This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.
From the WSJ:
Home-Price Declines Accelerate
Drop of 1.7% Shows Mortgage Market Still Is Unsteady
By SUDEEP REDDY
May 23, 2008; Page A2
Home prices are falling faster as the economy slows and turmoil in the mortgage markets continues.
Prices fell an average of 1.7% nationwide in the first quarter from the final three months of 2007, according to the Office of Federal Housing Enterprise Oversight. The decline was the largest in the index’s 17-year history. The government index, which is seasonally adjusted and based on data for home purchases, had dropped 1.4% in the prior quarter. Compared with a year earlier, home prices dropped 3.1% in the first quarter.
The price drops, which occurred in 43 states, “spell further erosion in home-equity levels and potentially more trouble for mortgage markets,” said the agency’s director, James Lockhart, who added that the declines may help potential home buyers. Areas that had the biggest price gains over the past decade now are experiencing the sharpest declines. Prices in California and Nevada declined more than 8% from the prior quarter.
A separate monthly index showed that prices fell 0.4% in March compared with February, and 3.7% from April 2007, when the index hit its highest point.
…
Other nationwide indexes show steeper declines. The S&P/Case-Shiller index, which includes a broader variety of mortgages and which showed a nationwide drop of 8.9% in the fourth quarter from a year earlier, is set to release first-quarter figures next week.
“The OFHEO report shows the weakness in the housing market, but does not, in our view, fully portray the dire state of the market,” Lehman Brothers economist Michelle Meyer said in a note to clients.
From CNBC:
JP Morgan Launches Major Round of Layoffs
Officials at JP Morgan have launched a major round of layoffs in the firm’s vaunted investment banking department, axing dozens of executives in an attempt to downsize the unit amid a massive slowdown in business, CNBC has learned.
People at the firm say at least two hundred executives were laid off over the past two days – a move unrelated to the firm’s recent purchase of Bear Stearns.
…
A spokeswoman for JP Morgan confirmed the cuts and said many of the people leaving were junior bankers.
…
As many as half the people in the mergers and acquisition department were told they no longer have jobs, one executive told CNBC.
Only indirectly related to housing, but interesting. We cut off our land line in the past year and had no problems going cell-only.
From the AP:
Cell-only homes rising
For nearly three in 10 households, don’t even bother trying to call them on a land line phone. They either have only a cellphone or seldom if ever take calls on their traditional phone.
The federal figures, released Wednesday, showed that reliance on cells is continuing to rise at the expense of wired telephones. In the second half of last year, 16 percent of households had only cellphones, while 13 percent also had land lines but got all or nearly all their calls on their cells.
The number of wireless-only households grew by two percentage points since the first half of last year. Underscoring the rapid growth, in early 2004 just 5 percent had only cellphones.
From the AP:
Home price index posts largest drop in history
A home-price index considered to be the most comprehensive reading of the U.S. market posted the sharpest decline in its 17-year history, and analysts say housing has yet to bottom out.
Rapidly falling home prices in California, Florida and Nevada skewed the national results.
The Office of Federal Housing Enterprise Oversight said Thursday that home prices fell 3.1 percent in the first quarter compared with last year.
It was only the second quarter of price declines since the index started in 1991. The price index first declined on a year-over-year basis in the final quarter of 2007, when it dropped 0.45 percent.
Another widely followed reading, the Standard & Poor’s/Case-Shiller index, has shown larger declines for major U.S. metropolitan areas. But analysts say the government index provides a more comprehensive reading of nationwide housing market.
That’s particularly true for midwestern states, where prices never skyrocketed and have been less affected by the real estate downturn.
…
Still, declines in the government index, which focuses on less expensive properties and includes fewer houses bought with risky home loans that have gone sour over the past year, show the depth of the housing market’s troubles.
Prices fell in 43 states, with California and Nevada showing the biggest declines. Home prices dropped by more than 8 percent in those states.
The government index also fell 1.7 percent from the fourth quarter of 2007 to the first quarter of 2008, the largest quarterly price drop on record.
“The large overhang of real estate inventory awaiting sale continues to force price declines in many areas, but particularly in places that had seen very sharp appreciation,” Patrick Lawler, the agency’s chief economist, said in a prepared statement.
…
Earlier this month, economic forecasters surveyed by the Federal Reserve Bank of Philadelphia projected the government index would show a 5.4 percent annual decline in the fourth quarter of 2008. The survey projected the reading would not recover until early 2009.
Adam York, an economic analyst with Wachovia Corp., said Thursday’s data was unsurprising. “It was pretty widely expected that we would see declines this quarter and for some time to come,” he said.
From Bloomberg:
Sales of Existing Homes in the U.S. Probably Declined in April
U.S. sales of previously owned homes probably fell in April to a record low, signaling no let-up in the housing recession, economists said before a report today.
The National Association of Realtors may report that home resales dropped 1.6 percent to a 4.85 million annual rate, the lowest level since comparable records began in 1999, according to the median forecast of 67 economists in a Bloomberg News survey.
Defaults on subprime mortgages have prompted lenders to restrict credit, while falling property values have given buyers who are still able to get financing reason to delay purchases. Mounting foreclosures will add to the glut of unsold houses on the market, prolonging the real-estate slump and hurting growth.
“Although sales are likely to fall further, inventories should edge higher,” said Drew Matus, senior economist at Lehman Brothers Holdings Inc. in New York. “Given rising delinquencies, we expect an increasing number of foreclosed homes to return to the market, keeping inventories bloated.”
The report from the Realtors group is due at 10 a.m. in Washington. Survey estimates ranged from 4.70 million to 4.95 million, after a 4.93 million pace in March.
From the Washington Post:
Mortgage Fraud Cases Surge, Convictions Rise, FBI Reports
The housing market slump translated into brisk business last year for mortgage scammers and the federal agents who pursue them, with the FBI winning 206 convictions, recovering nearly $22 million and still chasing a growing number of securities and commodities fraud cases.
According to an FBI report released yesterday, the 1,204 mortgage fraud cases pursued in fiscal year 2007, which ended Sept. 30, resulted in 321 indictments and court orders for $595.9 million in restitution.
In fiscal 2006, the agency followed 818 mortgage fraud cases, leading to 263 indictments, 204 convictions, court orders for $388.9 million in restitution and $1.4 million recovered.
The depressed housing market is an ideal climate for perpetrators of fraud, experts say. Identify theft, especially the targeting borrowers of with good credit, is prone to spike as are scams promoted as foreclosure rescues.
From the Courier Post Online:
Panel OKs time-out for mortgage renegotiation
A legislative committee Thursday advanced a measure that would open up a three-year window for homeowners facing punishing hikes in their mortgage payments, or foreclosure notices, to work out a new deal with the lender or cash out by selling the house.
…
“The idea of saving a large number of people’s houses feels great. . . . And it doesn’t cost the taxpayer any money, not a dollar,” said Assemblyman Neil Cohen, D-Union, sponsor of the bill and chairman of the Assembly Financial Institutions Committee.
“Nobody has anything like this in the country,” Cohen said, referencing how other states deal with ballooning home-mortgage payments arising from foggy loan agreements with glossed-over clauses that trigger increases in interest rates.
…
Homeowners facing a so-called “reset,” where payments grow with time, would be given the chance to continue paying at the initial rate for up to three years.
Lenders would be required to notify homeowners when the escalator is about to begin, in writing 120, then 90, 60, and 30 days beforehand.
The notice would tell, in plain language, all the expectations and options facing the borrower.
In the three-year time-out, a borrower would be able to try to renegotiate a loan or could sell the house and repay the lender.
Cohen said this would help banks because they do not like having to manage and sell foreclosed buildings, and this way they receive income even if it is only the initial rate of monthly payments. “All rights of a lender are protected,” Cohen said.
Tamara Kendig, spokeswoman for the state judiciary, said there were 4,366 foreclosures filed in March, up from 3,108 in March 2007 and 2,098 in March 2006.
The totals were 3,984 in January and 4,026 in February, Kendig said.
…
Another measure passed by the committee extends the time period that foreclosed homeowners have to try to repurchase their dwelling from 10 days to 60 days.
Both measures have versions in the state Senate.
A 1.7% price decline is not going to let me release my pant up demand.
#8 Thank you, it’s too early in the AM to have that image. I’m glad your pants will be up a little longer.
grim (7)-
“The idea of saving a large number of people’s houses feels great. And it doesn’t cost the taxpayer any money, not a dollar,” said Assemblyman Neil Cohen, D-Union, sponsor of the bill and chairman of the Assembly Financial Institutions Committee.”
Is this guy really that stupid? “Feels great”? Allowing a “time out” in order to negotiate a breach of contract? Doesn’t cost the taxpayer any money? What does Mr. Cohen think will happen when 3/4 of the mortgage investors in NJ close up shop and leave?
Even Obama understands the consequence of gubmint-mandated mortgage recasts or a moratorium on ARM resets. And, the people who will be hurt by this the most are- not ironically- lower-income borrowers.
#10 clot
It’s hard to tell if most politicians are stupid or simply willing to throw us and future generations under the bus to get themselves reelected.
Oh…I get it…Mr. Cohen will become Assemblyman for life, if he can manage to jam through this piece of swill legislation.
The sad thing is, the vast majority of the electorate is so stupid, it doesn’t even know when it’s being pandered to…even when the result of the pandering will be the opposite of the result promised.
NJMLS Sold & Under Contract (Pending) April Data for Bergen County
Year Sold U/C
1991 523 1040
1992 651 877
1993 571 879
1994 555 1065
1995 440 772
1996 595 1022
1997 646 974
1998 749 1060
1999 642 1015
2000 569 925
2001 532 861
2002 849 1035
2003 676 987
2004 761 1070
2005 811 1092
2006 613 878
2007 682 843
2008 486 733
Aren’t there still more voters who aren’t in foreclosure than are? I keep wondering if pushing through this kind of legislation just comes back to haunt them.
Jafo, NJ Patient
here is a link for you
http://tinyurl.com/63a56q
this tries to answer some of jafo’s questions from yesterday and has the chart that patient referenced the other day as well.
Vodka (from yesterday)-
How are you at combining fertilizer and diesel? :)
17
i have dabbled in “farming” in my day ;)
from al jazerra:
Race a factor in US presidential election
http://www.youtube.com/watch?v=M8J9laUNgL4
Vodka (19)-
NIce to see Hillary has found her core constituency.
I especially enjoyed the Manwich auction in the YouTube video.
I think Hillary needs a Manwich right about now.
Clot & Kettle,
Grim already has the Plunge Protection Team monitoring this website I don’t think he needs the Department of Homeland security involved too:)
“And it doesn’t cost the taxpayer any money, not a dollar”
Until they want to get a mortgage.
HEHEH
Department of Homeland security has been watching several people on this board for a while i would imagine. dont worry, the appropriate individuals have already been added to the LIST
clott,
manwich for $1 is a rippoff! you can get it cheaper then that for 1 can!
OT, but do you know anything about the general state of the collierville RE market (TN)?
hey the street vendors all raised a buttered bagel to a buck today. Last year it was 50 cents. Chipolte raised its prices by a buck.
Vodka (25)-
Collierville (and Germantown) have fared a lot better than Memphis in the recent downturn, but I know the market is tough there. Collierville’s property taxes are lower than Memphis’, and the schools are good, so it’s the perfect destination for a family fleeing Memphis.
Historically, buyers in the Memphis area make smaller downpayments and take on more mortgage obligation than the average US borrower. As we all know, that’s a recipe for disaster. I know that many Memphis suburbs have also imposed moratoriums on new construction over the past 2-3 years, in order to work through a huge overhang of unsold new homes inventory. I’d imagine they’re still working through it.
Some of the stats you may see on that area may show foreclosures not up that much. Don’t be fooled; that’s because foreclosures run high there all the time…even in up markets.
Aren’t there still more voters who aren’t in foreclosure than are? I keep wondering if pushing through this kind of legislation just comes back to haunt them.
It will, but they don’t understand that.
For those not in foreclosure, this kind of bailout either appeals to their liberal instinct to coddle “victims” of big mean lenders or, it appeals to their own self-interest to prop up the value of their own home.
Fight for the less fortunate
The political ads have hit the airwaves and the direct mail flyers have reached the mailboxes of Sparta residents calling for a conservative change on the Sparta town council. These ads speak in direct opposition to affordable housing and to the NJ Council on Affordable Housing (COAH), suggesting that COAH is part of a left-wing agenda that threatens to “destroy our town as we know it today.” (Carey Ann Shaftan)
Shaftan has said that “Sparta is worth fighting for.” Perhaps that is so. But the better, more ethical, fight is for the rights of those less fortunate than ourselves. We cannot exempt our communities from their constitutional obligation to provide fair housing for low- and moderate-income persons, nor can we turn our backs on those who mow our lawns and bus our tables and somehow suggest that they travel in from an urban center to do our bidding. If this county is a good enough place to work, it’s good enough place to live.
Lewis Ranieri, the mortgage bond pioneer trying to salvage a Texas bank that lost more than 90 percent of its value, is seeking $1 billion for a separate venture to buy home loans.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aeSa.4BZJFIs
27 Clot
I think you’re right there. I have good friends that couldn’t stand Memphis anymore so they moved just a little bit away to Southhaven MS. They bought land nearby but I forget what the exact area is. They mean to build on it and while cheap by our standards, it wasn’t a great bargain for them. Now they’ve decided to wait on building because of the downturn in the area. All of this done to find a better place for their son (my godson) to go to daycare/school.
Clot,
Glad to see you’ve moved up to 7th place (-: with a little effort we could get you to 2nd!
Just desserts for the poster who inspires/enlightens/irritates the most posters!
KL
Boro to file a complaint against state’s COAH
Mayor: Eatontown unable to meet COAH’s new housing quota
BY DANIEL HOWLEY Staff Writer
The Eatontown Borough Council is expected to file a formal complaint against the state’s Council on Affordable Housing (COAH) after the borough’s affordable housing obligation more than quadrupled.
The council is charging in the complaint that COAH skewed the amount of vacant land available in the borough, which inflated the borough’s affordable housing obligation, according to Mayor Gerald Tarantolo.
Tarantolo explained that COAH officials labeled several borough parks and open space preserves as buildable land when calculating Eatontown’s affordable housing obligation.
According to a series of proposed amendments to COAH’s current round-three regulations, Eatontown’s affordable housing obligation jumped from 92 units to 447 units, Tarantolo said.
“Where are we going to build [the 447 units]?” Tarantolo asked, adding, “I have no idea.”
According to Tarantolo, COAH officials used a geographic information system (GIS) to map out the available land in the borough where affordable units can be constructed.
314 Rich: Thanks. The decline accelerates.
grim #3 I have been cell only for over two years
328 rent:it appeals to their own self-interest to prop up the value of their own home.
That is the only reason.
Opposing view from candidate on post #29.
Keep Sparta safe and clean, Shaftan
One has to wonder why the Sparta Town Council would rush to ratify the new affordable housing regulations proposed by Governor Corzine even as other towns across the state are uniting to fight them.
Under the new COAH regulations endorsed unanimously by the council, Sparta will be forced to construct 429 low income housing dwellings on top of the newly constructed rental and low income units on Woodport Road and Upper Main Street.
Under the new one in 5 COAH formula, Sparta must endorse the construction of 2145 new housing units, all in high density “urban style” developments. This kind of housing will turn Sparta into a city and destroy our town as we know it today.
I’m running for Sparta Council to keep our town a safe, clean and suburban community. Low income housing will increase crime, raise taxes, overcrowd our schools, wreck property values and destroy Sparta as we know it.
I didn’t believe the last paragraph from candidate. She linked low income to Crime, with no basis. Just shows what politicians will do for votes.
Planners get their snouts into Sparta
But the town doesn’t have to comply with COAH. Shaftan’s wife Carey is running for the township council on a platform of telling the state to get stuffed. Towns that don’t comply can find themselves open to lawsuits by developers. But the Shaftan theory is that even if the town faced such a suit, the town could negotiate something less dreadful than snout houses.
Troast disagrees.
“It’s no longer an option,” he said of COAH. “Either you do it or you’re going to die.”
He then summed up the argument that I have heard so many planners make on behalf of COAH.
“In a way, we have not done the right thing over the years,” he said. “We have excluded different types of housing because we didn’t want ‘those people’ in the community.”
Whoever “those people” are, I wouldn’t want them moving into my town either. They have awful taste.
But I don’t think that’s what Troast was saying. If I don’t mistake the plain import of his words, the planner was implying that the people who pay his salary are somehow less than noble in their views toward their fellow man.
Maybe that’s true. Or maybe they just don’t like planners sticking their snouts into their business.
Lot of opinions posted on that site. I think this whole debate of new housing under COAH requirement will heat up later this summer.
Only indirectly related to housing, but interesting. We cut off our land line in the past year and had no problems going cell-only.
We’ve been cell only and Skype for 8 months now. Cost me $90 for an entire year of unlimited calling with Skype. It’s a phone and cradle with the base station connected directly to my router. We couldn’t be happier. Although, Skype does not offer outgoing caller ID, sometimes people do not pick up their phone as they’ll either see Unavailable# or 0001234567. I just use the cell if that happens.
congresswoman’s home sold in foreclosure (CA)
http://blogs.wsj.com/developments/2008/05/22/congresswomans-home-sold-in-foreclosure-auction/?mod=googlenews_wsj
Response to article in #38 from Mr. David Trost, Planner of Sparta.
I had a long conversation with Mr. Mulshine on the topic of center based development, affordable housing and housing types that have resulted from COAH regulations within and outside of Sparta.
Here is another example of the press putting words in peoples mouths and reaching false conclusions. Over the years, as a state we have failed to encourge different housing types and have excluded some to keep “those people out”. The result was the Fair Housing Act of 1985 mandating that all communities provide opportunities for various housing types and income levels. As a professional planner and a human being, I support this constitutional obligation.
Sparta Township has worked with land owners and developers to comply with the constitutional requirements of the laws of the State of New Jersey. The Housing Plan focuses balanced growth in the right places based on “center design” and smart growth principles. The character of Sparta has and will be in the forefront of any Master Plan I am responsible for as the planner for the Township. We have utilized many housing alternatives to meet the mandated housing obligation including age restricted housing, mixed use buildings with apartments, Round Top town homes, Alternative Housing for people with disabilities.
By the way who is againist providing housing for our seniors, newly graduated college students, single parents etc. The Sparta Master Plan is an attempt to meet those needs first in the character of Sparta.
Pointing the finger at Sparta and imply “shame on you”and turning this into a political issue is just wrong. Ask the Towns who have put their heads in the sand and are now under court order to build whatever is required to meet their mandated housing obligation. The cost to the taxpayers of these communities is great and their community character is taken out of their hands. By the way, if Round Top was a court mandated project, I would say twice as many housing units would be built. The Round Top developers worked with the Township and accepted a density less than the COAH Regulations. Did Sparta do something wrong? I do not think so.
Whether you like or dislike auto dominated “snout” housing design, freedom of choice is the American way. Yes, in my professional opinion, an alley design with garages hidden from the main street network is more appealing, however the developer and the buyer should have the right to choose. Many factors go into a site plan and to blindly bash Sparta and the developer is unfair especially for political gain.
In closing, how much regulation and state government and court interference do we want? I say just enough to protect our rights and the rights of others and the ability to build a thriving sustainalbe community.
http://www.bloomberg.com/apps/news?pid=20601093&sid=a4JboGbvjwwk&refer=home
NC summer houses getting killed
bairen Says:
May 23rd, 2008 at 6:17 am
A 1.7% price decline is not going to let me release my pant up demand.
For some reason it sounded very dirty to me…
I think newspaper website allowing people to comment on articles is great positive development. As earlier example shows and even in my past experience, Journalist have leaning toward one conclusion and at times try to take only parts of the message from contributor. It has happened to me in past where from the whole interview, the parts supporting the article are taken and sometimes out of context. This at least provides an opportunity.
I think they should have separate corner where any person who is quoted in article can clarify their position.
10 clot
“Is this guy really that stupid?”
Yes
This has been another episode of Easy Answers to Easy Questions
kl (32)-
7th place? You must be kidding…I hadn’t even looked.
Please, guys, vote for Grim first. Then, go over to my blog and call me an a**hole. I’m beginning to enjoy it.
Cell only here as well. Love the fact telemarketers never call…
#42 John: Americans spending manically over these last few years, and now all of a sudden they are concerned. So typical.
“NC summer houses getting killed”
Even with the gas prices, it’s still a great vacation for the money, especially for families.
I was down in Corolla, NC back in April, and there was a family there from Boston. Seems like they we’re happy and we’re planning on coming back the next spring.
Boston to Corolla, NC, now that’s a lot of gas.
John Says:
May 23rd, 2008 at 8:31 am
hey the street vendors all raised a buttered bagel to a buck today. Last year it was 50 cents. Chipolte raised its prices by a buck.
Forget overpriced housing, 5$/gallon gas and such..
Now this is really suck.
Chipotle have shrunk their burritos already – all their portions are comparably smaller than they were 4 years ago, now they are rasing their prices.
I was eating Chipotles in the stores #1 and #2 -in denver – bach than they were great cheap food. Ever since the chain is getting bigger and less tasty. Welcome, new Taco-Bell.
Italics Off
Not sure if this was posted yesterday:
Bear Stearns Is Sued Over Option To Sell Its Headquarters
http://money.cnn.com/news/newsfeeds/articles/djf500/200805221942DOWJONESDJONLINE001002_FORTUNE5.htm
40 Haus Jaeger
“congresswoman’s home sold in foreclosure (CA)”
I’m still waiting for the quote about how she’s a victim of the bank, they lied to her about the terms, etc.
Although the “no sir, never happened” response is interesting, too.
NJ affordable housing revamp weighed
TRENTON, N.J. – Suburban New Jersey communities would be barred from pushing affordable housing into poorer cities under a proposal advanced Thursday by Assembly lawmakers also weighing whether to attempt to concentrate low-cost housing near mass transit.
The measure is designed to help New Jerseyans struggling with some of America’s most expensive housing.
“New Jersey’s Fair Housing Act has neither been fair nor has it led to enough housing for our residents,” said Assembly Speaker Joseph Roberts Jr., D-Camden. “For too long our state largely failed to make affordable housing available to families who simply need a safe and affordable place.”
Census data shows New Jersey as the second most expensive state for homeowners and the fourth for renters, despite a 1975 state Supreme Court decision requiring all New Jersey municipalities to provide housing for low- and moderate-income residents.
Roberts said the bill, released Thursday by a housing committee, would receive more consideration during a June committee hearing. He described the bill as a work in progress, and said it could, among possible changes, let contiguous communities to work together to concentrate low-cost housing around transit such as commuter rail lines.
“NC summer houses getting killed”
Speaking of which, where’s Mitchell?
“bairen Says:
May 23rd, 2008 at 6:17 am
A 1.7% price decline is not going to let me release my pant up demand.
For some reason it sounded very dirty to me…”
No worries – he won’t release his pant up demand until he’s been stimulated by the government.
Fannie, Freddie Report Progress
In Cutting Some Mortgage Rates
By JAMES R. HAGERTY
Executives of Fannie Mae and Freddie Mac told Congress they are finally bringing down interest rates on some “jumbo” mortgages.
The executives testified Thursday before the House Financial Services Committee, whose chairman, Rep. Barney Frank, a Massachusetts Democrat, was seeking information on why such mortgages have remained relatively expensive.
Although the ceiling is higher, loans of more than $417,000 continue to be significantly more expensive. That is partly because investors see the larger loans as being more likely to be refinanced quickly if interest rates fall, making them less attractive as investments.
But the gap has narrowed. HSH Associates, a financial publisher in Pompton Plains, N.J., said its surveys showed the average rate last week for a 30-year fixed-rate mortgage of $417,000 or less eligible for sale to Fannie or Freddie was 6.17%. The average for such loans of between $417,000 and $729,750 was 6.61%, or 0.44 percentage point higher. (The rates are for loans on which borrowers don’t pay any “points,” or fees, to reduce the rate.) In March, the larger loans carried rates as much as about 1.30 points more.
44 SG
Furthermore, my experience is that, on a regular basis, journalists don’t bother to check FACTS. It’s a great thing when you can comment at the end of a news article with a link to the facts that the journalist got wrong.
When will the pant up demand be pant down?
Fannie Mae OKs less down for homes
Fannie Mae, responding to pressure from homeowner and real estate groups, will allow buyers in markets with falling home prices to purchase houses with 3 percent down payments, potentially increasing the company’s risk.
The largest U. S. mortgagefinance provider fell as much as 4. 5 percent Friday as the announcement, combined with new legislation that may require Fannie Mae and Freddie Mac to finance a government mortgage program, demonstrated the extent of lawmakers’ sway over their policies.
“It basically shows you that they have a public purpose mission that doesn’t always help the shareholders,” said Moshe Orenbuch, an analyst at Credit Suisse in New York, who has an “underperform” rating on shares of Fannie Mae and Freddie Mac.
Citigroup’s `Last Roman’ CDO Shows Enron Accounting
http://www.bloomberg.com/apps/news?pid=20601206&sid=apA4GEivg9Y8&refer=realestate
“They never got the real problem fixed after Enron,” said Lynn Turner, the chief accountant for the Securities and Exchange Commission when the Enron scandal was exposed. “When people find out how little FASB did, they’re going to be shocked. FASB needs to be taken out behind the woodshed and given a good whoopin’.”
My vote for quote of the year!
16 kettle
cool – hope you keep updating that puppy. Funny – I was going to respond to your post at 225 yesterday by noting that this was the biggest (but by far not the only) reason that I think ol’ Malthus has his whetstone out and is sharpening up the scissors.
Then I saw the title of the blog.
Heh.
I was in Avon, NC last year. No trip for us this year. With twins and a four year old, there is just no reason to travel that far. Cabana in Long Island this summer for us.
From MarketWatch:
U.S. April existing-home sales stronger than 4.83M expected
U.S. April single-family homes for sale highest in 23 years
U.S. April existing-home median price down 8% in past year
U.S. April existing-home inventory rises 10.5%
“Realtors report that existing home sales fell 1% to 4.89 million annual rate in April, according to Dow Jones. More soon.”
“U.S. April existing-home inventory rises 10.5%”
Is that MOM or YOY?
From CNBC:
Homes Sales Fall 1% in April, Better Than Expected
Sales of existing US homes fell 1% in April, slightly better than expected, but inventories of unsold homes surged 10.5%, according to the National Association of Realtors.
Inventories rose to 4.55 million units at the end of April. At the current sales pace that would put the supply of homes at 11.2 months’ worth, the highest since the association began tracking single family and condo properties together in 1999.
For single family homes, at the current sales pace there were 10.7 months’ worth, the biggest supply since June 1985 when it stood at 11.4 months.
wow
Market plunges, and apparently everyone’s reaching for a beer.
“For single family homes, at the current sales pace there were 10.7 months’ worth, the biggest supply since June 1985 when it stood at 11.4 months.”
Interestingly, June 1985 was quite some time before anyone saw a bottom to that cycle.
From the NAR:
April Existing Home Sales (PDF)
Northeast sales down 4.4% from last month, down 14.7% year over year (SAAR). On an unadjusted basis, home sales in the Northeast are down 14% from last year.
Median price in the Northeast fell 7.7% from a year ago, average price fell by 4.7%.
Sales of single family homes in the NE fell by 7.4% MOM/SAAR, and are down 11.3% YOY/SAAR. Unadjusted YOY down by 9.8%.
Median sales price of SFH in the Northeast down by 10.5% YOY, average price down by 6.4% YOY.
Northeast sales down 4.4% from last month…
In the past few months NAR liked to point out MOM numbers as if seasonality had no effect.
When the Northeast is DOWN from the previous month, well that just doesn’t bode well for housing.
“U.S. April existing-home inventory rises 10.5%”
Is that MOM or YOY?
Month over month, unfortunately.
Months supply (absorption) is up by 31.8% in the last year.
Regarding Zillow.com
How accurate are their ‘Zenstimate’ housing valuations? Accurate, Fairly Accurate, Unreliable, or Utter Crap?
From Bloomberg:
Home Resales in U.S. Fell 1% in April to 4.89 Million Rate
Sales of previously owned homes in the U.S. fell in April, matching a record low and signaling no let-up in the housing recession.
Purchases declined 1 percent to a higher than forecast annual rate of 4.89 million from 4.94 million in March, the National Association of Realtors said today in Washington. The median price dropped 8 percent from April last year, the second- biggest decline ever, as the number of houses on the market surged.
…
“The housing market overall has not yet reached a trough,” Brian Bethune, an economist at Global Insight Inc. in Lexington, Massachusetts, said before the report. “Market conditions remain weak and inventory levels remain excessive,” so we don’t “expect activity to stabilize until the end of 2008.”
…
Sales were down 18 percent compared with April 2007.
The number of previously-owned unsold homes on the market at the end of April jump to 4.55 million, up from 4.12 million in March. The total represented 11.2 months’ supply at the current sales pace, the highest on record and up from 10 months at the end of the prior month.
…
The median price of an existing home fell to $202,300 from $219,900 in April 2007.
Regarding Zillow.com
Zestimate? Somewhere between unreliable and cr*p.
From the AP:
Sales of existing homes fall 1 percent in April
Sales of existing homes fell for the eighth time in the past nine months, with the backlog of unsold single-family homes rising to the highest level in more than two decades.
The National Association of Realtors said Friday that single-family home sales dropped by 1 percent to 4.89 million units, matching the all-time low set in January. These records go back to 1999.
The median price for an existing home dropped 8.5 percent, compared to a year ago, to $200,700. Analysts predicted further price declines given the huge backlog of unsold homes, which rose in June to 10.7 months supply at the current sales pace, the highest inventory level since June 1985.
“Months supply (absorption) is up by 31.8% in the last year.”
Jeebus
From the WSJ:
Home Resales, Prices Decline,
While Inventories Increase
By JEFF BATER
May 23, 2008 10:19 a.m.
WASHINGTON — Existing-home sales fell a second month in a row during April, while inventories surged and prices dropped sharply from a year earlier.
Home resales fell to a 4.89 million annual rate, a 1.0% decrease from March’s revised 4.94 million annual pace, the National Association of Realtors said Friday. Originally, the NAR estimated sales fell 2.0% to 4.93 million in March.
The median home price was $202,300 in April, down 8.0% from $219,900 in April 2007. The median price in March this year was $200,100. High inventories have exerted downward pressure on prices. The decline has kept would-be buyers from signing off on property as they wait for still-lower price tags.
…
Aside from tighter loan standards and prices falling under the weight of bloated inventories, a weakening job market hasn’t helped the housing market. The key nonfarm payrolls number in the government monthly report on employment has gone down four times in a row. In April, nonfarm payrolls receded by 20,000 jobs, the latest Labor Department data showed.
The April resales level of 4.89 million reported Friday by NAR was slightly above Wall Street expectations of a 4.86 million sales rate for previously owned homes.
…
Inventories of homes increased 10.5% at the end of April to 4.55 million available for sale, which represented an 11.2-month supply at the current sales pace. There was a 10.0-month supply at the end of March, revised from a previously estimated 9.9 months.
Regionally, existing-home sales in April fell 6.0% in the Midwest and 4.4% in the Northeast. Demand rose 6.4% in the West. Sales were unchanged in the South.
From MarketWatch
Unsold houses rise to 23-year high in April
Sales decline 1% even as prices plunge 8% year-on-year
The U.S. housing market weakened further in April, with a flood of homes coming on the market even as sales and prices declined, the National Association of Realtors reported Friday.
…
The inventory of unsold homes jumped 10.5% to 4.55 million, an “uncomfortably high” level, said Lawrence Yun, chief economist for the real estate trade group.
…
Retailers are reporting better sales in just the past two weeks, Yun said, following the announcement by Fannie Mae that it would abandon its declining market policy, which required higher down payments.
Did he (or MarketWatch) mean realtors? Cause who gives a flying “insert favorite term here” about what retailers are doing?
75 water
I’d say if you’re trying to gauge a neighborhood, unreliable, and if you’re trying to get an estimate for a specific house, utter crap.
Jeremy Warner’s Outlook:
The oil price will eventually return to earth, but collateral damage is likely to be serious.
As the world economy slows, the best guess remains that oil and other commodity prices will follow the usual cyclical pattern of eventually falling back to more affordable levels.
Admittedly, these “normalised” prices are likely to be a lot higher than in previous cyclical downturns.
Yet whatever the demand/supply dynamic, there comes a point in all markets when price reaches the limits of the economy’s capacity to pay. It’s already happened with housing in America, Britain and many parts of Europe, where the same arguments about insatiable demand on limited supply as are now deployed by bulls of the oil price were once used to explain and justify ever-rising real estate prices.
As we now know, a large part of the house price spiral was down simply to a ready supply of cheap credit chasing an asset which everyone thought immune to Newton’s law of gravity. As a consequence, ever greater quantities of money were poured into the market, until it eventually became essentially unaffordable. Prices are now correcting accordingly. Many of the same bubble characteristics are observable in the commodity markets, and particularly the oil price.
RE:63 Mikenj..your kids will have a ball at the pool. They don’t care if it’s a fancy vaca or not, they have their parents with them, their parents are relaxed and having fun…that’s all they care about..I have 5 kids and some of our best times were times when we did nuthin…
“an “uncomfortably high” level, said Lawrence Yun”
HAHAHAHA!
What a nar.
What, no bottom?
83 SG
“It’s already happened with housing in America, Britain and many parts of Europe, where the same arguments about insatiable demand on limited supply as are now deployed by bulls of the oil price were once used to explain and justify ever-rising real estate prices.”
I’ll buy that argument as soon as someone’s willing to rent me some oil.
Ah, there it is, I was getting worried.
At the same time, a greater number of areas are showing sales gains from a year ago and a recent reversal in mortgage policy means the market is better positioned for a turnaround, according to the National Association of Realtors®.
I reach for a beer but they are up in price too!
Laurie Says:
You got five kids well at least your husband had a lot of fun!!!]
May 23rd, 2008 at 10:30 am
RE:63 Mikenj..your kids will have a ball at the pool. They don’t care if it’s a fancy vaca or not, they have their parents with them, their parents are relaxed and having fun…that’s all they care about..I have 5 kids and some of our best times were times when we did nuthin…
There was another post a day or so ago that mentioned tranches…now before everyone says “WTF” …remember a few weeks back when a poster wrote about The TV show “This American Life”? The show spent an hour explaining the mortgage crisis and how it all came to be…that was one of the BEST explanations of a very complicated mess. I downloaded it and tried to make sense of the mortgage crisis while walking my dog..the show was very well done, very interesting..there was a part about CDO’s and tranches that I had to listen to 5 times before I even began to understand it…really worth going to I tunes and downloading.
Sure looks like a bottom to me..
http://bp0.blogger.com/_pMscxxELHEg/SDbTf6_dmUI/AAAAAAAACBA/BA5jVduMH-I/s1600-h/EHSApril08.jpg
The show aired the weekend of 5/12 and is available on I tunes
uh oh
gonna have to find a way to strip kleenex out of the core inflation number:
http://dailybriefing.blogs.fortune.cnn.com/2008/05/23/kleenex-prices-on-the-rise/
How are you guys spending the long weekend? Thought about a day trip to NJ-beach with the kids, but seems a still little to cold.
Also, as a sad renter of a small ‘luxury’ apartment there is no backyard to enjoy. That will just inspire my wife to give me that ‘we need to buy a house now’ routine that she must have learned from the ‘Suzanne researched this’ clip.
They’re wrong about oil, by George
Rip up your textbooks, the doubling of oil prices has little to do with China’s appetite.
Instead of just causing a brief recession, the oil and commodity boom threatens a prolonged period of global “stagflation”, the lethal combination of high inflation and economic stagnation last seen in the world economy in the 1970s and early 1980s. This would be a disaster far more momentous than the repossession of a few million homes or collapse of a couple of banks.
It seems to me that all policy solutions backfired. To overcome Tech bubble bust, the rates were lowered causing real estate bubble, to overcome real estate bubble again rates are lowered causing commodity and oil bubble. Each of these bubble seem to get bigger in volume and affect large group of people. Tech bubble – may be few mil equity speculators, RE bubble – 10’s of mil flippers, commodity bubble – the whole world pays the price. You need to eat food right, demand is increasing, supply is reducing – Yeah right. I guess it seems MSM just want to recycle old articles, just change the name of asset.
John..regarding kids..as my late father said and my husband has often said when it comes to kids..”the screwing you got ain’t worth the screwing you get”…ahhh..my Dad was funny.
Hey I’ve got new slogan:
You can build more houses,
BUT THEY ARE NOT MAKING ANY MORE OIL!!!
Unfortunatelly is it true..
# njpatient Says:
May 23rd, 2008 at 10:26 am
75 water
I’d say if you’re trying to gauge a neighborhood, unreliable, and if you’re trying to get an estimate for a specific house, utter crap.
Where can I look for more accurate information?
Boston, May 23, 2008 (MidnightTrader via COMTEX) — JPMorgan Chase & Co (JPM) is down nearly 2% in morning trading following reports that at least 200 executives, mostly junior bankers, are being fired today to cut costs in the face of declining investment banking business.
As many as 1,000 executives work in the firm’s investment banking unit, putting the reduction at 20% at a minimum, a firm spokesman told the Associated Press.
Up to half of the mergers and acquisition department was fired, one executive told CNBC. Other Wall Street firms have made similar cutbacks, but none are as thought to have been as deep.
dblko: How about NJ RE Report picnic in one of the fine state parks? Everyone bring their own food, drinks and real estate stories.
njpatient Says:
May 23rd, 2008 at 10:41 am
uh oh
gonna have to find a way to strip kleenex out of the core inflation number:
http://dailybriefing.blogs.fortune.cnn.com/2008/05/23/kleenex-prices-on-the-rise/
just replace it with recycled paper towels, and call it equivalent substitution.
Kleenex went up in price, but ACTUALLY it is cheaper now.
Gotta love hedonic adjustment
Wouldn’t you agree – New York stake is the smae as McDonald’s Habburger?
1. Prices falling
2. Sales falling
3. Inventory rising
There you go – everything you need to know about real estate
SG 37
There is a known casual link between lower income groups and higher rates of “physical” crime (i.e larceny, assault etc). higher income groups can be tied to a hhigher rate of white collar crimes. Out of sight out of mind, no-one really cares about white collar crime, but doesnt want to have other sorts of crime associated with the area they live in.
I am not trying to paint everone one with the same brush. being a low income indiviual does not make you a criminal. but data from the FBI ctrime data base as well as interpol support the casual link. numerous studies can be found by doing a google search.
Dblko,
I’ll be on the 307p to Bayhead with 4 Tall Boys in hand!!!
At Request of Bond Issuers or Bankers,
Credit-Rating Firms Switch Analysts
Some college students shop around for the easiest professor. Wall Street investment banks and bond issuers have done the same thing with analysts at credit-rating firms.
http://online.wsj.com/article/SB121150904038316447.html?mod=wsjcrmain
So essentially the same problems that were apparent during the internet bubble, fraudulent accounting and cozy analyst/issuer relationships, were there during the credit bubble, just flipped from equity to debt.
Good thing we have the Sarbanes Oxley Act! I kid, I kid.
#63 Mike: Regarding NC. We have been thinking of going there for the last few years. Any additional information would be appreciated.
Such as where is Avon, (outter banks I presume). How long of a drive, prices, (for a week rental) perhaps a realtor you might have used. Thanks again.
Dealbreaker says they let 50% of first year analysts go too:
http://dealbreaker.com/2008/05/layoffs_watch_08_jpmorgan_1.php
Kettle1: I agree with your points. I am sure there is data to support it Crime and Income relationship.
But whatever happened to Income, Race, Gender, Religion equality? The laws passed by politicians, being openly dis vowed when doing election campaign.
Paragraph from last article from UK.
The people who tell you that commodity prices today are driven by “economic fundamentals” are the same ones who said that house prices in Britain were rising because of land shortages. The amazing thing is that just months after losing hundreds of billions in the housing and mortgage bubbles, investors and governments around the world have reverted to the discredited fallacy that financial markets always reflect economic reality, instead of the boom-bust cycles and misconceptions that George Soros’s book vividly describes.
http://www.nyc.gov/html/oem/html/ready/prepared_supplykit.shtml
What we should be packing for memorial day.
From MarketWatch:
The market’s losses accelerated after a report showing inventories of unsold U.S. homes surged to a 23-year high in April.
Continental’s $200 million of 8.75 percent notes due in 2011 fell 3.5 cents to 71.5 cents on the dollar, with the yield jumping to 20.5 percent from 18.8 percent. The extra yield investors demanded to own the bonds instead of Treasuries with similar maturities climbed to 17.5 percentage points from 15.6 percentage points.
Better use those contental points, that airline is going under very soon.
SG,
Peak Oil is here so crude will likely see $200-240 this time next year.
3b,
my family does annual/semi-annual GTG’s at wrightsville beach near wilmington NC. Its a nice beach while still being near town activities and amenities. It would be a 8-10hr drive from nj depending on time of travel and you can get a house for 10 people for 3-5K for a fri to fri rental.
i have used the following agency and am happy with them.
http://www.bryantrealestate.com/
the gator and I are chilling out at the Nags Head pub in London right now. One does not see really see how Bush killed our dollar until you spend 14 bucks on a pint of cider and a guiness. Cheers ya all.
I see that the recent market rally was a lot like the Mets Yankee series. For a minute there, I thought the Mets were decent.
Nice numbers on housing sales eh?
No Comments onAmerican Airlines plan to charge for every piece of luggage?? Sounds like a logistics nightmare to me…hey,flight attendant..can you help me stow this steamer trunk in the overhead bin??.or Skycaps outfitted with little banks to make payments for the luggage…oh no…THAT won’t slow down the process…
This is funny..
“Perhaps the absurdist commentary that accompanies each monthly release means someone at the NAR is trying for a doctorate in Absurdism, and these monthly releases are their doctoral thesis. Nothing else (short of blunt head trauma) explains the ridiculous monthly spin.”
– Barry Ritholtz.
I will be out this Memorial Day weekend looking to buy………. a nice used sailboat that is.
Remember the troops this weekend, attend a local parade.
RE:115…my oldest just returned from 6 months studying in London…ouch..she was so hungry that even a staunch vegetarian like her looked lovingly at a burger on the grill…”food i don’t have to buy!!!”
SG
But whatever happened to Income, Race, Gender, Religion equality? The laws passed by politicians, being openly dis vowed when doing election campaign.
I am not sure what you mean.?.?.?
I would suggest that their will never be iincome equality. You can minimize income inequality, But you or i will never be able to afford the opportunities that warren buffet would, whether educational, financial, or social. the only way to achieve income equality would be to have a truley commuunist society. And i do not mean soviet communisum, i mean text book comunisum, where everyone is aloted a given amount oof resources and and any extrat is redistributed to the rest of the society.. Every system has winners and losers. that doesnt mean leaving somenoe to die jhomeless on the corner You can offer someone opportunity but handing someone success has been shown to be disasterous. look at lottery winners. the majoprity of lottery winners have lost the majoriy of their money within a few years. they have no idea how to manage it since they did not have to earn it.
A government failure, not the market’s
By Martin Hutchinson
As commentators have come to realize the depth of the economic mess in which the United States is now mired, an increasingly loud theme of their wailings is that the free market has failed, so that we need more government regulation and state control.
Time after time, bedrock principles of a free market economy have been violated by the corrupt and overblown US government.
In the United States since 1995, the Federal Reserve has increased the broad money supply – whether measured by M3, disgracefully discontinued by the Fed in March 2006, or by the St Louis Fed’s Money of Zero Maturity (MZM)- almost 4% per annum faster than the growth rate of nominal GDP.
This money supply increase was wholly artificial, generated by actions of government, notably former Fed chairman Alan Greenspan’s bizarre 1993 decision to cease targeting the money supply in forming monetary policy.
First, stocks soared in the late 1990s to levels entirely unjustifiable on any reasonable valuation mechanism, with even the Dow Jones Index of 2000 being more than double its proper level.
In the US after 2000, the solution was to expand the money supply still further, overriding the market’s natural deflationary corrective mechanisms by forcing real interest rates down to well below zero. That, allied to the “creativity” of the housing finance sector produced a boom in housing that was unprecedented in the United States. When that in turn led to disaster, the Fed over-expanded money supply yet again, and produced a commodity bubble that has pushed the oil price up by 50% in eight months and is now threatening the entire fabric of the world economy as well as potentially starving millions of the Third World’s impoverished people. While the poor may starve, the rich, either asset owners or, as on Wall Street and in corporate top management, asset manipulators, have done very well indeed from cheap money, much better than they should have done in a truly free market.
I think that paragraph was almost similar to one I wrote earlier in comments. Good read for those who need reality dosage, esp folks like REInv…
From MarketWatch
Bought but can’t hold
Commentary: Put your house on the market now? Are you nuts?
Either American home sellers are an incredibly optimistic lot, or they think they are stock traders who need to dump their assets in a declining market. How else to explain the surge in homes going up for sale in April, in the teeth of the worst downturn in housing since the Great Depression?
Because home buyers are spooked by the current environment, in which home prices have been falling in many markets across the country, there has been a glut of unsold homes on the market for more than a year. Sellers have been cutting their prices to attract the limited buyers out there — the median price of a home sold in the U.S. in April was off 8% from a year earlier — but that has done little to cut into the inventory.
Against that backdrop, sellers still concluded April was the time to move. The inventory of unsold homes on the market jumped 10.5% in April to 4.55 million units. At the current sales pace, that represents an 11.2-month supply of houses — nearly double what the real estate industry considers to be a health level.
…
But even by seasonal standards the number of houses put on the market last month was high. And here is why that is particularly ominous:
• Many of those potential sales are likely forced. Strapped homeowners who are struggling to keep up with mortgage payments may feel compelled to sell and get what they can for their house before the financial burden overwhelms them.
• Many of those houses are foreclosures. With foreclosure proceedings nearly double what they were a year ago, banks are being handed the keys to record number of properties. Their aim is to get rid of them, regardless of market conditions.
• Many of these moves are not discretionary. Let’s face it: The job market is not the most stable right now. Folks who face layoffs or are “asked” to transfer may have little choice but to put their home on the market.
• Many of these properties are failed investments. The speculators who bought — mostly condos — in the boom times in anticipation of quick profit have been caught with their windows down. They may have been tempted to hold for a rebound, but like stock traders they will also cut and run with no bottom in site.
Some of the folks who put their houses on the market in April may end up pulling them off the market in subsequent months, once they see how choppy the water really is. But for most, it’s now sink or swim.
— Steve Kerch, assistant managing editor/personal finance
kettle1: Wrong usage of word – equality. I guess i meant discrimination.
You are right you cant be equal in terms or race, gender, income, religion etc…
Laurie,
the airlines as they have existed for the last 20 years are on their death bed. From what i have read most airlines considered 100-120 dollar oil thier worst case scenarion and they become unprofitable ( if that even menas anything given their heavy government subsidies) at anything over $120. Airlines will continue to raise prices on everything from luggage to coin opporated toilets. But it is just a matter of time. peoples discretionary income available for flying is rapidly disappearing due to economic conditions and would have a hard tioime maintianing the status quo, much less a string of price increases.
Commercial flights for the average joe will be mostly dead within 5 – 10 years due to cost.
We may also see a semi-nationalization of the US airlines ( the ones that are left after a wave of consolidation) similar to the railroads
” I thought the Mets were decent.”
You misspelled “descent.”
122 rich
“Commentary: Put your house on the market now? Are you nuts?”
I remember when all the bulls were telling us that “no one HAS to sell – if they can’t get their price then they won’t sell.”
wasn’t that long ago.
There are many uses of oil and natural gas, as industrial/agricultural inputs and energy beyond heating/transportation. However, transportation is where oil is the least substituble given current infrastructure. The same goes for heating, where public infrastructure is NG and private is oil.
My understanding is the US has sufficient coal to provide for all if its non transport energy needs up to 200 years at current demand growth. Coal can also be refined into pretro and by-products – albeit on significant cost and environmental impact. However, there are cleaner more efficient methods coming online. Of course there is the issue of EREOI. However, that is only an issue if the the energy source for conversion is not sufficiently abundent.
Its not pretty, but worse case you bring more nuke online for electricity, and use nuke to convert coal into oil or gas. Obviously this isn’t a sustainble solution. But the idea isn’t to run this way forever, its to buy you another 20-50 years. You also wouldn’t try to replace all conventional supply, just ease the pressure.
Peak oil’s impacts are usually discussed in terms of socio-economic breakdown. However, the reality is no nation is going to accept this fate, and die easy. Especially not nuclear armed ones. A worse case peak oil scenario, is basically going to mean WWIII. So contigency planning, in terms of investments or real estate is sort of moot. You can’t just buy commodities, move closer to industry/food sources, or learn to garden.
In terms of solution, I am big proponent of tele-commuting. Unless you job involves physically touching things or people – there is no reason for you travel to an office where you also burn additional fossil fuels via seperate electricity and heating/cooling.
Electricity should be primarily nuclear near to mid term,with use of breeder reactors. Solar and wind should also be brought on for diversification and easing load on fuel cycle.
Transport fuels should shift to bio and plug in electric, with conventional, shale, and gassification filling any near term gaps.
It might be worth having the gov invest in shale and gasification capacity, even it sits unused. Just to take some of the risk/supply premium out of market, and provide protection against real disruption.
Airlines Looks To Recoup Fuel Costs
http://www.minyanville.com/articles/delta-AMR-DAL-UAUA-US-CAL/index/a/17273
So prices are down 8% YoY and the months’ absorption number is exploding. Pretorios, would you care to revise your prediction for this year? Before you ask, several months ago I predicted down 10% YoY according to the NAR index. This is starting to seem optomistic.
“The inventory of unsold homes jumped 10.5% to 4.55 million, an “uncomfortably high” level, said Lawrence Yun, chief economist for the real estate trade group.”
What are you talking about dooshbag, there’s plenty to choose from and interest rates are at historic lows.
I would be pleased to see the major airlines go out of business. Then maybe we can replace them with ultra low cost carriers like in Europe.
#114 kettle; Thanks I will check out their web site
looks like Obama is considering Dodd (aka, Dud) for VP. Can you say ‘bailout city’
“Peak oil’s impacts are usually discussed in terms of socio-economic breakdown. However, the reality is no nation is going to accept this fate, and die easy. Especially not nuclear armed ones. A worse case peak oil scenario, is basically going to mean WWIII.”
Optimist.
NJP,
I remember when all the bulls were telling us that “no one HAS to sell – if they can’t get their price then they won’t sell.”
I can put a name to one of them, Donald “Duck” of Gold Coast Cliffside.
Said he was pulling his home in the Fall as he was sure the market would turn around this Spring.
“In terms of solution, I am big proponent of tele-commuting. ”
Hear, hear!
NJP,
I replied to your post but I’m in moderation. Possibly due to a reference to a former poster?
I recall a certain poster from Cliffside Park who said he could pull his home as he claimed the market would turn around.
Damn!
Two posts in a row in moderation?
Due to a town name?
Re: Airlines cutting down..
I flew Continental on an international flight recently, and NO FREE DRINKS!!
Where’s the sellers luking on this blog right now? Please tell me how you’re going to get top dollar and will hold out for your price and how you’re not going to give it away? Please tell me, I’m dying to hear your plan. And remember, I’m a home owner myself.
“skep-tic Says:
May 23rd, 2008 at 11:36 am
looks like Obama is considering Dodd (aka, Dud) for VP. Can you say ‘bailout city’”
Why stop at just a city? More like Bailout Nation!
Clott,
although i think i already know the answer; in your personal opinion is someone who is depending on their house as a significant portion of their retirement funds beter off trying to wait out the downturn in the collierville area or cut their losses now and sell at a loss? they have been in the house for 5 years and had a 30% down payment.
gary, if you are a seller in this market, and i am .. you better have staying power.
if you don’t your f’d again.
Jafo,
you have some valid points. but the infastructure needed for such transiitons dosnt fully exist and as oil/energy gets more expensive, construction of alternative system becomes ever more prohibitive.
There are very viable alternatives but the transition is significantly harder then most people realize and there are economic/technicical/social hurdles that all have to be overcome and you also need an economy strong enough to take the stress of an energy infrastructure shift.
WOuld love to discuss this wiht you at the next GTG i do not want to threadjack this into the NJ oil blog.
Oh and i agree with Nj patient, you sound like quite the optomist! ;)
I saw a new billboard on 78 in PA this morning
“Someone is loving your rent.
Smart people are buying now.”
I did not catch the name of the company that put it up.
Second member of NY state police in Albany HQ kills himself. Spitzer’s short tenure in Albany was surely the worst ever (not counting McGreepy in NJ).
“He left a note inside his home in which he expressed concern about being targeted in an ongoing internal affairs investigation regarding the handling of evidence in a high-profile case,”
link
I agree Kettle, no more oil speaky from me.
NJ patient,
glad you enjoyed the link i put up ( and the name). I will try to clean the data up a bit this weekend as its a little rough at the moment. I dont plan on trying to compete with grim, just though it would be good place to put some of this stuff for when it comes up in discussion
#121 – SG – Thanks for that link, great article.
It’s a shame stuff like that doesn’t show up in mainstream U.S. pub’s.
Bear Stearns Private Client Head Named
– 05/23/2008
Barry Sommers, co-head of Bear Stearns’ Private Client Business, will be appointed ceo of PCB, according to WSL sister publication Private Asset Management. It could not be determined whether Steve Dantus, co-head of PCB, will be assigned to a new role or leave the firm. The Private Client unit will work alongside J.P. Morgan’s Private Bank, headed up by ceo Mary Erdoes, following the merger.
Manhattan-based Alan “Ace” Greenberg, chairman of the Executive Committee of Bear Stearns, has been retained as a vice chairman for JP Morgan Chase. In the role, he will support Sommers and work primarily with Bear Stearns’ PCB. Greenberg declined to comment on speculation that his appointment could lead to further structural changes at the firm. Calls to Sommers and Dantus were not returned.
Tosh
even if such articles showe dup in the mainstream, very few people would show any interest and even fewer would understand the implications.
#149 – I know, it’s depressing.
Yeah, you need pictures like OK Magazine
let me raise a philosophical question for the group…
If you watched the AL Jazerra video in post #19. ( news cast about race issues in the election, focusing on the recent experiences in kentucky)
Consider that as a rough approximation, the people in that video are representative of about 30% of the population in terms of intellectual sophistication. How do yuo run a large scale democratic republic without the power being concentrated in an upperclass when a sizable portion of your population is ignorant of many of the local, regional and international events and power structers that drive national policies ?
This was a hotly debated question amongst the founding fathers of the USA.
152 kettle
and I believe that among the reasons for the electoral college system was the reduction in direct power of the toothless moonshine voter.
Not that I think that there’s a viable answer to the problem (unless someone invents a “Smart” button).
patient,
do you mean that little red button from office depot?????
that was easy!!!!!
ps feel free to request charts or data you are interested in and i can toss them up
nj patient,
you are correct, many of the power strcutures in our government were orginally setup to provide a minimal buffer between joe sixpack and the congreesman/senator etc
#152 kettle: Which I guess gets us back to the whole elitist question. Is it elitist to be informed? That seems to be the case today.
Are you elitist just by virtue of being a college grad? I know college grads and higher, that basically know nothing about nothing.
And yet I know people who have 6/7th grade educations who are incredibly well read, and very knowledgeable on many subjects, by simply being curious and having a love of learning and reading.
I keep reading about how all the educated “elitists” are supporting Obama? (I am witholding judgement on him at this time), but does it make sense to have people running around saying I want change, and yet none of this so called change has really been articulated at this time?
It seems to be the majority of Americans are uninformed on most topics, and that includes the so called elitists.
(54)-
Dear Jackasses in Trenton,
When you force a municipality like Holland Twp (rural Hunterdon Co) to build COAH up to the max, be sure to budget a teensy more to buy a f*&^ing car for every one of these folks you send out here…SINCE THERE’S NO F(*&^ING PUBLIC TRANSPORTATION AVAILABLE!
Morons.
Sincerely,
Clotpoll
3b
It seems to be the majority of Americans are uninformed on most topics, and that includes the so called elitists.
true, this goes back to clot’s idea that i happen to agree with:
a people who are well read, and very knowledgeable on many subjects, by simply being curious and having a love of learning and reading are an inherent threat to any large beaurocratic government that wants to rule its peopl einstead of serving them.
my memorial day trip to Jones Beach (sorry, it’s a long story)
Two years ago, I decided to take the wife and kids to the last day of the air show out at Jones Beach, headlined by the Blue Angels.
My plan was to take a picnic, catch the air show, and enjoy the ocean. For some reason we had a late start and wound up stuck in traffic on the approach to the beach, then the cops forced everyone to turn around and head back.
So right after we turn around, desperate to salvage the day, we see a sign for a state park and decide to check it out. Oddly enough, we we’re directed into the overflow parking lot in the local town dump, so this idea didn’t look promising, but we pressed on. We straggled out of the car wondering where the hell to find the park, and we are told to just head up the hill. Sure enough, we found a thickly vegetated park trail, that lead up a hill overlooking the bay and Jones Beach. And we’re in luck, we had an awesome view of the beach and the air show.
On the walk up the hill, I happened to notice these strange looking birds, like miniature turkeys, wandering all over, and on top of the hill were these nicely camofouflaged blue pipes sticking out of the ground about eight feet.
We break out our blanket and are about to enjoy a serious feast when the park manager strolls up and in a very serious voice warns us about ticks in the park. At first we kind of blow him off. After all, we aren’t city folk and we’ve seen a few ticks before. But we thank him anyway for the head’s up.
About an hour later we discovered that we we’re picnicking on top of the old town dump which was creatively recycled into a new park. The occassional pipes that popped out of the ground we’re there to vent the gas, and the birds we’re actually guineau fowl imported from Africa to eat the ticks which had apparently overrun the hill.
Our picnic blanket ended up covered with ticks.
Guinea Fowl anyone?
Clott 157
this is one of my issues with COAH. Where are the majority of the individuals who are going to live in this housing find employment? and does the reduced housing cost compensate for the increased commuting costs associated with living in the woods
156 3b
I think “elitist” as it’s used in political-speak is always intended to be pejorative and never intended to imply knowledge. And, while I count myself no fan of the “elite” (whoever they are) I am even more suspicious of those who loudly proclaim that we should at all costs avoid electing anyone who appears to be intelligent.
“Guinea Fowl anyone?”
No thanks, I’m full.
#161 njpatientthat we should at all costs avoid electing anyone who appears to be intelligent.
I wholeheartedely agree.
161 NJ patient,
I want my president to be subsatntially smarter then the average bear, prefferably somewhere in or above the 99Th percentile
hey, now we are talking: let’s nationalize oil industry and establish “reasonable profits board” and confiscate excess profits. This should calm things down.
“In a grilling of oil executives by a House panel yesterday, Rep. Maxine Waters, D-Calif., threatened to nationalize the industry if it didn’t do something about the rising prices at the pump.”
also:
“Representative Paul Kanjorski is a Democrat from Pennsylvania. His plan would establish a “Reasonable Profits Board” in which the government will determine whether or not a company’s profits are excessive. ** H.R. 5800 would tax industries’ windfall profits. The bill would set up a Reasonable Profits Board..
164
That is the problem, we keep electing humans who are only smarter than 99% of the bears.
http://www.townofhempstead.org/content/rc/preserves/levy.html
That park by Jones Beach you went to is great.
164 ket
“I want my president to be subsatntially smarter then the average bear,”
But instead we got one that’s dumber than a pic-uh-nic basket.
#167 njpatient: Dumb is one thing. Dumb and arrogant is very dangerous.
talking about dumb people:
“In a grilling of oil executives by a House panel yesterday, Rep. Maxine Waters, D-Calif., threatened to nationalize the industry if it didn’t do something about the rising prices at the pump.”
also:
“Representative Paul Kanjorski is a Democrat from Pennsylvania. His plan would establish a “Reasonable Profits Board” in which the government will determine whether or not a company’s profits are excessive. * H.R. 5800 would tax industries’ windfall profits. The bill would set up a Reasonable Profits Board.
# 157 Clot
Amen!! I was thinking exactly the same thing.
JB,
One of two things.
You have a cease & desist or a gentleman’s agreement?
Which ever, noted.
2007 Worst-Ever Vintage for US Subprime, Alt-A RMBS
http://www.researchrecap.com/index.php/2008/05/23/2007-worst-ever-vintage-for-us-subprime-alt-a-rmbs/
Early reviews of the 2007 vintage of Subprime, Alt-A and Prime Jumbo residential mortage-backed securities indicate it will be the worst ever in terms of delinquencies, judging from Standard & Poor’s latest assessment. The delinquency rate on Alt-A RMBS, for example, is four times as high as the 2006 vintage at the same stage of seasoning.
Doesn’t sound like the 9th inning to me
#157, #170, #160
I understand objections w.r.t. dense lower income housing in far off suburbs without transportation. But there is misconception about COAH. Towns don’t have to join them if they don’t want to. The only thing is if they don’t builders can sue them for zoning permits. So, towns have 2 options to choose from, and most don’t want to deal with builder lawsuits.
I feel eventually folks living in far off suburbs with lower income will look for employment options in those suburbs compared to driving to urban areas everyday, due to cost and time it takes.
[169] Jamil,
Is it any wonder why Jim Rogers has essentially disinvested in the U.S.? In fact, he moved to Singapore, and with the new expatriation legislation and the possibility of an Obamanation, I bet he renounces US citizenship within the next year. Or at least his kids do.
Time to start exploring the offshore financial structures available before the window slams down. ‘Patient will do well with all those NRAs he will counsel on their comp packages.
#174: what new expatriation legislation? Even if you renounce your IS citizenship, IRS holds you as a US citizen for tax-purposes for the next 10 years. Similarly, for permadent residents.
Anyway, I think (oil) companies should move their HQs out of the US. Corporate tax-rates are highest in the world and government is openly talking about nationalization and confiscation of profits, just like in Venezuela.
#174 (Nom Deplume): what new expatriation legislation? Even if you renounce your IS citizenship, IRS holds you as a US citizen for tax-purposes for the next 10 years. Similarly, for permadent residents.
Anyway, I agree: US (oil) companies should move their HQs out of the US. Corporate tax-rates here are almost highest in the world and government is openly talking about nationalization and confiscation of profits, just like in Venezuela. This is a dangerous country to run a business.
is anyone playing the CNBC $1,000,000 contest?
#174 (Nom Deplume): what new expatriation legislation? Even if you renounce your IS citizenship, IRS holds you as a US citizen for tax-purposes for the next 10 years. Similarly, for permanent residents.
Anyway, I agree: US (oil) companies should move their HQs out of the US. Corporate tax-rates here are almost highest in the world and government is openly talking about nationalization and confiscation of profits, just like in Venezuela.
I have a feeling right after the typical holiday gas price news stories; today’s real estate news will be next as one of the top stories of the weekend.
From MarketWatch
This week’s Real Estate stories
People with homes to sell this year were hit with a cold reality slap on Friday: The U.S. housing market weakened even further in April as inventory increased, sales declined and home prices continued to drop, according to data from the National Association of Realtors.
Lawrence Yun, chief economist for the group, said the inventory of unsold homes and condos was at an “uncomfortably high” level. Inventory rose 10.5% to 4.55 million homes for sale in April.
The national median existing-home price for all housing types was $202,300 in April, which is 8% lower than a year ago, according to the group.
The association reports that the slowdown in sales was greatest in high-cost areas, and that relatively more sales in low- and moderate-priced markets had the effect of bringing the median price down. And, indeed, it’s always important to remember that local conditions vary by city, neighborhood and sometimes even by block.
But that may do little to ease the fears of buyers sitting on the sidelines, waiting for conditions to settle. Jump in too early and, they fear, a month later the home will be worth less than they paid for it.
More RE related stories at the link above, Rich
PS JB, Starting your weekend early? Sweet.
SG 173
But there is misconception about COAH. Towns don’t have to join them if they don’t want to. The only thing is if they don’t builders can sue them for zoning permits.
This still defeats the purpose of planned sustainable development (in the sense of construction relative to what the local infrastructure and environment can maintain without character or environmental degradation)
Forcing a town to either build a subsatntial number of low/moderate income housing or or allow a builder to build a substantial # or new mcmansions is trying to close the barn door after the horse is already out.
The COAH rules should dictate that any new construction be held to these constraints, not that towns have to meet the requirements retroactively.
The current rules basically stipulate that many communities will have to become urbanized when the local population has no desire to do so.
Once again there has clearly been a failure to properly address this issue to date. but forcing what would essentially be urbanization on a large number of communities is not right as the negative (increased use/stress = more taxes)infrastructure impact will most likely outweigh the improvements
Affordability: Is it A Sign Of The Housing Bottom?
Posted By:Diana Olick
http://www.cnbc.com/id/24794436
I’m hearing the word “affordability” a lot these days, increased affordability to be specific. The Realtors were hammering that particular positive during their monthly existing home sales presser this morning, and this week I received a note from a well-respected real estate consultant out on the west coast, John Burns:
“Housing affordability has improved dramatically in the last year, particularly in those markets where affordability was previously the most concerning,” Burns writes. Burns uses a Housing Cycle Barometer rating, a measure of the relationship between incomes and housing costs, for more than 380 metro areas in the nation.
“The number of markets that we designate as ‘Areas of Significant Affordability Concern’ – where the Barometer rating was 7/5 or higher (out of 10) – has fallen from 42 markets one year ago to only 3 markets today.”
Burns tells me he and his people are calling a bottom this month because the disconnect between demand and supply is no longer getting worse, and will get better from here. He says this is important because it dictates good investment strategies:
“The better capitalized builders and others with capital will begin picking up excellent land at very distressed prices very soon,” Burns tells me in an email. “This is exactly what they need to get their businesses back on track. Those builders without the capital will miss the opportunity.”
I think the affordability factor is the best news I’ve heard in this housing market in quite a while, but I worry about the supply and demand theory. The Realtors today reported that inventories of unsold homes rose yet again in April to an astounding 11-month supply.
Whether you like the NAR’s numbers or not, there are an awful lot of homes out there with no traffic, new and old, and foreclosures are only adding to the lot. I’m not ready to call a bottom, but with prices continuing to fall, and sales picking up in some particularly distressed markets, perhaps the bottom is at least near.
#176 Rich: Maybe the sellers and realtors in Bergen Co. will finally wake up, and realize the party really anr truly is over.
If you want to sell your house lower your price. If you bought 10 years ago or more, and have not used your house like an ATM, you will still walk out fine. If not than plan to saty a long time.
Hopefully another 6 to 12 months and we will see some really significant price declines,and the serious buyers out there can and will buy.
I still hold to my prediction that prices will revert to around 2001/02 levels.
168 3B
“Dumb is one thing. Dumb and arrogant is very dangerous.”
What about dumb, arrogant and mendacious?
From MarketWatch
Wachovia guru: Good-bye progress on housing front
Good-bye progress on housing front! “We had been making some progress over late 2007 and into 2008 on the inventory level,” says Adam York at Wachovia, “and we basically erased all of that this month” following the latest existing home sales report. He says mortgage rates are low but tighter lending standards are stopping would-be homeowners from buying. A spike in foreclosures is also adding to the glut of unsold homes on the market, now at a 23-year high. York tells John Wordock he sees no housing bottom until later this year at the earliest.
“elites” is just shorthand for those people who want to raise taxes on the “rich” (while they live life as tax-free coupon clippers a la Teresa Heinz Kerry), insist that we move toward alternative energy (but won’t accept wind farms off Cape Cod) and who insist affirmative action is necessary (especially since their children who are legacies at top universities aren’t really affected by it)— in other words, people who want all of the commoners to bear the cost associated with assauging their rich/white guilt.
Disclaimer: I don’t believe we are anywhere near the bottom, but I know there have been posts over the years here about afordability.
Once again there has clearly been a failure to properly address this issue to date. but forcing what would essentially be urbanization on a large number of communities is not right as the negative (increased use/stress = more taxes)infrastructure impact will most likely outweigh the improvements
It’s chicken and egg issue. I would argue that increased demand would force towns to do better planning, reduce wasteful spending etc… The question primarily is does NJ wants to be grow economically or just be where it is. The higher cost of living is biggest reason for businesses from expanding.
“‘Patient will do well with all those NRAs he will counsel on their comp packages.”
That’s well under weigh.
skeptic 182,
good definition
purchasing power has not improved for most buyers. they now need downpayments, must document their income and cannot get super low teaser mortgage rates. the drop in prices has not been nearly enough to offset the above
178 NJLifer
Sounds like Diane Olick is still a graduate of the “you tell me the news and I’ll type it up and print it” school of journalism.
She’s such a nar.
#55
Just read the North Carolina Cottages Sit Empty as New Yorkers Stay Home
http://www.bloomberg.com/apps/news?pid=20601093&sid=a4JboGbvjwwk&refer=home
I think the article is on the money. Im my development there are a few homes I know that are owned by NY people. (Vacation, Tried to move but cant sell back north, etc) Over the past couple of months I have seen for Rent signs on two of them. That supports the article. One put the home up for sale which is probably a good idea considering that home prices are up in my neck of the woods for some reason. Might be the time to sell but some times I think Charlotte isn’t in a bubble because we never really had the big year over increases. Still doesn’t mean we cant go down but I think we will level out and maybe drop a few percent by years end. I can honestly say that houses aren’t moving fast here but they are still moving providing the seller doesn’t tack on 30k from the previous years value. People cant sell in the surrounding areas at increased prices so I cant see homes increasing for longer. Can only have so many people moving locally.
I don’t think they are going to the Jersey Shore either because several friends of ours own shore homes and said we could stay there they weeks open that the homes aren’t rented. This season the phone isn’t ringing off the hook like previous seasons. I would guess its like this everywhere. $3,000 weeks for the Jersey shore homes aren’t exactly a real getaway either. I think the average person realizes they can do better.
I also think the article makes sense to go to South Carolina instead and save a few hundred. My wife set us up for camping on an island in South Carolina and I want to explore the Charleston area this summer.
Camping is a hot topic this year and its $1.00 per person at most parks I know. $30.00 for a cabin.
But how does lower downpayments and teaser rates make houses more affordable? That is why housing crashed in first place. It actually makes it less affordable. The 3/27 concept was Kooky to begin with. Instead of getting low rate for 30 years, you got a very low rate for three years and a higher rate for 27 years. So 27 out of 30 years I am paying a high rate so I can save a little in three years. Cool. Plus less down means more borrowed which means that 27 years at a higher rate is even a worse deal.
Home prices down and unsold listings way up
The big news in the April existing home price report released today by the National Association of Realtors wasn’t the 8% drop in median home prices or the better-than-expected 1% decline in sales.
It was the whopping 10.5% jump in the inventory of unsold homes. The number of homes available for sale jumped to 4.55 million at the end of April, representing an 11.2-month supply at the current sales pace. There was a 10-month supply of homes at the end of March.
“The increase in inventories is a bad sign for the next several months,” Bill Hampel, Chief Economist for the Credit Union National Association and Affiliates, said after the data was released. “It means we’re not out of woods yet.”
SG
there is no quick fix. I see it as a contiuing process type solution. enforce COAH on any new development but not retroactivly. The bursting bubble will do its part in reducing housing costs and then the new construction bringing in the COAH regulations will continue to ease the situation over the next 5+ years. Instant fixes often cause more problem then they cause. and the current COAH implimentation strikes me as just a little too much “feel good” to be practical.
SG how do you propose that you mesh COAH with land/open space preservation? where does the money come from for widening of roads and expansion of sewer systems?
the town of washington in warren county is a good example. They built up a large amount of open space without upgrading the roads or the sewer system. Now they have huge traffic issues and are fighting over how to expand sewage treatment without violating environmental regulations. there are other issues involved as well, such as poor planning. But i see washington as an example of te effects we might see from the current COAH implimentation
July 2007 our Government (Consumer Product Safety Councel) mandated new Fire Retardance Standards for the Mattresses we sleep on.
The specific materials that the CPSC studied were antimony trioxide, ammonium polyphosphate, boric acid, decabromodiphenyloxide (DBDPO), melamine, and vinylidene chloride.
You can breath these chemical in, eight hours a day, knowing they are reducing @ 270 fire deaths per year. The CPSC will revise it’s decision based upon an analysis of ill effects in the future.
If you guys really want to get the NAR term out there you need to push it onto Reddit, Digg, or the like. once it gets on those sights the number of hits for NAR as a negative term will sky rocket
182 skep
Yes, used that way (or to describe I-bankers who want privatized profits and socialized losses and the politicians who give it to them), agreed.
194
but then it wouldn’t be an in joke! :)
confused,
in 10 years there will be a bunch of articles about how mattresses are toxic.
I am not joking, Those chemicals used as flame retardents are not the best idea. I know that at least 2 on the least are considered hazardous to breath ( dust wise) in industrial environments.
for more fun google “brominated Flame retardents”
make (175)-
I’m in it.
njp,
Instead of har-dee-har-har, we can say nar-de nar-nar.
Sign of times to come in NJ??:
Vallejo files for Bankruptcy:
http://www.mercurynews.com/news/ci_9359529?nclick_check=1
“We’ve exhausted all avenues at this point, and this is all we had left,” Davis said. “I had hoped to avoid it all the way up until yesterday. It’s something we can’t avoid. It just doesn’t work. We can’t pay our bills.”
patient,
but it would be quite amuisng to see the NAR term used negatively on a large scale. consider it counter marketing
patient (188)-
IMO, Olick is pretty good. Check out her blog sometimes. That’s the forum where she gets to cut loose with her own opinion. For the most part, I think she has an excellent handle on the current situation, especially in the severe bust markets (CA, FL, AZ, NV).
She is no nar.
clot
I confess, I just wanted an excuse to use the term.
Kettle1:
Enforce COAH on any new development but not retroactivly.
I am no expert, but I believe COAH is in place since 1985 or something. Only thing changed is in 2003 they changed to what they call Growth formula, where houses are built in the towns where jobs are getting created. In that case, they are tied to the fact that if town want to allow businesses to come in, then they should also housing for those folks who work there. Clot mentioned that in his town, small biz folks are ferrying folks from Newark in minivan to work at stores. That is unfair at many levels. I believe retroactive numbers are due to fact that most towns did not do anything since 2003 at all.
The bursting bubble will do its part in reducing housing costs and then the new construction bringing in the COAH regulations will continue to ease the situation over the next 5+ years.
Even if bursting bubble takes prices back to 2002 level, you won’t make any significant dent in affordability. And I believe the COAH requirement need to be met by 2018, almost 10 more years.
SG how do you propose that you mesh COAH with land/open space preservation?
Well there seems to be space for McMansion on 1 acre lot. You can easily build 40 condos in that much land.
where does the money come from for widening of roads and expansion of sewer systems?
You have property taxes, state taxes, federal taxes. With increased housing there would be surely large property taxes. 2 bed condo resident will pay at least $4000 in taxes. 40 of them should give large sum as well.
Above points on your questions. Ideally, I would like different solution, but this is the system we got.
jamil (169)-
Funny, I don’t remember oil companies asking for gubmint subsidies when oil was $11 a barrel.
sg (173)-
There is- in reality- no option for a municipality to do anything other than participate in COAH.
Builder remedy suits are ruinous to towns, both fiscally and in the final result (which almost always goes the builders’ way).
No irony, builder remedy suits (even though they are triggered by the alleged “need” for affordable housing) actually end up doing nothing to create adequate housing for lower-income folks.
From the Star Ledger:
Group: NJ backs taxing wealthy, corporations over cuts
A group that opposes Gov. Jon S. Corzine’s proposed budget cuts said Friday that New Jerseyans would rather tax the wealthy and corporations.
The Better Choices Budget Campaign said its polling shows:
• 80 percent back closing corporate loopholes to avoid cutting services.
• 79 percent back increasing income taxes on those earning more than $250,000 a year to avoid Corzine’s cuts.
• 73 percent back increasing income taxes on those earning more than $250,000 a year to give homeowners an extra $500 in property tax rebates.
[207] Vic,
If it is a muni, then the state steps in and becomes a receiver. No muni can recover from this–once it starts down this path, it is a death spiral. The state basically has to come in and prop it up for a generation with direct aid and administration, and guarantees on its muni debt. Those that can walk away will, making the muni look like Slavic Village in Cleveland. Might as well wall it off and put the Bureau of Prisons in charge of it.
If you don’t hold NJ muni bond funds at that point, it will be a good time to get in as existing muni bonds (esp. those with exposure to the muni, like W&S bonds) will get pounded and yields will go up. Right now, NJ muni closed end funds sell at a discount to NAV and the tax equiv. rate is something like 7%.
If it is the state itself, we are all screwed. Might as well move to PA to take advantage of the interstate tax compact (or “move” in the virtual sense by finding a friend or relative that will “rent you a room” in their PA home).
On topic of COAH needs,
The main issue is not low income housing, it is primarily on how to pay for it. Either towns can pay for it themselves or have builders pay it. In case they want builder to pay for it, then they have to approve 4 more market rate houses for builder. That’s where the issue really lies. Town having 200 affordable housing obligation, can either pay for them or allow someone else to build 1000 houses. The builder in turn will give those 200 houses at much lesser price, but will recoup that cost by other 800 houses.
What scares current homeowners is what will happen if they start building so many houses? Most are worried about their property prices falling, not that much about services etc… Though many will talk about services, reality is they care more about their own home prices funding their retirement.
(214)
A group that opposes Gov. Jon S. Corzine’s proposed budget cuts said Friday that New Jerseyans would rather tax the wealthy and corporations.
I hope this group doesn’t work for any of these corporations as they may lose their jobs as these businesses leave the wonderful state of NJ.
What do successful corporations and households do when they can no longer afford something?
Cut out the expense.
SG
i am a renter, so have no interest in home value going down. My ultimate point is that large scale buildout of outlying areas is a bad idea. I support th basic requirement for affordable housing (i.e your 40 unit condo example) but the 4 to 1 developer alternative is insane.
This is my opinion only as i have data to back it up; but i have to ask if there is really enough employment available to support the number of proposed low income housing. if there is not enough employment then you are only going to exacerbate the situation
204. kettle1 Says:
May 23rd, 2008 at 3:02 pm
confused,
in 10 years there will be a bunch of articles about how mattresses are toxic.
I am not joking, Those chemicals used as flame retardents are not the best idea. I know that at least 2 on the least are considered hazardous to breath ( dust wise) in industrial environments.
for more fun google “brominated Flame retardents”
Kettle;
http://www.wcpo.com/content/news/localshows/iteam/story.aspx?content_id=f1cf6683-dd13-4156-952b-7af7f585c771
This manufacturer uses Antimony as the FR. But his mattress has a zipper which allows the purchaser to remove the FR toxins. It’s intended for customer who don’t want to die. He will also make it for you without FR, if you have a note from your doctor or chiropractor saying you are allergic to toxic chemicals.
#155 kettle,
That’s one of the reasons why the pols campaign on “family values” and other nonsense instead of the real issues. Appeal to the lowest common denominator.
if there is not enough employment then you are only going to exacerbate the situation.
I believe the formula is like 1 house for every 25 new jobs or 1000 sqft of warehouse development. I am sure with those conditions, you have enough employment.
4 to 1 developer alternative is insane.
After all builder has to recover the cost from other houses, right. I am sure that may seem too much in summit, but less in south jersey town. I guess it’s probably average.
#187 njp
mendacious – my new word of the week. must drop that one on my coworkers.
#190
low dowpayment and teaser mortgages don’t make houses more affordable in the long run, but they do in the short run, and since most people buying houses seem to only think in terms of the next few years, it makes a big difference in terms of the overall perception of “affordability”. this is why lenders called these loans “affordability products”
# 215 – Nom, Thanks for the info.
All talk about the Auction Rate Securities market has died down. Has this market recovered or is it completely dead?
If dead, how do munis raise money in the short term for cheap now?
#224 victorian: The auction rate market is dead. Every day multiple millions of ARS securities are being converted/flexed out to either long term debt, or variable rate (non-auction debt).
The ARS market was narrow in that only high net worth individuals and corporations were able to buy these securities.
Money Markets funds could not purchase these securities, as tehy did not have a put mechanism, but rather relied on the auction process.
Many of these corps. (Best Buy was a huge player) used these securities to mangage cash/inventory needs.
Once these things failed, these market participants will never go back to that product.
The lawsuits however, are just starting wnd will be ongoing.
#224 If dead, how do munis raise money in the short term for cheap now?
Variable rate demand bonds,non-auction.
John Says:
May 23rd, 2008 at 10:47 am
Boston, May 23, 2008 (MidnightTrader via COMTEX) — JPMorgan Chase & Co (JPM) is down nearly 2% in morning trading following reports that at least 200 executives, mostly junior bankers, are being fired today to cut costs in the face of declining investment banking business. As many as 1,000 executives work in the firm’s investment banking unit, putting the reduction at 20% at a minimum, a firm spokesman told the Associated Press. Up to half of the mergers and acquisition department was fired, one executive told CNBC. Other Wall Street firms have made similar cutbacks, but none are as thought to have been as deep.
John: Surprisingly, these jobs ARE located in NYC. However, what was not reported is that they were all voluntary and unpaid. As a result, they will not have an impact on the econoimc climate of NYC. We are in luck.
3b – Thank you very much!
You would think people care about the price of gas, think again, look at the GSP traffic today, no one cares, they’re all going to the shore. Where’s the recession I ask?
frank
take a look at this to get an idea of why. gas prices dont start to really hurt the top 50% of the population until around $6-8
http://tinyurl.com/3p53rp
#230 Nice simple graph Kettle1
Its getting high enough that the lower income groups will stop going to work because they wont make money in the commute.
Get a pay raise by being on unemployment!
What then is the incentive for them to return to work?
regardiong Jafo’s comments from yesterday….
is there anyway to ine this data???
5.What precentage of long interest are non-consumers or producers?
6.What percentage of consumer, distributor, and refiner purchases are stock piling to hedge against future increases vrs. near term needs?
mine the data? is it tracked anywhere, multiple sources perhaps?
231 – Mitch,
Consider also that gas prices are like a tax, and this alters work behavior. When the marriage penalty was more severe, the combination of marriage penalty and AMT meant that spouses in certain situations were making little or no money, and in some extreme cases, were actually losing money by working (after factoring costs of working, such as gas, meals, day care, etc.)
So, for some people, this could cause a second earner to exit the workforce in order to avoid those costs. I had long thought that we were heading to a society where dual earning households were DINKs or those with 2 high earners and few children. This is largely tax and cost driven, and this will exacerbate the trend.
Kettle
We should talk at next GTC. I will reign in oil/energy talk too.
One last pointing shot, what do you make of oil execs saying they can be profitable at 60 a barrel given projected demand and discovery/production costs?
I also think that higher energy costs and weak dollar, could improve trade balance long term while reducing energy demand from our importers.
Non Deplume
I knew I said I would stop on energy talk. But why should bloggers be held to higher standards of integrity then our state politicians?
An interesting analysis would be after tax comparison of purchasing more expensive housing closer to industry/commerce, vs commuting via car from further out. The interest and for most prop tax would deductible, where gas is not.
I still think the answer here is telecommuting. I believe like 20-40 percent of gasoline use is for commuting and business travel. In my experience, the vast majority of that is by white collar workers that just need computer, phone, and internet.
I find it humorous how there is occasionally talk of pushing truck traffic to overnight in conjested areas and how road work is already there, when those are the folks that really need to be on road.
make that than, rather than then:)
Regardless of how much of energy prices are speculation, I would like to see the money that has been tied up there and in other non-productive vehicles (credit and other derivatives) put to real energy, transport, and telecom investment.
Kettle, may I suggest that 20% is a hefty (not to mention arbitary) stress point for a family at $25k.
Ten percent, based on gas price history, would be the stress point.
For those of you who don’t deal with lower-income families much, think about this. Some of these families bring home $400 a week, if they’re lucky. Let’s be positive, and assume they don’t have a child support order from a past life haunting them. So, when gas was $20 a week to fill up the Elantra, they’d bring home 95% of their pay – and use the credit cards to live until the next check.
Twenty percent of their net – $80 – means not that they are stressed; they are incapacitated.
The difference is an order of groceries.
Some kids at my daughter’s school are showing the signs already.
jafo 236: yes, telecommuting makes more and more sense, including companies limiting travel and getting hd videoconf equipment. Latest stuff is really amazing and nothing like those crappy videoconf systems few years ago. Anyway, I work from home about 50% of time. Early morning telcos the main reason, rather than gas.
239 pat
I chose 20% as a “financial Distress” point. not a stress point, but distress. a stress point would be have just enough to cover gas. a Distress point is when you cannot cover the expense anymore
Also note that on the graph i posted that i chose those incomes on the basis that the 2002 US census states that 20% of US families make 25K or less, 20% of families make 100K or more and the median family income is 47K ( i rounded the number to 45K)
unfortunately some people like myself have limited ability to telecommute. 50-70% of my work is hands on (engineering) depending on the project.
Pat,
my numbers were based on gross income. While this does not make a huge difference at the 25K level i chose gross (pretax) income for simplicity.
#234 Friend of mine down here just told his wife 2 months ago its not worth it for her to go to work. Tax wise at the end of the year its better than with her income.
kettle, I’m not trying to convince you to change the concept of your graph…that upper income folks are not stressed yet.
But for family income under $50k, there is already a large group under distress – that is masked by the comparison to the upper group.
It might be due to the graph’s assumption that families have a breakeven point under which two drivers is no longer a reasonable assumption.
graph’s lack of assumption
Pat
Thanks
Great.
I will be *&%(&# working all %*$$*&%^(%* weekend.
Where is my %^#*% recession??!?
NJP,
From home?
Just thought I’d check the ole’ blog before going back to sipping a brandy based julep.
Hope your’re able to do the same.
Rich
About that oil drilling by Cuba mentioned in previous thread: Yes, China is starting to drill oil near Key West in Florida, thanks to a deal with Cuba.
US oil companies could drill there as well (in a similar distance of the coast, in US waters) but congress has prevented that. Bush admin has tried to pass legislation to allow that several times, no avail. Instead, we have senators interrogating oil execs and demanding nationalization and Excess Profit Boards.
If you want cheaper gas, allow oil drilling in ANWR and offshore (better yet, vote out the bums out who oppose this).
24- kettle- The one time the FBI came to our house unannounced, I almost was rude ’cause I thought they were mormons or jehovah’s witnesses. That was the only reason I could imagine folks in suits at my door. After I almost ran them over with the stroller (I was in a hurry, they hadn’t knocked yet) and they almost pulled guns on me (I think. The third member of the team stayed well back and looked suspiciously at me the whole hour), they promised to call ahead next time.
If anyone wants to contact the
FBI directly, I did keep the cute one’s business card. It’s on my fridge, held on with an anti-war magnet, next to the anti-Bush bumper sticker. The juxtoposition amuses me.
re: oil. kettle, permission to post your graphs on my small blog? or at least link to your blog?
Inventory in NJ up by another 700 units this week. Can anyone buy a house or two?
With inventory at all time hight and Wall St. layoffs getting worse, what will it take for prices to take a real drop? 30%-40% drop like in CA, NV and FL.
With inventory at all time hight and Wall St. layoffs getting worse, what will it take for prices to take a real drop? 30%-40% drop like in CA, NV and FL.
Different dynamics in NJ. We didn’t have rampant overbuilding in areas with zero access to anything. We don’t have development after development sitting empty or entire high rises with units only owned by flippers. So, I don’t expect to see a CA or FL style “collapse” here.
We DO, however, have very overpriced housing in a state with a decaying economy that is slouching its way towards being an overtaxed and increasingly irrelevant welfare state. However, like the middle aged woman in a mini skirt and bare midriff that doesn’t know her looks have faded, many of our state’s inhabitants still believe NJ is the economic and cultural center of the country and buyers should be grateful for an opportunity to own a piece of Shangri-La. After all; we are close to Manhattan.
Rather than an outright CA or FL style collapse, in NJ we have a war of attrition between buyers and sellers, where sellers are begrudgingly yielding ground to buyers.
While I expect to get to 30% off peak, it won’t happen all at once and a some of the decline will be the result of rising inflation “catching up” to housing prices.
new jersey has truly become a welfare state.
ready todays papers … grim will post em.
From MarketWatch Weekend Edition
Bank failures to surge in coming years
IndyMac, Corus, UCBH under pressure as credit crunch slows economy
…
Only three banks have failed so far in 2008. But that number is set to surge as the credit crunch slows economic growth and hammers some lenders that grew too fast during the recent real-estate boom, experts say.
…
At least 150 banks will fail in the U.S. during the next two to three years, according to a projection by Gerard Cassidy and his colleagues at RBC Capital Markets.
If the current economic slowdown deteriorates into a recession on the scale of those from the 1980s and early 1990’s, the number of failures will be much higher this time around — probably as high as 300 of them, by RBC’s reckoning.
…
Cassidy and his colleagues have developed an early-warning system for spotting future trouble at banks called the Texas Ratio.
The ratio is calculated by dividing a bank’s non-performing loans, including those 90 days delinquent, by the company’s tangible equity capital plus money set aside for future loan losses. The number basically measures credit problems as a percentage of the capital a lender has available to deal with them.
Cassidy came up with the idea after covering Texas banks in the 1980s. …
The analyst noticed that when problem assets grew to more than 100% of capital, most of the Texas banks in that precarious position ended up going under. A similar pattern occurred in the New England banking sector during the recession of the early 1990s, Cassidy said.
Along with his colleagues, Cassidy applied the same ratio to commercial banks at the end of this year’s first quarter and found some disturbing trends.
…
“Bank failures don’t cause recessions, they lengthen them,” Mason, the Drexel professor, explained. “We could get a mild recession that could linger for a while longer because of the inability to recharge capital in the banking and financial system.”
——–
Two page article at the link above including details on banks, construction loans and regulators
Ridgewood
2502779 Sold
ACT 560 LAUREL RD $729,500 2/1/2005
ACT* 560 LAUREL RD $729,500 2/7/2005
U/C 560 LAUREL RD $729,500 2/14/2005
SLD 560 LAUREL RD $745,000 4/21/2005
2821183 Active
ACT 560 LAUREL RD $719,000 5/23/2008
Tenafly
2516738 Sold
SLD 13 COPPEL DR $1,390,000 9/7/2005
2804711 Active
ACT 13 COPPEL DR $1,489,000 2/4/2008
PCH 13 COPPEL DR $1,450,000 3/20/2008
PCH 13 COPPEL DR $1,419,000 5/5/2008
PCH 13 COPPEL DR $1,399,000 5/12/2008
PCH 13 COPPEL DR $1,359,000 5/23/2008
From the Philly Inquirer:
Area’s home sales in April off 24%
Existing-home sales fell regionally and nationally in April, with officials of the National Association of Realtors placing some of the blame on tighter credit.
Sales last month were 24 percent below April 2007 in the eight-county Philadelphia region, according to the Prudential Fox & Roach HomExpert Report, using data from Trend Multiple Listing Service.
Nationally, the same year-over-year comparison saw sales decline 17.5 percent, the NAR said.
Because HomExpert includes Mercer and Salem Counties in New Jersey and New Castle and Kent Counties in Delaware, there is no median-sale price for the eight counties alone in its calculations.
For all 12 counties, however, the median sale price declined 1.1 percent year over year, HomExpert reported.
In the eight counties, year-over-year price changes ranged from a decline of 6.8 percent in Gloucester County to a 1.9 percent increase in Montgomery County.
#253 Frank,
Come on and man up. Why buy only 1 or 2? Think big if you want to be a hitter. Pick up at least a dozen.
Democratic leaders see ‘housing hubs’
Sites could be built near rail depots, schools
The Corzine administration and Assembly Democrats are working on a plan to locate affordable housing near commuter rail lines as a way to provide moderate- and low-income residents with places to live near transportation to jobs.
Assembly Speaker Joseph Roberts (D-Camden) and state Community Affairs Commissioner Joseph Doria said they foresee the housing hubs as also including middle- and upper-income homes and apartments near train stops along commuter rail lines.
The elimination of RCAs, however, is expected to become a sticking point as the legislation moves to the Senate, where Sen. Raymond Lesniak (D-Union) wants to keep them as an option for suburban and rural towns.
At yesterday’s hearing, killing the program was opposed by East Orange Mayor Robert Bowser, who is president of the New Jersey State League of Municipalities, and Bridgewater Mayor Patricia Flannery.
Roberts’ plan would allow towns and the state to levy a 2.5 percent fee on the value of new or expanded commercial development to raise money for affordable housing. Doria said the revenue, when combined with a federal tax credit, can raise $200 million a year.
Gov. Jon Corzine wants to see 100,000 affordable houses and apartments erected or refurbished by 2018. A recent state Council on Affordable Housing study found a need for 115,280 units. The study suggested, for example, that 9,778 are needed in Middlesex County, 9,254 in Morris County, 6,120 in Essex County and 5,290 in Union County.
Jamil,
Actually the Bush brothers were also responsible for reducing drilling on Florida’s coast:
http://www.spokesmanreview.com/news-story.asp?date=053002&ID=s1156519
#262 The gov wants 100k affordable homes?
Easy, just chop up the soon to be abandoned mcmansions into apartments and problem solved.
From Reuters via Yahoo
Buffett sees “long, deep” U.S. recession
The United States is already in a recession and it will be longer as well as deeper than many people expect, U.S. investor Warren Buffett said in an interview published in German magazine Der Spiegel on Saturday.
He said the United States was “already in recession” and added: “Perhaps not in the sense that economists would define it” with two consecutive quarters of negative growth.
“But the people are already feeling the effects,” said Buffett, the world’s richest man. “It will be deeper and last longer than many think.”
From Reuters via Yahoo
Buffett sees “long, deep” U.S. recession
The United States is already in a recession and it will be longer as well as deeper than many people expect, U.S. investor Warren Buffett said in an interview published in German magazine Der Spiegel on Saturday.
He said the United States was “already in recession” and added: “Perhaps not in the sense that economists would define it” with two consecutive quarters of negative growth.
“But the people are already feeling the effects,” said Buffett, the world’s richest man. “It will be deeper and last longer than many think.”
alia 252
feel free to link to them. FYI i plan on cleaning them up a bit this weekend, so you may want to wait until monday.
feel free to e-mail me if you have specific questions, you can get my e-mail from grim
rich,
re bank failure article….
so is it time to buy a safe and start making my deposits to the Bank of Kettle?
only half kidding
#229, Frank,
I keep asking the same thing. And it’s not just the gas and driving down the shore. Look at the restaurants, the malls, the shops, the spas,etc. They are crowded and people have shopping bags full of their purchases. People in northern NJ have not changed their lifestyle one iota (sp?). My neighbors just traded their high end gas guzzling SUV for a brand new bigger gas guzzling SUV. If someone can show me any evidence from Morris to Bergen counties that folks are acting like it’s a recession, I would like to see it.
HEHE, Jamil
Bush and others who have limited drilling in various locations may have actually done much more good then they realize.
Oil supplies are not even close to being truly “constrained”. Once the real pressure starts, when oil is somewhere north of $400/barrel; then the various reserves that have been off limits will be a godsend. realize at that point that the oil will not be for gasoline but for critical commodities such as fertilizer and petrochemicals (and some gas/diesel for critical services)
njpatient Says:
May 23rd, 2008 at 7:09 pm
Great.
“I will be *&%(&# working all %*$$*&%^(%* weekend.
Where is my %^#*% recession??!?”
That IS your recession – longer hours, push the “productivity” for the same outlay.
Duh!
Kettle (268),
You can always park your cash at the Bank of Rich (nice ring to that)!
Alia 252 –
Sounds like a story.
The previous resident of my house used to dabble in the sale of “unofficial pharmaceuticals”. Came out of the shower once to find the house surrounded by an armed SWAT team. Only my very scary looking dog kept them out.
Week later, another couple of cops from a different town came a calling.
I suggested they all learn to communicate and update their system as the dude hadn’t lived there for quite a while.
Real Estate Outlook: Worst is Over
Whew!
Had they only waited one day to post this…
RE Continental.
I have $8000 in tickets for this summers sojourn (gag). They are not ALLOWED to crash before then.
Although I may check into insuring myself against that.
Maybe I shouldn’t have used the word “crash”, substitute “go bancrupt”, I don’t need to jinx my family.
275 Lisoosh
I like Continental. If they crash I’m afraid Jet Blue will too. And I have tix for holiday season travel.
Grim,
Is it possible for you to do this for New Jersey?
thanks
http://bp0.blogger.com/_pMscxxELHEg/SDbl16_dmWI/AAAAAAAACBQ/iceB1M4__t0/s1600-h/EHSinventorySeasonalApr08.jpg
At least some congressmen have functioning brains..
Drill, Coast Haste (IBD)
“Energy Security: With the prospect of an oil shortage and $12 gas, the energy crisis is turning into a national emergency. One solution: Give states the option to develop offshore tracts.
Uncle Sam bans states from drilling in the Atlantic, Pacific and eastern Gulf mainly to protect the environment. Some 85% of the U.S. coastline is off-limits to energy production — including huge reserves off Florida’s coast, which China is exploiting in Cuban waters.
To change that, a lawmaker is offering a novel idea. Rep. Sue Myrick of the House Energy and Commerce panel wants to let coastal states decide whether drilling is environmentally risky. She has introduced a bill that would give coastal states that want offshore drilling the power to opt out of the Interior Department’s offshore restrictions.
And as a powerful incentive, Myrick, R-N.C., proposes cutting them (and adjacent states) in on the federal revenues from leases. Washington now collects as much as $8 billion a year in existing Gulf royalties, a figure that would balloon as coastal regions opened for exploration.”
Just read the North Carolina Cottages Sit Empty as New Yorkers Stay Home
http://www.bloomberg.com/apps/news?pid=20601093&sid=a4JboGbvjwwk&refer=home
Isn’t it funny we talk about a depression..or bad economy..and the big impact of everything is that we might have to cut back on our vacation house and spending….and people who own second homes actually have to slightly reduce their rentals…I like the part where the guy says he’ll skip the $400 golf outing… wow..times are tough.. :)
MrT Says:
May 24th, 2008 at 12:22 pm
ClubberLang: Yeah..but did you see the insinuation….NJ Shore is going to benefit from this effect….good for us…
[279] Jamil,
Sadly, ants are better at planning ahead
than this congresswoman. (thank god for two yr terms)
You cannot think for a minute that the problems created by one state do NOT AFFECT the nexy state, do you?
I mean, you know those little dotted lines delineating state borders on maps are only visual aides, right?
I mean, you can’t be thinking that what one state does will not affect it’s neighbors because those little dotted lines will prevent any disasters from spreading…, right?
And, of course, as a congresswoman on the energy and commerce committee, this woman knows that each state has it’s own department of offshore drilling, completely capable of handling all tasks required to engineer, build and operate drilling platforms next to the local ferris wheel…
And lastly, what do YOU think they would do with the oil…?
Give it to YOU?
282: Using your logic, states would have no rights since everything they do affect other states. Nuclear and coal plants, even low taxes affect the neighboring state.
If people in Florida (or Alaska) want to drill oil, this should be fine. China is drilling in similar distance from Florida already and I’m pretty sure China (and Cuba) could care less about any environmental standards so this is bogus argument. States can opt to use federal environmental regulations for oil drilling. There hasn’t been practically any pollution or leaks from massive US oil drilling operations (even during Katrina).
283 Jamil
There hasn’t been practically any pollution or leaks from massive US oil drilling operations (even during Katrina).
sorry man, but i have to call you out on this statement. Oil drilling is a dirty nasty business. ALL oil drilling creates some pollution, the question is how much. 2 minutes on google will give you more then enough examples.
#284, kettle1:
Investor’s Business Daily
“Foes have successfully cloaked their arguments against offshore drilling in eco-apocalypse, claim it will lead to oil spills. Fearing tar-ball-pocked beaches, the tourism industry has joined the greens in lobbying against such bills.
Their fears are unfounded. And politicians concerned about America’s energy security ought to do a better job educating the public with the facts. For example:
• Less than one one-thousandth of a percent (0.001%) of the 7 billion-plus barrels of oil that Washington has allowed to be produced offshore over the past 25 years has been spilled, according to the Interior Department.
• A whopping 63% of petro pollution in North American seas comes not from offshore rigs, but from natural seepage from the sea floor. Source: National Academy of Sciences.
• There hasn’t been a major oil spill from an offshore well since 1969 even though rigs since then have been lashed by Katrina and other major hurricanes.
Today’s drilling operations are safer and cleaner. Offshore operators are subject to at least 17 major permits and must follow 90 sets of federal regulations. Clean beaches can coexist with offshore production. The mammoth reserves can be captured with little risk to the environment.
In fact, the government estimates that 50% of our undiscovered oil lies offshore. It’s time to let states go after it.”
I would rather have US companies drill oil near US cities than Chinese.
Jamil,
pollution and environmental degradation encompasses much ore then just crude oil spilt in the surrounding environment.
I am not necessarily against the drilling, but the potential negative effects are being massively understated.
#249
NJpatient– same here.
Regarding oil drilling:
Lets say Maryland decides drilling is o.k. with them, and they allow drilling and an accident occurs. Given the currents in the Mid-Atlantic, oil from such a spill will likely affect Del, NJ, and NY, and could affect RI and MA as well. If those states did not want to take the risk, they may still suffer the consequences, even though our friends in MD will get all the benefit from the leases.
beaches are not the only concern with offshore drilling. also have to consider how it will affect fish. fish populations are already precariously low
# 128 “My understanding is the US has sufficient coal to provide for all if its non transport energy needs up to 200 years at current demand growth”
And there lies the rub, “At current demand growth.” Once we increase our use we decrease the length of time we have. In the final analysis, we need to move beyond fossile fuels sooner or later so it might as well be sooner.
“non-transport energy needs” is not a problem as there are plenty of alternatives for it, ie nuclear, coal, wind/solar/ocean tides etc.
Unfortunately, there is strong political opposition for safe energy production, especially wind, from learjet liberals.
Anyway, if we get rid of that fat drunk driving senator who escaped the crime scene and let Mary Jo to die, wind farms can be built again in northeast, even if they block the view from learjet mansions.
291 jamil,
agree with you on that point
From an e-mail news alert. The story can be found via google news.
SAN FRANCISCO (Reuters) – The city of Vallejo, California, filed for bankruptcy on Friday, a move signaled by its city council earlier this month as it struggles to avoid running out of money amid steep city personnel costs and sliding revenues from a housing slump.
#291 jamil,
I agree too. I would rather see wind farms then oil rigs off the coast.
I agree with wind farms.
(have a new kitten, typing is crazy!)
Call me crazy, but I think wind farms are awesome looking. Like something from the future. Awesome in like I’d pay EXTRA to see it from my windows.
Sort of cool like Luke Skywalker’s childhood home…clean and precise, nothing superflous, quiet but with background white noise as a calming agent, like water over rocks or crickets in the evenings…
I cannot believe Kennedy fought it. I would’ve been front and center to sign up to put them outside in view of my house.
On windfarms and wave generators, I too have a high-tech industrial aesthetic. I find them much more attractive than mcmansions with their faux brick fronts.
Re Kettle’s commute, I understand there are even professional/white collar/knowledge workers that need to be “onsite”. Some engineers, and currently all surgeons being examples. Although, there are some neat new remote control/robotics that might let surgeons due their job over network connection, as good if not better (practice motion, get perfect then playback).
However, if reduce aggergrate demand, then gas should be cheaper for you and others. Even if the per gallon cost isn’t less, than the total commute cost should be less due to reduced traffic and thus better mileage.
I have seen this already, over the last few months with the higher gas and tolls. Of peak traffic to city has been dramtically reduced.
First holiday weekend traffic report:
CNJ and Philadelphia traffic to the Poconos was non-existent from 8 am through 11 am.
Almost no trucks were on the PA Turnpike.
We went to a large cemetery in the old home town. I wanted the little one to see thousands and thousands of flags the Legion puts in. An old guy told me there weren’t so many people planting flowers this year.
http://www.yomiuri.co.jp/dy/business/20080525TDY08001.htm
Riddles lie behind subprime crisis, aftermath
“…the next policy action that the United States must undertake in order to wrap up the crisis is to write down home mortgages on a grand scale.”
251 jamil
Wrong again, but what’s new…
You must have missed my post.
285 jamil
If Investors Business Daily’s claim that 7 million barrels of oil have been spilled in offshore drilling constitutes the argument that the process is clean, then we can dispense with the argument that it’s dirty: that’s already been made by Investors Business Daily.
250 rich
home now – only three transactions teed up today – but have the gin and tonic in hand at last, heavy on the lime. Tomorrow’s another long day.
260 grim
Thanks for the good Philly info. I have on occasion searched for a philly RE source that can carry half the water of this site (or any water at all) with no luck. If you (or Pat or any of our eastern PA readers) can direct me to any good independent RE sources for PA/Main Line/Philly area, I’d be grateful. I suspect I may be SOL, however.
263 hehehehe
Don’t confuse jamil with facts.
The same goes with drilling in Cuban waters, because the trade embargo is too precious a political football.
287
Sorry, skep-tic
s*cks.
jamil – listen to shore and skep at 288/89. Those fellas aren’t bleeding heart liberals, and they don’t shave facts to fit their debates. They also know what “logic” means.
As to wind energy – I’m all for it. Let’s both of us speak up in favor then, right?
off to bed.
This has been great.
We should do it again sometime.