NJ: Recession until 2010

From Newsday:

Forecast says NJ in recession until early 2010

New Jersey is more than a half-year into a mild recession that should end in early 2010, according to a Rutgers University economic forecast released Wednesday.

The state will lose about 20,000 jobs beyond the 10,000 already lost this year before a recovery begins, said the semiannual report of the Rutgers Economic Advisory Service.

The report appears to be the first analysis to claim that New Jersey is in recession and describe its breadth and magnitude.

“The state’s job base has barely changed since the beginning of 2006, while employment in the U.S. continued to grow until December 2007,” said Nancy Mantell, the service’s director.

A recession is generally considered two consecutive quarters of falling gross domestic product, so confirmation occurs after a recession has started. No such measure is available for New Jersey, so the Rutgers assessment is based largely on job losses, Mantell said.

New figures Wednesday from the state Labor Department presented an even harsher picture than the Rutgers report, finding that New Jersey lost 14,100 jobs in the first half of the year.

The report comes as residents of New Jersey and the nation cope with growing unemployment, rising prices for gasoline and food, but falling prices for real estate.

“Things are going to be a little tight for a while. But compared to the national recession, we don’t think this will be as bad,” Mantell said.

Gov. Jon S. Corzine and others have said the nation has already entered a recession. The acting chief of the governor’s Office of Economic Growth, Angie McGuire, on Wednesday said the administration has taken steps to address tough conditions, including cutting spending in the state budget that took effect July 1.

From the Asbury Park Press:

Experts forecast a recession

New Jersey’s economy, struggling with soaring energy costs and a faltering housing market, is headed for a mild recession that will last until 2010, Rutgers University researchers said Wednesday.

The prediction of impending job losses puts off any hope of a recovery in the real estate market. Housing prices are expected to fall 12 percent to 15 percent during the next year, experts said.

“I wish the outlook were otherwise,” said Patrick J. O’Keefe, a director at J.H. Cohn, an accounting firm, and the former chief executive officer of the New Jersey Builders Association. “But the laws of gravity that govern the relationship between household income and home prices can only be suspended for so long.”

The outlook is grim. Nancy Mantell, director of the Rutgers Economic Advisory Service, said she expects the state to fall into a recession later this year that will last about nine quarters — into 2010 — and cause it to lose about 31,000 jobs.

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441 Responses to NJ: Recession until 2010

  1. grim says:

    From the Star Ledger:

    N.J. lost 4,100 jobs in June

    New Jersey employers shed 4,100 jobs last month, largely in manufacturing work tied to the struggling housing market, according to state data released this afternoon.

    The state’s unemployment rate fell a tick to 5.3 percent in June, and remained below the national rate of 5.5 percent, the New Jersey Department of Labor and Workforce Development said. But the N.J. jobless rate still stands at a higher level than it has for the past 12 months, aside from a sharp spike in May. In June 2007, for example, the rate stood at 4.2 percent.

    All of the job losses came from the private sector. The public sector added a net 100 positions, driven by an increase of 400 jobs in local government, the state said. Federal jobs in New Jersey fell in June, while state government jobs were flat.

    “New Jersey’s employment situation over the first half of the year was directly in line with the job losses that occurred nationally,” New Jersey Labor Commissioner David Socolow said in a statement. “During the first six months of 2008, New Jersey’s total nonfarm employment declined by a total of 14,100 jobs, or 0.35 percent, while the nation lost 438,000 jobs, or 0.32 percent over the same period.”

  2. grim says:

    From the Guardian:

    Wall Street Journal to axe 50 journalist posts

    The Wall Street Journal is to cut 50 journalist posts in a restructure to centralise the editing of the paper in print and online, its managing editor, Robert Thomson, has revealed in a memo to staff.

    Most of the editorial cuts will come from the WSJ’s office in South Brunswick, New Jersey, which was set up following the September 11 terrorist attacks near the newspaper’s Manhattan headquarters.

  3. grim says:

    From Bloomberg:

    Not Even Corzine’s Goldman Resume Could Help Him Erase Deficit

    New Jersey Governor Jon Corzine said in November he was willing to lose his job if that’s what it took to cut the state’s $32 billion debt load. Now, the former Wall Street bond trader says more borrowing is inevitable.

    “It may be possible that we need to grow debt if there are capital projects we have to do and we don’t have any other way to fund them,” Corzine, a first-term Democrat who is starting his re-election campaign, said in an interview.

    New Jersey, whose median household income of $64,470 is second only to Maryland, is one of 29 states that ran short of revenue to balance this year’s budget, up from three in 2006, the Center on Budget and Policy Priorities in Washington found. Lawmakers across the country, who previously sought to trim debt and cut taxes, are instead increasing borrowing as the slowest economy since 2001 erodes consumer spending and home values.

  4. DL says:

    We need a name for it. The Great Depression is already taken.

  5. grim says:

    From the Trenton Times:

    State continues to lose jobs

    A forecast of continued shakeout in New Jersey’s housing market was provided during the Rutgers briefing in New Brunswick yesterday by Patrick O’Keefe, director of the Roseland accounting firm J.H. Cohn, and former executive direc tor of the New Jersey Builders Association.

    O’Keefe said that New Jersey home prices, which began falling in 2005, will fall by another 12 percent to 15 percent over the next 12 months, then remain flat through 2010, at which point, “prices in New Jersey will be 27 to 30 percent below the peak they hit in 2007.”

  6. grim says:

    Boy, I remember the days when saying home prices would fall 30% would be enough to raise a torch-wielding mob.

  7. bairen says:

    #6 grim,

    I think that O’keefe guy is being too optimistic.

  8. bairen says:

    “New Jersey is more than a half-year into a mild recession that should end in early 2010,”

    Has there ever been a 2 year long recession that was “mild”?

  9. grim says:

    From the Record:

    NJ job losses will continue, expert says

    New Jersey is more than a half-year into a mild recession that should end in early 2010, according to a Rutgers University economic forecast released today.

    The state has added few jobs since the beginning of 2006, said economist Nancy Mantell of the Rutgers Economic Advisory Service (R/ECON). And she predicted that over the next two years, it will lose 31,000 jobs from the employment peak of 4.08 million jobs in the fourth quarter of 2007.

    The Bergen-Hudson-Passaic labor area gained only 500 jobs between May 2007 and May 2008, with losses in manufacturing nearly outweighing gains in private services and government. Rutgers expects the area to lose about 6,000 jobs between 2007 and 2009, and then pick up about 40,000 from 2009 to 2018.

    Mantell predicted that the state’s economy will begin turning around in 2010, and that by mid-2011, the state will have recovered the lost jobs.

  10. Confused In NJ says:

    4. DL Says:
    July 17th, 2008 at 6:25 am
    We need a name for it. The Great Depression is already taken.

    “The Final Depression – Greenspan’s Folly”

  11. grim says:

    For Bi, from the WSJ:

    J.P. Morgan posted a 53% fall in net income as the firm recorded $1.1 billion in mortgage-related markdowns.

  12. SG says:

    Seems like some new ideas are coming forward.

    http://www.pickensplan.com/

  13. SG says:


    Towns in Hunterdon, Somerset, Warren counties join challenge to affordable-housing rules

    A group of 19 municipalities in Somerset, Hunterdon, Warren, Morris, Essex, and Monmouth counties on Tuesday filed an appeal in state Superior Court against the new Council on Affordable Housing (COAH) regulations published on June 2, the same day an appeal was filed by the New Jersey State League of Municipalities on behalf of all 566 communities.

    The municipalities include Clinton Township, Bedminster, Bernards Township, Bernardsville, Bethlehem, Bridgewater, Town of Clinton, Greenwich, Hanover Township, Millstone Township, Montgomery, Peapack-Gladstone, Readington Township, Roseland, Roxbury, Union Township, Warren Township, Watchung and Wharton.

  14. SG says:


    New Jersey Regional Coalition wins historic housing victory

    On Thursday, July 17, 2008 at 2 p.m., Governor Jon Corzine will sign one of the most important changes to New Jersey’s affordable housing laws since the Fair Housing Act was passed in 1985.

    The centerpiece of the recent legislation is the abolition of regional contribution agreements (RCA), which have allowed wealthy municipalities to pay poor municipalities to accept their affordable housing obligation. This law helped perpetuate segregation and increased the concentration of poverty in our inner-cities.

  15. Tom says:

    “faltering housing market”

    I’m not too fond of comments like that in the press. The problem isn’t that housing prices are falling it’s that they rose so high.

    If you were sick, you’d be concerned when your temperature was going up and happy when it’s going down not the other way around.

  16. grim says:

    From Bloomberg:

    IndyMac’s Failure May Prompt Rush to Withdraw Bank Deposits

    IndyMac Bancorp Inc.’s collapse may spur withdrawals from banks ranging from First BanCorp in Puerto Rico to Los Angeles-based Nara Bancorp Inc. as customers trim accounts below the $100,000 limit on deposit insurance, according to Sandler O’Neill & Partners LP.

    “IndyMac’s failure has people worried about others,” Mark Fitzgibbon, a principal at Sandler O’Neill, said in an interview. Fitzgibbon told clients in a report this week that signs of weakness may prompt customers “to more actively move deposits to banks that are perceived to be healthier.”

    The result could be a liquidity squeeze at banks that rely on “jumbo” deposits, Fitzgibbon said. His report, published July 15, included more than 50 companies with jumbo time accounts, typically certificates of deposit, that exceeded 25 percent of first-quarter deposits.

  17. grim says:

    This one is a day old, but I don’t think it was posted..

    From Bloomberg:

    Hamptons House Prices Fall Amid Wall Street’s Decline

    The Hamptons housing market is feeling the heat of Wall Street’s meltdown.

    Second-quarter sales volume dropped 29 percent and the median price fell 11 percent to $735,000 from a year earlier in the resort communities on the East End of New York’s Long Island, Suffolk Research Service Inc. said in a report today.

    Transactions are dropping as financial firms have cut more than 93,000 jobs and taken more than $416 billion in mortgage- related losses and writedowns. The retreat in global stock markets, waning consumer confidence and the deepening housing recession are also keeping prospective buyers at bay.

    “People are buying with their heads much more,” said Diane Saatchi, a senior vice president of New York-based brokers Corcoran Group. “Their lifestyles are very much the same, but people are being much more cautious.”

    The median price, the level at which half the homes in a market sell for more and half sell for less, changed because fewer high-end houses traded hands, Saatchi said. That doesn’t mean values are necessarily falling, she said.

    “Last year’s $2 million house is still this year’s $2 million house,” Saatchi said. “The difference is this year nobody bought it.”

  18. Laughing all the way says:

    What’s the guess on when NJ goes bankrupt?

    2015?

  19. bairen says:

    #18 laughing

    it will never happen. Debt is the new wealth you know

    / off sarcasm

  20. thatBIGwindow says:

    Horray! Now we can all buy that coveted house in Upper Haughtyville for pennies on the dollar…nah, we won’t have jobs. I guess we will all have to live on our down payments.

  21. BC Bob says:

    “Boy, I remember the days when saying home prices would fall 30% would be enough to raise a torch-wielding mob.”

    LOL. When I first came on this site and stated 30-40% off peak, even the bears thought I was delusional.

    The bulls at that time? HMMM, where are they?

  22. BC Bob says:

    “faltering housing market”

    “I’m not too fond of comments like that in the press.”

    Tom,

    How did they report the market on the way up? Actually, faltering is very conservative. It’s a major bust.

  23. BC Bob says:

    JB,

    Can’t make the GTG on Friday. I’m heading down to LBI. Alternative site, how about The Terrace Tavern?

  24. thatBIGwindow says:

    I want to recall my previous statement about not having jobs, I completely forgot about Meadowlands Xanadu which will create about 20,000 jobs in Northern NJ (which means under the new COACH regulations the towns within the Meadowlands district will have to provide affordable housing for us all!)

    Gotta love NJ

  25. Tom says:

    “How did they report the market on the way up? Actually, faltering is very conservative. It’s a major bust.”

    On the way up everything was peachy. Now’s the problem according to what you hear.

    People don’t seem to understand that if you gorge yourself for so long, you can’t just keep it all in. That’s why the housing market is in the toilet :)

  26. mark says:

    how much trouble is carla in?

  27. Cindy says:

    (4) DL (10) Confused

    “We need a new name for it. The Great Depression is already taken.”

    Greenspan’s Grand Depression

    The motto: “Brother can you spare me $1,000?” or
    “Brother can you spare me a grand?”

  28. grim says:

    “The Mess That Greenspan Made”, but I think it might be taken..

  29. thatBIGwindow says:

    When Obama gets elected he will fix everything and we will once again be in 2005! Good times ahead folks.

  30. BC Bob says:

    “People don’t seem to understand that if you gorge yourself for so long, you can’t just keep it all in. That’s why the housing market is in the toilet :)”

    Tom,

    I agree. Kind of like an overloaded septic tank. You can only fill it with X amount of —-.

  31. BC Bob says:

    Since we are on themes;

    2007- Year of the denial.
    2008- Year of the reaction.

  32. Pat says:

    It seems like forever ago – 2006.

    Being laughed at for some pretty silly (at the time) things I believed about the future of house prices.

    My bad prediction was that I thought interest rates would be much higher by now.

  33. Essex says:

    Fear the hearts of men are failing
    These our latter days we know
    The great depression now is spreading
    God’s word declared it would be so

    I’m going where there’s no depression
    To a better land that’s free from care
    I’ll leave this world of toil and trouble
    My home’s in heaven
    I’m going there

    In this dark hour, midnight nearing
    The tribulation time will come
    The storms will hurl the midnight fear
    And sweep lost millions to their doom

    I’m going where there’s no depression
    To a better land that’s free from care
    I’ll leave this world of toil and trouble
    My home’s in heaven
    I’m going there

    I’m going where there’s no depression
    To a better land that’s free from care
    I’ll leave this world of toil and trouble
    My home’s in heaven
    I’m going there

    –No Depression, UNCLE TUPELO

  34. njrebear says:

    ThE GrEaT CrUnCh

  35. grim says:

    Essex,

    Worth mentioning that the Uncle Tupelo version is a cover of A.P. Carters’ “No Depression in Heaven” (1936).

    I admit, the Tupelo version is one of my favorite alt-country/bluegrass tunes.

  36. Richie says:

    …And I always thought Recess was the happy time during school days…

    Stop making the GTG’s on days where we have plans, damnit!

    -R

  37. HEHEHE says:

    THE RIGHTEOUS PATH
    I got a brand new car that drinks a bunch of gas
    I got a house in a neighborhood that’s fading fast
    I got a dog and a cat that don’t fight too much
    I got a few hundred channels to keep me in touch
    I got a beautiful wife and three tow-headed kids
    I got a couple of big secrets I’d kill to keep hid
    I don’t know God but I fear his wrath
    I’m trying to keep focused on the righteous path

    I got a couple of opinions that I hold dear
    A whole lot of debt and a whole lot of fear
    I got an itch that needs scratching but it feels alright
    I got the need to blow it out on Saturday night
    I got a grill in the backyard and a case of beers
    I got a boat that ain’t seen the water in years
    More bills than money, I can do the math
    I’m trying to keep focused on the righteous path

    I’m trying to keep focused as I drive down the road
    On the ditches and the curves and the heavy load
    Ain’t bitching bout things that aren’t in my grasp
    Just trying to hold steady on the righteous path

    There’s this friend of mine I’ve known all my life
    Who can’t get it right no matter how hard he tries
    He’s got kids he don’t see and several ex-wives
    And a list of bad decisions bout eight miles wide
    Trouble with the law and the IRS
    And where he’ll get the money’s anybody’s guess
    He’s a long way off but if you was to ask
    He’d say he’s trying to stay focused on the righteous path

    Trying to keep focused as we drive down the road
    Like we did back in High School before the world turned cold
    Now the brakes are thin and the curves are fast
    We’re trying to hold steady on the righteous path

    We’re hanging out and we’re hanging on
    We’re trying the best we can to keep keeping on
    We got messed up minds for these messed up times
    And it’s a thin thin line separating his from mine

    Trying to hold steady on the righteous path
    80 miles and hour with a worn out map
    No time for self-pity or self-righteous crap
    Trying to stay focused on the righteous path

    Drive By-Truckers

  38. Sassy says:

    I’m holding out for the McSorley’s GTG!! Or, the next one in the big apple.

    Wee one needs another surgery, so we’re taking her on a pre-op surgical tour, one f’n plan I wish I could cancel! Still paying off the last surgery, discovering the yoke of debt servitude for the first time.

  39. DL says:

    Ref 17: “Last year’s $2 million house is still this year’s $2 million house,” Saatchi said. “The difference is this year nobody bought it.”

    Excuse me, but doesn’t that make it less than a $2 million house?

  40. BC Bob says:

    No bear market in NJ public servant jobs;

    “Orange mayor quadruples his salary with move. On leave as W. Orange cop, but adds $76,000 salary as civilian fire director”

    http://www.nj.com/starledger/stories/index.ssf?/base/news-5/1216269395262650.xml&coll=1

  41. chicagofinance says:

    Pat: you are a gem

  42. chicagofinance says:

    grim unmod

  43. Frank says:

    “Not Even Corzine’s Goldman Resume Could Help Him Erase Deficit ”

    Why not borrow the money? NJ muni rates are so low it only make sense to borrow now and pay for it few years with inflated dollars.
    It’s a brilliant idea, our governor is a genius.

  44. BC Bob says:

    “Misery hasn’t had this much company in more than 15 years.”

    “The jump in consumer prices reported today by the Labor Department means the so-called Misery Index, the sum of the unemployment and inflation rates, is the highest since President Bill Clinton took office in January 1993. The measure, created by Arthur Okun, an economics adviser to President Lyndon Johnson, rose to 10.5 in June from 9.7 in the prior month.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aHXJY.fS72Ss&refer=home

  45. lostinny says:

    40 Sassy
    I hope the little one is better soon.

  46. lostinny says:

    Sorry Grim. I’ll be in Deliverance land this weekend. Riding horsies and shooting guns! Yeehaw!

  47. schabadoo says:

    When Obama gets elected he will fix everything and we will once again be in 2005! Good times ahead folks.

    I’ll take the Clinton 90s again. He too had to clean up Bush’s mess, but it was gravy after that.

  48. JP – 2Q Credit loss prov $3.45 B vs $1.53
    – 2q Home Eq charge-offs $511M va 98M
    – 2Q $1.1B mark down at IB
    – Lvl 3 assets now 7% of total assets up from 6%.

    So it’s bad, the deterioration is accelerating and they’re still hiding huge losses. Should be an up day for them.

  49. BC Bob says:

    “Some of the world’s largest sovereign wealth funds are seeking to reduce their exposure to the US dollar in a sign of global concern about the currency.”

    “One big sovereign fund in the Gulf has cut its dollar-denominated holdings from more than 80 per cent a year ago to less than 60 per cent, while China’s State Administration of Foreign Exchange (SAFE) has been looking to strike deals with private equity firms in Europe as a part of a strategy to reduce its dollar holdings.”

    “Behind the scenes, fund officials are questioning the credibility of the Federal Reserve and US Treasury in defending the dollar and maintaining financial stability”

    http://www.ft.com/cms/s/0/1f51a6de-539b-11dd-8dd2-000077b07658.html

  50. Laughing all the way says:

    Can’t make the GTG on Friday. I’m heading down to LBI. Alternative site, how about The Terrace Tavern?

    I’m not a Jersey guy (from Va), and i mostly don’t like the shore, but i found long beach island pretty awesome. good eats. quiet. nice beach. YOU DON’T HAVE TO PAY TO GO ON THE BEACH. went there for labor day and stayed at the best B&B we’ve ever stayed at. nice town.

    if we are looking to buy anywhere at the shore, that’d be my first choice. spring lake is 2nd … but it’s way, way out of our price range.

  51. John says:

    Morgan had estimated up to $1 bln gain from Bear deal

    Its a bull market baby!!! Lets crush the long oil short financials crowd this week!!!!

  52. Sean says:

    I read someplace, I disremember where, but we are not having a recession or decession or reflation or repression or some kind of infarction.

    The current “worry” has now reached epic proportions which may turn out to be global stagflation – a phenomenon never before encountered, and still yet unnamed.

    I was thinking we should call it “nullflation” or “dammflation” or perhaps “divorceflation”, but I am sure some economic professor from some highbrow English University will come up with something catchier.

    Yes unfun, no bonus, no vacation, and no nookie, global stagflation. After all in these times of no consequences or responsibility who needs to have a localized depression?

  53. lostinny says:

    52 Laughing
    LBI would be my first choice too. Unfortunately, its completely out of the way for us. But I so enjoy it when I’m there.

  54. ac says:

    Housing starts up 9.1% mom (-26.9% yoy). It gets even more interesting when you look into the details.

    08:31 17Jul2008 RTRS-US June housing starts up 9.1 pct; NY code cited

    WASHINGTON, July 17 (Reuters) – U.S. home building projects started in June surprisingly rose 9.1 percent due chiefly to a change in New York City building codes that, if it were ignored, would have seen starts decrease by 4.0 percent, a government report said on Thursday.
    The Commerce Department said housing starts set an annual pace of 1.066 units in June, the highest since February. Economists polled ahead of the report were expecting a 960,000 unit rate.
    New York City enacted a new set of construction codes effective July 1, that largely explained an 11.6 percent increase in building permits and the starts number, the government said.
    Excluding multifamily data in the Northeast, the government said, there was a 0.7 percent increase in permits and a 4.0 percent decrease in housing starts in June.
    Building permits climbed to 1.091 million, higher than the 960,000 expected by economists.
    (Reporting by Patrick Rucker, editing by Joanne Morrison)

  55. Frank says:

    Clotpoll,
    Please let me know when you sell your SKF for a loss.

  56. BklynHawk says:

    I like acronyms so here’s my attempt for an(before a second cup of coffee)alternative name for the US economy:

    The Great H.U.R.L.E

    Housing
    Underwater
    Recession
    Lost
    Economy

  57. Laughing all the way says:

    15 mins till the market opens … what’s the prediction for today? up? down?

    absolutely random bi-like prediction:

    down 45 points for the day.

    (of note: You guys know your stuff so well that I’ve found myself watching CNBC in the middle of the day and laughing at quotes like, ‘have we reached the bottom?’)

  58. NNJ says:

    grim unmod 60.

  59. Sean says:

    re #59 Frank, can you do us all a big favor and please predict the outcome of Fannie and Freddie.

  60. BC Bob says:

    “The Great H.U.R.L.E”

    Rock Chalk [58],

    Next time I see you, remind me about the above.

  61. make money says:

    LOL. When I first came on this site and stated 30-40% off peak, even the bears thought I was delusional.

    The bulls at that time? HMMM, where are they

    I changed my religion!

  62. make money says:

    BC, {51}

    The great bubble called the US Dollar is searching for a pin. Just a matter of time before it finds one.

  63. lostinny says:

    I still say half off. I guess I’m way too bearish.

  64. Frank says:

    #61,
    Why? Who cares about my prediction?

  65. Herring123 says:

    BC Bob (32), actually I think you have it wrong:

    2005 – peak
    2006 – denial (“there is no bubble”)
    2007 – anger (“how dare you say prices can fall an inflation-adjusted 30%, you housing terrorist, you”)
    2008 – bargaining (“ok, prices may fall a little bit, eventually the writedowns will end”)
    2009 – depression (several bank failures later)
    2010 – acceptance (“wow, prices do fall, people were so stupid to pay that price in 2006 because everyone knew a housing bubble was imminent”)

  66. Secondary Market says:

    darn, i’ll be working in the ny office tomorrow too. but i just booked my train back to philly for 5pm. sheeeet!

  67. BC Bob says:

    [67],

    I’ll buy that.

  68. rhymingrealtor says:

    I won’t even say I will attempt to go the GTG in NYC – I was going to the last one that just minutes from me, but alas when I finally could break away from my family obligations it was over. It was an impromptu start of about 5pm but husband not home from work yet, oldest son ( my sometimes babysitter) at work, dinner to be made,since it was at Shannon Rose I almost ran out saying I needed something from Target.
    Oh well, someday.

    KL

  69. lostinny says:

    71 KL
    We missed you at the last one.

  70. Hobokenite says:

    The median price, the level at which half the homes in a market sell for more and half sell for less, changed because fewer high-end houses traded hands, Saatchi said. That doesn’t mean values are necessarily falling, she said.

    Funny how you never hear them saying the opposite while median home prices are rising.

  71. Victorian says:

    sorry if this is a repost..

    Here are the companies which have been placed on the SEC’s no-short list..

    * BNP Paribas Securities Corp
    * Bank of America Corp
    * Barclays PLC
    * Citigroup Inc
    * Credit Suisse Group
    * Daiwa Securities Group Inc
    * Deutsche Bank Group AG
    * Allianz SE
    * Goldman Sachs Group Inc
    * Royal Bank ADS
    * HSBC Holdings Plc ADS
    * JPMorgan Chase & Co
    * Lehman Brothers Holdings Inc
    * Merrill Lynch & Co Inc
    * Mizuho Financial Group Inc
    * Morgan Stanley
    * UBS AG
    * Freddie Mac
    * Fannie Mae

    WTF is Goldman doing on that list???

  72. John says:

    Those are the 19 primary broker dealers authorized by the fed

  73. John says:

    Bond of day for Chi Fin people

    PORT AUTH N Y & N J ONE HUNDRED TWENTY 05.12500% 01/15/2036 SECOND SER SER. 2001
    Basic Analytics
    Price (Ask) 98.476
    Yield to Worst (Ask) 5.230%
    Yield to Maturity 5.230069%

  74. NNJ says:

    Housing: Barron’s Calls a Bottom

  75. NNJ says:

    Oh yeah, let the Barron’s bashing begin.

  76. kettle1 says:

    Cancel your f’n plans, I don’t want to hear excuses.

    NICE! dont F with grim!

  77. njpatient says:

    2 grim

    “Most of the editorial cuts will come from the WSJ’s office in South Brunswick, New Jersey”

    That’s a typo. They clearly meant the New Brunswick that’s in Canada. Or perhaps Brunswick, Maine.

  78. kettle1 says:

    10 COnfused

    perhaps “Bernanke’s Blunder”. While greenspan set the stage our friend Bergabe has not taken any serious steps to stop it.

  79. njpatient says:

    6 grim

    “Boy, I remember the days when saying home prices would fall 30% would be enough to raise a torch-wielding mob.”

    Whatever. Price drops of 30% are mere “stagnation” if they take place over 6 years at -5% per year (as measured by whichever price measurement survey is the most convenient at the time). And in local areas such as Hoboken, Weehawken and parts of Jersey City, prices will be just fine.

  80. Shore Guy says:

    # 4 “We need a name for it. The Great Depression is already taken.”

    Inasmuch as we seem to have reared a geneation, or more, of folks who seem to think they should be able to have everything and anything they want, at any time, and regardless of cost or their income, and they feel robbed if they do not get it NOW! I suggest:

    Ingrate Depression

    In the alternative:

    The: Doh! What were we thinking? Of course bidding up housing prices to 10X annual income, and taking on massive amounts of debt far in excess of prudent relationship to income or net worth depression.

  81. njpatient says:

    8 bairen

    “Has there ever been a 2 year long recession that was “mild”?”

    It’s a new paradigm.

  82. njpatient says:

    “J.P. Morgan posted a 53% fall in net income as the firm recorded $1.1 billion in mortgage-related markdowns. ”

    That CAN’T be true!! bi (and S&P) said there would be no more writedowns!!!

  83. 3b says:

    NNJ Maybe they are right, maybe they are wrong. However, most reasonable people after all that has happened would remain skeptical that we have actually reached a bottom at this point,.

    I have over the last few weeks challenged your contention that prices in NJ will not go down, or only very little, with facts, and reasonable dissent based on those facts.

    In most cases you did not reply.

    My belief remains that you are either a realtor, or a recent homebuyer.

    You whole arguement has been again that prices in NJ will not go down or go down very little, because you say so.

    Once again I would ask you to provide facts,and rational and reasonable arguements as to why you hold that belief.

    While you are at it, please provide an explanation as to what fundamentals drove house prices in North Jersey to 7 or 8 times median income, when the historic average has been 2.5 to 3 times income.

  84. njpatient says:

    15 Tom

    “I’m not too fond of comments like that in the press. The problem isn’t that housing prices are falling it’s that they rose so high.”

    Yep. The MSM still don’t get it. Current reporting is still rife with that crap, and it really frosts my a$$.

  85. NNJ says:

    3b, the reason I don’t reply to you is baseless comments by you that somehow I am a realtor or recent homebuyer. Don’t make conclusions when you don’t have any decent basis.

    Go read the article by Barron’s and dispute those facts. btw, Barron’s did call a Oil Price peak a few back back.

    You do know that Case of Case-Shiller called a housing bottom as well.

  86. BC Bob says:

    “Oh yeah, let the Barron’s bashing begin.”

    NNJ,

    Not Ableson. By the way, Liang quoted the NAR many times in that article. Comforting?
    Is this the best you have?

    http://www.cjr.org/the_audit/barrons_housing_story.php?page=all

  87. grim says:

    Housing is the next bubble, get in now or resign to live the rest of your life in the back of your Honda.

  88. All Hype says:

    Victorian (73):

    You are looking at the too big to fail list. Communism is alive and well in the USA for those companies. WaMu and Wachovia – You are on your own!! Kiss them goodbye…

  89. make money says:

    SAN FRANCISCO (MarketWatch) — Japan’s private-sector financial institutions held slightly more than 10 trillion yen ($95 billion) in debt securities issued by U.S. mortgage lenders such as Fannie Mae and Freddie Mac as of the end of the fiscal year in March, according to a published report.

    You would think that they learned they lesson considering that they’re dealing with this for the past 18 yrs.

    I guess they’re not as smart as we think they are.

  90. grim says:

    Please Lord,

    Just one more bubble.

    I promise not to piss it away this time.

  91. Shore Guy says:

    # 30 “When Obama gets elected he will fix everything ”

    Oh, yea; our agent of change. He will change everything: every dollar you earn will be changed into a quarter.

  92. njpatient says:

    17 grim

    This:
    “Second-quarter sales volume dropped 29 percent and the median price fell 11 percent to $735,000 from a year earlier in the resort communities on the East End of New York’s Long Island, Suffolk Research Service Inc. said in a report today.
    Transactions are dropping as financial firms have cut more than 93,000 jobs and taken more than $416 billion in mortgage- related losses and writedowns. The retreat in global stock markets, waning consumer confidence and the deepening housing recession are also keeping prospective buyers at bay”

    Reminds me of this:

    “pretorius Says:
    March 6th, 2008 at 5:06 pm
    3b,

    Let’s face it, Wall Street layoffs have been mild in light of the size of the financial crisis.

    Remember the doom and gloom you predicted back in September?

    “The old ‘October surprise’ is still the way the street does it.” – 3b, September 2007.

    “I’m hearing 10-20% layoffs. Bear, as we know it, will not be the same. It’s either massive restructuring, 30-50% layoffs” – 3b, September 2007.

    When I look at the jobs report each month, the only places that are negative are Orange County and Detroit.

    The worst case scenario for New York area jobs simply hasn’t played out.”

    Of course, to be fair, if pretorius were here he’d say those 93,000 job cuts were not all from Wall Street itself, and East Hampton is a long way from Manhattan.

  93. HEHEHE says:

    “WTF is Goldman doing on that list???”

    Didn’t you get the memo? They are the unelected rulers of our country.

  94. Joeycasz says:

    #67

    the 2006 denial is spot on.

    I had friends flat out get insulted after they bought in 2006 when i mentioned that the bubble had burst. I got the “i don’t believe there is a bubble” and “location, location, location”.

    I wanted to shake them until the stupid fell out.

  95. bairen says:

    I think I’m going to open a store selling pitchforks, torches, tar, and feathers.

    I believe that will be the next bubble.

  96. make money says:

    J.P. Morgan Chase, the nation’s third largest bank by assets, said Thursday second-quarter net income fell 53% as the credit crisis continued to bite, driving markdowns on mortgage positions and leveraged loans higher, and as the company took more than $500 million in costs for its Bear Stearns acquisition.

    Ok so profit is down 53% and cost went up but the expectations are soo low that they beat the street.

    Pardon me but if my rental profit are down 53% I wouldn’t be too excited and thrilled.

  97. njpatient says:

    31 BC

    “Kind of like an overloaded septic tank. You can only fill it with X amount of —-.”

    Are we talking about the GSEs again?

  98. Sean says:

    re: #73 Victorian

    The SEC is preventing the Hedge Funds from stealing from the impending slaughter, since those banks all need lots of time to unwind losses slowly, for example Lehman is in full deleverage mode they are down from 31% to 24% leverage.

    The more the SEC and Govn’t can do the slow the unwinding the longer the banks have to fix their balance sheets.

    As far as the rest of us? We are all meat popsicles.

  99. Shore Guy says:

    100 Don’t forget pikes.

  100. make money says:

    You are looking at the too big to fail list. Communism is alive and well in the USA for those companies. WaMu and Wachovia – You are on your own!! Kiss them goodbye…

    Amen brother. Once this short lived rally fades(by next week) short them too death.

  101. njpatient says:

    43 chifi

    I missed that post by skeptic somehow. Thanks for repeating – was a good read.

  102. All Hype says:

    You are looking at the too big to fail list. Communism is alive and well in the USA for those companies. WaMu and Wachovia – You are on your own!! Kiss them goodbye…

    Amen brother. Once this short lived rally fades(by next week) short them too death.

    _______________________________________________

    The Fed and the SEC are friggin stupid. They just told you who they are throwing to the wolves and who gets the hammer and sickle bailout. There is going to be a precipitous drop in the market in the next month or so. All this just to give a bunch of stupid ass bankers a chance to make a buck!

  103. njpatient says:

    62 NNJ

    Thanks for the months-stale news.

  104. njpatient says:

    69 Frank

    “Who cares about my prediction?”

    OK – you got me. I’m stumped.
    Who?

  105. 3b says:

    #90 NNJ: I made the so called baseless comment, based on a remark that you made, which I admit I do not remember word for word,but it was a classic realtor comment something to the effect I believe that because of proximity to NYC, prices would not go down in NJ.

    Again that is a classic realtor comment, or a comment from a recent homebuyer who was told that by a realtor. If that is not the case, than I apologize.

    As far as Case Shiller, he may be right regarding Cal. AZ, Fla housing markets.

    In relation to this area I believe he is wrong,and that the correction is not complete yet. The recently ended Spring selling season in North Jersey would tend to support my view.

    Finally I would like to point out that prior to making that comment, (realtor/recent homebuyer) I had challenged you on several occasions to provide a reasonable rational dissent as to why prices in NJ would not go down,

    Than as now you remain silent.

  106. grim says:

    Note: Philly Fed includes portions of central/southern NJ.

    From Marketwatch:

    Manufacturing falls in Philly region for 8th month

    Manufacturing in the Philadelphia region weakened for the eighth straight month in July, the Federal Reserve Bank of Philadelphia said Thursday. The Philly Fed index rose to negative 16.3 from negative 17.1 in June. Readings below zero indicate most firms in the survey said business was worse in July. Economists expected the index to improve slightly to negative 16. Three-fourths of companies reported paying higher prices for inputs, while a third said they were able to raise their own prices.

  107. njpatient says:

    70 Herring

    ”wow, prices do fall, people were so stupid to pay that price in 2006 because everyone knew a housing bubble was imminent”

    This is known as the Joe Klein Stance (also known as the Joke Line Stance and not to be confused with the Larry Craig “Wide Stance”): This week he says that whatever happened last week was what he predicted the previous week.

    Just don’t go back and actually read his old columns.

  108. njpatient says:

    71 Secondary

    “but i just booked my train back to philly for 5pm. sheeeet!”

    (1) you can’t postpone?
    (2) the proper spelling is “sheee-it!”

  109. Shore Guy says:

    Watching the Dow this week, and especially this morning, makes me envision traders watching the Titanic.

    Hits berg: White Star share price goes down 20 points

    Starts taking on water: down 20 points

    Analyst predicts it may sink: drops 40 points

    Although she is listing and bow is starting to go beneath the water, the ship has not slid under the waves as quickly as initially thought: White Star share price goes up 100 points

    Bow fills with water forcing screws up out of water, bridge slides to water level. Analysts observe how shiny the props are, and the quality of the band: Price goes up 30 points.

    Observers note she appears unstable and may sink. Price drops 20 points

    Other observers note that the White Star Line is too important to trans-Atlantic shipping to fail and the Titanic is the most important product, which only recently received AAA ratings. Price surges 50 points.

    ship pitches to 45 degrees, bridge slips under water and analysts note there may not be enough lifeboats for all passengers. Price drops 20 points.

    Other analysts observe that that the ones who are denied lifeboat space are either low income, who are of no consequence to the economy (or as a NJ official notes a “drain” on the economy) or they are wealthy and insured, and their deaths will bring an infusion of cash from insurance settlements and the re-marrying wives will help form even wealthier unions thus improving the strength of the economy, and producing jobs for waiters etc. at weddings, and subsequent parties. Grave diggers are also expecting a windfall. Price increases 20 points and the wider market goes up 10% in anticipation of more good news from White Star.

    As the ship slides into the water, analysts bid up ship builders and White Star increases another 20 points based on the publicity it has received. Said one analyst, “White Star’s name is on everyone’s lips. When people think trans-Atlantic travel, White Star is the name they will think of.” With White Star’s announcement that it plans even more unsinkable ships, and news that “not everyone died” White Star’s shares surge ahead in after-hours trading.

  110. still_looking says:

    even dead cats bounce :) Amen, brother, All Hype.

    grim, we [lamentingly, regrettably and miserably] can’t make the gtg. Maybe next time. see email.

    Herring, I love it.

    sl

  111. BC Bob says:

    AH [106],

    I would love to see a 5-10% rally.

    Every other rally has failed, lower highs, lower lows. The cheerleaders called a bottom on April 18th, when the Dow rallied 224 point, ditto on June 5th, after a 216 point rally. Hey, I guess the bottom is in again? If they ever traded it like they forecast it, they would be busted.

  112. Secondary Market says:

    @112
    i’m trying to book a dog walker so i can stay in nyc a little longer. good to know sheeee-it won’t go to mod.

  113. SS says:

    got to love this one!!

    July 17 (Bloomberg) — Pakistan investors stormed out of the Karachi Stock Exchange, smashed windows and cursed regulators after the benchmark index fell for a 15th day, the worst losing streak in at least 18 years.

    “I have lost my life savings in the last 15 days and no one in the government or regulators came to help us,” said Imran Inayat, 45, a protester and a former banker who retired early and said he lost 300,000 rupees ($4,175) on the market.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a111C0hsxBic&refer=home

  114. Shore Guy says:

    # 118 ““I have lost my life savings in the last 15 days and no one in the government or regulators came to help us,” ”

    See. THAT is the reason billionaires everywhere prefer the NYSE. In times of trouble, they can count on Uncle Sam to come and bail them out and protect their capital investment.

  115. njpatient says:

    OK – I’ll start.

    80 NNJ

    “Oh yeah, let the Barron’s bashing begin.”

    OK, I’ll start.

    That article is so mind-numbingly stupid that it made me tired.

    Here are some choice quotes:
    “Chip Case is … among those who think home prices may be nearing a bottom” [sounds definitive “may be” “nearing” – known as the BOLD STANCE]

    “Case acknowledges history might not repeat, as the U.S. could be on the cusp of a painful recession.” [oh.]

    “Still other numbers suggest prices are close to bottoming. The S&P/Case-Shiller Index for April, released just last month, showed the biggest year-over-year price decline yet, of 15.3%. ” [that sounds ominous]

    “Buried in the numbers, however, and widely ignored in the media, was the news that home prices actually rose, albeit slightly, between March and April, in eight of the 20 markets covered by the index” [gee – why was it widely ignored by the media? Maybe because MOM numbers don’t account for seasonality and are worthless in determining where the market is heading? This sentence is profoundly, breath-takingly stupid.]

    “Other than Larry Kudlow of CNBC, none of the journalists who interviewed me after the latest release seemed at all interested in any of the positive developments,” says David Blitzer, chairman of the S&P Index Committee. “They seemed focused on the bad year-over-year number.” [Oh. My. God. So the only person who agrees with the premise of the article is Larry Kudlow??]

    “Help for the housing market also may be on the way in the form of proposed congressional legislation that would allow the recasting of some $300 billion in troubled subprime mortgages through the Federal Housing Administration. The bill, which some have derided as a bailout, would demand sacrifices by both lenders and borrowers, and could help to ease conditions in the subprime market.
    Of greater importance, a government takeover of loss-ridden Fannie and Freddie — the subject of widespread speculation late last week — would ease concerns about the continued availability of credit in the housing market. Fannie and Freddie, which buy mortgages from banks and repackage them into mortgage-backed securities, are the biggest source of financing for the U.S. mortgage market.” [Ah – so we’re at the bottom because you can trust the United States government to fix the problem. I’m so relieved…]

    “Home prices often take five to 10 years to recover fully from severe declines such as this. But at least the available data suggest the scary dive in home prices soon will be over.” [THAT’S THE CONCLUSION!!! So all that hot air concluded that we are only two years into a downturn that is likely to last between another 3 and 8 years, but we should take heart because the declines in home values will be less rapid going forward]

    NNJ, I can’t decide whose the bigger fool – the author of that article or the guy who link to it here. Every time you open your mouth, some idiot speaks.

  116. make money says:

    See. THAT is the reason billionaires everywhere prefer the NYSE. In times of trouble, they can count on Uncle Sam to come and bail them out and protect their capital investment.

    It’s beacuase of that the NYSE as a leader are numbered.

  117. DL says:

    In 2006 I priced an Audi A6 (U.S. specs, in dollars for export) here in euroland. Price was $46k. Same car in the dealer showroom went for $70k. Today, that car goes for over $100k, twice what it seels for in the U.S. 19% VAT is responsible for some of the difference but I can’t help thinking the dollar is in serious trouble. I expect when I return to NJ the only things we’ll be able to buy with our deflated currency are products made in the U.S. manufactured by U.S. workers with deflated wages.

  118. MT says:

    #21 BC Bob,
    I predicted 30% off from the peak. I think I was wrong. See the house in VA. The price came down from $ $466,000(9/24/07) to $189,900(today 7/17/08). About 60% off!!

    http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?property_type=SFR&source=MRIS&cKey=rsd2k2r6&listing_num=FX6525596&mls=MLS_BALTIMORE

  119. njpatient says:

    85 shore

    “Doh! What were we thinking? Of course bidding up housing prices to 10X annual income, and taking on massive amounts of debt far in excess of prudent relationship to income or net worth depression.”

    That comes after folks can no longer afford to drink Duff Beer all day at Itchy and Scratchy Land.

  120. njpatient says:

    88 3B

    “My belief remains that you are either a realtor, or a recent homebuyer.”

    Likely both.

  121. njpatient says:

    90 NNJ

    “3b, the reason I don’t reply to you is baseless comments by you that somehow I am a realtor or recent homebuyer. Don’t make conclusions when you don’t have any decent basis.”

    That is what is known in politics as a “non-denial denial”.

    Try saying this: “I am neither a realtor nor a recent homebuyer.”

    Can you?

  122. bairen says:

    #103 Shore Guy Says:
    July 17th, 2008 at 10:04 am

    “100 Don’t forget pikes.”

    Pikes probably require skilled labor and would cut into my margins. How about rails instead?

  123. Shore Guy says:

    # 124 The “THrough The Looking Glass” aspect of current policy and the workings of the Market, leaves a prudent person feeling like a chump sometimes.

  124. njpatient says:

    93 All Hype

    “Communism is alive and well in the USA”

    Hey – we have the gulag aspect of it and the spying-on-your-neighbors aspect of it, so why not add the economic aspect of it.

    Is it true that we suggested that Iraq take our constitution, given that we’re no longer using it?

  125. NNJ says:

    njpatient, your stupidity is mind-numbing.

    It seems like OFHEO, NAR, Case-Shiller, Zillow, GSMLS, Barron’s are all wrong or manipulated with the data they publish. The only numbers that matter are ones here. Sure way to stay poor.

  126. chicagofinance says:

    njpatient Says:
    July 17th, 2008 at 10:39 am
    OK – I’ll start.
    80 NNJ
    “Oh yeah, let the Barron’s bashing begin.”

    njp/bost/nnj/grim/albani etc.:

    I sent this e-mail…YESTERDAY…in response to one of my LARGEST clients stuffing this article in my face. SO I STUCK MY NECK OUT WITH MY WALLET, not just spit out a disposable diatribe on a blog….

    _____________________________________________
    From: Jordan Celkupa
    Sent: Tuesday, July 15, 2008 1:50 PM
    Subject: Barron’s Article

    I disagree with it. It seems like a shallow and flimsy discussion. I think we are moving a leg down into a recession, and further credit issues. Honestly, the article discusses why some of the commonly held arguments may be wrong, but it really falls flat as to providing grounds that would catalyze a stabilization.

  127. NNJ says:

    130, now that’s more like it.

  128. BC Bob says:

    patient [119],

    That article can be ripped to shreads. Unfortunately, I did not have the patience[no pun], nor the time to get into it. I don’t know why the dolt, NNJ, did not include Ableson’s setiment reagarding the same market.

  129. njpatient says:

    113 shore

    you forgot one point:

    The Federal Gov’t announces that it will raise the Titanic from the bottom no matter the cost to the taxpayers.

    [Thank goodness they wouldn’t be that stupid, right?]

  130. John says:

    Brokers don’t know nothing. I have a smith barney account I rarely use I get a call out of the blue from the broker regarding a Wamu bond I owe that expires 8/25/08 telling me that SB issued a sell recommendation on the bond. I was like first of all the bond matures in a month and second where were you a year ago. Plus that was Tuesday of this week right before the biggest day in financials ever. Guy told me they were told to call clients as they deem it speculative risk as of Monday of last week. Basically they picked the bottom to tell people to sell. If you did the opposite of what SB told you, you could retire rich. Then he said he was also calling the GM/Ford people advising them to sell. WHAT – the bonds are 50 cents on a dollar, bottom line anyone who bought at 100 cents on a dollar is better off risking getting 30 cents on a dollar in bankruptcy as they still got a chance to get 100 cents on a dollar at maturity and a few interest payments. Where was SB in June when those bonds were trading at 85 cents on a dollar. Bottom line they get paid to guess.

  131. BC Bob says:

    Chi [130],

    Love it.

    JB,

    Can we post that article [Barron’s] as the main topic tomorrow, forget about the weekend discussion. If not, then Monday. Let’s debate that article.

  132. John says:

    Actually, they are raising it from the bottom, searching for DNA in order to clone the victims while they rebuild a replica of the boat so that in 20 years when the cloans are completely grown up the titantic can finish its voyage and deliver its passengers unharmed.

    njpatient Says:
    July 17th, 2008 at 10:55 am
    113 shore

    you forgot one point:

    The Federal Gov’t announces that it will raise the Titanic from the bottom no matter the cost to the taxpayers.

    [Thank goodness they wouldn’t be that stupid, right?]

  133. NJGator says:

    Grim – Re: GTG – Stu’s in Vegas. Is that an acceptable excuse? I’ve asked him to win enough money out there to buy a beach house for summer GTG’s. At the rate the economy’s going, he may not need to win all that much!

  134. chicagofinance says:

    JJ: I have active leads for people bagging SB, Wachovia, and ML for being useless in the face of all this mess and further, stuffing their pockets with AR munis….

  135. njpatient says:

    127 Shore

    “The “THrough The Looking Glass” aspect of current policy and the workings of the Market, leaves a prudent person feeling like a chump sometimes.”

    Yes, and it’ll probably stay that way until our Dear Leader figures out why a raven is like a writing desk.

  136. kettle1 says:

    126 bairen

    may i suggest a mace then, does not require much skill and they are easy to produce.

    http://www.swordsandarmor.com/mall/mace-spiked-club.htm

  137. skep-tic says:

    #17

    “Last year’s $2 million house is still this year’s $2 million house,” Saatchi said. “The difference is this year nobody bought it.”

    so… how do you know it’s worth $2 million?

  138. njpatient says:

    NNJ 131

    “130, now that’s more like it.”

    He disagreed with you, dummy.

  139. njpatient says:

    129 NNJ
    “It seems like OFHEO, NAR, Case-Shiller, Zillow, GSMLS, Barron’s are all wrong or manipulated with the data they publish.”

    No – the data from OFHEO, Case-Schiller, GSMLS and even NAR continue to indicate accelerating damage to RE, so I don’t know what it is that you believe you’re referring to.

  140. 3b says:

    #124 njpatient: Agreed.

  141. NNJ says:

    njpatient, name calling is childish, grow up.

    I know he disagreed with me, he has the balls to put his reputation on the line.

  142. 3b says:

    #129 NNJ: Sure way to stay poor.

    More realtor speak?

  143. njpatient says:

    144 3B

    Think we’ll get an answer to my question at 125?

    I think it’s a done deal.

    Both.

  144. Tom says:

    njpatient,

    “Is it true that we suggested that Iraq take our constitution, given that we’re no longer using it?”

    When you storm into a place with a bunch of soldiers I think it may be considered more than a suggestion. :)

  145. njpatient says:

    “I know he disagreed with me, he has the balls to put his reputation on the line.”

    He’s self-employed.

    Have you put your reputation on the line?

  146. chicagofinance says:

    FYI….please recall the June 2, 2008 cover story of Barron’s…published when the prevailing stock price was $17.10. A recent low below $9 was reached 48 hours ago, although a dramatic run has brought it back to $12.

    http://online.barrons.com/article/SB121218756175534083.html?mod=9_0031_b_this_weeks_magazine_main

  147. 3b says:

    #131 NNJ: now that’s more like it.

    And yet you relied on someone else to come up with it.

  148. njpatient says:

    146 3B
    “More realtor speak?”

    Good point – I missed that.

  149. NNJ says:

    Yes Barrons was wrong on GM, seems to be right on Oil. And anyones guess on how right they are on Real Estate.

  150. NNJ says:

    3b & njpatient, you guys are idiots.

    I don’t know why any realtor would like prices to stay high, they should care about volume and not price.

  151. 3b says:

    #145 NNJ: I know he disagreed with me, he has the balls to put his reputation on the line.

    As opposed to yourself.

  152. bairen says:

    #153 NNJ

    1 for 3 would make them an All star hitter in baseball.

  153. chicagofinance says:

    NNJ: I appreciate that comment. So we are zealots here, but we are not nuts…..

  154. twice shy says:

    Isn’t Barrons now owned by Rupert Murdoch, along with the WSJ? You need look no further as to why editorial standards may have been lowered and reporting quality compromised.

  155. 3b says:

    #154 NNJ: Name calling? In my disagreements with you, I have never resorted to name calling

  156. NNJ says:

    159, 3b, sorry I think it was BC Bob.

  157. kettle1 says:

    NNJ i missed it, what is barrons stance on oil?

  158. make money says:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aSGUyHu0Si64&refer=home

    Wall Trade Center in the new Michigan of Auto industry!

  159. heavy hitter says:

    #76

    “Here are the companies which have been placed on the SEC’s no-short list..”

    What a list of posers. HH does not need government backup. I take my (rare)losses and move on.

  160. njpatient says:

    NNJ at 129
    “njpatient, your stupidity is mind-numbing. ”

    NNJ at 145
    “njpatient, name calling is childish, grow up.”

    NNJ at 154
    “3b & njpatient, you guys are idiots.”

  161. njpatient says:

    156 bairen

    “1 for 3 would make them an All star hitter in baseball.”

    Yes. Except they’re wrong about oil, too, so 0 for 3.

  162. njpatient says:

    161 kettle

    Here’s Barrons’ stance on oil
    http://online.barrons.com/article/SB121400286913193263.html

  163. njpatient says:

    and in keeping with their RE article, here’s the full hedging from Barrons:

    “In the next decade, oil indeed may hit $200 a barrel. But prices could fall to $100 a barrel by the end of this year if Saudi Arabia makes good on its pledge to increase production; global demand eases; the Federal Reserve begins lifting short-term interest rates; the dollar rallies, and investors stop pouring money into the oil market. ”

    So there are a full 5 “ifs” (count ’em) needed to accomplish their preduction, each less likely than the last.

  164. njpatient says:

    3B – you notice still no response to 127?

  165. BC Bob says:

    “And anyones guess on how right they are on Real Estate.”

    NNJ,

    I’ll go out on a limb. Abelson,[Barron’s], is correct, Liang is wrong. My reputation is now on the line.

    Liang’s position seemed like a regurgitation of Yun’s garbage. I’ll be happy to debate point by point.

  166. Tom says:

    #85 devils advocate: who is to say that median income multiple is the right way to value a house? What about a multiple of average income? Or median upper class (ie for the most part, those who buy homes) income? Median ignores the case of the “rich getting richer,” which there has been some evidence of lately.

    For example, say five people lived in NJ and their incomes were this in 1999: 20 20 50 89 100. The median is 50. If the average house is $300, this is 6x median income. The average is 55.8, so houses are 5.4x average income.

    Now fast forward to 2006 and their incomes are as follows: 18 22 59 110 120, and the average home is $400.

    The median income is still 50. Homes are now 8x median income (2x more) but the average is 65.8 so they are 6.1x average income, an increase of just .7x.

    Granted i know nothing about the relationship of average vs. median income as a multiple of housing prices over time, but there is no rule that says house prices should be a certain multiple or anything. They are determined by the market and not all buyers and sellers use the same “rules of thumb.”

  167. HEHEHE says:

    I find it interesting the recent spate of seemingly overly optimistic Barron’s articles may have something to do with Rupert Murdock’s recent takeover of all the Dow Jone’s pubs?

  168. PGC says:

    #129 NNJ

    “It seems like OFHEO, NAR, Case-Shiller, Zillow, GSMLS, Barron’s are all wrong or manipulated with the data they publish. The only numbers that matter are ones here. ”

    You do have a point here. Only the NAR have released a correction based on Grims numbers. The others should start falling into line soon.

    Will be sorry to miss the GTG, the new tax deduction is keeing m up at night.

  169. HEHEHE says:

    From Dealbreaker:

    Raid On Wachovia!
    Posted by Bess Levin, Jul 17, 2008, 11:20am
    Ten state securities regulators just showed up at Wachovia’s St. Louis headquarters, reportedly seeking documents on auction rate securities sales and marketing practices. Today’s “on-site investigation” follows over seventy formal complaints and Wachovia’s failure to comply with requests for information.

    http://dealbreaker.com/2008/07/raid_on_wachovia.php

  170. kettle1 says:

    Does Bi work for Barrons????

  171. njpatient says:

    Hey NNJ
    Re the guy who wrote the oil article?
    He’s the same guy who wrote this completely brilliant piece about a dozen stocks that could rebound this year.

    You should see the names on that list!

    http://online.barrons.com/article/SB119949673330669207.html

  172. njpatient says:

    174 PGC
    har!

  173. John says:

    Trouble with median income is that at best 60 – 70% of people really have financials to afford a house. Historically, pre easy money only people above a certain income level with steady legal income could buy a house. So the median income that the census includes mcdonalds and car wash workers etc.

    If you use median income to guage home affordability only the top 70% should count as the bottom 30% should be renting.

  174. NNJ says:

    Hope you don’t follow Shiller:
    (published April 1, 2002, maybe it was a joke)

    http://money.cnn.com/magazines/fortune/fortune_archive/2002/04/01/320622/index.htm

    Certain regional markets may already be in trouble. According to data from Case Weiss Shiller, home prices in San Francisco have been dropping precipitously. In the first quarter of 2001 the average price of a single-family home there rose 4%, but by the end of the year had fallen 7%. “We’re seeing a bubble bursting right now in San Francisco,” says Robert Shiller, an economics professor at Yale University and partner at Case Weiss Shiller. “We’ve never seen such a sharp drop, and we’re expecting it to fall even more.” Shiller, who warned of a stock market bubble in the late 1990s and coined the phrase “irrational exuberance,” believes there’s the risk of a housing bubble in other major cities. At the top of his watch list are Portland, Ore., Seattle, Denver, and New York.

  175. njpatient says:

    176 sapiens

    “Could it be true?”

    I have no idea, but given that the US federal gov’t gives every indication of intervening in the contractual relationship between banks and homeowners, perhaps going REO doesn’t look like such a bad option to the banks anymore.

  176. njpatient says:

    NNJ

    More old news?

  177. HEHEHE says:

    Patient that is quite a list :))

  178. bairen says:

    #178 njp

    Do you think that writer is bi?

    7 of his 12 picks are done over 30%

  179. skep-tic says:

    #62

    “The surge in low- and mid-range sales has been sufficient to push average peak-to-trough prices down by 24.6%, despite the index’s valuation-weighting.”

    so this Barron’s argument is that overall declines are misleading w/r/t to high end properties because a higher percentage of sales are now happening at the low end. I would actually come to the opposite conclusion. Higher priced homes are not selling in large part because of the lack of availability of jumbo mortgages and the recent requirement to document income. The fact that there are apparently so few higher end sales causes me to question the reliability of price discovery happening there. It seems reasonable to believe that the market clearing price is actually much lower than the prices as reported

  180. bairen says:

    #184 freudian slip. done = down

  181. Sapiens says:

    NJP -(181)
    God help us, there will be blood on the streets.

  182. Fiddy Cents on the Dollar says:

    Tom :171

    Be careful trying to apply median income to home prices. With such a wide range of incomes in NJ, you can’t put everybody into the same cubbyhole.

    At the low end of the income scale, those folks can’t buy a median home. They should look at fixer-upper bungalows (if they’re handy) or strictly rentals (if they don’t know a screwdriver from a hammer).

    The government can’t mandate that everybody gets a Center Hall Colonial located in a good school district.

  183. skep-tic says:

    #62

    “According to the latest report from the National Association of Realtors, sales of single-family homes, condominiums, town houses and co-ops edged up 2% in May from April’s levels. That might not sound like much of a jump, but May marks only the second month in the past 10 to have seen an increase.”

    seasonality?

  184. BC Bob says:

    sapes,

    Where have you been, digging?

  185. kettle1 says:

    188 Fiddy

    The government can’t mandate that everybody gets a Center Hall Colonial located in a good school district.

    But the can sure as heck try, comrade!

  186. Tom says:

    171: Tom (not me I’m not replying to myself :) )

    The median price to income ratios are pretty good indicators. If you take a microscope to one particular area and only look at a handful of sales it might be meaningless.

    Have a look at the chart toward the bottom of this page that shows historical median house price to income ratios broken down by income level. It may answer some of the questions you had in your post.

  187. NNJ says:

    chicagofinance, being zealot is not bad, cherry-picking data to reiterate pre-determined conclusions is dangerous.

  188. 3b says:

    #169 NJpatient: Are you surprised??

  189. 12 to 15 percent is a significant decrease in home prices. Let’s hope that it doesn’t turn out as bad as predicted.

  190. njpatient says:

    “cherry-picking data to reiterate pre-determined conclusions is dangerous.”

    And how about falsifying data?

    I guess you’d have to be a real nar to do that.

  191. Tom says:

    171: Tom

    One more… this is a chart that shows the median and average house price to median incomes for bergen county. I cound’t find data for the average incomes.

  192. Fiddy Cents on the Dollar says:

    Gubmint Mandates….in an election year, the promises are flying hot & heavy.

    Median Incomes….again, I caution. The incomes in Tom’s example are all over the map. The median is still $50K. But at the low end, you’re not on the same playing field. No soup for you!

  193. skep-tic says:

    #62

    “It is important to remember, as well, that even after a steep drop in the S&P/Case-Shiller Indices, long-term buyers in the top 20 U.S. metro markets have seen their properties appreciate by 70% since 2000. Home prices often take five to 10 years to recover fully from severe declines such as this. But at least the available data suggest the scary dive in home prices soon will be over.”

    I guess that is why the builder’s confidence index is at an all time low.

    Banks are also obviously very optimistic on housing, which is why they continue to tighter mortgage approvals.

    We also have 10.8 months of inventory of homes on the market nationally, not counting all of the REOs and FSBOs. So this is also a good sign.

    Finally, 70% return in the last 7 years implies a compound annual rate of return of over 7.5%, which is well over the long term historical return on residential real estate, which is between 3-4%, so clearly this is also a sign that prices are at a bottom.

  194. Nom Deplume says:

    No F’in Excuses was directed at me, I think.

    No Excuses, this is the Recession/Grim Appreciation GTG, NYC Version. I have it INKED in (no f’in pencil for me).

    Patient, you in? You can always go back to the office.

  195. John says:

    Ok serious question. I am booking speakers for a conference and a big shot at the CFTC commodities futures trading commission wants me to propose topics for a one hour speech that mainly accounting, complinace, auditor, consultant, type people from BDs, banks, CFMs or big 4 firms will attend.

    Any suggestions on topics. Please leave the funnies to a min.

  196. chicagofinance says:

    Tom Says:
    July 17th, 2008 at 11:32 am
    who is to say that median income multiple is the right way to value a house? What about a multiple of average income? Or median upper class (ie for the most part, those who buy homes) income? Median ignores the case of the “rich getting richer,” which there has been some evidence of lately.

    GPS: You invoke the “rich getting richer”, which I guess places you right in the crosshairs for a series of indictments about your objectivity. Regardless, your logic is flawed because you only parse the data set relative to income. If you marshal the data set for housing prices in an identical fashion, then you by definition are providing the most acceptable statistical numerator for your supposedly flawed denominator.

    I am not suggestion that it is ideal, but it the most mathematically defensible.

  197. chicagofinance says:

    suggesting

  198. 3b says:

    #195 NNJ: Cherrypicking data? If there haas been one consistency on this blog since it’s inception it has been grim’s determination to present all the data, from all sides.

    Did you forget it was he who successfullly challenged the NAR on the NJ data, which required them to issue revised numbers?

    Who exactly is cherrypicking data?

    You are posting information provided by Barrons in this instance.

    They and others had resisted from the begining that there was a housing bubble, along with so many other issues that they and others in the MSM pooh-poohed.

    Now Barrons in this instance is claiming we are at the bottom.

    So explain to me why people on this site should not be skeptical of Barrons in this instance, who was part of the MSM who denied the existence of a bubble in the first place?

  199. kettle1 says:

    Regarding the Grim appreciation GTG,

    working on my schedule, may be there will know by the end of the day.

  200. 3b says:

    #197 Why???

  201. kettle1 says:

    hey if barrons is 0 for 3 doesnt that mean that statistically they are more likely to be correct on each subsequent call? or are they all independent events?

  202. Sapiens says:

    Bob -(191)

    It turns out I am a crappy farmer, and to tell you the truth I am not to fond of it. Fellow down the road tells me we just got too much rain. Whatever.

    But all in all I am ready for whatever may come.

    How about you?

  203. chicagofinance says:

    John Says:
    July 17th, 2008 at 12:07 pm
    Ok serious question. I am booking speakers for a conference and a big shot at the CFTC commodities futures trading commission wants me to propose topics for a one hour speech that mainly accounting, complinace, auditor, consultant, type people from BDs, banks, CFMs or big 4 firms will attend.

    Any suggestions on topics. Please leave the funnies to a min.

    http://www.chicagogsb.edu/pdf/weil_testimony.pdf

  204. Fiddy Cents on the Dollar says:

    John-

    Re: Topics

    See if they want to address the Ratings Agencies that blessed all the sub-prime bundles as AAA quality.

    I’d like to hear that speech myself.

  205. Nom Deplume says:

    [71] Secondary,

    If you have a regional ticket, you can use it on another train; I did this all the time. Acela may be tougher, but I always used the “missed the earlier train” excuse with the conductor and NEVER got any smack.

    If you need a dog walker and are anywhere near Rittenhouse, call Arnie Zacharias on Panama Street (he is in the book). Tell him the owner of a Boston Terrier named Lord Byron referred you. Just don’t be put off by the funky answering machine message. (Course, he would need access, so if that is not possible, don’t bother).

  206. RentinginNJ says:

    who is to say that median income multiple is the right way to value a house?

    Whether or not it’s the right way to value a house, medain income and home value have historically been correlated and have tended to move in tandem. Historically, whenever home values grew faster than median income, a correction took place. When median incomes rose, so did home values.

    So, are you now suggesting that the past 100 years of historic precedent is merely a statistical coincidence? Or, is it really “different this time”?

  207. Clotpoll says:

    Frank (59)-

    Do you have any idea where I’m averaged in at? Do you have any idea of using shorting as a portfolio hedge?

    Then STFU.

  208. make money says:

    Prime looks terrible,” he told analysts on the call. “And we’re sorry, and there’s nothing else we can say.”

    The company currently holds $34.4 billion of jumbo mortgages, along with $2.5 billion of Alt-A mortgages. Net charge-offs among prime loans in the second quarter rose to $104 million, more than double the $50 million recorded just one quarter earlier. JP Morgan jumped in headlong into jumbos and Alt-A mortgages during 2007 — obviously an ill-timed bet, given where the market has headed.

    “We were wrong, we obviously wish we hadn’t done it,” Dimon told analysts. “We’re very early in the loss curve.”

    Home equity loans are also proving to be problematic; JP Morgan holds $95.1 billion in the category, and saw net charge-offs rise to $511 million in Q2 from $447 one quarter earlier. High CLTV seconds in particular are “performing poorly,” according to the company’s investor presentation.

    Jamie Dimon says Prime loans are terrible and he wishes he hasn’t done it. I like this guy. He’s a straight shooter.

  209. BC Bob says:

    “Do you have any idea where I’m averaged in at? Do you have any idea of using shorting as a portfolio hedge?”

    Clot,

    Hedge? I’m not sure he understood averaged?

  210. BC Bob says:

    John,

    Regarding margins and position limits;

    Bring up the topic of large spec’s designating their orders as swaps, in order to be qualified as a hedger.

  211. Clotpoll says:

    BC (115)-

    “Hey, I guess the bottom is in again? If they ever traded it like they forecast it, they would be busted.”

    Here’s what I really like: a slop shop like LEH tells the world that all is fine, no capital problem…then goes out three days later and raises a gazillion dollars. Why is this blatant lie somehow OK, and short-sellers get punished for alleged “rumor-mongering”? The biggest rumor-mongers of all are the CEOs of these insolvent institutions.

    If the SEC cracks down on shorting financials, “price discovery” will be more brutal, capricious and volatile than if you, me and the whole world naked shorted the whole sector.

    Welcome the the F@scist States of America, Japanese-style.

  212. Clotpoll says:

    NNJ (129)-

    I AM a Realtor. I do this every day. In fact, all I do now is help borrowers and lenders pick up the shattered pieces of deals that should never have been done.

    One big problem right now is: ALL THE NUMBERS FROM THE ORGANIZATIONS YOU MENTION EITHER ARE COOKED, OR ARE SPUN TO THE POINT OF BEING TURNED INTO OUTRIGHT LIES.

  213. Jamey says:

    6: How long before some of those underwater homeowners turn those torches on their own houses?

  214. 3b says:

    #220 Clot: Are you cherry picking the numbers????? But hey NNJ appears to know better than you, what with you acyually being involved in this every day.

  215. bairen says:

    #211

    Any chapter from Poor Charlie’s Almanac.

  216. Jamey says:

    99, 126:

    I’m more a halberd kinda guy. Keeps the severed head from sliding down to the pommel end of the pike.

  217. 3b says:

    #214 rent: Or, is it really “different this time”?

    God, didn’t you really think that it is different this time would finally be put to rest, after all that has happened?

  218. Clotpoll says:

    3b (222)-

    NNJ should spend a week with me.

    You haven’t lived ’til you’ve seen a family in default on a 900K mortgage eating dinner off their last piece of furniture: a pool table.

  219. Tom says:

    By the way, from the limited first hand accounts I saw in my area, people that were buying 600-800k homes in my area had around a 100k combined income and very little savings. A good down payment was considered 10%. At least that was true of first time buyers.

    The ones that had a combined income of around 200k were buying 800-1,000k homes but only because they had a good amount of savings and a great deal of equity as they climbed the property ladder. The ones in hoboken made out the best. For them, buying a 900k home was like buying a 400k home as a first time buyer.

    The problem with spending too much of your income on housing is that you have less to put away towards savings and into other spending that helps the economy as a whole.

    If you bought a house at the inflated prices and thought it would be a good investment so you weren’t too concerned about other savings, it was a bad decision. You’d be better off renting and putting the difference into other investments. Even something safe and low earning like CD’s. It’s probably going to be about middle of next decade before a home bought in 2006 will reach the same price again according to forecasts.

    People buying homes that much more than they make isn’t good for them, it isn’t good for the banks, it isn’t good for the economy. Add the increase of other necessities and things don’t look good.

    The thing I ask myself when I look at the chart broken up by income is… Do the people in the high income group have a high income because they purchase homes around 1x yearly income? Think about it. If you only lived in a home that was 1x your yearly income, you’d have a ton of money to put into other investments.

    Except for one case where someone had a really good run, the people I know that live in million plus homes started out in more modest homes. As the market improved, their mortgage balance decreased and their income increased they were able to move up to better and better homes.

    First time buyers shouldn’t have been turning up their noses at houses just because they didn’t have new hardwood, kitchens with SS appliances and granite countertops.

  220. Nom Deplume says:

    [192] Kettle,

    Seems I am hearing “comrade” being used a lot more these days. Mostly in sarcasm. I mentioned it to a friend and he agreed that he has been hearing it a lot too.

    Should I buy my Che t-shirt now, before the run?

  221. Nom Deplume says:

    [221] Jamey,

    Watch the news and this blog. Already there is a big uptick in arson.

  222. Jamey says:

    165:

    Which would make them perfect for the Mets…

  223. PeaceNow says:

    For your afternoon entertainment:

    http://lovelylisting.blogspot.com/

  224. 3b says:

    #227 Tom:it isn’t good for the banks, it isn’t good for the economy. Add the increase of other necessities and things don’t look good.

    I agree. See if you stretched to get into the house, and most of your check is going to apy the mtg, and other necessities, than there is little to no disposable income to buy disposable consumer goods.

    And if you can’t HELOC, and your CC’s are maxed, than you are of no use to the consumer driven economy.

  225. 3b says:

    #226 Clot:900K mortgage!!!! Truly incredible, probably needless to say, but they did not of course have the income to support that kind of mtg.

  226. njpatient says:

    202 nom
    indeed!

  227. Frank says:

    “Do you have any idea where I’m averaged in at? Do you have any idea of using shorting as a portfolio hedge?”

    Clot,
    Since you’re so negative, I assume you are all short, so you hedge your shorts with ultra short SKF? Do you understand what hedging is?

  228. Outofstater says:

    #226 Clot – I hope you are planning a vacation with your family this summer. It sounds like you could use a break from the nonstop misery you see on an hourly basis.

  229. njpatient says:

    209 kettle

    “hey if barrons is 0 for 3 doesnt that mean that statistically they are more likely to be correct on each subsequent call? ”

    You are kidding. I know you are kidding.

  230. skep-tic says:

    #227

    The trade up strategy worked really well for a long time. I do not think it is going to work out so well going forward. You cannot count on your starter home to appreciate in value sufficiently to allow to move up to a better home based on this alone anymore. You actually need to make more money and save more, which is also questionable for many people given that wages are stagnant for most of the middle class and savings are minimal in most families. You do make an interesting point about the upper income brackets pulling away, but upper income housing does not exist in isolation. As housing down the chain gets cheaper, it will ripple up, I think

  231. Clotpoll says:

    Frank (235)-

    Please cease your straw man positing as to what I may or may not be long or short.

    There are scads of issues one can be long in this market…even if one’s sentiment is overarchingly negative.

    Why the desire to continually harp on the two-day performance of one ETF I happen to own? What’s your real agenda here?

  232. Clotpoll says:

    Stater (236)-

    A vacation would cut into my drinking time. :)

  233. Frank says:

    “You haven’t lived ’til you’ve seen a family in default on a 900K mortgage eating dinner off their last piece of furniture: a pool table.”

    Weeeeeeeeee, I can not afford to pay for my McMansion, my Hummer, my Jetski, my Ipod, my wide screen TV and a pool with my realtor job. Weeeeeeeeeeeeeeeee

  234. Frank says:

    “What’s your real agenda here?”
    I have not agenda, you were making fun of my XLF pick, now it’s payback time, I have no hard feeling.

  235. BC Bob says:

    “Weeeeeeeeeeeeeeeee”

    Frank,

    I know it’s difficult, however, can you try your best, not being an idiot? At least for one day, maybe even an hour.

  236. kettle1 says:

    237 NJP,

    yes, a poor attempt at humor

  237. Clotpoll says:

    Frank (242)-

    Perhaps you need to repeat 5th grade math (in particular, reading charts).

    In the past 3 months, XLF has dropped to $20.50 from around $28. In the same time frame, SKF has gone from around $105 to $141.

    Pick any time frame from one month out. One of these issues is in the money; one is a dog with fleas.

    BTW, your attempt at humor is pitiful. You’re actually managing to plumb the depths below the level of troll now.

  238. njpatient says:

    244 ket
    it’s such a common misperception when it comes to probability that I’m never sure…

  239. Hobokenite says:

    So any clue how late the GTG will last? I’ll be in the area, but busy until later (9ish).

  240. njpatient says:

    “Frank,
    I know it’s difficult, however, can you try your best, not being an idiot?”

    No.
    This has been another episode of Easy Answers To Easy Questions.

  241. Tom says:

    skep-tic,

    Maybe I didn’t state things correctly because what you said in your response is what I was partly trying to say.

    I don’t think that buying a starter home during the bubble would have been a good idea because all homes were overpriced. I think that if people chose to borrow more reasonably the bubble might not have been so bad. If either lenders or borrowers had been more prudent we wouldn’t be in this mess.

    Even if you purchased a home that was 2.5x your yearly income you’d have made a bad investment but you wouldn’t be hurting financially. In the towns around me that would mean a coop in most cases. The coop boards have pretty stringent guidlines from what I’ve seen and it wouldn’t be odd for someone that could get a loan to buy a $600k home would have a hard time getting board approval to purchase a $200k coop. You’d be better off not buying but you would have hopefully made other investments and wouldn’t be at risk of foreclosure unless something else happened.

    One of the point we seem to disagree on is who is at fault and I’m genuinely interested in understanding your position better.

    From your comments you seem to think that the consumers should have shown greater restraint. That they were looking for easy money. I feel that a lot of companies made big money during the tech boom even though there was a huge correction. Other companies have since been seeking that easy money again. Since then, it seems more companies are seeking short term gains rather than practices that would show sustained growth at a slower pace. It’s one thing for a $10million company to show 3 or 4 digit increases in value but when a $1billion company tries it it doesn’t work.

    The consumers were just trying to do what the businesses were doing in my view. I think we all need to be more responsible.

    I kinda feel like some of the bigger companies had this feeling to not look like dogs during the tech boom and tried to show similar gains. After the bust, the accounting scandals and other problems and now the housing bubble, that maybe we never really reached a bottom with the tech bubble and since then companies have been trying to find a way to make up for that. Instead they see the money coming in and like it and instead of trying to use it to fix the problem cause another one. This is all just crazy speculation with nothing to back it up though. :)

    In the start of this decade, the government tried to encourage lending so that consumers could help drive the economy to fight the recession. It worked, and it also helped us get out of the Great Depression. What happened though, instead of using that practice as a quick shot of adrenaline to catch up and then let things go back to normal, people liked the results they were seeing and didn’t want to stop.

    Many people that can’t qualify for a prime loan probably can’t because they don’t have good money management skills. Expecting them to be restrained seems like a stretch. Lenders should have known better.

    I think it would have been great to have a bit of a boost to help get the economy geared up again but I feel that the result wasn’t money being put into the economy to cycle around, instead it was put in the bottom and pulled out the top for the most part.

  242. Tom says:

    I need to learn to type with one hand so I don’t type so much :(

  243. RentinginNJ says:

    First time buyers shouldn’t have been turning up their noses at houses just because they didn’t have new hardwood, kitchens with SS appliances and granite countertops.

    #227 Tom,

    Actually, with most people I know, this wasn’t the case. I think if this were true, the bubble would be most pronounced at the upper-middle and upper end of the market as buyers passed over the lower end stuff. In fact, the most absurd price increases occurred at the lower end as buyers were progressively priced out of mid and upper tier homes.

    I know several people who in a normal market would have bought a mid-tier home, but instead were in bidding wars for unimproved 1950’s POS starter capes lest they be “priced out forever” and never be able to buy.

  244. make money says:

    Clot, Frank (235),

    What are you still doing holding USD?

    Well who is going to fill the Bazzooka with the USD that Paulson will fire off to save fannie and Freddy, and Mer, C, Leh, and the likes?

    well, if you said the US Tax payer you’re half right. They other half will be paid through inflation via USD holders from around the world.

    At some point very quickly, soverign funds, private equity funds, hedge funds, etc will realize this and dump dollars faster then you can blink.

    After this happens the Foreign central Banks will say enough is enough and follow as they don’t want to be the last holding on to this wortless fiat currency.(bagholder)

    This will send dollar to thew floor, commodities and materials through the roof.

    Got GOLD?

    I can’t see another scenerio happening. Does anyone?

  245. chicagofinance says:

    GPS: “I think it would have been great to have a bit of a boost to help get the economy geared up again but I feel that the result wasn’t money being put into the economy to cycle around, instead it was put in the bottom and pulled out the top for the most part.”

    WHAT?!?!? Move to France then…..

  246. Al says:

    Oil at 40$!!! (almost!)

    P.S. I still stand by my new prediction of oil being 150$ before end of summer, and hitting 200$ (my previous one was 150 – made late last year, boy was I wrong) before new year.

    I hope thatfed’s rate will increase significantly and it will prevent inflation, but at the same time we do need to get rid of national debt and entitlment programs like SS and medicare. Also tone down pensions.

    The way to do it is to inflate and index all of thouse with made-up CPI!

  247. chicagofinance says:

    make money Says:
    July 17th, 2008 at 2:22 pm
    Got GOLD?
    I can’t see another scenerio happening. Does anyone?

    albani: Don’t extrapolate a trend line. Think mean reversion and the flexibility built into long-run demand curves. Said in plain English. “If we are so f—ed, where does that leave everyone else?”

    The only way this long-run shift is poisoned is when you have too many people such as the GPS, with their moral righteousness and feel-good legislation, unleashed on the economy.

  248. garageland says:

    Re #37

    I love that I can read about the state of the economy/housing market here AND learn little known alt country facts :-)

  249. Tom says:

    251: Ah I see where I had misspoken. I didn’t mean to imply those houses were any more affordable during the bubble. Just that if people stuck to buying houses within a good price range compared to their income the more expensive houses wouldn’t be selling and it might have helped reign things in.

    “I know several people who in a normal market would have bought a mid-tier home, but instead were in bidding wars for unimproved 1950’s POS starter capes lest they be “priced out forever” and never be able to buy.”

    I know some people in that situation as well. Instead of buying improved 1950’s homes, they were trying to buy the unimproved homes for 200k less. Both were overvalued.

    The first thing that would have happened after the sale would be a delivery of a roll-off dumpster. Must have been a good time to own a few. I don’t know if it was like this everywhere. But from 2000-2005, did you guys notice the dumpsters were getting bigger and bigger? At one home I passed by, I was surprised to see there was anything still standing on the property when I saw the size and that it was full.

  250. Al says:

    P.S. Who pays for USA inflation/credit crisis:

    For Example: Russial in winter of 2007 had 36% of it’s international currency funds (oil money) in Fannie and Freddie stocks. I believe one was 70$ and another was 50$. What are they now?? – 10$ and 8$?.

    Here goes about 30% of Russia’s Oil money for the last 2-3 years. It is not chump change. I founs somewhere that it was about 187 billions last year. so what 50 billions loss??? I guess it is not that much :) compare to Freddie/Fannie defauls costs….

    Smart ministry of finance my home coutry has…. (Yoda)

    Funny – nobody, amongst general population, really care as they would never see these money anyways.

    Another fact: Dollar depreciated with respect to Ruble by about 23% in last 2 years. Infation i russia is at 10-15% (official!!!). So math problem – whats is inflatyion rates based on htis in USA?? Anyone?
    (i know it does not really work this way as main player is upegging of the world from dollar)

    Smart ministry of finance my home coutry has…. (Yoda)

  251. Outofstater says:

    #252 How about a sudden, unexpected and meaningful hike in interest rates? Isn’t that going to become necessary as the world dumps dollars and we hold Treasury parties complete with balloons and streamers and cake only nobody shows up to buy any?

  252. BC Bob says:

    njp [248],

    Yes, slam dunk.

  253. Al says:

    I know some people in that situation as well. Instead of buying improved 1950’s homes, they were trying to buy the unimproved homes for 200k less. Both were overvalued.

    you probably meant for 200K more???

  254. skep-tic says:

    Tom– I think you tend toward the same misconception of our fearless leaders in Washington, namely that the economy is like a marionette. If only we had a more skillful puppeteer who knew how to pull the strings better, we would not be in this mess, or any mess ever.

    I think it is closer to the truth to say that there are certain strings that can be pulled that have a certain effect at the margin, but the marionette actually has a soul and moves on its own accord, like Chuckie. Or maybe it is more accurate to say it is like Voltron, since its actions are determined by the coalescence of individual decisions of individual actors, each of which has free will and different motivations.

    Put more simply, capitalism is a bottom up phenomenon, not top down.

  255. 3b says:

    Headlines from the WSJ:

    The financial sector again led a climb in the broader stock market after strong earnings from J.P. Morgan, with the Dow industrials rising nearly 200 points. Oil prices dropped again, extending a three-day skid of roughly $15 a barrel. 2:34 p.m.

    J.P. Morgan Chase’s net fell 53% as credit-loss provisions more than doubled and its investment bank cut the value of leveraged-loan and mortgage-related securities by a further $1.1 billion. Shares rose. (Conference call transcript) 1:58 p.m

    1.after strong earnings from J.P. Morgan

    2.J.P. Morgan Chase’s net fell 53% as credit-loss provisions more than doubled.

    Can someone tell me which is which?

  256. njpatient says:

    262 skep

    I agree with all of that other than the last sentence, unless by “top” you were referring to the government, in which case I agree. But pure free market capitalism would, if anyone ever tried it, result in a heck of a lot of monopolies, which is about as top-down as it gets.

  257. njpatient says:

    263 3B
    Sorry – the weather is too nice today.

  258. John says:

    You need to work on your math skills.

    The trade up stratgy works best in a down market. If you are in a 500K POS Cape and want a million dollar home every one dollar your POS Cape falls in value the trade up home falls two dollars.

    The Trade down strategy does not work as well in a down market. Your 2006 one million dollar home your were counting on for retirement is now worth 600K when you retire in 2010.

    Anyone looking to trade up should be standing on a soap box screaming with joy every time real estate falls further.

    skep-tic Says:
    July 17th, 2008 at 1:41 pm
    #227

    The trade up strategy worked really well for a long time. I do not think it is going to work out so well going forward. You cannot count on your starter home to appreciate in value sufficiently to allow to move up to a better home based on this alone anymore. You actually need to make more money and save more, which is also questionable for many people given that wages are stagnant for most of the middle class and savings are minimal in most families. You do make an interesting point about the upper income brackets pulling away, but upper income housing does not exist in isolation. As housing down the chain gets cheaper, it will ripple up, I think

  259. RentinginNJ says:

    But from 2000-2005, did you guys notice the dumpsters were getting bigger and bigger?

    Sure. Throughout most of housing history, the conventional wisdom on housing improvements was that they generally didn’t return financially what you put into them (unless you were a pro who did this for a living). You would do the improvement for your own enjoyment and as a secondary benefit you might get back some of what you put into it if you sold. A really good kitchen or bathroom upgrade might get you 80% of what you spent.

    Then, in 2000-2005, improvements were all thought to add outsized value in relation to the investment. Behold, the HGTV age. A coat of paint? Sure, that’s worth $10k. Knock down the sheetrock between the kitchen and dining room? Wow, an open floor plan; $25k; cha ching. And of course the creme de la crème; $20k worth of granite countertops and stainless appliances….$100k, maybe be if you added the coveted island.

    These days I usually skip over listings with granite & stainless because most buyers still think they are entitled to an outlandish return. I’d rather put my own in.

  260. make money says:

    albani: Don’t extrapolate a trend line. Think mean reversion and the flexibility built into long-run demand curves. Said in plain English. “If we are so f—ed, where does that leave everyone else?”

    Everyone else will be better off once they stop supporting us.

    Russia has just past Germany as the leader in European car sales. Car sales are dead here as the US consumers are broke and can’t borrow while Russians are buying cars with cash. Eventually Brazil, Russia, Australia, China and India will pick up the and surpass the demand destruction that will accurr here.

    Ben and the Fed are saying that inflation will come down due to a recession, and wage stagnation, they dead wrong.

    Our standard of living will go to the floor, we wil not be able to afford foreign stuff anymore. Instead of shipping the toys, electronics, apparell, etc to us and not getting paid back th eChinese will use their savings and buy the stuff themselves.

    World markets are down more then NYSE due to the world panicking and worring about us while we are arrogant and keep saying that the rebound and the bull market is right around the corner.

    The next Bull Market is at least a decade away.

  261. 3b says:

    #265 NJPatient: Yes, true. Time for a stroll to clear my head. WSJ Barron’s NY Post whatever, why bother.

  262. Sean says:

    new JibJab is up, http://www.jibjab.com

  263. John says:

    BTW Jamie Dimon is a bit of a luntic. I did a report for him back in 2004 and the dammm chase six sigma girl took my black and white report and turned it into color to show the RAG ratings. Red/Amber/Green. Well that nut saw the 5 page report in color with a 100 person distribution list and he realized color copies are like 40 cents a pop. Well the luntic ran down from his ivory tower over at 270 park and comes running over to 245 Park around 6pm screaming like a maniac to the whole department about who printed it in color and a whole hour bru ha ha happend. The a few days later he was standing by the limos at 8:55am making sure no one got the ride before the 9:00am approved company time. All this is cool but his family lives in Chicago and he takes a private jet back and forth each week and even takes his whole family to disney world on the jet. That God I am too lazy to do color reports and that girl got the blame. Went back to Black and White the next day. It is good to know that Jamie enjoyed my reports but I should have thrown in some housing doom back in 2004 and that stock would be at 100.

  264. Al says:

    About trade-down/up – it would be interesting to see how the prices went up on medium level houses vs started homes. I fee that starter homes/fixer uppers went up a lot %-wise compare to average home.

    I did stated before that with quality of starter homes in NJ and price of next lvl homes being fairly close (about 25-50K difference in some central Jersey towns) it makes sense to save more and buy next lvl home.

    Unfortunatelly I do not see huge drops in price of under 300K priced homes anywere in NJ.

    most lowballs/comp-killers on these site are in 1mil-500K range.

    500K is not an average home in this country. 500K with 12K taxes – Idiotic. I guess people in NJ are too rich.

    AVERAGE home in USA is at 209K. Average home in USA is bigger/newer/better than average home in NJ.

  265. make money says:

    ChiFi,

    con’t from (268)

    This is coming from a life long bull and someone who understands Austrian Economics.

  266. njpatient says:

    Renting

    “Throughout most of housing history, the conventional wisdom on housing improvements was that they generally didn’t return financially what you put into them (unless you were a pro who did this for a living). You would do the improvement for your own enjoyment and as a secondary benefit you might get back some of what you put into it if you sold. A really good kitchen or bathroom upgrade might get you 80% of what you spent.

    Then, in 2000-2005, improvements were all thought to add outsized value in relation to the investment.”

    There’s a very simple reason for this, and it’s the credit bubble. People who didn’t have the cash to put in their own granite and stainless could instead borrow to buy a house that already contained said granite and stainless. To anyone in this position, the value of the house with the upgrades exceeded the sum of the value of the house without the upgrade plus the cost of the upgrade, because they could borrow for the former but not the latter.

    As credit tightens and cash becomes king, the value of upgrades falls through the floor.

  267. make money says:

    AVERAGE home in USA is at 209K. Average home in USA is bigger/newer/better than average home in NJ.

    Al, you must have forgot that we are close to NYC and hence special.

  268. RentinginNJ says:

    it would be interesting to see how the prices went up on medium level houses vs started homes.

    See the data set for NYC commutable
    http://www2.standardandpoors.com/spf/pdf/index/cs_tieredprices_062418.xls

  269. Tom says:

    skep-tic,

    That’s not exactly how I feel. The Bush administration encouraged HUD and other agencies to increase home ownership in america. Since the pulled the strings in one direction they should have reigned them in when things were getting out of hand or stayed out of it to begin with.

    I’m all for a free market and capitalism, but once the scales get tipped on one side, they need to be balanced in some way for capitalism to work. I’m not saying everyone needs to be equal but rather things should function more like the food chain where you have everything from elephents to microorganisms. If one predator hunts their prey to extinction, they risk extinction themselves.

    I think the ideals of capitalism and conservatism have been misinterpreted in the same way screwed up kids with bad hair that sit on the corner and throw bottles at cats misinterpret what anarchy is all about.

  270. skep-tic says:

    #266

    John– during this bubble there were tons of people who traded up every two years. They didn’t make more money in their jobs; they just put big DPs down from price appreciation of their prior homes. Don’t forget they were leveraging their initial investment. This strategy is great when market is going up but does not work in a flat or down market. Since I think we will be flat to down for a very long time going forward, I think the starter house strategy doesn’t make very much sense.

  271. Bubble Disciple says:

    Re: 43

    Most of the people alive in the US today only know of the post-WWII economy (myself included), when we were the only truly dominant economic power.

    I don’t think it’s an accident that the middle class in this country experienced its greatest economic gains while most other countries were rebuilding after WWII.

    It also helped that our only serious military threat (Soviet Union) had a broken economy. Also, we used our power to gain trade advantages over other weaker countries.

    I think things started to change when people in government put the interests of private corporations ahead of people, with the rationale that, if it would all eventually provide an ultimate gain for the US economy.

    This may have worked for a while but was not sustainable, because there is no incentive to invest in the US anymore.

    Now, that the average American worker is facing stiff competition across all segments of the economy, people are realizing that the upward mobility is unsustainable.

    So as ChiFi said, when the economy is no longer growing, people resort to get rich quick schemes. As we can see, this is a negative sum game for the country as a whole, because the short term gains are always eclipsed by the long term loses.

  272. bairen says:

    #271 John,

    When Long Term Capital imploded Jamie spent a few days hanging out in Salomon’s Prime Broker back office bugging everyone about everything. I wanted to point out to him that the back office people weren’t the ones doing trades with LTC, but my boss thought that wouldn’t be prudent.

    Also, when the Worldcom scandal broke in 03 with the analyst who wrote a glowing recommendation on Worldcom emailed to Sandy Weihl about getting his kids into some fancy daycare, Sandy comes strolling past my desk a few days later. I turned to the guys around me and asked if they thought Sandy could help my 1 year old nephew out.

  273. Clotpoll says:

    Anybody see Jamie Dimon on Charlie Rose a couple of weeks ago?

    What a douchebag. One or two breaks go the other way, he’d be in the same boat as Cayne, Schwartz, Mozilo, etc. Instead, he tries to present himself as some sort of paragon of prudent lending.

    His feigned outrage over the alleged rumor-mongering that took down Bear was pitiful.

  274. RentinginNJ says:

    I think the starter house strategy doesn’t make very much sense.

    I agree. It used to be that a starter home was an affordable place for a young couple/family to live for a few years and build equity as you continued to save, get a few raises/promotions at work an prepare to conservatively trade up to something bigger and nicer that you probably couldn’t afford without this steppingstone.

    These days, however, starter homes are way overpriced and you risk losing equity through falling prices. You are better off renting, saving a bigger dp, taking advantage of falling prices and skip the whole starter home step altogether.

  275. Clotpoll says:

    Of all the lenders I do short sale workouts with, Chase is the scummiest by far.

    They recently tried to trap a client of mine in a “loan modification” that would’ve done nothing, other than trap them in their house for another five years.

    My clients don’t speak English real well, and Chase both harrassed them and did everything in their power to get me out of the picture. At one point, they told my client they’d be summarily evicted if they didn’t accept the modification. Chase even tossed my original short sale package and destroyed all their records pertaining to it.

    If that isn’t predatory lending, I don’t know what is.

  276. grim says:

    Most of the people alive in the US today only know of the post-WWII economy (myself included), when we were the only truly dominant economic power.

    I don’t think it’s an accident that the middle class in this country experienced its greatest economic gains while most other countries were rebuilding after WWII.

    Bingo

  277. Nom Deplume says:

    [247] ‘bokenite

    Don’t know but I don’t plan to stick around a long time. Wife and little nom get back from weeklong trip to Chicago (no finance) on Friday and little nom misses Daddy (who is, acc. to little nom, a “Rock Star”).

  278. make money says:

    Most of the people alive in the US today only know of the post-WWII economy (myself included), when we were the only truly dominant economic power.

    I don’t think it’s an accident that the middle class in this country experienced its greatest economic gains while most other countries were rebuilding after WWII.

    You seem to get it. Now what happens? Where do we go from here?

  279. Victorian says:

    Is Dimon turning over a new leaf??

    “Part of that weak economic outlook can clearly be attributed to mortgages. In a surprisingly short conference call with analysts, Dimon suggested that losses in JP Morgan’s prime mortgage book could triple in the foreseeable future as the credit mess moves out of subprime and into Alt-A and jumbo loans.”

    “Prime looks terrible,” he told analysts on the call. “And we’re sorry, and there’s nothing else we can say.””

  280. John says:

    Jamie is a cheapo. Back when I worked at Shearson with Jamie’s friend Peter Cohen that nut had only one supply area in an entire office building. He had some stupid rule pencil had to be less than three inches long and pen must be out of ink and you had to turn in old one to get new one at a time. When someone said at our town hall that is so much work to do I might as well go buy my own, Jaime’s pal Peter Cohen said “exactly” What everhappend to Peter Cohen? That short schmuck got fired around the time Shearson merged with Smith Barney. What a deutch bag, he shook our hands one day to boost morale and that cigar smoking midget was so short I did not even have to stand up.

  281. make money says:

    http://latimesblogs.latimes.com/laland/2008/07/wamu-refusing-i.html

    WaMu not accepting IndyMac Checks even though they’re guaranteed by FDIC.

    I guess they’re pissed that they’re not on that DO NOT short list.

  282. ben says:

    “Most of the people alive in the US today only know of the post-WWII economy (myself included), when we were the only truly dominant economic power.”

    Yes, we built a huge infrastructure to manufacture products prior to the war. Once the war ended, we took off and left everyone in the dust. Today’s economist would have predicted the U.S. economy to collapse with the end of WW2 the same way they predict China’s economy will collapse when the U.S. falls under. Once the U.S. falls, China leaves us in the dust.

  283. skep-tic says:

    #282

    Exactly. My wife and I refer to our current rental as our starter home. Actually buying an equivalent house would be like a trap.

  284. Al says:

    To Clot # 283:

    Clotpoll Says:
    July 17th, 2008 at 3:20 pm
    Of all the lenders I do short sale workouts with, Chase is the scummiest by far.

    Chase even tossed my original short sale package and destroyed all their records pertaining to it.

    If that isn’t predatory lending, I don’t know what is.

    Banks do not have to do short sale. If they prefer to Evict – I am all for it!!!

    Irresponsible/stupid people must be punished for their actions.

    They bid up prices of a house to sky high and made it impossible for me to buy it.
    I do not feel bad for them.

    If all banks would Foreclose Fast and Evict we would get to the bottom a lot faster.

  285. Al says:

    Remember – people used to go to prison for unpaid debts. Now all they get bad credit for 5-6 years.

  286. John says:

    Chase should deport these people and sieze their assets. Plenty of my relatives as well as my wife used to work for chase and hold the stock in their retirement accounts. Those short sale people are common criminals stealing from widows and orphans retirement accounts. The only way they should stay in the house is in an unmarked grave in the backyard.

  287. Against The Grain says:

    #288

    “What a deutch bag”

    I don’t get it. Was the guy German?

  288. Hard Place says:

    271 – Dimon going postal

    John,

    I find that a lot of senior execs have that in them. It keeps people on their toes.

    I’m planning to let my inner postman come out once in a while, so I can move up the corporate ladder so I can get beyond a POS cape.

  289. make money says:

    First, the political situation is that both Paulson and Bernanke were handed a poisoned chalice by their predecessors. By consuming more than we have produced for decades, Americans are now confronting the reality of diminished living standards. These inevitable declines have been masked by a series of massive liquidity injections by former Fed Chairman Greenspan. This was done to avoid the political cost of the natural corrective medicine of recession. It fueled both the dot.com and the real estate booms. The current liquidity injections are now fueling inflation in food and energy.

    The problem for policy makers is that large portions of the electorate are starting to realize that a weak dollar is not simply a problem for those who vacation in Paris. People innately understand that a falling dollar is adding to the cost of living. So there are very strong political reasons for the Fed and the Treasury to talk tough on the dollar. In his Congressional testimony, Bernanke noted that the strength of the dollar is “a top priority”. Notably, he did not say that it was “the” top priority.

    The political reality of the continued erosion of American wealth, and the reluctance of officials to allow the public to fully comprehend the extent of the problem, has tied their hands and feet. However, their mouths still have the ability to move freely.

    While inflation inflicts greater economic damage over the long term, recession causes more “political” damage over the short term. In an election year, it may come as no surprise that the short term problems will attract the lion’s share of attention. However, the rest of the world is not nearly as concerned with these political points, and instead favors combating inflation over recession.

    Doubtless, Bernanke and Paulson see the acute danger of raising rates to combat inflation and to defend the U.S. dollar. The present recession is based on a housing collapse of gigantic proportions and could all too easily be pushed into a depression by an interest rate hike. With this terrifying prospect in view, it is little wonder that Bernanke and Paulson are keener to avoid depression.

    Therefore, like a tackler in American Football or in Rugby, it pays not to look at what an opponent ‘says’ with his eyes or arms or mouth, but at what he ‘does’, with his feet! By ignoring the head fakes, and concentrating solely on the fundamentals, it’s easy to see that the Fed is pursuing a policy of inflation and dollar debasement. So, expect continued soft to neutral action on interest rates, accompanied by further overall weakness in the U.S. dollar.

    With such a stance likely to be in place well into 2009, international faith in the U.S. dollar may fall to such depths that the special “reserve” status it enjoys may be challenged by the Euro. This possibility would move a step closer to a probability once the European Union becomes a sovereign state after January 1, 2009

    newsletter from John Browne

  290. Al says:

    John Says:
    July 17th, 2008 at 3:48 pm
    Chase should deport these people and sieze their assets. Plenty of my relatives as well as my wife used to work for chase and hold the stock in their retirement accounts. Those short sale people are common criminals stealing from widows and orphans retirement accounts. The only way they should stay in the house is in an unmarked grave in the backyard.

    Now you are Talking!!!

    My 401k is down 8% YoY… Lets take it back from thouse short sale people!!! Once we are at it lets also tuck in 5% growth for a year!!!

    P.S. I am not sure about unmarket grave in the back yars though as it will bring RE value of a house down. Come on we have a landfills/hudson river for that. Cement bucket is cheaper than burial.

  291. fg says:

    who makes deutch bags? looie vitton?

  292. Tom says:

    “If all banks would Foreclose Fast and Evict we would get to the bottom a lot faster.”

    Yes, that’s exactly what banks want. To be left holding all those homes after the market has hit bottom so people can scoop them up for pennies on the dollar?

    Banks should be interested in doing short sales and other modifications. The sooner the get rid of these houses the less they have to pay in fees and lose in market value. Plus an existing homeowner will normally be willing to pay a bit more than what the bank could get at auction. The problem is if they can afford to do that.

  293. RentinginNJ says:

    Banks do not have to do short sale. If they prefer to Evict – I am all for it!!!

    Except that a short sale is in their best financial interest. Banks are more than welcome to skip the short sale and go to foreclosure, but what good does that do? They will get less for the asset once its in foreclosure.

    As a shareholder, you should be just as mad at Chase for their reckless lending.

  294. Al says:

    I am not mad at Chase or any side of a Short-Sale. I am just commenting on Clot’s comment about short sales – short sale is a gift to home-owner. A gift which we all giving to homeowner.

    It is not a right or priviledge.

    After looking at about 10-15 completelly ruined houses from Foreclosure – filthy, disgusting and outright scary – I am all for short sale if it helps to avoid meaningless destruction of the property like the houises I’ve seeing.

    But short sale is not a givemn right. it is a confession to a debtor by a bank.

  295. Al says:

    huh – stupid autocorerct corrected to confession but missed givenm

    confession – should be concession

  296. Tom says:

    Al,

    I think you misunderstand. Short sales aren’t a gift. They’re a way for two parties in a bad situation to make the best of it. Chase’s other option would be to wait the month’s it takes to make it to auction while the homeowner lives rent free and hope they don’t declare bankruptcy.

    Now we don’t know all the details of the transaction but the notions you have seem a bit misguided.

    Curious though, what areas are you seeing those destroyed foreclosures? The few I’ve seen were in good shape.

  297. Jamey says:

    282:

    Funny, I felt that way — that the idea of the “starter home” was either obsolescent or outright dead — when I bought my house in 1998.

    I done bought my home then; I had — and have — no desire to pack up and move in a few years. If I had, I’d have continued to rent**.

    **No swipe at renters. Honest!

  298. make money says:

    Larry Kudlow had Ron Paul on his show and gave him all the respect he deserves.

    He talked down the Goldilocks economy and beat up the Fed for their inflation.

    Unbelivable. This is Larry Kudlow and the CNBC we’re talking about. I don’t know of a bigger and more stubborn Bull then larry kudlow.

    See for yourselves.

    http://www.youtube.com/watch?v=BD11WJpJvSg&feature=related

  299. Tom says:

    Clot,

    I’m curious, were are your clients at as far as missed payments or foreclosure? You said Chase threatened to evict, did they already take possession of the property or were they just talking out their rears?

  300. Al says:

    I looked at about 10-15 houses in Middlesex county 9 I can even give you past MLS’s if you want. (towns; Brunchburg, Middlesex, Dunellen, Piscataway…) All houses were starter homes – 250K-300K price range.

    And short sales are gifts to homeowners.

    How about getting rid of student loans??

    Credit card debt settlements are gifts as well – you spent these money and did not pay them back.

    Credit score hits and foreclosure records are just paper trail. it is not like you got your arm cut out.

    I am not misguided – it might be the best think to do for a bank, but it is a gift. Especially now, there is no tax on forgiven debt anymore. feel free to move into a bigger house than you can afford, buy a car with home equity, take a cruise.

    It’s on the house!!! Literally.

  301. Al says:

    I wonder if Middlesex get’s you in moderation???

  302. Victorian says:

    OK — Here is a big one!

    Google Earnings Trail Analysts’ Estimates; Shares Decline

  303. John says:

    Merrill the third-largest U.S. investment bank said its quarterly loss applicable to common stockholders equaled $4.97 per share compared with a profit of $2.07 billion, or $2.24 per share, a year earlier.

  304. John says:

    Only if it is used in the same sentence as daisey chain

    Al Says:
    July 17th, 2008 at 4:21 pm
    I wonder if Middlesex get’s you in moderation???

  305. BC Bob says:

    make [306],

    Don’t cry for me Argentina.

  306. njpatient says:

    “I wonder if Middlesex get’s you in moderation???”

    No, but c*cktail does.

  307. Hard Place says:

    I voted for Gore and I often times wonder what the US would be like if we had a real president with vision.

    http://www.nytimes.com/2008/07/18/us/politics/18gorecnd.html?hp=&pagewanted=print

  308. Sean says:

    MER lost $4.95/share with to $1.91 expected, looks like the financials rally just went up in smoke.

  309. BC Bob says:

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    Financials
    Sponsored by:
    MER 30.73, +2.73, +9.8%) reported a $4.65 billion second-quarter net loss late Thursday as the brokerage firm continued to be hit by write-downs on large mortgage-related exposures. Merrill said it lost $4.65 billion, or $4.97 a share, during the second quarter, compared to net income of $2.14 billion, or $2.24 a share, in the same period a year earlier. Excluding discontinued operations, the net loss was $4.6 billion, or $4.95 a share, Merrill said. The firm was expected to lose $1.91 a share, according to the average estimate of 17 analysts surveyed by Thomson Reuters. Forecasts ranged from a loss of 70 cents a share to a loss of $4.21 a share.

  310. John says:

    Make a nice mix of compost/fertilizer out of the dead beats, at least they will be good for something. Its organic, whole food and wild by nature can sell some organic short sale salad. If we don’t want to decompose them we can use the meat at the Grey Papyaya Hotdog Recession Buster special.

    P.S. I am not sure about unmarket grave in the back yars though as it will bring RE value of a house down. Come on we have a landfills/hudson river for that. Cement bucket is cheaper than burial.

  311. John says:

    A few years back Barrons did a cover story called Chasing Merrill, back then Chase wanted to buy them. If Thain does not turn it around soon Jaimie will be showing him what it means to get it Greek style.

  312. All Hype says:

    I would not want to be a MER employee right now. They must be sweating bullets!

    That was a bad, bad quarter!!!!

  313. John says:

    Capital One income falls 40% on drop in U.S. card income

  314. John says:

    It is so bad that Stanley O’Neal wants his job back at GM building cars, either that or a look a like for Obama.

  315. make money says:

    BC(316)

    It’s ok caused they actually sold the only assets that were worth anything.

    What are they gonna do for new capital next quater?

  316. Sybarite101 X says:

    John,

    Coming tomorrow? It’s only a couple of blocks away from your job!

  317. ben says:

    All Hype, they aren’t sweating. They are still collecting their salaries and their commissions. I had a friend that worked at Bear. He couldn’t wait to get fired because he would get a severance package.

  318. 3b says:

    DJIA Up 276 on Wednesday
    DJIA Up 198 on Thursday

    Merill amkes their announcement after the close, and

    DJIA?????? on Friday

  319. 3b says:

    #323 ben: Of course and some I know are taking the summer off, will look in the Fall.

    Look where?? What happenes when the severacne is gone?

  320. BC Bob says:

    “All Hype, they aren’t sweating.”

    Ben,

    Talk to a few Merrill employess. They are walking on egg shells.

  321. BC Bob says:

    “Look where?? What happenes when the severacne is gone?”

    3b [325],

    Then the BLS adds them to the employment payrolls, birth/death.

  322. njpatient says:

    “It’s only a couple of blocks away from your job!”

    john works around the corner from me?

  323. BC Bob says:

    4:44 p.m.[MER] Moody’s cuts Merrill Lynch to ‘A2’ from ‘A1’; outlook stable

  324. Tom says:

    “He couldn’t wait to get fired because he would get a severance package.”

    He must not be in the financial side of things since jobs in that sector will be scarce.

    I don’t know about other people, but I’d think twice about hiring someone to make financial decisions who didn’t seem to know to get out before he was forced out.

    Plus starbucks isn’t doing to hot and the good positions have already been taking by the last round of layoffs.

  325. BC Bob says:

    “Capital One income falls 40% on drop in U.S. card income”

    The next dominoes to fall; cc, auto loans, student loans.

  326. All Hype says:

    Capital One: What’s in their wallett?

  327. 3b says:

    #327 BC Bob: I guess. But if these guys were smart, they would be looking now, for anything. That severance will go quickly,and the months fly by.

    And in this environemnt it is going to be incredibly tough landing something, even away from Wall St. In fact for many they will not ever return to Wall St.

  328. BC Bob says:

    “I don’t know about other people, but I’d think twice about hiring someone to make financial decisions who didn’t seem to know to get out before he was forced out.”

    Tom,

    Many, on WS, saw this coming. Where do you suggest they could have gone, even those with their eyes wide open?

  329. make money says:

    Capital One income falls 40% on drop in U.S. card income”

    The next dominoes to fall; cc, auto loans, student loans.

    No worries. Fitch will stamp them AAA and they’ll dump them at the Window.

    Say hello to inflation. I’m telling you the Dollar Bubble is searching for a pin.

    Lets get USDreport site going.

  330. make money says:

    Many, on WS, saw this coming. Where do you suggest they could have gone, even those with their eyes wide open?

    Shangai, Mumbay or Dubay…

    It’s like the Michigan car industry, move down south to Chatanooga Tennesee.

  331. 3b says:

    #330 Tom:He must not be in the financial side of things since jobs in that sector will be scarce.

    News flash!! Jobs in ALL sectors are or shortly will be scarce, unless you work for the state of NJ. AKA, The Peoples Republic of NJ.

  332. BC Bob says:

    “Shangai, Mumbay or Dubay…”

    make,

    One other option; BYE-BYE.

  333. make money says:

    http://mrmortgage.ml-implode.com/2008/07/17/mystery-surrounds-wells-fargos-earnings/

    hat tip to Mr. Mortgage.

    WFC earning are quastionable at best and if you ask me deserve a nice little SEC probe.

    Ohh I forgot SEC is busy and they’re sreached thin as we speak.

  334. kettle1 says:

    from another blog i frequent, is this standard of a sign of times?

    A cautionary tale: I took a large check from Smith Barney to my local credit union for disposition. Most of the money went into CDs but I wanted $47K in cash. It was like I wanted their eye teeth and their first born to get the cash out of them. I had to wait 7 days for a certified check from 1/2 mile away to clear and then present my drivers license for photocopy and answer questions while they filled out numerous forms. They made it very obvious that they were not happy about what I was doing although I am rated as a ‘Platinum’ customer and have done biz with them since 1980.

  335. make money says:

    BC (338)

    It’s a sad sad story.

    Just make sure you and your family are OK. That’s all one can do.

  336. njpatient says:

    332 All Hype

    Post of the day.

  337. njpatient says:

    336 make

    “It’s like the Michigan car industry, move down south to Chatanooga Tennesee.”

    Pardon me boys, is that light at the end of the tunnel a choo choo?

  338. BC Bob says:

    “332 All Hype”

    “Post of the day.”

    I saw that one. Classic.

  339. BC Bob says:

    just saw that one.

  340. Tom says:

    “Many, on WS, saw this coming. Where do you suggest they could have gone, even those with their eyes wide open?”

    I can tell you where I think they should go but it would probably get moderated. :)

    Seriously though, a lot of these people shouldn’t be around other people’s money. Most are just people that didn’t know or need to know what they were doing, the banks just needed people to fill seats and answer phones. Just like “stock brokers” and “programmers” during the tech boom that jumped into the field from other areas.

    The ones that knew what was going and didn’t do anything about it or even those that didn’t pay attention and didn’t know aren’t the types that will be able to compete in the tough market.

    The decision makers will probably be ok, serve on a few boards at least. The high end auction markets will probably be doing a lot of business as most won’t be making nearly the same money.

    I wonder if the capt of the titanic went down with the ship because he didn’t want to learn another trade.

  341. grim says:

    From the WSJ:

    Write-Downs Push Merrill Lynch
    Into Red for 4th Straight Quarter
    By KATHY SHWIFF
    July 17, 2008 5:13 p.m.

    Merrill Lynch & Co. posted its fourth consecutive quarterly loss on $9.75 billion in additional write-downs on assets tied to the tanking housing market.

  342. #347 – Merrill Lynch & Co. posted its fourth consecutive quarterly loss on $9.75 billion

    /looks around for njpatient…

    Noo ! It can’t be true, bi said there would be no more write downs!

  343. Sorry njpatient, I wanted to get to use that line one time.

  344. sas says:

    call me crazy… but I think Merrill Lynch will make it.

    They have alot of friends in Asia, whom will give them a hand.

    as always, we will be keeping a watchful eye.

    SAS

  345. sas says:

    WaMu… gone!

    say goodbye to WaMu….say goodbye my baby!

    SAS

  346. njpatient says:

    tosh – feel free, my friend

  347. All Hype says:

    MER: 9.75 billon write down? 9.75 billon? Man, that is a hellava number!

    I will be first to take a crack at the Citi writedown……

    11 billion…..

  348. NJfinance says:

    Is there going to be a posting of the North Jersey June 2008 Residential Sales?

    just curious…

    Thanks.

  349. njpatient says:

    man’s busy
    be patient.

  350. BC Bob says:

    “be patient.”

    njp,

    Is that akin to, be like Mike?

  351. njpatient says:

    “Is that akin to, be like Mike?”

    Exactly, only not as tall, thin, handsome or wealthy, and not nearly as bald.

    I’m named after another NBA fella, though.

  352. Tom says:

    njpatient Says:
    July 17th, 2008 at 6:22 pm

    man’s busy
    be patient.

    Easy for you to say :)

  353. 3b says:

    #329 BC BOB Outlook stable???

  354. njpatient says:

    Senator Larry Craig says we’re no longer going to let other countries “jerk us around by the gas nozzle”.

  355. bairen says:

    #357 njp

    “I’m named after another NBA fella, though.”

    Latrell Spreewell?

  356. bairen says:

    #360 njp

    I’m glad he’s taking a wide stance on this issue.

  357. 3b says:

    #346 TOM: AS a long timer vetran fo Wall St. I take some offense to that comment,

    There are thousands of good and ecent people who have losy and will loose theri jobs.

    Many are secretaries, adminstrative, clerks back office, IT People, and yes even good traders, and bankers,and salesmen.

    I am a former muni short term salesman/trader (in another life), and I and many others took our jobs very seriously and we were proud of what we did and believe it or not the customer always came first.

    Some idiots made some incredibly stupid miatakes and innocent people are paying fro those mistakes with their livlihoods.

  358. Nom Deplume says:

    [357] Patient,

    He has a better jump shot.

  359. BC Bob says:

    3b[359],

    A stable ratings from Moody’s? I’m sure the SEC was altered, provoked them to restrict naked short sales.

    By the way, what planet was the SEC visiting while the maestros were slapping Prime A on a pile of do-do.

  360. njpatient says:

    but he doesn’t work as hard

  361. BC Bob says:

    “I’m named after another NBA fella, though.”

    Is your name Dikembo? I can pic The Dikembo Patient’s after viewing a open house, waving their fingers;

    http://www.youtube.com/watch?v=stjzC8pG15A

  362. BC Bob says:

    an open house.

  363. lostinny says:

    Patient-
    Larry Bird? Because you like to give them the bird? :)

  364. Laughing all the way says:

    what online banking spots are people using that appear safe? Besides ING and Emirgrant …

  365. BC Bob says:

    Maybe he’s David Stern, legal angle? Then again, a Rhode’s Scholar, Bill Bradley. If he’s having s#x with an avg of 3 woman a day, he’s Wilt. In the past, I never realized why his first name was Wilt?

  366. BC Bob says:

    Laughing,

    Everbank?

  367. njpatient says:

    ” In the past, I never realized why his first name was Wilt?”

    But it should have been obvious why he’s “the Stilt”.

  368. Nom Deplume says:

    [366] NJP

    True. I bet you are still in your office.

  369. njpatient says:

    Two stilts for walking. One stilt…

  370. njpatient says:

    374
    you win

  371. Nom Deplume says:

    not really. I’m still here as well.

    But I will get to Brigadoon before you.

  372. Nom Deplume says:

    [370] Laughing

    I am at ING and HSBCDirect. Happy with both but I am over the FDIC limit so I am setting up accts for Mrs. Deplume (half her money anyway).

  373. Laughing all the way says:

    how scared should Wachovia bank users be by this news?

    http://www.bloomberg.com/apps/news?pid=20601087&sid=avoYWzMJM0og&refer=home

  374. PGC says:

    #203 Straw

    I assume you have “GAAP for Dummies” penciled in.

    Here are a few

    Recession Proof Risk – Measuring Risk on the downside of the market.

    Compliance for the uncomplient. – How to make noncompliant departments conform.

    Risk analysis of illiquid products – As the markets for products such as ARS changes, how should Risk and compliance models adapt.

    SOX, Lessons Learnt. – Predicting future regulatory environments and how to prepare.

    Valuing Pandoras box. – How to measure risk of complex products that are difficult to understand.

  375. MJ says:

    @227 Tom: “People buying homes that much more than they make isn’t good for them, it isn’t good for the banks, it isn’t good for the economy.”

    Perhaps, but I sorta understand folks for doing so, and here’s why:

    A family earning of, say, $100k should should expect to live in a house of a certain size and quality. But said family has no opportunity to by the that house for a reasonable price. The prices have been pushed sky high, so that even though the family is paying way more than they can afford, they aren’t necessarily buying more house than they should! In other words, if housing prices were correct, many families would not be so compelled to spend more than they can afford.

    Similarly, a person driving an SUV is not necessarily making the choice to put their own safety and well being in front of sedan drivers. Once a certain amount of SUVs are on the road, a person buying an SUV may just be trying to reasonably protect themselves from being run over by other SUV drivers.

    If a bull in the middle of a herd doesn’t run with the herd, what would be its fate?

  376. Nom Deplume says:

    [379] not very.

    Some background: States are always taking on national banks and federal thrifts, trying to create jurisdiction where none exists. I recently got to tease (very mildly) the NJ AG for trying to enforce the consumer fraud act on subs of national banks. NJ lost badly.

  377. BC Bob says:

    Laughing [379];

    Let’s forget about ARS, I’d have more confidence bankrolling the thugs in South Kearny. No disrepect meant to the thugs, comparing them to Wachovia.

  378. MJ says:

    @238 skep-tic: “The trade up strategy worked really well for a long time. I do not think it is going to work out so well going forward. You cannot count on your starter home to appreciate in value sufficiently to allow to move up to a better home based on this alone anymore.”

    I think you are correct.

    More so, one is probably wiser to forget this whole concept of a “starter home” and save for the home that will suit them until they retire. Especially if one is buying /now/, when almost all of us here see that almost anything bought now will drop and take perhaps a decade to recover principle.

  379. Clotpoll says:

    Al (292)-

    “If all banks would Foreclose Fast and Evict we would get to the bottom a lot faster.”

    Al, before you hold forth on a topic, you might want to actually know something about it. That way, you don’t come off like an idiot. To wit:

    1. Foreclosure is the SLOWEST way to resolve a delinquent loan situation. A big part of that is because foreclosing lenders often do have to evict the former occupant. That takes a lot of time.

    2. Foreclosure is a judicial solution, meaning that time, money and effort have to be expended on attorneys, filings, fees, sheriff’s commissions (yeah, you have to pay the sheriff a commission in a foreclosure) and marshals to enforce judgments. It goes without saying that a non-judicial (i.e., short sale) is a less-expensive, more-expedient solution.

    3. Foreclosed properties- besides costing the bank more and taking forever to resolve- also go onto the bank’s books as non-performing dead weight. So, when a Mr. Perfect like you finally needs that loan to buy your personal Shangri-La, you might want to hope that all your local lenders aren’t jammed up with vacant craphouses. If they are, you might not like the terms you get offered. Deny it all you want, but a foreclosure epidemic now will affect your ability to borrow in the future.

  380. MJ says:

    @241 Frank: ” I can not afford to pay for my McMansion, my Hummer, etc.”

    I bought my HUMMER in cash, FYI. Both of them.

  381. BC Bob says:

    Nom,

    The US Attorney for District of NJ, a huge Boss fan. We had beers together during Born to Run.

  382. sas says:

    “Fannie, Freddie spent $200M to buy influence”
    http://tinyurl.com/5f6dml

  383. Clotpoll says:

    Tom (304)-

    Just in case you haven’t noticed, Al is full of shit.

  384. sas says:

    Fannie’s Damage to Date
    http://tinyurl.com/6z2eph

  385. Clotpoll says:

    Tom (307)-

    My clients were only 60 late, NOD not even delivered. So, Chase wasn’t even close to having any grounds to evict.

    They realized my clients weren’t sophisticated and tried to scare them and take advantage.

  386. Clotpoll says:

    3b (324)-

    Note the quick getaway by the smack-talking Frank.

  387. njpatient says:

    you can say shit but you can’t say c*cktail?

  388. sas says:

    “Investigators find abuse in gov’t contract program”
    http://tinyurl.com/65oply

  389. Tom says:

    Clotpoll Says:
    July 17th, 2008 at 8:20 pm
    Tom (304)-
    Just in case you haven’t noticed, Al is full of shit.

    I tried to give him the benefit of the doubt and just assume he was ignorant.

  390. njpatient says:

    Kevin Drum on the faux logic I’ve previously noted (“rising oil prices will cause falling oil prices”).

    “FINANCIAL REPORTING FOLLIES….The New York Times reports today that the stock market is up. Here’s the story they invented to explain it: (a) there’s a widespread belief that the global economy is tanking, thus (b) reducing the demand for oil and (c) driving down oil prices. Wall Street, (d) seeing plummeting oil prices, (e) is elated and (f) drives stock prices up.

    There are two basic possibilities here: (a) this explanation has been created out of whole cloth or (b) Wall Street investors are idiots. Or both. For now, I’m going with (a).”

  391. John says:

    taking over 10K in cash requires bank to file a SAR on you. Suspicious Activity Report, big pain in butt. keep doing it and maybe you will make OFAC list

  392. Clotpoll says:

    make (339)-

    WFC will have its day when more of the poison percolates up into prime paper.

    WFC mortgages- at the end of the day- are heavily prime, but underpinned by some seriously bad subprime underwriting.

    They’re going to go down hard. In fact, they have yet to really learn their lesson. Right now, they’re out there flogging 3-2-1 buydowns like cheap, rented mules.

  393. BklynHawk says:

    Clot #385-
    You’re right. I think even the “doom and gloomers” and tough love types calling for massive amounts of foreclosures here would really want a more orderly correction at this point.

    Unfortunately, I think we’ve passed that point. Lenders’ standards are getting much more stringent whether by choice or mandate from regulators or management/directors/shareholders/credit agencies. I dont’ know what point in the cycle we are, but it’s not the very beginning any more.

    It will get bleaker for homeowners, sellers, buyers, lenders, government officials in the coming months. Everyone has been or will be affected in some way.

    My only hope would be to get it over sooner than later and get the inevitable over with and move on.

  394. Tom says:

    391: Clotpoll,

    From my short time here I didn’t think you’d be exaggerating, I was just curious. That sure sounds like a screwed up thing to do but I’m not really surprised. When the word subprime first started being spoken in the news, all we kept hearing was that it was going to be limited to the cowboy lenders like countrywide and the big banks wouldn’t have any problems. I didn’t buy it then and we know now it was a lie. I wonder what else will be coming.

    I posted a link with some information on how GE Money was taking advantage of minorities by giving them higher interest rates. Have you had any experience dealing with them?I haven’t heard if they sold off WMC but they did sell off some of their loans at a loss. They had some arrangements with Citi that I think didn’t turn out too well. One of their big credit cards was HD which had really high defaults reported last year.

    I wonder if the beating they’ve taken improved their tactics or made them worse.

  395. Clotpoll says:

    patient (396)-

    Is “both of the above” a choice?

  396. Clotpoll says:

    Tom (400)-

    No direct dealings with GE. However, you gotta think they’re up to their eyes in poo, as GE Financial caused them to blow their last quarter and is weighing down the whole enterprise.

  397. MJ says:

    Where does that person live that they feel like it’s a good idea to walk out of a bank with $47k in cash? I mean, really?!

  398. galgon says:

    Could someone give me an address on MLS:2548743 ?

    I really need to get back on the GSMLS email listing again. I guess its time to search for a realtor.

  399. MJ says:

    @404 galgon:

    329 OLD ALLERTON RD 08801

    neat little house.

  400. Tom says:

    #363: AS a long timer vetran fo Wall St. I take some offense to that comment,

    The IT folks, admin, hr staff, etc will have an easier time moving into other market segments. Those in the finance side won’t have as many options.

    The banks needed to hire more people to handle the volume they were generating. You can’t tell me their all financial wizards. Those people were lucky for the boom to be able to be making the money they were making.

    Those that know what they were doing should have an easier time moving on.

    It wasn’t just a handful of people screwing up. The losses are projected to be in the trillions. We’ve already seen losses in the billions. The whole country has been affected. There have already been indictments and there are ongoing FBI investigations. What happened wasn’t just stupidity, it was criminal in many cases and hopefully the biggest offenders get brought to trial and not just some of these token small fish.

    I’m sure the people are good people, but I don’t really have much sympathy if they lose their jobs. There are millions of people that will suffer loses that weren’t making money off the companies that caused this mess and weren’t defaulting on loans after cashing out hundreds of K in equity.

    Someone should really take a much closer look at what’s happening on wall street. Two huge bubbles so close together just isn’t right.

  401. njpatient says:

    404 galgon
    email grim – he can set you up with listings.

  402. MJ says:

    @404 galgon: catch seems to be Route 78 road noise :(

  403. Tom says:

    Clot or anyone else,

    I haven’t found anything online but I heard GE was looking to sell GE Money. They’ve been trying to sell of some of the pieces in other countries but haven’t read anything about selling off the whole deal.

    Anyone heard anything? The news they’re putting out makes it seem like their consumer finance division isn’t so bad but I find that hard to believe. If anything, I would have thought things would have been worse for them since they bought a subprime lender so late in the game.

  404. Laughing all the way says:

    BC has done it again – i just googled Everbank, and I will be opening an account there soon.

    Sometimes, i never know when the guy is joking or serious but this seems to be another hit.

    Thanks, man

  405. Tom says:

    381: MJ

    A family earning of, say, $100k should should expect to live in a house of a certain size and quality.

    Right, and when they can’t find a house of that size and quality they should realize that housing prices are inflated and wait for them to fall. If people were smart enough to show restraint, prices wouldn’t have gotten so out of hand. Realtors and mortgage brokers convincing a McDonald’s manager making 35k a year to buy a 500k house is one thing. If you’re able to make 100k you should have a little more sense
    to at least question what was happening.

  406. galgon says:

    MJ: Thanks for the info. Looks like its right by the immaculate conception church in Clinton. I am sure their will be road noise since it is so close to 78 but anywhere you go in Clinton will have some road noise issue.

    I guess the catch is i am not sure about buying a 150 year old home. There could be a lot of hidden issues.

  407. Tom says:

    hmm… 411 in moderation. is realtor a banned word?

  408. Clotpoll says:

    galg (411)-

    Sounds like a NASCAR race there.

  409. Orion says:

    Wells Fargo: $84 Billion is a whole lotttaa mullah.

    From HousingWire:

    http://www.housingwire.com/2008/07/16/second-liens-still-lurking-at-wells-fargo/

  410. galgon says:

    Clot 414

    So I can open the windows while I watch a race and feel like I am actually there? Sweet! I think I will be skipping this one. Although I am still encouraged by a decent looking house in Clinton at sub 300k pricing.

    That last house (mls 2536427) went off the market in under a week if I remember correctly. I assume it is still under contract. I would be curious to see what it finally closes at.

  411. Sean says:

    Keep an eye on DC, they are still inking the bailout for Fannie and Freddie, and now Pelosi
    wants another stimulus plan.

    http://thehill.com/leading-the-news/pelosi-seeks-50-billion-stimulus-2008-07-17.html

  412. BC Bob says:

    “It wasn’t just a handful of people screwing up. The losses are projected to be in the trillions.”

    Tom,

    The masters say we in the 9th inning, Dalio says $1.6 T, approx $1.2 T to go. If Dalio is correct, close to $16 T will be sucked away from future lending. In addition to this, close to $3 T has evaporated from home equity. Credit crunch? No, that was late 2007, early 2008. We have entered the next phase, or Act 5, the credit crash.

    The largest debt and credit bubble in our history,knocking on the door simultaneously? In conjunction with one of the biggest bubbles in our history. No wonder Bergabe is scared s*itless. This subject/scenario was not covered in his Princeton classes.

  413. BC Bob says:

    Laughing [410],

    I receive some of their daily work. I have heard that they have a teflon coated reputation. That said, I have no experience regarding an actual account there. Make sure you do your due diligence and fully understand the vehicles where your $ is placed.

  414. Cindy says:

    (418) BC Bob

    Bob….Given those statistics, what can be done. I mean to fix things going forward – today. Not fix them for tomorrow but down the road a piece as well???????

  415. skep-tic says:

    we’ve had many banking/financial panics in this country and recovered from every one of them. I think the key is for the gov’t to let the market correct (which it will do eventually anyway) rather than clumsily trying to prevent it. this is what caused the great depression to drag out for so long, and this is what has caused Japan’s economic malaise for the last 15 yrs

  416. sas says:

    “Ron Paul on Fox Business News”
    http://tinyurl.com/6nhflw

    SAS

  417. Cindy says:

    (421) skep-tic

    I am an optimist..and a realist. I couldn’t agree more. (I have agreed alot with you lately.)

    I’m just about 60 so I have seen some crap and yet on on we go. I guess what I am asking is really, what appropriate actions are there then instead of all of this mumbo jumbo (I don’t think we will be doing away with the fed as Ron Paul suggests.)

    I have been harping on “raise the rates” since forever but now we have painted ourselves into such a corner.

    If everyone REALLY took all of their write-downs – right now – what would happen?

  418. Cindy says:

    (422) SAS

    Why wouldn’t that woman let him finsh his sentences…He was answering my questions!

    Like a heroin addict…”We won’t get better with another shot of inflation.”

    Rein in spending
    Rein in government

  419. sas says:

    I will tell you whats on tap…

    The dollar will continue to decline, the people will beg for the govt & Fed reserve to “do something”, and thus a new currency will be formed. That new currency will be called “The Amero – North American Currency”. The currency of Canada, USA, and Mexico.

    Sounds crazy.. sounds like a conspiracy theory, but when the sh*t hits the fan, and people have lost almost all purchasing power, the people will beg for it.

    http://en.wikipedia.org/wiki/American_currency_union

    SAS

  420. sas says:

    also, for you state pension people, be alert, and keep your ears open to the words privitization.

    review the crisis in Argentina. think it was in the early 90s.

    SAS

  421. sas says:

    also blokes, wealth is neither created or destroyed, its just transferred.

    The questions are just from where? to whom? and what is the trasferring agent?

    SAS

  422. Cindy says:

    Thankx SAS

    I hope you know that messes with the “optimist” part of me.

  423. skep-tic says:

    Cindy– your guess is as good as mine. I suppose if everyone was straightforward and let the market function as it should, the mortgage market as we have known it in recent years would probably completely collapse. As a result, real estate prices would probably plunge far beyond any of their bubble gains. Institutions which hold a lot of MBS could fail. There is a ton of this stuff out there and the effects would be widespread. This would obviously be very painful and scary, but honestly right now I think our gov’t is courting dollar collapse, which would be even worse. I have been very pessimistic on real estate for going on 3 yrs now (since I discovered this blog), but I never imagined the bursting of the real estate bubble could have such wide reaching effects. It seems to me there is no easy way out at this point, which is why our gov’t seems intent on inflating us out of the problem as much as possible. It is a very dangerous game to play right now because we as a nation are rapidly losing credibility.

  424. Cindy says:

    (429) skep-tic AGAIN – I’m agreeing with you…

    But -thanks to sites like this – people are talking…the “constiuents” are restless…(I think that is why we have seen so many meeting in DC as of late.) Mainstream media has Ron Paul on as an expert….Ah, I feel optimistic again…

  425. Cindy says:

    (429) “It is a very dangerous game to play right now because we as a nation are rapidly losing credibility.”

    Truer words were never spoken…I just have to believe we have the intellectual power in this country to figure it out..

    Night all..

  426. skep-tic says:

    unfortunately, real economic calamity is too distant of a memory for most to admit that it is possible. for example, whenever you see worst case scenario type analysis, it always excludes the great depression. why? it is obvious that this is the worst real estate downturn since the 1930s. There is clearly a relevant comparison to be made here, but almost no one is willing to make it. Unfortunately, the public figures in this country who do make these comparisons are generally somewhat kooky and bizarre, such as Ron Paul and Roubini. They are trotted out by the cheerleaders as a sideshow as if to imply that such massive calamity is delusional. It is not. The foreign press knows it. You will see it brought up by credible people now in the Financial Times. This is what I mean by the international community no longer buying the American script. We are on the verge of learning a hard lesson here but barely anyone is aware.

  427. njpatient says:

    427 sas

    Sounds like you’ve been reading about thermodynamics.

  428. James Boyer says:

    Is is so bad here in Norther New Jersey that the cops are out trying to write 20 tickets a day each in a effort to bring in more tax money. No Really, they are writing way more tickets locally then I have seen in forever, and they don’t seem to care how many traffic problems they create by pulling people over on Morris Twp’s Madison Ave, or East Hanover Ave. They just let traffic back up forever as they exert their pound of flesh from the poor motorist.

  429. David says:

    How is the Real Estate market in Central Jersey, especially in Edison area? My dad wants to sell his townhome and move to south. He says he can wait for 6months to 1 year if the market is going to get any better.

  430. jvck vcgqdmr says:

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