Tue 1 Jul 2008
From the Press of Atlantic City:
N.J. economic outlook sinks as joblessness rises
The Federal Reserve’s forecasting gauge for New Jersey’s economy has turned negative for the first time in 17 years.
The leading index of the Fed’s Bank of Philadelphia predicts the state’s economy will shrink 0.2 percent during the next nine months.
Jason Novak, senior economic analyst for the Philadelphia Fed who oversees the forecast, said Monday the outlook has dimmed mainly due to joblessness.
While the index includes information on housing permits, interest rates, business delivery times and more, the labor component is driving the decline. Joblessness in New Jersey jumped from 4.9 percent to 5.4 percent in May.
“It’s just this unemployment rate issue, that’s what concerns me,” Novak said. “It looks a lot like Pennsylvania and Delaware do.”
The weaker economies in those states turned their forecasts negative last year. He said New Jersey’s worsening outlook could be a blip that might be reversed next month or the start of a prolonged slowdown similar to neighboring states.
Building permits fell sharply in the state in the May index, released Friday, and delivery times turned negative. The most positive measure for the month was a slight increase in payrolls, Novak said.
From Bloomberg:
Broad Says U.S. Economy in Worst Recession Since World War II
Billionaire investor Eli Broad said the U.S. economy is in the `worst period’ of his adult life as a housing market recovery remains “several years” away.
“This is worse than any recession we’ve had since World War II,” Broad, 75, said in an interview yesterday. Broad, the founder of homebuilder KB Home, said the U.S. should avoid a depression on the scale of the 1930s because the country now has sufficient “safety nets.”
…
Selling off vacant, unsold homes could take “several years,” Broad said.
…
“It will turn around in due time,” Broad said of New York- based AIG. “It’s not going to be overnight.”
From the Star Ledger:
Bush signs bill extending jobless benefits
Jobless New Jerseyans who have exhausted their state unemployment insurance benefits will get up to 13 additional weeks from the federal government under legislation signed yesterday by President Bush.
…
About 108,000 Jerseyans are collecting unemployment, state labor commissioner David Socolow said yesterday. The maximum time to collect is 26 weeks; the federal extension is 50 percent, meaning an individual who was eligible for the full 26 weeks will get 13 extra weeks; someone who was eligible for 22 weeks will get 11 more weeks.
The amount of the check is 60 percent of the average weekly wage during the worker’s base year, up to a maximum of $560 per week. The payments are subject to federal, but not state, income taxes.
Each week, 3,000 New Jerseyans exhaust their unemployment benefits, and the extension will provide badly needed income to those who still haven’t found work, Socolow said. And this money will stimulate the economy: “The unemployed typically spend every dollar on basic family needs,” he said.
The extra income will shore up a job market that has limped to a standstill: In May, the state jobless rate surged to 5.4 percent, from 4.9 percent, and the state’s 4 million-plus labor market has shed 10,900 jobs since January.
(Note: How exactly, do jobless benefits “shore up” a distressed job market? They may shore up a weak economy, but the job market? If anything, they provide an incentive to stay unemployed, perpetuating that weak market.)
#2 Wow. Some great news for me. When I get the ax on 8/29 I can have cash rolling in for 9 months.
I think I’ll take my unemployment check and launch my own investment firm. I’ll name it Bairen Investments (BI in honor of bi’s market timing skills $40 oil and rally in financials comes to mind) Maybe I’ll never have to work again.
你好。
When I get the ax on 8/29 I can have cash rolling in for 9 months.
I’d prefer to get the axe in the spring, personally. I’m not much of a skier anymore.
I dont know 2K a month might not go that far for most of us.
From the LA Times:
Critics blame Countrywide’s Angelo Mozilo for housing fiasco
Angelo Mozilo struggled last week to bid farewell to No. 1 home lender Countrywide Financial, the company he led for 39 years, only to see it toppled by misadventures in high-risk mortgages.
The usually silk-smooth Mozilo garbled words and at one point knocked over his microphone at a special shareholder meeting.
Looking grim and sounding resigned, he said the era of independent home lenders such as Countrywide was at an end. Still, he added, “Countrywide is a great American story.”
But as Bank of America takes over Countrywide today, some observers are portraying Mozilo as the headstrong protagonist in the lender’s saga who became blinded by ambition and pride — and helped create the national housing fiasco.
I dont know 2K a month might not go that far for most of us.
No golden parachute?
I thought Mass. was already headed out of their slump. What gives?
From the Boston Globe:
Mass. home foreclosures more than double in May
Home foreclosure deeds more than doubled in Massachusetts in May, although a new state law has yielded a temporary decline in foreclosure petitions, the first step in the process. Boston-based publisher of real estate data Warren Group said deeds - the final step in a foreclosure - rose to 1,405 in May. That’s up from 677 in the same month a year ago. Petitions to foreclose fell nearly 82 percent to 390 compared with the same month a year ago. But the decline is temporary, because of a foreclosure-prevention law recently approved by state lawmakers that creates a 90-day cooling off period before foreclosure proceedings can begin in court. Previously, those proceedings could begin within 30 days. after a borrower went into default.
Thought London was prime too..
U.K. House Prices Drop Most Since 1992, Manufacturing Contracts
U.K. house prices fell by the most since 1992 and manufacturing unexpectedly contracted in June as banks starved the economy of loans and commodity prices soared, bringing the nation closer to a recession.
…
“The economy has yet to feel the full effect of the credit crunch, and there are negative effects from the high oil price,” said Lena Komileva, an economist at Tullett Prebon in London. “Recession is a great possibility. We’re getting closer to a 50 percent chance.”
…
House prices fell 0.9 percent in June, the eighth consecutive monthly drop, according to Nationwide. The pace of decline on the month was slower than the 2.5 percent drop in May, the most since the index started in January 1991. On the quarter, Northern Ireland led annual declines.
Luxury-home prices in central London, the world’s most expensive location for prime real estate, fell for a second month in June as sales slumped, Knight Frank LLP said in a separate report.
“I can’t see this price decline coming to an end any time soon,” said George Buckley, an economist at Deutsche Bank AG in London who predicts values may fall at least 10 percent this year. “The biggest driver in prices tends to be approvals and yesterday’s figure was quite shocking.”
From the WSJ:
Lehman Hits Lowest Level
Since 2000 Amid Buzz
By SUSANNE CRAIG
July 1, 2008; Page C1
Lehman Brothers Holdings Inc. shares tumbled on Monday to their lowest level since 2000 on yet another swirl of speculation that the Wall Street firm is in trouble, including possibly having to sell itself for a bargain-basement price.
Tuesday morning triptych..
From MarketWatch:
Saudi King Abdullah blames speculation, taxes for oil price
Saudi Arabia’s King Abdullah said in an interview Tuesday that speculation and taxes are to blame for record oil prices, not output levels from the world’s largest reservoir of crude. “We have nothing to do with the rising prices of oil in the world and there might be some other factors contributing to the increase, such as a few people trying to play with the market to serve their personal interests while some countries are increasing duties on oil products, except on those which they produce locally,” King Abdullah said in Tuesday’s edition of the Arab Times.
From the WSJ:
Read My License Plate: It Cost Me a Fortune
Oil-Rich Persian Gulf Drivers Take Vanity Tags to a Whole New Level
By MARGARET COKER
July 1, 2008
With oil near record highs, the Persian Gulf is awash in cash, stimulating a return to some very conspicuous consumption.
Ferrari S.p.A. says sales in the Middle East leapt 32% last year. BMW Group’s Rolls-Royce Motor Cars says the UAE, a country with a population of just 4.6 million, is now one of its top five global markets. All those expensive cars clogging the roads have given rise to another must-have status symbol: a prestigious license-plate number.
…
Hundreds of men in starched robes descend on an opulent hotel here to vie for the most distinguished digits. Earlier this year, Abu Dhabi businessman Saeed Khouri made headlines and the Guinness Book of World Records when he paid $14 million for the tag simply sporting a “1.” (The auction can be viewed on YouTube.) His cousin, stockbroker Talal Khouri, paid $9 million for “5″ — the second-largest sum ever paid for a license plate.
From the Indianapolis Star:
Drilling offshore isn’t answer to oil-price problem
It would take from eight to 14 years if an oil company started now before any new offshore oil would begin to flow.
Using White-House-released figures predicting a maximum average annual production of about a million barrels, we could expect to see an addition of a little less than 1 percent to the world’s current daily production of oil, resulting in a not dramatic downward pressure on prices in a tight market, if we have a tight market 10 years out.
There is not an isolated U.S. market for oil. There is only a world market that has to be affected, and when people say this new drilling could increase U.S. oil production by 7 percent, that’s good news primarily for those in the oil-production business.
TANELLI BLASTS NEW STATE COAH RULES
Council President Steve Tanelli said he will offer a resolution for the borough council at its July meeting condemning the state’s new Affordable Housing rules as being, “far beyond reasonable and an economic threat to the community and other surrounding communities.”
Tanelli said COAH-3 will make it difficult to attract commercial tax ratables to the community at critical time when the borough is trying to map a new future for the Meadowlands portion of the community.
He noted that the state housing sales for the first quarter of the year dropped by 30 percent and that home prices are falling throughout the region. “In the face of one of the worst housing recessions in almost a century, the State of New Jersey – in one of the poorest decision it could possibly make — is going to mandate the construction of hundreds of thousands of units of additional housing. All that will do is drive down the value of homes for existing homeowners, whose life savings are tied up in their property values.”
More layoffs coming for CIT, err, Lone Star…
From the Star Ledger:
CIT sells home-lending business for $1.5B
Commercial finance firm CIT Group is selling its home lending business to Lone Star Funds for $1.5 billion, reducing its exposure to a line of business hurt by the soured housing market, the company said this morning.
CIT, of Livingston, has roughly 1,500 employees in New Jersey. One of two servicing centers for the home lending business is based in Marlton.
Lone Star, a collection of private equity funds with offices in Dallas and other cities, will assume about $4.4 billion in debt from CIT as part of the deal. Some 300 employees work for CIT’s lending unit servicing centers, which also includes a location in Oklahoma.
Oceanport, nonprofit spar over tax bill
A not-for-profit housing group until now had been embraced by Oceanport officials for making available a handful of apartments at below-market rental rates, helping the borough put together an affordable-housing plan to meet state requirements.
But the honeymoon ended when the Affordable Housing Alliance of New Jersey filed for an exemption to get out from under its $9,000 tax bill on a 1-acre property where it has six rental units on Main Street.
“All that will do is drive down the value of homes for existing homeowners, whose life savings are tied up in their property values.”
SG,
Yelling fire in the theater because he didn’t like the movie. Affordable homes created under COAH typically come with income limits and resale contingencies. How many recent homeowners would qualify for a COAH home? Very few. It is arguable that these homes aren’t even part of the broader housing market.
“You should really see a professional who could help you with the massive cognitive dissonance from which you suffer.”
njp [336], last night.
I agree 100%. He should seek the help of a professional, not being sarcastic.
It seems like he suffers from Dissociative Identity Disorder {Hershel Walker}. One minute the NJ RE market is on fire, then his friends are buying at 50% off peak.
It is possible, Frank’s right, we are in a raging bull and a decelerating, bear market at the same time?
In the past month, the cost of insuring against default on the bonds of Lehman Brothers, Merrill Lynch and other big banks and brokerages has surged, threatening to exceed the stress levels prior to the Bear Stearns debacle. Spreads on inter-bank Libor and Euribor rates in Europe stubbornly persist at or near record levels.
Credit default swaps (CDS) on Lehman debt have almost doubled from around 130 in late April to around 250 now, while Merrill debt has spiked to 196. Most analysts thought the tide had turned for such broker dealers after the Fed invoked an emergency clause in March so that they could borrow directly from its lending window.
However, the Fed may now be exhausting its potential. It has swapped almost US$300 billion of 10-year Treasuries for poorer quality collateral, and provided term auction credit of $130 billion. One senior financial-services practitioner commented that, “The steep rise in swap spreads this [month] is ominous. The deterioration is in stark contrast to what investors have come to hope since March.”
Lehman Brothers took write-downs of just $200 million on its $6.5 billion portfolio of sub-prime debt in the first quarter even though a quarter of the securities had “junk” ratings, typically worth a fraction of face value.
http://www.atimes.com/atimes/Global_Economy/JG02Dj03.html
17 BC
What was the trauma that would have brought this on? Losing money in the market?
What was the trauma that would have brought this on?
I’ve seen this behavioral transformation here before…
It almost always stems from buying a house. I call it “Bear Capitulation Disorder”.
lost [19],
Anxiety, schizophrenic, stress, depression, etc.. Sound like traders, blown out of their positions?
Maybe this will help him?
http://www.amazon.com/gp/product/1416537481?ie=UTF8&tag=realmentalhea-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=1416537481
Stock futures on Tuesday pointed to a sharply lower market open, weighed down by climbing oil prices and investor wariness of over a slump in financial stocks in Europe. Wall Street was poised for a rocky start after the Dow finished flat on Monday but suffered its worst first-half of the year since 1970 as record oil prices, a persistent credit crisis and sluggish profit growth battered global equity markets.
From the Star Ledger:
New mayor looking to pay off her debts
Much of Wilda Diaz’s first day as Perth Amboy’s new mayor will be spent raising money during three fundraisers today to help pay off the $60,000 debt her campaign amassed while pulling off an upset victory over the city’s longtime mayor, Joseph Vas.
Before her noon swearing-in ceremony at Perth Amboy High School, Diaz will host a pre-inaugural champagne brunch at the Raritan Yacht Club, at which supporters have been encouraged to do nate up to the maximum of $2,600 to her campaign account. In the evening, Diaz has scheduled a $250-a-person cocktail reception, followed by a $125-a-person gala, both at Seabra Armory restaurant.
…
Diaz said she wanted to settle her campaign debts as quickly as possible to allow her to focus on her new position as mayor.
“I don’t want to worry about it,” Diaz said. “I want to stay focused on my job. I don’t want to owe anyone for anything when I come in.”
You’ll owe, maybe not dollars, but you’ll owe.
BC Bob,
Have you studied economics by any chance? The idea is to buy low and sell high.
Banks are unloading their mortgages at less than 50% of outstanding balance, you buy them in bulk and sell the properties retail. Get with it, instead of commenting on a blog.
21 Bob
Yes I might agree. But DID or formally called Multiple Personality Disorder is a disorder brought on by very serious trauma. It’s a defense mechanism to protect the psyche. One personality goes off and does things that the “main” personality doesn’t know about. Frank’s writings may be rambling but he is aware that he writes for both sides.
“U.K. House Prices Drop Most Since 1992, Manufacturing Contracts ”
Who cares about U.K. prices, Manhattan prices have increased 30%+ this year, British are buying in the US instead of UK.
#25 frank: So when did you close on your house, was it 2007, 2006, or perhaps even this year?
#27 frank Ah no, prices in Manhattan did not rise 30% this year.
And the UK interest is waning in Manhattan real estate, as they deal with their own set of problems (similar to our own) across the pond.
“The idea is to buy low and sell high.”
Frank,
Brilliant. Why don’t you comment on your 2005 RE purchase.
#20 grim; Will he claim his wife made him buy the hosue? Some men use that excuse, in an attempt to shift the blame.
Spousal triggering is typically a precondition. This is one of the key reasons you see the tremendous cognitive dissonance that is so characteristic of the disorder. It’s not that the bearish values have been given up, it is that they’ve been repressed in order to appease the desires of the spouse. This results in a constant psychological struggle defined by the need to justify the purchase.
32 grim
Well said.
JB [32],
Richard.
BC (17)-
“It is possible, Frank’s right, we are in a raging bull and a decelerating, bear market at the same time?”
Hey, if we can simultaneously have raging inflation and a deflationary credit crisis, side-by-side…
It’s a great time to buy a home? Maybe it’s a better time to be a schizophrenic.
#34 - That guy flipped on a dime.
lost (26)-
Is “just plain stupid” a legitimate medical diagnosis?
It ought to be.
37 Clot
I wish it were. But I’d lose my license if I wrote that in a report somewhere. :)
I think Pete Townshend put it best:
“I had to go to this psychiatrist every week. Every Monday. He never really knew what was wrong with me. He said I wasn’t mad or anything. He said there’s no such thing as madness. I told him he should try standing in a queue at Brentford football ground on a Saturday morning, I thought it might change his mind. My dad put it another way. He said I changed like the weather. One minute I’d be a tearaway, next minute all soppy and swoony over some bird. Schizophrenia, he called it. Nutty, my mum called it.
It used to be alright at home. My dad would get pissed out of his brain every single night, and when the telly finished he’d storm out of the house like a lunatic to get to the Eel and Pie shop before it closed. He’d come home with enough for an army. I never liked the eels, just the pies and mash, and the liquor. My friend Dave said that eels live on sewage. My dad must be full of it, he used to eat five bleeding cartons of eels a day. I don’t think he ever twigged I was doing five cartons of leapers every day. Each to his own sewage.”
http://www.quadrophenia.net/thestory/dialogue.html
“Frank’s writings may be rambling but he is aware that he writes for both sides.”
lost,
He must be the king of straddles.
Frank sure comments allot about Hoboken. I suspect he is a Kannekt Klown A.K.A. realtor from the town that brought us Frank Sinatra and the 750k 2 br condo with 12k in taxes and a view of a brick wall.
How is the condo flipping going these days Frank?
Bollocks, there was no lapse, simply busy eating eels and pie.
Moody’s admits lapses in European debt ratings
Moody’s Corp. on Tuesday said its credit-ratings agency unit has “initiated employee disciplinary proceedings and accelerated measures to strengthen its rating and monitoring processes” after a review of its ratings procedures for European constant-proportion debt obligations. The company has concluded members of a European CPDO monitoring committee engaged in behavior contrary to Moody’s code of professional conduct, according to a statement. “In this instance, monitoring committee members considered issues not relevant to the rating process in reaching their conclusions,” said Moody’s Chief Executive Raymond McDaniel. “In response, we are taking immediate and appropriate action to address the lapse in our rating process and to ensure that a similar event does not occur again.”
Capitulation is at hand. Brace Yourself Bridget this won’t hurt a bit.
Thanks from yesterday, clot…
I’m buying RE only, no books.
I get conflicting signals from this guy. Business hardly running, no computers, lights out in front half of building, etc. Was paying elec bill with his cc when I arrived there to meet him.
Threw a lot of $$ at the place. Nice job, too. Fencing, gates, lots of paint, polished cement floors, tiled offices, landscaping, several thousand feet of air lines, new power drops/panels, new heating…
Probably had passion at some point but got caught not staying up to date and started the slow bleed of customers…
I originally thought he was marinating in money, but simple things are leading me away from that idea. Using the cc to pay bills, him telling me the SBA is crap (?) and the bank wouldn’t give him a 50K line of credit (why would he need?), told me he’s tired of chasing his money and “always being behind the eight ball in his bills”…
Anyhoo, he paid 270K in 2001 and he’s having a professional appraisal done.
He said he already turned down 950K from “the co next door”, so I’m assuming he’s sitting on his own personal goldmine with hands and legs crossed.
Sigh.
I’m stiiiiiiiiiill lookin’…
Clot [39],
I went back to the doctor
To get another shrink.
I sit and tell him about my weekend,
But he never betrays what he thinks.
Can you see the real me, doctor?
I went back to my mother
I said, “I’m crazy ma, help me.”
She said, “I know how it feels son,
‘Cause it runs in the family.”
Can you see the real me, mother?
Clotpoll [39],
“Out of my mind on the 5:15!”
“Zoot suit, white jacket with side vents
Five inches long.
I’m out on the street again
And I’m leaping along.
I’m dressed right for a beachfight,
But I just can’t explain
Why that uncertain feeling is still
Here in my brain.”
God, I love that album.
Frank,
So you’re saying your “friends” are a corporation of sorts that are purchasing multiple homes in foreclosure (not the mortgages as you state) from a lender at 50% of market value and selling them for 80% of market value?
Rumor is Lehman is having a Bear of a problem.
“Rumor is Lehman is having a Bear of a problem.”
PB [50],
This kind of a problem?
http://www.flickr.com/photos/fintag/1028442949/
#48 gary: I know that you are finished, and done, with real estate. However, you still have obligations to the board.
I asked you late last week, to please post anoherr open letter to realtors/sellers;that request was not completed.
I will ask a second time that you honor your obligations to the board, with an open letter to realtors/seller.
Do not limit your use of invective and profanity.
You cooperation in this matter is greatly appreciated.
C’mon Benny, we have a rogue CPDO analyst on the loose out in Europe, haven’t you heard? No cut?
“Capitulation is at hand.”
John,
The vix isn’t even close to same room as it was in Jan and March.
#24
She must be new to politics. Hasn’t she heard of kickbacks? It’s the New Jersey way.
Great. Not only do regularly I not get work done because of this site, now I have to go find Quadrophenia. I’ve got the vinyl.
The vix isn’t even close to same room as it was in Jan and March.
Speculators not in that trade anymore.
#41 Sean; and a view of a brick wall.
And then there is that one that sits in the middle of Hoboken train tracks, and it has balconies too!!
Oh and at night it looks pretty empty, no lights, noc urtains. Perhpas Frank can buy and flip thsoe too.
January 2006,
Peter Schiff on CNBC,
Is is just me or is this the only guy that actually makes sense? His explanation makes a simpleton like me see the light.
http://www.youtube.com/watch?v=1J51I2zJ1r0
Regarding Unemployment benefits:
R Patrick Says:
July 1st, 2008 at 7:22 am
I dont know 2K a month might not go that far for most of us.
@k IN NJ is just not enough.
So I wounder: - can I move out of NJ and still collect unemployment benefits - move to PA for cheap rents???
My lease does have lost job clause.
#59 MM: Can you give us a brief run down on what he is saying?
Al
I believe as long as you worked in NJ you are entitled to those benefits no matter where you live. You need to make sure the unemployment office in NJ is aware of your address change so you get your checks though.
When Lehman told the market that it didn’t need to take write-downs and didn’t need to raise equity and then ONE week after this announcement it fired its CFO and raised capital it said it didn’t need, in order to pay for write-downs it said it didn’t have.
Sounds like a winner to me!
Patrick.net has nice chart today on Mortgage securitization.
http://patrick.net/wp/?p=616
From the image above, it looks like the bundling of mortgages into mortgage-backed bonds has pretty much disappeared, and that jumbo lending has suffered about as much as other kinds of lending.
3b,
I’m working on that obligation. :) Let me find a quote from some sh*thead realtor and/or seller and I’ll point out how much of an id*ot they really are.
BC Bob,
My 2004 sale in Hoboken would have been up 75%, my 2005 purchase is flat or up.
65 Gary
How about John’s story about the realtor’s application with how much one makes, what kind of car they drive, etc.?
Trans-fats to keep NJ economy lubed.
NJ BAKERS’ FAT CHANCE
New Jersey bakers are hoping the Big Apple’s trans-fat ban means more dough for them.
As of today, the city’s prohibition on hydrogenated oils extends to all baked goods, but no such restrictions exist across the river in the, uh, Larden State.
“We hope this will be good for business,” said Sal Picinich, at Carlo’s Bakery in Hoboken.
Noting he will still be baking “the old-fashioned way,” Picinich said, “Anyone who needs their trans-fats fix should know we’re only a short drive or PATH ride away.”
#6 R Patrick
2k a month in NJ isn’t much, but my wife works. Also won’t have to pay $2,500 a month in daycare if I’m out of work.
I’d rather work though.
” my 2005 purchase is flat or up.”
based on what?
Rich In NNJ,
“So you’re saying your “friends””…
there are buying mortgages at various states of foreclosure, completing them and then selling the properties.
Look at the IndyMac sale from yesterday, 20-60 cents on the $, look the CIT sale today, there’s serious money to be made out there.
Where there is distress there is opportunity.
“based on what?”
Based on the homes that are selling around me, it could even be up based on the few homes that sold in the last month.
lostinny,
I must’ve missed that story… work has me tied up right now but I’ll come up with something. lol!
clot: 37
I see it every working day of my life…
Every single working day….
Darwin is spinning in his grave.
sl
http://www.cnbc.com/id/15840232?video=781849815&play=1
Unbelivable. CNBC squawk box bowed down to Peter Schiff and agreed with everything he said. They were actually making fun of the other two morons they put up agaist him.
Ladies and gents to be this is capitulation. Peter Schiff owns squawkbox!
http://www.cnbc.com/id/15840232?video=781849815&play=1
From MarketWatch:
U.S. June ISM manufacturing index 50.2% vs 49.6% in May
#72 frank: Why didn’t you just tell your wife no? Are you afraid of her?
“U.S. June ISM manufacturing index 50.2% vs 49.6% in May”
Where’s the gloom and doom? I would expect ISM to drop to 20 based on this blog.
From MarketWatch:
U.S. May construction spending down 0.4%
U.S. April construction spending down revised 0.1%
U.S. May private construction spending down 0.7%
U.S. May public construction spending up 0.4%
U.S. May construction spending down 6% year over year
U.S. May private residential construction spending down 1.6%
#65 gary: Thank You.
#77 frank See #78.
3B,
My 5% Euro CD have earned me close to 20% due to the dollar devaluation. Why would anyone put money in US CD’s or keep their wealth in USD is behind me.
If one puts his DP of say 100K in EuroPacific Capital even today, with the collapse of RE and USD in 4-6YRS you’ll buy your BC home in CASH.
81 MM
Is it legal to invest in Euro CD’s?
Interesting..US Oil Consumption Falls Back To 2002 Level
http://www.guardian.co.uk/business/feedarticle/7621544
“The revision, which showed April demand was the lowest for the month since April 2002, came even before gasoline prices surged to new records in June.”
82 lisoosh: Hmm, why would it not be legal?
You can invest in Euro CDs in the US, or open an account in Europe..
81: “Why would anyone put money in US CD’s or keep their wealth in USD is behind me. ”
The long-term currency risk cuts both ways. Deficits and economic challenges in (many countries in) Europe are even worse than in the US, so I wouldn’t tie all my money in Euros (especially if you live outside Europe).
What a mugshot..
Did fire chief let crew fill up at taxpayers’ expense?
#59 make money,
Schiff is the man when it comes to forecasting and common sense. I have an account with his firm, never felt safer, never been happier with my gains. Everyone disagrees with him on TV, yet he’s the only one who’s consistently right. He’s obviously making ridiculous amounts of money right now.
84 Jamil
I am lostinny. Lisoosh is another poster. Thanks.
I’m asking because I don’t know anything about investing in Euro CD’s.
kettle, I assume you saw this:
http://tinyurl.com/5cdxem
“global demand for oil products has surpassed supply in every quarter since the fourth quarter of 2006, according to the U.S. Energy Information Administration.”
BC Bob Says:
July 1st, 2008 at 8:16 am
njp [336], last night.
It is possible, Frank’s right, we are in a raging bull and a decelerating, bear market at the same time?
Bost:…but where are all the loose women?
Frank is definitely…..Delivered Vacant Frankie T.
lostinny: sorry, I was careless. Anyway, at least for now, it is legal to invest in non-US denominated assets (This may of course change in the future).
http://money.cnn.com/2003/06/02/pf/expert/ask_expert/
Are there any ways an individual investor can profit from the dollar’s downtrend?
(2003, but should stillbe relevant)
10 grim
“Thought London was prime too..”
Surely pretorius has an explanation.
Are you sure that article was about the London that is in England? Perhaps they meant the London that is in Las Vegas…
70 septic,
based on the zimbabwean dollar … which is currently at about 8000% inflation
Booya for the shorts…
Quarterly / Trailing 12 Months
DJI -7.44% / -15.35%
S&P 500 -3.23% / -14.86%
Nasdaq 0.61% / -11.92%
Leh. AGG -1.08% / 7.13%
Frank (71),
I don’t believe anyone here would disagree that if you know what you’re doing you could still make a buck in real estate. The examples you post are those that are the buying and selling of distressed property under market value.
Your first assertion that NJ RE is hot does not correlate to under market value sales. Period.
25 frank
“Banks are unloading their mortgages at less than 50% of outstanding balance”
So you were wrong yesterday when you said that NJ property is grossly overpriced? Wrong by at least a 50% margin?
91 jamil
Thanks for the link. Of course, if I were to do that, I’d have to find a bank offering more then the whole 3% I’m currently getting through ING for me to feel it’s worth it.
27 frank
“Manhattan prices have increased 30%+ this year”
Link?
Or does that stat smell musty because you found it in your butt?
nj patient ,
yes i did, thanks for the heads up though :)
did you want my e-mail address last night? or did you just not like that my blog doesnt have an e-mail link?
From MarketWatch:
Mortgage insurer may lose top status with Freddie
The mortgage insurance business of Old Republic International may soon lose its position as a top insurer with housing-finance giant Freddie Mac.
68 grim
“Anyone who needs their trans-fats fix should know we’re only a short drive or PATH ride away.”
What a maroon. It’s not taste, it’s cost.
They’ll ride out on the path to save 10 cents on a cake?
Come for the cake, stay for the fries.
71 frank
Can’t go into it, unfortunately, but now I know for a fact that you’re completely full of crap.
Unfortunately, the weather is too nice.
jamil
“Interesting..US Oil Consumption Falls Back To 2002 Level”
Definitely. Perhaps what is most interesting about it is the degree to which it indicates that US demand no longer drives global demand.
But it also puts the lie (yet again) to frank’s contention that US consumption habits haven’t changed.
84 jamil
“The long-term currency risk cuts both ways. Deficits and economic challenges in (many countries in) Europe are even worse than in the US, so I wouldn’t tie all my money in Euros (especially if you live outside Europe).”
I would echo that caution at this point.
From the Star Ledger:
AAA sees fewer cars on road this weekend
#72
““based on what?”
Based on the homes that are selling around me, it could even be up based on the few homes that sold in the last month.”
Please show us a few concrete examples. 2005 sold price vs May/June 2008 sold price.
86 ben
“He’s obviously making ridiculous amounts of money right now.”
That much is clear from the grin on his face this morning talking to the clowns on CNBC
#72
based on your claims so far, I would expect you could produce many examples of 30-50% gains
99 ket
The former. Can you have grim forward to me?
Investigative journalist Seymour Hersh believes that the United States may be closer to armed conflict with Iran than previously imagined.
NPR
http://www.npr.org/templates/story/story.php?storyId=92025860&ft=1&f=1001
got gold?
NJ patient,
i passed the request to grim this morning
From MarketWatch:
Worker confidence falls in June, survey says
For the first time in five years, more workers are at companies that are laying people off than are at companies that are hiring, according to a monthly survey of worker attitudes released Tuesday by polling firm Rasmussen Reports.
The Rasmussen employment index fell by six points to a record low of 78.6 in June. A year ago, the employment index was at 101.5.
In June, 20.9% of workers said their bosses were hiring, while 21.5% said their employers were laying people off. A year ago, 30.3% said their firms were hiring and 15.1% said they were firing.
Meanwhile, the number of people who said they were worried about losing their jobs rose to 22.1% from 21.2% in May.
Slightly more than 50% said their personal finances are getting worse, while about a fourth said their finances are getting better.
113 ket
received.
Glen Rock break-in story is incredibly disturbing.
Is it legal to invest in Euro CD’s?
Lost,
Holler at someone at EuroPacific and they’ll brake it down for you. You take your USD buy Euro’s and use those Euro’s to buy a CD.
I would look into Silver and Gold at this point though as the world will search for a new reserve currency and Euro is not a lock due to it’s own troubles.
my two cents.
India consumes 30% of the World’s Gold. The numbers coming from India don’t bode well for continued consumption at this pace.
…unlocked rear sliding glass door
Never liked these doors. Always in the rear of the house (out of view) and easy access. More so when left unlocked.
I saw a news story a while back saying that they used gold in marrage cerimonies in Iraq.
A “gold cerimony” was required in which the soon to be husband purchased jewelry for his bride and presented during the event.
If the bride and her family did not accept the offering then there would be no wedding. The gold was a sign of the husbands wealth and indicated the stability of the marrage.
I don’t know if India practices this type of behavior but it could be the reason why so much gold is consumed there.
I think your contributing to out-of-wedlock births if you buy into gold :)
118 NNJ
well, that is a good thing for people who hold gold.
On a side note, land fills may be the next hot properties! the average concentration of various precious metals and other industrially useful materials in land fills is approaching the average concentration of the same materials in natural mines.
the bonus is that we already know where the land fills are!
Gold indicates the Husbands ability to provide for the wife and kids.
Gold is also a lot more transportable, in the event of natural disaster or war, gold is better than currency or real-estate.
grim
is there a link to the story that i missed?
the glen rock break in?
“Bost:…but where are all the loose women?”
All RE agents are like loose women, you can buy their services for a high price.
59 Make money, have your read “Crash Proof” yet…I have not had time, maybe on vacation next week. Just finished Steve Leebs “the coming economic collapse”
#123 kettle: northjersey.com, click on my towns, click on Glen Rock.
Police originally believed that the victim knew her attacker, but now believe that she did not.
They also claim to have physical evidence, and hope to apprehend the attacker quickly.
I heard bad things about Perth Mint. Some of the rumors include them not having enough gold to back issued certificates.
regarding glen rock break in…
think daddy bought the daughter one of these yet???
http://www.mossberg.com/products/default.asp?id=22
NJrebear,
That is a very deep hole you are about to step into. Do some goggling, at least 1 large bank in NYC was sued over the same thing. if you really want the gold physically accessible in an emergency then buy a safe and hold the physical metal at home
kettle1 ,
I agree. IOUs don’t count when it comes to physical gold.
Rich:When you get a chance, can you give me the address and property taxes for njmls#2822790 (Oradell) Thanks.
re: gold
if we are in such a disaster scenario where you cannot even lilquidate your investment accounts, I do not understand what value physical gold will have at that point
Another reason why Florida schools bomb on tests
“Live bombs haunt Orlando neighborhood”
http://www.cnn.com/2008/US/06/30/backyard.bombs/index.html
From MarketWatch:
Ford U.S. June sales drop 28%
Ford Motor Co. said Tuesday its June U.S. sales fell 28.1% to 174,091 vehicles, dragged down by poor truck sales. Ford reported that June U.S. truck sales fell 35.6% to 101,981 units from a year ago. Ford’s popular F-series trucks suffered a 40.5% drop in June U.S. sales to 38,789 units from last year.
I wonder how quickly Toyota can reconfigure that new San Antonio truck plant to pump out hybrids.
I’m really sorry guys, I deleted bi’s recommendation to go long at 11am. I’ll make up for the lost profit in scotch at the next gtg.
From CNN/Money:
Europe may push the Fed to raise rates
The fireworks may come a day early for the financial markets if the European Central Bank, as expected, raises interest rates on Thursday.
If the ECB, Europe’s counterpart to the Federal Reserve, hikes rates, that could put even further pressure on the anemic dollar and send commodity prices even higher.
132, skeptic, Canada is not a bad drive from here. I’m sure they’ll find some good use for your gold. Gold has survived every crisis. Currencies have not.
#135 - From what I’ve read Toyota’s taken a big hit to sales as well. About the only one doing well (relatively) is Honda.
Had Ford not killed it’s U.S. small car development they could at least be offering the Ka or the Puma here now.
#44 spam/bacon
hey… I thought I was still_looking!! :)
sl
3B (131),
840 Oradell Ave
‘07 (Current) Taxes: $10,054.80
Kettle,
I posted that to your attention on Sunday. They actually had a piece on CNN of all places. The world is headed for lunacy
LEH is under $20, it was at $76 a years ago. I’d imagine that for those who are paid largely in options/shares these are some pretty nerve wracking days.
25 Reasons To Remain Cautious
http://www.minyanville.com/articles/UPS-BBY-LEH-FDX-gm-F/index/a/17826
Clot,
Check out TGC and BQI the past two days.
tosh,
I’m still hoping that Benz brings the subcompact A series to the US.
Or is it still too soon for the U.S. to embrace the luxury subcompact? Would Americans consider it an oxymoron?
have your read “Crash Proof” yet…I have not had time, maybe on vacation next week. Just finished Steve Leebs “the coming economic collapse”
I bought 25 copies and gave them as Xmass presents last year.
Gold should not be looked at it as a comodity. It’s a currency.
It’s importance is beacuse it’s scarce. You can’t run a printing press on Gold.
138
ben? bergabe????
132 skeptic
in a collapsed economy any fiat currency is worthless while anything of intrinsic value will maintain value. In a collapsed economy no one wants your greenbacks, but fuel, food, guns, gold, will be accepted in kind for any various trade or purchase you may with to make. Towards the end of WWII germay’s suppliers would only accept gold bullion in payment as they new germany was done and the currency would be worthless.
#137 Grim
“The Fed should have done a surprise preemptive rate hike at its last meeting,” Knapp said. “Maybe the ECB will try and nudge the Fed in the direction of joining the inflation fight.”
Nudge - umm… Behavioral economics at work?
142 HEHE
what are you referring to , post #???
#146 - It might be a generational thing. I know I wouldn’t have a problem with them but my parents certainly would.
Speaking of this is the 1 series actually on sale yet in the US? Particularly the 135i?
I know I haven’t seen any that I can think of.
Hmm, I haven’t seen too many A3s either. Maybe we do have a problem with luxury sub-compacts and I’m just odd.
tosh,
the average american probably wouldnt fit in one
“I’d imagine that for those who are paid largely in options/shares these are some pretty nerve wracking days.”
tosh [143],
How about the bonuses that were paid in rsu’s. The Frank’s of the world were touting WS bonuses as the savior/next jolt for RE prices.
#152 - Ha! I hadn’t even considered that as one of the reasons.
now we are in world war iii:
http://abcnews.go.com/Politics/US/story?id=5281043&page=1
Kettle,
The Hersh piece
#153 - Speaking of NYC, I don’t know if anyone posted this over the weekend. It is all about the high end market, but when was the last time you saw a free month’s rent anywhere in Manhattan?
#155 bi,
So beat the rush and go volunteer.
can we short ww3?
tosh,
135i is for sale. Has been since march. I’ve only seen a couple, and I don’t think they’re selling all that well since they start at 35k.
Speaking of Oil, expect more actions like this by Russia if military action is taken against Iran:
http://www.nytimes.com/2008/06/27/business/worldbusiness/27venture.html?_r=1&oref=slogin
#160 - Thanks Sybarite. I haven’t seen any. They might be a steal in a year used then. I’ll have to keep my eyes open.
Make/Ben,
Greenspan and gold;
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.”
http://www.financialsense.com/metals/greenspan1966.html
http://www.chicagotribune.com/business/sns-ap-poland-us-travel,0,2935590.story
Grim,
US wants Poles to visit, spend lots of money
WARSAW, Poland - Time to shop until you drop across the Atlantic, the U.S. embassy says. In an unusual appeal, the United States is enticing Poles to visit and spend money this summer in hopes of propping up its faltering economy. The campaign comes as the Polish currency hit a historic high — reaching 2.1194 zloty to the dollar on Monday.
JB,
163 in mod.
Tosh,
No problem. I hope so too. The engine in those cars is marvelous stock, and respond to simple tuning amazingly. I’m surprised I haven’t seen any at any autocrosses yet, as they should be great fun to toss around.
Useless fact of the day. The name of the Polish currency, the Zloty, translates to gold.
Dave, have not heard from your friend yet.
make,
If they did, they’d drop the visa requirements. Sorry U.S., the Poles no longer dream of coming here.
From the NYT:
Strong Economy and Labor Shortages Are Luring Polish Immigrants Back Home
I say we call the USD G-money if we ever go back to gold standard.
If they did, they’d drop the visa requirements. Sorry U.S., the Poles no longer dream of coming here.
We just need them to come and shop until they drop to get us over this slowdown.
We are promoting ourselves as a third world country with a safe political system.
“I say we call the USD G-money”
make,
Gone?
I prefer “Dollero”
I say we call the USD G-money
That does have a certain ring to it. But I’ve seen New Jack City more than once, so my taste might be suspect.
NNJ,
Neither have I. I’ll resend the info in case he doesn’t check that email.
Thanks again.
Dave, ok.
I admit my understanding of this is weak, but it seems impossible to me that any major currency will ever adopt a gold standard again. There isn’t enough gold in the world to function as a medium of exchange at this point. so money backed by gold would seem to me to fail as well
Throw the financial engineers out the window and rev up the John Deere’s. Go figure? Today, soybeans and Citi trade the same handle, $16. The difference, one is moving upwards to the right, the other lower to the right.
skep [177],
True. Gold is only increasing at approx 1% a year, without any further exploration. Currencies are increasing 12-18%, M3. Gold can not keep up with inflated currencies. Which is more valuable?
There isn’t a central banker in the world, able to function with their currency backed by gold.
Update on agent no. 2 in Brigadoon:
The assembled sages on this board said to kick her to the curb last week. I did not right away, but, as usual, NJP et al., were prescient.
Mrs. Nom was already questioning whether to keep her when I asked the agent to get me mortgage data on a seller. Agent replied that she had no idea how to do that, and that she had access to tax data only. A few minutes later, I sent her the link to the Union County Clerk’s land record order site (and you can’t tell me that a major realtor with a HUGE office in Brigadoon doesn’t register as a user).
So, she is either (a) lazy, (b) lying, or (c) both. Either way, I am acceding to Mrs. Nom’s wishes and telling her that her services will no longer be required.
that’s the agent, not Mrs. Nom.
wake up… oil futures turn negative
skeptic,
In theory, a non-fiat asset backed currency could be based off of a basket of assets such as copper/gold/silver/platinum.
While i make no claims of being an economist, i dont see why you could not construct a growing economy of these. economic growth would result in deflation. But then again this takes up back to the idea that growth based economics is a suicidal long term strategy
are we going to $40 bi?
Ridgewood FUTURE Comp Killer!
639 HEIGHTS RD
Purchased: $880,000 8/29/2005
Current MLS#: 2826682
OLP: $945,000 4/30/2008
LLP: $879,000 6/30/2008
kettle1,
economist have always used “deflation” as a scare tactic. In a real productive economy, your goods get cheaper and your currency gains in purchasing power. This is a good thing.
With fiat money, inflation inflates prices to unfounded levels, then they deflate. It sucks that they do, but they should have never gone up that high in the first place.
Bottom line, lower prices are always a good thing.
I work for a company out of Piscataway, NJ that has offices in Maryland and have been looking for a house for about a year here in MD.
Nom Deplume I sympathize with you about RE agents as I have run into bad and worse ones. (No offense to any RE agents reading) I have already gone through two RE agents and I probably will be a lot more cautious before picking another one.
The first couldn’t tell you anything more then the best places to eat around the community. The second was more realistic but was willing to let you walk into a mistake for his own wallet.
The housing bubble saw an explosion of RE agents entering the market that had absolutely no skills or experience.
“wake up… oil futures turn negative”
bi,
Were you sleeping during the last $100 move up.
Bi,
all kidding aside, why do you believe that oil is going to go down? what time frame do you think this will happen in?
Westwood FUTURE Comp Killer!
89 LEXINGTON AVE
SOLD: $405,000 6/22/2004
SOLD: $450,000 4/18/2005
MLS#: 2826669
ListPrice: $409,000 6/30/2008
skeptic
“I admit my understanding of this is weak, but it seems impossible to me that any major currency will ever adopt a gold standard again. There isn’t enough gold in the world to function as a medium of exchange at this point.”
way off base. There is more than enough gold to function as a medium of exchange, especially in this day and age. Your medium of exchange must be rare. You can digitize it, and everyone can grab a piece of the pie. If the world had an ounce of gold in it, you could run your economy off that ounce, as long as everyone is allowed to own a piece of the pie. This world functioned fine for 4900 years with gold/silver acting as the medium of exchange. Nothing is special about the past 100 years that has changed anything.
186 i wonder if that would work? we’re seeing that sellers don’t want to sell at a lwer price than what they bought at. if you told them, “but look, the numbers are smaller but you can buy more, because bread only costs a penny” would they get it?
people are kinda simple. it takes a lot to dissade a small child from the “truth” that dimes are smaller than pennies, so they’re worth less. and at least kids are flexible and interested in learning. most adults aren’t.
oil could go back down to 100 or 110. It may stay there for a while. After that, it’s going to continue it’s ascent up.
Why do comments get stuck in moderation?
Spotted a smart car on 80 coming back from Chicago this past weekend. The thing looked like it could have been run over by any one of the million tractor trailers on the road without the trucker even waking up from his driving induced coma.
For driving around town the thing would make perfect sense but on the open road with all those 10 ton behemoths? No thanks.
ben
I agree, but this would also take aay a lot of the power that governments and banks have over the financial markets. In such a market you would also need to apply real controls on fractional banking not the joke that is the current us system of approx 0%.
I say 0% because banks are allowed to borrow reserves and can therefore not have any “real” money on hand.. In some sense i suppose you could argue that this is a negative reserve rate.
#195
Mike NJ,
Agreed. I saw one on the NJ Pike in heavy traffic and I was worried about it. If one of those got rear-ended at moderate speed by a sedan I think they’d be in trouble.
Englewood FUTURE Comp Killer!
159 3RD ST
SOLD: $227,000 9/26/2003
MLS#: 2814452
OLP: $249,900 4/9/2008
LLP: $199,900 7/1/2008
188#, current crude oil price starts to factor in the posibilities of war with iran. to have oil price to go down, it needs a trigger such as
1) starting actual war with iran instead of hot air; or
2) UN passing a resolution to let US, EU, and asia taking over middle east countries
…
“Nothing is special about the past 100 years that has changed anything.”
Ben,
???
The fed was created in 1913. The birth of the printing machine.
re: inflation, hyperinfaltion and Gold, when the Media starts broadcasting about hyperinfaltion ala 1924 Germany it is time to load up on gold again even if it is for the short term.
Hennecke Says U.S. Faces ‘Hyperinflationary Depression’
June 30 (Bloomberg) — Martin Hennecke, a senior manager at Tyche Group Ltd., talks with Bloomberg’s Paul Gordon in Hong Kong about the outlook for the U.S. and global economies and his investment strategy. (Source: Bloomberg)
http://www.youtube.com/watch?v=dpDgrvYd36k
alia,
if your childs coins are made of gold or any other material that has intrinsic value then they are correct that the larger coin is worth more. Your child is assuming that the coins in his hand have a monetary value related to their material worth. They do not. The value of a penny is independent of the value of the copper that it may be made of.. The coins do have an intrinsic value based on the value of the raw metals they are made from, hence the US government recently banned melting US coins for scrap. Many US coins are now worth ore as metal scrap then the value stated on their face.
[187] Nick,
Sad part was that she was experienced and referred to us. But this is not unusual. I met a person that bought a house I briefly considered, and he informed me that he went through 8-9 realtors during his search in Brigadoon.
There was a court case on the west coast last year where a couple sued their broker because they paid 150K over the comps (most of which were houses in the same tract development). Argument was, I believe, fiduciary duty to the client. The court said agent had no duty, and, therefore, did not need to keep client from walking into overpriced house.
This means that an agent is simply a functionary, like a secretary. I don’t pay for their judgment because I cannot trust it. I do pay them to be my representative but, like any employee, if you aren’t going to work, you’re fired.
Ben
are you an MIT alumni by any chance?
140 still
“hey… I thought I was still_looking!! :)”
heh - always think that every time someone says they’re being patient.
http://www.myspace.com/hubcitysjunkyardpalace
“The national foreclosure crisis is currently upon us in a way that could affect all of our lives here at the Junkyard Palace. Sometime after this summer, the bank is forcing the property to change between owners’ hands, and we are as of yet unsure if any of us will be staying.”
sorry, 202 was very poorly worded…. string of consciousness.
Oakland Comp Killer!
126 LAKEVIEW TER
SOLD: $240,000 7/27/2005
MLS#: 2738669
OLP: $265,000 9/22/2007
SOLD: $235,000 6/30/2008
Oakland Comp Killer!
2 WOODS END
SOLD: $725,000 10/10/2006
Last MLS#: 2810557
OLP: $819,900 8/5/2007
SOLD: $705,000 6/30/2008
Former “Fund Managers of the Year” performance in 2008.
http://seekingalpha.com/article/83121-guru-returns-show-just-how-tough-the-going-has-been-lately
Toshiro - how about deluxe apts in the sky on the upper east side in foreclosure - Check out this NYC coop
http://www.maltzauctions.com/auction_detail.php?ID=386556&v=d#vDetail
toshiro_mifune Says:
July 1st, 2008 at 1:04 pm
#153 - Speaking of NYC, I don’t know if anyone posted this over the weekend. It is all about the high end market, but when was the last time you saw a free month’s rent anywhere in Manhattan?
kettle1 Says:
July 1st, 2008 at 12:01 pm
NJrebear, That is a very deep hole you are about to step into. Do some goggling, at least 1 large bank in NYC was sued over the same thing.
HOLD ON EVERYONE!
I see: loose RE agents; beer goggling; deep hole; and paying your spouse (Nom) for services rendered…..what the -hey- is wrong with you people?
Tenafly Comp Killer!
233 ENGLE ST
SOLD: $925,000 8/15/2005
MLS#: 2710094
OLP: $1,200,000 3/15/2007
SOLD: $860,000 6/30/2008
two points:
1. gold may have intrinsic value as a building material, but otherwise its value is socially determined, not intrinsic, the same as paper money.
2. let’s accept that things are not so different from times past when when specie backed currency was widespread. Aren’t you guys perhaps exaggerating how stable currencies were back then? Seems to me that panics were a pretty regular occurrence in the U.S. when we had a gold standard. Runs on the currency were fairly frequent where you had everyone demanding to exchange notes for specie at the same time and banks and the gov’t not having enough specie on hand. More than once, as I recall, specie exchanges were suspended by the fed gov’t for long periods of time (someone more familiar with this history please correct me if I am off base). The point is that every currency, even gold backed, is pretty emphemeral and based mostly on public confidence. Hard currencies introduce a lot of logistical problems and don’t seem to eliminate this essential feature of money, so I don’t see what the real advantage is
S&P DOWNGRADES SHARES OF
BANK OF AMERICA TO STRONG
SELL FROM SELL
Recent Price : $23.47
Recommendation:
BAC has completed its acquisition of Countrywide Financial (CFC 4.3 NR), and we believe its risk level has been elevated from CFC’s deteriorating mortgage portfolio.We estimate that BAC will add roughly $95 billion of CFC’s mortgage loans to its own $868 billion dollar loan book. About $27 billion of these loans are
Option Arm, which we believe haven’t yet been stress-tested.We look for BAC to increase its provisions and to cut its dividend to preserve capital.We are reducing our 12-month target price by $5 to $19, a
below-peer 8.8X our ‘08 EPS estimate of $2.16.
Whose the guy looking for a house in MD..Nicholas? How did you find this blog?
Where in MD?
Matt King, head of global credit strategy for Citi, is pessemistic about the credit crunch.
In relating the situation we are in to football I quote, “Unfortunately in terms of impact to the economy we are in like the first five or ten minutes of the first half”
http://www.ft.com/cms/893ac9c8-757e-11dc-b7cb-0000779fd2ac.html?_i_referralObject=780319142&fromSearch=n
Don’t put more than one link in one post.
I like cupcake metaphors best now.
We are one bite into the first Devil Dog in a box of twelve with 30% more free.
I stole that from Rich.
I don’t really know how I stumbled onto this thread. I was heavily discussing on a website trulia.com on “why someone would buy in this market”.
I was looking for some data on forclosure and I think I ran into some information that Grim posted and used it in a discussion. Since then I have followed you guys for the last few weeks, Lurking mostly.
I’m looking in PG County as I work just inside the Beltway.
Oh, we’re going to Montgomery County. Guess I can’t ask you for an agent name.
John Says:
July 1st, 2008 at 2:51 pm
S&P DOWNGRADES SHARES OF
BANK OF AMERICA TO STRONG
SELL FROM SELL
JJ: thank you for that heads-up
Skeptic,
If i offer you 1 pound of gold or 1 pound of paper, which would you want? you can ask that question to 99.9% of the worlds population and they will take the gold every single time.. The value of gold comes from it natural intrinsic properties an well as its scarcity.
You also are confusing value and reserves. There was certainly volatility and there were bank runs. The bank runs occur because banks hold fractional reserves not because the currency is backed by gold.
check out the wiki on fiat currency for more detail or google for “debt as money”
#141 Rich: Thanks very much as always. I though it had potential as a low ball, but not on Oradell Ave, and over 10k in taxes too.
Pat Says:
July 1st, 2008 at 2:54 pm
I like cupcake metaphors best now.
MORE PRURIENT REFERENCES…cupcake?
STOP IT I SAY!!!
I read some statistics that said 1 in 50 are RE agents in California. It feels just about the same in MD.
The Title and Settlement industry is soft too. I called three different companies to get prices on just thier services (exclude taxes and other fixed fees) and the price got 100$ cheaper each one I called.
First quoted 1000$, second quoted 900$, third quoted 800$. I called the first one back to ask why they were so high. They said that they were quoting last years prices and the new price was 700$.
I’m floored as to how soft the housing market is around here. I am almost inclined to offer the buyer agent 0.5% to represent me and return the 2.5% to me at closing.
“1. gold may have intrinsic value as a building material, but otherwise its value is socially determined, not intrinsic, the same as paper money.”
skep,
I am super bullish the yellow metal. More bullish gold, than bearish RE. That said, I would never buy it as a bldg material. Wasn’t even aware of its use in that capacity. It is not an industrial metal, i.e.,copper. Gold and crude are traded on every major foreign exchange desk in the world. I trade it strictly as a currency.
Courtesy of CR:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaONIcIJHvPI
Manhattan’s office vacancy rate rose to its highest level since 2006 in the second quarter as financial firms, beset by losses, fired workers and reduced their office space, real estate brokerage Cushman & Wakefield Inc. said.
I think CF’s not getting his Twinkies going this week. He’s a loose dingdong.
GM bonds are now paying 23% and they are offering zero per cent financing. Backwards Loan Sharking.
#228
BC– I was using “building material” broadly. My understanding is that gold is a virtually irreplaceable material used in making certain electronic devices
My broader point is that, beyond this, gold does not seem to me to have any fundamental intrinsic value to people. It is not like food, clothing, shelter, etc (i.e., not necessary for survival). So if there is widespread economic armagheddon type collapse (like some people here seem to be planning for), I’m not sure what gold would get you
Is this your idea of a cupcake?
http://www.youtube.com/watch?v=DSH_0yxcS6g
“…I’m floored as to how soft the housing market is around here.”
N- I watched my nephew in NoVA put his THS on the market in 2006 and get out just in time with one reduction in 6 months. I told my brother and his wife to get out if they could. She told me things were fine and there was no way the situation was as grave as I thought. This is a woman with a graduate degree. Nobody ever listens to their little sis, anyway.
Anyway, their house is now valued at half. They’ve both just retired, and it’s too late.
I’m still shocked at the REO discounts I’m seeing. My husband got his final offer to relo to Rockville a few weeks ago, and we just now started looking.
The Devil Dog metaphor should be you are bent over and someone is jamming you with a frozen devil dog and you are praying it defrosts before your rectum gives out. This is going to be a long hard RE bear market. Those gold jackets are going to be stained with holes in the arm cause they ain’t getting new ones for a long time. Those jumping in now will be biting the pillow come 2009.
ReWe are one bite into the first Devil Dog in a box
John, do you have to bait him?
#229 pret can explain this away. Pret? Pret? Where are you?
skeptic,
your are correct, in certain industries gold and other precious metals are key compoenents.
Going back to gold Vs paper paper.
answer this one question for yourself, which one would you rather take, and you have the answer you are looking for.
John/others,
Any bond recommendations?
Skep,
Gold is currency that can’t be duplicated, immitated, reproduced or multiplied.
The fact that it’s scarce is it’s value. It has withstood the test of time, thousands and thousands of years it has been used to preserve wealth.
In 2000 DOW was worth 45 ounces of gold. Today it’s worth 11.
I have seen hyperinflation in former republic of yugoslavia when milosheviq was running the printing press to fight a war that Serbia couldn’t afford. Sound familiar?
The people with savings, middle class nad the wealthy who didn’t get out of the Dinar got wiped out.
Everyone was using Deutche marks, USD, Gold and Silver.
My dad bought a VW Golf 5 yrs old with a $100 Gold Coin!!!
People will only trust in God and in Gold.
[227] Nicholas,
I’d avoid PGC if I were you. In some ways, its like Essex Co. There are some nice parts, but the dregs drag it down. In PG, it is mostly dregs, so much so that Bowie repeatedly agitates for secession. That said, if it is simply too convenient, you should get some good deals, but be sure you are away from the ‘hood. There are parts of PG that scare the hell out of Bronx residents.
[212]Chi,
For the record, I am not paying the missus for services.
Also from CR:
http://dealbook.blogs.nytimes.com/2008/05/21/foreign-investors-pull-back-on-nyc-real-estate/
The extraordinarily strong office market in Manhattan in recent years owed its vigor in part to the presence of foreign real estate investors. Now, however, many such investors, even those with deep pockets and a strong currency on their side, are waiting on the sidelines.
skep,
In 2001, it cost $250 to buy 1 oz of gold. Today it costs $940. Did gold become that much more expensive or did the dollar become that much cheaper. Well, judging by the costs of commodities across the board, it seems like the dollar that has become cheaper. No?
215#,
since s&p is usually late to the party, i would think it is the time to do the opposite.
>S&P DOWNGRADES SHARES OF
BANK OF AMERICA TO STRONG
SELL FROM SELL
Recent Price : $23.47
Recommendation:
bi,
Did you see my question yesterday?
Could you give us some biographical details so that we can perhaps understand you better?
Age, male/female, where you live, what you do for a living …
bi Says:
July 1st, 2008 at 4:08 pm
Dude….you are going to have some heads spinning here…please be careful….
182 bi
“wake up… oil futures turn negative”
go back to sleep.
A while back there was a wee discussion on how silly it was to put money down on a car lease. Take a read of this from Craigslist and see how much the guy put down and how much he stands to lose. I bet you could get this for a great price.
Talk about HELOC.
MW(2007) 650i Convertible-INCREDIBLE ASSUMPTION OF LEASE OPPORTUNITY - $599 (Univ City/Lower Merion)
Assume the balance of my lease at only $ 599.99 a month total. 25 months left on 36 month lease. Subject to a 48 hour approval from BMW Financial. The average monthly payments for this car are between $1,200-$2,000(approx). Has a little over 18,000 miles. I added 2 extra rear video screens in each headrest — DVD Player in trunk with remote and 2 wireless head phones(around $4,000). Has tire and wheel replacement policy already paid for, as well as, a scratch policy already paid for (both for the length of the lease). Lojak system also an added extra!
I put down $33,407.00 down last August when I got the car (+ all the extras paid for), asking for you to pay me $15,000 to assume the lease to offset costs.
189 kettle
“what time frame do you think this will happen in?”
bi’s maximum investment horizon is 24 hours
njrebear Says:
July 1st, 2008 at 3:39 pm
John/others,
Any bond recommendations?
Yes. Connery was the best one.
http://www.fredflare.com/display_images/3225_D.jpg
“July 1 (Bloomberg) — Billionaire investor Eli Broad said the U.S. economy is in the worst recession since World War II and a recovery in the housing market is “several years” away.”
“This is worse than any recession we’ve had since World War II,” Broad, 75, said in an interview yesterday. Broad, the founder of homebuilder KB Home, said the U.S. should avoid a depression on the scale of the 1930s because the country now has sufficient “safety nets.”
“This is the worst period of my adult lifetime,” Broad said, speaking about the U.S. economy. “I do not think things are going to get any better” before the next president takes office in January. Selling off vacant, unsold homes could take “several years,” he said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAZwgRY7yikM&refer=worldwide
HE (145)-
Nice, but the crack spreads are diminishing. Makes me scared of refiners, but the oil/gas services, those I’ll take.
All disclaimers. I also declined an opportunity to grab fistfuls of SKF 30 days ago. I still cannot remember why I passed. Probably too busy watching soccer.
re: financials. more analysts feel the sell-off of this sector was over-done. citi already hit the target of $16+ today. to me, this is a pattern of bottom:
http://finance.yahoo.com/echarts?s=xlf#chart3:symbol=xlf;range=5d;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
That is it I am gong to grave rob some gold teeth or mug mr. T tonight.
In regard to bonds. This market is killing me. Other than the stray 1-5 year muni at 4% plus I have thrown my hands in the air. A little mad money in GM,NCC, Ford, WM or CIT is ok but I can’t sleep too well with much of any of that. GM at 23% is nuts in 4 years you got back whole investment so from then on it is gravy until they collaspe and then you might even get back 30 cents on a dollar. Buying a 5K GM bond at 60 cents on a dollar is only 3K so that is a fun mad money bet. Trouble is I buy those little pieces just for fun and all my short term stuff is cds, munis and short term investment grade. Waiting out this slow torture stock/re market is annoying.
The only crack spreads I want to see the robber oil barrons getting is over at Rikers Island.
clot 253:
…sigh… I unloaded all of mine at 144… yep. I should be cryin’ but I bought it in the double digits… so I can’t complain.
BUT:
I still think there’s room to grow…
All the usual disclaimers..– don’t listen or follow my advice. I’m just dumb (see above.)
sl
227 nicholas
“First quoted 1000$, second quoted 900$, third quoted 800$. I called the first one back to ask why they were so high. They said that they were quoting last years prices and the new price was 700$.”
post of the day!!
“ISM is up, but it isn’t good news”
http://pbp.typepad.com/economy/2008/07/ism-is-up-but-it-isnt-good-news.html
but, bi
Who are you?
#260 scribe…
the silence is deafening, eh?
sl
“US wants Poles to visit, spend lots of money”
this a joke, US does not give out visas to Poles, so it’s mission impossible.
#200, BC Bob
“The fed was created in 1913. The birth of the printing machine.”
That wasn’t even America’s first printing machine, let alone the worlds. They all ended in disaster and the current one will too. There’s a reason the founding fathers wrote in that only gold and silver can be legal tender into the Constitution.
Mercedes-Benz USA posts higher June US sales
where’s the recession?
“Who are you?”
scribe,
http://www.youtube.com/watch?v=l_FZVD5lsAw
kettle1,
“are you an MIT alumni by any chance?”
-sorry, Rutgers
ben [263],
Preaching to the choir.
skeptic
“Runs on the currency were fairly frequent where you had everyone demanding to exchange notes for specie at the same time and banks and the gov’t not having enough specie on hand.”
You only had a run on the currency because they didn’t have the discipline to not inflate them. When you print more notes than gold, you are no longer on the gold standard.
“My broader point is that, beyond this, gold does not seem to me to have any fundamental intrinsic value to people. It is not like food, clothing, shelter, etc (i.e., not necessary for survival). So if there is widespread economic armagheddon type collapse (like some people here seem to be planning for), I’m not sure what gold would get you”
It would get what it always has. All it is a medium of exchange. Real money that cannot be debased by the government. You are talking total collapse. The dollar lost half it’s purchasing power the past decade. Gold? Not so much. See what it gets you?
chifi,
should i buy and hold these bonds?
http://www.uncrate.com/men/images/2007/05/bond-girls-are-forever.jpg
Bob, we need audio in our posts so I can pick up the sarcasm.
ben - hear you go
http://www.tk421.net/gallery/sounds/haha.wav
pun intended
frank
“Mercedes-Benz USA posts higher June US sales
where’s the recession?”
Here it is:
http://money.cnn.com/2008/07/01/news/companies/auto_sales/index.htm?cnn=yes
Auto sales plunge
Buyers flee SUVs and pickups but can’t find the cars they want, resulting in steep declines at most automakers.
I see a few houses in Montclair that sold above asking in the last few months. What’s up with that?
NNJ,
Someone’s friends bought Mercedes Benz and houses in Montclair.
njrebear…what?
Funny house estate of day, looked at estate sale priced 150K below market for quick sale. Find out from brother reason for quick sale is 60 year old spinster daughter with Torrets lives then and she should FU and gives finger to everyone and uses her car to try to run down neighbors. Get this she works in childrens dept. in Lord and Taylor. I love fun closing. Almost as good as my brothers closing where husband cheated on wife with blind women and they were both doing FUs in the clsoing.
NNJ,
This comes up often. There are realtors that cover GR / Montclair that list below market in order to draw multiple bids. They are usually successful. The sold price isn’t necessarily above comps, just the aggressive list.
Grim and others, please correct me if I’m wrong.
275
how ’bout they listed 10% below the recent comps of that area?
sl
When we run out of gas I guess it will be nicer to be pushing a 2008 benz than a 1998 Taurus.
279: darn I type too slow…
sl
ten % is not a discount, houses will fall at least another 10 % you need 20-25% off comps to make it worthwhile.
Oh how I love getting the offer shopping call.
I see a few houses in Montclair that sold above asking in the last few months. What’s up with that?
Almost every Burgdorff listing will sell above asking, because they push their clients to price under market. They let the property sit on the market for a week or two to garner interest, they usually don’t accept offers earlier, and then let her rip. Bidding war, sells for over asking, like clockwork.
I’ve noticed that Rhodes Van Note has started to get in on that game.
Super position to be in as a seller, not so great to be a buyer.
Thank goodness the majority of sellers are too smart for this game.
since the beginning of this year, prices in thousands.
mls list sold
2512996 795 780
2510800 469 510
2509791 569 631
2508519 699 725
2506212 715 751
2505672 539 554
2504166 699 705
2506157 869 895
2501706 698 753
2501041 639 705
2495678 685 745
2493263 579 652
2492226 765 810
2492279 800 865
2490695 1475 1550
2475139 1050 1200
2472278 1750 1950
#285 grim:
“Thank goodness the majority of sellers are too smart for this game.”
Sarcasm…? Sorry, the meter is broken today. Pls advise. K thx
Sarcasm.
If more sellers used this strategy, we might actually see the market pick up.
Instead they overprice and stew, adding more inventory to an already bloated market.
since the beginning of this year, prices in thousands.
Like I said, almost all Burgdorff and Rhodes
#288 grim-
Agree. Seems like a win-win to me… There should be little to no risk in pricing a house under market.
If no bidding war ensues, are sellers forced to accept a bid if all offers come in at or below the “under market” price? Or can they hedge and come up with reasons why the asking price is suddenly not enough?
“since the beginning of this year, prices in thousands.”
NNJ [286],
That’s it, mainly from B’dorf and Rhodes? This is the best you can come up with? Now Compare that to the posts Grim and Rich include on this site, comp killers, lowballs, etc… Flush.
njrebear Says:
July 1st, 2008 at 4:54 pm
chifi, should i buy and hold these bonds?
Bear: I was always partial to Major Amasova…a nice girl from Queens…
http://www.barbara-bach.com/pistola3.html
chifi,
:)
Maplewood has the same thing going on, houses sold at or above asking.
BC Bob, you mean the evil realtors are taking the stupid sellers and buyers of Montclair for a ride? I thought there were plenty of smart people in Montclair.
That doesn’t happen in Bergen County since the sellers all have homes made of gold and immediately get multiple offers - so get yours in today!
“houses sold at or above asking”
NO, that can’t be true, people on this board told me that the housing market in NJ is in a free fall. You must be talking about Maplewood, NC.
I’m not sure of the RE documents that they make you sign in NJ but I sold a home in Ohio and my RE agent made me sign documents that made backing out of a bid painful.
Document states that if a bid comes in that is at or above asking price then you are required to take the sale or be liable for paying the selling agents commission whether or not you sold the home.
It goes along with the fact that the RE agent did his/her job and just because you got the jitters they shouldn’t be penalized.
I would be interested if the MLS numbers above had to sign some type of document stating the same thing.
On GSMLS in Montclair, in 2008, 33 out of 85 houses sold went above asking. This does not inlcude houses sold at asking. I can’t imagine realtor fraud is going on such a large scale.
Bueller? Bueller?
I did some digging on mortgages today…got my printouts…now can someone explain it to me?!?!?! ;)
MTG= Mortgage (duh!)
NOS= What the heck is this???
DEED= Deed (…does this mean it was paid off?)
CANCEL1= Mortgage paid in full (figured out that one :)
DEEDTRANS= What is this also?
NOS2= Don’t know what this is, either…
UCC= ” ” ” ”
ASSIGNL= ” ” ” ”
This one owner has FIFTY EIGHT entries starting from 1992 thru last November… (Heloc for 350K)
I swear, I have more bank names on this report than John has stories…
Oh, and a curiosity question…there’s a WOE on here for 10K in back taxes… it says it’s only good for 60 days, so does lien on the property expire after 60 days? I mean, does the state need to keep re-submitting it or what?
Anyone who has ever dug into this stuff and could let me know what those acronyms stand for would be greatly appreciated!
And 10 out of 85 sold at asking.
So 50% of the houses from GSMLS in Montclair in 2008 sold at or above asking. If you are in the market, you can’t ignore it.
“BC Bob, you mean the evil realtors are taking the stupid sellers and buyers of Montclair for a ride?”
NNJ,
No, not at all. Nothing to do with buyers/sellers. What I was saying; your example is trivial compared to the comp killers, lowballs on this site. In addition to this, Clot states that prices, closed sales, are 20% off peak. Also, KL states, in her area, that 20% of the SFH’s and 25% of the MFH’s listed are short sales.
Intrepretation, bust. That’s not trivial.
In Montclair 78 homes are Under Contract on GSMLS, let’s see how the prices come up.
s_l,
Maybe if we knew bi’s background, we could put his rather unusual investment perspective into some sort of context.
Bost,
I was thinking the same :)
BC Bob, are you kidding me. 50% homes went OVER or AT asking price and you think that is trivial.
DEEDTRANS= What is this also
Deed Transfer?
Maybe “NOS” is notice of sale?
Just guessing, though.
#297 frank:NO, that can’t be true, people on this board told me that the housing market in NJ is in a free fall.
It may not be in a free fall yet, but it s falling, and it will be in a free fall.
What could possibly prevent the free fall? Jobs on Wall St, ah, NO!!!. The robust state economy, with its hot employment market, that is creating thousands of high paying jobs, ah, NO!!!
So it is your belief that prices ar not, and will nto go down, simply becasue you say so. You offer no compelling counter arguement, that they are not,a nd will nto fall.
In fact you offer no arguement at all. That is why you cannnot be taken seriously.
john, you’re cracking me up today.
I can’t imagine realtor fraud is going on such a large scale.
What is fraudulent?
This is, without any doubt, the *BEST* strategy to use in the current market.
1) Price points excite buyers
2) Large pool of buyers attracted
3) Multiple bidding situation
No downside, no fraud. ‘dorff is a master of the craft.
“Oh how I love getting the offer shopping call.”
Oh to be a fly on the wall.
(Reminds me of that great Arizona State product, Oddibe McDowell, whose first name was pronounced such that it always caused Grandpa Patient to say “now that spring is here”).
So 50% of the houses from GSMLS in Montclair in 2008 sold at or above asking. If you are in the market, you can’t ignore it.
What was the number in 2005?
So 50% of the houses from GSMLS in Montclair in 2008 sold at or above asking. If you are in the market, you can’t ignore it.
What was the number in 2005?
The trend is upwards.
#305 NNJ Omly 150 left to go on the gsmls. Hurry, bring your checkbook.
3b, I see 119 with several under attorney review. But hey, I have no vested interest in Montclair, I just found the data different than what you guys are talking about all day.
The trend is upwards.
Really? You sure you have that chart rightside up?
Between 1/1/2005 and 7/1/2005 I see more than 65% selling over asking, 8.5% selling at asking, and 26.5% selling under asking.
Between 1/1/2006 and 7/1/2006, 61% sold over asking, 7% at asking, and 32% sold for under asking.
I see 119 with several under attorney review
A datapoint without historical context is irrelevant.
Montclair Under Contracts 1/1 - 6/30
2006 - 252
2007 - 239
2008 - 198
17% below 2007, 21% below 2006
In 2006, 252 houses were under contract.
In 2008, 198 houses were under contract.
In 2006, 61% went above asking price.
In 2008, 40% went above asking price.
Holy crap, let me stock up on guns and gold.
“Really? You sure you have that chart rightside up?”
JB [315}
http://www.rateitall.com/i-888173-come-on-feel-the-noise-careerbuildercom.aspx
So what you are saying is that Montclair is representative of the entire NJ market?
Damn, I’d love to continue this argument, but I’ve got to go present a lowball.
Maplewood has the same thing going on, houses sold at or above asking.
Nutley seems to be experiencing this as well. Any idea why this trend persists and if/when it will die down?
297 frank
a house can be sold above asking and yet 50% below it’s previous sale price.
Pretty simple concept, despite it’s never having occurred to you.
In 2006, 252 houses were under contract.
In 2008, 198 houses were under contract.
NNJ[317],
20% decline. That’s a colossal decline. It’s a bear market in stocks, also a hedgies performance fee. Obviously, you are not a hedge fund manager. Otherwise, a 20% decline would scare the dickens out of you.
not saying gold hasn’t been a winner recently, but it has also had big runups previously and then collapsed and gone nowhere for 20+ years as well. so I’m not sure how it can be portrayed fairly as this super-secure store of wealth.
again, in all matters related to monetary theory, I admit that I have no expertise. I have read though that in hard currency times there were often problems of hoarding of gold such that there was insufficient circulation of money. merchants made do by actually issuing paper of their own to trade with. the point is that you can constrain the money supply too much (just as you can make it too expansive). It seems to me that there would be a real risk of this happening given the size and scope of our economy if we went back to hard money. Again, I would appreciate arguments to the contrary.
Another idea I’ve heard that I think is interesting is a global currency where the money supply is set ahead of time by an automatic standard (rather than controlled by individuals who may choose to manipulate it for political reasons). if this was to be accepted, it would seem to me to achieve many of the goals of hard money (constrain inflation) without its limitations/pitfalls
#321
“a house can be sold above asking and yet 50% below it’s previous sale price.”
this is the definition of a hot market, in fact.
BC Bob, I am not a Hedge Fund manager and neither are you. 20% drop in VOLUME is not as important as price.
307 3B
“So it is your belief that prices ar not, and will nto go down, simply becasue you say so.”
Yes! Frank believes that prices will stay afloat as a result of the application of sufficient amounts of hot air.
(That’s how many balloons float, but someone should tell him that bubbles are different.)
324 skep
“this is the definition of a hot market, in fact.”
To frank, it apparently is.
325 NNJ
“BC Bob, I am not a Hedge Fund manager and neither are you. 20% drop in VOLUME is not as important as price.”
Of course not. But the former predicts the latter.
Gold didn’t have any price gains for 20 years because the currency was strong and we had a productive economy. A lot of things were cheap in that time period. Food, oil. You track the price of those things, they went hand in hand with gold and still do. Btw, gold was 35 bucks an ounce 40 years ago. It’s approaching 1000 now. Seems like a pretty damn good store of wealth to me. I have a 5 dollar gold piece from 1905. It’s now worth about 330. Gold is gold, it buys you the same amount of stuff it always has. Dollars and Euros? Not so much.
this housing market is beyond laughable. Every open house I’ve been too, the people walk out of these houses laughing because they are asking about 100k too much. What’s really laughable is that you go back to the tax codes and see what they were bought at circa 2001.
Ok, armageddon is here:
“The coffee chain Starbucks plans to close 500 stores in the US on top of the 100 it had already announced.
Up to 12,000 full and part-time jobs will go, although Starbucks will try to move staff into other stores.”
What next? Stores selling $400 jeans closing down?
funny OT:
http://sportsillustrated.cnn.com/2008/baseball/mlb/07/01/bondsball.Hall.ap/index.html?cnn=yes
Ecko bought the 756 ball in an online auction last September, a month after Bonds broke Hank Aaron’s career home run record.
Ecko then asked fans to vote in an Internet poll on what he should do with the ball. The winner: Brand it with an asterisk, to reflect the steroid allegations surrounding Bonds, and give it to the Hall.
The ball indeed was marked, with the asterisk dye-cut into the cowhide where “Major League Baseball” is printed.
[...]
Bonds called Ecko an “idiot” when the designer announced plans to hold the vote. The slugger later said he would boycott the Hall if it displayed the ball with an asterisk.
“20% drop in VOLUME is not as important as price.”
NNJ,
Would you say it’s a precursor to higher prices, in the headwinds of rising inventory, rising inflation, lower real incomes and tightening credit?
“not saying gold hasn’t been a winner recently, but it has also had big runups previously and then collapsed and gone nowhere for 20+ years as well. so I’m not sure how it can be portrayed fairly as this super-secure store of wealth.”
skep,
I am not a gold bug, just very bullish at this time.
How the market performed 20 years ago is inconsequential. I was selling gold calls in the 90’s and was bullish/long RE. In addition to this, I was traveling overseas, in the late 80’s and the dollar was Numero Uno. Our fiscal/monetary policy was supportive of king dollar at that time.
No need to go into the fed’s actions from 2001. Presently, when concrete/structural changes are implemented, supportive of the dollar, I will rotate out of intangibles and back to paper. That said, the fed’s choice is to inflate or manufacture apple carts. I’m not fighting the fed, I am only following their direction.
#329
“Gold didn’t have any price gains for 20 years because the currency was strong and we had a productive economy. A lot of things were cheap in that time period. Food, oil. You track the price of those things, they went hand in hand with gold and still do. Btw, gold was 35 bucks an ounce 40 years ago. It’s approaching 1000 now. Seems like a pretty damn good store of wealth to me. I have a 5 dollar gold piece from 1905. It’s now worth about 330. Gold is gold, it buys you the same amount of stuff it always has. Dollars and Euros? Not so much.”
OK, I understand what you are saying, but you are selectively picking your entry and exit points. It is not as though the value of gold has remained constant through eternity. In fact, if you look at the history of gold prices, it has proven to be a very poor investment over the long term, especially for those who buy it after a massive run up like we have seen recently.
#321,
“a house can be sold above asking and yet 50% below it’s previous sale price.”
Show my a house in NJ, outside of Newark that sold for 50% below prior sale.
Man, I never get tired of dropping the lowball. Watching that agent walk out of the office muttering “waste of time” was priceless.
grim, you know, I’ve always been way on your side, but you’re even starting to piss me off.
;)
337
Grim Piggybacking on your post. I know there’s a lot of talk here about newer agents with no experience and how they handle sales. What do you all think is the percentage of agents that have been in the game a long time but still won’t come to reality in terms of pricing?
Frank,
Just as a thought experiment, consider what would happen if you listed a house for sale for $100.
skeptic, of course gold is a poor investment. It’s money. It doesn’t pay anything. If you were looking to invest your gold, you would loan out your money to the bank or someone else for a fixed interest rate. However, in this type of environment, gold is a much better bet than investing in American Stocks or sticking your money in a CD. People who have CD’s are getting killed right now. In a bull market with strong currency, the market will easily outperform gold. When central banks are trying to prop up their economy via inflation, gold easily outperforms those markets. Gold, oil, commodities, and foreign stocks have outperformed the Dow and the Nasdaq incredibly in the past 8 years and will continue to do so. I’m not going to hold onto my gold/silver forever. There will be a time to sell and a time to get back into US stocks. As for now, they are in for a huge beating.
Ben– good points all around. I guess I just don’t understand how you know when gold is better to hold than dollars, euros, etc. It seems to me it would be fairly easy for a central bank to demolish the value of your gold (which you will ultimately have to sell for some kind of real currency). I understand the overall point of inflation being bad, and I can see how owning gold can protect against this somewhat, I just am not convinced that gold is quite the panacea you’re making it out to be (or maybe I am missing your point).
Upset homeowner shoots real estate agent in Mich.
http://www.cnbc.com/id/25484232/for/cnbc
336 frank
“Show my a house in NJ, outside of Newark that sold for 50% below prior sale.”
Why don’t you tell me?
You said your buddies were buying at 50 cents on the dollar and selling at 80.
You were lying?
Sorry I am late to the Montclair discussion, but I wanted to throw something out there. back in 2005, the underprice, multiple bids over asking game played for almost any property in town - even total dumps. Today if you want to play that game, your home better be in pristine, move in condition and you’ve probably staged it. Some things may still be going for ‘over asking’m but that doesn’t mean that the market has not significantly slowed here.
BTW the house across the street from us that is a total fixer uppper is listed for $120k below assessed price has not moved in over a month. It needs work, but 2-3 yrs ago there would have been a bidding war due to it’s 1 block from midtown direct location. It’s definitely not 2005 in Montclair kids.
remind me tomorrow to tell you Mrs. Patient’s funny story about how completely facked the NJ RE market is.
central banks can’t devalue gold. It requires creating it out of thin air. Sure, they can flood the markets with their reserves to knock the price down, which they’ve been doing, but those are finite. Dollars and Euros are infinite. They’ve done such a poor job trying to suppress the price of gold. It’s up 300%. You’ll know when it’s time to get rid of your gold. When every yahoo on the corner is talking about owning gold, I would say sell.