But will they take the losses?

From the WSJ:

Housing Bill Relies on Banks To Take Loan Losses
Lawmakers Pressure Lenders to Pitch In To Curb Foreclosures
By DAMIAN PALETTA
July 28, 2008; Page A3

WASHINGTON — The housing rescue bill passed by the Senate Saturday hasn’t been signed into law, but top Democrats already are putting pressure on regulators and bankers to make sure a major program to prevent foreclosures doesn’t fall flat.

For struggling U.S. homeowners, the success or failure of the program — which would let roughly 400,000 owners refinance into affordable, government-backed loans — depends largely on bankers’ willingness to take a partial loss on the loans and to reduce the amount of money borrowers owe.

Bankers say they will do it, but it isn’t clear how many loans they might be willing to restructure.

“I absolutely do believe that there will be more principal reductions,” Michael Gross, Bank of America Corp.’s managing director for loss mitigation, mortgage, home-equity and insurance services, told a congressional panel Friday.

Experts say the program’s eventual participation could rise dramatically if home prices continue to drop — which could put more pressure on lenders to offer borrowers more assistance. Lawmakers are already pressing regulators and lenders to prepare now so the program can begin without delay when it goes into effect Oct. 1.

Taking a loss on a loan by writing down the principal owed is one of the least desirable options for loan servicers. They typically prefer to either lower the interest rate or extend the life of the loan — from 30 years, for example, to 40 years.

“The real problem is going to be, just like with every program out there, are the banks going to take this seriously?” said Rebecca Case-Grammatico, a staff attorney at the Empire Justice Center in Rochester, N.Y., who advises clients facing foreclosure. “And if they don’t, we’re in the same position we’ve been in all along.”

The program will be run by the Federal Housing Administration, a division of HUD, and will insure up to $300 billion in refinanced 30-year, fixed-rate loans. The mortgages can’t be for more than 90% of a home’s newly appraised value. For mortgages that exceed the value of the home, the lender would have to voluntarily write down the principal to the qualifying level. If the home goes up in value, the borrower must share newly created equity with the FHA.

The program will begin Oct. 1 and end Sept. 30, 2011. Borrowers won’t be able to qualify if they have intentionally defaulted on their loans or if they had a debt-to-income ratio of less than 31% as of March 1.

This entry was posted in Housing Bubble, National Real Estate, Risky Lending. Bookmark the permalink.

289 Responses to But will they take the losses?

  1. grim says:

    Two more banks were closed by the FDIC on Friday. Also from the WSJ:

    Bank Failures: Consequences Of Expansion
    By ROBIN SIDEL and DAMIAN PALETTA
    July 28, 2008

    The latest bank failures as the industry slogs through its worst crisis in a generation are showing the consequences of the frenetic expansion that took place when times were good.

    The latest example came late Friday, when federal regulators shut down First National Bank of Nevada, based in Reno, and First Heritage Bank of Newport Beach, Calif. The $3.2 billion in deposits of the closed banks were acquired by Mutual of Omaha Bank, a unit of insurer Mutual of Omaha. The branches are reopening Monday.

    The two failed banks were units of closely held First National Bank Holding Co., based in Scottsdale, Ariz. Both had been grappling with problem loans and had a combined first-quarter loss of about $140 million. First National Bank of Arizona, which was absorbed into First National Bank of Nevada in June, had a first-quarter loan-loss provision of $95.9 million.

    Efforts by the struggling banks to raise capital this spring were unsuccessful, and they also approached other banks about selling themselves, according to a person familiar with the matter.

    They are the sixth and seventh banks to have been shut by regulators so far this year, though they far smaller than IndyMac Bank, the Pasadena, Calif., lender that collapsed earlier this month. IndyMac was a nationwide powerhouse in mortgage lending, while First National Bank of Arizona relied on brokers to generate loan volume from much of the U.S.

    Regulators are anticipating more closures as banks are overwhelmed by bad loans.

  2. SG says:

    This could not be true, as I was told, only Sub-prime people with low income were facing foreclosures.


    $998000 DON’T MISS THIS PRE-FORECLOSURE OPEN HOUSE!!! Sun. 7/13, 12-3 (Freehold, NJ) (map)

  3. sas says:

    “As costs rise, inflation’s next front is retailers”
    http://tinyurl.com/693s2q

  4. sas says:

    “Pay-as-you-drive insurance rates heading to N.J.”
    http://tinyurl.com/6d76zo

  5. sas says:

    “Tourism appears to be taking dip at the Jersey Shore”
    http://tinyurl.com/5hjroe

  6. SG says:

    From Steve Forbes,


    Bust Up These Beasts

    The Bush Administration should vigorously push to have Fannie and Freddie recapitalized and broken up into 10 to 12 new companies, with their ties to the government completely severed. Yes, this would mean Uncle Sam’s pumping in some $300 billion in equity capital and, perhaps, taking on some $100 billion in those questionable mortgages. But such an investment would enable these companies to have a sound debt-to-equity ratio in the vicinity of 4-to-1. Shares in Fannie and Freddie would then be exchanged for shares of common and preferred stock in the new, solvent firms. Current shareholders could ultimately recover their losses, and taxpayers could eventually get most, if not all, of their money back. In fact, Uncle Sam might even make a profit.

  7. SG says:


    How Fannie got burned

    But whose fault is housing’s burst bubble? Is it Alan “Easy Money” Greenspan’s? The loan sharks pushing subprimes? The go-go Wall Street investment houses and their go-along rating agencies?

    There’s plenty to go around. Point is, don’t believe those who want to deflect public anger onto Fannie Mae. It has earned the financial guarantee that a Democratic Congress has given it. Chances are that guarantee won’t be needed. More likely Fannie soon will be called upon, as it was in ’38, to pull the housing market out of the ditch and help rescue capitalism from its own excess.

  8. SG says:


    Foreclosure Rescue: Who Gets Help

    She and thousands of others in her community. When America’s category 5 housing hurricane hit Florida this year, its eye came ashore at Miami Gardens. More than 4,000 of its 22,000 residential units are in foreclosure, giving this predominantly African-American city just north of Miami one of the state’s — and one of the nation’s — highest mortgage failure rates.

  9. grim says:

    From the NYT:

    Worried Banks Sharply Reduce Business Loans

    Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring.

    Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral — collectively dropped almost 3 percent over the last year, to $3.27 trillion from $3.36 trillion, according to Federal Reserve data. That is the largest annual decline since the credit tightening that began with the last recession, in 2001.

    The scarcity of credit has intensified the strains on the economy by withholding capital from many companies, just as joblessness grows and consumers pull back from spending in the face of high gas prices, plummeting home values and mounting debt.

    “The second half of the year is shot,” said Michael T. Darda, chief economist at the trading firm MKM Partners in Greenwich, Conn., who was until recently optimistic that the economy would continue expanding. “Access to capital and credit is essential to growth. If that access is restrained or blocked, the economic system takes a hit.”

    Companies that rely on credit are now delaying and canceling expansion plans as they struggle to secure finance.

  10. Tom says:

    “There’s plenty to go around. Point is, don’t believe those who want to deflect public anger onto Fannie Mae. It has earned the financial guarantee that a Democratic Congress has given it. Chances are that guarantee won’t be needed. More likely Fannie soon will be called upon, as it was in ‘38, to pull the housing market out of the ditch and help rescue capitalism from its own excess.”

    I have a lengthier opinion on the new housing rescue bill but in summary. Last year, Fannie Mae and Freddie Mac both bought an additional $20 billion in subprime mortgages and congress was praising them for helping to save the housing market.

    Reality is they transferred the loans to a government insured institution while a bail out of the GSE’s seems to have already been in the works.

    My prediction on what’s going to happen next. Banks will try to resolve as many non performing loans as quickly as possible and some of this legislation might help in that regard. Most of these will likely be ones that are currently not government backed in any way. After banks have unloaded a good bit of their bad loans, start to see house prices fall as theres no need for the banks to keep them inflated. Actually, it’s better that they correct so they can start giving out good loans again. Realtors and mortgage brokers might not be too happy so expect to hear the same nonsense coming from them about how so and so market is isolated from falling prices because of Venuses position in relation to Jupiter and the solar flares.

  11. grim says:

    NJ JEDI kNIGHT Says:
    July 26th, 2008 at 8:38 pm

    GRIM

    Just wanted to tell you your old foe Warren Boroson couldn’t debate you with facts so he resorted to name calling like a juvenile at his blog towards you instead.

    Link here http://warrenboroson.blogspot.com/2008/07/truth-about-grim.html

    Honestly, I’m flattered. I’d nearly forgotten about him. Warren, I’ll gladly extend the olive branch and retract/delete what I’ve said in the past, without even asking you to do the same. How about we sit down for a chat? Maybe an interview for the blog?

  12. grim says:

    C’mon, don’t start a fight, I don’t need a libel/slander lawsuit..

  13. Clotpoll says:

    grim (13)-

    Don’t do it. Have you seen his blog? I’d rather read the phone book. Just god-awful, self-involved blather.

    Cultivate your enemies well. They can be just as valuable as friends.

  14. chicagofinance says:
  15. Laughing all the Way says:

    Stay above the fray, Grim. This guy’s clearly swinging up in an effort to generate interest in his blog.

    Had brunch with my lawyer Sunday. He and his wife are looking to flip some properties in the DC area, but they have not found one bank that will let them buy without putting down 20%. They’re finding the new rules to be very strict – i wish i remembered all of them – but realize it’s actually for the better.

  16. Laughing all the Way says:

    WASHINGTON — The White House has increased its estimate for next year’s deficit to nearly $490 billion, a record figure that will saddle the next president with deepening budget problems in his first year in office, a report due out Monday shows.

    USA Today
    http://www.usatoday.com/news/washington/2008-07-27-deficit_N.htm

  17. lostinny says:

    13 Grim
    The guy is a douche. Don’t demean yourself.

  18. lostinny says:

    16 Chifi
    Well I bet I’m screwed. Let’s see what the Gov has to say.

  19. Mikeinwaiting says:

    Chifi 16 Can we steal this guy for NJ.

  20. Mikeinwaiting says:

    Grim Don’t lower yourself, that guys not worth it.

  21. HEHEHE says:

    Re 16,

    How come a guy who is legally blind can see what is coming but Bergabe/Paulson see blue skies ahead?

  22. lostinny says:

    Good morning Mike!

  23. lostinny says:

    23 hehehe
    He’s using his 3rd eye.

  24. Tom says:

    I’ll demean myself. What an idiot. What kind of reporter did this guy claim to be? You go to his website and you see a big picture of a book which I guess is one he wrote or worked on but you don’t even see his name on the cover. At least not big enough to read. Is he advertising that he read that book? I’m confused.

    “GRIM is this anonymous bastard who runs a website called NJReport.com.”

    Anonymous? I even know Grim’s name and I’m new here and can’t even remember some of my relatives names. Guy can’t even get the name of the website right. Looks like he even included the mysterious Grim in his Wikipedia entry and got the website wrong there again. What kind of reporter can’t even find out the name of the person he’s attacking when that person has been posting his name and has been in the news too? At least show some basic reading skills and get the website right.

    “He repeatedly calls me a “shill” for the real-estate industry.
    Because, as a reporter, I have often quoted real-estate people who were positive about the real-estate market.”

    OK, maybe he is a shill, maybe he’s not a shill. Sounds like what he was saying with regards to the re market was off the mark.

    Plus didn’t all the stuff regarding him happen like 3 years ago or so? Now he chooses to respond and expects not to get laughed at? I think he just misses the attention.

  25. Tom says:

    “How come a guy who is legally blind can see what is coming but Bergabe/Paulson see blue skies ahead?”

    They don’t see blue skies ahead. They want to convince us that there are blue skies ahead so they can hoard all the umbrellas.

  26. Mikeinwaiting says:

    Hi! Lost. By the way I did it again “guys” in my post LOL. Tell hubby I was asking for him. Us bad boy smokers must stick together.

  27. Sean says:

    Leave the old timer Warren alone he is unemployed and perhaps facing forclosure.

  28. lostinny says:

    Mike
    If you didn’t point it out, I wouldn’t have noticed. I’ll let hubby know. Does your wife nag you to quit like I nag him?

  29. Tom says:

    I tried posting this a couple days ago but didn’t get a response. Maybe too many people away for the weekend.

    Anybody know more about this Mahwah foreclosure?

    Looks like the Town’s counsel has been fighting this foreclosure since 2003 and some pretty tight constraints were put on the auction which included creating a cap for the sale price as well as limiting the people that would be able to bid on it.

    In the end, the Township of Mahwah purchased the property. The foreclosure was for a second mortgage that was issued after the first mortgage had gone into foreclosure.

    I’ve never seen this before. Is it commonn for a town to fight a foreclosure so hard on behalf of a homeowner?

    Looks like it was an affordable housing unit but that didn’t keep them from raising flags when the mortgage was filed. Does anyone know any more? Do you know when this unit was classified as affordable housing? Other units in that complex have recently gone for more than double what the cap was and ones that I believe have the affordable housing designation were going for slightly more as well.

    You guys seem to know everything. Don’t fail me now :)

  30. willwork4beer says:

    Grim,

    You’re a true gentleman, always taking the high road. Me, on the other hand…

    Someone should clue Warren into a few facts of life:

    1. A lot of people read this blog.

    2. Most of them are a little angry.

    3. Some of them are heavily armed.

    4. Some of them wear tin foil hats.

    5. Most of them are very protective of Grim.

    Warren: I would begin with, “I’m really, really sorry.”

    Enough said.

  31. Mikeinwaiting says:

    Lost, no she is bad too!
    I caught it after posting as usual.

  32. Sean says:

    Never Fear Volcker is here.

    Obama to Meet With Rubin, Volcker, Buffett on Economic Plans

    By Julianna Goldman

    July 27 (Bloomberg) — Democrat Barack Obama said he is convening a meeting on the economy tomorrow that will include former Treasury Secretary Robert Rubin, former Federal Reserve Chairman Paul Volcker and billionaire investor Warren Buffett as he pivots to the U.S. economy after a nine-day trip abroad.

    “I expect some further fine-tuning of short-term policies based on what’s happened over the last several months,” Obama said in an interview last night aboard his presidential campaign plane returning to Chicago from London.

    The meeting in Washington will also include former Treasury Secretary Lawrence Summers, New Jersey Governor Jon Corzine, former Labor Secretary Robert Reich and Anna Burger, secretary- treasurer of the Service Employees International Union, said David Axelrod, Obama’s chief strategist.

    Rubin advised New York Senator Hillary Clinton during her primary campaign against Obama. Buffett, chairman of Berkshire Hathaway Inc., plans to phone in to the meeting, Axelrod said.

    Obama, 46, an Illinois senator, said he wants to “really work through in detail some of the immediate steps that may need to be taken both between now and the end of the year and after inauguration” to strengthen the housing and financial markets and to talk more about long-term economic strategies.

    `Do Business With Me’

    Obama expressed satisfaction with his foreign trip.

    “I think voters can take a look at this trip and say to themselves that this guy can function effectively on the world stage,” Obama said.

    He stopped in Afghanistan, Iraq, the Middle East and Europe, where he visited troops, conferred with military commanders and met with dozens of foreign leaders. The trip allowed Obama to make his case that he’s ready to be commander-in-chief as John McCain, 71, the presumptive Republican nominee, casts him as a neophyte on foreign affairs and national security.

    “The reports of the heads of state that I met with were that they could do business with me and that obviously is what we wanted to make clear,” Obama said.

    The threat of a nuclear Iran dominated discussions in Jordan, Germany, France, Britain and especially in Israel, where Obama’s stated willingness to meet with adversaries has raised concern. Iranian President Mahmoud Ahmadinejad has repeatedly threatened Israel and questioned its right to exist.

    Obama said Israeli leaders he met with, including Prime Minister Ehud Olmert and Likud Party Leader Benjamin Netanyahu, didn’t express those concerns, and he praised Olmert for engaging in diplomacy with Syria and Hamas through intermediaries.

    “They recognize that we have to have a very hard-headed, non-ideological approach about how do we move our strategic interest forward,” Obama said.

    Military Power

    “I think they have confidence that my interest in diplomacy does not preclude all other approaches to potential American power, including military power,” Obama said.

    The U.S. and its European allies accuse Iran of pursuing a nuclear weapons program; Iran insists its activities are peaceful and legal under the nuclear Non-Proliferation Treaty.

    Obama, whose stops in Afghanistan and Iraq came during the first leg of his trip, also said he’s “not yet” confident that the recently elected Pakistani government will provide the necessary cooperation with U.S. and North Atlantic Treaty Organization efforts to root out al-Qaeda and Taliban base camps in the tribal areas along the Pakistan-Afghanistan border.

    `Inadequate’ Cooperation

    “What we’ve seen so far has been inadequate,” Obama said. “There is no doubt that we have to have a greater cooperation with Pakistan.”

    Obama, who has said the U.S. must refocus on Afghanistan, has called for a phased 16-month withdrawal of troops from Iraq to redeploy two or three more brigades to Afghanistan. He said, however, that the extra brigades are a “necessary but not sufficient requirement for us to solve the problem.”

    Pakistan’s newly elected Minister Yousuf Raza Gilani will visit Washington this week and meet tomorrow with President George W. Bush.

    Obama said he’s “hoping that I have a chance to meet him and have discussions with him,” though he didn’t say any meeting has been arranged.

    When it comes to asking for more cooperation from European allies in the NATO effort in Afghanistan, Obama said, “we need to make sure that we are helping to make clear what’s at stake.”

    “Hopefully to the extent that we are showing an interest in their top agenda items like climate change, that strengthens cooperation and gives them more political room to put more resources and more efforts in Afghanistan,” he said.

    In one month, Obama will accept his party’s nomination at the Democratic National Convention in Denver. He refused to comment on his vice presidential search.

    `Inclusive’ Convention

    He said he’s focusing on making the convention “more open and inclusive,” and that he’s been thinking “thematically” about his acceptance speech at Invesco Field on Aug. 28.

    Obama said he has been “spending a lot of time figuring out how can we refresh the format so it’s not only an interesting TV show but also it builds on grassroots organization.”

    Obama said in his meeting with advisers he expects to “get their read on where the economy is going,” and fashion some “additional steps” to address the short-term economic and financial and housing issues.

    After the foreign trip, he is expected over the next week to spend most of his time talking about domestic issues with a special focus on the economy.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=abKPolAPZtx4&refer=home

  33. Sean says:

    grim #34 in Mod re: Volcker is working for Obama.

  34. John says:

    WAMU Bond paying 40%!!!!!!

    WASHINGTON MUT INC NT 4.00000% 01/15/2009
    Basic Analytics
    Price (Ask) 86.350
    Yield to Worst (Ask) 39.251%
    Yield to Maturity 39.251458%

  35. Mikeinwaiting says:

    Grim, Lost, all how about a mini at the Rose Sat at 5 pm start early avoid driving home in the bag late at night. Police less on the prowl early.

  36. Sean says:

    I would like to be a fly on the wall at this meeting.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=abKPolAPZtx4&refer=home

  37. lostinny says:

    Mike
    I am trying not to drink much right now because I’m doing really well on my diet but if people want to gtg, I may be able to come hang out.

  38. NJLifer says:

    Folks,

    I need some advise on my 2 year plan. I convinced my wife that we should sell our house next year (around March 2009) and rent a home in the town we want to live in for an additional 1-2 years. After that we would buy a home in that town. I know the time to do that was probably last year, but is it still a good startegy?

    Thanks,
    NJLifer

  39. Al says:

    NJLifer Says:
    July 28th, 2008 at 8:57 am
    Folks,

    I need some advise on my 2 year plan. I convinced my wife that we should sell our house next year (around March 2009) and rent a home in the town we want to live in for an additional 1-2 years. After that we would buy a home in that town. I know the time to do that was probably last year, but is it still a good startegy?

    Thanks,
    NJLifer

    Do you have to sell – just stay in your house untill market recovers – if you are going to buy in NJ anyways why even bother?

    P.S. Time to sell was 2006.

  40. tbw says:

    NJLifer: What is wrong with your current house?

  41. Al says:

    you will know that market recovered because Grim’s blog will callit a bubble again.

    Housing market seems to always be either in a bubble or crush with short periods in-between.

  42. Clotpoll says:

    lifer (38)-

    You missed the boat. Might as well stay put.

  43. Mikeinwaiting says:

    Lost Drinking is optional. That is just so wrong! Lets see if Grim is able to make it & if any others can. Play it by ear, it is early in the week.

  44. NJLifer says:

    Sorry, I left that part out. I live in a nice house in Saddle Brook. Not a great town, but not a dump either. The schools reflect that as well. The towns we are looking to buy in have much better school systems (Montvale, Woodcliff Lake, Rivervale), but the homes also cost a lot more. So I’m not desperate to move and probably have 50% equity in my current home and about $100k in the bank.

  45. tbw says:

    See, for me I am the opposite. I want to buy in a town with not so great schools. That way, I don’t have to worry about paying for college.

  46. Stu says:

    NJLifer:

    Keep the current home and buy a second home. Thats what 25.5 would do!

  47. Al says:

    NJLifer Says:
    July 28th, 2008 at 9:07 am
    Sorry, I left that part out. I live in a nice house in Saddle Brook. Not a great town, but not a dump either. The schools reflect that as well. The towns we are looking to buy in have much better school systems (Montvale, Woodcliff Lake, Rivervale), but the homes also cost a lot more. So I’m not desperate to move and probably have 50% equity in my current home and about $100k in the bank.

    If you are happy were you are, and have money you can always send you kid to private school – think about costs for selling your house, buying new one, moving etc. Possibly Higher taxes in Premium towns as well.

    Just stay put, send your kid to private school.

  48. Mikeinwaiting says:

    Lost off to work I go catch you latter.

  49. grim says:

    Lost,

    Here is what I’m thinking, mini-gtg on Friday

    Ignore, a momentary lapse of reason.

  50. Stu says:

    The Loop!

    I haven’t been there since my college years. Is lunch a go go still open?

  51. lostinny says:

    51
    Grim I can’t go to Loop without DH and he’s working early Sat morning so I don’t think he’ll go.
    How about Pyramid on Sat night then?

  52. painhrtz says:

    Grim don’t go to the Loop unless you want to hang out with psuedo club kids and wanna-be goths. Plus any of the GTG folks could potentially pick up a nasty disorder just walking in the place.

    Used to frequent the loop in the 90’s
    Still ashamed of myself for going
    Goth girls are bad for your health
    Especially if she is a cutter

  53. CB in SJ says:

    Krugman’s column on the Housing Bill:

    http://www.nytimes.com/2008/07/28/opinion/28krugman.html?ex=1374984000&en=5f4440bf298b33c2&ei=5124&partner=permalink&exprod=permalink

    “This bill is the latest in a series of temporary fixes to the financial system — attempts to hold the thing together with bungee cords and masking tape — that have, at least so far, succeeded in staving off complete collapse.”

  54. grim says:

    I’ll retract, it’s a terrible choice of venue for a gtg.

  55. lostinny says:

    Pain
    Whatever goes to the Loop could not possibly be confused with a club kid. Goths go there? I didn’t think most of them were old enough to get in.

  56. SG says:


    Fannie, Freddie Find Housing Bill Leans Toward Rescue

    July 28 (Bloomberg) — Bank of America Corp., JPMorgan Chase and Co., Treasury Secretary Henry Paulson and Pacific Investment Management Co.’s Bill Gross are winners in the housing-bailout bill Congress passed last week.

    Losers in the bill include shareholders of Fannie Mae and Freddie Mac, who may see their equity wiped out if the U.S. Treasury uses its new authority to take over the government- sponsored companies. Fannie and Freddie shares have fallen more than 70 percent in New York Stock Exchange composite trading this year.

    Congress accelerated action on the housing bill after lawmakers added a plan sought by Paulson, 62, allowing him to back up Fannie and Freddie. The Treasury may now buy shares of the companies, which own or back half of the $12 trillion in U.S. mortgages. The change prompted President George W. Bush, 62, to drop his veto threat. Bush is expected to sign the bill today.

  57. tbw says:

    Speaking of places in Passaic, anyone ever been to Dingbats?

  58. kettle1 says:

    adont know if this has already been posted.

    July 23 (Bloomberg) — Fannie Mae, the largest U.S. mortgage finance company, couldn’t find a buyer who would pay $6,900 for the three-bedroom house at 1916 Prospect St. in Flint, Michigan. So broker Raymond Megie, who is handling the foreclosure sale, advised cutting the price to $5,000.

    Megie still couldn’t sell it. “There’s oversupply,” he said. The home sold in 2005 for $110,000.

    http://www.bloomberg.com/apps/news?pid=20601109&sid=aMz0dl3IdwjU&refer=exclusive

    dont worry, this couldnt happen in prestigous NJ.

  59. tbw says:

    “dont worry, this couldnt happen in prestigous NJ.”

    Maybe in southern NJ, but certainly not in Bergen or Morris County

  60. Stu says:

    Do Goths fist pump? That could be an astonishing site to see!

  61. kettle1 says:

    froma another blog:

    Lehman has $160B hard-to-value Level 2 assets and $40B impossible-to-value Level 3 assets. The WSJ article posted a couple weeks ago applies a 5% cut on Level 2 and 25% on Level 3. Based on analysis from my boss, most of the Level 3 assets are mortgage-backed CDOs. The recovery rate is only 50%, at best. For Level 2 assets, a 25% haircut is most likely. The combination of both will result in $60B of additional losses, which would more than wipe out their book value of $23B plus their market cap of $12B.

    If the mark to market of the lehman CDO’s follows National Austraila Bank, then the losses that lehman is facing are even more sognificant and the WSJ estimates are “irrational exhuberance”.

    SHould we start handing out numbers for the bailout????

    number 1,254; your bailout is ready for pickup!

  62. lostinny says:

    Stu
    Nah they “grave” instead.

  63. NJ kiwi says:

    tbw #47
    Love the strategy. Think I will take it a step further and home school my kids. Wonder if 18 hours a day of Dora the Explorer and George reruns should negate any college future. Or at least reduce it to a community college.

  64. kettle1 says:

    If lehman valued their CDO’s the samae as NAB, then they are actually looking at closer to 100+ billion dollar loss. YEEHAW

  65. HEHEHE says:

    From RealDeal:

    Restoring credibility to appraisers

    While many groups bear culpability for the subprime mortgage meltdown, appraisers, in particular, helped determine the sea levels that have put millions of Americans “underwater.”

    http://ny.therealdeal.com/articles/restoring-credibility-to-appraisers/print

  66. kettle1 says:

    PGC

    the average food distribution network ( from wareouse to grocery store) in the US and UK has about 1-2 week of supply. A store can be cleaned out in a day and the remainder of the 1-2 week supply becomes very scarce after that. JIT (Just In Time) supply chains work great until you have a supply disruption.

  67. HEHEHE says:

    Check out the picture of the kid in Zimbabwe in this article, hilarious, how long until we see the same in the US:

    http://longorshortcapital.com/upside-to-zimbambwenomics.htm

  68. PGC says:

    From the Irish Independant

    FOOD Minister Trevor Sargent is to spearhead a wide-ranging review of farming policy and food security later this year amid increasing fears that an oil shock or hauliers’ strike could hit food supplies and deliveries to supermarkets.

    http://www.independent.ie/national-news/food-crisis-plan–on-the–menu-1441723.html

  69. HEHEHE says:

    Should we be stocking up on canned goods?

  70. John says:

    http://www.priv.njmls.xmlsweb.com/Reports.asp?CMAID=5919214&Date=7/27/2008&Time=16:20&ReportID=c_full

    My friend is going to look at this house this weekend in upper saddle river, is it a good price. Out in LI in a good neighborhood this house would be two million, but I don’t know the NJ market and was curious what you would think it would be worth?

  71. Rich In NNJ says:


    Warren Boroson’s Comedy Debut

    Come for the laughter, stay for the ham!

  72. John says:

    Bonjovi said it best about the state of the NJ re market, OOOOHHHHHH WERE HALFWAY HOME OOOOOOHHHHH WE’RE LIVIN ON A PRAYER

  73. SG says:


    Credit cards – Superprime slime

    American Express reveals unexpectedly weak results

    June was particularly ugly: “roll rates”—the number of customers falling from current to 30 days delinquent, or from 30 to 60 days—jumped sharply. Amex’s charge-offs of debt deemed unrecoverable have climbed in a few months from unusually low levels to well above the historic average of 4.8% of balances outstanding.

    But broader forces are at work. With property prices tumbling, unemployment rising and consumer confidence at a 16-year low, even “longer term, superprime card members” are feeling the pinch, Kenneth Chenault, Amex’s boss, told analysts this week. They are spending less on discretionary items, and many are struggling to keep their balances down—even, ominously, if they have gleaming credit scores.

  74. PGC says:

    #72 HEHEHE

    Funny, I was canning peaches last night.

    While this lot are going for g#ns and gold, I’m going for the third G which is groceries.

  75. BklynHawk says:

    HEHEHE #70-

    Two punch lines for that one:
    1. I would have brought more, but there was a run on wheelbarrows at the store.
    2. Will this be enough for the chewing gum?

  76. painhrtz says:

    # 57 lostinny polish buddy of mine went every thursday for 5 years. More Smiths, Depeche Mode, Morrisey and the Cure than you could shake a stick at. I learned to hate that place with a passion. Then again I haven’t been there in ages.

    I always liked Ricks in Moonachie, Decent atmosphere in the summer all the air kisser, blow outs morons and guidettes are down the shore. Plus you can almost always hold a conversation in the place.

  77. lostinny says:

    Pain
    I was far from a regular there. DH was, also at Aldo’s. Now Loop took whatever crowd was left at Aldo’s. I never thought of the place as goth but that’s probably because I hung out in the real goth clubs in the city. :)

  78. watergapnomad says:

    Ah the Loop, I saw De/Vision play there earlier this year.

  79. SG says:

    From Economist.com


    Fannie Mae and Freddie Mac – End of illusions

    Only six months ago, politicians were counting on Fannie Mae and Freddie Mac, the country’s mortgage giants, to bolster the housing market by buying more mortgages. Now the rescuers themselves have needed rescuing.

    The illusion investors fell for was the idea that American house prices would not fall across the country. This bolstered the twins’ creditworthiness. Although the two organisations have suffered from regional busts in the past, house prices have not fallen nationally on an annual basis since Fannie was founded in 1938.

    Fannie and Freddie did not stick to their knitting. In the late 1990s they moved heavily into another area: buying mortgage-backed securities issued by others (see chart 3). Again, this was a version of the carry trade: they used their cheap financing to buy higher-yielding assets. In 1998 Freddie owned $25 billion of other securities, according to a report by its regulator, the Office of Federal Housing Enterprise Oversight (OFHEO); by the end of 2007 it had $267 billion.

  80. make money says:

    Wells Fargo is now number one lender. Yahooooo. Time to short the heck out of them.

    http://www.thetruthaboutmortgage.com/wells-fargo-grabs-top-spot-from-countrywide/

  81. make money says:

    Should we be stocking up on canned goods?

    Hehehehe,

    I say we put in 5K-10K each, rent a wearhouse(or a McMansion), and store non perishable food. I guarantee a 100% return on our investment in 12 months.( That’s if we don’t actually end up using the stuff ourselves due to shortages.)

    Clot is in charge of security via fire arms and pitbulls.

  82. make money says:

    http://www.lvrj.com/breaking_news/25941494.html

    SilverState Bankcorp i son it’s death bed and John McCains son is on the board so he decides to jump ship and hands in his resignation.

    No shame in his game.

  83. make money says:

    Silver State Bancorp, the Henderson-based holding company for the similarly named bank, reported that Andrew McCain, son of Republican presidential candidate John McCain, resigned today from the boards of directors of the bank and bank holding company.

    http://www.lvrj.com/breaking_news/25941494.html

  84. make money says:

    WASHINGTON (MarketWatch) — Top experts at the International Monetary Fund said Monday that they are comfortable with their previous estimate that the financial market turmoil will cost about one trillion dollars. In an update of the crisis, the IMF said a top worry has materialized: a vicious downward cycle in which a weaker economy leads to a weaker financial system and on and on. At the moment, a bottom to the housing market is not yet visible, the report said. One reason that European banks do not seem to be hurting as much as U.S. banks is that they have not yet released much information about 2008, the officials said

  85. kettle1 says:

    make money,

    in your wharehouse scenario, the most effective secutiy is obscurity. If knowledge of any substanial stock comes out in a shortage, either the people or the government will snatch it. make sure you label the stocks as something undesirable. A bunch of biohazard stickes on boxes, a few hazmat suits lying about, and perhaps leave an open bottle of ammonia around to make the area smell bad.

    presentation is half the battle ;)

    Clott is the other half

  86. make money says:

    grim(86) Please unmod.

  87. make money says:

    Kettle [89],

    I was gonna label them Granite countertops. Good Idea?

  88. HEHEHE says:

    Drop ceilings are always good for hiding things. At least on TV.

  89. kettle1 says:

    make,

    sure, toss in a few radtion warnings and your set.

  90. kettle1 says:

    i follow the chipmunk method myself. redundancy

  91. kettle1 says:

    make,

    it sounds like Wells Fargo is working the smoke and mirrors.

    Wells Fargo was one of the first to use heavy Level-3 placement of toxic paper early in 2007. Last quarter there was a debate on how they valued their mortgage servicing rights. If you remember, Wells beat last quarter from “mortgage banking.” Yeah, right. It seems like questions arise every quarter regarding the quality of their earnings, and yesterday was no different.

    This story concerns their massive $84B Home Equity Line/Loan portfolio, of which much is now under water due to massive house price depreciation. Technically (and realistically) these have become unsecured. This is a real problem for banks. By my estimates, Wells Fargo wildly under-reserved on their home equity exposure.

    Not only did Wells change the time line for placing a loan into “default” by extending the term out 60 days, essentially hiding 60 days of defaults, but they are also using AVMs to determine value from March of 2008, even though the median home price has fallen 5.4% since then.

    A 5.4% fall could have thrown double-digit percentages of home equity loans into an even more serious negative equity position, which would have required additional loss reserves. Wells does not seem to care. Maybe Buffett should urge them to come clean? Or does the sage of Omaha think (real) home prices will come back to the frothy peak of the bubble, even in California?

    As a note, about $12B of Wells home equity exposure is in first lien home equity loans, which do have a much lower default risk. However, such a massive amount is over 90% that even if you deleted all the other exposure, the $35.6B in high-risk is enough to do serious damage to shareholder equity.

  92. make money says:

    Grim,Clot, Rich, or anyone with this information.

    Based on this housing bill. What consitututes a conforming loan that Fannie and Freddy will buy.

    Any info on this? Limits? Docs? LTV? etc.

  93. grim says:

    From MarketWatch:

    No end of financial turmoil in sight, IMF says

    Top experts at the International Monetary Fund said Monday that there is no end in sight for the turmoil that had gripped financial markets for the past year.

    “Global financial markets remain fragile and indicators of systemic risks remain elevated,” said Jaime Caruna, the IMF’s point man of the crisis at a press conference.

    The U.S. housing market remains the key source of the turmoil. And there are still no signs of an end to the downturn.
    “At the moment…with delinquencies and foreclosures rising sharply and house prices continuing to fall, a bottom for the housing market is not yet visible,” Caruna said.

    IMF officials said they are comfortable with their previous estimate that the financial market turmoil will cost about one trillion dollars in total mark-to market losses.

  94. jamil says:

    Re the next war in the middle east. Israel must act before S-300 is fully operational (hmm, wasn’t the same plot in Star Wars?).
    Again, the probability is 100%, time-wise the strike must happen in the next few months.

    Iran’s S-300 Delivery Debated as Israel Delays Pre-emptive Strike Allowing Diplomatic Progress a Chance

    “Israeli and American military officials are now publicly differing on whether Iran will receive its pivotal S-300 Russian anti-aircraft batteries by September of this year or well into 2009, ..
    The S-300’s potent versatility is a key factor in Israel’s pre-emptive Iran strike strategy. A test of the strengths and weaknesses of a similar S-300 system by Israeli Air Force jets and drones over Crete with the cooperation of Greece, was first reported in The Cutting Edge News exclusively on July14, 2008.

    Considered one of the world’s most versatile radar-missile systems, Russia’s S-300 batteries can simultaneously track hundreds of semi-stealth cruise missiles, long-range missiles and aircraft, including airborne monitoring jets. “

  95. fireworks says:

    so if a loan’s already securitized and sold to a pension fund, what happens?
    the servicing company can just cut a deal with the home owner and pass the loss to the pension fund?

  96. jamil says:

    NJ state legislature has an opening. http://www.wnbc.com/politics/17013031/detail.html

    “N.J. Legislator Resigns Amid Child Porn Probe”

  97. make money says:

    Servicers to Ask for Access to Discount Window?

    You simply cannot make this stuff up. Reader Steve pointed us to a HousingWire post, which says that mortgage servicers may too come knocking on the Fed’s window for financial support, thanks to the housing bill just passed by Congress.

    Can we start a business that’s window accessible as well.

  98. Shore Guy says:

    “Borrowers won’t be able to qualify if they have intentionally defaulted on their loans or if they had a debt-to-income ratio of less than 31% as of March 1.”

    So, folks who are in trouble but at least TRIED to be prudent, get no help wheras the reckless get bailed out? Is this correct?

    On a nicer topic, anyone else get out tp see Bruce last night at Giants Stadium?

  99. make money says:

    http://www.reuters.com/article/fundsFundsNews/idUSL863553320080728

    MOSCOW, July 28 (Reuters) – Russia has approximately halved to less than $50 billion its exposure to U.S. mortgage lenders Fannie Mae and Freddie Mac a senior central bank official told Reuters on Monday. “It’s now less than $50 billion,” central bank first deputy chairman Alexei Ulyukayev said, when asked about Russia’s investments in the agencies.

    Russia held about $100 billion at the start of 2008.

  100. BC Bob says:

    Make,

    The fed has opened its window to the gse’s. Basically, Fannie/Freddie can now issue debt and show up at the window. Fannie/Freddie now has a license to print.

  101. BC Bob says:

    “On a nicer topic, anyone else get out tp see Bruce last night at Giants Stadium?”

    Shore,

    I’m going on Thurs and Sat[Foxboro]. I heard 30 songs and over 3 hours. How was it?

  102. Doyle says:

    #105,

    BC, going tonight… still trying to figure out how to get out of here early.

    A few co-workers went last night, said it was 3 1/2 hours and amazing.

  103. BC Bob says:

    Doyle,

    The set list was nuts.

  104. make money says:

    104 BC,

    The fed has opened its window to the gse’s. Basically, Fannie/Freddie can now issue debt and show up at the window. Fannie/Freddie now has a license to print.

    What’s this gonna do to housing? It has to help somewhat at least.

    I already know what’s gonna happen to USD and everything denominated in it.

  105. BC Bob says:

    “The repugnant bailout nation”

    “There seems to be little outrage as the US, a country where free enterprise is supposed to reign, moves to nationalize losses without even contemplating reform.”

    http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/TheRepugnantBailoutNation.aspx

  106. make money says:

    http://www.marketwatch.com/news/story/marketwatch-first-take-more-pain/story.aspx?guid=%7B5123B9A6%2DD5E4%2D4D47%2DABA9%2DCD1F5B420367%7D&dist=hplatest

    Thi shousing bill was a big step towards hyperinflation. in a very few short years ahead we will be studying the collapse of the USD. It will put Oprah and Bi in the same boat. Billionaires.

  107. Doyle says:

    BC,

    He sang everything everyone wanted to hear. I am ducking out at 4p, need to get in that lot early.

    Look out Tuesday AM.

  108. Nom Deplume says:

    [13] Grim,

    I read that screed and it reminded me of t-shirt I saw at the range on Saturday that sums up what I viscerally felt about Warren.

    It said “Rope, Tree, Journalist. Some assembly required.”

  109. ben says:

    Oprah will probably be a trillionaire when hyperinflation hits.

  110. make money says:

    Locally, Australian bank shares were savaged on Friday after NAB booked an $830 million writedown on risky US mortgages.

    NAB shares plunged more than 13 per cent in their biggest one-day fall since 1987.

    “This is the bottom for us for housing in the US because we are now cleared out,” Mr Stewart told ABC TV yesterday.

    However, he said “things are going to get worse” for the US housing market.

    “There are more than 18 million vacant properties for sale in the United States just now,” he said.

    “That’s more than the whole housing stock of Australia.”

    Mr Stewart said even before the US housing crisis started, house prices were dropping as a result of overstocking.

    “They had just built too many houses, so the market was soft,” he said.

    In the US, people were literally walking away from their houses as their equity in them became negative.

    “If that happens, continually happens, then these houses come on the market and, of course, they further depress prices,” Mr Stewart said.

    He said it was a worrying time for the US economy and it would be some time before it recovered.
    http://www.news.com.au/couriermail/story/0,23739,24085546-3122,00.html

    So he wrote down everything, hit zero and called the bottom at zero. Nice work. 18 million empty homes in America. Yikes.

  111. John says:

    How New Jersey voted on housing bill
    Aye NJ-1 Andrews, Robert [D]
    Nay NJ-2 LoBiondo, Frank [R]
    Nay NJ-3 Saxton, H. [R]
    Aye NJ-4 Smith, Christopher [R]
    Nay NJ-5 Garrett, E. [R]
    Aye NJ-6 Pallone, Frank [D]
    Aye NJ-7 Ferguson, Michael [R]
    Aye NJ-8 Pascrell, William [D]
    Aye NJ-9 Rothman, Steven [D]
    Aye NJ-10 Payne, Donald [D]
    Nay NJ-11 Frelinghuysen, Rodney [R]
    Aye NJ-12 Holt, Rush [D]
    Aye NJ-13 Sires, Albio [D]

  112. tbw says:

    While you are at Giants Stadium, make sure you look for a large, multi-colored building…the future of North NJ jobs, the future of affordable housing in the meadowlands….Meadowlands Xanadu.

  113. Doyle says:

    #115

    I see it every morning and evening and gag a bit each time…

  114. grim says:

    From the Record:

    Pal Park man admits to $20M mortgage scam

    A Palisades Park businessman admitted masterminding a more than $20 million mortgage scam involving at least 17 lending institutions in federal court today.

    Jacob Kim, 53, the former president and owner of American Macro Growth in Palisades Park, pleaded guilty to conspiracy to commit bank fraud.

    Kim led a scheme in which he and other brokers used one business or property as collateral to obtain loans from several different banks without informing the banks of their actions. To bolster the loan applications, the company brokers submitted falsified tax returns that inflated the income of the applicants.

    The clients who received the credit then paid Kim and the other brokers sizable commissions.

    As part of a plea agreement, Kim faces between 121 and 151 months in prison under the federal sentencing guidelines, said Assistant U.S. Attorney Bradley A. Harsch.

  115. make money says:

    Grim(117),

    He gets 10yrs for 20 mill. Assuming they’ll let him out in 5 for good behaivor. Four million per year, who says that crime doesn’t pay?

  116. grim says:

    From CNBC:

    Housing Market Won’t Bottom For 18 Months: Tilson

    Home prices will continue to decline rapidly, and won’t bottom out for at least 18 months, said Whitney Tilson, managing partner of T2 Partners hedge fund.

    Defaulting prime mortgages will drive the next phase of the credit crunch, which has so far been led by the resetting of subprime mortgages orginated in 2005 and 2006, and option arms, said Tilson, who is short the housing market.

  117. All Hype says:

    While on a plane last nite, I talked to a banker at Citi. She stated that they have gone through 3 layoffs and #4 is around the corner. She said that half of his group is gone. She looked really worried.

  118. grim says:

    From Bloomberg:

    Wachovia May Sell Mutual Funds, Broker, Analysts Say

    Wachovia Corp. may sell its mutual funds, the securities brokerage or Northeast and Texas branches as Chief Executive Officer Robert Steel copes with fallout from a record $8.9 billion quarterly loss, according to analysts.

    Businesses that Steel may decide aren’t essential to the fourth-largest U.S. bank could include Wachovia Securities, comprised of the A.G. Edwards brokerage acquired last October, and the Evergreen mutual funds, said analysts Brad Hintz of Sanford C. Bernstein & Co. Inc. and Gerard Cassidy of RBC Capital Markets Inc. Wachovia said the brokerage isn’t for sale.

    “Both of those franchises have real market value even with asset valuations being very low in financial services today,” Hintz said. “They aren’t making more retail distribution channels any more. Those are like Wal-Marts for the mutual fund industry.”

    Steel pledged to sell “non-core assets” on July 21 after disclosing the worst loss in Wachovia’s history. He didn’t define what he considers “core” at the Charlotte, North Carolina-based bank, instead promising a review that will be completed in several months. The ex-Treasury Department official joined Wachovia July 9 after the ouster of CEO Kennedy Thompson.

  119. grim says:

    From MarketWatch:

    Economic shocks may last longer than 3 years: Fed’s Mishkin

    Recent adverse shocks to the economy — including the financial market turmoil and the sharp increase in the price of oil may affect the economy for longer than the next three years, Federal Reserve Board Governor Frederic Mishkin said Monday. The comment was part of Mishkin’s argument that the Fed should lengthen the horizon for the public projections on output, unemployment and inflation. If the economy remains sluggish through 2010, then inflation might come in below the inflation rate for 2010 set out in the forecast, Mishkin said. The Fed currently expects headline inflation to moderate to a rate of 1.8% to 2.0% in 2010 from a rate of 3.8% to 4.2% this year. Mishkin wants the Fed to adopt a formal inflation target. Many economists have used the three year inflation forecast at an unofficial Fed inflation target.

  120. make money says:

    WASHINGTON — A Bush administration official said Monday the next government will inherit a record federal budget deficit for next year that approaches $490-billion (U.S.).

    The official said the deficit was being driven to record levels by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession. A deficit approaching $490-billion would easily surpass the record deficit of $413-billion set in 2004.

    The administration official spoke on condition of anonymity because the new estimate had not been formally released.

    White House press secretary Dana Perino had no comment on the $490-billion figure. But she told reporters that the White House and lawmakers acknowledged months ago that they were going to increase the deficit by approving a short-term boost for the slumping economy.

    “Both parties recognized that the deficit would increase, and that that was going to be the price that we pay,” Ms. Perino said.

  121. NJl$rd says:

    Recommend to the ‘post of today’. We need reform or die. Where are the great leaders of today?

    #109 BC Bob Says:
    July 28th, 2008 at 12:37 pm

    “The repugnant bailout nation”

    “There seems to be little outrage as the US, a country where free enterprise is supposed to reign, moves to nationalize losses without even contemplating reform.”

    http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/TheRepugnantBai

  122. Chris says:

    I don’t think that the Housing bill will help out much. Most people are so far upside-down that it will be cheaper for a lender to take the house back. I am in the same situation. We owe quite a bit more than our house is worth.

  123. John says:

    What is the point of the article, the taxpayers are paying for it.

  124. kettle1 says:

    OT,

    MRS Kettle and I are very unhappy with our current pediatrician. Their philosophy is to treat the sympton not the cause and to medicate willy nilly.

    Does anyone have any experience with a pediatrician who doesnt throw around medication like candy and takes a more “whole” person approach as to treating the symptons?

    My son has been having breathing issues for the last couple of months and all the current doc wants to do is keep himp umped ful of steriods to treat the symptons while saying “he’ll grow out of it in a few years”.

    We had a good doc before, but unfrotunatly he left the area ( he said cost of living was too high!!!!)

    Feel free to get my e-mail from grim if anyone has any reccomendations. We are located near rockaway and are willing to travel up to 1 hour for a really good doc.

  125. bairen says:

    #120

    Tilson also shorted Bear and has shorted some banks and lenders.

    His longer articles and video interviews are pretty informative.

  126. NJl$rd says:

    #74 John – upper saddle river
    http://www.priv.njmls.xmlsweb.com/Reports.asp?CMAID=5919214&Date=7/27/2008&Time=1

    2007 tax assessor’s value: $911,600
    Last sale and tax info
    Sold 10/09/2003:
    $975,000 *
    2007 Property Tax:
    $16,682

  127. bairen says:

    kettle1,

    just sent you an email.

  128. BC Bob says:

    Tickets for I.O.U.S.A. go on sale today.

    http://www.fathomevents.com/details.aspx?eventid=728

  129. kettle1 says:

    133 BC

    the next GTG????

  130. John says:

    Thanks btw if a house like this is sold for 1.2 million does the taxes automatically go up or does it stay at $911,600.

    NJl$rd Says:
    July 28th, 2008 at 2:04 pm
    #74 John – upper saddle river
    http://www.priv.njmls.xmlsweb.com/Reports.asp?CMAID=5919214&Date=7/27/2008&Time=1

    2007 tax assessor’s value: $911,600
    Last sale and tax info
    Sold 10/09/2003:
    $975,000 *
    2007 Property Tax:
    $16,682

  131. BC Bob says:

    Kettle,

    AMC Clifton Commons 16
    405 STATE ROUTE 3
    CLIFTON, NJ 07014
    9736140966

    ????

  132. Curious says:

    Hi,

    Can anyone tell me the sold price of 11 winding hill drive, 07840, which sold last week?

    Thanks in advance

  133. Sassy says:

    #128

    The Kettles, I can refer you to a pediatric allergist / pulmonologist affiliated with NYP if so interested. We started allergy testing – kid has serious dairy, red dye and antibiotic allergies which exacerbated symptoms (remedied by removing offending foods till age 5 – reducing chance of life long allergy). Got distracted by other more urgent matters. Daughter is slowly outgrowing asthma – we’ll need to go back and re-test for antibiotics. Protocol was combination of reducing exposure to allergens once identified, and also treating symptoms with meds. OK to contact me thru Grim for reference if interested. Doctor’s office is located Upper East Side off of York Avenue. ATB!

  134. JBJB says:

    Anyone here have any experience negotiating a home sale within the family? My wife’s uncle is selling and says he would sell to us for below current list. He has been in the house for 35 years, has no mortgage, but the place needs a lot of work. I really don’t want to lowball a family member but we would only be interested at a price well, well below their current ask. He currently has a realtor and the place has sat on the market for 7-8 months so it obviously is not priced correctly. The location is great, in Midland Park close to the Ridgewood NJT station. Any suggestions?

  135. Stu says:

    Kettle1 (128):

    The rye guy goes to Dr. Charlie in West Orange. Although sometimes you get one of the other two doctors, they are all pretty much equally anti-meds. They are not hippy-dippy holistic types either and have been really good when it comes to squeezing an appointment in. Dr. Charlie is a complete nut, but a great pediatrician. All his patients adore him and I think it is due to his no-nonsense approach. He pretty much says it like it is and offers you all the options. He even varies a bit on inoculations and tells you which ones he favors and which one he feels you can safely skip.

    My son suffered from non-stop sinus infections from 6 months to about a year. During the diagnosis, Dr. Charlie looks at my sinuses and says, “Yup, he’s screwed! He’s inheritied the same terrible plumbing as you have. You can put tubes in his ears, put him on anti-biotics full time or you should both see a chiropracter regularly to loosen things up!” We opted for the tubes and Ryan has had one infection since.

    Here’s another one. We were blessed in birthing a son who could puke at will. Some kids kick you in the shins, some kids throw tantrums, ours would just projectile vomit anytime he wasn’t happy. Dr. Charlie’s advice? Change the crib sheets and reload and act like nothing happened! Luckily, Ryan outgrew this phase.

    Here is an article on the guy from the Star Ledger.

    http://www.nj.com/war/ledger/index.ssf?/news/ledger/stories/20050731sl_drcharlie.html

    Dr. Coy, one of the other peds at the practice is pretty cool as well. Ryan had some toe nail fungus that would have probably freaked out some worry-wart parents. Dr. Coy says, forget about the meds as it is not hurting him and it will fade on it’s own anyway.

    Needless to say, I really respect the outfit.

  136. Zack says:

    #138 –

    Why negotiate with a family member when there are plenty houses for sales. (recrd level)
    For you to get a good deal, you will have to lowball your relative and if you are uneasy doing this for emotional reasons, then look at other properties.
    My 2 dollars (adjusted for inflation)

  137. Stu says:

    I.O.U.S.A. GTG – AMC Clifton 16 (on Route 3), has tickets for 8pm showing on 8-21-08. $18.

    This would be the ideal GTG. Afterwards, we could invade some dive bar to discuss it.

    Grim, it’s in Clifton!

  138. grim says:

    Done, it’s on the docket.

    IOUSA GTG
    Thursday August 21st
    8:00pm
    AMC Clifton 16, Rt 3, Clifton NJ

    Be sure to buy your tickets early!

    http://www.fathomevents.com/details.aspx?eventid=728

  139. Stu says:

    I’m gonna buy 500 tickets and put them up on stub hub ;)

  140. BC Bob says:

    Speaking of IOUSA;

    WASHINGTON (MarketWatch) — The U.S. Treasury expects to borrow $171 billion in the fourth fiscal quarter — about $59 billion more than a late April projection, the government said Monday. Analysts said the federal government’s increased role in the market for student loans and the collapse of IndyMac increased borrowing needs. For the first quarter of the next fiscal year, which begins in October, the government expects to borrow $142 billion. This forecast assumes quarter-end cash balances of $45 billion on Sept. 30 and $40 billion on Dec. 31.

  141. afe says:

    Fiddy (from yesterday)- Manalapan. I did some more thinking about this opportunity and even if the owner goes for the lowball and probably like any other purchase, the most important factor will be how long we would stay here, which is at least 10-12 years.

  142. ben says:

    kettle, if the breathing issue is due to sinus infection, get your son a Neti Pot. I use the thing once a week to clean my sinuses. It’s like an instant cure and beats antibiotics any day of the week.

  143. Stu says:

    Kettle1:

    Perhaps you should cut him off at one pack a day?

  144. scribe says:

    From the WSJ:

    Paulson Urges Covered Bonds
    Associated Press
    July 28, 2008 2:56 p.m.

    WASHINGTON — The Bush administration and federal banking regulators have joined with the nation’s four largest banks to endorse a new way to pump money into the battered U.S. mortgage market.

    Treasury Secretary Henry Paulson unveiled a set of best practices Monday designed to encourage banks to issue a debt instrument known as a covered bond. The administration hopes these bonds will replace some of the mortgage financing that has disappeared as investors have incurred billions of dollars of losses on mortgage-backed securities.

    Mr. Paulson said: “As we are all aware, the availability of affordable mortgage financing is essential to turning the corner on the current housing correction.” (See the full text of the statement.)

    More details to follow.

  145. kettle1 says:

    thanks for all of the responses regarding the pediatrician. will discuss with Mrs kettle and follow up. thanks all!!!!!

  146. kettle1 says:

    my son appears to have asthma like attacks whenever he gets a cold, but at no other time. It gets pretty bad once he gets a cold. our doc kinda just shrugged and says hit the steriods. no interest in helping us find the root cause

  147. Sybarite101 X says:

    hey curious,

    what town?

  148. Clotpoll says:

    scribe (149)-

    Barn door open.

    Horses gone.

  149. Will V. says:

    Hey kettle, I was like that when I was little. I would get a cold or flu then it will turn into Asthma. The problem with me was that there was too much mucus and my allergies to certain things did not help. Question, do you have animals? I have slight allergies but when I got sick it broke down my tolerance and I ended up being really allergic. The doctor is right though, I did grow out of it. My son goes through it a little now, he has a nebulizer and takes pulmicort.

  150. RaulV says:

    @ 139

    never mix business with family, one side always feels like it lost…..it never works out!

    Tried to buy a business from my wife’s uncle, the contract negotiations were a nightmare, in the end I just walked away…before the bridge was completely burnt! We still see the uncle every now and then, but he still thinks I was trying to “screw” him.

  151. Nicholas says:

    Was searching for some waterfront property in Anne Arundel County, Maryland.

    OLP 2007: 1.4 million dollars
    LLP Current : 875,000

    I swear it must be play money because the house is the size of a postage stamp on a 0.5 acre lot.

    Your telephone rings and your neighbor picks up his phone by mistake.

  152. Nicholas says:

    I can’t find the listing for it now but it was on Edgewater Dr., Edgewater MD. I grew up around the area so it was hillarious that I saw a 1.4 million dollar property listed on that street.

    Do you think that so many retireing/dieing people are leaving vacant so many houses causing this glut in inventory? I see just as many title transfers from deceased to heirs as forclosures around my area.

    I mean we do have a large glut of aging population don’t we?

  153. grim says:

    What is up with AIG

  154. curios says:

    Kettle, It is mount olive.

  155. Clotpoll says:

    grim (159)-

    It’s just doing what I need it to do. ;)

    Lots of people are really nervous about that company. They’re knee-deep in it.

  156. ADA says:

    Grim,

    not its stock price, I bought at $38. Big mistake.

  157. make money says:

    Clot, (161),

    Not Knee depp my friend they’re neck deep. I said this back in March.

  158. kettle1 says:

    Stu Says:
    July 28th, 2008 at 3:08 pm
    Kettle1:

    Perhaps you should cut him off at one pack a day?

    We tried, but anything less then 2packs a day and its a constant temper tantrum. Just not worth it!!!

  159. Clotpoll says:

    make (163)-

    Note the correlation between SKF closing price and bi’s absence here…

  160. sas says:

    “China’s economic ‘bargaining chip'”
    http://tinyurl.com/6cq65j

  161. make money says:

    Note the correlation between SKF closing price and bi’s absence here…

    NOTED.

  162. Sybarite101 X says:

    curious

    $411k

  163. make money says:

    sas,[166]

    Great read.

  164. kettle1 says:

    SAS

    I have read on a few blogs that BofA and the othr major banks have recently had presentations by the DHS detailing the lock down procedures that will be put in place in a “state of emergency”, they include locking down safe deoposit boxes and requiring a DHS rep to be present at the opening of any boxes. the only thing that they will allow to be removed are personal documents. i.e not cash, shiny metals etc.
    Sound familiar???

    its all rumor at this point but

  165. OneTimePost says:

    Interesting graphic regarding housing prices in NYC from BP blog. It will be interesting to see the fall colors. (Sorry for the pun).

    http://bigpicture.typepad.com/comments/2008/07/house-prices-ne.html

  166. jamil says:

    Start Drilling Now to Lower Oil, Gasoline Prices (via Bloomberg)

    “And if you want oil prices to decline, drill.”

    Congresscritters must re-authorize drilling ban few days before the election (unless Nancy Pelosi get rid of House rules – this is the most ethical and transparent congress, after all). It’s going to be interesting to see how Nancy is going to avoid a vote on that. Vast majority of voters support drilling, but little people don’t matter..

  167. kettle1 says:

    Jamil,

    can you back up your calim that drilling will change anything? any recognized organizations/scientists that have released a report with real numbers???

  168. sas says:

    “Sound familiar?”

    yes.

    that is why I’ve said awhile back on these boards. I’m a big believer in doing some midnight gardening.

    sas

  169. kettle1 says:

    Jamil
    the other reason drilling willy nilly is a bad idea, is that the oil we have in the groud is a rapidly appreciating asset, one that we may need down the road. sucking the tanks dry now is a very short sighted move that will come back to bite us later.

  170. jamil says:

    Naturally, nobody can confirm future one way of other, but this is pretty obvious. See the article.

    “What about prices today? A vast body of academic literature finds that future prices and spot prices are intricately linked in a manner that could only occur if producers are constantly updating their plans based on expected prices.

    A recent study by economists Param Silvapulle and Imad Moosa of Monash University in Australia found strong evidence of what is called bidirectional causality. Future prices and spot prices are inextricably linked. ”

    Btw, can you clarify why releasing few drops of oil from SPR would lower the price of oil, but massive amount of oil (and new refineries etc) would not?

  171. kettle1 says:

    some fun numbers courtesy of autoatic earth

    Cost of the various US housing bail-out programs to date, through the Federal Reserve, the Federal Home Loan Banks, the Federal Housing Administration and Fannie Mae and Freddie Mac.: $1.46 trillion.

    Increase from 2006 to 2007 in Fannie Mae and Freddie Mac part of the bail-outs: $621 billion (expected to be much higher this year)

    Total new financing the Fed has made available to markets: $446 billion

    Cost for (non-Fan and Fred) housing part of the The Housing and Economic Recovery Act of 2008. a new program at the Federal Housing Administration for refinanced 30-year fixed loans: $300 billion. Homeowners “rescued”: 400.000. Cost per home: $750.000.

    Increase in US debt limit to accommodate the bill: $800 billion, to $10.6 trillion from $9.816 trillion .

    Time the bill will be implemented: Summer 2009

    Taxpayers cost for explicit government guarantee for Fannie and Freddie: more than $1 trillion

    2008 salary Fannie Mae CEO: $13.4 million .

    Increased amount of what FHLB calls “advances” to member banks: $274 billion,

    Total advances: $914 billion (second quarter of 2008).
    NOTE: the FHLB has a “Superlien” with the FDIC. When banks go belly-up, they get their money first, before depositors do. The FHLB boasts that it has never lost a penny on a loan to its member banks.

    Decrease in average home value in the past two years in South Florida: $100,000, $4,100 a month, $136 a day, or $5.70 every hour.

    New record US budget deficit for period starting October 1: $490 billion

    George W. Bush February deficit forecast: $407 billion

    Funds required to meet the US transportation infrastructure demand: $225 billion a year

    Current spending: $100 billion per year

    Bridges in the U.S. that are either “functionally obsolete” or “structurally deficient: 25%

    Budget for House bill passed Wednesday for highway and mass-transit projects: $8 billion

    Expected 2009 Congress transportation bill $400 billion over 6 years.

    Worldwide asset writedowns and losses: $469 billion in the past year

    Capital raised: $345 billion

    Cost of payments distributed under US economic stimulus package: $168 billion

    Cost of invasions Iraq and Afghanistan: $10 billion to $12 billion a month

    Decrease in miles driven by Americans in past 7 months: 40 billion, 3.7%.

    Number of days one third of UK adults can survive on savings: 11

    Forecast increase UK unemployment: 1.6 million to 2.5 million over the next two years.

    U.S. Treasury securities outstanding: $4.67 trillion

    Amount held by Japan and China: more than $1 trillion combined.

  172. Fiddy Cents on the Dollar says:

    AFE :146

    You’ve been there long enough to know that area. You know what you’re getting into with the traffic on Route 9 and the political shenanigans. Got kids in the school system??

    If you’re going to be there for the next 10 years, and can get it at the right price…..go for it.

    I can look into recent sales to give you a better idea of price ranges. Is it one of the newer townhouse complexes?? 2 bedroom or 3 beds??

  173. Cindy says:

    “Privatizing gain and socializing loss ruined a once thriving sector of the American financial services industry – the S&L’s.”

    That quote was taken from Ludwig von Mises Inst. Austrian Economics – Literature -focused on the Garrett Hardin’s paper “The Tragedy of the Commons.”

    All you have to do is take away the “S&L’s” and put in “banks” or “GSE’s” or “securities firms” ….

    Probably the most clear cut article was Andy Sutton 4/13/08 Financial Sense Univ.
    Keynesian vs. Austrian..

    But it was all good reading.

  174. John says:

    Did someone say that before you can drill Nancy Pelosi you need to be properly oiled?

    I am catching up but don’t know what the heck you are talking about?

  175. Sybarite101 X says:

    John,

    Going to burgerfest?

  176. kettle1 says:

    Jamil,

    There isnt going to be any sudden substantial rush of new oil from any drilling in the US. Bringing new flows online is not quick or easy given the charaterisitics of the locations and geology to be drilled. I agree with the EIA’s assesmnt that all additional drilling will do is slow the decline in oil, not stop it.

    The only way to maintian or reduce proces long term is to see significant demand destruction. The implications of such an event are not pleasant for whoever has their demand destroyed.

    I have yet to see 1 explanation of how drilling can have any significant effect on long term production.

    Its not the drilling in and of otself i have a problem wiht, but the reason. current events are not a very good one.

  177. willwork4beer says:

    #180

    And there it is. John scores another post of the day. LOL :)

  178. njpatient says:

    172 jamil

    re the article you link to, you may want to find someone with greater credibility than the guy who wrote “Dow 36,000” in 2000 right before the dotcom crash, and who is now an economic adviser to one of the Presidential candidates (and so compounds incompetence with incentive to print spin).

  179. Cindy says:

    This economics course is truly discouraging. I make no money. I have no gold. I get to look forward to (or not) a pension paid to me (or not) in US dollars.

  180. John says:

    Is it this weekend? Are you going?

    Sybarite101 X Says:
    July 28th, 2008 at 4:47 pm
    John,

    Going to burgerfest?

  181. Sybarite101 X says:

    How about this conundrum:
    Americans get poorer ->
    in turn buying cheaper chinese-made products ->
    enrichening the chinese economy ->
    increasing their middle class ->
    causing increase in demand for oil/other commodities ->
    driving up price of said commodities ->
    making Americans poorer ->…

    Seems like an inevitable cycle to me.

    Speaking of which, did anyone catch the Ted Koppel 4-part series on Discovery about China? Interesting and scary stuff.

  182. Sybarite101 X says:

    John,

    Not yet, it’s 8/16, but I bring it up now because if you’re going I’m making it priority 1 to be there.

  183. Tom says:

    Kettle,

    A few years ago, I knew which mortgage companies were going to be the worst off because of the number of commercials they aired. Recently I’ve been seeing a lot of Wells Fargo commercials and thinking the same thing.

    Plus Donald commented on my blog that one of their brokers sent him an email about 97% financing. Anyone know if he ever sold his place?

  184. Tom says:

    189 in moderation. Seems like every other comment of mine goes into moderation even when I don’t include links or bad words :(

  185. sas says:

    njpatient,

    yeah bloke!

    In one hand!!…

    we have that idiot Kevin Hassett, the guy who wrote “Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market-published in 1999″… now as senior economic adviser to the John McCain 2008 presidential campaign.

    and in the other hand…

    we have Zbigniew Brzezinski, that guy who started Mujahideen (i.e. Al-Qaeda, or aka. the CIA’s middle eastern hired hit men), now a foreign policy advisor to Barack Obama.

    man… we really are screwed.
    you better buckle up, because we are going on a long, bumpy ride.

    SAS

  186. sas says:

    njpatient,

    yeah bloke!

    In one hand!!…

    we have that idiot Kevin Hassett, the guy who wrote “Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market-published in 1999″… now as senior economic adviser to the ~Jo_hn_Mc_Cain 2008 presidential campaign.

    and in the other hand…

    we have Zbigniew Brzezinski, that guy who started Mujahideen (i.e. Al-Qaeda, or aka. the CIA’s middle eastern hired hit men), now a foreign policy advisor to Ba_ra_ck O_ba_ma.

    man… we really are screwed.
    you better buckle up, because we are going on a long, bumpy ride.

    SAS

  187. sas says:

    sorry for the underscores…
    it was the only way to sidestep the Stazi.

    ;)
    SAS

  188. make money says:

    Anyone know if he ever sold his place?

    Tom,

    It it performed the electric slide down the hill. AIG was his insurer.

  189. lostinny says:

    So Grim
    No kind of gtg this weekend at all?

  190. grim says:

    I suppose we could, any ideas?

  191. grim says:

    Ridgewood/BC maybe?

  192. sas says:

    sean Hannity is a moron who engages in propaganda.

    B_ush is a fake conservative moron.

    Mc_Cain*e is out to lunch

    O_bama is an idiot.

    and if you are debating to drill or not drill oil, and think this is whats important to bring gas prices down, and if you still think there is a difference btw the right & left… brother… I have blue cheese on the moon I’d like to sell you.

    better buy gold & accept your house is a depreciating asset & you’ve been rope a doped thinking RE only goes up.

    man!
    sas

  193. Zack says:

    MER raising $8B in capital by dilution.

  194. sas says:

    I’ll be in Bergen County this weekend.

    sas

  195. grim says:

    From the Star Ledger:

    New Jersey ranks near bottom for business in survey

    New Jersey ranked fourth-worst among states when it comes to business climate, according to a survey of U.S. corporate executives compiled by Development Counsellors International.

    Corzine among economy experts meeting with Obama

    Gov. Jon S. Corzine was among the panel of advisers talking with Barack Obama about the economy today.

    Corzine joined investor Warren Buffett, Google CEO Eric Schmidt and former Federal Reserve chairman Paul Volcker, among other economy experts meeting with the Democratic presidential hopeful in Washington.

  196. ReadngtnDude says:

    Kettle, RE: doctors

    We have some experience in this area with one of our teenage sons. We found an excellent Pediatric Pulmonologist at Morristown/Goryeb Hospital. His name is Dr. Arthur Atlas. I would highly recommend him for at least a second opinion and he is balanced on the use of steroids.

    BTW, Allergies are very often at the bottom of these issues but it is not always so clear cut.

    RD.

  197. Tom says:

    make money,

    “It it performed the electric slide down the hill. AIG was his insurer.”

    Can you elaborate, I don’t quite understand.

  198. Nicholas says:

    “A few years ago, I knew which mortgage companies were going to be the worst off because of the number of commercials they aired. Recently I’ve been seeing a lot of Wells Fargo commercials and thinking the same thing.”

    This week I saw a RE add for Champion Realty that stated “You wouldn’t determine the weather outside by asking the weatherman the temperature in the Artic, the same goes for Real Estate. Real Estate is local so ask your local RE agent about prices in your area”

    I laughed for a while since it was on my list of things an agent will tell you that don’t hold true all the time but they state as if they are fact.

  199. afe says:

    Fiddy –

    Thanks for the input. The main selling point: I love my neighbors! School-wise, I am not worried, I am one of those “go get my child what she needs” types, so if she needs something, I will advocate for her and get it, here or Basking Ridge or Newark. Basicaly, as you pointed out, I am attracted to it as an option because it is “the devil I know”. Financially, it is a toss-up. I think in the best case scenario we would come out even (even after 10 years, who knows) and maybe not after putting in the dough for cosmetic changes. But since we would be spending a total of 1/3 the price we were willing to pay in Basking Ridge or Bridgewater (the 2 towns we were looking at most recently) and would not have to take out a loan, we are holding signicantly less risk. We have to work out some kinks in the commute thing/ so we are going to give it a few months and then if everything is lined up, make an offer. Then he has to accept! :) I will contact you in the near future if that is okay (via grim) to let you know if we need comps.

  200. Clotpoll says:

    Zack (198)-

    Thanks for providing bi with a “buy” signal on MER. He is a dilution expert.

    Also, a delusion expert.

  201. lostinny says:

    Grim
    We could do Shannon Rose like Mike suggested or if you want to get your 80’s freak on, we could go to Pyramid.

  202. Clotpoll says:

    grim (200)-

    When’s somebody gonna tell Obama to get as far away from Corzine as possible? Every time I entertain the notion of actually voting for him (the notion usually passes quickly), I remind myself that he’s being advised by Corzine.

    That snaps me back to my senses.

  203. sas says:

    dollar devaluation by the Federal Reserve is the main cause of gas prices, and inflation.

    this little debate about drilling (a very minor factor), is to blind you and divert you away from the real issue…the Major Factor.

    The Federal Reserve is neither private nor do they have any reserves. They are an unelected cartel that has control over the money supply. They print money out of nothing, and lend it to you with interest, i.e so more moey will have to printed up to cover interest.

    The Game is rigged bloke. Get out of debt now, or you will be on the bankers treadmill your whole life.

    SAS

  204. Clotpoll says:

    207, moderated.

  205. Shore Guy says:

    # 105

    It was a great set list, in general, with a little dip about halfway through. The sound was a bit muddy, seemingly from the sound being turned up to 11, instead of 10. I think that some shows I saw earlier in the tour were better overall. That said, heis a great showman and any concert that starts with 10th Ave. Freezout, ends with Rosalita, and includes both Atlantic City (my favorite Springsteen song, just ahead of Crush On You) and Jungleland is a winner in my book.

    I too will be there on Thursday ( if we hadn’t already gotten Police tickets, we would have gone to Boston as well). Wave over to row one in Sect 111; I will wave back.

  206. scribe says:

    Tom,

    His house sat on a cliff. There were some posts where he was talking about hiding cracks in the foundation from prospective buyers.

  207. willwork4beer says:

    200 Grim

    Last I heard (and I’m sure it was here), NJ was second worst. Guess those guys didn’t get that memo…

  208. Clotpoll says:

    Wake me up when Johnny Rotten decides to go on tour.

  209. Tom says:

    Grim,

    Regarding Jacob Kim and AMG mortgage fraud case. I have been tracking the story for a few years. For a long while it went dead until they recently caught him. I tried contacting the NJAG because the initial reports indicated the amount of fraud was $100 million but the recent indictments only mentioned $20 million. I have more info on the Palisades Park mortgage fraud case. One of the properties mentioned in the news stories is listed for auction in Bergen County soon.

  210. Clotpoll says:

    beer (212)-

    I fully expect the state of NJ to be hunting down and summarily executing small business people within a year or two.

    Of course, they won’t execute us until they seize all our assets and re-distribute them to the “needy”.

  211. Clotpoll says:

    scribe (211)-

    “There were some posts where he was talking about hiding cracks in the foundation from prospective buyers.”

    Those were the good, old days. I miss Duck.

    He was the best troll ever here.

  212. scribe says:

    Fiddy,

    Do you have access to the Middlesex MLS? If so, can you get me the details on this one?

    MLS ID# 818439
    $529,900

  213. Shore Guy says:

    # 207

    “The Game is rigged bloke. Get out of debt now, or you will be on the bankers treadmill your whole life”

    Midnight Oil had lyrics much like this some years ago. Working from memory:

    “Blue-collar work don’t get you nowhere. Just go round and round in debt. Someone’s got you on that treadmill, baby. And I hope you’re not beaten yet.”

  214. grim says:

    From MarketWatch:

    How the housing bill hits home

    One of the highlights of the housing bill waiting to be signed by President Bush is a tax credit of up to $7,500 for first-time home buyers. But read a little closer and it doesn’t seem quite as appealing for buyers: that credit has to be paid back.

    That’s just one of the lines of fine print in the bill that mutes the benefit to consumers, housing analysts say.

    According to the bill, the tax credit has to be returned in installments over 15 years. In essence, the perk amounts to a no-interest loan, said Cameron Findlay, chief economist for LendingTree.com, an online company that matches consumers with lenders.

    But in addition to that small matter of paying the money back, it also doesn’t help much in a buyer’s challenge to come up with a down payment, Scharin said. The money would come after a house is bought.

    And if you’re a prospective home buyer who believes the economists who say that housing prices still could slide, that “tax credit isn’t going to be an inducement — unless you were going to buy anyway,” said Jim Arbury, senior vice president of government

  215. lostinny says:

    BTW OT
    Does anyone have extra tix for The Police this weekend?

  216. lostinny says:

    Clot
    Sex Pistols did a reunion tour. Did you go?

  217. scribe says:

    Here’s the follow-up from the WSJ:

    Paulson, Banks Unveil
    Plans for Covered Bonds
    By MEENA THIRUVENGADAM
    July 28, 2008 4:56 p.m.

    WASHINGTON — Four of the U.S.’s leading banks are jumping on a government bandwagon to promote the development of a covered-bond market in the U.S.

    Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. Monday unveiled plans to launch covered-bond programs and become leading issuers of the financial instruments, which date back to 18th-century Europe.

    [snip]

    The guidelines are thought to provide the necessary legal, regulatory and market framework necessary to develop a covered-bond market in the U.S.

    Federal Reserve Governor Kevin Warsh commended the guidelines and said the Fed would accept the bonds as collateral.

    http://online.wsj.com/article/SB121727042664390535.html?mod=hps_us_whats_news

  218. Laughing all the way says:

    i haven’t read today’s comments yet, but Grim, that has to be a full post

    http://www.wsbtv.com/news/16980412/detail.html

    Family gets extreme home makeover in 2005. MORTGAGE IS PAID OFF. And they are given 100k.
    Last year, they take out a loan for 450k … and now they’re in foreclosure.

    This quote is unreal: ““What’s going to happen is instead of keep paying my mortgage, I’m going to take my money and not pay my mortgage because I’m being harassed,” said Harper.

  219. scribe says:

    Clot, #217

    That was a hilarious thread.

  220. Tom says:

    “His house sat on a cliff. There were some posts where he was talking about hiding cracks in the foundation from prospective buyers.”

    Are you guys using metaphors or did the house really slide down the cliff?

  221. willwork4beer says:

    214 Clotpoll

    From each according to his abilities, to each according to how closely he’s related to some politician. Welcome to the People’s Republic of NJ.

  222. grim says:

    I suppose we could end up at Shannon Rose again (close to me, I’m not going to complain).

    Saturday night?

  223. Shore Guy says:

    #212 Clot,

    You can have Johnny, gimme Patti Smith.

  224. SG says:

    A Deficit Forecast of $482 Billion, a Record
    By ROBERT PEAR and DAVID M. HERSZENHORN

    WASHINGTON — The White House predicted on Monday that the Bush administration would bequeath a record deficit of $482 billion to the next president — a sobering turnabout in the nation’s fiscal condition from 2001 when President Bush took office and inherited three consecutive years of budget surpluses.

  225. njpatient says:

    “it also doesn’t help much in a buyer’s challenge to come up with a down payment, Scharin said. The money would come after a house is bought.”

    Put another way, it only helps those who could already afford to buy a house.

    Oops.

  226. lostinny says:

    228 Grim
    I think that will work. Mike wants to go early I think.

  227. njpatient says:

    “record deficit of $482 billion ”

    Put another way, that’s a massive federal tax increase – deferred.

  228. SG says:


    Banks Throw Weight Behind Paulson Covered-Bond Plan

    July 28 (Bloomberg) — Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. threw their support behind Treasury Secretary Henry Paulson’s effort to spur covered bonds as a new source of mortgage financing.

  229. grim says:

    Let me know a time so I can get it up on the main page over the next few days, hopefully we can get a good turnout.

  230. Shore Guy says:

    # 227

    If the world made any sense, the current Giants Stadium would be turned over to Rutgers, instead of being turned into a parking lot when the new stadium is completed, and Rutgers would not go spending $100 million to expand their dump.

  231. lostinny says:

    Well I think Mike said 5 originally. I don’t care either way.

  232. Clotpoll says:

    lost (222)-

    IMO, it’s not a true Pistols reunion tour unless they exhume Sid and put his remains on the stage.

  233. Clotpoll says:

    Sort of a punk Weekend at Bernie’s…

  234. Clotpoll says:

    Are you guys going to a club, a bar, or some kind of early-bird special?

    The conversation sounds like my in-laws in Fla:

    “Well I think Mike said 5 originally”

  235. scribe says:

    Tom,

    No.

    I think that thread was a riff. He was pulling everyone’s leg.

    But it was a good one.

  236. grim says:

    Unless you want punk, in which case you could meet up at Loop on Friday

  237. Clotpoll says:

    Tom (226)-

    In that particular case, the line between metaphor and reality has been blurred beyond recognition.

    I think Duck’s house is a metaphor for everything that’s happened in the US since Hurricane Katrina.

  238. scribe says:

    Grim,

    I’ve been to two of these, and I’ve yet to hear you speak.

    The loud music didn’t help any.

    The next time, could you please say the following:

    HULLO, SCRIBE

    :)

  239. grim says:

    we need some kind of calendar widget to keep track of these things

  240. Clotpoll says:

    scribe (241)-

    I think Duck was dead serious. Fit his character perfectly.

  241. Clotpoll says:

    Uh-oh. Now Grim’s resorted to techspeak.

  242. Clotpoll says:

    Another drinking school with a football problem:

    GAINESVILLE, Fla. (AP) – The University of Florida can raise a glass to another national title – best party school in the country. The Gators, known for wild celebrations following national championships in football and basketball, wrested the party title away from West Virginia University and beat out the University of Mississippi and Penn State University, in the Princeton Review survey of 120,000 students released Monday.

    The university has made the top 20 party school list for the past 15 years, but has never been No. 1.

    Freshman Allison Belanger, a journalism and political science major, said she’s only been on campus for a few weeks but already has had no problem finding a party.

    “All I have to do is leave the dorm,” said Belanger, 17. “A lot of people study hard and party hard.”

  243. grim says:

    “All I have to do is leave the dorm,” said Belanger, 17. “A lot of people study hard and party hard.”

    And why is there no party in her dorm?

    Slacker.

  244. lostinny says:

    238 Clot
    I completely agree, which is why I didn’t see any show on that tour.

  245. lostinny says:

    Grim
    I can’t do loop without DH. Too much drama there for me.

  246. njpatient says:

    Scribe – I agree with clot that our favorite Warner Bros troll was on the level about sliding downhill.

    I believe that he felt that such behavior demonstrated his incredible smarts.

  247. Nom Deplume says:

    [216] clot,

    Small business people won’t be executed. They are too useful.

    Didn’t you ever see The Matrix? I figure you for a couple of D cells.

    Seriously, you will see increased taxes and new regulation, particularly in the benefits area. Also min. wage hikes and payroll taxes.

    There are already exit taxes, and I expect they will take on a new element vis-a-vis a tangible personal property tax (which existed but was repealed) on property being removed from the state.

    Washington State already does. If you sell moveable business property, WA state counties routinely issue you an Order barring its transfer until they impose and collect an exit tax. I expect NJ to toy with the idea, if they aren’t already.

  248. Sybarite101 X says:

    Shore,

    How does that make any sense? New Brunswick and East Rutherford are what, an hour away from each other?

  249. Tom says:

    Hard to believe anything he says. Thought I saw something where he claimed to rent the house and live in his mother’s basement too.

    He sounds more like a realtor still trying to convince people it’s a good time to buy.

    Anyone ever confirm that the house he was talking about existed and that he was the owner?

  250. NJl$rd says:

    It’s not too late to raise awareness. Stopping irresponsible consuming & importing, starting saving and paying back the debt. In a nutshell, tight your belt and get rid of the ‘entitlement’ mentality.

    #166 sas Says:
    July 28th, 2008 at 4:10 pm

    “China’s economic ‘bargaining chip’”
    http://tinyurl.com/6cq65j

  251. NJl$rd says:

    Nah, it’s yet another new gimmick by the wall street. It won’t solve the root cause of the problem.

    #234 SG Says:
    July 28th, 2008 at 6:26 pm

    Banks Throw Weight Behind Paulson Covered-Bond Plan

    July 28 (Bloomberg) — Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. threw their support behind Treasury Secretary Henry Paulson’s effort to spur covered bonds as a new source of mortgage financing.

  252. BC Bob says:

    Shore,

    I’m in Sec 6, field. It looks like it’s right below 111. If I find out what sec we will be in, tailgate, I’ll let you know.

  253. Cindy says:

    (254) Nom

    Oregon and Washington have weird tax laws.

    Oregon has no sales tax but does have 5/7/9% income tax so if you work and own property you pay for everything.

    Washinton has no income or corporation tax but does have a 6.5% sales tax.

    So Washington folks come over and shop in Oregon and Oregon drives any one with money out of the state to live in Washington so they won’t have to pay income tax.

  254. Sybarite101 X says:

    Is this the Loop I keep reading about here??!?:
    http://loopinn.com/

    What kind of gtg is this?

  255. chicagofinance says:

    Clotpoll Says:
    July 28th, 2008 at 6:28 pm
    lost (222)- IMO, it’s not a true Pistols reunion tour unless they exhume Sid and put his remains on the stage.

    Everything today is just a whitewashed version of what it was…
    http://www.hotelchelsea.com/history.php

  256. sas says:

    “2 realty agents convicted of mortgage fraud”
    http://tinyurl.com/5bjd5l

  257. Cindy says:

    Daily Reckoning Mon. 7/28 Dead Cat Bounce

    ***The boom in finance is over – but that doesn’t mean there won’t be some spectacular bounces…leveraged stupidity…

    “In the four years leading up to the credit crunch Wall Street’s big banks paid themselves $250Billion in bonuses. It didn’t seem to matter to anyone that the source of the wealth was largely a swindle. ..and that real profits could never be realized. Now, the banks are writing off bad loans…and turning to the taxpayer for a handout. But no one has offered to return a bonus, as far as we know.”

  258. All Hype says:

    You gotta read this about MER over at Calculated Risk. That CEO Thain is one dishonest and/or clueless SOB!!!

    http://calculatedrisk.blogspot.com/

  259. jamil says:

    WS bonus system makes me sick. It clearly encourages fraud and negligent behavior and in the end taxpayers have to pay for this.

    I have nothing against bonuses if I don’t have to pay for it in the end. Some sort of system should be set up to prevent this next time. Maybe bonuses should be deferred or be more like tax credits over the next 10 years and can be canceled if it turns out that taxpayer have to cover it or if fraud is found. I’m sure better system can be created, this was just an example (which still allow big bonuses in rare non-fraud non-bailout scenarios). Also, stricter criminal penalties for people involved in mortgage/finance fraud. Mandatory 25-year sentence for fraud should help a bit.

    Anyway, “Friends of Dodd” would write the eventual legislation so why bother..

  260. House Hunter says:

    ever see this real estate chart simulated as a roller coaster..kind of interesting yet scary
    http://youtube.com/watch?v=kUldGc06S3U

  261. stu says:

    Jamil,

    You are too partisan for your own good.

    That’s right, I forgot. All Dems suck, but all Republican’s are angels.

  262. Fiddy Cents on the Dollar says:

    scribe :218

    I don’t have access to Middlesex MLS, but someone else on the board did (and I can’t remember who it was).

    OK a shoutout…..which one of you intrepid posters has access to Middlesex MLS?

    Anyone?

    Bueller??

  263. Tom says:

    “ever see this real estate chart simulated as a roller coaster..kind of interesting yet scary”

    Yeah, funny. I found it earlier while searching for some other stuff.

  264. BklynHawk says:

    Guys-
    Never been to The Loop. Would these guys play there?

    http://uk.youtube.com/watch?v=uuL_XOGi-LM

  265. NJl$or says:

    Speaking of MER, I worked there as a consultant for a few months in their ISP/IT group back in 2006. The employee morale in the IT / back office was really low. And a lot of them were either clueless or lazy or bearuacracy or all of above.

    During one of those ‘big’ meetings to raise morale, a department head from business side gave speech of how the business hire over hundreds of ‘smart’ IBs from top b-school. How those ‘smart’ @ss worked in the war-room together to produce the ‘winning’ strategies. What’s a bunch of waste….

  266. John says:

    even worse at MER the unvested stuff is all common stock that got distroyed. The bonds and pref stock is making out, but the people getting canned with worthless grants are getting the Bear treatment.

  267. John says:

    god save the queen she ain’t a human bean.

  268. Xanaduman says:

    Judging by Steve Forbe’s prescription to save
    the “Fannies” by breaking them up and infusing
    capital, I would bet he is holding a lot of
    Fannie Shares.

  269. NJl$ord says:

    I’ll stop worry about other people. I’ll worry about what kind of value I could bring on the table. I have no expectation from God that I’m his most favorite so that I’m ENTITLED to whatever I desire. In the end of the day, I’m the problem of my problems.

    #187 Sybarite101 X Says:
    July 28th, 2008 at 5:03 pm

    How about this conundrum:
    Americans get poorer ->
    in turn buying cheaper chinese-made products ->
    enrichening the chinese economy ->
    increasing their middle class ->
    causing increase in demand for oil/other commodities ->
    driving up price of said commodities ->
    making Americans poorer ->…

    Seems like an inevitable cycle to me.

    Speaking of which, did anyone catch the Ted Koppel 4-part series on Discovery about China? Interesting and scary stuff.

  270. Clotpoll says:

    sl-

    Sent you an e-mail.

  271. Clotpoll says:

    (276) NJeyesore-

    “In the end of the day, I’m the problem of my problems.”

    Please refresh my memory; is this Kant, Hegel or Kirkegaard?

  272. Clotpoll says:

    “In the end of the day, I’m the problem of my problems.”

    Grim, I think you have a new subtitle for the blog here.

  273. All Hype says:

    even worse at MER the unvested stuff is all common stock that got distroyed. The bonds and pref stock is making out, but the people getting canned with worthless grants are getting the Bear treatment.

    ____________________________________________
    Looks like the management at MER is throwing the existing shareholders under the bus and moving in the SWF people. How much more they can dilude the stock is beyond me but we will soon know.

  274. Clotpoll says:

    (276)

    All roads lead back to Messrs Rotten & Vicious:

    Too many problems
    Oh why am I here
    I don’t need to be me
    cos you’re all too clear
    Well I can see
    There’s something wrong with you
    But what do you expect me to do?
    At least I gotta know what I wanna be
    Don’t come to me if you need pity
    Are you lonely you got no one
    You get your body in suspension that’s no
    Problem problem
    Problem the problem is you

    Eat your heart out on a plastic tray

    You don’t do what you want then you’ll fade away
    You won’t find me working nine to five
    It’s too much fun a being alive
    I’m using my feet for my human machine
    You won’t find me living for the screen
    Are you lonely all your needs catered
    You got your brains dehydrated

  275. NJl$ord says:

    Funny, this is the first rule I learn being a slumlord. lol!

    # Clot101 Says:
    July 28th, 2008 at 10:27 pm

    “In the end of the day, I’m the problem of my problems.”

    Grim, I think you have a new subtitle for the blog here.

  276. Sybarite101 X says:

    Where did you get anything remotely related to entitlement from my post?

    NJl$ord Says:
    July 28th, 2008 at 10:04 pm
    I’ll stop worry about other people. I’ll worry about what kind of value I could bring on the table. I have no expectation from God that I’m his most favorite so that I’m ENTITLED to whatever I desire. In the end of the day, I’m the problem of my problems.

  277. chicagofinance says:

    Aldo’s is where I learned to dance to this…..
    http://www.youtube.com/watch?v=8rsLao-aoHY&feature=related

  278. chicagofinance says:

    My memory of the Loop……dancing to House of Pain and then at the part where they say JUMP-JUMP-JUMP-JUMP-JUMP-etc….I got undercut by this guy and I hit a light fixture and smashed the bulb. Then the bouncer took my Depeche A%% and jammed a boot up my faloom-bwe-bwe…

  279. WickedOrange says:

    CLASSIC….

    ‘Extreme Makeover’ house faces foreclosure

    Jul 28, 2:31 PM (ET)

    LAKE CITY, Ga. (AP) – More than 1,800 people showed up to help ABC’s “Extreme Makeover” team demolish a family’s decrepit home and replace it with a sparkling, four-bedroom mini-mansion in 2005.

    Three years later, the reality TV show’s most ambitious project at the time has become the latest victim of the foreclosure crisis.

    After the Harper family used the two-story home as collateral for a $450,000 loan, it’s set to go to auction on the steps of the Clayton County Courthouse Aug. 5. The couple did not return phone calls Monday, but told WSB-TV they received the loan for a construction business that failed.

    The house was built in January 2005, after Atlanta-based Beazer Homes USA and ABC’s “Extreme Makeover” demolished their old home and its faulty septic system. Within six days, construction crews and hoards of volunteers had completed work on the largest home that the television program had yet built.

    The finished product was a four-bedroom house with decorative rock walls and a three-car garage that towered over ranch and split-level homes in their Clayton County neighborhood. The home’s door opened into a lobby that featured four fireplaces, a solarium, a music room and a plush new office.

    Materials and labor were donated for the home, which would have cost about $450,000 to build. Beazer Homes’ employees and company partners also raised $250,000 in contributions for the family, including scholarships for the couple’s three children and a home maintenance fund.

    ABC said in a statement that it advises each family to consult a financial planner after they get their new home. “Ultimately, financial matters are personal, and we work to respect the privacy of the families,” the network said.

    Some of the volunteers who helped build the home were less than thrilled about the family’s financial decisions.

    “It’s aggravating. It just makes you mad. You do that much work, and they just squander it,” Lake City Mayor Willie Oswalt, who helped vault a massive beam into place in the Harper’s living room, told The Atlanta Journal-Constitution.

  280. njpatient says:

    283 syb

    I was equally confused.

  281. Clotpoll says:

    syb (283)-

    Best not to question; just accept.

    I think this is a classic case of a poorly-formed bulb, shining dimly.

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