail fund. Shouldn’t be long now! I do see it as a very interesting way to diversify though.

    Stu: I don’t think it is an equity fund. It is a fixed income fund (i.e. PIMCO) with an equity index-arb component…”…the latest from the fixed-income giant are market-neutral funds that invest for appreciation in the Enhanced RAFI 1000 Index, while shorting the S&P 500….”

  190. RentininNJ says:

    Renting Watch Pequannock flood zones all over the place.

    Thank for the heads up. I grew up in the area, so I’m pretty sure what’s safe & what floods.

  191. njpatient says:

    As a past attendee of our Real Estate Law programs, The City Bar Center for CLE invites you to attend “Future Perspectives on Affordable Housing & Economic Development In New York City Policy & Practice”

  192. rhymingrealtor says:

    Chi,

    Sorry to be a pest.. the tax thing, Was she supposed to send it in? While not a lot for most $300.00 is a lot for someone disabled.

    Thanks
    KL

  193. chicagofinance says:

    Herring123 Says:
    March 31st, 2008 at 3:17 pm
    My opinion is based on the conventional wisdom at diehards.org, which is supported by academic papers in the site’s reference library, available at:

    Herring: that is a Bogle site….it’s like watching Fox News for your political commentary….do you appreciate the conclusions of the “academic papers” and how their THEORETICAL points should be applied to INDIVIDUAL situations? or do you blindly follow the diatribes of a man that refused to collaborate with the directors of Vanguard and needed to be summarily “retired”.

    Just read the wiki and read between the lines…..
    John Clifton “Jack” Bogle…[edit] Upon graduation he went to work for Walter L. Morgan at Wellington Management Company.

    After successfully climbing through the ranks, he ended up as chairman at Wellington, but was later fired for an “extremely unwise” merger he put into place, a poor decision he considers his biggest mistake, stating “The great thing about that mistake, which was shameful and inexcusable and a reflection of immaturity and confidence beyond what the facts justified, was that I learned a lot” and moved on to found Vanguard in 1974.

    [chicago opinion – I would suggest that wisdom ensued, but ultimately his personal foibles persistence]

    [Note further – ]Bogle is famous for his insistence, in numerous media appearances and in writing, on the superiority of index funds over traditional actively-managed mutual funds. He believes that it is folly to attempt to pick actively managed mutual funds and expect their performance to beat a well run index fund over a long period of time.

    [note use of the word “insistence”]

  194. chicagofinance says:

    rhymingrealtor Says:
    March 31st, 2008 at 5:22 pm
    Chi, Sorry to be a pest.. the tax thing, Was she supposed to send it in? While not a lot for most $300.00 is a lot for someone disabled.
    Thanks KL

    KL – apologies…your family member is the intended target audience for the IRS. You should send in the form. Sorry for creating any false alarm.

  195. stu says:

    ChiFi: I get it, but do not see strong enough evidence that this will be a valuable strategy during an upturn. If you are using your gains from shorting the S&P 500 to invest in the enhanced RAFI 1,000. Then what do you get when the S&P 500 moves up? You would have to take some of the shares out of the RAFI gains to pay the short on the S&P, no?

    In backtesting since 1976, I read that the arbitrage strategy yielded a gain about 2% better than the S&P alone. Now factor in the >1% management fee and margin of error based on the possibility that the time period favored such a strategy and seems hardly worth it.

    I’ll keep digging, and I respect Gross a lot, but this wreaks of market timing IMO.

  196. 3b says:

    #182 pret: You deiall knows no bounds;simply amazing. Or perhaps sad.

  197. Not Chi says:

    KL, yes. One qualification for the minimum payment is to have received at least $3,000 in any combination of qualifying income from retirement, disability or survivors’ benefits from the Social Security Administration (as long as she is not a dependent or eligible to be a dependent on someone else’s income tax return).

    Refer to the sample 1040A she received. She will not have received a label, so be sure to enter her name, address, and SSN in the boxed area.

    Handwrite “Stimulus Payment” in the top margin.

    Recipients of Social Security, VA and Railroad Retirement payments must complete Line 14a of Form 1040A to report their 2007 annual benefits.
    Enter her SSDI in the (a) box for the year 2007, but do not enter any taxable amounts in the right column. An estimate (12 x her monthly check) should be sufficient.

    Sign and date in the signature section on the back of form.

    http://www.irs.gov/newsroom/article/0,,id=177937,00.html

  198. chicagofinance says:

    stu Says:
    March 31st, 2008 at 5:30 pm
    In backtesting since 1976, I read that the arbitrage strategy yielded a gain about 2% better than the S&P alone. Now factor in the >1% management fee and margin of error based on the possibility that the time period favored such a strategy and seems hardly worth it.
    I’ll keep digging, and I respect Gross a lot, but this wreaks of market timing IMO.

    stu: I’m not plugging the fund. I was bringing it up as an example that my opinions are: #1 held by many; #2 valuable enough that one of the greates fixed income minds out there would considering using a strategy that benefit from inefficiency. Otherwise, forget it.

    However, I just want to point out something….I first will say point blank that I hate back-testing etc. etc., but using your analysis:

    You are getting an actively managed bond fund by one of the best minds in the space, yet you are being given a 2% return boost with the market neutral strategy, and possible having that more than cover your asset management expenses. So you get arguably “PIMCO Total Return” for free and some extra cash……just saying…

    Bottom line: f the thing….

  199. Frank Hague says:

    Could someone give me a history on MLS ID# 70015027.

    Thank you in advance.

  200. chicagofinance says:

    OT Middle of the 4th: Mets 6 – Marlins 0

  201. njpatient says:

    6 – 2

  202. stu says:

    Point taken ChiFi:

    Last I checked Johann was throwing a no hitter. ;)

  203. stu says:

    Crap…Just checked the boxscore and now they’re only up by 4.

  204. chicagofinance says:

    Stu: bottom line…I like the RAFI or Wisom-Tree garbage better that any of the standard indeces if one was going to index.

    I think ultimately you would be very attracted to the DFA approach.

  205. chicagofinance says:

    unaudited
    Comparative Performance Statistics

    Quarterly / Trailing 12 Months

    Dow Jones Industrials
    -7.55% / -0.74%

    S & P 500
    -9.92% / -6.91%

    Nasdaq Composite
    -14.07% / -5.89%

    Leh. Brothers U.S. Aggregate Bond Index
    2.14% / 8.07%

    Consumer Price Index (CPI)
    0.80% / 4.00%

  206. grim says:

    Whew!

    25 Elkwood Terrace, Tenafly NJ

    Purchased: 7/23/2004
    Purchase Price: $1,150,000

    Sold: 3/31/2008
    Sale Price: $1,150,000

  207. spazz says:

    Apologies in advance for asking such a noob question, but I’m just looking for a little anecdotal insight into credit scores (and the effect of marriage) from the experts here.

    I’m about to get married, and my credit scores range from 775-790 from the three agencies. I don’t know what my fiancee’s scores are, but I suspect they’re in the 600’s.

    If we buy a house together, are our scores averaged in some way?

    Also, I have been seeing references that a 750 FICO gets you the best rate. Does a 800 score get you any better of a rate than a 750 score? Or is 750 the floor for the best rate?

    (Just FYI for background, I will have the 20% dp.)

  208. Herring123 says:

    Chi: I’m not sure what the point in posting the wiki is, it does not speak to the merits of an active v. passive investing argument. I am aware of who runs the site, it’s actually not run by Bogle (he has his own blog), but by his fans. While the group to some degree suffers from “groupthink” (as with njrereport folk) I’ve heard and digested the arguments set forth by the pro-active investing camp (and there are many; they get a lot of media press, ie Ben Stein and Jim Cramer, who wasn’t truly discredit until very recently) and don’t buy it. I think I’m smart enough to be a bit objective, here (I didn’t form my beliefs just because I’m annoyed I don’t have enough money for you to accept me as a client!)

    Anyways the Boglehead conventional wisdom isn’t that active management will fail over the long term. How else do you explain the success of Peter Lynch, Warren Buffet, and until recently, Bill Miller? Rather, it’s that long term success for actively managed funds is rare and tough to predict ahead of time; people in general do not pay enough attention to the compounding effect of costs; and staying the course in times of financial uncertainty is important to capture the relatively high returns offered by equities since most people are poor market timers (especially doctors and lawyers). As a group, it’s not anti-advisor, heck, the biggest contributors are advisors.

    Anyways, no point in summarizing what folks can read for themselves if interested, I just don’t see what Bogle’s personal story and/or attitude has to do with the active v. passive argument.

  209. lostinny says:

    Oh I miss the fun when I’m working. Take it easy Mike. I’m sure you are a great conversationalist. See you at the next gtg.

  210. grim says:

    If we buy a house together, are our scores averaged in some way?

    If you require her income to qualify, the short answer is yes. However, the way this is done can differ. No sense talking about them, since the methodology will differ.

    Your combined (averaged) score will need to be above the 720 mark to qualify for the highest rates. Maybe higher if you are talking about a portfolio lender.

    If you think you might fall below 720, I’d suggest finding out what her credit score is now, where the problems lie, and then working to raise it. Don’t wait until you’ve got a contract on the table to worry about it.

  211. grim says:

    If the problem lies in a lack of history, I believe the joint cardholder FICO hack still works. By adding your spouse as a joint cardholder on your longest and best history accounts, she gains the benefit of the longer payment history. This is a post-nuptual activity, as it will give your soon-to-be wife full access to your account, as well as responsible for any current debt.

    Otherwise, sit down together and pull the FICO, find out where the problems lie and take care of them.

    Shouldn’t be a big problem to raise that FICO a couple of points to ensure your average is over 720. Factor in a little breathing room (temporary dip in your FICO) for any wedding/honeymoon debt on your cards.

  212. chicagofinance says:

    Herring123 Says:
    March 31st, 2008 at 6:36 pm
    ie Ben Stein and Jim Cramer, who wasn’t truly discredit until very recently) and don’t buy it. I think I’m smart enough to be a bit objective, here (I didn’t form my beliefs just because I’m annoyed I don’t have enough money for you to accept me as a client!)

    herring: Stein and Cramer? Also, the rest of that comment I find really offensive, as it is a passive-aggressive insult that has no business in this discussion.

    You also wrote this….
    Herring123 Says:
    March 31st, 2008 at 3:54 pm
    I don’t understand the point of market-neutral funds for typical investors. If you want to reduce risk in a portfolio, isn’t it much easier (and cheaper, with an expense ratio of >1%) to simply raise your bond allocation?

    Herring: So you know enough to be dangerous, but that cuts both ways obviously.

    I want to point something out based on these comments. The Bogleheads really have two points: (1) do what we say works; (2) don’t worry about anything else, it is irrelevant. It is part 2 that gets my nose bent out of shape and ultimately make me refer to indexers as zealots or a cult (I used Bogleheads interchangeably). Why? People enjoy the simplicity it provides, because it takes something very complicated and gives you a rule of thumb. That’s fine, but please recognize it as such, and spare me your soapbox.

    I seriously do not think you appreciate the implicit assumptions you are making…..

  213. kettle1 says:

    question for the pro’s….

    consider the regulatory beast being proposed by paulson,(i.e the fed picking up a majority of the SEC’s powers). Isnt this letting the fox run the hen house? the fed is not a government organization (associated with but not run by). SO now we are going to have a corp comprised of the largest banks in the counrty (i.e the fed) regulating all the other banks. hope this clear, this is a complex question but dont have the time at the moment.

  214. Johnny Jersey says:

    Where Do We Go From Here??????

    My Fiancée and I are currently in the market for a home or town house in the central/east NJ area. Combined salary before taxes is around $115,000(with very little debt). We could be approved for a mortgage in the neighborhood of $350,0 00 but we realize this is unrealistic so we are looking for a home in the $230,000 price range. It seems that the government is looking to bail out people who have bought homes above their means in a market that was over inflated and now people like us who are trying to buy a home in affordable price range are the one’s to suffer. Many houses in the area we are looking to purchase still seem to expensive for us and if the government starts helping out people that cannot afford the homes they live in, it will only keep these prices at a level too high for the commoners. I do feel that some of these people may have been duped by mortgage brokers who may have been looking to make a quick sale but you should have really thought about what you were getting yourselves into. I pay taxes like everyone else and it doesn’t seem right that my tax dollar should go towards someone else’s poor perception of their own financial reality. If anyone has any insight into our current situation please respond.

  215. chicagofinance says:

    herring:

    I also want to respond here…
    “…As a group, it’s not anti-advisor, heck, the biggest contributors are advisors…”

    This comment is a fact, but is not for an intellectually honest reason.

    The advisors that focus on indexing use it for three reasons:
    (1) Gives an excuse to ignore active investing as a business practice with very little legal liability. Further it provides de facto CYA if the market goes south: market=approach.
    (2) Reduced time spent on investing means that advisers are freed to do the things that really matter to them, which is ignore their existing client base, and instead focus on marketing and sales to new clients.
    (3) Allows the adviser to invoke the mirage of some greater moral high ground or refined approach, when the reality is (1) and (2).

    At the end of the day, the most important issues in investment advice are: fiduciary responsibility, integrity, competence, fair compensation (and not a penny more).

  216. bairen says:

    MLS ID# 2501200

    I think this is a short sale. An agent emailed this listing to me and part of it reads “Sale subject to seller’s lender approval”

    Are the caldwells a nice area? How about Roseland and Verona?

  217. Mikeinwaiting says:

    217 JJ Your preaching to the choir.Write your congressmen make phone calls whatever you can.No one wants to see people on the street but the problem is to large to sort out good from bad.So they bail them all & we get screwed or they let the chips fall.There is an election this year check out who has the position that will help you.
    Keep saving for DP.
    I don’t think congress will get the bailout thru as Bush (Having been taken over by aliens)has vowed a veto.So the next President will be the one who controls the bail out.You never know maybe by fall this year you might be able to get something nice in that range.(I don’t know market in your area). Good Luck

  218. grim says:

    bairen,

    North Caldwell is a nice town, but that isn’t an ideal location in town. Near the Ol’ Essex County Pen, although not as close as the place on Ferndale I took a look at about a year back.

    I can’t say I’ve been up Mountain Place, the tax map says it’s a private road, but I don’t know how old that map is.

    Looks like a nice place, the price isn’t too bad. This property was listed at $525k for more than 200 days.

  219. rhymingrealtor says:

    Thanks Chi and Not Chi,

    I filled it out as you stated and sent it.

    KL

  220. spazz says:

    grim, thanks for the reply, it was extremely helpful.

    Yes, as far as I know, my fiancee has no real credit history other than her credit cards (ie, no student/car loan or mortgage). And seeing what I’ve seen, I suspect she’s been late on her payments a few times. :)

    One last question, though: my salary should be more than enough to cover the mortgage on the modest home for which we’re looking; can we still buy the home in both of our names but only use my credit history to apply for the mortgage?

  221. grim says:

    Tankan ugly..

  222. Johnny Jersey says:

    220 Thanks for your response. We have about $30,000 to put down right now and we are able to put away about $1100 a month for a down payment so the longer we wait the better off we will be. My main concern is the uncertainty of the market. Many people say that it still has further to fall but I am not so sure if this applies to all areas of the country. We are looking in Southern Monmouth/ Northern Ocean area. We put a lowball offer on a town home that went back and forth but the sellers ultimately decided they would be better off renting it out until the market came back around. It really came down to the fact that they took out an equity loan on this place and they could not afford to sell it at the price we were willing to give. I understand people expect the price of their homes to increase from year to year but they also have to realize that the artificial rise from 2005-2006 was just a mirage and now it is time to come back to the real world. The economy as a whole is heading south and the area I am looking to buy a place in is really not the hot bed for job opportunities. We are getting married in September and were originally going to wait until after to start looking, but the media makes it out to be like now is the best time to buy in the history of the housing market. Anyway I will continue to look around and give offers that I feel to reflect the true value of these homes. Unless I am completely delusional and everyone in NJ is able to afford to pay for overpriced homes.

  223. rhymingrealtor says:

    We are getting married in September and were originally going to wait until after to start looking, but the media makes it out to be like now is the best time to buy in the history of the housing market

    Johnny Jersey,

    It is not the best time in history to buy.

    KL

  224. Village Idiot says:

    We went rental apt hunting in Hoboken on Sunday. We are moving from a W. Village walkup looking for something with an elevator now that the wife is pregnant. We were surprised to find many street corners with a sign to an open house (for sales presumably). We looked at a 2 bed rental loft converted from an industrial building on borders with Jersey city. Nice place, if you like the open plan loft feel, but overlooking a railway junction on a road that I would never want my wife walking after dark. They wanted 3300 in rent (might go for 3000) but had obviously been on the rental market for a while from their attitude. They gave us an info sheet from when they bought 2.5 yrs ago at 599k and told us that they tried to sell but would def not to try and sell from under us if we moved in etc etc…. We left somewhat unimpressed and were standing on the corner at the lights and saw an old faded open house sign on the streetlight from 12/9/07 trying to sell the place for 635 (599+6%??). This flyer mentioned 12k pa in taxes and 850pm in shared fees. During our visit they also mentioned $120 per month ac/heat bill that they would pay. All in all, close to 2k per month from their 3300 (more like 3000) in rent.
    Ouch.
    The rental market is also soft, we went to a full service place near the PATH and the guy showed us 3 empty apartments on the spot. They would waive the BS $450 up front one time facility fee and if we signed that day it would be rent free til May 1 etc etc. I called this place twice last summer and they never even returned the calls.
    Even the famous ‘Boken is hurting!

  225. Johnny Jersey says:

    226 You may be right but all I hear is low interest rates, so many houses on the market, and not enough buyers (or at least not enough buyers that can get proper financing). This seems like the recipe for a buyers market but I do not seem to be reaping the benefits as of yet. Maybe I will just buy a house for as much as the bank is willing to lend me and wait for someone else to help me out when I can no longer afford to make the payments. No sense in waiting on the sidelines while everyone else is about to get a handout.

  226. Clotpoll says:

    pret (182)-

    That post does it. You are beyond hope.

    Is your “learning style” the one in which you need to get gobsmacked between the eyes 4-5 times in order to get the picture? Have you ever as much as talked to anyone who owned Manattan RE in, say, 1980 or 1991?

    I lived in Manhattan for years, courtesy of a mortally-crippled RE market. Any other scenario, I’m another bloke in the tube, hoofing it over from NJ. Isn’t there ANYBODY in your masters-of-the-universe company who can give you a clue?

  227. Clotpoll says:

    ChiFi (207)-

    Wisdom Tree = index guys who advertise to the world that they’re stockpickers.

    Gotta love it. Anybody who buys that crap deserves what they get.

  228. Clotpoll says:

    ChiFi (218)-

    Indexing blows.

    Just my .02 USD.

  229. Clotpoll says:

    bairen (219)-

    Caldwells = think Soprano, Tony

    Roseland = more lawyers per square foot that anywhere on Earth

    Verona = inventor of robbing parking meters born here

  230. Clotpoll says:

    spazz (223)-

    I think it’s time to make her swear some kind of blood oath. Or something. You can’t be a regular here until everyone in your family makes a public renunciation of their profligate ways.

    The oath should contain the following:

    – massive & mandatory cash savings
    – at least one weekend a month online, shopping CD rates
    – memorization of addresses of all NJ Trader Joe’s locations
    – no granite counters
    – foreswear purchase of the stock of any individual company
    – promise to rent forever, if necessary
    – promise to haggle with landlord at rent-renewal time, no matter what
    – no car more extravagant than a ’99 Subaru
    – no lunches out
    – $600 stimulus check goes to savings, no questions

    And, if all else fails, put her to the “Baltimore Colts” test, a la “Diner”. Here’s an updated version:

    Baltimore Colts Test

    This is the test I gave my ex-girlfriend. She had to pass this test before I would marry her. Yes, exactly like Eddie in Diner. Since I’ve never been married, she flunked.

    Short Answer:

    1. When did the Baltimore Colts die?

    2. Lydell Mitchell was traded for who?

    3. Bert Jones was traded to the LA Rams for two draft picks. Who did the Baltimore Colts draft with those picks? Bonus points if you can name the two NFL Hall of Famers the Baltimore Colts passed up.

    4. Joe Washington on a rainy Monday night, did what in his third game as a Baltimore Colts.

    5. Who started for an injuried Bert Jones to open the 1978 season?

    6. Johnny Unitas threw his final TD pass as a Baltimore Colt to what WR?

    7. What happened up in the sky during that game?

    8. What team did the Baltimore Colts play in their last game in Baltimore before they were stolen?

    9. What is the World’s Largest Outdoor Insane Asylum?

    10. What is the Ghost to the Post?

    11. The Baltimore Colts traded who, for the pick that they used on Bert Jones? Bonus points if you name what team the player was traded to.

    12. The Miami Seahawks of the All American Football Conference went bankrupt. What city did they move to?

    13. Don Joyce won a fried chicken eating contest during training camp one year. Who did he beat?

    14. If you pass this test and we get married, we will NEVER use what moving company?

    15. Johnny Unitas was drafted by the Pittsburgh Steelers. He never played a game his rookie season. But his picture was in newspapers all over the US. Why?

    16. Ernie Accorsi resigned a GM of the Baltimore Colts because?

    17. The Baltimore Colts got a #1 draft choice after Don Shula left for the Dolphins. Who did the Baltimore Colts take with that #1 pick?

    18. When that drunk bastard traded away that crybaby QB, he got Chris Hinton, Mark Herrmann, and a #1 pick in 1984. What else did that drunk bastard get from the Denver Broncos?

    19. The Baltimore Colts drafted four QB’s during the 1982 and 1983 drafts. Name the four QB.

    20. Name the four members of the Sack Pack.

  231. Pat says:

    http://tinyurl.com/352j9p
    Bear Stearns: Crisis and “Rescue” for a Major Provider of Mortgage-Related Products

  232. Herring123 says:

    Chi, you raised many points, its tough to respond to all, but here’s a good faith effort:

    In a prior comment, Stein and Cramer were names I pulled off-the-cuff, just because they’re big names. I could’ve substituted Peter Lynch, etc. with no effect. Also, I said the latter part to lighten the mood a bit, its tough to convey that over blog comments, I apologize for coming off as passive-aggressive.

    Regarding points (1) (“do what we say works”) and (2) (“don’t worry about anything else, it is irrelevant”) I don’t think that’s a fair assessment, as there is a diversity of opinion among Bogleheads, at least with respect to passive strategies. Many, if not a majority, utilize DFA funds or DFA-like strategies, and believe overweighting small and value stocks will continue to boost returns as it has in the past. Others take a more pure market-weight approach (in commenting on DFA, Bogle said “wiser heads than mine will have to determine how much exposure US investors need to something like small Japanese or international value stocks”).

    I personally have nothing against active strategies, as long as they’re low-cost. Heck, my entire fixed income allocation is in PIMCO Total Return. Still, I’m suspicious of market-neutral funds because it seems like the latest trendy marketing gimmick in the mutual fund biz (“now you too can use strategies employed by the fanciest hedge funds at the super low price of 1-and-change-percent per year”). Many fund companies only recently started rolling them out, even stodgy old Vanguard just got one. I (and probably most Bogleheads) am not against anything that’s not super simple, I just believe that in assessing a fancy strategy, its cost should be weighed against the obvious simple (and lower-cost) alternative.

    Regarding the contributing advisors, it’s difficult to be sure of their motives for adopting a particular strategy, but I think it’s unlikely that they adopt a certain strategy because they’re lazy and don’t care about their clients (I thought I was cynical). Call me crazy. Then again, I don’t personally know them or many other financial advisors, so it’s tough to say.

    Clot, if you’re still reading, I’ve learned a great deal from you, but its tough to take “indexing blows” seriously from a guy who thinks buying TIPS is like rolling over and dying.

  233. Pat says:

    Clot, are we really as much into groupthink as you and herring imply?

    If we all agree that we’re having groupthink, is THAT groupthink?

  234. Herring123 says:

    Re TIPS, I meant that only because they perform well during a flight to quality. Now that the real yield is zero I wouldn’t touch them with a ten foot pole either.

  235. Clotpoll says:

    Herring (235)-

    Sorry. I just can’t imagine investing without some degree of enjoyment being involved. The one thing Cramer advocates that I’d agree with is that you need a little ill na na-type action to keep your head in the game.

    I’d also submit that successful investing involves acknowledging that there’s an element of pure gambling at play.

    Indexing doesn’t blow…it’s just boring as shit.

  236. Herring123 says:

    Indexing is all about acknowledging that there’s an element of pure chance at play. For those that find gambling more stressful than enjoyable, like me, indexing is a fantastic strategy.

  237. Clotpoll says:

    Pat (236)-

    No. Just having some fun.

    Although some of the savings strategies I’ve read here lately verge on the Dahmer-esque.

    Damn, you only live once…and you can’t take it with you. Gotta have fun and let the freak flag fly once in a while.

  238. Clotpoll says:

    Herring (239)-

    Chacun a son gout. I just can’t abide watering down a hard-earned winning postion with a forced investment in a company that is known to be poorly-run and a money-loser.

    That, to me, is the definition of counterintuitive.

    It is just not that hard to identify companies that have superior earnings and decent management.

  239. Sean says:

    Clotpoll you need a vacation.

    go for it (this blog is not fun) before your head explodes.

  240. Punch My Ticket says:

    Clot [238],

    Indexing doesn’t blow…it’s just boring as shit.

    Sorry but I get my jollies elsewhere.

    WADR to your (and chifi’s) expertise, indexing is the simplest and least expensive way for most investors to go.

    I’m a little peeved about chi’s comment up at #218 re fiduciary responsibility, integrity, competence, fair compensation, as if the two most prolific advisors at Bogleheads – Swedroe and Ferri – are lacking any of those characteristics.

    Complicated product is built complicated so that the rubes can’t see what’s happening behind the curtain. It’s full of hand waving and smoke and mirrors so that the uninitiated don’t notice the fat fees. For every one like chifi who waves fiduciary responsibility, there are 100 who are held to no more than “suitability”, which means absolutely f-all in the real world, and usually to nothing at all, because investors don’t know they’re being fleeced or are too ashamed to admit it.

    Investing is boring? So what! Investing should be boring. Go for a walk, push your kids on the swing, coach little league. Hell, bet the ponies or play high stakes hold’em in Vegas if that’s how you get your kicks. But getting your kicks by letting some smooth talker churn your portfolio or fill it with some high fee “story” is financial suicide.

  241. Clotpoll says:

    Sean (242)-

    Thanks, but I’m not a vacationer. I coach soccer year ’round (plus, US Club games involve summer team travel), and my daughter plays lacrosse (can’t go anywhere during Spring break).

    I get my giggles by giving people the treatment. There’s a certain Zen in it.

    Until I snap, that is. :)

  242. Clotpoll says:

    ticket (243)-

    “But getting your kicks by letting some smooth talker churn your portfolio or fill it with some high fee “story” is financial suicide.”

    I agree. However, being a growth investor does not mean that one must chain himself to a “smooth talking” advisor. That is a complete fallacy. Your assertion reeks of straw man a bit.

    I’d also submit that an advisor- who’d willingly water down your returns by chaining you to companies that are documented underperformers- is the definition of “smooth talker”.

  243. Sean says:

    and Karma too Clotpoll……

    each giggle only increases the bad….

  244. John says:

    Hey johnny jersey marry ugly and rich that way you won’t have to worry about a mortgage. My brother always said when you go to a nursing home the old ladies all look the same so you might as well marry a rich ugly one cause in the end they all look the same.

    Just kidding, big guy congrats. Most newlweds in the last three years drank the kool aid and believed that renting is throwing money down the toliet so they jumped right in and overextnded themselves, don’t worry about rates going up. If you are saving your downpayment will grow in value if rates go up meanwhile housing prices often fall when rates go up. Getting a cheaper rate by putting down less and getting a bigger mortgage does not help. My wife somehow got a joint title but the mortgage is just in my name. what a deal for her. you don’t need to put your wife on the mortgage if you don’t want, but if you divorce she has the best put option in the world, if the house is underwater you get all the mortgage, if the house is in the black she gets half the profits, sweet.

    housing will fall for another 1-3 years, not a bad time to rent a cheap place, save more and skip the starter and go straight to the trade up in 2011.

  245. Clotpoll says:

    Prep-school, Ivy-finished, 1600-SAT “managers” are running the US economy into the ground…and now laying the groundwork for how you and I are going to bail them all out and pay for it all.

    They’re doing it by using their retard, bastard brethren from sleep-away-school (read: Bush, George) to abet their crimes.

    Can anyone please tell me why a reasonably smart person- with a modicum of intelligence and interest- can’t outperform these yutzes?

  246. Pat says:

    John, I think the SavingsDahmer comment was directed at you & me.

  247. njpatient says:

    229 clot
    ” Isn’t there ANYBODY in your masters-of-the-universe company who can give you a clue?”

    Clues are VERY expensive these days, clot. In fact, you need to really lever up to have any chance of buying one, I hear tell. Most folks take 30 years to pay off their clue loans.

    Some folks are apparently defaulting. Have to just walk away from their clues. Not a big deal, though – they just take a hit in the credibility.

  248. njpatient says:

    “housing will fall for another 1-3 years, not a bad time to rent a cheap place, save more and skip the starter and go straight to the trade up in 2011.”

    You’re singing my song. I’ll just get a headstart in 2010.

  249. Clotpoll says:

    John (247)-

    “My brother always said when you go to a nursing home the old ladies all look the same so you might as well marry a rich ugly one cause in the end they all look the same.”

    And when it’s time to do the nasty, roll ’em in flour and look for the wet spot, right?

  250. Punch My Ticket says:

    Clot [245],

    It’s money/mouth time. Here’s a list of the 25 biggest market caps in the S&P 500. Tell us today which ones will be “documented underperformers” in a year.

    ExxonMobil Corporation
    General Electric Company
    Microsoft Corporation
    AT&T, Inc.
    Procter & Gamble Company
    Chevron Corporation
    Johnson & Johnson
    Bank of America Corporation
    Apple, Inc.
    Cisco Systems, Inc.
    Google, Inc.
    Altria Group Inc.
    Intel Corporation
    Pfizer Inc.
    International Business Machines Corp
    American International Group
    Citigroup, Inc.
    J.P. Morgan Chase & Co.
    ConocoPhillips
    Hewlett-Packard Company
    Merck & Co., Inc.
    Verizon Communications Inc.
    PepsiCo, Inc.
    Coca-Cola Company
    Schlumberger, Ltd.

  251. John says:

    If there is a box of depends nearby their might be two wet spots.

  252. Sean says:

    Punch

    without a chart? cumon fella take the time to make a chart…

  253. John says:

    I redid my taxes tonight and I envy those subprime folks, I got pummeled by AMT and those folks are getting checks in the mail from uncle sam after stiffing the banks. With my 14K in amt I am handing out around 25 of those checks myself, hope I get some thank you cards.

  254. Punch My Ticket says:

    Hey, they’re documented underperformers. Who needs a chart?

  255. Sean says:

    re: (kettle1) The bingo prize is all yours.

    The Fed can’t bust anybody, but the can tell the ‘fellas” to please raise capital.

    Anyone who ever thought about going to law school or watched any old Capone movie knows the Treasury Agents have the power of arrest, real policing is what is needed, not another old watch dog that can barely bark.

  256. Clotpoll says:

    punch (253)-

    So, a growth investor must be a fortune-teller? Tell me if the Pats will be in the Super Bowl next year.

    However, as far as documented YTD performance, these guys are a no-brainer (I should also disclose now that I have a significant position in SDS, which double-shorts the S&P 500).

    I’ll cut-and-paste your list, and comment on each. The time stamp of this will show that I’ve had no time to research any of these before giving a buy/sell call. My own little Lightning Round…fun!:

    ExxonMobil Corporation- ok dividend, a snooze otherwise
    General Electric Company- falling asleep, law of big numbers
    Microsoft Corporation- no b@lls, no dividend, show some stones and get into a real fight with Yahoo
    AT&T, Inc.- brief run is over; SBC with a coat of lipstick
    Procter & Gamble Company- outstanding company, just performs and performs
    Chevron Corporation- watered-down Exxon
    Johnson & Johnson- please
    Bank of America Corporation- buy this, you are a certified idiot
    Apple, Inc.- big run, catching breath, will grow slower now
    Cisco Systems, Inc.- great investment…in 1996
    Google, Inc.- see Apple
    Altria Group Inc.- break-up a bit disappointing; can’t go wrong selling cigs to the rest of the world though
    Intel Corporation- gouge out my eyes with a grapefruit spoon
    Pfizer Inc.- talk about dead man walking…
    International Business Machines Corp- why can’t I be long it when they get these nice pops?
    American International Group- former CEO is Lucifer; lots of subprime investments. Great buy…if you’re a m@sochist
    Citigroup, Inc.- yeah, right
    J.P. Morgan Chase & Co.- enough derivatives exposure to destroy the free world. I think I’ll buy this with a market order!
    ConocoPhillips- value trap
    Hewlett-Packard Company- I thought Carly was kinda hot
    Merck & Co., Inc.- who knew statin drugs wouldn’t work any better than Pez?
    Verizon Communications Inc.- love FIOS; hate toxic corporate culture
    PepsiCo, Inc.- excellent performer, well-run; a good defensive play
    Coca-Cola Company- see Pepsi. So. American branch (KOF) is better buy
    Schlumberger, Ltd.- love it, super well-run, will pop again when natural gas takes off this Summer

  257. Clotpoll says:

    John (254)-

    Thanks for seeing my gross and raising it a disgusting.

  258. d2b says:

    Not sure about the stocks but I would bet against the Pats next year.

  259. Clotpoll says:

    Punch (253)-

    Even in a good market, the S&P 500 doesn’t interest me much. I always have the feeling that the easy money’s been made, and the smart guys are long gone by the time any company makes it onto the index.

    Here’s the stuff that catches my attention- both good and bad- as a growth investor (all disclaimers):

    Yamana Gold
    Mosaic Companies
    Monsanto
    Silver Wheaton
    Guess
    Hologic
    Range Resources Corp
    Boston Beer
    Sociedad Quimica de Chile
    Petrobras

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