Mon 5 May 2008
From Bloomberg:
Wall Street CEO Chorus Is Singing Out of Tune
It’s become fashionable in certain circles — primarily among administration types and Wall Street chief executives whose banks are losing gobs of money — to say that the worst is over for the subprime/housing/credit/economic crisis in the U.S.
Whether they express their optimism in baseball terms (“in the eighth inning or maybe the top of the ninth”), as a percentage (“maybe 75 percent to 80 percent over”) or in the form of a timeline (“closer to the end than the beginning”), these faith-based predictions contain the audacity of hope.
I mean, where’s the evidence? Let’s start with Public Enemy No. 1: housing. For all the false claims of a bottom in the last two years, real residential fixed investment, as it’s called in the gross domestic product accounts, keeps registering increasingly larger declines. In the first quarter, residential investment fell at a 26.7 percent annualized rate, the ninth consecutive quarterly decline and the biggest since 1981.
Home sales and prices continue to plummet. Until buyers step in to absorb the glut of homes on the market, compounded by foreclosed properties dumped on the market at a time when credit availability is constrained, it’s hard to see why home construction should pick up anytime soon.
The deterioration in the value of a household’s main asset has sapped consumer confidence and spending. Spending rose 1 percent in the first quarter, the smallest increase since the 2001 recession.
…
The financial strains will eventually abate, but the effects from the credit channel will linger, taking their toll on the real economy.“Phase Two of the crisis is coming from rising unemployment, rising commercial real estate vacancy rates and falling profits,” says Paul Kasriel, chief economist at Northern Trust Corp. in Chicago. “This will precipitate problems in credit card, auto loan, commercial real estate and high yield corporate debt. We are in the eye of the hurricane right now.”
Even the eye isn’t looking so great.
From the Washington Times:
Economic slump hits luxury-car market
U.S. sales of luxury auto brands including Toyota Motor Corp.’s Lexus and Daimler AG’s Mercedes-Benz decreased last month, adding to evidence that the economic slowdown is causing even wealthy buyers to curb spending.
Sales by automakers’ luxury divisions — broadly defined by analysts as those selling autos for $40,000 aimed at the most-affluent consumers — dropped 13 percent from a year earlier, according to Woodcliff Lake, N.J.-based Autodata Corp. That outpaced the 8.9 percent decline in sales of all vehicles.
The results reflect the run-up in gas prices, dropping real estate values and tighter credit that forecasters said may halt economic growth by midyear. Sagging stock markets and shrinking bonuses may also be weighing on premium-brand buyers, spurring them to join lower-income shoppers in paring purchases.
“Normally, the case is the upper end is unaffected” by the economy, Jeff Schuster, an automotive sales analyst with J.D. Power & Associates in Troy, Mich., said in an interview. “You have this financial markets crisis that appears to have impacted the segment to a greater extent.”
From MarketWatch:
Housing weakness isn’t over yet, Buffett says
Housing market weakness isn’t over yet, Berkshire Hathaway Chairman Warren Buffett said on Sunday.
Residential real estate markets in Nevada, California, Arizona and Florida have been hit the hardest, but trouble in those states has a “mild contagion effect,” across the whole U.S., Buffett explained.
Buffett said he sold two residential units in San Francisco about two years ago. The real estate agents wanted him to list one of the properties for $995,000, but Buffett listed it above $1 million and it sold for $1,750,000 in one day, the billionaire recalled.
“There were 20 buyers that day,” Buffett said during a company press conference. “That wouldn’t happen now — it wouldn’t happen in San Francisco today.”
“It’s not over yet,” he concluded.
From the WSJ:
Wall Street, Lenders
Face Subprime Scrutiny
By AMIR EFRATI
May 5, 2008; Page A4
Federal prosecutors are stepping up their scrutiny of players in the subprime-mortgage crisis, with a focus on Wall Street firms and mortgage lenders.
Prosecutors in the Eastern District of New York in Brooklyn have formed a task force of federal, state and local agencies that will involve as many as 15 law-enforcement agents and investigators.
The U.S. attorney for the office, Benton J. Campbell, who supervises about 150 prosecutors, said the group will look into potential crimes ranging from mortgage fraud by brokers to securities fraud, insider trading and accounting fraud.
Mr. Campbell said the “jury is still out” on just how much criminal activity the office might find, particularly on Wall Street, which saw a sudden decline in the value of securities backed by pools of mortgages last year. “There are market forces in play in that area, and that doesn’t necessarily mean there is fraud,” said Mr. Campbell, 41 years old.
From the WSJ:
Economy May Face Prolonged Pain, History Suggests
By GREG IP
May 5, 2008; Page A2
The worst of the financial pain may have passed, but the economic pain could be just starting.
The nation’s financial markets have rallied since early March, with stocks up and yields on risky corporate and mortgage-backed bonds falling relative to safe U.S. Treasurys. Optimists got an added boost Friday from a government report that U.S. unemployment fell in April.
But history suggests celebration may be premature. It’s common in a crisis for markets to hit bottom long before the economy does. That’s because markets are forward-looking and because economic weakness is the way the underlying imbalances that produced a crisis are corrected.
The financial crisis is usually an expression of broader problems in the economy,” says Harvard University economist Kenneth Rogoff, who along with Carmen Reinhart of the University of Maryland, recently wrote a history of financial crises back to the 1300s. “It’s a mechanism that exacerbates and deepens the recession, but it’s seldom the trigger.”
The economic fallout from a crisis depends on how much underlying economic factors — such as consumption, investment and asset prices — are out of whack with their fundamental determinants. The 1987 stock-market crash and the near-collapse of hedge fund Long Term Capital Management in 1998 threatened the heart of the financial system. But the underlying imbalances were largely limited to the financial markets themselves: stocks overvalued relative to earnings in 1987, and excessive hedge-fund borrowing in 1998. Thus, once the Federal Reserve’s rescue operations had mitigated the threat to the financial system, the economic fallout was limited.
The current crisis is different. For several years, U.S. home prices and home construction kept climbing past levels considered sustainable. Homes became collateral for trillions of dollars in borrowing. That depressed savings, inflated consumption, fueled rapid lending and loosened loan standards.
When home prices stopped rising, the diciest mortgages began to default, triggering the crisis. But even now, prices are above most estimates of sustainable levels, and household saving has barely picked up. Even if the Fed’s bailout of Bear Stearns Cos. in mid-March proves the apex of the crisis, as some think, the economy could still contract as consumers adjust to lost wealth and reduced access to credit.
From the NY Daily News:
Used car lots take backseat
Slow economies have historically meant big business at used-car lots. This time, though, a credit crunch has buyers crowding big dealers to check out cars referred to as preowned.
It’s all about the financing: New car dealers can offer loan arrangements on both new and used cars, while traditional used-car lots leave it to customers to get loans.
This year, it’s been tougher for consumers to qualify for used-car loans - though more people than ever need financing to make their purchases, said Sam Novel, the owner of Automania in Long Island City, Queens.
“The banks are being more picky,” said Novel, who predicted that sales at his used-car lot on Northern Blvd. will be lower this year than 2006, his last robust year.
Weak auto sales are another indication that the subprime mortgage crisis has spread well beyond real estate.
From Bloomberg:
UBS May Cut 8,000 Jobs After 12 Billion-Franc Loss
UBS AG may cut as many as 8,000 jobs as it grapples with the biggest credit writedowns of any European bank and a 12 billion-franc ($11.4 billion) first-quarter loss.
Switzerland’s biggest bank, which had a 3 billion-franc profit a year earlier, is set to spell out plans for layoffs when it reports detailed results tomorrow. The company will probably say it’s eliminating between 2,500 and 3,000 jobs in its investment bank, more than 10 percent of the division, two people familiar with the matter said May 2.
“UBS is scaling down investment banking,” including reducing trading bets and giving up off-balance sheet units, said Frankfurt-based Landsbanki Kepler analyst Dirk Becker, who advises clients to “reduce” holdings of UBS. It is “realistic” to estimate that the company will fire one tenth of its 83,000 employees overall, he said.
From the APP:
Business climate toxic
Gov. Corzine was giddy in praising Novo Nordisk’s recent decision to expand its U.S. headquarters in Princeton. He said the health care company’s decision “demonstrates the state is an attractive location for innovative companies to grow.”
Unfortunately, it is anything but. Study after study has ranked New Jersey among the least business-friendly states, due to high taxes and excessive red tape. Unless the state eases the tax burden and overhauls its regulatory structure, businesses will continue to choose other places to locate and expand.
The Small Business & Entrepreneurship Council’s recently released 2008 Business Tax Index placed New Jersey dead last of 50 states. The state ranked in the bottom five in personal income and capital gains tax rates and in state and local property taxes.
The adverse impact taxation is having on the state’s economic health has been clear for some time. A Rutgers University report released two weeks ago found that New Jersey’s private-sector job growth ranked 41st nationally over the past two years.
…
But even these steps will not succeed unless the state revamps its tax system, which makes it so expensive to live here, and its regulatory structure, which businesses find cumbersome and overly restrictive.
Taxes and regulation are intertwined with economic development. It is a concept Corzine has yet to grasp.
Greetings JB - have you posted sales figures for April? Any sign of a pickup from March? Thanks.
Don’t have the GSMLS sales figures for April yet, I believe Rich posted NJMLS for Bergen, and NJCoast posted Monmouth.
—————–
Preliminary NJMLS Bergen County Sold and Under Contract (Pending) Data for April
Year Sold# U/C#
1985 236 482
1986 362 707
1987 621 676
1988 681 627
1989 519 476
1990 439 480
1991 523 1040
1992 651 877
1993 571 879
1994 555 1065
1995 440 772
1996 595 1022
1997 646 974
1998 749 1060
1999 642 1015
2000 569 925
2001 532 861
2002 849 1035
2003 676 987
2004 761 1070
2005 811 1092
2006 613 878
2007 682 843
2008 461 723
—————–
Closed sales for Monmouth County SFH for April
according to the Monmouth County MLS as of today.
2002- 497
2003- 445
2004- 538
2005- 457
2006- 423
2007- 368
2008- 320
Under Contract for April
2002- 733
2003- 662
2004- 817
2005- 824
2006- 628
2007- 535
2008- 470
We were driving around yesterday looking at houses and saw some pretty modest ones in our price range of about $300-325,000. All with at least 3br and 1.5ba. All the houses of course were still considered fixers but for the most part from he naked eye it looked to be mostly cosmetic. We were looking in areas like cranford, roselle park, union (near Schering Plough) and because i wanted to, West Orange. I was ASTONISHED at how much taxes were for most of these houses. The two we saw in Roselle Park were $8,000+! Cranford was in the $6,500 range and West Orange is unfathomable. There was a house priced at $300,000 with $12,000 taxes! Don’t get me wrong, I’d love to live in West Orange and realistically if it wasn’t for the taxes i would. Union on the other hand had pretty “decent” taxes as they ranged from $4,800-6,000. Gotta love a town with industry to help foot the bill.
I’m sure it’s been asked already but how are the April numbers looking?
From Reuters:
BofA may renegotiate deal to buy Countrywide: Friedman
Bank of America Corp is likely to renegotiate its deal to buy Countrywide Financial Corp down to the $0 to $2 level or completely walk away from it, said Friedman, Billings, Ramsey, which downgraded Countrywide to “underperform” from “market perform.”
Countrywide’s loan portfolio has deteriorated so rapidly that it currently has negative equity and the proposed takeover of the company will be a drag on Bank of America’s earnings due to the elevated credit expenses at Countrywide, analyst Paul Miller wrote in a note to clients.
I saw a super place yesterday, I was tempted to jump on it. Priced $50k below the 2003 purchase price. I was interested in this house two years ago, was driving with the wife and dog, and we passed the place, wife made me stop the car and call the owner. I was outraged by the price he quoted on the phone, I wished him luck with his sale.
It is currently priced more than $150k below that 2006 FSBO asking price.
Currently in pre-foreclosure with a handful of lis-pendens. Owner is attempting a short-sale.
Wife says no, she wants blood in the streets. I think we’re going to wait until this one goes into foreclosure and goes back to the bank.
From Bloomberg:
Hovnanian Says Deteriorating Market to Hurt Results
Hovnanian Enterprises Inc., New Jersey’s biggest homebuilder, will report additional costs of as much as $275 million for the fiscal second quarter because of the worsening U.S. property market.
The company, based in Red Bank, New Jersey, said home deliveries dropped 21 percent in the three months ended April 30. The extra expenses will amount to at least $225 million on a pretax basis, Hovnanian said today in a statement.
Homebuilders are struggling through the slowest period of home sales in 25 years. The market’s weakness forced Hovnanian to slash prices to generate revenue, causing the company to report a loss for the last six quarters.
“Continued deterioration in sales pace, pricing and gross margin” contributed to the increase in costs, according to the statement.
“Normally, the case is the upper end is unaffected” by the economy.
[1],
Normally, ususally, never before, 1st time ever, worst ever, worst since, etc.. Yeah, we get it. There is certainly a bull market in these phrases.
“Bear Stearns job cuts could exceed 10,000″
http://www.financialnews-us.com/?page=ushome&contentid=2450552487
re 15,
Yeah but with the birth/death model that comes out to 105 jobs gained.
Updated NJMLS Bergen County Sales & Under Contract Data for April along with Inventory
Year Sold U/C
1998 749 1060
1999 642 1015
2000 569 925
2001 532 861
2002 849 1035
2003 676 987
2004 761 1070
2005 811 1092
2006 613 878
2007 682 843
2008 486 733
First of the Month Inventory Data
2004 2005 2006 2007 2008
April 3,342 3,288 5,330 5,526 5,956
May 3,546 3,567 5,809 5,972 6,356
June 3,932 3,913 6,350 6,248
Current (5/4): 6,330
JB,
Sent you the data
RE: 12
What area are you looking in? 2003 prices?
From MarketWatch:
Amex could see layoffs after NYSE deal: report
Roughly 75% of the workers at the American Stock Exchange could lose their jobs after the exchange is acquired by NYSE Euronext, according to a published report Monday.
The American Stock Exchange would cut about three-quarters of its staff if the planned takeover by the operator of the New York Stock Exchange goes through, people familiar with the situation told The Wall Street Journal. The deal, announced in January, is for $260 million in stock plus the proceeds from the sale of the Amex’s headquarters in Lower Manhattan.
When the proposal was made, the Amex had about 380 employees. The Big Board would keep about 100 to 120 of them, the newspaper said, since the exchanges’ operations overlap in all areas.
Not sure if this 2-day series on the “faltering real estate market “has already been posted. I think it’s from mid-April?
From The Record
The Crisis Next Door
There were 10K people working at Bear Sterns?
A lot of those Bear lay-offs are imaginary. I have around 60 friends at Bear and the over 50 over paid people are toast. But that is a few per department. The under 50 crowd and not overpaid good ones were offered good job. The under 50 so so crowd were offered so so jobs. Everyone has up to June to find another job and if they quit they still get the good severance package. If they take the so so Chase job and don’t like it and quit they get nothing, not even unemployment. Also if they take that so so job and get fired for cause they get nothing or if they get laid off in future severance may not be too generous. In my friends 70 person dept. The top ten were toast of the other 60 around 30 were offered jobs and of that 30 17 accepted and 13 turned it down and opted for the package. Not too bad. That top ten was overpaid for many years and they are getting good severance. This ain’t enron with everyone out on the street.
AMEX forrgatabout it.
was driving with the wife and dog
Did the same when looking for houses. Found out our dog gets car sick after the first hour :(
grim Says:
May 5th, 2008 at 8:29 am
From MarketWatch:
Amex could see layoffs after NYSE deal: report
grim: none of the AMEX jobs are in NYC
Bernanke is scheduled to speak on mortgage markets today at 8:30 p.m. in New York.
Anyone listening.
#12 grim:Wife says no, she wants blood in the streets.
Your wife is a smart woman.
Toronto Star:
‘Tail risk’ is U.S. Fed’s greatest fear
http://www.thestar.com/article/421161
“Since recovery from real-estate slumps almost invariably takes as long as the preceding bubble took to inflate, property analysts anticipate the U.S. housing slump, which has yet to bottom out, will last well into 2010. This is where “tail risk” comes in. If American consumers feel a negative wealth effect for anything like four more years – not an unlikely scenario given stagnant job creation and household-income growth, along with sustained high and rising fuel and food costs – delinquencies on Main Street forms of debt including credit cards and vacation, car, and home-reno loans are bound to rise.”
#15 BC Bob: I wonder who are all these rivals that the headhunter is talking about that are offering jobs to the Bear employees? Merril, Morgan, Credit Suisse, UBS?
I know of course some firms will be looking to hire some key former Bear employees selectiviely, “upgrading” their ranks if you will.
But I really do not think there are rivals out there scooping up these people left and right, because the rivals are going through their own layoffs.
#21 14k
#22 John: Well my friends at Bear tell me the opposite,most of the employees will be let go.
For instance Bear has a muni bond dept, so does JP Morgan. The combined firm does not need 2 muni depts, they will take a few key players from Bear’s muni dept, and the rest will be let go. It is as simple as that, now take the muni example and use that for almost every other area/dept in Bear.
Bear’s clearing business will probably be sold, as JP has gotten out of that line of busienss over the last 10 years.
This merger only works for JP, if they do it on the cheap. As a Wall St guy you should know the number 1 over head cost for firm’s is employees.
If this is to work for JP, than most of the employees will be let go.
Financial stocks fall, Countrywide off 13%
09:36 a.m. 05/05/2008 By Greg Morcroft Provided by
NEW YORK (MarketWatch) - Shares of Countrywide Financial fell 13 Monday morning after one analyst said that Bank of America should abandon plans to buy the country’s biggest mortgage lender. He added that short of walking away from the deal, Bank of America is almost certain to cut its offer price to as low as nothing to $2 a share from the initial $7 a share bid. FBR Capital Markets analyst Paul J. Miller Jr.
Bernanke is scheduled to speak on mortgage markets today at 8:30 p.m. in New York.
Anyone listening.
Yeah John, He’s gonna talk about his new invention the YLF…
Fed opens up the Yahoo Lending Facility (YLF)
In response to recent events Federal Reserve Board voted unanimously to authorize the Federal Reserve Bank of New York to create Yahoo Lending Facility (YLF) to avoid significant stock market distruption and to support Yahoo! Inc shares. Yahoo! Inc and its authorized agents will be able to borrow from the facility to support stock price.
This facility will be available for business on Monday, May 5. It will be in place for at least six months and may be extended as conditions warrant. The interest rate charged on the credit will be the same as the primary credit rate, or discount rate, at the Federal Reserve Bank of New York.
In addition, Yahoo! Inc shareholders who are unable to sell their shares at or above Friday, May 2 closing price, will be able to swap Yahoo! shares for the US Treasuries at the set price of $29.70 per share.
Please make sure you cite your sources.
33 Grim,
I was being sarcastic…I got an e-mail from a friend and copy and pasted above.
This is blogging NO?
“Bank of America is almost certain to cut its offer price to as low as nothing to $2 a share from the initial $7 a share bid.”
That $2 # seems to be popular. Let’s be consistent, how about $10, the fed guarantees the first $3B.
make [32],
lol.
3b
Bank One and JP Morgan folks at Chase all think they are smarter than anyone. Even within Chase - Heritage Chase, Heritage Manni Hanni, Heritage Chemical etc are all a lower class of people in Jaimie’s mind and you either have to be very valuable and a hot commodity or dirt cheap to survive. Chase has a big muni business, what is the value propostion bringing on the Bear Muni people?, if they are equals they are toast, if they are slightly better they are toast. They need to stand out head and shoulders above the Chase people to even get a job. Plus Chase has a bias towards older workers, basically if you are not SVP by 40 it is game over and get out, only AVPs/Clerks survive over 50 working for peanuts or FOJs, friends of Jamie.
BC [35]
3B is peanuts these days I’m sure you meant 30B.
I have another idea for Ben;
Lets create a Dow12000 lending facility, where the fed backstops Dow @ 12,000 and provides US treasuries to all investors if the Dow drops to an 11 handle.
This ought to put confidence in the USD and the markets.
Brilliant!
make [37],
Yes, I meant 30B, similar to JP/Bear.
Re #1 you mean the fact that all the certified preowned vehicles at my nearby Lexus dealership are lease repo defaults is a bad thing for business?
BC,
Notice Gold and commodities this morning! It’s gonna be a great couple of years agree?
From MarketWatch:
U.S. April services sector rises to 52.0%, upward surprise
Nonmanufacturing sectors of the U.S. economy expanded during April after three months of contraction, the Institute for Supply Management reported Monday. The ISM nonmanufacturing index rose to 52.0% from 49.6% in March. The increase was unexpected. Economists were looking the index to inch lower to 49.4%
grim Says:
May 5th, 2008 at 7:23 am
“Wife says no, she wants blood in the streets.”
JB, could you please let this board know when your wife offically declares that there’s blood in the streets?
I’m betting this will be the best indicator that it’s time to jump in and buy.
Thanks.
Bank of America is almost certain to cut its offer price to as low as nothing to $2 a share
At $0 per share, I might start making an offer…
What is considered the “typical” spring selling months?
From start to finish?
12 grim
must …. suppress …. schadenfreude ….
Nope. Couldn’t do it. Now wallowing with enjoyment.
By the way, one of my favorite things about visiting houses is seeing how other folks do the furniture layouts; sometimes you can get some pretty good ideas.
After we got home from one particular visit this past weekend, Mrs. Patient made me move the sofa so that it blocked the entire stairway to the second floor (this places greater emphasis on the communal nature of the first floor).
On Sunday I was returning from Miami and I sat nect to a guy who was returning from a trip to bid on timeshare foreclosures. It was at some complex across on the water where people stopped paying their maint. fees and the facility took back the property. He picked up 16-18 shares (may have been 20, I dont recall at the moment) for $1 each. There were no other bidders. He has an obligation to pay something like $300 a week in maint fees for each share. The shares run in sequence and his plan is to snow-bird there for essentially $5-6,000 a year. It apparently includes maid service, pool, yadda yadda.
I myself have no particular interest in time shares but there seemed to be a degree of sense in what he did, as Mrs. Shore and I were paying $600 a night these past couple of nights.
16 hehehehehe
hehehehehehehe!
“After we got home from one particular visit this past weekend, Mrs. Patient made me move the sofa so that it blocked the entire stairway to the second floor (this places greater emphasis on the communal nature of the first floor).”
It also makes it incredibly difficult to sneak a midnight snack upstairs with you at bedtime.
Orion,
March thru May is when contract activity is at its highest. Sometimes this bleeds into February or June, but it depends on the county as well as the weather.
Closed sales peak in June through August.
# 43 Pretty soon they will be paying BA to take them. Mr. M may even need to kick in some of his $.
re 47, considering if he sells at $2 a share he made 100% profit. Funny how Marriot is such a Morman based company still has no problem shaking down young families on a vacation to sell them something for $20K that is in effect worthless. Maybe they only sell to non-Mormans anyhow and since we are all going to hell anyhow what the heck is the difference.
37 make
“3B is peanuts these days”
I dunno … I rather enjoy his posts…
make money Says:
May 5th, 2008 at 10:01 am
BC, Notice Gold and commodities this morning! It’s gonna be a great couple of years agree?
albani: look….what you are saying is not that obvious….I will not preclude the chance that it can work, but no way is such a bet in-the-bag…..if China stops stimulating post-Olympics, you may get whipsawed like no one’s business. It is (really)high risk - high reward….but that’s what you like….
The scary part is that in March 2007 CFC was trading higher per share than JPM. Did people in March 2007 really think on a go forward bases CFC was worth more than JPM? Shows how irrational the market is.
njp,
My wife was enthralled with an idea that she had taken from an Upper Montclair home a few years back.
The owners had converted a hallway coat closet into a shower. Yes, you read that right. You open the closet door, and step right into the shower.
Why didn’t we ever think of this?
Imagine the time savings of not having to walk down the entire length of the hallway to take a shower. There owners were clearly experts in the time and motion study. This little modification could save us all years of wasted time.
And all this time we thought that a bathroom actually needed a toilet or a sink, silly us.
# 52 is Marriot big into time shares?
njp,
Don’t forget about the peek-a-boo bathroom on the third floor. Walls? Doors? Why bother?
“The scary part is that in March 2007 CFC was trading higher per share than JPM.”
Bear was trading 3X’s higher than JPM at the same time.
49 Stu
Good point - it’ll help me lose a couple.
From the Pittsburg Tribune Review:
For sale: Local homes left in shambles
Bob Watkins and his partner Minh Truong have plenty of work these days cleaning out vacant houses.
It’s courtesy of the nation’s mortgage foreclosure crisis.
Their company, B&M Services LLP, hauls out debris and makes properties secure. They work for Darli Walker, a real estate agent with Achieve Realty of McCandless, who deals primarily in the sale of foreclosed houses for a number of national lenders.
“Because of the number of foreclosures taking place, more local real estate agents are getting into these types of sales,” said Walker. Usually, they work for lenders who have taken ownership from financially troubled borrowers.
There are plenty of houses for them to sell.
During the first three months of 2008, 1,187 houses were foreclosed in the five-county Pittsburgh region, the second highest total for a three-month period on record, according to RealStats, a South Side-based real estate information company.
Its report covered Allegheny, Beaver, Butler, Washington and Westmoreland counties.
Another report found that during the 23 months between January 2006 and November 2007, 9,046 homes had foreclosure proceedings in Allegheny County. That’s a rate of one per 65 housing units, said the University of Pittsburgh Center for Social and Urban Research in its March 2008 Economic Quarterly.
(50) Thanks, Grim.
Grim - 56 - Don’t knock it. Our prior owner converted to a shower, then converted for a washing machine (when they could no longer walk the stairs to the basement) and now through Stu’s handiwork is a gi-normous food pantry!
And a bathroom doesn’t even need a sink. Our owners converted a closet in the basement into a “1 fixture bathroom” - toilet only and connected to hot water, no less, or as the assessors called it a “Montclair Special”. According to the assessing company, it added $921 to the value of our home. You can only imagine how many hours Stu had to spend to find the perfect 18 inch sink that was small enough to actually fit in said closet.
State’s going around in circles
The council, commonly known as COAH, issues mandates every few years for the amount of affordable housing that should be built in every town. The latest mandates call for about 187,000 new units to be built around the state.
The number for just one of the towns that abuts the circle, Bridgewater Township, is 1,711. Multiply that by five and you’ll see how many new houses would be built in Bridgewater if developers are permitted to use the so-called “builder’s remedy,” which permits them to build four market-rate units for each unit that will be sold below cost.
“We didn’t have exclusionary zoning,” said Flannery. If Bridgewater did, it wouldn’t have been able to cram 15,000 housing units into the 33 square miles of the township.
An affordable housing tax to discourage people from building affordable housing? It sounds crazy, as does everything else that comes out of Trenton these days. But Doherty sees a method in the Democrats’ madness.
“If the current administration keeps killing the economy, then everyone will leave the state. Housing prices will drop,” he said. “So maybe that’s their strategy.”
toilet only and connected to hot water
Sounds luxurious, warm seat, every time.
I suppose you could just call it the other half of a half bath.
The Administration’s Housing Strategy and Economic Update
http://online.wsj.com/public/resources/documents/wsj080501_HousingPresentation.pdf
jb
“The owners had converted a hallway coat closet into a shower. Yes, you read that right. You open the closet door, and step right into the shower.”
Bonus: you can still hang your raincoats in there!!
58 grim
I did forget! That was a riot. Especially the window into the hall/stairs.
I suppose that’s handy if you’ve got toddlers who are just learning to use the potty and you need to keep an eye on them.
Toddlers?
I can imagine the fiasco when she yells “potty”. Dad grabs kid, vaults and rolls over the couch blocking the stairs. Runs up three flights of stairs, passing the kid through the bathroom drive-thru window at the top of the third flight.
Did you make it in time?
“Sounds luxurious, warm seat, every time.”
It might sound funny (or gross), but if you flushed once before you did your duty, it was virtually impossible to release a bowl painter. Not to mention the cleaning power of warm water.
The former homeowner might have been on to something? Or more likely, just on something.
NJGator Says:
May 5th, 2008 at 11:03 am
And a bathroom doesn’t even need a sink. Our owners converted a closet in the basement into a “1 fixture bathroom” - toilet only and connected to hot water, no less, or as the assessors called it a “Montclair Special”.
Ally: I dated someone 15 years ago who lived on Claremont in a huge house converted into about 5 apartments. Her shower was in a closet. She had no oven, but she did have a toilet, stovetop, and dining room table in the same room. Talk about $hitting where you eat…..
by the way….new cool fuuny stuff from Chicago…
http://www.nudges.org/
69 grim
LOL
and this was the same place with the pharmacological museum in the giant glass case in the den.
Big fan of Thaler
$120
there is a session……
http://www.chicagogsb.edu/gls/schedule/newyork/2008-05-07.aspx
You busy on Wednesday?
I think I am open…..let me check if it is sold out…..
71 Chifi - 3rd floor illegal “boarder apartment”? Gotta love those. 1/2 of our neighbors have em. The extra $800 or $900/month in rent does ease the tax burden for them.
Most interesting slide from The Administration’s Housing Strategy and Economic Update (post 66). The last one is the real kicker.
When Will the Correction End?
-Some people fear a vicious cycle of lower home prices, increased foreclosures, increased inventories leading to even lower prices
-Homebuilders are the key to breaking that cycle
-Single-family starts are falling –as one would expect –down 63% to 680k per year in March from 1.8mm peak in early 2006
-Household formation is about 1.2mm per year
-We are working through the excess inventory
-New home inventory is down 18% to 468,000 units in March from peak
-As prices continue to fall, we expect buyers to step into the market
(when?)
Does anyone on the list have access to the Monmouth-Ocean MLS? I need to get some sales comps for my father in law’s tax appeal.
Many thanks.
Lisa
ChiFi,
Maybe I’m to simple to understand China post Olimpics lack of stimulus threat to holding Physical Gold.
If they stop giving us the 2B per day say hello to inflation as the fed will have to print it.
If they dump USD currecy reserves then it’s even worse as those dollars will come home to roost.
What’s post Olympic China have to do with our federal Gov’t on a way to financial collapse by increasing the money supply by 15% annually. Not too mention a balance sheet filled with trash and unwanted junk.
Federal reserve…got junk..just bring it to the window.
#79
Was in a house on Upper Mountain that had a boarder apartment above the garage.
Electric heat, window AC, but no bathroom. Bathroom was located in the basement of the house, tenant had the keys.
John #22: So they are just unceremoniously dumping everyone over 50? Wow. Nice effing guys. And leaving themselves wide open for an age discrimination suit, too.
Warm water toilets: heat has a tendency to enhance odor… just saying. :o
Depends. Age discrimiantion only applies to someone hired under the age of 40 who was fired over the age of 40. Can’t sue for age disrimination if you are fired in your 50s or 60s if you were hired in your 40’s. Also they start pushing you out the door by your late 30’s. They also offer a good severence package that you can only get if you agree not to sue. Finally, they do what they just did to my friend who is 47, they take away your office, them move you to cube out by the 27 year olds, take away your staff and them make you report to a 27 year old.
“$120″
Nice.
make money Says:
May 5th, 2008 at 11:28 am
ChiFi, Maybe I’m to simple to understand China post Olimpics lack of stimulus threat to holding Physical Gold.
albani: I am not selling you short, and I am also not talking down to you. Reading things in print on a blog means things lose a lot of context. You have ball$ of steel. I respect that a lot. You already won the friggin’ “game”. I am in the business of helping those who already won not to take risks that would cause them a big loss.
What I see time and time again?
In the casino, and the guy has had the best night of his life….up maybe $5,000 or something….close to the end of the night, people getting itchy and start betting $500-$1000 a hand and get wiped out……
grim Says:
May 5th, 2008 at 11:23 am
You busy on Wednesday?
chicagofinance Says:
May 5th, 2008 at 11:24 am
I think I am open…..let me check if it is sold out…..
grim: we are in…..e-mail me and we can set up the details…..
To all financial advisors/Tax professional in this blog:
Here is my situation.
I have a C corporation.
I filed for an extension for 2007 tax returns earlier this year.
My tax accountant (also a financial advisor) finalized my tax return last week and he said that if I opened up an SEP plan, I could reduce my tax liability.
I said, fine.
He wants me to join some sort of mutual fund program he has with TFS securities since he is a certified CFP with them.
I looked at their propsectus and I was not satisfied with their performance.
I rather open up a fund with CGM Focus Fund headed by Ken Heebner. They have an excellent track record. So, I email him asking him to look into this.
He replies back saying
“1. They do not have an investment model, diversification, and auto rebalancing feature
2. They may not have SEP and 401(k) IRS approved prototype plans. If you go to a Retirement planning company, they generally charge 3 to 4K initial set up and then ANNUAL maintenance fees
3. My CFP certification and licenses does not allow a retirement planning without a model (to manage risk).
4. CGM is not an approved fund for the TFS securities, Inc, (my license are with them). Approval is based on many factors. They and I are subject FINRA and NJ regulation.”
Looks like basically he cannot open up an account with CGM because it is not part of TFS securities underwhich he is licensed to operate.
What do I do? I want to park my money in CGM and my Financial advisor cannot (maybe will not) open an account for me.
Any thoughts appreciated.
Grim 83 - Geez - and I thought we were slumlords because the tenant’s electric circuits were in our basement and they had to come into our unit whenever the circuits tripped.
Hey chicago finance, that Merril Pref your client talked bout turned out to be good deal plus somehow they set it up QDI to qualify for the 15% rate. That one sold out.
Citi has a pref going off today that is at $25 a share tentative yield of 8.5% in the 15% tax bracke. QDI too. Sounds good I may get in plus in 30 days when it goes NYSE it should pop 4 or 5% for a possible 8.5% plus 5% yield of $13.50% in 15% tax bracket if I hold it a year.
It sounds like more upside then downside but I am not a chicago finance expert.
The local “King of Real Estate” who’s trying to shut me up has taken to some in-office training/motivation/self-help. Looks like things are getting a bit testy among his denizens of top performers.
Here’s a taste of one of his daily initiatives. If things in my office prompted me to do something like this, I sure wouldn’t make it public:
Today, it is about Encouragement. More specifically it is about your role as encourager. Many of our clients, our friends, or family members, ourselves, need our encouragement. As a leader, people will come to you to help them. (In this current market I personally have had a lot of you come to me) The best way to help them is to diagnose how they are feeling. I have attached a list of 32 ways a person may feel who is desiring encouragement. The best thing about this diagnosis is that many of the people will tell you which of these emotions they are feeling.
Once you have established the word that best describes their current state, then you can help them. For example, those who feel stressed, out of control, out of balance, disorganized, overwhelmed, out of focus, etc. tend to need realignment. Peter Drucker (one of the greatest leadership/management thinkers of all time) would help in this way. Mr. Drucker would say, “I need to take the one or two things that I need to focus my attention on right and do them.”
You would ask the “What is the one thing you need to do right now?” Focus them on that one thing and get them to do it. (For somebody who feels like a failure, worthless, insignificant, or discouraged, it might be, “What is the one thing you need to focus on right now to get another client?” Then help them do it.)
The fall and winter time of the year is a time that these feelings are especially rampant, but with the challenging market we have today it does not matter what it is doing outside. Go out there, be open to people’s issues, be that strong lighthouse, and listen. This is a major step in the development of you, the leader.
Here’s the list of the 32 ways people may feel:
1. Cranky
2. Discouraged
3. Disillusioned
4. Disorganized
5. Doubtful
6. Drowning in Debt
7. Dumb/Stupid
8. Failure
9. Fatigued
10. Ignored
11. Insecure
12. Insignificant
13. Lonely
14. Mediocre
15. Negative
16. Out of Balance
17. Out of Control
18. Out of Focus
19. Overwhelmed
20. Nervous
21. Pressured
22. Rejected
23. Resentful
24. Stressed Out
25. Stuck in a Rut
26. Trapped
27. Uncreative
28. Undisciplined
29. Unloved
30. Unmotivated
31. Victimized
32. Worthless
By tapping into and tuning into how others feel, you will be the strong empathetic leader people are looking for in a friend and a professional. Look at each feeling and imagine yourself counseling the person. What would you ask? What do they need? What is the appropriate question and what would be the appropriate follow-up question? What if your friend told you he or she was lonely? cranky? pressured? By imagining this beforehand, it will make you a better listener, friend, leader when they need you most.
“Coffee is for closers” would have been more effective.
93 Clot
I’d ask him since when does a real estate license allow one to diagnose anything?
Today, it is about Encouragement. More specifically it is about your role as encourager. As a leader, people will come to you to help them. (In this current market I personally have had a lot of you come to me) The best way to help them is to diagnose how they are feeling.
What a load of cr*p
Phony encouragement and good feelings don’t sell homes. The best thing you can do is level with your client. Let them know the situation is dire and the market is and will continue to fall. Get them to accept the situation they are in and do what it takes to sell the home today and capture the most value, rather than staying 2 steps behind a falling market like most sellers seem to do and selling later for even less.
#94 - At the very least it’s more honest than pretending to care about people when you don’t.
Also, that’s got to be Baldwin’s best stuff. Yeah it’s showy and scene chewing, but oh so good. Has he been as good as that in anything since?
I just heard that the French now hate their new president because he is: an economic wonk, hands on, and engaged. I wonder if they would like to trade. We have the perfect guy for them.
That touchy feely thing seems a little complicated, maybe he should have sent out $2,99 bottles of KY if he wanted the homebuyers to feel less screwed.
Maybe my local GMC dealership can do this to sell its ten MPG 60K Yukon Denallis XLs. Maybe they don’t want to get ten MPG cause they are unloved.
# 90 Look at the Solo 401(k). It allows one to sock away much more than a SEP does.
John (52)-
I go away for a few days. I start to feel better about the world. I don’t see this blog for almost 96 hours. Then this:
“Maybe they only sell to non-Mormans anyhow and since we are all going to hell anyhow what the heck is the difference.”
It’s nice to be back.
Zack Says:
May 5th, 2008 at 12:29 pm
I rather open up a fund with CGM Focus Fund headed by Ken Heebner.
He replies back saying
“1. They do not have an investment model, diversification, and auto rebalancing feature
2. They may not have SEP and 401(k) IRS approved prototype plans. If you go to a Retirement planning company, they generally charge 3 to 4K initial set up and then ANNUAL maintenance fees
3. My CFP certification and licenses does not allow a retirement planning without a model (to manage risk).
4. CGM is not an approved fund for the TFS securities, Inc, (my license are with them). Approval is based on many factors. They and I are subject FINRA and NJ regulation.”
Looks like basically he cannot open up an account with CGM because it is not part of TFS securities underwhich he is licensed to operate.
Any thoughts appreciated.
Zack: I have no fact pattern (nor do I want one). Something sounds a bit off, but ultimately, I have a lot of stones talking any crap about a peer in a public forum. At best you take some one at their word, but THEY BETTER SHOW JUST CAUSE TO EARN IT.
That said…please review this list….http://www.tfsweb.com/doclib/files/ZENTFS/17670/Mutual%20Funds%20-%20Approved%20Product%20List%20TFS%20Securities,%20Inc.%20060106.pdf
Hey Grim (or anyone)–
Would someone mind looking up MLS Number: 2514339 for this longtime lurker? Curious about DOM, and whether it’s a relist.
Thanks in advance!
http://www.tfsweb.com/doclib/files/ZENTFS/17670/Mutual%20Funds%20-%20Approved%20Product%20List%20TFS%20Securities,%20Inc.%20060106.pdf
lost (95)-
The guy who wrote this (or, more likely, cribbed it- unattributed- from another source) is diagnosed ADHD.
NJGator (from yesterday) Thank you so much! Having slept on it, I have renewed my commitment to not buying anything before 2009. (And yeah, train proximity is pretty important at the moment…) Nice to know how helpful my hopefully-someday- neighbors are, though! :)
Gimme the Glengarry leads!!!
#81 NJGator
I have access to the Monmouth/Ocean MLS. You can get my email address from Grim.
Zack: I just noticed the list is 2 years old. It is “possible” that the family was pulled.
We all knew ResCap was in trouble. Now we know how long the clock will tick…
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCugzO9ZEhaM&refer=home
105 Clot
Ah that explains it. Those who are in therapy think they are therapists. But then there are therapists that need to be in therapy themselves.
Zack: I need coffee….CGM Focus is no-load……
108 NJCoast - Thanks. I will be in touch shortly.
Ben,
It is a new listing, 3 days on market, no prior history on the GSMLS. I’m not sure why, but it looks familiar.
Zack: don’t quote me! I don’t need problems.
Talk about robbing Peter to pay Paul:
“ResCap, the eighth-largest U.S. residential lender in 2007, today began offering as little as 80 cents on the dollar to exchange or buy back $14 billion of bonds to extend maturities and stave off bankruptcy. To finance the debt restructuring, ResCap is seeking a new $3.5 billion credit line from its parent GMAC, which is owned by General Motors Corp. and an investor group led by Cerberus Capital Management LP.”
93 clot
This is my favorite part:
“As a leader, people will come to you to help them. (In this current market I personally have had a lot of you come to me) The best way to help them is to diagnose how they are feeling.”
Hey gary, how are you feeling?
Re 101, don’t laugh, the Puerto Rico Marriott has a casino next door and their is an entrance to it from the marriott, the marriott which is morman does not allow casinos on its properties as it is a sin. But you can walk though the loobby to sin if you want. Even crazier in Puerto Rico it is illegal to serve alchol in a casino so you have to walk back to marriot through the connection in the lobby to buy your drinks even though the mormans don’t believe in that either. Too much religion and laws for me to enjoy my black jack. Vegas Baby where I get looked down upon for not sinning.At the marriot it is not a sin to sell rip off time shares but it is a sin to drink coke. OMG if Mitt Romney was president I don’t even want to think up what laws he could create let alone Donny and Marie singing at the intergauration.
i see that was renting’s favorite bit as well.
Kinda stood out.
99 john
lol
General Comment…..review the portfolio of your money manager before you invest. Just because you made the right call, doesn’t imply that such a process is repeatable.
An investor should focus on the process, not the call.
FYI - “the call” is “…bet the ranch on energy, materials and emerging markets versions of both…”.
ChiFi,
I see your point. I just love being right and profiting from it. It’s a hell of a feeling.
I really see no way out of Inflation in the next couple of years. Even if our beloved president and his working group conceeed recession and focus on the greater danger of inflation and hence raise the FFR to 10% this would be the equivalent of an atomic bomb placed underneeth the financials.
Noone is gonna want the USD regardless. Gold as a form of money not commodity.
GM/GMAC/Rescap,
GM said let’s spinoff GMAC so we can monetize this business and protect it against a decline from the US auto business. Now GMAC is injecting capital into Rescap to keep it from floundering, which could potential trigger bigger issues at GMAC. So when GM made the decision were they cutting bait on GMAC, or was it the other way around? Can’t tell now.
First time i have been able to be on before 9PM, so a quick note: Thanks for all the very useful insight and humor. To those who feel refering to POS, FB, idiots etc seem to make them smarter/better than others, remember “Pride goes before the Fall”.
Thanks Grim…this might be the first halfway decent house to appear in our price range in Madison, so I was curious.
Listing has no photos of the bedrooms, though, and as many photos of the outside of the house as of the in. Seems like a bit of a red flag, but it may be worth watching.
Thanks again!
Make Money according to you by 2011 we will all homeless and with no fuel. But we will be able to buy monster SUVs with DVD/CD players for $100 bucks and all I need to do is recycle some french fry oil and power up the babies electrical system and I will be sleeping on plush leather in surround sound. It aint all bad baby.
It is escape from NY all over again and you are the Snake Pleskin of this blog!
I saw this listing in MLS in Chatham. Gotta love the honesty….
MLS # 2500928
Sold AS IS. Electric is off and there is water in the basement. Mostly LAND value.
Looks like it is bank owned as well. Translation to me… House is worthless. Must be some story behind this one.
GM tried to sell GMAC but the best they could do was to get Cerbus to buy half. So GM is in the position they split the loss with Cerbus but they can still lose their 50% equity stake. They are kinda half pregant and are torn between walking away and trying to pump it up just enough so they don’t lose their equity. It is double down time for them.
Re 101, don’t laugh, the Puerto Rico Marriott has a casino next door and their is an entrance to it from the marriott, the marriott which is morman does not allow casinos on its properties as it is a sin. But you can walk though the loobby to sin if you want. Even crazier in Puerto Rico it is illegal to serve alchol in a casino so you have to walk back to marriot through the connection in the lobby to buy your drinks even though the mormans don’t believe in that either. Too much religion and laws for me to enjoy my black jack. Vegas Baby where I get looked down upon for not sinning.At the marriot it is not a sin to sell rip off time shares but it is a sin to drink coke. OMG if Mitt Romney was president I don’t even want to think up what laws he could create let alone Donny and Marie singing at the intergauration.
I was in the Marriott at Condado beach in Puerto Rico 3 months ago and had no problems ordering liquor in the casino. Sometimes the bar waiters/waitresses were a bit slow, but the liquor kept coming at no cost while we were at the tables.
-R
#100
Apparently I am too late to open up 401 for 2007, but I can do it for 2008. SEP is the only choice for 2007.
#102
So are you saying that since CGM is not in the list of available mutual funds that CFS subscribes to, which implies my advisor cannot set me up with CGM.
130
I meant TFS and not CFS.
make money Says:
May 5th, 2008 at 1:43 pm
ChiFi, I see your point. I just love being right and profiting from it. It’s a hell of a feeling.
mm: I was thinking about CGM in particular….they are not unlike Janus in the late-1990’s. You look like a friggin’ omnipotent genius…..until you are not…..
BC and kettle - this note from some second-rate blog:
“Drunk The Milkshake
While fairly volatile so one shouldn’t make too much of day to day fluctuations, I’d say the oil price spike is notable because it’s happening in a time when the dollar has been rising a bit. Normally quite a lot of the oil price fluctuations (and “quite a lot” is an imprecise blogger term) can be explained by fluctuations in the dollar, with oil prices rising as the dollar declines relative to other currencies, but this time they’re moving apart.”
Drunk The Milkshake
While fairly volatile so one shouldn’t make too much of day to day fluctuations, I’d say the oil price spike is notable because it’s happening in a time when the dollar has been rising a bit. Normally quite a lot of the oil price fluctuations (and “quite a lot” is an imprecise blogger term) can be explained by fluctuations in the dollar, with oil prices rising as the dollar declines relative to other currencies, but this time they’re moving apart.”
via Atrios
Zack Says:
May 5th, 2008 at 1:58 pm
#100 Apparently I am too late to open up 401 for 2007, but I can do it for 2008. SEP is the only choice for 2007.
#102 So are you saying that since CGM is not in the list of available mutual funds that CFS subscribes to, which implies my advisor cannot set me up with CGM.
Zack….look at the list….IT IS THERE…..
here you go grim…..
Polish Vodka Distributor Is Worth a Shot
http://www.smartmoney.com/stockscreen/index.cfm?story=20080417-growth-stocks&afl=yahoo
#1124 Ray: True. Also remember what goes around comes around.
Some of these idiots and FB’s and people asking big bucks for their POS’s, were some of the very same people who just a couple of years ago were cheering this madness on.
Anyone who voiced any difference of opinion was scoffed at or told this is the market. If you do not like it, move, and on and on.
Because of their recklessness a lot of damage has and will continue to b inflicted upon the real estate market and the economy in general.
This will continue to unfold, exposing us to real systemic risk. And for what?
And on top of it now we are being asked to bail out banks and reckless borrowers.
I can only imagine the howls of protest a couple of years ago, if there was any movement to limit these outsized profits/prices.
Now that the shoe is on the other foot, they must be helped?
I have no sympathey for any of them. You reap what you sow.
kettle - you’ll enjoy the comment thread at Big Picture:
http://bigpicture.typepad.com/comments/2008/05/oil-120-1.html
#127 Hard Place,
I just passed that home a few weeks ago driving through town and noticed it since it looked so unkept. I even wondered at the time what was up with it. Thanks for sharing.
“Genworth Financial, one of the largest insurers, recently told lenders that after Monday, it no longer will consider applications for second-home purchases anywhere in Florida. The new policy is irrespective of borrowers’ credit scores, assets or other characteristics.”
John - GM/GMAC/Rescap
My response was a bit tongue in cheek. Management was first saying the spinoff was to protect GMAC from being dragged down by auto business. Now it seems like the mortgage business could be a drag on GM. I agree GM might have to do something here. Like it didn’t have enough problems on it’s own.
“Today we are breaking with our tradition of profiling a $250,000 loss, and we are going big time — $500,000 lost on one property. This flip is sunk. These flippers are so far underwater, they are not on a ship of fools; they are on a submarine.”
http://www.irvinehousingblog.com/blog/comments/how-to-lose-500000-in-a-year/
139
d’oh!!
#134
Thanks. I see CGM in the list. I have emailed my advisor to clarify what he is talking about as I see that fund that I want to use in the list of appoved funds by TFS under which he is licensed.
I will keep you posted with his response.
Thnaks again.
John - Genworth.
So it this going to be the other shoe to drop in Florida? If more lenders do this than there may be another leg down in FL. Tighter lending standards for primary borrowers and now no lending to 2nd home buyers. FL is going to get pretty ugly once this works it’s way through the market.
re post at 141
property now bank-owned.
Bank will lose well more than half a $1M on just ONE little house (4/2 single-floor ranch).
How to lose a lot of money really fast.
#143 - Zack - If you having a problem getting a fund you want call Joanne at X 115 and explain the situation to her, trust me she will take it very seriously. But only do this if your rep. is giving you the run around.
Mike NJ - Chatham house.
Yeah, the pics look pretty unkept. I gotta say they are asking alot for the land if the structure is unsound. Question is why water in the basement? Are certain areas of Chatham below the water table?
From MarketWatch:
Banks squeezing credit to consumers, businesses
Consumers and businesses found it harder to borrow money over the past three months, the Federal Reserve reported Monday, a sign that the historic credit crunch now hitting the economy is still worsening.
More than half of the banks surveyed by the Fed said they had tightened the screws on commercial and industrial loans, commercial real estate loans, residential mortgages, and home-equity lines of credit. Almost no banks eased credit terms for any type of loan, the Fed said in its quarterly senior loan officer survey.
The credit squeeze has moved far beyond the subprime segment to affect nearly every borrower. Tighter credit could slow economic growth, especially consumer spending, economists say. Lack of credit could sink the commercial real estate market as well.
The crunch showed few signs of abating. The net fractions of banks reporting tighter lending standards “were close to, or above, historical highs for nearly all loan categories in the survey,” the Fed said.
Banks said they were restricting credit because of worries about the economy, worries about risk or illiquid markets, and worries about their own fragile capital position.
Banks were increasing interest-rate spreads, requiring more documentation, demanding more collateral, or requiring co-signers and or covenants before granting credit.
Consumers are being hit hardest by the stricter lending practices, the survey showed. Standards for all types of mortgages tightened even further, while a record 25% of banks said they were less willing to make consumer installment loans.
Standards for home-equity loans and credit cards were also much tougher.
patient [133],
Depends oh how one defines “rising a bit”?
http://charts3.barchart.com/chart.asp?jav=adv&vol=Y&grid=Y&divd=Y&org=stk&sym=DXM8&data=H&code=BSTK&evnt=adv
144 hard
no doubt!
What do you think the guy in the last paragraph below is now thinking???
http://www.bradenton.com/local/story/579375.html
After complimentary coffee and introductions Saturday morning, the area’s first official “foreclosure tour” headed on its way.
Roughly 25 people - the bulk of them investors - attended the tour on a small chartered bus that made stops in east Manatee County. Neighborhoods on the tour included University Park, Fairway Lakes, Harbourage on Bradenton River and The Inlets at Riverdale.
…
The first of eight houses visited during the tour was a three-bedroom, two-bath home in University Park being offered by the bank for $249,000. The home sold for exactly $100,000 more two years ago, according to Manatee County property records.
Another 2,749-square-foot home on a freshwater canal in the Inlets at Riverdale off State Road 64 East, the most expensive on the tour, was selling for $439,900 - $265,000 down from what it sold for just two years ago.
…
Dan Delzer of Lakewood Ranch took the roughly four-hour tour Saturday in order to work on what he calls his “10-year-plan.” That plan involves becoming wealthy through investing in real estate.
“I have a goal of 10 years, being financially free, and it doesn’t come from bringing home a paycheck,” Delzer said. “I think anyone in Sarasota or Bradenton, you have to get in right now. I don’t think we’re going to see prices this low again. Anybody that’s waiting, I don’t know what they’re waiting on.”
NJCoast - Check your mail and thanks again!
From Bloomberg:
Fed Says `Historical Highs’ of Banks Tighten Lending Standards
The Federal Reserve said the proportion of U.S. banks making it tougher for companies and consumers to borrow approached a record in the past three months as the credit crunch deepened.
A net 70 percent of banks increased loan rates over their cost of funds for commercial and industrial borrowing, according to the central bank’s quarterly survey of senior loan officers released today in Washington. That compares with 45 percent in the January survey, the Fed said.
The survey, conducted last month, was available to Fed policy makers last week when they cut interest rates by a quarter percentage point. Banks are restricting access to credit after financial firms posted more than $318 billion of losses and writedowns in the aftermath of the crisis sparked by subprime mortgages.
“The net fractions of domestic banks reporting tighter lending standards were close to, or above, historical highs for nearly all loan categories in the survey,” today’s Fed report said.
…
In response to special survey questions on home-equity lines of credit, about half of U.S. banks said they tightened terms on existing loans, mainly because of declines in home values below appraised values, as well as increased defaults and changes in borrowers’ finances.
Today’s report comes amid signs the U.S. economy is weathering the housing and credit contractions. A report today showed service industries unexpectedly grew for the first time since December, while the economy as a whole expanded at a 0.6 percent annual pace in the first quarter, matching the pace of the last three months of 2007.
149 BC
Yeah - be that way with your fancy charts and numbers and statistics and actual facts.
njpatient - FL homes
Somebody take away the Kool-Aid!
patient 137
Denial, one of the quintessential human emotions and the reason why sudden change in human societies often results in a crash instead of planned adaptation. you can be shown the door, but you have to walk through it yourself
Dollar bulls/bears…
Anyone think the dollar is getting close to hitting bottom?
Morgan Stanley Plans to Cut About 1,500 Workers
http://biz.yahoo.com/cnbc/080505/24468578.html
Hard Place,
Yes, many in Chatham have French drains and thus sump pumps because some areas of town are prone to water in the basement. We do not have anything and did get water once, but only a year ago when we had three straight days of downpour. I bet since the electric was turned off the pump obviously was not working and spring showers brought water.
That is definitely a lot of money for a house you still have to tear down and then rebuild.
Hard Place [156],
A short term technical/intervention move or substantive, and concrete fiscal and monetary, long term, policy adjustments?
Let’s forget short term noise. We have growing fiscal/trade defecits, a current account balance that demands over $2B a day, a printing machine that is smoking hot, fed bailouts and increasing long term entitlement obligations. Technically, who knows where the bottom is, fundamentally, we are digging a deeper hole.
Mike NJ -
That would make sense. No electric, no working pump. So the bank to save a couple dollars of electricity ends up taking a couple thousand to tens of thousands of dollars off the value of their asset.
156 Hard
I agree with BC 159
Hard Place
Saw that one. Could not get the wife interested. Can’t understand why ;-)
Might me interested in shorting myl. They distribute digitek which is in a massive recall. Used for heart failure. They where doubling the dose of the pills and the pills are made in china. This pill is taken by millions.
I have take this pill and have been sick for the past 5 months had no idea why. People have died from this. It has not hit the national press yet.
BC Bob,
Talking from a L/T perspective. Personally I’m not eager to buy dollars, but getting closer to the point where I may start thinking about it. Probably a question to start asking after the election. Who is in office will be a big driver. Democrats scare the pi$$ out of me.
BC
BANGKOK (Reuters) - The cyclone and flooding in Myanmar’s two major rice growing areas have “potentially serious effects” for food supply in two other impoverished countries, a U.N. official said on Monday.
but dont worry prices are up only due to speculation just like oil
Nom -
Did u see the pics? How did leaves end up in the living room?
From the Fed:
The April 2008 Senior Loan Officer Opinion Survey on Bank Lending Practices
In the April survey, domestic and foreign institutions reported having further tightened their lending standards and terms on a broad range of loan categories over the previous three months. The net fractions of domestic banks reporting tighter lending standards were close to, or above, historical highs for nearly all loan categories in the survey. Compared with the January survey, the net fractions of banks that tightened lending standards increased significantly for consumer and commercial and industrial (C&I) loans. Demand for bank loans from both businesses and households reportedly weakened further, on net, over the past three months, although by less than had been the case over the previous survey period.
(cont)
Majorities of domestic respondents reported that they had tightened their lending standards on prime, nontraditional, and subprime residential mortgages over the past three months. About 60 percent of domestic respondents—a somewhat larger fraction than in the January survey—indicated that they had tightened their lending standards on prime mortgages.2 Of the 37 banks that originated nontraditional residential mortgage loans, about 75 percent—a somewhat smaller fraction than in the January survey—reported a tightening of their lending standards on such loans over the past three months.3 Finally, 7 of the 9 banks that originated subprime mortgage loans—a somewhat higher proportion than in the January survey—indicated that they had tightened their lending standards on such loans.4
About 25 percent of domestic respondents, on net, experienced weaker demand for prime residential mortgage loans over the past three months, and 30 percent indicated weaker demand for nontraditional mortgage loans over the same period. The net fractions of respondents that reportedly experienced weaker demand for these two types of loans in the current survey were significantly smaller than in the January survey. Finally, about 65 percent of domestic respondents—a net fraction similar to that in the January survey—reported weaker demand for subprime loans.
About 70 percent of domestic respondents—a somewhat higher fraction than in the January survey—indicated that they had tightened their lending standards for approving applications for home equity lines of credit (HELOCs) over the past three months. Regarding demand for these lines, about 20 percent of domestic banks, on net, reported weaker demand over the past three months.
Special questions on existing HELOCs. About 50 percent of domestic respondents reported having tightened terms on existing HELOCs over the past six months. Nearly all respondents pointed to declines in the value of the collateral significantly below the appraised value for the purposes of the HELOCs as reasons for tightening terms on these lines. Large majorities of respondents also cited increased defaults of material obligations under loan agreements, as well as significant changes in borrowers’ financial circumstances, as additional reasons for tightening terms on the existing HELOCs.
“Here’s the list of the 32 ways people may feel:
1. Cranky
2. Discouraged
3. Disillusioned
4. Disorganized
5. Doubtful
6. Drowning in Debt”
How the h@ll do you “feel” drowing in debt? How about your ARE drowning in debt.
Always hated that motivational garbage. Tens of thousands of dollars on the line in quarterly bonus and some d*ck like this takes up half of a day to have a meeting about a “sales competition” to motivate where the prize is a lousy $50 watch. And always a mens watch, so the female sales staff don’t even get the benefit of “prize” they can actually benefit from.
Bills coming in, real money on the line and these jokers always talking about “motivation”. Hate them. Hated working for the loser time wasters.
Well, I just came back from my home inspection in Westfield, and here are the highlights:
HI found asbestos-wrapped pipes, and I said that was a big problem. My guy said “why, that can be wrapped?” and I replied “my wife’s father died from asbestos.” Needless to say, he shut up for the rest of the day.
Here’s another quote from the HI while in the crawl space: “Looks like some water here. Nope, rat urine.” (Sellers said no known pests, yet there were bait stations everywhere).
Went to test the whirlpool tub. Water in tub was greenish-brown. This tub was frequently used so it wasn’t accum. sediment. Does Westfield have a water problem? (and no, the whirlpool tub didn’t work).
Lots of evidence of water infiltration in basement (sellers had intially “overlooked” the water questions on the disclosure, then said that the window wells had leaked once). Did not explain the gutter they made from the fireplace clean out to the sump pump. That was pretty funny.
Attic insulation was vermiculite. Really. I cannot say when vermiculite was used for insulation in my lifetime but there it was. Anyone need a lot of free fertilizer?
Multizone HVAC turned out to be a damper control.
This house lost two other contracts this year. It is about to lose a third.
#146
Does Joanne work for CGM or TFS. Which phone number are you referring to?
Thanks
Make Money according to you by 2011 we will all homeless and with no fuel. But we will be able to buy monster SUVs with DVD/CD players for $100 bucks and all I need to do is recycle some french fry oil and power up the babies electrical system and I will be sleeping on plush leather in surround sound. It aint all bad baby.
It is escape from NY all over again and you are the Snake Pleskin of this blog!
Dear John,
I am who I am.
We will not be all homeless and without fuel. We have tourist coming here and enjoying our nation, enterteainment beacuse it’s cheaper for them. By 2001, we will not be able to afford anything foreign. remember the days when having a foreign tie or a foreign shirt, or a foreign car was prestige and reserved for rich only, well now days everything cheap is foreign and everything quality is foreign.
Hence Asia, India, Russia are what the US was in the 50’s and 60’s. They are creditors and producers
To get out out of the dollar will only preserve my purchasing power not enhance it for international goods however I will be enjoying the local goods and services very cheap. Things like landscaping and haircuts, but will pay the same for a BMW.
hard place,
the next president is likely to be powerless to do much to fix out situation. It would take the entire country gearing up for the effort similar to WWII and victory gardens. try telling grandma that you are cutting her SS or medicaid/medicare. try telling the various industrial power houses that they will no longer be subsidized and try telling the average american that they must now suffer a reduced standard of living in order to correct the error their ways over the last couple of decades.
let me know how that works out
kettle [165],
Yes, blame it on hedge funds and speculators. Ambac lost $36 a share last year and $12 the 1st quarter. Yet, the only reason the stock got blitzed was zealous shorts.
Nom 170
“Does Westfield have a water problem?”
Nothing that should turn it that color, but I can tell you in the multiple Brigadoon abodes we’ve been in the water pressure was abysmal (so much so that I always check the tap when we’re visiting, and my conclusion is that this doesn’t only apply to where we have lived).
“Sellers said no known pests, yet there were bait stations everywhere”
Did you get the brand name on those bait stations? I’d like to buy some!
#171 - Joanne works for TFS, 732 758 9300. She does most of the day-to-day ops. If you want to get into a fund they offer but your rep is being difficult about getting you into it she is the person to talk to. She’s good people, if a bit busy.
Sorry if I was unclear before.
170 Nom
Sorry to hear that. If the owners were smart, they would have cleaned up what they could or at least answered questions truthfully after the first contract which I’m sure went through inspection.
But that’s if they were smart.
175
Patient
I don’t think they make them as big as you want them.
Re 172 what makes you think we will sit here and take it. I for one will just take a job in Europe. It is a global economy. Moving countries today is like moving states 20 years ago. I have first cousins working in Japan, Austraila, Germany, England and Ireland. Not a big deal. Plus I think people will get up to around 80-90% in foreign equities and bonds if this happens. I think us americans have been their done that. Plus with a weak US dollar who is buying 5 and 7 series anyhow. In Europe and Japan they sell the low rent cars. Lexus, Mercedes, BMW high end V8s are headed to the US and with no buyers good luck.
Back 40 years ago airline tickets to Europe were almost $500 bucks when people made less than 10K a year. Everyone drove beat up cars and we had no cable, internet, fancy vacations etc. I am fine with going back to that.
Nom,
Depending on the age, old vermiculite sometimes contains asbestos contaminants. Not sure if you were joking about using it as fertilizer or not, but it is best left undisturbed.
Re HI found asbestos-wrapped pipes, and I said that was a big problem. My guy said “why, that can be wrapped?” and I replied “my wife’s father died from asbestos.” Needless to say, he shut up for the rest of the day.
Why do people try to sell houses that way? All you have to do is throw some wet old towels or blankets over the pipes, razor them on the bottom and throw it out. People are insane nuts when they see absestos and want you to spend tons and tons of money to remove but somehow when they see a house that used to have absestos they don;t care how it was removed.
re vermiculite,
google libby montana.
http://www.epa.gov/asbestos/pubs/verm.html
njpatient [117],
Hey gary, how are you feeling?
Why, with my hands, of course! And you thought just because I have two brain cells left, I couldn’t answer that one.
all i can say is wow!
Lord, come down in a mighty way and strengthen us so that we can bring down these high gas prices,” Twyman said to a chorus of “amens”
Tired of paying through the nose, Americans try praying at the pump
http://news.yahoo.com/s/afp/20080505/lf_afp/usreligionpovertyenergyoil_080505042253
Uh-oh, I’ll stay away from the political topics… Too easy to get people fired up…
Now about those pests. Vermin is hard to get rid of. Once they find their way in, they are hard to root out, especially if it is a family. My mom had a squirrel problem for months. They were camping all over in the roof and than dug their way through to the garage. Eventually they even made it into my dog’s old crate w/ his dog bed. Scared the heck out of my wife when she started rifling through some of the stuff in the winter and the squirrel freaked out thinking they were hibernating for the winter. One screaming wife. One screaming squirrel. Don’t know who was more scared… LOL….
JOHN (post 22) and ChicagoFinance (post 24):
What’s your insight on Amex (Amex fuggetabout it…)? Why are you stating that no Amex jobs would be lost in NY… what areas have they referenced?
Lots of talk/speculation that Warren is going to buy out Amex, but wanted to get your thoughts on what your comments refer to!!!
Grazie!
John 181 that is the worst advice I have ever heard on Asbestos removal. Not to mention the multitude of laws that will be broken if it is done that way. Hey it is Westfield though so worth it is worth it. Sarcasm off
Uggh should have grammar checked don’t kill grammar Nasi’s
John (181)-
Improperly removing asbestos wrapping on pipes is MUCH worse than leaving it. Improper removal causes asbestos particles to be released into the air. Not good.
Gazillions of old homes in NJ have asbestos-wrapped pipes. It’s best to just let that wrapping be. If you’re that afraid of asbestos wrapping, better not be looking to buy an older house.
Asbstos- in an of itself- is not the issue. What inspectors call “friable” (subject to contact or friction that causes release of particles into the air) asbestos IS an issue.
Grim - Fed Reserve data…
Interesting to note that in the last big consumer led recession in the early 90’s we are far above the tightening responses for resi mortgages. During that time and this is post S&L crisis we had approx 35% of domestic banks reporting tighter lending standards. In this period, we are probably around 65-70% reporting tighter lending standards. With this amount of tightening, if we get employment pullback than I’m willing to bet the farm this will be worse than the 90’s housing correction.
Rat urine?
Hey, you’re on your own making that call.
[180]
Grim, Thanks. That is a deal breaker right there. Wife would go nuts to learn that, and it would have to be removed, not just encapsulated.
[177] lost,
Can’t tell you how often I found bait stations or rat poison left in out of the way places where it would supposedly never be seen, yet I know where to look and what to look for. One house in Chatham also checked no pests. Wife saw a mouse in the kitchen, and when I looked in the corner, droppings everywhere. Hard to miss.
I basically consider the disclosure as a useful tool in implying the seller lied, thus getting a better price.
Update: My guy is now working me over hard because he thinks I am going to walk. Supposedly, the seller called him (wonder how she knew) to advise that the green water was caused by the town flushing the hydrants recently. Part of my plan for dealing with agents is to have some “subjective” reasons that can’t easily be argued with for dinging a house. Here the seller misrepresentations and the not-easily remediated conditions mean that he will have to work the other side really hard.
John (#22, 86):
I noticed that you frequently bad mouth employees over 50 and view them as over-paid.
Well, what do you think should happen to people who are intelligent, experienced and over the age of 50? Hopefully, you too will reach that age one day and then you too will worry about employment.
One well-known Big Pharma company in NJ (that is currently imploding) has been quietly reviewing people for the last 2 years as “below expectations” once they hit 50 years of age, and then using that as an excuse to get rid of them - thus not having to pay a full severance. We have even heard of past completed reviews being altered (negatively of course) to make the person look worse - anything to get rid of them.
And yes, there can be age discrimination even if you were hired in your 40s and gotten rid of in your 50s. Esp. if the CEO says he wants to “change the culture”, bring in new people, etc., but only gets rid of those in their 50s (by now all those 60 and older have been disposed of).
It seems that accumulated experience doesn’t count anymore….
RE: Asbestos argument.
We have asbestos wrapped pipes. They are in excellent shape and the testing we did with the inspector prior to purchasing ensured us even further. When we finished our basement recently, we put all of our pipes in soffets so one can not even see them. This should help us when we rent out our unit. I second the wet towel removal technique. Either leave them in place or have a professional remove it.
re 187 we are talking about the american stock exchange
re: Absestos
Technically, there are no Federal or State regulations that forbid a homeowner from removing asbestos in their own home themselves.
Ttransportation and disposal of asbestos-containing waste in NJ is regulated by the Department of Environmental Protection (DEP) so you need to make sure you have a contractor with a licence pick it up and dispose of it.
However you could just bury it in the backyard, and leave it for some other generation to deal with.
Nom,
if you really want to back out then require them to have a dust sample from the HVAC ductwork tested for asbestos since it may have been present in the house for decades. i would be shocked if they were willing to. But then again i am not a RE guy
the actual test would cost about $150 - 250
[192] clot,
I did not ask him how he knew it was rat urine.
Nor did I want to know.
Okay… enough on asbestos! Let’s elaborate on your thoughts for Amex with all this credit mess going on…..
I’m interested in what some folks on this board have to say on this. thanks!
Other market ruminations (if that’s a word)…
O&G portfolio booming…
BC,
have you noticed the price of sulfur lately?
Hey Gary,
How can little Graydon play lacrosse for Brigadoon HS when he’s hacking up toxic oysters, caused by his asbestosis?
re: American Stock Exchange.
The futue of retail or open market trading is further consolidation.
For the big boys all the action will be in the dark pools, bypassing the exchanges and the SEC completely.
kettle [203],
I know it’s on a tear. However, I don’t follow closely.
BC
as you may or may not not know, sulfur is a key component in fertilizer and other agricultural and industrial commodities (i.e sulfuric acid). domino effect
Sean not 100% true, there is a displayed and non displayed market. Dark pools like ITG and its midpoint match does not provide latency and is not subject to NMS, plus buys and sells at your price must equal at cross time. ITG will route away a block order when necessary to other dark pools and then if necessary to the displayed market. Liquidity is often lacking in the non-displayed market which in order to execute a large block trade you need a combo non displayed displayed versus displayed execution method.
#157 hehe: All in California I am sure.
re: (208)
John without getting into a liquidity discussion, the creation of the dark pools is to hide the trade correct?
Whatever happened to the the importance of transparency and regulation?
MS…what company?
#42
grim Says:
May 5th, 2008 at 7:23 am
“Wife says no, she wants blood in the streets.”
JB, could you please let this board know when your wife offically declares that there’s blood in the streets?
I’m betting this will be the best indicator that it’s time to jump in and buy.
Thanks.
“blood in the streets” Yeah! I wonna see the deep red blood, too. Please tell me when & where.
Clotpoll [204],
C’mon, you should know this; Graydon lives in a 4300 sq. ft. CHC built in 2005. No asbestos to worry about it.
Now, cousins K’brie and Archer, that’s a different story. Mom got the victorian in the Whitehouse area from the divorce settlement and the guy she’s dating is a litagation lawyer and he says the insulated pipes next to the wine cellar are like a mesothelioma smorgasbord.
From MarketWatch:
Merck to cut 1,200 U.S. sales force positions
More Westfield stories please, they always make me smile.
Puropose of dark pools is to get a better price on a block trade and not to let your trade hit the tape.
Lets say our friend who was buying up Ford recently called his broker and said buy ford, well pretty quickly the street would know his intentions and drive up the price. Also dark pools often assign monikers to the account to protect privacy. For instance up to recently everyone on the street knew Trump used Bear. So lets see a flood of sell orders on Trump casinos hit the tape from broker 352, the stock will tank. What you do is work it in the dark pool in bits and pieces and then work desk inventory before you hit the tape on the remaining shares in the block.
Sean Says:
May 5th, 2008 at 4:29 pm
re: (208)
John without getting into a liquidity discussion, the creation of the dark pools is to hide the trade correct?
Whatever happened to the the importance of transparency and regulation?
Clot,
Glad you back- missed ya!
KL
gary (213)-
“Mesothelioma smorgasbord”? Just how many characters populate that sick little world inside your head? :)
If John Cheever was the “Chekhov of the suburbs”, what does that make you?
kl (217)-
It’s nice to be missed.
It’s also good to be back to the sturm und drang of this board. For a while there, I thought I was becoming a happy person again.
Nom here,
Vermiculite house going back on active. I killed it in attorney review, in no small part due to the comments here.
Thanks to all who commented. You saved me tens of thousands.
118:
Uh..Illiterate bigot, giving false information. I’m shocked, shocked.
Re 101, don’t laugh, the Puerto Rico Marriott has a casino next door and their is an entrance to it from the marriott, the marriott which is morman does not allow ……OMG if Mitt Romney was president I don’t even want to think up what laws he could create”
Yeah, you are so right. After all, as a governor, he turned Massachusetts into a fundamentalist “Morman” state.
# 185 Or we could conserve energy and up the CAFE standards, but that would actually require action and responsibility.
# 192 It is easy to distinguish it from other critters’ urine bythe taste, I am told.
Hard Place, Mike, Nom etc re: 2500928 in Chatham.
I dropped by that place a few weeks ago. What a wreck. It seems to have settled in such a way that the windows have popped out of the frames, the floor was buckling (my son that was really cool) and the basement was hosting a serious insectarium. Through the basement window frames we could see what looked like a couple feet of black water. There was a lot of buzzing.
Seemingly for special effect, two hawks were perched on the chimney and greeted our arrival by turning screeching circles overhead.
There was a strange mound in the backyard with white PVC pipes sticking out, which seemed to be for ventilation. What is that? I’ve since noticed it elsewhere, though usually not on residential property.
The address is 255 Loantaka. The property is swamp.
I just saw your posts
One more thing on that Chatham property:
Out of curiosity, I just looked through the county records on that place. They seemed to have inherited it from their parents in the 1990s, took out a mortgage, paid it off in 2003 and I guess took out a couple more mortgages, because they defaulted on $867,000 of debt.
Citi got the place at a January sheriff sale when no one bid. It’s on gsmls now for $617,000. Good luck to Citi.