Foreclosures up 65% in April

From Bloomberg:

U.S. Foreclosures Rise 65 Percent as Vacated Homes Add to Glut

U.S. foreclosure filings climbed 65 percent and bank seizures more than doubled in April from a year earlier as rates on adjustable mortgages increased and vacated homes added to a glut of unsold homes, RealtyTrac Inc. said.

More than 243,300 properties, or one in every 519 households, were in some stage of foreclosure, the highest monthly total since RealtyTrac, a seller of default data, began statistics in January 2005. Nevada, California and Florida had the highest rates. Filings rose 4 percent from March.

Properties in foreclosure “contribute to already bloated inventories of homes for sale, and put downward pressure on home values,” RealtyTrac Chief Executive Officer James Saccacio said today in a statement.

The collapse of the U.S. housing market, the worst since the Great Depression, is contributing to the economic slowdown and may push the economy into a recession. Median prices for a single- family home fell 7.7 percent in the first quarter, the biggest drop in 29 years, the National Association of Realtors reported yesterday. There were 4.06 million U.S. homes for sale at the end of March, 40,000 more than the prior month, the Realtors association said in an April 22 report.

“Inventory levels have soared to unprecedented levels” Brian Fabbri, chief North American economist for BNP Paribas, said in an interview. “Builders and homeowners have to lower their prices significantly to sell that inventory out.”

Foreclosure filings in New York were up 39 percent from a year ago and up 12 percent from March. The state ranked 29th with 5,696 filings.

In New Jersey, foreclosure filings ranked 15th at 5,143, up 65 percent from a year ago and up 15 percent from March.

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261 Responses to Foreclosures up 65% in April

  1. grim says:

    From CNN/Money:

    Foreclosure filings hit record in April

    U.S. foreclosure filings reached a record high in April, rising almost 65% over the previous year and putting municipalities at risk by putting into the value of taxed property, according to a study released Wednesday.

    Some 243,353 households, nearly one in 519, received a foreclosure filing during April, according to the U.S. Foreclosure Market Report from RealtyTrac, an online marketplace that tracks foreclosed properties. That was up 4% from March, and surpassed the record of 239,851 set in August 2007.

    It’s “the highest monthly total we’ve seen since we began issuing the report in January 2005,” said chief executive James J. Saccacio in a statement.

  2. grim says:

    From the Star Ledger:

    Corzine: NJ windfall should cut debt

    Gov. Jon Corzine acknowledged Tuesday that New Jersey is getting an unexpected budget windfall, but he said the extra cash should be socked away to help reduce the state’s debt rather than spent to restore proposed cuts.

    “Am I pleased we have the windfall that allows us to pay down debt? Absolutely,” the governor said after Treasurer David Rousseau updated lawmakers on the state’s budget outlook. New Jersey has $32 billion in debt, the fourth-heaviest burden in the nation.

  3. grim says:

    From MarketWatch:

    Greenspan sees U.S. house price bottom in ’09: reports

    U.S. home prices will likely bottom out in early 2009 after the market absorbs excess inventories, former U.S. Federal Reserve Chairman Alan Greenspan told audiences in Asia Wednesday, according to news reports. Greenspan, who spoke by video link to audiences in Hong Kong and Singapore, said the current pace of liquidation will accelerate, but excess supply won’t be eliminated until early 2009, according to Dow Jones Newswires, which cited prepared remarks provided to investors by Deutsche Bank, which sponsored the conference. Greenspan told the audience U.S. economy is showing resilience and flexibility. He also said high oil prices are structural and will likely continue due to a lack of investment in capacity and infrastructure, the report said.

  4. grim says:

    From the NY Daily News:

    City foreclosure woes surge

    The number of city homeowners in danger of losing their place to foreclosure soared 28% last month from April 2007.

    While 2,201 are at some stage in the foreclosure process, for 211 of them, the battle was over – lenders repossessed their homes, according to real estate Web site RealtyTrac. Another 1,666 got default notices last month, and the rest got word their homes will be auctioned.

    The upswing was ominous: In April 2007, just 10 homes were repossessed citywide. There are about 3.3 million households in the five boroughs.

    In the city, Queens had the highest number of foreclosure filings, 926, and the highest number of repossessed homes, 117. In Brooklyn, 649 foreclosure notices were filed, and in Staten Island, 293. Bronx homeowners received 249 foreclosure notices, and 84 were sent out in Manhattan.

    Citywide, one of every 1,631 households got a foreclosure notice last month.

  5. grim says:

    From the WSJ:

    Fed Officials Say Economy May Remain Sluggish for Some Time
    May 14, 2008; Page A16

    With financial markets continuing to face strains, the economy could remain sluggish for some time, Federal Reserve officials said. But with markets and economic data showing some improvement, a few policy makers started broaching the prospect of eventually raising rates.

    In remarks to an Atlanta Fed conference Tuesday, Fed Chairman Ben Bernanke said conditions in financial markets are “far from normal” and the central bank was prepared to expand its lending programs if necessary.

    The Fed in recent months has created numerous new direct-lending tools to relieve pressures in credit markets. Markets for certain types of mortgages, corporate debt and other areas have improved, Mr. Bernanke said, but “pressures in short-term-funding markets persist.”

    “At this stage conditions in financial markets are still far from normal,” he said. “Ultimately, market participants themselves must address the fundamental sources of financial strains…and this process is likely to take some time.”

    Gary Stern, president of the Federal Reserve Bank of Minneapolis, said Tuesday that he expects a shallow recession this year with “subdued” economic performance — growth that is barely positive or barely negative — for at least the next two quarters.

    Mr. Stern said the economic environment is similar to the early 1990s when “headwinds,” a phrase then-Fed Chairman Alan Greenspan used to refer to banks’ reluctance to lend, weighed on the economy. “It took some time for that to all dissipate,” Mr. Stern said in an interview with The Wall Street Journal. “There was a lot of concern about the initial sluggishness of the recovery….I personally expect that’s going to turn out to be the case here as well.”

    Richard Fisher, president of the Federal Reserve Bank of Dallas, rejected the idea that the economy already is in recession. The slowdown “will last a little bit longer than people expect, but it may not be as deep as many anticipate,” Mr. Fisher told a community forum in Midland, Texas, on Tuesday. When the economy does eventually emerge from its troubles, he said, one of the biggest concerns is there will be a “much higher base rate of inflation than we would want.”

  6. grim says:

    From the WSJ:

    Home-Price Decline Spreads
    Number of Metro Areas Hit Reaches Three-Decade High; Toll Brothers Feels the Pinch
    May 14, 2008

    In the latest sign that the housing market is deflating at a record pace, the National Association of Realtors said prices declined in more metropolitan areas in the first quarter than at any time in the past three decades.

    The trade group said median prices fell in about 100 metro areas — the most since the trade group began keeping such records in 1979. It also said Tuesday that median home prices rose in 48 metro areas — the lowest number on record. Nationally, the median home price fell to $196,300, down 7.7% from a year ago.

    Lawrence Yun, the group’s economist, said the sales-price data are being distorted by foreclosed homes and other distressed sales, which are fueling price drops in certain neighborhoods, while the lack of available so-called jumbo mortgages for high-priced homes has resulted in fewer sales in upscale neighborhoods. The upshot is that the median price for a metro area may be falling, but the prices may very sharply “neighborhood by neighborhood,” Mr. Yun said.

    Still, high-end homes are clearly under some price pressure. Luxury builder Toll Brothers Inc., which reported preliminary second-quarter results on Tuesday, said its average home price dropped 17% to $590,000 from a year earlier and was down 7% from the previous quarter, partly because of increased incentives. Toll says it is offering most incentives on homes that were built for buyers who ultimately backed out of their contracts. The builder also said its average price was lower because it sold fewer homes in high-price markets such as California and Manhattan.

    Toll says one of the biggest problems is that many buyers are putting down deposits but end up canceling because they fear they won’t be able to sell their existing home. “They go to their friends and neighbors and say, ‘We just bought a new home,’ and everybody says ‘What? Are you crazy? Prices are dropping,'” Chief Executive Robert Toll told analysts during a conference call.

  7. grim says:

    From the Record:

    A break for Bergen sellers

    Bergen County home prices continue to hold up better than in many parts of the nation as the real estate slump shows no signs of bottoming out.

    Median home prices dropped 2.4 percent in Bergen County and 8.1 percent in Passaic in the first quarter of 2008, compared with the same period a year ago. That compares with a nationwide drop of 7.7 percent, according to price data released Tuesday.

    In Bergen County, according to the New Jersey Multiple Listing Service, the median price of an existing home sold during the quarter was $450,000, down from $461,000 a year earlier.

    In Passaic, the price was $357,500, down from $389,000 a year earlier.

    Sales activity is down in most places. The volume of sales dropped 22 percent nationwide and more than 30 percent in Bergen and Passaic in the first quarter, compared with the same period a year ago. Statewide, the volume of sales actually climbed 4 percent, though the reason was unclear.

    Bill Gilsenan of Gilsenan and Co. Realtors in Ridgewood said home shoppers are “waiting to buy at the very bottom of the market. Where that may be, no one knows.”

    At some point, he said, these prospective buyers will be drawn into the market because they’ll need different housing.

    “People get married, they have children, they want to downsize, they’re transferred,” he said. “Life goes on.” He argued that buyers should look at the long-term trends, rather than worry about short-term market cycles, because most people live in their homes for a number of years.

    Some of the data released Tuesday suggest that home prices in the region have given up the gains of 2006 and 2007. According to the NAR, the median sales price of existing single-family homes in the New York metropolitan area, which includes Bergen and Passaic counties, was $491,900 in the first quarter — close to the $495,200 level of 2005.

    Some properties are selling for less than 2005 values. For example, Colin Somerville, an agent with Re/Max in Saddle River, recently sold a Montvale condo for $420,000, down from the $460,000 the homeowner paid in 2005.

    Somerville also said the prices of new homes have come down about 10 percent to 15 percent off their peaks, much faster than the prices of existing homes. Homeowners tend to be reluctant to lower their prices, because they have emotional ties to their properties. They often believe they deserve to get at least as much as their neighbors got in 2005.

  8. grim says:

    From the Star Ledger:

    N.J.’s housing market is doing better than most other states

    In New Jersey, the housing market continued to fare better than the nation as a whole.

    Home prices in the Garden State rose in a number of areas, including the Atlantic City region, where the median sales price increased 4.8 percent in the first quarter, to $277,400, and the Trenton-Ewing market, where the median price rose 1.6 percent, to $288,200. The median is the price where half the homes sold for more and half for less.

    And in stark contrast to the rest of the country, New Jersey was one of only three states where the volume of existing home sales actually rose in the first quarter compared with a year earlier.

    Nationally, existing-home sales — which generally account for 85 percent of all home sales — dropped 22 percent from the first quarter of 2007, the NAR reported.

    However, in New Jersey, the sales volume rose 4 percent. The other two states that posted increases in home sales for the quarter were Alaska and Illinois.

    Kenneth Fears, an economist with the NAR, attributed the jump in existing home sales in New Jersey to a dramatic drop in 30-year fixed mortgage rates over the past six months. Fears said interest rates on conforming, 30-year, fixed-rate loans slipped to as low as 5.8 percent, from 6.8 percent, making home buying more affordable.

    The low rates, coupled with sluggish sales the previous two quarters and New Jersey’s proximity to Manhattan, apparently led to a spike in demand during the most recent quarter.

    “Part of what we’re seeing now is pent-up demand is getting released again,” Fears said. “Sales in New Jersey were very slow for awhile and it was hard to get financing and rates were higher. It has since loosened up.”

    In New Jersey, existing home prices in the Newark-Union area, which includes Essex, Hunterdon, Morris, Sussex and Union counties, fell 3.4 percent, to $409,300. In the New York-northern New Jersey area, the median price fell 3.9 percent, to $445,400. And in the Edison area, which includes Middlesex, Monmouth, Ocean and Somerset counties, the median home price fell 0.6 percent, to $361,200.

    But even in those parts of the state where prices fell, the declines were modest compared with most of the rest of the country.

    The NAR blamed much of the record decline in home prices on liquidity problems that are making it difficult for homebuyers to secure financing for expensive homes in high-priced markets.

  9. bairen says:

    #3 Why do people pay to listen to Greenspan? The only reason I can think of is to listen to him, then do the opposite, like watching Cramer and the rest of the bobble heads on CNBC.

  10. bairen says:

    #5 Why do politicians and the Fed act concerned when housing starts dropping in price? Where was this concern during multiple years of 10%+ increases? higher housing prices = money unavailable for productive purposes in the economy. Lower prices = more money for investment and discretionary spending.

  11. grim says:

    From MarketWatch:

    Mortgage applications rose 2.9% last week: MBA

    Mortgage application filings rose a seasonally adjusted 2.9% last week compared to the prior week, driven by increased interest among homeowners seeking out refinancings, the Mortgage Bankers Association said on Wednesday.

    Applications for the week ended May 9 were down 1.1% compared with the same week in 2007 on an unadjusted basis, according to MBA’s weekly survey.

    Applications filed for mortgages to purchase homes dipped a seasonally adjusted 0.7% on a week-to-week basis, while refinancing applications rose 6.5% .

  12. Mikeinwaiting says:

    Grim when I refresh I lose name & email in reply field. Are there still problems or is this on my end?

  13. grim says:

    Ahh, I understand it now. The current ratings measures weren’t flawed, they measured what they intended to measure. However, they didn’t measure what we thought they measured, for that we need a new measure.

    In other news, MBIA and Ambac were upgraded by Moody’s on Wednesday to Triple-A Smiley Face, and Triple-A Gold Star, respectively.

    Moody’s to unveil new ratings measures -FT

    Credit ratings agency Moody’s Investors Service will on Wednesday unveil two new measures to help investors understand the risks in structured finance products, the Financial Times said.

    Michel Madelain, the new chief operating officer of Moody’s, told the newspaper that the new indexes would show how rapidly a security could lose a top-notch rating if the economic climate changed.

  14. grim says:

    Grim when I refresh I lose name & email in reply field. Are there still problems or is this on my end?

    Try clearing your browser cache and cookies. There is still a problem I’m trying to fix, when the name/email fields are blank, you should be pushed to a login screen, instead you get an error.

  15. grim says:

    From Reuters:

    Tax rebate won’t stem U.S. recession: Merrill

    The U.S. economy is in a recession and stimulus from a government tax rebate later this quarter will only temporarily stem a fall in consumer spending, a Merrill Lynch (MER.N: Quote, Profile, Research) economist said on Wednesday.

    U.S. households will get tax rebates next month as part of a $152 billion stimulus package passed earlier this year, aimed at propping up an economy hit by the subprime mortgage crisis, losses at top banks and a credit crunch.

    “I still maintain the business cycle is bigger than the government,” Merrill’s North American economist David Rosenberg said at a client conference in Singapore.

    He said the world’s largest economy was already in recession as consumer spending and confidence had fallen and jobs losses were rising, with the number of hours worked having fallen sharply.

    Describing housing as “the quintessential leading indicator,” Rosenberg, a long-time bear on the U.S. economy, said he expected home prices to fall another 15-20 percent before stabilizing.

  16. grim says:

    From MarketWatch:

    Freddie Mac expects credit-related expenses to remain high

    Freddie Mac expects to raise $5.5 bln in new core capital

    Freddie Mac Q1 provision for credit losses $1.2 bln

    Freddie Mac 1Q loss $151 mln, or 66 cents a share

  17. njpatient says:

    Hi ho
    Hi ho

  18. Rich In NNJ says:


    Do you ever sleep?

  19. Mikeinwaiting says:

    Grim thanks ok now.

    NJP Ditto 18!

    CPI due out about 25 min, welcome to fantasy island.

  20. NJ kiwi says:

    Someone to feel sorry for on this bright and sunny Weds morning. I posted the link so that you can see the pic for the full effect.
    He has some work to do now to save up for UC Santa Cruz for young ‘Chase’. (I guess at least he didn’t name the kid “Countrywide or HSBC”.)

  21. grim says:

    Hi ho
    Hi ho

    Your motivation makes perfect sense to me now.

  22. grim says:

    Core up 0.1%

    No inflation!

  23. HEHEHE says:

    Greenspan said it’s too hard to see a bubble yet now he knows when a bubble will end. Can’t they send that guy off to a home someplace?

  24. grim says:

    From MarketWatch:

    U.S. April CPI up 0.2% as expected

    U.S. April core CPI up 0.1% vs. 0.2% expected

    U.S. CPI up 3.9% in past 12 months

    U.S. CPI core up 2.3% in past 12 months

    U.S. April CPI energy prices flat vs 1.9% gain in March

    U.S. April CPI food prices up 0.9%. largest since 1990

  25. Shore Guy says:

    # 23 It sounds very Zen-like.

  26. Shore Guy says:

    # 8 “And in stark contrast to the rest of the country, New Jersey was one of only three states where the volume of existing home sales actually rose in the first quarter compared with a year earlier. ”

    The cynic (realist?) in me does not see this as a sign of strength. When one takes these numbers and considers the number of underwater borrowers in NJ, I would not be surprised to find the volume reflecting people who refused to sell last year (because they faled to recognize the change in market conditions) and have now decided to bail to cut their losses. When volume is up and prices are flat, I do not see this as a sign of a “healthy” market; were it so, the volume would be pushing prices up at a considerable clip.

    Any thoughts from anyone else?

  27. Shore Guy says:

    # 22 Indeed. It seems the price increases in food and energy are the economic equivalents of neutrinos: they exist but have little effect on day-to-day living.

  28. Shore Guy says:

    # 2 Against my expectations of what might fall aout of Trenton, this actually makes sense. Conswquently, I suspect this proposal will never fly.

  29. All Hype says:

    Grim (24): Love those fantasy numbers. Look for the Fed to lower the rates in June/July. They have the cooked numbers to slash the FFR to 1.0% by the end of the year.

    Oil to $150 is certain by the end of the summer. $200 oil is around the corner for Christmas.

    We are F***ed!

  30. Shore Guy says:

    Take a look at this from the FBI relating to mortgage fraud. The photos are amazing.

  31. Shore Guy says:

    The above photos are from condos that were involved in a mortgage fraud. The appraisal described “recently renovated condominiums” to include Brazilian hardwood, granite countertops, and a value of $275,000.

  32. Shore Guy says:


    # 30 in mod. It has a link to an FBI report.

  33. Shore Guy says:

    # 29 Does that make the stimulus check that some of you are getting foreplay?

  34. grim says:

    #26 – I don’t believe the number of sales increased in NJ.

    NJMLS, GSMLS and Monmouth/Ocean MLS show steep declines over last year. In addition, the NJ areas that are covered by Prudential Fox and Roach (Philly region) were showing large YOY declines as well.

    Where did home sales increase so dramatically in NJ, as to overcome the steep declines seen across the regions I actively monitor?

    Sorry, but I don’t buy these numbers, call me a conspiracy theorist if you want. They don’t correlate at all with other published sources.

  35. John says:

    WYOMISSING, Pa., May 13, 2008 /PRNewswire-FirstCall via COMTEX/ — Sovereign Bank (“Bank”), a federal savings bank and a subsidiary of Sovereign Bancorp, Inc. (SOV) announced today that it has priced $500 million of fixed rate subordinated notes. The notes will have a coupon of 8.75% and will mature as of May 30, 2018.

    So all the banks and AIG etc. are selling bonds in the mid 8’s yet inflation is tame.

    Even more interesting the WSJ was saying that bond sales and pref sales for 8% coupons have continuing demand as the customers who bought them each year have 8% of their principal thrown off as interest payments and they have to keep reinvesting it. Crazy stuff, I bought a short term Soveign secondary market bond last week with a 9% YTM. These are early 90’s post junk bond meltdown yields. Yet they are supposedly investment grade banks and insurance companies that are regulated. Freeging AIG and Citi are paying junk bond rates. Crazy stuff. Even crazier citi managed to create equity like structure in its prepetual pref so that 8.3 coupon is taxed at the 15%. The few people I know with money are locking in and with commodities on a tear along with bonds I don’t see why people would want to rush right back into real estate as an investment.

  36. Frank says:

    “Sale prices of homes stabilizing at Shore”

    So much for the NY commuting town theory. Prices are are going down around NYC and going up down the shore.

  37. All Hype says:

    Shore Guy (32): Forplay is considered fun, we are in for some serious pain…

    I am now convinced that these checks were sent out just to pay for energy.

  38. 3b says:

    JP Morgan to cut 4000 of their own employees, away from the Bear take over.

  39. grim says:

    So much for the NY commuting town theory. Prices are are going down around NYC and going up down the shore.

    It’s all in the spin, John.

    SFH Median Home Price – Edison MSA (Monmouth, Ocean, Somerset, Middlesex)

    2005 – $375,000
    2006 – $387,700
    2007 – $380,300
    2008(q1) – $361,200

    Current median home price is currently 3.7% under the 2005 median home price.

    Of course, nobody was talking about this yesterday.

  40. Shore Guy says:

    # 37 What was the advice Queen Victoria (I believe it was) received about her wedding night? Something to the effect of “Lie back and think of England.”

    I assume she got kissed during the process, I trust we will not.

  41. chicagofinance says:

    3b Says:
    May 14th, 2008 at 9:15 am
    JP Morgan to cut 4000 of their own employees, away from the Bear take over.

    3b: all in South Dakota in their credit card operations and hot dog vendors at Chase Field in AZ.

  42. grim says:

    Nor do I expect the media to discuss it either.

    The fact of the matter is, according to the NAR, the median single family home price in Monmouth, Ocean, Middlesex, and Somerset is now sitting almost 4% *UNDER* 2005 prices, and almost 7% *UNDER* the peak price set in 2006.

  43. Shore Guy says:

    # 42 AND, because folks at the far upper reaches of the economic scale (far above my pay grade) still have and will continue to have vast quantities of cash available for second-, third-, and fourth-home purchases in places like Bay Head, Mantaloking, Spring Lake, Sea Girt, Loveladies, Ship Bottom, etc., the numbers for the Shore will remain skewed, and any decline in prices will appear smaller than it actually is.

  44. Shore Guy says:

    The new frontier for RE development? Get in on the ground floor, just bring long underwear.

  45. 3b says:

    #41 Chgo: And from their Fixed Income desk in Manhattan, Manhattan Beach that is.

  46. 3b says:

    #42 grim: What about Bergen

  47. grim says:

    #43 – Ship Bottom? How did that make the list?

  48. Shore Guy says:

    Oceanfront is oceanfront, bayfront too.

  49. gary says:

    According to the NAR, the median sales price of existing single-family homes in the New York metropolitan area, which includes Bergen and Passaic counties, was $491,900 in the first quarter — close to the $495,200 level of 2005.

    In New Jersey, the housing market continued to fare better than the nation as a whole.
    And in stark contrast to the rest of the country, New Jersey was one of only three states where the volume of existing home sales actually rose in the first quarter compared with a year earlier.

    So, I’m to believe this is skewed, twisted and biased, yes?

  50. Al says:

    Are foreclosures and reposessions are counted as sales???

    I believe so…

    Which kind of gives you an Idea of whats coming to NJ. will we end up like CA – 36% of ALL home sales are REO’s???

  51. grim says:

    Bergen is in an MSA with a very broad definition.

    New York-Wayne-White Plains
    Kings County, NY
    Queens County, NY
    New York County, NY
    Bronx County, NY
    Westchester County, NY
    Bergen County, NJ
    Hudson County, NJ
    Passaic County, NJ
    Richmond County, NY
    Rockland County, NY
    Putnam County, NY

    2005 – $495,200
    2006 – $539,400
    2007 – $540,300
    2008(q1) – $491,900

    Current median home price is 9% under 2007 as well as approximately 0.6% under 2005 median price.

  52. grim says:

    Are foreclosures and reposessions are counted as sales???

    Foreclosures are not.

    However, if REO properties are marketed and sold through the MLS, they are.

  53. Al says:

    grim Says:
    May 14th, 2008 at 9:10 am
    #26 – I don’t believe the number of sales increased in NJ.

    NJMLS, GSMLS and Monmouth/Ocean MLS show steep declines over last year. In addition, the NJ areas that are covered by Prudential Fox and Roach (Philly region) were showing large YOY declines as well.

    Where did home sales increase so dramatically in NJ, as to overcome the steep declines seen across the regions I actively monitor?

    Sorry, but I don’t buy these numbers, call me a conspiracy theorist if you want. They don’t correlate at all with other published sources.

    See Post #50.

  54. Al says:

    So when banks buy a home through auction it is not counted as a sale?

  55. Painhrtz says:

    Through the looking glass we go nothing to see here.

    WASHINGTON – Inflation pressures eased a bit in April despite the biggest jump in food prices in 18 years.

    The Labor Department reported Wednesday that consumer prices edged up 0.2 percent last month, compared to a 0.3 percent rise in March.

    The lower inflation reflected a flat reading for energy, which helped offset a 0.9 percent jump in food costs as prices climbed for many basic items, from bread and milk to coffee and fresh fruits.

    The unchanged reading for energy reflected a big 4.8 percent jump in natural gas prices, offset by a 2 percent decline in gasoline costs.

    The reported drop in gasoline prices reflected the government’s accounting process, which discounts expected seasonal price changes.

    Since gasoline prices normally rise significantly in April, the 5.6 percent rise in prices for the month turned into a 2 percent drop after the government adjusted for normal seasonal changes. That was little comfort for motorists now paying record prices at the pump, which are nearing $4 per gallon.

  56. Shore Guy says:

    Speaking of oceanfront. Has anyone seen any erosion/accretion data for the NJ coast? Mrs. Shore and I had been considering picking up an oceanfront lot or house in NC, and got poking around the state’s erosion/accretion database and decided there was no way in Hades we would sink a single dollar there. The minimum beach loss seems to be 2’/yr and some sections it is 15′. The state of NC now requires that structures be built no closer to the water than 60x the annual erosion rate.

    I get the sense we are in better shape than that, but it makes one wonder.

  57. grim says:


    The NAR data is a survey of MLS sold homes. New homes not sold through the MLS are not included, foreclosures at auction are not included, mom selling her house to her son is not included, FSBO are not included, etc etc.

    The survey is of MLS listed sales.

  58. make money says:

    The “BRICs” (and Mortar) of the New Global Economy

    In the past quarter century, the center of wealth creation has steadily moved away from the United States and towards new foreign competitors, especially the so-called “BRIC” countries of Brazil, Russia, India and China, where economic growth rates have greatly eclipsed the U.S. In recent years, this economic might has translated into much higher returns on their respective stock markets. These movements are creating a wave of real wealth that wise American investors cannot afford to miss.

    In the mid 1970’s, a transformation began in which the driving force of the American economy shifted from ‘producers’ to ‘consumers’. Today, as measured by the GDP, consumption accounts for some 72 percent of the American economy. It is no wonder then, that as economics is so synonymous with spending, that the recently passed “stimulus package” is skewed heavily (90%) in favor of the consumer (where the votes are) at the expense of producers.

    But after a generation of consuming more than it has produced, America has dissipated vast amounts of its wealth.

    Unwilling to allow the citizenry to confront the reduced living standards that such dissipation requires, successive American governments have instead produced consumer booms in technology and real estate. Inflated through a combination of deficit spending, borrowing and massive depreciation of the U.S. dollar, the bubbles created by these policies have left future generations of Americans saddled with vast debts and an anemic currency.

    But while America has lost much of its wealth, the rest of the world has gained. Since the late 1980’s, a wave of economic enterprise has swept across the world. Under the leadership of the Reagan-Thatcher-Gorbachev triumvirate, communism melted, opening the world to free trade, and brought some 2 billion new consumers to the market. It also brought some 2 billion hard-working, low cost producers into direct competition with the developed West.

    Today, Western consumers not only buy their clothes, toys and sneakers from BRIC factory workers, but they are also likely to use service workers in those countries to manage help-desk call centers, prepare tax returns and read X-rays. As a result, growth rates in BRIC countries skyrocketed and corporate profits and stock prices followed suit, far outstripping the average performance of U.S. stock markets.

    The benefits of the great, new world consumer super boom have flowed mainly, as should be expected, to ‘producer’ nations. As an example, the S&P 500 Average Index rose by some 14 percent gross in 2006 (Incredibly, some 80 percent of mutual fund managers failed to equal even this return). Further, when deductions were made for management fees, transaction costs, 3 percent inflation and the depreciation of the U.S. dollar, many American investors actually experienced a ‘real’ net loss in that year. By contrast, the stock markets of BRIC offered far superior yields in appreciating currencies with Brazil up 33%, India 47%, Russia 71% and China 131%!

    One major impact of the increased manufacturing power of the BRIC nations, and even smaller countries like Vietnam, is a greatly increased thirst for raw materials. As formerly impoverished populations gain wealth, demand for higher quality food impinges upon the established demand of the ‘mature’ markets. These two factors have greatly benefitted nations such as Canada, Australia and New Zealand that provide raw materials, energy and food.

    As a result, perhaps a more appropriate and meaningful pneumonic device for international investors would be BRIC JACS (Brazil, Russia, India, China, Japan, Australia, Canada and the Smaller nations, such as Singapore, Vietnam and New Zealand).

    American investors face a difficult situation. While the American economy has slowed almost to recession and a property debacle and massive de-leveraging still threaten, the economies around the world are still booming. The solution is clear; Americans must “Go abroad”, if not with themselves than at least with their wallets. Investment portfolios should be constructed not just of BRICS, but also of the JACS which largely hold them together.. macro-economic mortar so to speak.

    The true dimensions of the changes heralded by the end of the Cold War are only now becoming clear. The world looks headed for a gigantic economic boom. Massive economic prizes will go to the ‘producing’ economies. Economies that produce less than they consume can expect some economic and political shocks. Investors should beware and construct their portfolios accordingly.

  59. John says:

    Actually when banks buy a home at auction it should not be counted as a sale as it is an artifical price, sometimes one dollar. NAR wants when a bank even if they use a realtor and MLSI and hold open houses and sells their REO property to the a member of the general public not to count. That is just crazy. Yea they go for cheaper the bank is making a business decision to sell quicker to avoid carrying costs and get the cash back even if it is 70 cents on the dollar so they can get it to work on a performing loan or an investment. People hold on to a price point that has nothing to do with the market.

  60. Shore Guy says:

    # 55 “The Labor Department reported Wednesday that consumer prices edged up 0.2 percent last month, compared to a 0.3 percent rise in March.”

    Playing Karl Rove: Inflation declines 33%. Proof that Administration economic policies have the economy on the right track.

  61. Al says:

    So let me get this straight – gasoline rose 3.6% but it actually dropped 2%???

    I am really getting mad -and what pissing me off the most – most people are so ignorant and when you are trying to explain it to them the moment you say “Percent” – you lost them.

    Well I guess people get what they deserve. I see in 5-6 years average person will be spending 30-40% of their income on food.

  62. Al says:

    grim Says:
    May 14th, 2008 at 9:40 am

    The NAR data is a survey of MLS sold homes. New homes not sold through the MLS are not included, foreclosures at auction are not included, mom selling her house to her son is not included, FSBO are not included, etc etc.

    The survey is of MLS listed sales.

    han I really do not know how did the sales rose. But I guess NJ is different and everything is possible here due to proximity to Manhattan.

  63. 3b says:

    #51 grim; Thanks.

  64. Shore Guy says:

    # 62

    It is a great deal, but just try to fit it in the pantry.

  65. Sapiens says:

    Ready to buy in outerspace? ha ha ha

    MEDIA ADVISORY : M08-089 NASA to Announce Success of Long Galactic Hunt WASHINGTON — NASA has scheduled a media teleconference Wednesday, May 14, at 1 p.m. EDT, to announce the discovery of an object in our Galaxy astronomers have been hunting for more than 50 years. This finding was made by combining data from NASA’s Chandra X-ray Observatory with ground-based observations.

    To participate in the teleconference, reporters must contact the Chandra Press Office at 617-496-7998 or e-mail Live audio of the teleconference will be streamed online at:


    A video file about the discovery will air on NASA Television on May 14. NASA TV is carried on an MPEG-2 digital signal accessed via satellite AMC-6, at 72 degrees west longitude, transponder 17C, 4040 MHz, vertical polarization. NASA TV is available in Alaska and Hawaii on AMC-7 at 137 degrees west longitude, transponder 18C, at 4060 MHz, horizontal polarization.

    For information about NASA’s Chandra X-Ray Observatory on the Web, visit:


  66. 3b says:

    #49 gary: It is telling the story they want to tell, not the whole story.

    I am surprised that after all that has gone on you would not consider that numbers/information can be skewed, twisted and biased.

  67. grim says:

    I really do not know how did the sales rose. But I guess NJ is different and everything is possible here due to proximity to Manhattan.

    The NAR reported numbers are incorrect.

    There is no way NJ sales are up 4% from Q1 2007, the data has got to be wrong.

    I’m going on record with this statement.

  68. Al says:

    Rice at Costco right now is 19.99 for 50lb bag – actually less than 1$/kilo!!! (it is about 881.58$/1000 kilos’ or 12 cents profit from each kilo’s!!!

    I am going to buy 10000000000 kilo’s from Costco, sell them for 1003$/metric ton, and make 120000000$!!!.

    After that I can afford a house in NJ.

  69. 3b says:

    Here is a comp killer (I believe)in River Edge. This house was purchased in 2005 for I believe 500k.

    They added a new kitchen. It has been in and out of forclosure (they keep getting it postponed apparently).

    Although the realtor web site is still listing it at 489K, my daily review of the njmls site shows that it was dropped to 449K this morning.

  70. gary says:

    3b [66],

    When I see the acronym “NAR”, I immediately start chuckling, so I don’t trust anything they say. However, after all that has gone on you would think there would be greater price drops and a lot more pain. It’s happening in many parts of the country but it hasn’t really happened here.

  71. Al says:

    I have aquestion – what can people tell me about Springfield ??


    What it is like, how are the schools, taxes, and general stuff – chrime and such.

  72. thatBIGwindow says:

    Speaking of crime, did anyone hear about the member of Latin Kings who was arrested for selling a gun? Apparently he lived in Prestigious River Edge! I found that funny

  73. SG says:

    Whitney Whips Wall Street

    There are two things Wall Street potentates don’t want to hear: (1) “Sir/Madam, there are some people from the SEC here to see you” and (2) “Did you see Meredith Whitney’s latest note?” Yes, it seems that the Oppenheimer (OPY) equity analyst, who has bedeviled big financial firms such as Citigroup (C) (, 11/26/07) with her bearish calls in recent months, has struck again. In a May 13 note titled “What Goes Up Must Come Down,” Whitney lowered her earnings-per-share estimates on Lehman Brothers (LEH), Merrill Lynch (MER), Goldman Sachs (GS), and Morgan Stanley (MS). The cuts were deep: Whitney reduced estimates by an average of 41% for the 2008 second quarter, 48% for fiscal 2008, and 20% for fiscal 2009.

  74. Hard Place says:

    Is there a way to get the NAR data on the MSA medians earlier than on their website?

  75. Shore Guy says:

    # 72 Crime pays?

  76. John says:

    Well the good news is that old Al Greenspan has called the bottom in early 2009. So all we have to do is keep our powder dry and buy a mcmansion in Feb 09 and hold off selling our starter cape till peak April 2009 selling season so we can buy low and sell high all within the same two months. That old Al is a crafty guy. Actually Feb 2009 might not be a bad time to buy a dollar time share or a one or two bedroom coop/condo in hamptons or shore at a distress sale. Those you can buy right from the bank cash. Betting the farm on a real property contingent on financing and sale of your first home will need at least six to 12 months past when the bottom occurs. At bottom it ain’t like banks will be running to give you money or their will buyers for your current home That will be when fear is the highest.

  77. thatBIGwindow says:

    #75: yes it does, I guess gang members arent only confined to less desirable towns. I wonder what the “blue ribbon school” folks think?

  78. 3b says:

    #70 gary: after all that has gone on you would think there would be greater price drops and a lot more pain.

    True, you have got me there. And I myself wrestle with that from time to time.

    However, since it has not happened on a larger scale here YET, it makes me all the more convinced that it will be even uglier and more painful here than it would have been.

  79. John says:

    Re 73 never trust a women with two first names.

  80. pretorius says:

    Shore guy 26, grim 34,

    I was surprised by the strength of the 1Q08 existing home sales number, but not that surprised. This metric includes single-family houses, condos and co-ops, so it captures the strong activity in Hudson County (lots of condos and co-ops there compared to the rest of the state) that single-family-only metrics ignore.

    Although the 3Q07 and 4Q07 figures reflected a sharp drop from the peak sales volume activity in 2003 and 2004, the sales volume in this housing slowdown is still above the low points in 1999 and 2000.

    I wouldn’t dismiss this better-than-expected number.

  81. pretorius says:


    I sent you a chart of New Jersey home sales going back to 1999. Please post when you get a chance.

  82. Shore Guy says:

    The more the spin meisters twist the data, the more I feel like i am living in the world of Winston Smith, where nothing the governemnt says can be trusted.

  83. mneer1 says:

    With the average home price dropping from $212,600 to $196,300, or $16,300 it should also be noted that on a mortgage of 196K w/ 10% down and a rate of 6.2%, interest, savings over a 30 year term is $17,675. A present value of that number is $9,636.
    (Why is 9,636 so large? Don’t forget that as a loan amortizes the bulk of interest is paid earlier and declines over time.)

    So all in, assuming the down payment was put into a 3% CD, a buyer would have saved a net value of $26,625 or 12.5% of the total investment (excluding closing costs).

    Be weary of anyone who talks to only the long term value of real-estate.

  84. 3b says:

    #72 tbw: Yes it was in Saturday’s Record. Apparently he ws 28, and ived on Taft Rd. However, not to sound racist, I thought the Latin Kings were a Hispanic gang, the name printed in the paper, did not appear to be Hispanic.

    In addition to the guy arrested, there was also a River Edge youth arrested with him, but released into the custody of his parents.

  85. Cindy says:

    Gotta leave for work but in the interest of how a house progressed along the inflated price continuum…here is what happened with my own home in California..(anecdotal from neighborhood sales and reports from my realtor.)

    Notice – about 1% a month (12% for the year) – then about 11/2% for 2005 – 2% for 2006 (that’s 24% for the year!)….then down she goes….)All stated as estimated values…

    purchased 1999 $115,000
    2000 $128,000
    2001 $160,000
    2002 $180,000
    2003 $204,000
    2004 $226,000
    2005 $268,000 – here we go!
    2006 $332,000 (house next door literally sold for that!)

    Well, it all goes down from there. My house is currently valued (according to comps in the neighborhood) at about $225,000. – back to the 2004 price…

    If that helps – that is exactly what happened to me…Maybe the percentage of run-ups wasn’t as severe for you – If you saw 5% per year instead of 12% through 2004 or if your 2005/2006 run-ups weren’t the 18% and 24% we saw…you could adjust the stats accordingly…

  86. grim says:

    I was surprised by the strength of the 1Q08 existing home sales number, but not that surprised. This metric includes single-family houses, condos and co-ops, so it captures the strong activity in Hudson County (lots of condos and co-ops there compared to the rest of the state) that single-family-only metrics ignore.

    Otteau Report 2008.Q1 – Includes Condos/Coops

    Hudson County – Sales Per Month
    2007.Q1 – 344.3
    2008.Q1 – 258.3
    % Change -25.0%

  87. Shore Guy says:

    # 80 You may be right that the numbers cannot be dismissed out of hand. Nevertheless, I remain wary, given the pressure on developers to discount and move units, homeowners pushed into short sales, etc.

    I guess I am back to the position taken by Reagan some years ago: Доверяй, но проверяй (doveryai, no proveryai). It will be interesting to see some granular analysis of the data.

  88. Cindy says:

    Oh by the way..never even considered selling – I love my home – exactly the right size and commute for me (1 1/2 miles to work – right next to shopping etc. as I will retire in the next few years – 1100 sq. ft – perfect for me…

  89. grim says:

    I’ve asked the NAR for the underlying raw survey data for NJ.

    If they agree to provide it, it will cost me $75.

  90. pretorius says:

    “grim Says:
    May 14th, 2008 at 9:18 am

    SFH Median Home Price – Edison MSA (Monmouth, Ocean, Somerset, Middlesex)

    2005 – $375,000
    2006 – $387,700
    2007 – $380,300
    2008(q1) – $361,200

    Current median home price is currently 3.7% under the 2005 median home price.

    Of course, nobody was talking about this yesterday.”


    The reason why nobody was talking about it is because these numbers aren’t seasonably adjusted. Prices are always a lot lower in the 1Q and 4Q.

    Comparing the 1Q08 figure to full-year figures from previous years is the wrong way to look at it. The right way to look at it is to compare 1Q08 to 1Qs in earlier years.

    By the way, the sales volume #s are seasonally adjusted.

  91. pretorius says:

    Shore guy, grim,

    I agree that the #s should be verified. However, past figures seem reasonable. Although the 1999-2007 figures are choppy, the general trend makes sense.

  92. grim says:

    Here is the data from the most recent Otteau Report:

    County Q1.2007 Q1.2008 % change
    Atlantic 318.7 237.3 -25.5%
    Bergen 807.3 542.7 -32.8%
    Camden 534.3 352 -34.1%
    Cape May 196.3 170.3 -13.2%
    Cumberland 42.3 31 -26.7%
    Essex 426.7 330.3 -22.6%
    Gloucester 276 204.7 -25.8%
    Hudson 344.3 258.3 -25.0%
    Hunterdon 120.3 111.3 -7.5%
    Mercer 290.3 217.3 -25.1%
    Middlesex 706.7 523 -26.0%
    Monmouth 741.3 573 -22.7%
    Morris 480.7 364.7 -24.1%
    Ocean 751.3 562 -25.2%
    Passaic 263.3 213.7 -18.8%
    Salem 51 31 -39.2%
    Somerset 362.3 248.3 -31.5%
    Sussex 167.7 125 -25.5%
    Union 365.7 270.7 -26.0%
    Warren 108.3 76.7 -29.2%

  93. Shore Guy says:

    # 89 $75 and your head on a pike, I believe is what the small print said.

  94. Al says:

    Shore Guy Says:
    May 14th, 2008 at 10:13 am
    # 80 You may be right that the numbers cannot be dismissed out of hand. Nevertheless, I remain wary, given the pressure on developers to discount and move units, homeowners pushed into short sales, etc.

    I guess I am back to the position taken by Reagan some years ago: Доверяй, но проверяй (doveryai, no proveryai). It will be interesting to see some granular analysis of the data.

    Правильной дорогой идете, Товарищ!!!

  95. gary says:

    3b [78],

    Which leads me to believe that the worst has already happened and what we’ll have is flat prices for the next couple of years. If we don’t see acceleration in price declines by the latter part of this year, then we’ll know the bottom is near. To say we’re going to get 30% off of peak in this area is a dream.

  96. grim says:

    GSMLS – First Quarter Sales

    Bergen,Essex,Hudson,Morris,Passaic,Somerset,Sussex,Union,Warren Counties

    SFH, Condo, Coop

    2003 – 5619
    2004 – 5862
    2005 – 5787
    2006 – 5573
    2007 – 5316
    2008 – 3718
    Down 30% YOY

  97. njpatient says:

    18 rich

    “Do you ever sleep?”


  98. njpatient says:

    “CPI due out about 25 min, welcome to fantasy island.”

    Da plane!

  99. 3b says:

    #95 gary: well I disagree that the worst has already happened. I think we are waiting for the next shoe to drop.

    But I do belive that the next 6 to 12 months will be key as far as declines. I lived through the last houisng bust, and as I have been saying, I see no reason/s that would indicate that thie one will be lesss severe.

    In fact all indicators point to the fact that this one should be more severe than the last one.

    And yes I am in the BC Bob camo 30% off peak. But of course I will still bring the red beer cups.

  100. gary says:


    I hope you get that raw data because I want to know how the f*ck sales are apparently falling off a cliff while prices appear to stay elevated.

  101. gary says:


    I lived through the last one, also. And I’m sorry, but 30% ain’t going to happen here. Regardless, let the beer flow. :)

  102. Shore Guy says:

    I generally prefer “горожанин” to “Товарищ.” But given the current state of things, “Товарищ” may be more appropriate.

  103. grim says:

    NJMLS – SFH, Condo, Coop

    Closed Sales – Q1
    2007 – 2718
    2008 – 2002
    Down 26%

    Contract Sales – Q1
    2007 – 3771
    2008 – 2784
    Down 26%

  104. make money says:

    Nearly seven in 10 Americans are worried about maintaining their standard of living, as concern has spiked higher in just the past five months, according to a new Washington Post-ABC News poll. Soaring consumer prices are a major challenge, with many people struggling under the weight of the rising costs of fuel, food and health care.

    no worries here. CPI is contained much like the subprime the feds say.

  105. njpatient says:

    28 shore

    “Against my expectations of what might fall aout of Trenton, this actually makes sense. Conswquently, I suspect this proposal will never fly.”

    Righto. I guess I have to revise my odds of it happening slightly upward from 0%, however.

  106. NNJ says:

    101… gary I think there will be occassional spikes in sales and prices when pent-up demand explodes.

  107. njpatient says:

    34 grim

    “I don’t believe the number of sales increased in NJ.”

    I had assumed it was an unblinking lie.

    I read that post twice to see if I’d missed where the number came from; then I realized: Yun’s a$$.

  108. Shore Guy says:

    # 104 If core inflation stays flat, but food and energy go up 500%,, is there anyone who could, with a straight face, say inflatio is flat?

  109. grim says:

    I had assumed it was an unblinking lie.

    We need to know which NJ-based MLS systems reported to the NAR, and what they reported.

    NAR methodology surveys roughly 30-40% of existing home sales, which means approximately 1/3 of NJMLS systems should be reporting.

  110. 3b says:

    #101 gary; The last real estate down turn?

  111. Shore Guy says:

    “inflatio” was a typo but I think it may be an appropriate new name for the phenomenon
    as it sucks dry our wallets.

  112. Jase Rion says:

    can someone let me know when and how much the property below was last purchased? again, thank you much!


    18 Fairview

    MLS# 2725002
    Listed: 6/19/2007
    OLP: $699,999
    Reduced to $644,900 on 7/20/2007
    Reduced to $574,999 on 9/25/2007
    DOM: 197

    MLS# 2819063 – Short Sale (Subj. to bank approval)
    Listed: 5/8/2008
    OLP: $480,000

    Was also listed for rent under MLS# 2743455, listed on 10/26/2007 for $2k/mo. Was on for 189 days.

  113. njpatient says:

    42 grim

    “Nor do I expect the media to discuss it either.”


  114. Al says:

    Shore Guy Says:
    May 14th, 2008 at 10:29 am
    I generally prefer “горожанин” to “Товарищ.” But given the current state of things, “Товарищ” may be more appropriate.

    Just a little correction, I believe you wanted to say – “citizen” over “comrade”.

    “горожанин” – means a person who live in town as opposed to a village.

    “гражданин” – means citizen.

    At this point Russian lesson is closed, please send a payment for a lesson to Grim’s donation page.

  115. Shore Guy says:

    # 105 “Righto. I guess I have to revise my odds of it happening slightly upward from 0%, however.”

    Heck yea. I would tripple that estimate ;-)

  116. Shore Guy says:

    # 114 Indeed. It has not been since the tanks were rushing into Latvia that I had to use any Russian. Clearly, I am rusty.

  117. Shore Guy says:


    One last Russian shot:

    Should it now be “All power to the bloggers!”?

  118. njpatient says:

    59 john

    “Yea they go for cheaper the bank is making a business decision to sell quicker to avoid carrying costs and get the cash back even if it is 70 cents on the dollar so they can get it to work on a performing loan or an investment. ”

    The fact is that if buyers have that purchase as an option, then Joe Seller down the block nevertheless has competition at a lower price.

    They can say it “doesn’t count” for comps ’til they’re blue in the face, but Joe Seller is still f*cked.

  119. gary says:


    Yes, the last RE down turn. I didn’t own then but my brother did. He bought a house in ’82 for 35K, sold in the late 80’s for 165K. Complete madness. Then, the bottom sort of dropped out. It isn’t happening here like it did then.

  120. Dman says:

    119# Gary

    In your opinion, why would it be any different this time? What’s the factor that changes things this time around?

  121. SG says:

    I have posted similar examples for last few days. I think in exurbs the cookie is crumbling very quickly. Here is one more example,

    MLS 2444779 in Washington Boro

    Currently asking $329,900

    Once again, Property Taxes: $11,933

    It’s brand new house (built 2003) with 0.4 acre lot, now selling for just $329K? I think in 2005 these houses were going for $450K or so.

    Grim Address please. Also it would be good to see comps as well.

  122. John says:

    Of course home prices look good in BC, ballpark I saw at least 40% of listing expire unsold. Only people who are getting somewhere near their price sell. The rest keep re-listing or letting it expire.

    On wall street your can’t always look at the prices of securities sold. Their is something called depth of market. For instance if there are tons of unexecuted buy orders sitting at below market price and hardly any unexecuted sells sitting above market prices it tells you that current stock price is going down. A simlar stock where people are buying at market price and unexecuted sells are sitting above market price tells you stock is headed up.

    In re unexcuted purchase orders are coming in below asking and people are willing to sell if anyone is even close to asking. That is a market where seller are just trying to get out and the majority of buyers are waiting for lower prices. It is irrelevant that April prices look good. The market is screaming it is going down.

  123. richinnnj says:


    It did drop back in early 90s, but not over night like you imagine it did.

  124. njpatient says:

    70 gary

    “When I see the acronym “NAR”, I immediately start chuckling”

    I think we need to turn it into a bad word, sort of on the order of what was done to santorum (look it up, ’cause this is a family site and I ain’t repeatin’ it here).

    I’m thinking maybe a synonym for fool. As in “and he forgot he’d opened the V-8 can before he shook it. What a NAR!”

  125. njpatient says:

    71 al

    “what can people tell me about Springfield ??”

    It’s best feature? Easy access to Brigadoon, of course.

  126. grim says:


    2444779 – 86 Alvin Sloan

  127. NNJ says:

    The Unemployment numbers in the 90s were horrendous. Right now I see nothing like that. We can’t hire decent IT people for less than $100K, and even BSC Employees are getting double pay till august.

  128. Shore Guy says:

    # 121

    Lets see, $329M with 20% dp leaves a mortgage of 263,200. At 6% over 30 years gives us a payment of $1,569. At just 4% increase in taxes each year, this homeowner will be paying as much in taxes each month as he/she is paying for the mortgage.

    Such a deal.

  129. grim says:

    It did drop back in early 90s, but not over night like you imagine it did.

    Long, slow grind, just like today. From the top, ’87-88 to the bottom, ’93-95.

    I was duped into thinking that the speed of news today would somehow cause the cycle to play out faster. It is simply not the case.

  130. Shore Guy says:

    # 125, AND you can be a neighbor of Cramer.

  131. grim says:


    Use a real email address, please.

  132. njpatient says:

    86 grim

    sure, but otteau failed to take into account the absolutely massive increase in sales in Cherry Hill.

  133. make money says:

    # 104 If core inflation stays flat, but food and energy go up 500%,, is there anyone who could, with a straight face, say inflatio is flat?

    Yes. It’s a long list.

    Because the central banks around the world are printing their currecy to buy and prop the dollar they are reporting double and triple inflation numbers that we are reporting.

    In addition, the nations who have their currency pegged to the Dollar are really struggling with inflation.

    But inflation here at home is contained. It’s a miracle. It’s gods will.

  134. grim says:

    Cramer lives on Hillcrest in Summit.

  135. NNJ says:

    I though Cramer lived in SH.

  136. Shore Guy says:

    In the final analysis, inflatio is your friend. Inflatio will reduce the size of our debts. Inflatio will make you smile. It may suck dry your savings, but, ask Mugabe, inflatio is good.

    I think I will go down and get some inflatio on main street.

  137. NNJ says:

    Ok, he does live in Summit. I just checked.

  138. Shore Guy says:

    # 133 “It’s gods will.”

    So much for Israel, clearly we are the chosen people.

  139. grim says:

    What, you think I was fibbing?

  140. njpatient says:

    89 grim
    “If they agree to provide it, it will cost me $75.”
    most of the way there. This I want to see.

  141. grim says:

    Knowing which celebs live where is important when peddling homes, especially if the buyer is vain. “Jim Cramer lives a few blocks over” is heard as “If you buy this house, you are as rich and smart as Jim Cramer”.

    Bam, sale.

    I tried to get Gary to buy a house in Upper Montclair because Steven Colbert lived about 6 houses away.

    He threw a lamp at me.

  142. 3b says:

    #119 gary: Well I lived through the one in the late 80′ early 90’s newly married, bought at the peak because we were “going to be priced out forever”, (same realtor nonsnes than).

    We sold it 10 years later for $2500 less than we paid for it, and that price did nto include all the substanial improvements we made on it.

    In the meanatime we tried to sell it, and the offers we were getting on it, were 25 to 30% and more less than we paid for it.

    Also at them same time we were out looking to see what we could buy, as the kids started to arrive, wanted bigger place, and the difference was shocking.

    4 bed 2 bath move in colonials 50k to 75k less than what we had paid
    paid for our small house just 2 years prior.

    These numbers in % terms represented at elast 30% off what we had paid for our house.(Talk about a depressing time.)

    As we did not and could not take that kind of loss without bankrupting ourselves, we stayed and paid the mtg off in 10 years.

    It was a bad down turn, and people with coops/condos fared even worse.

    1 bed room coops that were 125k at the peak, were availbale from the banks at 25k cash. I know people that took 50, 60% losses and more on real estate at the time.

    Perhaps I am colored by the past, but I just have not seen any convincing arguement as to why it will not be the same and worse this time.

    As I have said time and again, it is my belief that our economy and country as a whole was on a far better financial footing back then, even in a recession.

  143. gary says:

    Why prices are stubborn? At first, I thought population growth but it doesn’t appear to be a factor. Take a look for yourself:

    It’s definitely employment. I’m in IT and receive a few emails per week from recruiters asking if I’m looking. If employment holds up, so do the prices. Just go to Dice and tell me if it looks like things are dire.

  144. gary says:


    I’m Italian, we get someone else to throw lamps. :o

  145. Jill says:

    Al #71: I get my hair done at a salon in Springfield, so I’m there every 6 weeks. I asked about it here recently because the son of a co-worker just bought a house there. It has easy access to the highways, Brigadoon, and the equally chic downtown of Millburn — but it’s an older town, population is elderly so no way to tell which way it’s going. The New York Times wrote it up a few weeks ago here:

  146. 3b says:

    #130 grim: You duped? Do you belive that the spread of information faster today is not playing a role in the decline of prices faster than you would have thought?

  147. grim says:


    I’ll make you more upset.

    He lives in a house near Brookdale that he paid $515k for in 2000.

    Imagine that, a well known celebrity in a modest home.

    If it takes that kind of job to afford a $500k home in NJ, I don’t think I can afford a tent on the parkway median.

  148. Shore Guy says:

    # 144 The wildcard is DEBT. If folks are employed, but are still overspending day to day, employment figures alone will not support prices.

  149. 3b says:

    #144 gary Even if Wall St employemnt goes down? and it is going down?

  150. grim says:

    Do you belive that the spread of information faster today is not playing a role in the decline of prices faster than you would have thought?

    It is not, I firmly believe that. If anything, the increase in information is making this cycle play out longer, especially as noise is read as data. People are too fixated on the short-term movement, and their timeframe expectations have been compressed into something on the order of days.

  151. grim says:

    “Bottom Calling” in the real estate market is a perfect example.

    The “bottom” in pricing, during the last cycle, lasted for *YEARS*. Depending on the measure, you could probably say the bottom of the last cycle was found sometime between 1991 and 1995, a full five years. (edit)

    People here are expecting the “bottom” to last for approximately 2 days, after which the market will skyrocket upwards.

  152. NNJ says:

    Between April 1, 2000 to July 1, 2006, population in NJ grew 3.7%. I don’t have more current data.

  153. Victorian says:

    Interesting article over at BP..

    “The skeptics ask, mostly to themselves these days, why, if the crisis is over, are companies like AIG still losing big money? Why, if the CEOs of financial companies are so bullish on their companies’ futures are they selling dilutive stock at depressed valuations? Only one spring ago, these far-sighted chieftains were buying back shares at levels 2 to 3 times higher than current levels.

    It’s interesting; ,b> Wall Street CEOs are talking like bulls and selling like bears, while Wall Street money managers are talking like bears and buying like bulls. When financial companies feeling the need to dilute their shareholders just to make ends meet can link up with the trusting managers of other people’s money, it’s more than just the perfect match. It’s the perfect example of positive thinking at work in today’s markets.”

  154. PGC says:

    If they posted a median list price to go with the median sale price, it would be a good indicator of how the two are trending in relation to each other.

    I received a flyer from a realtor giving current listings with prices, under contract and Sales since the start of the year for my town. My non mathematical/ statistical take is :
    There are 1/3 more under contract listings than sales since the start of the year. This suggests Superbowl bounce was non-existent, but things are picking up.
    U/C and sold prices seem much lower that the listing prices.

    My own REO was listed and as I suspected, I seem to have set the price point for my area. Of the three properties listed on my street, one has just sold and two are under contract at prices within $10-$15K of my sale price. I wonder if the local market needed one property to set to set a comp price for the others to follow.

  155. Shore Guy says:

    # 152 “People here are expecting the “bottom” to last for approximately 2 days, after which the market will skyrocket upwards.”


    This point is KEY. We have become so focused on the short-term view in nearly every aspect of economic life that I do not believe that people have factored into their thinking that things will be flat for a long time. If folks finally reaslze this, perhaps price declines will accelerate.

  156. njpatient says:

    “If you buy this house, you are as rich and smart as Jim Cramer”.

    If you ever say something so rude to me I’ll drop you like a cheap habit.

  157. njpatient says:

    “I tried to get Gary to buy a house in Upper Montclair because Steven Colbert lived about 6 houses away.”

    that might work, however.

  158. John says:

    Ok so I am looking at short sales on long island, run across this house at 2798 Stevens Street in Oceanside NY, 11572 check out this sales history
    Listed today at 450K in short sale
    sold $603,720 11/05
    sold $444,000 5/05
    sold $250,000 2/02
    sold $136,000 08/94

    Prices are all over the place. That house went up in value from 94 to 05 (11 years)over $3,500 hundred a month! If you bought in 1994 and held you almost doubled your money every three years during that 11 year period. Funny thing is the guy in short sale who bought in 11/05 was he expecting the house to keep tripling every three years? Guess so.

  159. RayC says:

    Updated 2/24/2004 2:13 AM

    Greenspan says ARMs might be better deal
    By Sue Kirchhoff and Barbara Hagenbaugh, USA TODAY
    WASHINGTON — Federal Reserve Chairman Alan Greenspan said Monday that Americans’ preference for long-term, fixed-rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives.

    In a standing-room-only speech to the Credit Union National Association meeting here, Greenspan also said U.S. household finances appeared generally sound, despite rising debt levels and bankruptcy filings. Low interest rates and surging home prices have given consumers flexibility to manage debt, he said.


    This is the same Alan Greenspan we are talking about, right? The one who in 2004 recommended taking out an ARM and said US household finances were “generally sound? Is it him, or is there another Alan Greenspan out there?

    I just like googling, cutting and pasting way TOO much.

  160. RayC says:

    I know everyone has seen that Greenspan quote before. I just had to. In a related matter, I lost, well, all of my respect for Jon Stewart the night he had Alan on. He all but gave him a happy ending.

  161. Hard Place says:

    I did my check for the three towns I am interested in buying. A total of 127 homes on the GSMLS. Only one house within 15-20% of the price I would actually pay. Conservatively determined based on 1998 comp and 4% annual price inflation. What are some of your housing price guidelines? I waver a bit in terms of the year I like to use, but 1998-2001 is generally where I fall. Also 4% price appreciation I think is adequate given the low inflation figures since 1998.

  162. 3b says:

    #151: grim: interesting way of looking at it.

  163. CAIBC says:

    what is greenspan smoking? someone please explain!!

  164. njpatient says:

    149 shore

    “The wildcard is DEBT.”

    Agree (what’s new). And contrary to the “never underestimate the power of the American consumer” crowd, there is a limit to consumer debt. The folks who think it’s a good idea to borrow against their home to buy a car or a teevee have no more equity. This is why we’re seeing a drop in big ticket items (car sales, e.g.) and a big increase in credit card debt (and all the more troubling for what is apparently everyday staples (food, clothing)). Credit cards get maxed out just like houses, and when they go bust, folks can’t just mail in their cards and walk away.

    This house of debt does have a ceiling, and we’re about to crack our collective skulls.

  165. Hard Place says:

    RE price reactions…

    Level and speed of information may have changed, but people’s behavior hasn’t. Can’t get over the fact that the market takes a while to react due to illiquidity. It takes the lower comps to cycle not only within a town, but has to be within several blocks of a home. Seller will think, oh homes in my area are not affected, until “Comp Killer” passes through and wreaks its havoc on the area.

  166. njpatient says:


    Please explain??? Please share!!!

  167. NJGator says:

    Stephen Colbert is da bomb. And that location is walking distance to the dog park AND Shop Rite. What were you thinking, Gary?

    The Fairway section is lovely, but some of those modest homes do come with almost 20k tax bills.

  168. skep-tic says:

    the real estate crash is playing out rapidly in some places (FL, CA, NV), just not in most of the northeast. new homes aren’t as big of a factor here, and existing homeowners are slower in cutting prices. also, our local economy isn’t as reliant on homebuilding and we did not see the extremes of lending/speculation as these other places did. I’m not saying our area is immune, but there are good reasons why it isn’t dropping as much/as fast as the most bubbly areas. Still, down roughly 8% from the peak before we have even had a full selling season without access to loose credit is pretty good. I think we are seeing the dam break open wider in the last few months and I expect that prices will be down at least as much in calendar 2008 as they were in 2006-07 combined.

  169. make money says:

    For the first time in California’s history, foreclosure sales exceeded 1,000 properties per day in April, according to a report released Tuesday afternoon. Foreclosure sales at auction — the last step in the foreclosure process — jumped 44 percent in April to 22,838 sales, representing $9.45 billion in combined loan value, according to foreclosure data firm ForeclosureRadar.”

    over 1,000 properties a day? Yikes.

  170. Hard Place says:

    Back to pretorius’ comments yesterday about Wall Street employment…

    Despite lots of apocolyptic headlines about “Wall Street” layoffs, the number of people getting fired is nowhere close to the level experienced in 2001 & 2002. Meanwhile, US companies have more than $1 trillion stashed in the bank.

    So do you still think the # of layoffs won’t approach 2001 & 2002? We are only in the first year of those layoffs and its already approaching the total for 2001 & 2002 combined. I’m guessing the 12k in aggregate layoffs (8k at BSC and 4k at JPM) will have very little impact on Wall St? (sarcasm) JPM source stated that 2k of those are coming from declines in IB fees. I would wager that 2/3rds of those jobs are highly paid employees located in the NYC area. Anyone know of some good recipe to prepare some crow for pretorius to eat?

  171. Jonnyboy says:

    Baby boomers are putting off retiring

    mmm…I think this story will play out for oh…perhaps the next 30yrs or so when folks realize they can’t make ends meet with skyrocking inflation and reduced SS benefits.

    Do I want to retire now? Yes,” lamented 53-year old Charles…Charles Burge was able to consider retirement in his mid-50’s because of the generous pension he’s earned from New York City, nearly 2/3’rds of his salary. But selling his home is part of the plan as well...and you can guess how that story ends up. Poor Chuck was in the dog house for weeks when he broke the news to the missus.

  172. John says:

    Hard place, most of my friends who were laid off in last six months on wall street have jobs already. Maybe a little less, maybe a junkier firm. But in late 2001 and 2002 when you were let go there were no jobs, people went unemployed for quite awhile or left wall street for good.

  173. chicagofinance says:

    Hard Place Says:
    May 14th, 2008 at 12:15 pm
    Back to pretorius’ comments yesterday about Wall Street employment…
    Anyone know of some good recipe to prepare some crow for pretorius to eat?

    HP: If you want pret to “eat crow”, then you must buy the house that you want at a (reasonable-to-expect) price that you want.
    This site has always been about sharing information and scamming for babes. Everything else only serves to stifle objective discussion.

    Oh…also the site is also for SAS’ War stories about carpet bombing drinking some warm milk and cognac…..

  174. 3b says:

    #174 John: That cannot and will not last. There are simply not that many firms around even junkier ones that can pay anywhere near what the big boys were playing. Let alone hire all teh people that are and will be out there.

    And the Fixed Income market is dead, absolutely dead. All my contacts on the street tell me the same thing.

    Take a look at the Bond Buyer, and all the people looking for new fixed income positions.

    A friend of mine was let go from Morgan late last year. He landed a new job, at a small boutique firm.

    He knows there is no way he will get the kind of bonus money he got at Morgan,and he has to pay for his health benefits. At Morgan he was paying under 400 bucks a month for coverage, family of 4.

    He is now paying in excess of $1600 a month for less coverage for his family of 4.

  175. njpatient says:

    “This site has always been about sharing information and scamming for babes.”

    That clotpoll chick is smokin’!!

  176. want to live in NJ says:

    Hey guys what is your opinion about Fair Lawn. I am planning to bid on the house I liked. The price of that house was reduced 2 times (about 12%). Should I wait any longer?

  177. kettle1 says:

    So what happens to the FED’s pawn shop loans when the next big wave of write downs hit, or if citi ends up being the next bear?

    (see chart on page 1)

    the FED has approx 550 million in securities left to hand out after starting with 800 million. but dont worry it is not a bailout!

  178. Hard Place says:


    I disagree. People in 2001-2002 had alternatives as well, the smaller shops were all around too. However what generally happens is the large and bulge bracket firms reduce when business dries up. Some of those get absorbed into smaller places and the rest linger. Anyone cut in the next round are than in trouble. Those are the ones that are left without a seat when the music stops. As 3B points out it looks like the music is stopping. Hiring freezes at most of the core depts of the big boys except for isolated sectors like EMG, commodities and distressed.

  179. kettle1 says:

    hey BC

    runs on costco for flour instead of rice?

    The United Nations Food and Agriculture Organization (FAO) warned in March that Iran had detected a new highly pathogenic strain of wheat stem rust called Ug99.
    The fungal disease could spread to other wheat producing states in the Near East and western Asia that provide one-quarter of the world’s wheat.

    The FAO warned stated east of Iran — Afghanistan, India, Pakistan, Turkmenistan, Uzbekistan, and Kazakhstan to be on high alert.
    Scientists and international organizations focused on controlling wheat stem rust have said 90 percent of world wheat lines are susceptible to Ug99. The situation is particularly critical in light of the existing worldwide wheat shortage.

  180. Hard Place says:

    want to live in NJ,

    Evaluate your situation. Determine how long you can wait. Determine your capacity to purchase (finance) in this environment. Research the comps (current & historical) and the home and determine a price you think is reasonable. Make a bid in an amount based on evaluating your situation as described above.

    My situation. I can wait until 2011. I can finance with 20% down no problem. Based on comps (current & historical) in the area and what is available for sale, today I only saw 1 home worth buying. I would put in a bid at 15% of the ask.

  181. Hard Place says:

    Correction on above.

    15% off the ask.

  182. John says:

    What alternatives were there in 2001? I have a brother-in-law that got cut loose from Pru a few weeks before 9-11, guess what he is still unemployed. By the time the job market picked up in 2003 he had a stink of unemployment. His wife just kept working away and he is a stay at home dad as the 40K offers he got was way less than the child care costs and he could not afford to go back. I actually know a few 2001 lay off people who still make less money in 2008 than they did in 2001. They may not be counted as unemployed but OUCH>

  183. John says:

    15% of the ask is good, does that mean your are bidding 150K on one million dollar homes? Dude that is sweet.

  184. 3b says:

    #184 John:What alternatives were there in 2001?
    And the same holds true today. If not more so.

  185. 3b says:

    #182 hardplace:I would put in a bid at 15% of the ask.
    I think you mean 15% off the ask.

  186. Hard Place says:

    I’m a bit stubborn on overpaying, but my cahones are not that big where I would bid 15% of ask. Sometimes I think I should just to piss off some sellers who refuse to budge!

  187. 3b says:

    #178 Fair Lawn IMO is over all a good town. Good schools on a whole. Some will argue that they are not the best.

    IMO you do not need the best, simply good. Also a train town, and close to all highways.

    Also very reasonable taxes compared to most Bergen Co towns.

  188. 3b says:

    #188 hardplace: I would have no problem bidding 15% off asking. All they can do is say no.

  189. njpatient says:

    184 john

    ” I actually know a few 2001 lay off people who still make less money in 2008 than they did in 2001. ”

    Thanks for bringing up that point.

    As pretorius showed a couple of months back, the job market has never fully recovered from the bloodletting of 2001. But one consequence of that is that it will take fewer job losses, and less unemployment in 2008 to reach a state of un/underemployment that is as bad as in 2001.

    In short, the glass was already half empty at the outset.

  190. John says:

    If you are interested in buying in Fairlawn here is a great place to spend eternity with low cost and all maint included.

    22-21 Maple Ave
    Fair Lawn, New Jersey 07410 (201)796-1485

  191. grim says:

    From MarketWatch:

    Freddie Mac posts loss, sees more housing weakness

    Richard Syron, Freddie Mac’s chief executive, warned investors that the company probably faces more tough times ahead as the housing market remains weak.

    “While our expectation is for continued weakness in the housing and economic environment to negatively impact our overall performance through the remainder of this year, we have put Freddie Mac on a better foundation to manage through the current cycle and emerge a successful, long-term competitor,” Syron said in a statement Wednesday.

    Moody’s Investors Service, meanwhile, downgraded Freddie Mac’s financial strength rating but affirmed the company’s Aaa senior and all other debt ratings

    On a conference call, Syron said it’s too early to formally update the company’s estimate of a 15% peak-to-trough fall in home prices, but he noted that forecast are “strongly weighted on the downside.”

  192. NNJ says:

    If wall-street layoffs were so bad in 01-02, how come the home prices did not take a dive back then?

  193. #194 – The Fed. flooded the market with cheap money.

  194. grim says:

    If wall-street layoffs were so bad in 01-02, how come the home prices did not take a dive back then?

    The story that I’ve heard tossed around is that the 2001 recession was largely driven by businesses and declines in business spending. The consumer, and consumer spending, didn’t see as great an impact.

  195. Hehehe says:

    Wind Energy 20% of US Electricity by 2030

  196. grim says:

    From CNBC:

    Home Foreclosures: Crisis Is Only Getting Deeper

    It’s another record in the real estate market, and it’s not a good one. RealtyTrac, the online foreclosure sale site, which has also been tracking foreclosure activity since the beginning of 2005, reports the single largest one-month volume of foreclosure activity it’s ever seen.

  197. grim says:

    From the Press of AC:

    Housing slump? Not in Atlantic City area

    The Atlantic City area is in a sweet spot of the nation’s real estate market, according to first-quarter price and sales figures released Tuesday by the National Association of Realtors.

    Median home prices increased 4.8 percent in the Atlantic County market from the first quarter of last year, better than the 3.2 percent price rise for the Northeast region. Meanwhile, home prices dropped 7.7 percent nationwide for the period.

  198. NNJ says:

    #195 The Fed is again providing cheap money and Congress is giving tax rebates. This time around employment figures are not bad yet.

  199. 3b says:

    #194 NNJ: Well first of all house price has only started to really rise at around that time after the last down turn.

    And the collapse of the dot com bubble was somewhat contained to those industries and Wall St.

    Then of course we had the Fed lowering to allievate the reecession that was unfolding at that time.

    Then of course we had 9/11, and the Fed dropped rates dramatically, and all were encouraged to go out and spend, including spending on houses.

    The Fed is responsible for much of the rise in housing prices, as the fundamentals IMO did not warrant such massive increases in prices.

    Then after all of that we had the sub-prime no money down party of 04 through the begining of 06 which inflated prices even further beyond where fundamentals dictated they should be.

    And of course now today we have all of the fall out.

  200. Hard Place says:

    I have no problem putting in a 15% off bid. Done so and insulted many buyers…

  201. NNJ says:

    Case from Case-Shiller Index says ‘Housing at bottom’.

  202. grim says:

    The Fed is again providing cheap money

    Which hasn’t manifested itself in cheap or easy credit.

    and Congress is giving tax rebates.

    The $1,200 check?

    I suppose at 10-20% down, $1,200 will allow a buyer to spend an additional $6,000-$12,000. There are probably a number of markets where this will make a significant impact, although I’m not so sure it will help here.

  203. Hard Place says:

    Re: consumer vs corporate spending

    The typical numbers are that the consumer based economy is about 2/3rds and corporate spending is typically 1/3rd of GDP. In 2001-2 corporate spending took a big hit, 9/11 came and fed cut to keep consumers chugging along so things did not get worse. Led to overinvestment in housing, which is where we are now. So situation is financials are hurting due to consumers being over indebted and corporate balance sheet is fairly levered as well. So who still thinks this will not be worse than 2001-2? We’re still early in the game to detect the level of devastation. Dust still hasn’t settled, nor has the bomb dropping stopped.

  204. #200 – How much cheaper do you think they can make the dollar?
    So your house’s value stays the same for the next 10yrs but gas goes $10 a gal, milk to $8, etc. As inflation forces costs ever higher that stagnated house value is less and less via the those inflationary pressures. This is the scenario the Fed. is currently trying to engineer.
    This is all assuming that wages rise with inflation.

  205. skep-tic says:

    in addition to rock bottom mortgage rates in 2001, you also had the emerging mass marketing of debt instruments for buying homes that had never really existed on a wide scale before. the Clinton tax exemptions on sales of primary and secondary homes had recently taken effect. you had baby boomers in their prime earning years with a dead stock market looking for a place to put their money. I do not see too many parallels between 2001 and today

  206. grim says:

    This is all assuming that wages rise with inflation.

    Globalization seems to have made wages sticky upwards as companies look towards cheaper labor markets to keep wage costs low.

  207. njpatient says:

    “As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half. ”

    The new fall/winter selling season? Does this mean that if sales are lower in, say, November than in May, that the sky is falling?

  208. njpatient says:

    “Globalization seems to have made wages sticky upwards”


  209. njpatient says:

    “The Fed is again providing cheap money”

    Yes, but to whom?

  210. grim says:

    All that shiny new cheap money is making my old money worthless.

  211. #208 – That’s one of my big worries; companies won’t match wages to inflation.
    I honestly think we’re looking down the barrel of a Japan like ‘lost decade’. The only difference is I won’t get my hands on any cool R34 Skylines.

  212. Hard Place says:


    to banks to prop up their balance sheets and preserve their capital ratios.

  213. njpatient says:

    214 hard


  214. njpatient says:

    GK Chesterton:

    “It may be said with rough accuracy that there are three stages in the life of a strong people. First, it is a small power, and fights small powers. Then it is a great power, and fights great powers. Then it is a great power, and fights small powers, but pretends that they are great powers, in order to rekindle the ashes of its ancient emotion and vanity. After that, the next step is to become a small power itself.”

  215. kettle1 says:

    So far it looks like globalization is a losing proposition for the individual and a winning one for corporations. is anyone surprised?

  216. njpatient says:

    “is anyone surprised?”


  217. kettle1 says:


    companies will not match wages to inflation, end of story. most companies will shift the work outside the US first

  218. grim says:

    From Reuters:

    Pimco’s El-Erian: Fed tools won’t solve housing crisis

    Bond fund leader Pimco’s Mohamed El-Erian on Wednesday said the Federal Reserve does not have the tools to deal with the U.S. housing crisis and rapidly rising consumer prices, leaving it to lawmakers to avert a severe recession.

    The co-head of the world’s largest bond fund company said U.S. policy makers “do not have good policy tools to deal with the destabilizing combination of asset price deflation, and goods inflation.”

    El-Erian also added that the Fed is “particularly challenged” on account of its dual mandate that calls for maintaining solid employment and low inflation.

    “This comes at a time when regulators are trying to play catch up with a financial system that has morphed into something that does not fit neatly into existing frameworks and mindsets,” El-Erian wrote to clients after Pimco’s quarterly economic forum at its Newport Beach, California headquarters.

  219. John says:

    Quote of the day:

    “It is never to early to call for a bottom”

    Richard Simmons

  220. skep-tic says:

    #218 given that most people work for corporations, this is a false dichotomy

  221. Hard Place says:


    what’s the booby prize?

  222. Shore Guy says:

    # 199 “Median home prices increased 4.8 percent in the Atlantic County market from the first quarter of last year,”

    So, the bright spot in the nation is essentially flat, with respect to inflation. Yippee!

  223. John says:

    In a related civil case the mortician for the 93 year old women is suing for the time spent trying to get the smile off the womens face.

    make money Says:
    May 14th, 2008 at 2:05 pm
    Jersey boy is sentenced.

  224. #218 – Let’s not be too hasty here. Globalization isn’t all bad. Cheap products from China is about the only way the American working class has survived. Plus, wealthy Chinese are happy and less likely to nuke Taiwan and more likely to buy stuff from us.
    The problem is we dropped a lot of trade barriers in the mid and late 90’s expecting the displaced employees here to start writing C++ and perl. It wasn’t taken into account that not everyone can write C++ and perl.

  225. grim says:

    According to the NAR Q1 median price data, Atlantic County is the strongest region of NJ right now, all others are showing price declines.

  226. John says:

    Rev. Wright epitomizes the thoughts and actions that have prevented and continue to prevent black America from moving ahead and achieving their potential as a people. He suggests that this United States of America made up of sons and daughters of immigrants (I’m talking of the millions of 1st, 2nd, 3rd generation immigrants in this country) of every race, creed, color and religion each and everyone of them who had nothing to do with slavery, some how owe something to a group of people who have never been slaves? Its amazing. It seems everyone is to blame for the shambles black society is in with its violence, drugs, high school drop out rates, misogyny, and a host of other real and virulent problems, except for the very people who engage in such behavior. Enough. As a society, culture or people, they should look within themselves and fix their problems. When did this man become the spokesman for the ‘black church’? And of course his church is different, but that doesn’t mean his message and philosophy is acceptable, or productive or non-offensive or not-racist or indicative or our greater cultural behaviors, values and norms Americans. And yes, the link between this man and Obama really does matter. At a very minimum, it provides insight into the political and philosophical strain that Obama adheres to.

    Comment by Bill Cosby

  227. kettle1 says:

    223 skeptic

    why is it a false dichotomy? a global corporation doing well does not mean its workers are. if company X fires 1/2 its us staff and replces them with indians who make 1/2 as much then the company has done well, but not the indiviuals who were fired.

    also consideer that a lot of manufacturing went overseas to dodge environmental regulation. Are you suggesting that the people who live amongst the toxic waste from the unregulate manufacturing are doing better?

    an individuals and a companies well being are only loosley associated

  228. grim says:

    OSHA = Sarbox?

  229. kettle1 says:


    while cheap products are good for your wallet and good for a consumer economy there are a number or externalities that are negative.

    It seems to me that globalization is like comunisim. good on paper, but bad in practice. I think a lot of the negative effects of globalization come from the lack of liabilities that corporations have in relation to the power they wield.

  230. Hobokenite says:

    re:Greenspan’s bottom call

    Isn’t this the same moron who was calling a housing bottom in late 2006? Why would anyone believe him now, since he was clearly so wrong then?

  231. Shore Guy says:


    It reminds me of the towns that fought to get WalMart, only to have it destroy its existing shops, while providing fewer jobs, and fewer taxes.

  232. #232 – There are a number of pitfalls. It would be naive to the point of ignorance for me to deny that. Let’s just say it’s a complex subject with complex variables whose long term efficacy we disagree on.

  233. make money says:

    It reminds me of the towns that fought to get WalMart, only to have it destroy its existing shops, while providing fewer jobs, and fewer taxes.

    those same towns need to put their resources together and use their comparative advantage and efficiently produce something.

    Then you trade your goods for theirs. Globalization works but benefits go to producing nations and not consumers.

    That’s all.

  234. njpatient says:

    “Isn’t this the same moron who was calling a housing bottom in late 2006? Why would anyone believe him now, since he was clearly so wrong then?”

    He’s been wrong so many times that maybe the folks who labor under a misimpression of what is implied by the law of averages figure that “he’s due.”

    Nah – too many haven’t yet figured out that he’s repeatedly wrong.

    Listening to the knob-polishing given to him this morning by Schumer almost made me up-Chuck.

  235. njpatient says:

    229 John

    folks on anonymous chat boards who sign in as “Bill Cosby” are probably not Bill Cosby. FWIW.

  236. Bill Cosby says:

    238 njpatient

    You can say that again!

  237. lostinny says:

    “Listening to the knob-polishing given to him this morning by Schumer almost made me up-Chuck.”

    Maybe Schumer took a lesson from Spitzer’s girl?

  238. 3b says:

    #228 grim I wonder why the Atlantic City in particular?

  239. make money says:


    Globalization and free trade are the exact opposite of Communism. If I make I-pods and you make TV’s and Cars then when we trade my ipods will even out your TV’s but I will not be able to drive cars.

    For now you’re lending me money to buy your cars so I owe you dollars and pay you as I earn so it’s impossible for me to save.

    When I devalue the dollar I’m paying you with cause I have to then you have a decision to make.

    You cut production until you find another trading partner and then you realize that instaed of taking a buss to work everyday you buy the same car you produced.

    The same thing happened to our factories after world war II. We were making stuff to support the war and our factories were set up to make guns, ammunition, tanks, fighting jets, submarines etc. When the war finished we were stuck with all this production but no demand. Then we re-aligned our factories and started to make TV, refrigirators, cars, Washer/dryer, Comercial Jets etc stuff that we need to consume and was in demand for export.

    The same will happen with producing nations when US collapses and the demand for Elmo toys, plasma’s and wall mart junk collases. They will re-align those same factories and produce their own goods. They save so they hace access to cheap capital and enjoy comaprative advantage that we pissed away.

    This is not communism my friend. We are loosing a battle of capitalism. Sad day unless we re-invent ourselves with some sort of alternative energy and force everyone to buy it as a global warming mandatory initiative.

  240. grim says:

    From the Star Ledger:

    NJ unemployment creeps up

    New Jersey’s unemployment rate edged up to 5 percent in April from 4.8 percent, and state payrolls are down 9,900 jobs for the first four months of the year, the state Department of Labor and Workforce Development reported.

    The decline in state payrolls is in line with the national trend that has seen the U.S. lose 260,000 jobs this year so far.

    New Jersey added 1,000 jobs last month, a figure the state considers negligible compared with the state’s total workforce of nearly 4 million people.

    While calling April’s gains “flat, ” the state pointed to gains in certain sectors: business and professional services added 2,800 jobs; education and health services, 1,500; and information, 900. Manufacturing lost 1,200 jobs; construction, 800, and trade, transportation and utilities, 1,400.

  241. njpatient says:

    240 lost

    “Maybe Schumer took a lesson from Spitzer’s girl?”

    Gee – you think Chuck got paid?

  242. 3b says:

    #203 NNJ: Perhaps. Although even if at bootom, does not mean prices are going to start rising again any time soon.

    And if unemployment continues to accelerate, and I believe that it will, than prices will fall further.

    Way too early for the all clear signal yet, especially considering this thing only really started getting interesting less than a year ago.

  243. lostinny says:

    244 Patient

    Nah. He paid for the lesson. And the first one was a freebie.

  244. gary says:


    I just deleted a spreadsheet from a shared network that I can’t get back at the moment. I guess that makes me a real “NAR” job. LOL!!

  245. JBJB says:

    Globalization and free trade are good for the educated, motivated, innovative, and flexible. Protectionism is good for the ignorant,lazy, small-minded and corrupt. This is really all there is to it, and explains why certain contries or political idealologies support one form over the other.

  246. John says:

    Only in American a muslim from Egypt via England who has a Jewish wife and an american born daughter awho works for a California Company that is in turn owned by a German Company can control our bond markets. To that I salute you Mr. Mohamed El-Erian. Funny I somehow guess none of us would have the same opportunity to go to Egypt and get the best job.

  247. NNJ says:

    245 kb

    If prices are at bottom and not going up, would be a good time to buy than pay rent.

    If you can guess unemployment numbers than good for you, I can’t.

    If you wait for all clear signal, it will be too late.

    As someone said before, if you try to pick the bottom, all you get is a smelly finger.

  248. njpatient says:

    250 NNJ

    That’s four sentences – I disagree with all of them.

  249. njpatient says:

    230 kettle

    Well put.

  250. Hard Place says:


    Not saying I completely disagree with you. It may not be Egypt, but still the Middle East.

    Of course though he works for an American company.

  251. grim says:

    New thread

  252. 3b says:

    #250 NNJ: Well I am not convinced that prices are at the bottom, not even close.

    And if they are at the bottom, then they are not going up any time soon (probbaly not for years). I did live through the last down turn in real estate, so I soeak with a historical perspective.

    As far as a good tiem to buy, well in the realtor world it is always a good time to buy.

    And why rush? A good time to buy? Well my yearly rent on my nice 3 bedroom 2 bath home in my prestigious Bergen County town is substanially less than than the cost to buy. And with property taxes at around 10k in my town a year, why rush?

    Plus not convinced that prices are any where near bottom, so again why rush?

    To pay all that extra principal, and all that extra interest, on that extra principal, on top of the 10k a year in taxes?

    No thanks. I figure I can wait another year, prices certainly will not be going up guaranteed.

    I have a huge down payment, no debt, and nothing to sell. I believe I am golden to both a seller and his or her realtor.

    As far as unemployment, based on all that is unfolding, I believe it is reasonable to assume that unemployment will continue to rise over the next 6 to 12 months at least.

    One final point with all the inventory out there, and another overall bust of a Spring selling season, there are either a lot of others out ther like me, waiting, or else there are others out there who want to buy, but who cannot get the financing, or some combination of both.

  253. Al says:

    About wages being sticky up…

    During our annual meeting with company CEO’s the following question was asked:

    “food inflation healthcare costs, educational costs and gasoline prices are rasing. Company making record profits. Are there plans to start adjusting employee’s salaries to address rasing cost of living?
    Our standard increase for base-pay is at 3%/year – are there plans to increase it?”

    CEO’s answer: “Our company increases are in-line with industry standards, if you do not like it – quit.” So far NOBODY quit.(we haven’t lost ONE person in over 1 1/2 years due to them quitting. few retired, few got fired but NOBODY got better job and quit.

  254. 3b says:

    grim/richnj: Can one of you kind gentlemen at your convenience please provide me with the sales history and taxes for njmls 2800327.

    This is the one I was talking about this morning, purchased in 05 for 500K ( I believe),a and now in foreclosure. Thanks in advance.

  255. skep-tic says:

    kettle– obviously, globalization mostly sucks for people who lack skills. however, the reality is there is no way to put the genie back into the bottle. what should American companies do– pretend as if globalization is not real? they will soon be out of business and this would be even worse for the average worker. this is what I mean by false dichotomy– what is in the interest of American corporations is mainly in the interest of Americans generally– both are fighting to retain a piece of the pie in an increasingly competitive world

  256. jamil says:

    #259: “obviously, globalization mostly sucks for people who lack skills. ”

    Frankly, this is a ridiculous generalization. How do you think people in S.Korea, Singapore, Scandinavia etc escaped poverty after WWII ? It was because of globalization. Globalization is pretty much the only hope unskilled people in the developing world have.

    Your statement may have some truth in the US (still, those uneducated people in the US have better quality of living because of globalization – cheap AIDS drugs, computers, cellphones etc.)

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