Weekend Open Discussion

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

This entry was posted in General. Bookmark the permalink.

458 Responses to Weekend Open Discussion

  1. Rich In NNJ says:

    First

  2. DL says:

    Any predictions on what monotone Ben says today?

  3. DL says:

    “This time last year, Bernanke told the conference the Fed would take steps to shield the economy from the U.S. housing collapse, but would not bail out investors.”

    So how’d that work out?

  4. SG says:

    Went to IOUSA movie last night. Here are my comments,

    * I was surprised at the fact that theater was almost full. It definitely points to the fact that there is percentage of America wants to know about this issue.

    * I was kind of disappointed by no participation in the movie by current Administration. Either they were not asked, asked but denied or their content was edited out. I am thinking it might have been 2nd option, and which would be a shame. By participating, Bush administration could have redeemed some credit.

    * Not much discussion in movie about solutions. They could have talked about some proposed solutions, its pros and cons. Just knowing the problem, but not much solutions, makes it a half story.

    * None the less, I think must watch for almost everyone. You have to give credit to producer/directors for their efforts.

  5. SG says:


    Vacation Homes Without All the Expense

    With home prices tumbling in some of the country’s most attractive second-home destinations, it might be tempting to pick up a bargain on a beach cottage, a cabin in the woods, or a pad close to the Vegas strip. But wait. It may make more sense to rent and take the financial stress out of owning a vacation home.

  6. Everything's Hobroken says:

    I, too was there, though we ducked out during the latter part of the panel discussion.

    The movie was poorly cut. There was excessive footage of meeting preparations and it had an amateurish feel.

    There is insufficient reason presented for an average citizen to become alarmed because the presented proponents have insufficient public gravitas. Although they should have it given their qualifications, unfortunately the populace will, I think, require more.

    This is particularly true since it seems that the panelist there with the most perceived stature, Mr Buffet, is not fully on board. His suggestion that growth could cure the problem and apparently mistaken assumption that the model presented did not include growth was disturbing.

    He is correct, of course, that there is some growth factor at which the problem would be handled. It would be interesting to know what that growth value would need to be.

  7. reinvestor X says:

    Stop this bellyaching. Bernanke and Paulson had to do something. What did you want them to do? Nothing? Guess what, that’s not an option. The first order of business is to attempt to contain this recession.

    You guys aren’t going to be satisfied until you see a total collapse of the economic system. I don’t understand what sort of American would like to see his country decline like that. I have a hard time understanding why you guys want to have a drop in your own standard of living, let alone that of your fellow citizens. There’s actually a bit of dissappointment that’s consistently expressed here about “delaying” matters. Guess what? You make a risky bet to bet against America.

    While many of you refuse to invest and believe in America, much of the world takes a different view and this is why commodity prices have dropped while the dollar has climbed. Everyone knows that our nation is the last best hope and the safe haven for the world. Everyone wants to invest and be associated with America; that is everyone except filthest and most degenerate element amoung us-the liberal.

    This “hate America first” attitude is standard liberal fare. It’s unpatriotic and low down.

    “This time last year, Bernanke told the conference the Fed would take steps to shield the economy from the U.S. housing collapse, but would not bail out investors.”

    So how’d that work out?

  8. SG says:


    Lehman lashed: Subprime storm rages on

    Analysis: After racking up losses of more than £250bn in the subprime meltdown, investment banks could be forgiven for thinking that the great purge was finally drawing to a close.

    But with the jungle drums beating ever louder over Lehman Brothers, Wall Street could be facing even greater convulsions in the months ahead.

    As the realisation grows that the sun may at last be setting on their empires, European and US investment banks have begun slashing staff at break-neck pace.

    As many as 100,000 jobs could be axed across the industry in the wake of the sub-prime debacle, and ensuing credit crunch.

    Bankers who lose their jobs over the coming months will struggle to find another job any time soon. The latest survey by City recruiter Morgan McKinley showed that 84% of City firms expect either to cut positions or impose a hiring freeze over the coming year.

    There goes the NY Bankers buying houses in NJ.

  9. SG says:

    Everyone knows that our nation is the last best hope and the safe haven for the world.

    One of the main reasons most Empires (Roman, British etc…) fail is Over Confidence. There are some issues above political parties. If you want US to not fall into recession, then ask everyone to work hard, don’t ask for fed bail outs. Free markets made America great, you are proposing US no longer be a free market country.

    When House prices went up, the argument was, it’s free capitalist system which rewards risk takers. Then that bet turns out wrong, you want Govt help.

  10. Stu says:

    I agree with SG and Everything’s points. The other thing that was missing IMO was some representation from the lower and middle classes. There was a single brief mention of how low the income tax rates have become on the wealthy and only two mentions of how ‘W’ doubled the deficit while reducing taxes. There was a lot of rah rah rah for savings, but no talk of the difficulty of doing so with the diminishing wage.

    They did key in on many of the topics discussed here such as how China is becoming our master and the impact of printing money on inflation for example.

    The biggest failure of the documentary was the lack of solutions provided. It has the feel of the Gramm-Rudman act. Everyone knows to fear the lion (spend less/save more), but the lion’s got no teeth.

    Ultimately, IOUSA has solidified my desire to retire in Belize as soon as the little Gator graduates high school. I’m guessing that will be about the time that our empire collapses. Now if only Belken was a little bit tastier.

  11. SG says:

    2 economists’ books examine lessons from the subprime crisis

    By KEVIN G. HALL
    BEE WASHINGTON BUREAU

    WASHINGTON — Two new books from respected economists are offering provocative solutions to prevent another housing-spawned financial meltdown.

    In “The Subprime Solution,” Yale University economist Robert Shiller — the coiner of the phrase “irrational exuberance” to describe the financial-market boom of the ’90s — says the origin of today’s housing problems is psychological.

    Equally provocative is “Financial Shock,” by Mark Zandi, the oft-quoted chief economist for Moody’s Economy.com. His book is subtitled “A 360 Degree Look at the Subprime Mortgage Implosion and How to Avoid the Next Financial Crisis.”

    After leading readers through the sordid history of the nation’s housing meltdown, he offers 10 proposals to help prevent the next one. Some ideas already are being offered in part by the Treasury Department or Federal Reserve, things such as greater licensing and regulation of mortgage brokers and overhauling financial regulation to meet today’s market realities. But others that make sense have received little attention.

  12. reinvestor X says:

    When House prices went up, the argument was, it’s free capitalist system which rewards risk takers. Then that bet turns out wrong, you want Govt help.

    What?? Please stop this. You liberals have set up a virtual welfare state for those who aren’t risk takers and who generate nothing but costs to the economy. The bulk of the taxes are paid by those making money, so yes, if we run into a problem, why shouldn’t we be assisted? This shores up the economy and the government’s tax revenues. Why the hell is NYS having so many problems? Their tax revenues are down. Assisting those that drive this economy is in the nation’s interests.

  13. DL says:

    Ref 7. The point of the comment was that it seems those in charge of managing the situation are either in total denial or intentionally lying. Economics is (are?) like gravity and we seem intent on ignoring the laws of physics as we try and leave no Investment Bank behind. And for the record, I earn and save U.S. dollars, pay U.S. taxes, and serve in a job overseas that routinely takes me to some of the world’s premier vacation destinations: Bosnia, Kosovo, Afghanistan, Iraq, Georgia, etc. I’m hardly an America hater, but count me as someone who wants competent people in positions of responsibility. If those people feel its their right to use my tax dollars to reward the guilty and punish the innocent, I say fire them.

  14. Stu says:

    REtards view is way to common among the populace. This view of America #1 and to ignore the consequences of the failing economic reality we find ourselves in is largely to blame for our leaders not acting in a way to fix it.

    People will not save and invest through the socialization of losses that were purchased on credit! It is not investing if you do not contribute any of your own saved money (if you have any). And to blame the liberals for our economic woes is a blatant flat out lie.

    When I talk with my step-dad (a true red republican through and through. He is in his late 70’s) about politics, he was most impressed by Bill C’s ability to cut federal deficit and achieve surpluses during his tenure. Raygun, B 41 and B 43 have done nothing but to borrow money from our children and spend it recklessly on ineffective government programs. It sounds a lot like the failed liberal social policies of the Dems in the 50s and 60s, no? You can’t blame the liberals for the rampant federal deficits. Now way in hell!

    This country is so F’ed regardless of which party is in power. And I’m not just referring to the next 4 years. The rich keep getting richer and the poor are eventually gonna rape your wives and children. Enjoy your tax cuts and loop holes.

  15. Stu says:

    RE:

    To get us out of the great depression, the highest income tax rate was 94%. The wealthy paid it!

    Today, when the doodoo hits the fan, the wealthiest lobby for more tax cuts from the Republicans. Who is the selfish in this scenario?

    94%!!! Remember that ya douche bag.

  16. Essex says:

    If I had the cash I would be buying a 2nd home with no concerns…or a bigger one….it is about having money and not having money. Simple.

  17. From Calculated Risk, Sub-prime delinquencies surged in July. Apparently a large contributor to the increase in delinqs are the loan mods and repayment plans expiring. Remarkably these people still can’t afford their houses, I’m shocked!
    Also, Clayton Fixed Income Svcs. is reporting there was a 29% increase in 2k5 Alt-A delinqs. I’m not too familiar with Clayton so take it for what it is.

  18. BC Bob says:

    “While many of you refuse to invest and believe in America, much of the world takes a different view and this is why commodity prices have dropped while the dollar has climbed.”

    50.5,

    The Bayonne Bleeder hanging on the ropes.

  19. Shore Guy says:

    # 10

    “Ultimately, IOUSA has solidified my desire to retire in Belize”

    Mrs. Shore and I love Belize. The north is kind ofstark, but the rest is great. Do you own land there yet?

  20. cooper says:

    RE-
    #7

    “The bulk of the taxes are paid by those making money, so yes, if we run into a problem, why shouldn’t we be assisted?”

    Just so I’m clear on what your saying, as long as you pay taxes you can gamble at no risk? Sounds like somebody doesn’t believe in accountability.

  21. NJLifer says:

    Stu, there was a saying in Argentina that God must be Argentine, because their prosperity was impervious to the rest of the worlds ills. Now? Even though they still have an abundance of natural resources, they are no better than a third world country. The cause for the decline? Massive nationalization of all of their industries via massive accumulation of debt. Pretty much the industrial equivalent of our banking bailouts. Let’s hope that our arrogance does not lead us to the same fate.

  22. BC Bob says:

    cooper [20],

    The markets have annihilated him/her. Profits are mine, losses are taxpayer problems.

  23. DL says:

    Re 16 – “If I had the cash I would be buying a 2nd home with no concerns…or a bigger one….it is about having money and not having money. Simple.”

    That’s part of what torques me. We saved a fair amount of cash with which we hope to buy a house in NJ next year. (Thanks BTW for the house buying anecodotes in the comments – they helps alot.) In the last year and a half however, the value of our life’s savings dropped roughly 40% versus the euro over here and now inflation is about to wipe out whatever buying power it had left in the States. My wife’s grandmother lived through the hyper-inflation of the Weimar Republic after WW II and her joke about saving was “Do without while you have it so that in times of emergency you still have nothing.” (It sounds better in German.)

  24. Confused In NJ says:

    The government (rep & dem) will let you go to Belize in your underwear, but your money stays here. They need it for the illegal immigrants.

  25. Everything's Hobroken says:

    RE-
    #7

    ‘The bulk of the taxes are paid by those making money, so yes, if we run into a problem, why shouldn’t we be assisted?’

    Because that would prove that you are just like all of those ‘who generate nothing but costs to the economy’. Surely you do not want to be thought of as someone dependent on the government. Doing so would move you out of the desirable successful producer group into the undesirable failed consumer group.

  26. Frank says:

    Korean bank eyes Lehman takeover

  27. JP says:

    It’s not all doom and gloom out there. I work in the Data Communications Industry and have no problem paying my bills and saving money for a house. Salaries are decent and good help is hard to find. I plan to buy a place once it makes financial sense (Buying is cheaper than renting), but that seems to be taking forever. In the meantime, I enjoy the debt free lifestyle.

  28. cooper says:

    BC[22] it’s truly a shame when people are so self-absorbed/greedy, they expect others pay the tab for their party. Imagine waking up with no hang over and some else picked up the bill! reminds me of the old high school house party… 100 kids had a blast, 1 kid pays for it when the parents come home early.

  29. BC Bob says:

    “Korean bank eyes Lehman takeover”

    Frank,

    Up to the minute breaking news. By the way, crude broke $35 off its high.

  30. BC Bob says:

    “100 kids had a blast, 1 kid pays for it when the parents come home early.”

    cooper,

    Do I know you? I was 17 at the time, my parents kicked my ass.

  31. bi says:

    15#, stu, i don’t understand why people with high income have to pay higher tax rate. The most fair way is flat rate. it is not just fair, it also encourages people get rich.

    >RE:

    To get us out of the great depression, the highest income tax rate was 94%. The wealthy paid it!

    Today, when the doodoo hits the fan, the wealthiest lobby for more tax cuts from the Republicans. Who is the selfish in this scenario?

    94%!!! Remember that ya douche bag.

  32. cooper says:

    BC i can finally apologize for the “borrowed car” incident… LOL!

  33. NY developers defaulting on loan payments nor NYC apartments bldgs.

  34. 3b says:

    #12 So now you are a Welfare Queen.

  35. 3b says:

    #26 Frank: I believe that was yersterday’s story, and I understood that the Lorenas walked away> is this an update to that story?

  36. Frank says:

    BC,
    the news broke out today you putz

  37. BC Bob says:

    Frank,

    Had it 2 days ago. Thanks anyway.

  38. Shore Guy says:

    # 26

    I saw that. They picked it up at the Dollar Store. I thought about doing it yesterday, but had no place to srore it. Mrs. Shore said it was time to clear out junk, not accumulate it. I still have my eyes on Merrill, but have to clean out some shelves in the garage before I do it.

  39. #36 – Talks about Lehman’s failure w/ Korean/Chinese buyers started making the pages yesterday . Marketwatch is talking about a different buyer though.
    Hard to tell what is valid and what is disinformation in all this though.

  40. gary says:

    Forget all this fluffy rhetoric sh*t. Give me listing numbers in the so-called “key” towns that are showing some panic prices. Unless they start popping up like crazy, everything else is bullsh*t. If the sale prices are still not too far from peak, then all this doom and gloom talk is just that. F*ck the wishful thinking. You wanna prove me wrong, then prove me wrong. Until then, it’s all chatter.

  41. 3b says:

    BC Bob: I guess the Koreans may be coming back. I do not see what they would find attractive about Lehman, save perhaps their wealth management arm, what with the bulk of the rest of their business being Fixed Income, primarily mtg backeds.

    http://www.marketwatch.com/news/story/lehman-stock-up-pre-market/story.aspx?guid=%7B51C35B66%2DD5CF%2D4A2D%2D937E%2DB8A82EA70115%7D

  42. JP-CentralNJ says:

    I used to think a flat tax was best, but all it really does is expand the gap between the rich and the poor which is not good for society as a whole.

  43. Victorian says:

    Billionaire Warren Buffett told CNBC that Fannie Mae and Freddie Mac, the two largest mortgage finance companies, “don’t have any net worth.”

    “The game is over,” Buffett, the 77-year-old chairman of Berkshire Hathaway Inc., said in an interview. “They were able to borrow without any of the normal restraints. They had a blank check from the federal government.”

  44. Clotpoll says:

    Frank (36)-

    Go back to sleep. The Koreans walked away several days ago; they’re back today.

    Betcha 1-2 more bottom feeders will start sniffing around that rotting corpse pretty soon.

  45. 3b says:

    #40 gary: Problem is they are not that many sales pricecs, as not all that much is selling.

    Lots of asking prices are still at or near peak, but thoser houses are jusrt rotting on the market.

    I continue to be patient, because as I said earlier this week, asking prices ar starting to show some significant declines in may area;no need to rush.

  46. Victorian says:

    Here is some breaking news for ya —

    The US is getting clobbered by Cuba, 10-2 , in baseball.

  47. Clotpoll says:

    3b (41)-

    My guess is that LEH is so cheap, the price is reasonable vs whatever divisions of theirs actually still make money. Maybe they buy the company, keep the performers, shut down the money-bleeders and fire the whole scurvy lot.

  48. 3b says:

    343 Yeah nice job Buffet, are you just another Liberal hating American not willing to lend a helping hand to risk takers? (sarcasm off)

  49. 3b says:

    #47 Clot: Possibly, assuming of course as you say that they get it at a fire sale price. And the Koreans are shrewd negogiators, so I am sure they will.

    AT the end of the day however, it means a lot of layoffs at Lehman.

  50. BC Bob says:

    $2?

  51. chicagofinance says:

    Wait, so there was actually quite a number of you there and you blew us off. Especially with grim all sexied up with his second button undone and his chest hair….

  52. Clotpoll says:

    (49)-

    I’m ready to see a batallion of Korean risk managers hit Wall St.

    If they open some good Korean BBQ places down there, I’ll be visiting often for lunch. Nothing like some good homemade kimchee to clear the sinuses.

  53. Clotpoll says:

    BC (50)-

    Some goober on CNBC just said LEH could get bid up to $20. Woe be to this winner of that bidding war.

    As if.

  54. DL says:

    #40. I’ve been tracking house prices in Cherry Hill NJ for about a year now. Houses that were starting out in 2007 for 399k dropped to about 359k before they were taken off the market. Starting prices today are considerably lower. 3br/2ba that were offered at 359k are now available from 299k to 319k. I agree with #45, I suspect a lot of sellers are staying out of the market because they want 2006 prices and are waiting for the market to recover.

  55. BC Bob says:

    Chi,

    I was there, got there just after it started. Didn’t see anybody.

  56. reinvestor X says:

    You know what? I’m getting tired of your wanton disrepect and your flippant little attitude. You’re pushing for an appointment at high noon for an attitude adjustment session.

    Like I said, those who take the economic risks in this country pay over 50% of the damn taxes so liberals like you can sit around and moan about some income redistribution scheme. When those people are at risk, they do require assistance. Generally, what’s good for them is good for the economic well being of the country.

    I’ve got to run out for an appointment right now, but I’ll have more to say about your litte snipping attitude later.

    Stu Says:
    August 22nd, 2008 at 7:39 am
    RE:

    To get us out of the great depression, the highest income tax rate was 94%. The wealthy paid it!

    Today, when the doodoo hits the fan, the wealthiest lobby for more tax cuts from the Republicans. Who is the selfish in this scenario?

    94%!!! Remember that ya douche bag.

  57. gary says:

    3b,

    Look at this absurdity:

    http://www.realtor.com/realestate/mahwah-nj-07430-1097461570/

    I can’t find anything in Mahwah on the left side of route 17 (Craigmere?) that appears to be even close to affordable. Anyone, and I mean anyone who is signing papers to buy these houses at these still…. sublime f*cking prices should be slapped… hard. It’s comical. It truly is comical. And I’ll tell the buyers to their faces that they’re idiots.

  58. Victorian says:

    Did you guys catch the ad on CNBC for Cramer?

    It is called “Welcome to Cramerica” and shows some young kids repeating mantras like “We will not get fazed by the volatility” , “We will have patience” etc. like some freakin zombies!

  59. 3b says:

    #54 DL: I suspect a lot of sellers are staying out of the market because they want 2006 prices and are waiting for the market to recover.

    And I believe that before year end, many of those would be sellers will finally come to the realization that 2006 prices are not going to happen.

    And those that need, want, or have to sell will adjust their prices accordingly.

  60. Rich In NNJ says:

    Gary (57),

    Cragmere is on the right side of Route 17 heading north (east of 17). This home though east of 17 is not in the Cragmere section.

    Home is also listed for land due to the size of the lot.
    ACT 2 E CRESCENT AVE $799,900 3/18/2008
    PCH 2 E CRESCENT AVE $759,900 4/21/2008
    PCH 2 E CRESCENT AVE $699,900 8/3/2008

  61. kettle1 says:

    NJREReport Belize compound???????

    I’m In!

    On IOUSA:

    I agree with all previous comments. Very important information, slightly amateur feel ( not entirely a bad thing) and to much meeting prep footage. in the end the important info was there and this should be required viewing for all

    On thew commentary at the end of the film.
    i thought warren buffet was insincere at best. and they all dodged the hard questions. For example; someone asked ” we are a consumer econonmy, if we all stop shopping and start saving what would that do to the economy”.
    The response across the board was more or less ” we’ll be fine”. That is flat out wrong. It would be very ugly for a short period and then get better. But it would be very ugly for a little while.

  62. Everything's Hobroken says:

    ‘Wait, so there was actually quite a number of you there and you blew us off.’

    Sorry, had out-of-town guests who arrived late and were too tired to hang around for what I had hoped would be a post-show confab.

  63. 3b says:

    #57 gary: Agreed. But there are not to many signing those papers.

  64. All Hype says:

    What?? Please stop this. You liberals have set up a virtual welfare state for those who aren’t risk takers and who generate nothing but costs to the economy. The bulk of the taxes are paid by those making money, so yes, if we run into a problem, why shouldn’t we be assisted? This shores up the economy and the government’s tax revenues. Why the hell is NYS having so many problems? Their tax revenues are down. Assisting those that drive this economy is in the nation’s interests.
    ____________________________________________

    Allow me to translate, “Privatize the gains and solcialize the losses”.

  65. John says:

    Recession watch part III, went to party last night it was great. Afterwards went to the bars by Stone Street and could not move was a mob scene, town cars up and down the block by Harrys, every place was jumping. The signs are there the recession is ending.

    With that said my wife is interested in Jersey, she wants the names of good train towns with tony names and good schools only. Short commutes too Wall St and not too far out so we can visit LI relatives.

    Any suggestions? I think NJ can only get so cheap before the LI crowd who are used to run down 1.2 million 60 by 100 houses in Manhasset or GC start moving over to jumbo bubble era Toll Bros mcmansions on an acre for 1.2 million.

  66. stu says:

    I considered buying land in Belize about four years back, but I will not do it through a Belize company. I will make some friends down there and rent for a while until I can figure out how the locals do it. If you get far away from the cities, waterfront is cheap and property taxes are nill. Plenty of Americans retire in Puerto Vallarta similarly.

    I don’t require a complex style of living. Give me some electricity or propane, a fishing rod and an internet connection and I’m golden. In 15 years, you can all come down and visit. Maybe then we’ll strike up a poker game. REinvestor, perhaps if I’m ever in need of a caretaker, I’ll look you up. You should be pretty hard up for money by then.

    ChiFi, I saw you at the Rose for a moment, but ya showed up so late that I didn’t get a chance to introduce you to the Gator. I agree, Grim was looking hot…Guido Beach hot!

  67. syncmaster says:

    Starter homes are back!

    3 bedroom in Old Bridge (I think this is near the South Amboy train station) for 169.9k.

    http://www.realtor.com/realestate/old+bridge-nj-08879-1094941372/

  68. kettle1 says:

    DL 23,

    worry not my friend. While you are experiencing price inflation on a personal level, monetary deflation has already begun. those who hold cash are the winners in deflation and those who hold debt are the losers.

    Understand that what occurring in the Wiemar republic was monetary inflation. From one month to the next more German marks existed then the previous month. Currently in the US month after month, LESS dollars exist

    monetary inflation: the increase in the TOTAL supply of dollars (see M2 and M3)

    price inflation: an increase in consumer prices that can be independent of the total money supply.

    the same difference applies for deflation. price deflation isnt such a bad thing. monetary deflation destroys fiat currencies. The difference is crucial and is being missed in 99% of discussions

  69. still_looking says:

    BC,

    Mr SL and I were there…sitting in front of the group of non-stop clappers behind us on the right side.

    Or maybe this headache is from the empty-stomach pre-movie Shannon Rose stop…

    Good to see everyone else there, Chifi, SG, Jmac, and others.

    We missed Clot’s witty reparte however.

    sl

  70. syncmaster says:

    REinvestor, perhaps if I’m ever in need of a caretaker, I’ll look you up. You should be pretty hard up for money by then.

    Zing! love it.

  71. Clotpoll says:

    Hype (64)-

    I think Tard is channeling Mussolini.

    Maybe he will meet the same end.

  72. cooper says:

    3b[59]

    and then you’ll see the true back log of inventory comeback to the market. whats the over/under for months of unsold inventory?

  73. DL says:

    Kettle: “The difference is crucial and is being missed in 99% of discussions.”

    That’s one of the reasons I read this blog. Lot’s to learn. Thanks.

  74. Frank says:

    BC and Clotpoll,
    Maybe things are not so gloomy if a worthless bank like LEH can find a multiple buyers.

  75. stu says:

    Another Arab/Asian country is buying another American IB. Market rallies!

    Here is my suggested replacement for our pledge of allegiance…

    “Thank you massa may I have another?”

  76. kettle1 says:

    # chicagofinance Says:
    August 22nd, 2008 at 9:20 am

    Wait, so there was actually quite a number of you there and you blew us off. Especially with grim all sexied up with his second button undone and his chest hair….

    So i see that someone else noticed Grim on the prowl. He gets a new BMW and now he thinks he’s cassanova. Did you leave the BMW key FOB “Accidentally” hanging out of your pocket? ;)

  77. Laughing all the Way says:

    Interesting take on what ‘public figures’ think of bailing out homeowners facing foreclosure.

    http://whereistand.com/Opinions/26434/PublicFigures?start=10

  78. stu says:

    Multiple FOREIGN buyers Frank.

    What does this tell you? It tells me that things are really bad HERE!

  79. SG says:

    What?? Please stop this. You liberals have set up a virtual welfare state for those who aren’t risk takers and who generate nothing but costs to the economy. The bulk of the taxes are paid by those making money, so yes, if we run into a problem, why shouldn’t we be assisted? This shores up the economy and the government’s tax revenues. Why the hell is NYS having so many problems? Their tax revenues are down. Assisting those that drive this economy is in the nation’s interests.

    I am not Liberal or Conservative. I like to be called Independent. I have personally met and worked with at least 20 senators and 50+ congress members and their staff, from both sides of aisle. I don’t think you can match those numbers. Additionally, I would take credit of getting something done in Bipartisan manner in US congress and creating grass root efforts to pass legislations in 2000.

    By assisting failed investors, you are setting wrong precedent. Basically you are saying because one take risks, they should be prevented from downside, otherwise no one else would take risk and economy will go down. If the risk taker does not take calculated risk, they should not be rewarded. Also if they wanted insurance, they could have hedged their bets.

    If you would have walked the halls of congress the way I did, you would know these are not partisan issues. Some folks on panel correctly pointed out, When an issue goes bigger then election cycle, politicians will shy away.

  80. JP-CentralNJ says:

    “We will not get fazed by the volatility” = “We’re nuts” Economics Theory teaches that predictibility is the key driver of growth, and volatility is the opposite of predictibility.

  81. Clotpoll says:

    sl (69)-

    Sorry. I could not come, as philosophically I support taking on as much debt as humanly possible. ;)

  82. Zack says:

    If this (credit crisis) is a once in a century event, why are all people expecting the economy to recover next year following past recessions?
    I would think that if this is such a rare event, there is no historical precedence. Thats probably why wall street is up.
    Hope springs eternal confidence.

  83. Clotpoll says:

    coops (72)-

    I say it reaches 16 at the nadir.

  84. stu says:

    This morning driving north on the GSP in East Orange, there was a BMW on fire in the shoulder of the southbound lanes. The look on the owners face was priceless. About a mile further north, there was another car in the shoulder, but this one merely overheated. Same look on the driver’s face.

    Both scenarios painted a perfect picture of how I see the U.S. way of life going in the not so distant future.

  85. 3b says:

    #65 John: Funny I was down in that are last night, sea port, saw lots of toursits more than any thing else.Then went to Brady’s for drinks with some old Wall St buddies. I like the place, plus a friend of mine is one of the owners.

    My buddies were doom and gloom across the board. Nobody is expecting big bonus money this year,a nd some expect that their bonus will be the fact they have a job. And my friend who owns the place said business is off dramatically, even with him now being open on the weekends.

    So who was hopping down there, the employees from Merrill, Morgan Stanley, or maybe the Lehman guys were coming down to celebrate the potential buy out by the Koreans.

    You and I must work on different Wall St’s.

  86. kettle1 says:

    regarding Stu 84

    Quick BMW check! grim is the BMW OK?!?!?

    Ok, done poking fun at grim. its all in good fun :)

  87. SG says:

    gary: Have you tried Meditation?

    Bigger house will not make you happy, will just give you bragging rights. After seeing movie yesterday, I am planning to stay put till at least 2010.

  88. Clotpoll says:

    Frank (74)-

    Do you also collect, butcher and consume roadkill?

    There are certain people who find that a real bargain, too.

  89. 3b says:

    #82 Zack: Agreed. It is delusional. Like the economist yesterday from Univ MI, who says we could see the creation of 900K new jobs by mid 2009,led by the HOUSING and AUTO industries!!!

    Many of these clowns who are pontificating on a so called recovery, are the same clowns who denied there were problems in the first place.

  90. skep-tic says:

    #15

    “To get us out of the great depression, the highest income tax rate was 94%.”

    tax rates this high are counterproductive. we did not get out of the great depression because of policies like this (it was the war that did it). nobody with any economic sense would work for 6%.

  91. cooper says:

    [79]SG for prez!

    Clot[83]I’m with you on that, 16 is a good line, I’ll still bet the over, if i lose I’ll talk to re re and get reimbursed!

  92. ben says:

    it’s truly amazing how so many people in the “industry” are so clueless. It doesn’t amaze me that we amassed a giant trade deficit and created a giant asset bubble while destroying almost all our manufacturing jobs. What’s sad is, we are only going to get worse. It’s obvious that McCain and Obama have no clue about what is coming to them. Anyone with any common sense would throw this election. Whoever comes into office will be branded a total failure. I have a feeling that Rudy Guilliani had good reason to not campaign in the first couple of primary states. He didn’t want to win anymore.

  93. still_looking says:

    ket, 61

    You’re kind.

    I [am an admitted fan of “The Oracle” but] was appalled at his boorishness. Touting his 15% tax rate — less than his cleaning lady — is a slap in the face to the average citizen who has to actually work for a living. And pays tax after tax after tax after tax to show for it.

    He is very out of touch — yet on the Berkshire Hathaway Home Page is his own invective about our national debt from Time magazine,[2003!] – complete with squanderville and thriftville analogy.

    http://www.berkshirehathaway.com/letters/growing.pdf

    sl

  94. RentinginNJ says:

    You liberals have set up a virtual welfare state for those who aren’t risk takers and who generate nothing but costs to the economy.

    So you don’t have a problem with welfare then, you just want to see the welfare state expanded to include insuring you against risky investments.
    Bread and circuses for all!

    I wish I could be as optimistic as Buffet, but people really think like this. American’s have no shame anymore and the sense of entitlement runs so deep, I don’t know if it can be fixed.

  95. 3b says:

    #74 Frank:Maybe things are not so gloomy if a worthless bank like LEH can find a multiple buyers.

    Seriously, that is what that tells you, things are not so gloomy because another IB may be sold at a fire sale to aforeign entity?

    It should tell you that some are on the ascent, and that WE are on a rapid decline.

  96. Fiddy Cents on the Dollar says:

    sync :67

    That little bungalow in Old Bridge is a gem.

    I checked the MLS and how they got 3 bedrooms within 770 sq ft is a marvel. The Master is 10 x 8 and the other 2 are 9 x 8…..you’d have to go outside to turn-around in there!

  97. gary says:

    With all due respect, this blog is starting to sound like a bunch of sour grapes. Seriously. The world is coming to an end and I’m still trying to justify in my head how I can swing a POS split in a semi-decent town with a minimum 20% down and a family income in the low six’s. It should be a no-brainer.

    It’s quite logical. There’s no rhetoric involved. Let’s face it, we’re 10 years too late. That’s the reality of it. The income to price model is out the window. We still need to see listings prices come down AT LEAST 15% in order for the old rules to apply and I have a feeling that next year, like last year, I’ll be telling most of you the same thing and most of you will be telling me still… that it’s going to happen.

  98. still_looking says:

    I was refreshed to see how each FIRED resigned GW official refused to cop to the “I’m resigning to take a private job” bullsh*t.

    sl

  99. Nom Deplume says:

    [61] Kettle,

    I never did flesh out the NoPA compound idea, but the longer term goal is to also have an offshore compound. Further, the offshore compound, which will be owned by an offshore corporation, can hold loans from US sources (i.e., mortgages on the houses of the indirect shareholders) and the interest qualifies for the portfolio interest exemption while the mortgagor gets a deduction. One has to worry about attribution rules to avoid PFIC and FPHC status, and there is a risk of attack as a sham transaction, but if it flies, it makes for a nice little tax break. That, incidentally, is one reason the compound needs a min. number of owners. This is a phase II or III plan however. The primary goal is still to establish the US compound.

    Further to the Belize compound however, one issue is the stability of the foreign gov. Whose to say it will be better? Foreigners are still buying their escape properties in the US, just as they always have. Will Belize or Dominica respect private property ownership, or will they see the gringoes as a source of tax revenue (or point of a gun revenue, which you probably cannot legally defend against). Google “FarFEL” in Argentina on his take about survivalism in a partially-broken foreign system.

    Finally, another reason to have a US-based safe haven is local control. Once you are off the state/federal tax grid, you need only worry about the locality, which if rural, should be low tax. The feds cannot, imho, pass a property tax law because of constitutional constraints and no states that I am aware of tax real property, and such a tax in a landowner-friendly state is going to be quite unpopular. Hence, the need to focus on a rural state without a significant major city population, which is why NJ is out. Even PA is a stretch. No. NE and the Mountain states are best since land is cheaper and you are close to resources and entertainment.

  100. ricky_nu says:

    gary – last time things seemed “affordable” to me in BC was like 1998-1999.

  101. John says:

    3b, my friends have all moved on to private equity, hedge funds, international banks/bds or securities exchanges. The rats have left the ships called Merril, Lehman and Citi. Stone Street is a big GS hang out and Guardian and DTCC are right there. Comapanies that this recession is a not event. Brady’s gets more of a Merril, Citi, AIG, Lehman crowd and until the rats jump ship they will complain. Network Network Network and never hang out with sinking people as they will drag you down. My brother who got canned in spring was lucky to get a job with a raise. Once he got to 90 days unemployed he had the smell of day old fish and the employed people he know were about to move on in that relationship. Hard to enjoy tales of your new beamer and dinner at Lugers with an unemployed guy in the room.

  102. gary says:

    ricky_nu [99],

    Exactly, I agree. We are light years away from it.

  103. John says:

    Gary, you have an income in the low $600’s and you can’t afford a house?

    gary Says:
    August 22nd, 2008 at 10:04 am
    With all due respect, this blog is starting to sound like a bunch of sour grapes. Seriously. The world is coming to an end and I’m still trying to justify in my head how I can swing a POS split in a semi-decent town with a minimum 20% down and a family income in the low six’s. It should be a no-brainer.

  104. skep-tic says:

    #96

    “It’s quite logical. There’s no rhetoric involved. Let’s face it, we’re 10 years too late. That’s the reality of it. The income to price model is out the window.”

    no, it is real and that is why prices are dropping steadily. sellers do not want to believe that this is real, so they hold out irrationally. most of the houses you see for sale have been for sale for many months– why is that? — it’s because they’re overpriced. If your house is priced correctly, it sells within a month. You cannot judge this market based on the asking prices.

  105. kettle1 says:

    Looking 92,

    I think that buffet may be slightly disconnected just due to his stratospheric position in life compared to 99.9% of people. But i would guess that one of the main reasons he dodges so many questions and comes off so wishy-washy is that his comments can move markets. if warren buffet starts to say that the US is in severe danger and drastic measures need to be taken then you will see major market moves based on his comments alone.

    One other major issue with the film and the presentation was that they consistently said ” dont panic save money and a few tweaks and we can fix this” they imply that the situation is a leaky faucet, not a crumbling dam that you live below.

    make no mistake, failure to confront our fiscal dementia will mean the end of the american empire. until people understand that there will be no solution

  106. scribe says:

    This little crapbox house is a serious comp killer.

    3, 4 years ago, the rule of thumb was that the floor was $250,000 because, for that much, builders would buy these much older, small houses in the “old” part of town off Correja Ave. as tear-downs, even though the lots are small – usually, 40 x 100.

    I saw this house in the MLS. Memorable, because the asking price was over $200,000 – I think it might have been $275,000. My thoughts were that for such a POS, they must be looking at selling as a tear-down.

    This sale is too recent to be in the databases, so no indication of who bought it – whether it was retail or a builder – or whether it was sold by an individual or a bank.

    But $76,000? The lot should be worth much more than that.

    There’s been an awesome amount of new construction in that “old” part of town in recent years because it’s so convenient to Oak Tree Road and little India. It’s now known as the “market” area.

    http://www.trulia.com/homes/New_Jersey/Iselin/sold/21080146-128-Fiat-Ave-Iselin-NJ-08830

  107. gary says:

    John,

    lol! Low six digits.

  108. skep-tic says:

    I agree that it is frustrating that people who bought 10-15 years ago enjoy a substantially higher standard of living simply through luck. But then again when I think about the longer term, I realize that there is simply no way the prices around here are sustainable. You cannot find enough buyers to support these prices. Period. There is no mystery to this. So it is simply a matter of waiting for prices to come back to earth.

  109. kettle1 says:

    SG,

    nice to meet you last night. sorry i did meet some of the other posters who apparently showed up in stealth mode

  110. scribe says:

    John,

    I think Gary means low six figures, not $600,000.

  111. gary says:

    skep-tic [104],

    Great, prove me wrong. Let me see a bunch of sale prices for the last two months for towns in NW Bergen. I’m not talking about McMansions, I’m talking about a 4 BD dated split on a 75 X 125 property.

  112. gary says:

    Scribe,

    Exactly! :) John knew what I meant. lol!

  113. Orion says:

    (51) “Especially with grim all sexied up with his second button undone and his chest hair….”

    ….please continue. This sounds better than the movie.

    ; )

  114. danzud says:

    Wasn’t everyone saying that Bear was going to be bought out around 20-25 and then the price ended up being $2? Why would the Koreans pay $20?

  115. make money says:

    Understand that what occurring in the Wiemar republic was monetary inflation. From one month to the next more German marks existed then the previous month. Currently in the US month after month, LESS dollars exist

    All those USD are being held in Foreign Central Banks and other financial Institutions.

    When they decide todump them and send them our way. Watch out!

  116. stu says:

    Gary,

    I know what you are thinking and feeling. Most of us here can relate.

    You look at all of the POS capes that sold for 400-500K over the past 4 years and say, “How can this be if the average family earns well below your income level.” Well the answer is that they didn’t buy these homes. The banks did with their stupid exotic loans. Well the repo man is coming. Credit card deliquincies DOUBLED over the last three months. In FL, CA, MI, AZ, many homes are cheaper than they are in the Northeast. Many of these loans were significantly smaller in size than those in our area. A 20% drop in value on a home worth 200K is only a 40K hit to the lender. Now a 10% drop on a home worth 600K is a 60K hit to the bank. When we reach our 20% mark the hit will be 120K which is 3 times that of the 200K example. The areas with the large drops were dominated by subprime. Our area is more prime and Alt-A. These are showing early signs of pain and the raw number of Alt-A and prime is huge compared to the number of subprime. The banks like to argue that delinquency rates on prime and alt-a are much lower than subprime, but they conveniently ignore the comparative number of loans as well as the amount of lent money contained within in them.

    One year ago, Nouriel was laughed at like a modern day Socrates. 12 months later he is a hero! You MUST be patient. The headwinds grow stronger every day. When the black (insert day of week here) occurs, you will see the light. Until then, stop worrying so much. Or just buy a multi-family and rent out the top ;)

  117. BC Bob says:

    “Maybe things are not so gloomy if a worthless bank like LEH can find a multiple buyers.”

    Frank,

    Dubai, Temasek and Bill Miller, just to name a few, have also seen value. How’s that working? Maybe they are just dollar cost averaging?

  118. kettle1 says:

    make 115

    I agree 100% but when i look at the Chinese market plummeting, new zealand opening its own financial recycling window, Australian banks writing CDO’s and other voodoo instruments down to pennies on the dollar, and the ECB threatening to close the window ( among other systemic European financial issues; I see a situation where no-one is going to dump the dollar as it is a race to the bottom and would only serve to rapidly accelerate the demise of weak economies around the globe. Dumping the dollar is suicide for the global economy at this point. Central banks are busy BUYING dollars to prop up the US currency at the moment!

  119. SG says:


    Billionaires say US debts need attention

    By JOSH FUNK
    AP Business Writer
    AP Photo
    AP Photo/Nati Harnik
    Advertisement
    Buy AP Photo Reprints

    Your Questions Answered
    Ask AP: Making hydrogen, baseball’s trade deadline

    OMAHA, Neb. (AP) — Two billionaires used the screening of a documentary in theaters across the United States on Thursday to urge the country to come to grips with its staggering debt load.

    Warren Buffett and Pete Peterson were at the premiere of the movie “I.O.U.S.A.” to add their views to the film’s message: An economic disaster will befall the nation if the federal government’s $53 trillion in debts continue to grow.

    But Buffett said at a news conference before the movie’s showing that he doesn’t think the country’s financial picture is quite as dire as the filmmakers portray.

    “I do not regard our national debt as unduly alarming,” said Buffett, who is chairman and chief executive of Berkshire Hathaway Inc., and is listed by Forbes magazine as the world’s richest man.

    ==

    The best quote from Buffet was, “He buys sound businesses, as sooner or Later some bad management will come and try to ruin it. == after a pause == Our country may be in similar situation.”

  120. stu says:

    BC Bob:

    JPM thought Bear was worth $20!!! What was that, two week before they collapsed.

  121. 3b says:

    #100 John:my friends have all moved on to private equity, hedge funds, international banks/bds or securities exchanges.

    These areas are not immune either,as witnessed by hedge funds that are closing shop every day. And to continue to pay the big bucks, in any of these areas, you ahev to have the deals,and the funds to get these deals done.

    With ther U.S. in a recession thate we cannot call a recession,and Europe following, that will impact the areas you describe as well.

    I am on the other side now, having been wise enough when I worked at Goldman to learn how to be prudent. Once you are over 40 your trading sand sales days are over, if you get laid off. Since I was prudent, it ws not a concern.

    It was for the most part always a very prudent firm, particulary so when I worked there and it was still a partnership.

    Not arguing wit you, simply pointing out that you paint a far too rosy picture of what is going on down here on Wall St.

  122. Orion says:

    re: Lehman

    How about this scenario prior to this morning’s news break:

    a) KDB buys LEH stock cheap
    b) KDB leaks info on possible buy
    c) LEH stock soars and KDB sells, makes millions
    d) KDB leaks info it is no longer interested in buying LEH
    e) LEH sinks

  123. still_looking says:

    SG 119,

    Yeah, GW.

    Almost done with 8 yrs of the Fratboy.

    sl

  124. stu says:

    “The best quote from Buffet was, “He buys sound businesses, as sooner or Later some bad management will come and try to ruin it. == after a pause == Our country may be in similar situation.”

    SG, it was nice to meet you last night. I think you left the best part out of the quote out. Didn’t Warren mention that the business (and our government) is run by an idiot.

  125. 3b says:

    #111 gary: You are turning red again. Much of what is happening now was discussed on this site a couple of years ago, before it happened, and guess what it happened, and continues to happen.

    Just take it easy and be patient. Turn on your electric waterfall,and listen to Enya on your I-pod.

  126. Jamey says:

    REINVESTORX:

    I ask you this sincerely: Please stop being such a stupid, annoying f*cknozzle.

    Seriously.

    Thanks.

  127. still_looking says:

    stu, 124

    He didn’t outright say GW and Co. are idiots, he implied it.

    sl

  128. Orion says:

    (126) …nozzle. Too funny. Is it in Webster’s?

  129. stuw6 says:

    “Federal Reserve Chairman Ben Bernanke said Friday the financial crisis that has pounded the country — coupled with higher inflation — is taking a toll on the economy and poses a major challenge to Fed policymakers as they try to restore stability.”

    Hmmm. Didn’t bailing out Bear when the Dow was 1,500 points higher or dropping the interest rates when they should have been increased have something to do with our rampant inflation and inability to restore stability? You listened to Cramer and paid the price. You have less patience then Gary!

  130. Jamey says:

    19: “Do you own land there yet?”

    LOL.

    Can you have your staff get back to us about how many houses you own?

  131. 3b says:

    #111 gary:Let me see a bunch of sale prices for the last two months for towns in NW Bergen

    Can’t do that, because they are not selling. That tells it all.

  132. bairen says:

    #117 BC Bob,

    don’t forget Marty whitman bought MBIA and some other mortgage insurers based on their book value. After they crashed he said something about “We’ll just have to sweat this out”. I don’t think it’s a good idea for an 83 year old to live in a sauna.

  133. John says:

    I survive cause you always should be in the younger half of the room. The problem is a 35 AVP is toast, a 45 VP is toast, a 55 SVP is toast. You need to keep moving up food chain to survive past 40. It is a pyramid scheme where 90% of 30 year olds need to be gone by 45. That said most people do themselves in, the 45 year old six figure earner with no MBA, knowledge of multi departments, lots of networks and connections who is not at least the second in charge is and should be toast. That said for some reason the 30 year old gets caught up with wife, house, kids soccer practice and 15 years fly bye and next thing he is toast. That said 45% of people do themselves in and the other 45% their wives kill them and that leaves a clear run for the other 10%.

    My 47 year old brother rebounded this time by the skin of his teeth, he is now going to try to volunteer to be on boards, join networking groups, become a thought leader etc. Before he is toast again.

    3b Says:
    August 22nd, 2008 at 10:35 am
    #100 John:my friends have all moved on to private equity, hedge funds, international banks/bds or securities exchanges.

    These areas are not immune either,as witnessed by hedge funds that are closing shop every day. And to continue to pay the big bucks, in any of these areas, you ahev to have the deals,and the funds to get these deals done.

  134. BC Bob says:

    Gary,

    If I put out a limit order today, offering HOV at $10, how do you think I would fare?

  135. bairen says:

    #118 kettle1,

    I heard some even worse news from Australia. My favorite Taiwanese restaurant closed. Awesome beef noodle soup and bubble teas

  136. ben says:

    rofl, that’s right reinvestor, the real people who make an economy flourish are the risk takers who buy and sell real estate and stocks. No, the real people who move the economy are the people that built those houses you want to buy and sell. The real people who move the economy are the people working for General Electric making all those light bulbs in your house.

  137. stu says:

    I think it was 4.

    Oh wait maybe 7. I can’t tell you where they’re all located though, but I can tell you that General P rollerblades down Baghdad Boulevard in his skivvies nearly every day and without an escort.

    Sounds a whole lot like “Mission Accomplished”

    I have to credit ‘W’ though. When he was dodging the draft flying planes for the natural guard, he crashed three times less then M. Although his future wife did accidentally drive over her ex-boyfriend.

  138. BC Bob says:

    bairen [132],

    Yeah, there are just too many examples to keep track of.

  139. NJLifer says:

    #111 gary, give us a current NJMLS listing and maybe we can find a comparable sold home.

  140. kettle1 says:

    US response to china:

    China financially owns the US for all intents and purposes at this point. But we do have an option of counter leverage.

    Consider the following:
    <i.China’s coal consumption is rising at a 12-15% compounded annual rate. China’s coal production growth rate is slowing dramatically and will rise less than 5% this year. Putting these numbers together means that China will swallow all of the worlds exports in 2-4 years. Unless coal production can be ramped up dramatically elsewhere it is lights out everywhere.”

    and for the sake of this discussion assume that my information here is correct. Given the near term need that china is going to have for coal and considering that china is building on average 1 new coal power plant opens every 10 weeks, that is 5 per year ; The US can counter China’s economic leverage with energy leverage.

    We can/should begin a very aggressive effort to become chinas #1 coal supplier and maintina a high rate of free flowing coal. within 5 – 10 years assuming we play our cards right, china will be highyl dependent on the US for its primary energy source. We then have the US highly dependent on china for $$$ and China highyl dependent on the US for energy!!! we end up with a policy stalemate ana take away their ability to overtly strong arm us.

    Coal is nastry dirty stuff to burn, but as a realist i realize that it will be burned regardless due to politicial pressure. if its going to be burned away why not use it as leverage and export our pollution to china? no we cannot export all of the negative environmental effects, but we can export a number of them as the effects are seen at the location where you burn the coal!

    proud of me now RE101? and by the way i am dead serious about this concept!

    Does anyone know any senators/congressmen i can sit down with and get this bug in their ear? Believe me we will need all the leverage we can et in a decade or so.

  141. stu says:

    Gary:

    Here’s a great multi in a train town. Rent out the top unit for $400 a month and you can live there for free.

    http://www.realtor.com/search/listingdetail.aspx?ctid=367&mxp=17&typ=7&sid=6820e6f3da6f4fdc8545c66a40931631&lid=1084466164&lsn=4&srcnt=71#Detail

  142. Frank says:

    BC and Clotpoll,
    If things are so bad here, when are you moving to Cuba? Do you need a boat fare?

  143. Clotpoll says:

    John (133)-

    Wow. This sounds great. Where do I sign up?

    “That said for some reason the 30 year old gets caught up with wife, house, kids soccer practice and 15 years fly bye and next thing he is toast. That said 45% of people do themselves in and the other 45% their wives kill them and that leaves a clear run for the other 10%.”

  144. Shore Guy says:

    # 89 Jobs created in the new WPA, perhaps?

    Stu,

    Meet me for drinks at the Wet Lizard, overlooking the harbor. It is a good place to plot out a RE search.

  145. Clotpoll says:

    Frank (142)-

    The “love it or leave it” gambit. Great. I’m surprised to see it took you this long to pull it out…although you’re still timely enough, given your lower primate status.

    BTW, my picks for expatriation are Costa Rica, Chile, Brazil and Scotland.

  146. RentinginNJ says:

    ….Just had my bid hit on a house.

    I mentioned it here yesterday…It was priced below market. We made a strong offer. We were outbid by someone who bid over listing. We refused to budge. The deal fell through. They came back to us and hit our bid.

    Well, here goes homeownership.

  147. Shore Guy says:

    # 90

    “nobody with any economic sense would work for 6%.”

    I agree. That said, nobody paying that top tax rate on that marginal income was actually “working.”

  148. 3b says:

    #146 rent: Congratultions! Can You give us any color, such as what kind fo discount off of 05/06 prices did you get?

  149. 3b says:

    #141 Stu: You probably get for 15K

  150. kettle1 says:

    clott,

    Scotland is a very bad idea. energy/ arable acres per person/ climate change are all problems with that location. the other 3 should be ok

  151. RentinginNJ says:

    What is the typical cost of attorney review?

  152. Frank says:

    “Well, here goes homeownership.”
    Sorry to hear that. You will suffer for years to come now.

  153. NJLifer says:

    Frank – people don’t “leave it” because things are worse elsewhere. That being said, it doesn’t mean that people aren’t allowed to state the conditions of our economy.

    Clot – there is a difference between retiring somewhere and actually “making it” there. As far as your list of escapes, from everything I’ve seen, the big cities in Brazil still have security issues (kidnappings, druglord violence, etc.)

  154. gary says:

    Ok, so what you’re all telling me is that since my FICO is above 800 and I have at least 20% to put down, I should be able to make an offer somewhere in the 525K range for this house. I mean, afterall, nothing is selling and the ones that are listed are in desperation mode. Am I correct?

    http://www.realtor.com/search/listingdetail.aspx?ctid=26619&mnp=32&typ=1&sid=42e904be23db4cda9a97f475664a342c&pg=3&lid=1099742415&lsn=25&srcnt=138#Detail

  155. stu says:

    Yay for renting!

    Congrats. You will now have to change your moniker.

    How about ‘LosinginNJ’.

    ;)

    Seriously though, congrats. It’s a fun trip.

  156. BC Bob says:

    “Do you need a boat fare?”

    Frank,

    Hell, with all the boats currently being repossessed, it’s probably a better idea to buy one? May not be much more than the fare?

  157. stu says:

    I wouldn’t buy a boat from Frank. Like his home, it might soon end up under water.

  158. BC Bob says:

    Gary,

    Are you nuts? 450K, tops.

  159. kettle1 says:

    My family is selling a house in edison, less then 1 block from the train station. 1950 vintage, not touched since the 50’s and needs extensive updating. Comparables were selling for about 350K in 2005.

    The neighbor owns both houses on each side of this property. he called last week and offered 340K CASH and offered a 10K bonus if they could close and be in possession of the home by Aug 30.

    Is this money laundering or what? the price is insanely high for the house and a 100% cash transaction. My families attorney has OK’d the contract and looks to go through as expected. The details are just very odd. any thoughts???

    One suggestion i heard was that he wants to tear down all 3 houses and have the lots rezoned for a complex. The little research i did on the guy doesnt really point to someone with that kind of cash. And dare i say it, but he is russian. russian mob?

  160. 3b says:

    #152 Frank; No he will not, he did not buy at the peak. You are confusing him with yourself.

  161. gary says:

    BC Bob [158],

    Agreed! What’s the chances they accept that offer?

  162. 3b says:

    #154 gary: If you are serious make a bid. All they can say is no. And I agree 450K.

  163. 3b says:

    #151 rent: No seperate charge, that all comes under the attorney fee, which is typically 750 to 1000, for a relatively simple closing.

  164. SG says:

    Nobel Laureates Debate Role of Regulators During Financial Crises

    Some of the world’s brightest economic minds agree the current financial crisis exposed major flaws in the system, but disagree about the role regulators should play in preventing a repeat.

    At an annual gathering Thursday of economic Nobel laureates in Lindau, a town on a tiny, medieval island in southern Germany, three winners of the Nobel Prize in economics and one peace prize winner lamented the excessive risk-taking, lax management and impenetrable complexity at the heart of the financial system’s current turmoil.

    Joseph Stiglitz, a professor of economics at Columbia University who won the Nobel in 2001, suggested misguided innovation itself caused the current turmoil. Noting that homeowners’ most important risk assessment is the likelihood that they can retain their home amid market volatility, Stiglitz said, “these are the problems [financial markets] should have created products to match. But they created risks, and now we’re bearing the consequences of this so-called innovation.”

  165. cooper says:

    [154,158]
    YAHOO! def 450 best and final! chances are slim but getting better every day.

  166. BC Bob says:

    “Agreed! What’s the chances they accept that offer?”

    Gary,

    That depends. Are they a qualified seller?

  167. HEHEHE says:

    re: Lehman

    How about this scenario prior to this morning’s news break:

    a) KDB buys LEH stock cheap
    b) KDB leaks info on possible buy
    c) LEH stock soars and KDB sells, makes millions
    d) KDB leaks info it is no longer interested in buying LEH
    e) LEH sinks

    BINGO

  168. Hard Place says:

    RentinginNJ,

    Sorry you had to fall on the sword of homeownership, but your fellow renters can carry on the lowballing fight.

    Glad you stood your ground. Should have let them twist in the wind, but I guess you really liked the place. What’s your estimate in terms of how low off peak prices did you get?

  169. BC Bob says:

    Gary,

    You bid 450K, I’ll come in, right after you, and bid 425K. The games are over sellers. The buyers, qualified that is, hold the cards.

  170. Nom Deplume says:

    [146] rent,

    Congrats. Exactly what happened with us, just not so dramatic—we got outbid by 10K, then that deal fell through. Sellers had considered our bid seriously though, so it wasn’t as angst-ridden as your situation.

    We close 9/2. We are paying over asking so sellers did everything we asked for in the HI. Looking forward to a smoooooth close.

    Guess you are hosting the Late Fall GTG. ;-)

  171. gary says:

    3b,

    An accepted bid of 450K would blow the f*cking doors off the comps. It’ll never happen because the realtor would have a coronary and the sellers would be “insulted”. I’ll email the realtor this evening and ask for details.

    I’m working both Saturday and Sunday or else I’d go see the house this weekend. The first chance I get, I’ll make an appointment to see this house provided it’s not sitting below sea level, in a war zone or on an island. A bid of an even 500K would put it at 20% off list. If the house is close to what I can live with, I’ll bid. I’ll keep you all posted on this one.

  172. BklynHawk says:

    #140 Kettle-
    I like your idea.

    The other thing to keep in mind is what coal China does have is especially nasty stuff.

    I was talking to a retired senior Philippine government official (daughter lives in NJ). We were talking about China and coal. He said the Philippines stopped taking China’s coal because it was so dirty, even though it was really cheap.

  173. cooper says:

    what would you offer on this one? anyone?anyone? bueller?

    http://www.realtor.com/realestate/oakland+boro-nj-07436-1098423133/

  174. Nom Deplume says:

    [145] clot,

    I would consider Ireland. Low taxes generally, and if your income is as an “artist,” it is tax exempt (at least it used to be).

    So, you ship your assets to a tax haven trust, get Irish citizenship, renounce here and pay whatever exit tax (none provided you get under 600K), and the trust sends you “royalties” for that book you wrote in crayon.

  175. gary says:

    BC Bob [169],

    Great, let’s do it. I’ve got to up the paperwork. My pre-quals are waaaay too old. But no worries, my FICO and assets are even better than last year. I need one to two weeks to get everything in order because of work-related BS.

  176. chicagofinance says:

    kettle1 Says:
    August 22nd, 2008 at 10:15 am
    make no mistake, failure to confront our fiscal dementia will mean the end of the american empire. until people understand that there will be no solution

    ket: seriously…don’t be so literal and obtuse….you strike me as being in danger of the “can’t see the forest for the trees” thinking….I am a quant, and with all due respect, you are way too quant…

  177. kettle1 says:

    172 bklynhwk,

    a good portion of china’s coal is so poor that it is literally more dirt then coal!

  178. SG says:


    Nobel Laureate McFadden on Obama’s Fiscal Policy

    Mr. McFadden: “If you actually look at the details, these are centrist, not left-wing proposals. The message that he’ll expand government is a misrepresentation. Obama talks about a much more balanced fiscal policy than the current administration. And McCain does too, to the extent that he talks about policy at all.”

    WSJ: How do they compare to the current administration?

    McFadden: “They’re both running on a platform that’d be an improvement on our current administration. But that’s a pretty low standard. This administration has been a dismal failure.”

    WSJ: Why is Obama seen as promoting a more active government role, if his proposals are so centrist?

    McFadden: “He’s not been running very hard on his policy proposals. He’s been running a soft campaign till now. And McCain has been trying to paint him as a leftist. And he’s succeeding.”

    WSJ: Who do you support?

    McFadden: “I’m an Obama supporter, because I view him as a centrist,” in line with former president Bill Clinton. “Despite his personal failings, Clinton ran a pretty good government and a policy of fiscal restraint.”

  179. chicagofinance says:

    gary Says:
    August 22nd, 2008 at 11:41 am
    BC Bob [169],
    Great, let’s do it. I’ve got to up the paperwork. My pre-quals are waaaay too old. But no worries, my FICO and assets are even better than last year. I need one to two weeks to get everything in order because of work-related BS.

    gary: What about the results from your colonoscopy? Requirements are different now you know.

  180. kettle1 says:

    chifi,

    thanks for the warning, i try not to take myself to seriously and am also aware that betting on doomsday is a losing proposition.

    people should also be aware that i am not a finance guy and failed 5th grade math. Oh and i believe that the flying spaghetti monster will descend from on high and save us all with his noodly appendages!

  181. chicagofinance says:

    Bost: I’m really pissed we didn’t cross paths. However, the thought of grim’s chest hair really reduces my angst about it…..

  182. kettle1 says:

    ChiFI

    It also seems to me that you just cant get peoples attention unless you add some urgency. I probably do so in a very clumsy manner as i am not of the manipulator type personality.

  183. Hard Place says:

    gary –

    Not interested in as much % of list than what is the % off comps. If you get next years price today, go for it. If you really like the house and its a fair price, don’t think twice. You’ve been here long enough to know a good deal.

  184. 3b says:

    #171 gary: Good for you. As for myself. The hosue i posted in River Edge the other day at 449k is a comp blower. for the area, it is in, and the town as a whole.

    I am waiting until they drop the asking prices another 20K. then I am going to use that to bid on a couple of other hosues in town, with lower taxes that are samller. I do not need as big a house.

    I too will keep the board posted. But As BC says, the QUALIFIED buyers control this market. The reality is setting with home sellers.

  185. BC Bob says:

    “Bost: I’m really pissed we didn’t cross paths.”

    Ditto. I got their late and left midway thru the q/a session. I was looking around , didn’t see anybody. Maybe I need glasses, or 1 less martini before the show.

    I did enjoy the SNL clip.

  186. Hard Place says:

    Wow, with all these people thinking about buying it will get really quiet in here…

  187. chicagofinance says:

    I have a message from home telling me to stop at Whole Foods for Pacific Hemp Milk Original Flavor. Welcome to Chez Celkupa…..

  188. Zack says:

    #173 – Not more than $350K.
    Reason- it is a starter house, has only one full bath. Hence cannot be used by families with 2+ children.
    For a starter home in NJ, if both husband and wife are working with a combined income of 130K, you multiply 130*3 (ratio of income towards housing) which gives you 390K.
    Take 40K off the table as insurance incase the wife stop working, which gives you a fait price of 350K.

  189. skep-tic says:

    #146

    Congrats and good luck

  190. Victorian says:

    Damn. I think this is the last Friday for WAMU.

  191. gary says:

    chicagofinance,

    If I’m not qualifying for a loan with a minimum 20% down and my FICO and assets, then banks are out of the lending business.

  192. skep-tic says:

    #154

    Gary– I don’t know much about towns in NNJ. I do think in general that 15-20% off ridiculous asking prices is not a pointless bid right now, although you have to be prepared to be rejected by delusional sellers (the majority).

  193. John says:

    Kettle, first of all I doubt he is paying cash. He is mostly like paying by wire or check so the bank that processes transaction has AML/KYC/EDD/OFAC responsiblities and will have to block it or file a SAR if necessary. Unless he is gives you a bag of cash and he is from a SDN or on the OFAC list what do you care?

    Heck I am buying a car next week and the bank is going to file a SAR on me as I am taking out more than 10K cash to do it. Big deal.

    kettle1 Says:
    August 22nd, 2008 at 11:25 am
    My family is selling a house in edison, less then 1 block from the train station. 1950 vintage, not touched since the 50’s and needs extensive updating. Comparables were selling for about 350K in 2005.

  194. gary says:

    Hard Place [182],

    Exactly. No skin off my hide. If the sellers insist on a certain price, let them rot in the place.

  195. NJLifer says:

    Gary,

    It looks like that one is listed in GSMLS. Here are the last two months worth of Wyckoff sales in the $600-$650K range from NJMLS. As you can see, one went over asking, one right below asking, and the others not even close…

    213 FOX HOLLOW RD
    OLP – $729,000
    SOLD – $600,000

    420 FLAKER DR
    OLP – $595,000
    SOLD – $611,200

    160 COOLIDGE TER
    OLP – $759,000
    SOLD – $621,000

    451 JAMES WAY
    OLP – $625,000
    SOLD – $624,000

    454 WEISCH LN
    OLP – $769,000
    SOLD – $628,000

    762 WYCKOFF AVE
    OLP – $659,000
    SOLD – $635,000

  196. gary says:

    NJLifer [195],

    Great, thank you. Would anyone care to add their analysis?

  197. skep-tic says:

    re: payroll taxes. here is how the tax cap has gone up over the past 8 yrs.

    2000 76,200
    2001 80,400
    2002 84,900
    2003 87,000
    2004 87,900
    2005 90,000
    2006 94,200
    2007 97,500
    2008 102,000

    point is that there are already substantial tax hikes built in, but for some reason this is not enough for some people. how about instead of always looking to the revenue side, we address the cost side (i.e., reduce benefits)

  198. HEHEHE says:

    Renters getting perks in soft real estate market

    http://www.amny.com/business/am-rent0821,0,3135118.story

  199. 3b says:

    #190 Victorian: Damn. I think this is the last Friday for WAMU.

    Why??

  200. scribe says:

    kettle, #159

    My thoughts: Why look a gift horse in the mouth?

    There’s a sh*tload of stuff for sale in Edison.

    Take the money and run.

  201. kettle1 says:

    scribe, john.

    deal is already done. just thought it was odd and would see what the RE experts had to say.

    And by cash i did indeed mean wire transfer. no loans or credit involved.

  202. stu says:

    Gary,

    “Great, thank you. Would anyone care to add their analysis?”

    I like the multi in Paterson. Would make a much better comp-killer or would it?

  203. kettle1 says:

    Victorian,

    i have heard rumors of wachovia going down this weekend. Just rumors with nothing to back them up, we will see.

  204. marv says:

    #159 kettle 1:
    Similar situation to my family’s old home. We were pretty sure the buyer had ties to foreign organized crime. But everyone (including atty & acct) said to take the money and we did. The property was re-sold to a Russian a little over a year later and was torn down to make way for a McMansion in a neighborhood of 1940’s and 1950’s houses. The new house is not yet completed so the end of the story is unknown. But I would bet that your buyer does have a plan for a different use of the property and will pay you top dollar. You are lucky.

  205. HEHEHE says:

    Kettle,

    New movie re Peak Oil coming:

    http://www.energybulletin.net/node/46332

  206. SG says:

    Ron Insana’s Hedge Fund Closure a Cautionary Tale

    Hedge funds used to be seen as a license to print money, but 2008 is shaping up to be the year the bubble burst. Earlier this month, former CNBC anchor Ron Insana folded Insana Capital Partners, the hedge fund he launched in 2006, while superstar investor Dan Benton announced that he’s shuttering his $2 billion hedge fund Andor Capital Management in October.

  207. scribe says:

    kettle, #201

    Builders sometimes buy for cash.

    Sounds like he’s going for a three-fer to build something substantial.

  208. BC Bob says:

    SG,

    What the hey, you’re a reporter on CNBC, why not start a hedge fund? I would like to know what fools invested in this fairy tale?

  209. Victorian says:

    199 – 3b-

    Coz amongst all the cheers in the market today, WM is still getting pounded. Odd, isnt it?

  210. Great article at nakedcapitalism; If only central bankers would hit bottom.

    FTA;
    Bernanke has been extraordinarily aggressive in going to the limits of, even beyond, the Fed’s charter (it most assuredly did not have the authority to stick taxpayers with the losses that eventually result from the Bear bailout, but Congress failed even to slap the central bank on the wrist for overstepping its bounds). Second, there has been an intellectual vacuum about what to do about the mess.
    Good stuff. Plus they cite Thomas Kuhn, which makes my formerly academic heart flutter.

  211. 3b says:

    #206 Stu: I guess John’s friends are going to start hanging out at Brady’s.

  212. skep-tic says:

    interesting info from a blog on Greenwich RE:

    “I just spent much of the morning listening to Nora King, owner and president of the appraisal company Nora King & Associates. She looks great but her news was ugly. 50% of her firm’s Greenwich case load is now devoted to pre-foreclosure or work-out notes, compared to zero last year, and 34 homes in town are now in foreclosure with, as her caseload suggests, more on the way.

    Other tidbits: condo sales are not only way down, underwriters hate lending on them (which may be the cause of the effect). As King explained it, an underwriter in, say, Ohio, sees that 1/2 of its troubled loans, nationally, are arising from condos, and they don’t want to hear about what the condo market’s doing in Greenwich; they just don’t want anything to do with any of them.

    Sellers, know that the comparable sales your buyer’s lender wil look at are no older than 90 days (30 days in depressed and falling markets) instead of the 6 month window used before. So if your neighbor down the street sold his house for $X back in March, don’t count on your own house appraising out for the same amount.”

    http://www.greenwichrealestate.blogspot.com/

  213. Clotpoll says:

    Lifer (153)-

    Everything you warn about in Brazil will exist in the US within five years. Hell, we’re already a Third World country.

    In addition, I will not have to watch the Red Bulls in Brazil.

    “Clot – there is a difference between retiring somewhere and actually “making it” there. As far as your list of escapes, from everything I’ve seen, the big cities in Brazil still have security issues (kidnappings, druglord violence, etc.).”

  214. Nom Deplume says:

    [193] John,

    Why an SAR and not a CTR? Are you that sketchy?

    Oh, wait, never mind.

  215. Clotpoll says:

    HE (167)-

    How do you say “pump and dump” in Korean?

  216. kettle1 says:

    Clot

    펌프 및 덤프

  217. Clotpoll says:

    Plume (174)-

    1) Is blogging considered art?

    2) You ever see Irish soccer? Dreadful.

  218. PGC says:

    #154 Gary

    Do you have an address for it. I can do a quick drive by. I can toss a quick lowball from the car.

  219. bi says:

    “She was never vetted,” a Democratic official reported. “She was not asked for a single piece of paper. She and Senator Obsama have never had a single conversation about it. How would he know if she’d take it?”

    http://www.politico.com/news/stories/0808/12713.html

  220. Clotpoll says:

    vodka (179)-

    Is a noodly appendage the same thing as a f#cknozzle?

  221. Clotpoll says:

    chi (186)-

    Could you also pick me up a pint of bongwater while you’re there?

  222. BC Bob says:

    “Although we have seen improved functioning in some markets, the financial storm that reached gale force” around this time last year “has not yet subsided, and its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment,” Bernanke said in a speech to a high-profile economics conference here”

    “The Fed, he said, would monitor the situation closely and will “act as necessary” to make sure that inflation doesn’t get out of hand.”

    http://www.miamiherald.com/business/AP/story/653203.html

  223. kettle1 says:

    clott 219,

    i thing you are getting your websites mixed up again, this isnt the rubber suit and flog blog.

  224. Nom Deplume says:

    [216] clot

    1. No.

    2. Not a soccer fan. Would rather watch paint dry. So it matters not.

  225. kettle1 says:

    HEY LOOK! Someone who is more doom and gloom then me!

    A failure of U.S. mortgage finance companies Fannie Mae and Freddie Mac could be a catastrophe for the global financial system, said Yu Yongding, a former adviser to China’s central bank.

    “If the U.S. government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic,” Yu said in e-mailed answers to questions yesterday. “If it is not the end of the world, it is the end of the current international financial system.”

    http://www.bloomberg.com/apps/news?pid=20601080&sid=aslo2E01QVFI&refer=asia

  226. BC Bob says:

    kettle [224],

    Will Hank play a game of poker with them? By the way, it is a beautiful day.

  227. kettle1 says:

    payback for moving losses to UK banks and writing off the taxes???

    ‘Large Number’ of Banks Mis-Marked Assets, U.K. Regulator Says

    Incorrect securities pricing found at Credit Suisse Group AG, Morgan Stanley and Lehman Brothers Holdings Inc. is more widespread and will be investigated, the U.K.’s financial regulator said today.

    The Financial Services Authority said it will begin the probe next year after finding that securities valuations at a “large number” of London banks were “materially flawed or inadequate,” the agency said. The problems may worsen if banks fire compliance and risk officers, the FSA said.

    “We recommend that you consider carefully any headcount reduction exercises that will affect valuation-control functions at this sensitive time,” FSA Chief Executive Officer Hector Sants wrote in a letter to CEOs last week and made public today.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=auYi0eJARhsI&refer=home

  228. HEHEHE says:

    Kettle,

    Note the “Financial Services Authority said it will begin the probe next year ”

    http://nakedshorts.typepad.com/nakedshorts/2008/08/fsa-in-no-rush-to-price-obviousness.html

  229. HEHEHE says:

    Ranks right up there with FASB postponing the FAS

  230. Nom Deplume says:

    OT alert.

    CNN is basically now the Ob Veep Network—all veep coverage, all the time. It’s getting weird over there as folks brainstorm over who should be selected and why.

    Based on what I see to be the consensus opinion from the bloggers there, Obama needs a white male that is tough on defense, has international experience, and shares his economic views on taxation and the role of government.

    I hear Putin is available.

  231. Nom Deplume says:

    Grim,

    drat, forgot the o word. 229 in mod

  232. Al says:

    Is this money laundering or what? the price is insanely high for the house and a 100% cash transaction. My families attorney has OK’d the contract and looks to go through as expected. The details are just very odd. any thoughts???

    One suggestion i heard was that he wants to tear down all 3 houses and have the lots rezoned for a complex. The little research i did on the guy doesnt really point to someone with that kind of cash. And dare i say it, but he is russian. russian mob?

    There is nto Mob in russia anymore. It is now called goverment.

    In addition – if the offer is cash – why do you care??? May be they have sold thei’r parents/gramndparents 1 bedroom flat downtown Moscow for 500K last month… (a bit cheap for good “Raion” in Moscow… am not kidding)

  233. Al says:

    “If the U.S. government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic,” Yu said in e-mailed answers to questions yesterday. “If it is not the end of the world, it is the end of the current international financial system.”

    Translation: If US defaults on it’s debt in such a way (completely legally I might say) – we, Chinese are so royally screwed as nobody will pay us for years and years of cheap Chinese goods we have sent to USA over last 20 years.

  234. kettle1 says:

    AL 230,

    i dont care, just a curious individual, as i said before deal is done and all parties are happy. it was just a very unusual transaction.

  235. HEHEHE says:

    I admire how the market still moves when Bergabe says the Fed is keeping an eye on inflation. How f’g dumb are these people?

  236. chicagofinance says:

    This editorial makes me sick……..because it makes a defendable point….

    Wall Street Journal
    REVIEW & OUTLOOK

    The Next Bailout: Detroit
    August 21, 2008 10:58 p.m.; Page A14

    First came Bear Stearns, then mortgage lenders and borrowers, followed by Fannie Mae and Freddie Mac: They’ve all looked to Uncle Sam for a bailout, and now the word around Washington is that Detroit will be next on the taxpayer supplicant list.

    Earlier this month, the Detroit Free Press reported that the top dogs at Ford, GM and Chrysler had a meeting of the minds and decided that the way out of their current losing streak would be to ask the feds for a lifeline. They figure they’ll need $40 billion or so to ride out their current troubles until they reach the promised land of hybrids, the Chevy Volt, and, who knows, maybe even profits.

    We’ve since heard that lobbyists for the car makers are taking their pitch for direct federal loans around Washington, with a goal of unveiling the plan after Labor Day — conveniently in the frenzy of the fall election campaign. They’ve briefed Congressman John Dingell, the dean of Michigan Democrats, as well as officials in the Bush White House.

    The plan is for the government to lend some $25 billion to auto makers in the first year at an interest rate of 4.5%, or about one-third what they’re currently paying to borrow. What’s more, the government would have the option of deferring any payment at all for up to five years. Meanwhile, Barack Obama recently signaled that he’s open to federal money to help the auto makers invest in “renewable” technology, and Michigan Senator Debbie Stabenow and Mr. Dingell are supporting the $25 billion in loans to the not-so-Big Three as part of a second-round economic “stimulus.”

    Detroit’s political calculation is plain: Having seen the way Washington has bowed to rescue the mortgage industry and Wall Street, why shouldn’t auto makers give it a try? Michigan is up for grabs in the election, so now is the time to strike with a goal of getting the Bush Administration and both Presidential candidates to agree.

    The car makers can also claim with justification to have been hurt as badly as anyone by Washington’s policy blunders. The weak dollar has contributed to the spike in oil prices that has socked their most profitable vehicles. And the nonsensical way that fuel-economy standards force Detroit to subsidize cars that consumers won’t buy has helped put the Big Three in this hole.

    Then again, the car makers saddled themselves with a cost structure in flush times that has proved unsustainable as their market share has eroded. They have made great strides of late in shedding legacy pension and health-care costs, but they took decades to do so. The fact that GM’s lending arm, now 51% owned by the owners of Chrysler, dipped its toes in mortgage lending hasn’t helped either.

    There also happens to be a thriving U.S. auto industry outside of Michigan. These plants are owned by foreign companies, but they employ 92,000 Americans and build and sell cars here. Tens of thousands of their shareholders are Americans. Would these companies and plants get equal consideration under any bailout plan? And if Toyota and Honda get help, why not Delphi and other auto suppliers? We’re told the low-interest loan proposal would give priority to the “oldest” plants — which is another way of saying those plants organized by the United Auto Workers.

    Bailing out “national champions” because of their long history or politically connected work forces is something you’d expect from France. With rare exceptions — Chrysler in the 1970s — the U.S. government has managed to remain immune to that European disease. But as the nearby table shows, Washington has begun to make a habit of bailing out any business or industry that can marshal enough political clout. That’s a lot of risk to put on the taxpayer dime, and that’s not counting such other runaway liabilities as Medicare.

  237. Clotpoll says:

    HE (233)-

    See: Barnum, P.T.

  238. Clotpoll says:

    Or, Mencken, H.L.

  239. chicagofinance says:

    grim unmod

  240. John says:

    You should care where the money is, when someone you don’t know gives you cash or you give them cash you need to do your KYC, know your customer, when you take more than 10K in cash out of the bank you have the bank file a suspecious activity report sar, plus when you someone via check or wire if that person resides in a blocked country, Cuba Libia or the person is not the OFAC (office of foreign asset control) or drug king pin list your can be convicted of a felony. It is your responsibilty. Plus if you pay via a bank insturment for an illegal act it is money laundering. Spitzer paid via wire transfer for his call girl if he gets convicted of that it is a felony and he gets disbarred. Ignorance of the law is not an excuse. Send money to cuba and get caught and find out. The OFAC website is your best friend when dealing with a shady customer in a banking transaction, save a copy that you checked and sign it and date it.

  241. Hard Place says:

    A failure of U.S. mortgage finance companies Fannie Mae and Freddie Mac could be a catastrophe for the global financial system, said Yu Yongding, a former adviser to China’s central bank.

    Am I missing something? Do these guys not understand that more than likely it is the equity holder of Fannie and Freddie who will be wiped out. Sign me up for that job. I’m sure he’s getting paid more than I do. Fannie and Freddie debt will likely be propped up.

  242. Joeycasz says:

    #95

    I checked the MLS and how they got 3 bedrooms within 770 sq ft is a marvel. The Master is 10 x 8 and the other 2 are 9 x 8…..you’d have to go outside to turn-around in there!

    It’s amazing how many houses we saw that were like this. In the house we finally bought i have a storage closet in the basement(that’s actually quite nice, carpeted too) that’s 11×7 and every time i go in there i just say, “man…this is a storage closet that’s bigger than most rooms people are trying their very best to pass as a real room in their houses”.

    We saw a house in Kenilworth that was listed as 3 bedrooms 1.5 baths and when we got there we soon found out that they were counting the upstairs hallway as a bedroom and the half bath was a closet converted that looked worse than some bar bathrooms. Crazy.

  243. bi says:

    big news: osbmama has chosen edwards as his running mate …

    http://www.politico.com/news/stories/0808/12710.html

  244. skep-tic says:

    post in moderation re: bailout of Detroit automakers

  245. kettle1 says:

    John,

    its not my transaction, a family members but the attorney looked at it an vetted it. I do not know what paper work may or may not have been filed. this all went down on monday when the family member got a call from the neighbor saying he had heard the family member was looking to sell. The house hasnt even gone on the market yet and now it never will.
    The neighbor came by the house on tuesday night with a contract in hand ready to sign. went to the attorney first and the attorney cleared the deal.
    I still do not know how they will have the house empty in 1 week, but worst case they lose the 10K bonus….. not my problem

  246. Hard Place says:

    skep-tic,

    Not sure what you’re posting, but this smells of a bailout wrapped as a green building incentive. Detroit was blinded to begin with and misspent their profits on inefficient vehicles, instead of using it wisely. This could be the start of the automotive consolidation to go along with our financial one.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aIECoNZ8Zbgo&refer=home

  247. skep-tic says:

    #245

    yes, that’s what I was referencing. while they are at it, I would like a $10B 4.5% loan.

  248. lostinny says:

    241 Bi
    It says Edwards is a finalist, not that he is THE choice.

  249. Clotpoll says:

    lost (246)-

    Please pardon bi. English is his sixth language.

  250. chicagofinance says:

    Bost: When I answered your question yesterday about AIG, I was not even aware of this information. I don’t know where your source pulled that data about AIG credit spreads.

    Ultimately, if it was quote data using a certain pricing bond, as opposed to indicative theoretical spreads, the results are f—ed, because with new issues, investors holding paper in a certain space will automatically dump one bond for another. Especially in this environment, liquidity of a nice clean new issue with a handle close to market is going to be considered much more attractive. As a result, some of the spread data can be skewed by purely technical factors.

    Another issue to consider is whether these new issues are refunding or incremental. If they are incremental, and they all came pretty close together, that is a lot of paper to digest in a short period of time. When you note that most investors have no interest in touching any of this crap, it is pretty balls-ey that they managed to get the troops out there to build a syndicate in this stuff AND in the middle of August to boot.

    I stand behind my comments from yesterday even moreso now. Not bad for the f—ing piker I am. I’m feeling my oats…..

    WSJ
    Corporate Bonds Feel Pain As Spreads Climb Back Up
    By LIZ RAPPAPORT and SERENA NG
    August 22, 2008; Page C1

    The credit markets are treacherous ground for financial institutions, and their recent struggles raising money are dragging down the corporate bond markets.

    In recent days, price declines among investment-grade bonds have pushed their spreads — the gap between their yields and those of ultrasafe Treasury securities — to a multidecade high, according to Merrill Lynch data. These bonds now yield 3.11 percentage points more than Treasurys on average, exceeding their recent March peak at 3.05 points.

    That erases the improvement that took place from April to June, after investors were heartened that Bear Stearns’s problems didn’t topple the financial system.

    Junk-bond spreads are also growing, but at 8.3 percentage points, the gap over risk-free Treasurys remains below March’s high of 8.6 points. The current junk spread is still well under multidecade highs at 11 percentage points hit November 2002 — the bottom of the tech-driven downturn that included large bankruptcies such as Enron and WorldCom.

    The investment-grade bonds of banks, brokerage firms and other financial companies have suffered the most pronounced decline. Spreads on their debt have reached new highs as well, at 3.78 percentage points over Treasury bonds, significantly higher than the 3.62 point peak in March.

    Investors and analysts are concerned about the ability of financial institutions to withstand the now yearlong pressures on their balance sheets from illiquid assets and deteriorating loans, a weakening economy and a mountain of debt coming due in coming quarters. Fears about the future of housing-finance companies Fannie Mae and Freddie Mac are also weighing on the market for corporate debt.

    “I don’t have an appetite for financial institution debt at all,” says Tom Atteberry, partner at First Pacific Advisors LLC. “They are still early in the process of deleveraging,” he adds, referring to financial institutions’ raising capital and cutting back on borrowed funds in the wake of massive write-downs and losses.

    Some financial institutions are selling their best assets to raise funds, a sign they have few options left for raising capital, says Mr. Atteberry. For example, Merrill Lynch & Co. recently sold its stake in Bloomberg LP, and Lehman Brothers Holdings Inc. is shopping pieces of its investment-management business, including parts of Neuberger Berman.

    Indeed, one catalyst behind the recent decline in investment-grade corporate bonds, and financial-company debt in particular, was a string of bond sales last week by Citigroup Inc., American International Group and American Express Credit Corp. To sell a combined $8.25 billion in debt, all three companies had to pay investors significantly higher yields than what the firms had hoped. They paid 0.75 of a percentage point to one full point more than recent similar offerings by these companies, according to Thomson Reuters.

    Most of those bonds didn’t do well in secondary market trading. It surprised many investors, who worried that the trend might indicate deeper problems among the financials. Bankers say several financial firms postponed their near-term debt offerings until the fall after seeing the weak performance of last week’s deals.

    Financial institutions can’t put off their fund raising forever. They have $660 billion of U.S. dollar-denominated long-term corporate bonds coming due in the next 12 months, the highest volume ever for such a period of time, according to J.P. Morgan Chase & Co. research.

    “The market this August is as thin as we’ve ever seen it, and borrowers have had to pay very significant premiums to get investor focus,” said Therese Esperdy, head of global debt capital markets at J.P. Morgan, adding that there’s been a bit of a “downward spiral in valuations.”

    Investment-grade corporate bond issuance has also slowed with the market malaise this summer. After hitting a record level for corporate bond deals in May at $141 billion, June, July and August combined have seen only $106 billion in new investment-grade offerings, according to Thomson Reuters. Thus far this month, just $25 billion of such bonds have been slated for sale, a weak total even for the traditionally slow month of August.

  251. chicagofinance says:

    skep-tic Says:
    August 22nd, 2008 at 2:28 pm
    post in moderation re: bailout of Detroit automakers

    skep: my post also that needs unmod

  252. lostinny says:

    Clot
    I don’t even know where to start with that.

  253. cooper says:

    he said nozzle

    #188 thx zack, that’s where my head was at with the necessary upgrades

  254. hirono says:

    RE: #141 Stu –

    Took a look at that listing in Paterson and after doing a little search I believe it is an
    example of the irrationality of the RE and Loan market in the last few years.

    I find a sale closed 08/30/2004 for $280,000.

    My data source (which is not to be taken for a real mortgage search) shows a first on this for $252,000. I shows further (again take this for what its worth) that it is an adjustable loan with a 8.50 interest rate.
    This data source records no second but my guess is that it does exist and covers the remainder of the sales price.

    Deutsche Bank forecloses on 09/12/2005 but my record shows that it was not recorded until 07/11/2007. The price recorded is $200,100.

    Paterson and other towns were full of deals like this.

  255. bairen says:

    #241 bi,

    It’s a different Edwards too.

  256. kettle1 says:

    test

  257. bi says:

    i hope njp can add him to mr.o’s support list.

    http://www.politico.com/news/stories/0808/12716.html

  258. Barbara says:

    Reply to #96 and #104

    Gary, your post really hit home. We own our house and a few investment properties but we bought them all in the 90s. We thought by now we were going to be able to afford to buy a property every year or two, then the prices went nuts.

    Our whole economic scheme was shot to hell. In the 90s, we were rolling along nicely, making more and more each year. Well here I am 10+ years later, our income and equity buys us, well…..a POS split level in a decent town with 20% down. And not much else. I’m stubborn, we haven’t settled yet and now I’m a mom with one entering private kindergarten (!) and another on the way. The pressure is on but everytime we jump back in to the market, I feel exactly as you. That we missed the boat, 10 years too late.

    Then I read #104s post and it gives me a little reality check and some hope. This aschewed relationship between income and housing costs has to give, esp with the lack of credit and I hope our day will come soon.

    Still, I would have prefered to just have bought 10 years ago and been done with it :)
    Hang in there!

    Barbara

  259. gary says:

    Barbara [257],

    I just happen to hit the blog and saw your post a minute after you wrote it. Being pragmatic and grounded goes a long way. It appears that the koolaid consumption and denial on this board has become out of control. If it sounds like I’m p*ssed that it’s not 1998 again, it’s because I am. Yes, we missed the boat… let’s hope it comes back again. Thanks for adding a dose of sanity.

  260. David says:

    #116 Stu,

    “POS capes.” I own a cape. How can I tell if it’s a POS or not? Is there a checklist?

  261. bairen says:

    #259 David,

    If you have to ask… :)

  262. kettle1 says:

    level 3 assets for the different banks.

    http://bigpicture.typepad.com/comments/2008/08/level-three-ass.html

    cannot vouch for the integrity of the data so read with a grain of salt.

  263. 3b says:

    #258 gary: Are you saying that we are in denial, and have drank the Kool-Aid?

    The only ones in denial are the sellers, whoa re sitting with theri rotting listings.

    I think that was a low blow to most people on this board, who for the most part post logical and reasonable responses. We are not the ones in denial.

    At the end of the day you have a house and want another one. others on this board have not, and I believ you do a disservie to them with that remark. I had and sold, no big deal,and I will buy again sooner rather than later,at a sane price.

    If you want to start the ball rolling, than with all due respect put your house on the market, at a realistic price.

    It is like you will not show your hand, until the home sellers already on the market show theirs. You cannot have it both ways. Peace.

  264. David says:

    bairen,

    LOL. Seriously though. Why is it always a POS cape and never a ranch or other?

  265. Barbara says:

    Gary,
    One thing I have noticed on this board is that no one takes into account another financial aspect of the real estate game, that is, time and quality of life. No one wants to buy on at the tip of the market, but at the same time, placing bets on the lowest dip and waiting for it to happen can mean the difference between watching your children play freely at a clean and safe town park for the last 4 years VS. steering them clear of condom wrappers and crazies for 4 years. Ah, memories. This is my quandry. My regrets are not just financial, they are about time lost.

  266. lostinny says:

    Barbara
    People can rent in nice areas without having to steer their children clear of condom wrappers. And people can own in terrible areas where gunshots ring out at all hours. I understand your point but I don’t think not buying a home prevents one from living in a “good” area.

  267. Barbara says:

    Lostinny,
    I’m going to go into a lot of detail, but we are self employed and renting was not ever an option for us. We need control of the space.
    Your point is taken, just doesn’t apply to me and a lot of people who are self employed.

  268. tom says:

    Rich in NNJ probably listed this because I’m guessing 10% off 2004 prices counts as a comp killer.

    This Palisades Park sold for 10% bellow 2004 prices in a short sale about a month before it was supposed to be auctioned off by the sheriff. It was 14% below the judgment.

    Nothing sold at todays BC auction and that’s all I could find. I posted info on all the properties that were scheduled if anyone with better access wants to play house detective.

    With all the bank buy-outs and securitization, the defendant’s names are kinda funny. Things like J.P. MORGAN CHASE BANK N.A. AS TRUSTEE FOR CERTIFICATEHOLDERS OF BEAR STEAMS ASSET BACKED SECURITIES TRUST 2006-03 ASSET BACKED CERTIFICATES SERIES 2006-SD3

    Probably a result of the Boyko decission.

  269. BC Bob says:

    Barbara,

    You can rent a house in a safe town and stroll all day in the park or you can rent money to “own” in same desired town. Will Gaylord really be pissed if he is aware that you are renting? One other item, in a declining market, the asset sinks but the debt remains the same.

  270. David says:

    Gary,

    I was in the same boat as you 2 years ago. Really pissed. And under pressure too. Kid, wife, 1BR, etc. So I overpaid for a 1930s cape (not a POS–I think/hope!) in 2007; probably by $50k. Or more, I sometimes fear.

    Barbara is right about the tradeoff. It’s the best $50k I ever overspent. We’re here for the duration, great town, schools, etc. In a few years houses will resume a historical normal rate of appreciation and we’ll come out ahead. This is not kool-aid.

    I beleive the 70s are back, and if we don’t get a Fed with balls enough to raise rates we’re going to have stagflation. I’m betting on rates going up. And that is going to kill housing some more. But you know what? A nice run of unchecked inflation and pretty soon nobody will be talking about housing any more.

  271. skep-tic says:

    #271

    Indeed (said in the “Big Trouble in Little China” voice. See http://www.youtube.com/watch?v=gzh0qe8PUnY )

    I think many of us on this board were too young to have bought pre-bubble. I look at my friends, most of whom have good jobs, and nobody but the ones who get substantial help from their parents could afford to buy anything decent at bubble prices. So I have to assume that the market will come down to meet them, otherwise who will buy all of these places (Russians?)

  272. lostinny says:

    Barbara
    Point taken.

  273. tom says:

    awe fooey, I’m on mod. Is Boyko a bad word on Polish?

  274. Barbara says:

    BC Bob.
    a) who is gaylord? lol if this is board jargon, I’m lost.

    b) we got too conservative too soon, should have kept buying up until 2002 or so however, our equity is solid, not 2006 solid but we still enjoy a lot of breathing room.

  275. Nom Deplume says:

    [246] bi

    Not what it says, only that he is a “finalist.”

    IMO, it would be a poor pick b/c Edwards represents Texas and I seriously doubt Ob could put Texas in play. As far as issues, Edwards is a complete unknown. As far as experience, this hurts Ob both ways: If ob picked someone with less, it looks like two neophytes. If he picks someone with more, well, can you say Lloyd Bentsen? And, finally, if it is Edwards, everyone will speculate (1) why the savvier Washingtonians are avoiding the bandwagon, and (2) just how much a loser is this guy that he is willing to commit career suicide by being a Veep?

  276. scribe says:

    David,

    POS cape is just a term.

    It encompasses all types of older houses that are in poor condition and overpriced.

    It’s not personal to capes alone :)

  277. tom says:

    Barbara,

    If you bought properties back in 1998 you should have sold them all in 2005-2006. You probably could have even found some idiot to buy the house you live in and rent it back to you at a reasonable rate lol.

  278. David says:

    scribe,

    I would like to ammed and revise my remarks… I have now seen “POS split” used above. My charges of capeophobia were unfounded.

  279. SG says:

    Gary, Barbara and all folk feeling left behind,

    Just think about the folks in Japan. The guys paid peak prices in 1991, and has still not recovered. For next 2 years or so, one needs to find Zen and not worry about houses. I know we all want to keep up with Jones’s, but that’s not going to make you happy. If you want reality check, visit a 3rd world country and you will realize you are in much better situation.

    But if this is keeping you up at night or straining your relationship, go for the house you like and don’t worry about market.

  280. bi says:

    this time is real: drudge said bayh! good it was not clinton, gore or bloomberg.

  281. Rich In NNJ says:

    What?

  282. bi says:

    Drudgereport FLASH: Fri Aug 22 2008 17:52:03 ET /// KMBC’s Micheal Mahoney reports a company in Kansas City, which specializes in political literature, has been printing Obama-Bayh material… MORE… Gill Studios, would not confirm information about the material. They would not deny it either. At least three sources close to the plant’s operations reported the Obama-Bayh material was being produced…

  283. bi says:

    FLASH: Fri Aug 22 2008 17:52:03 ET /// KMBC’s Micheal Mahoney reports a company in Kansas City, which specializes in political literature, has been printing ODrama-Bayh material… MORE… Gill Studios, would not confirm information about the material. They would not deny it either. At least three sources close to the plant’s operations reported the ODrama-Bayh material was being produced…

  284. BC Bob says:

    “What?”

    Rich,

    No s*it! I thought Bi’s “Bayh”, indicated a buy signal for Sunday’s S&P open?

  285. Bystander says:

    #17,

    Toshiro,

    Clayton is (was, really)the #1 mortgage risk audit firm for the
    secondary mortgage market. They, along with Bohan Group (#2), were run by selfish, steaming piles who cared more about the quantity of the deals
    than the quality of the review. Both firms were subpoenaed by Andrew
    Cuomo for fraud investigation. Don’t think it went anywhere but both
    companies went under. Clayton was sold to a private equity firm and
    delisted from NASDAQ a couple of months ago. Bohan is gone. I think the
    CEO is trying his hand at virutal gaming. How funny is that. He was very good at virtual risk underwriting but a master of sniffing substances and harassing female employees. I saw their operations first hand and never have I seen such arrogance at all management levels. No
    regular raises, no 401K match for 3 years, 5 -10% bonuses even during the boom years…yet they acted like you were lucky to work there. Bohan
    actually kicked out both a founding partner (COO) and CFO back in ’04 because they refused to take on more deals than they could handle. New CFO was a pompous jack who graduated from Butgers but acted like a Frenchie elitist. New COO pressured underwriters to complete 10 – 12 loans a day! How is that due diligence? Both companies outsourced underwriting to India then lied to Wall St. about the quality and experience of their risk underwriters. In other words, there opinion is worth very little in my mind. Good riddance..

  286. Shore Guy says:

    from an e-mail alert:

    Officials said the Obama campaign had taken the trouble to print material bearing the names of several potential ticketmates — thereby minimizing the significance of a report that a printing company in Kansas was churning out signs bearing Bayh’s name

  287. Outofstater says:

    Re: Bailout for Detroit. Ugh! Never thought of that but I should have. That entire region has been living in a dream world for generations. They honestly believe that they are entitled to 95 percent of their salary in the “Jobs Bank” if they get laid off because “our fathers and grandfathers fought for these rights.” The guy on the assembly line really believed the company owed him a living where he can have a nice house, two new cars, a snowmobile, a boat, a second house “up north” and send his kids to the U of M.
    Then the American Axle workers decided to strike. Out for two months living on 200 bucks a week strike pay and then they ratifed a contract that cut their wages by nearly 40%. The week after the strike ended, Axle announced it was laying off 50 percent of its workforce. The chill winds of the free market finally reached Michigan. It was a long time coming and it was like witnessing the twilight of the industrial age.

  288. bairen says:

    I have no clue what bi is writing about. Nor do I care.

  289. Barbara says:

    #281
    Tom,
    selling in 2006 would not have been a smart move. Capital gains alone make it prohibitive, and not only would we lose the rental income, but we would lose the future equity. These investments are long term plays, they will put our kids throguh college and fund our retirement.

  290. Outofstater says:

    Another bank failure. Now the weekend can begin! This time it’s Columbian Bank and Trust of Topeka, Kansas.

  291. Outofstater says:

    Hmm. Do posts about bank failures disappear? Anyway, today’s special was Columbian Bank and Trust of Topeka, Kansas.

  292. Shore Guy says:

    From an e-mail alert a little earlier, and for what it is worth:

    Officials said the Oh-bama campaign had taken the trouble to print material bearing the names of several potential ticketmates — thereby minimizing the significance of a report that a printing company in Kansas was churning out signs bearing B-ayh’s name

  293. BC Bob says:

    Barbara [291],

    I sold in 2005. In my case, capital gains, [long term] were miniscule as compared to the subsequent drop in value. In addition to that, entry level accounting can always be employed to cushion the blow.

    I never had any intention to sell. I would have been content with prices rising at/near the rate of inflation. As a matter of fact, I didn’t pay attention to the yoy gain/loss of the asset, prior to the charade. That started to change in 2003-2004 when prices began their quantum leaps. Finally, when the market resembled the crude pit, after a pipeline explosion, I decided to move on. I was convinced the underlying fundamentals could not support this short term irrational binge.

    I never considered my house as my retirement blanket, nor will I if I buy again. Seems like a very dubious assumption to me. Too many baby boomers think/thought the same. The pipeline is troubling, can it absorb the future offerings. In addition to this, will the lights still functioning in Jersey, at that time?

    My experience, a house is a money pit, devouring huge amounts, yoy. Many forget to include this in their overall analysis, the cost to carry. Huge mistake. No?

  294. Clotpoll says:

    Barbara (269)-

    Have you been here for long? To the ultra-bear contingent, time and quality of life don’t play into the equation. Housing is a commodity consisting of 4 walls and a roof.

    Don’t like today’s market? Rent a house for cheaper than you can own- in the blue ribbon train town of your choice- and keep waiting for Armageddon.

  295. Clotpoll says:

    Barb (271)-

    “Your point is taken, just doesn’t apply to me and a lot of people who are self employed.”

    What do you do? Run a meth lab?

  296. Clotpoll says:

    SG (283)-

    “If you want reality check, visit a 3rd world country and you will realize you are in much better situation.”

    Visit a 3rd world country? Just walk out your door. We all live in one now.

  297. Barbara says:

    #296
    If you knew what I had to deal with just an hour ago next door, you post would have been prophetic. You beat me to it. Oysh.

  298. Barbara says:

    Clot, meth lab? Naw its honest work that requires inexpensive office space and storage. I take it your the board curmudgeon? Adorable!
    *musses your hair*

  299. Clotpoll says:

    Barb (298)-

    Curmudgeon? I prefer the term “douchebag”.

    I’d say Gary is the curmudgeon.

    “Inexpensive storage space”? To my landlord brain, that sounds like “flammable”.

  300. Barbara says:

    BC bob,
    sorry, no. These investment properties yeild 50% after mortage and taxes. They have been cash cows. Don’t know what you got yourself into there but sounds like it was good that you got yourself out.
    BTW, no accountant can shelter you from cap gains unless you turn it over into an untouchable trust or retirement account, or if he’s a liar.
    Sorry, chief, I know my way around and my BS detector is pinging.

  301. Barbara says:

    Clot
    “inexpensive storage space” to my buisness mind sounds like “more money left in my pocket”

  302. Confused In NJ says:

    Corzine rejected my proposal last year to implement a “NJ Fat Tax” on over weight state workers, but Alabama which is more progressive has embraced the idea, and will implement such in 2010.

  303. chicagofinance says:

    Barbara Says:
    August 22nd, 2008 at 9:37 pm
    BC bob,
    sorry, no. These investment properties yeild 50% after mortage and taxes. They have been cash cows. Don’t know what you got yourself into there but sounds like it was good that you got yourself out.
    BTW, no accountant can shelter you from cap gains unless you turn it over into an untouchable trust or retirement account, or if he’s a liar.
    Sorry, chief, I know my way around and my BS detector is pinging.

    Barb: a couple of points….
    #1 If you are attempting to prod clot, you would be wise to cease. He is probably the most credible poster on this board relative to knowledge and experience in residential real estate. His posts can be caustic to the uninitiated. Please attempt to read beyond that issue.
    #2 While you are probably enjoying the fruits of your investments, I would strongly argue that there is a high probability you fail to account for all of your imbedded and explicits costs of carry, up to and including opportunity cost. At a minimum, you have failed to optimize your personal financial situation. You are free to build your case, but I will likely not be convinced unless overwhelmed.

  304. BC Bob says:

    “Sorry, chief, I know my way around and my BS detector is pinging.”

    Barbara,

    Glad you know you’re way around, refreshing to hear that.

    Bought my first property in 1985, owned single family and investment properties for 20 years, flat in 9/05. Yeah, my BS detector was pinging in 2005. Just decided to act on it. You can continue to ping all you want. By the way, Henry and Ben have also been pinging lately.

  305. Shore Guy says:

    Barbara to Clot: ” I take it your the board curmudgeon?”

    What does that make John?

  306. chicagofinance says:

    Barbara Says:
    August 22nd, 2008 at 5:01 pm

    I think that your presence here can be described as an anachronism with 3 years of data an arguments that refute your position for the most part.

  307. Clotpoll says:

    Shore (305)-

    Bon vivant, world traveler and raconteur.

    Also, a wannabe.

  308. Shore Guy says:

    Chifi,

    Opportunity cost is one thing that soooo many people overlook, that and the time value of money.

    I just love the statements like: “I bought it 20 years ago and it has doubled in price since then.”

  309. chicagofinance says:

    WSJ
    Sen. Barack 0bama’s decision on a running mate remained a mystery. Virginia Gov. Tom Kaine spread word he had been ruled out and Sen. Evan Bayh of Indiana was told he was not 0bama’s choice, according to party officials. 11:14 p.m.

  310. reinvestor X says:

    Mr. O needs to cut the crap, stop this damn suspense nonsense and just tell everyone who the damn person is.

    His campaign does a build up to everything merely to capitalize on the marketing opportunty. I’m sick of hearing and looking at O. I can’t wait till he loses.

  311. scribe says:

    Of more interest from the WSJ, another bank failure Friday night:

    Regulators Shut Down
    Columbian Bank and Trust
    By DAMIAN PALETTA and JESSICA HOLZER
    August 22, 2008 7:35 p.m.

    WASHINGTON — State regulators shut down Columbian Bank and Trust Co. of Topeka, Kan. on Friday, the ninth bank to fail this year and fifth since July 11.

    The Federal Deposit Insurance Corp. estimated the failure would cost its deposit insurance fund $60 million. Columbian Bank and Trust had $752 million of assets and $622 million of deposits as of June 30, the FDIC said.

    The FDIC sold to Citizens Bank and Trust of Chillicothe, Mo., the insured deposits of the failed bank, which had nine branches. In addition, Citizens Bank and Trust agreed to buy $85.5 million of Columbian Bank and Trust’s assets, which are mostly cash, cash equivalents and securities.

    The FDIC said Citizens Bank and Trust did not purchase roughly $268 million of brokered deposits at the failed bank.

    Regulators have warned of more bank failures this year after several years of historically low levels. The credit market turmoil has hit banks of all sizes, leading to depositor worries across the country.

    On Tuesday, the FDIC is scheduled to provide an updated number of the banks that were on its “problem” list as of June 30.

    http://online.wsj.com/article/SB121944778275765185.html?mod=hps_us_whats_news

  312. scribe says:

    Of even greater interest, tomorrow’s Page One story from the WSJ:

    Banks Hit as Fannie,
    Freddie Get Downgrade

    By JAMES R. HAGERTY and SERENA NG
    August 23, 2008

    The fallout from troubles at Fannie Mae and Freddie Mac widened on Friday when some of their securities were downgraded, stinging the banks and insurers that hold them.

    Moody’s Investors Service slashed ratings on preferred stock of the two mortgage giants by five notches, to just above the “junk” level. The move highlighted the risk that they won’t be able to pay dividends on the shares.

    [snip]

    Uncertainty about whether Treasury will bail them out — and if it does, on what terms — would make it very difficult for either company to raise fresh capital on their own in the near term. “The current limbo state is highly problematic for financial markets, the housing sector and the economy,” says Lawrence Summers, an economist who served as Treasury secretary during the Clinton administration. “Decisive action to set a course for [Fannie and Freddie] is overdue.”

    In recent days, Freddie has been sounding out private-equity firms and other investors about buying new shares. But Mark Patterson, chairman of MatlinPatterson Global Advisers LLC, a private-equity fund specializing in distressed debt, says the amount of money Fannie and Freddie need to raise “just dwarfs any capital the private-equity community might have. Begging at private equity’s door is using a Band-Aid to address a massive wound that’s been festering unchecked for years and years.”

    Huge Losses

    Already, holders of common stock in the two companies have suffered huge losses. Freddie’s common shares fell 11% on Friday to $2.81 on the New York Stock Exchange. Fannie’s common shares recovered slightly, rising 3.1% to close at $5. For the week as a whole, Fannie’s shares were down 37% and Freddie’s dropped 52%. Both are down 95% from a year earlier.

    The preferred shares that were downgraded are hybrid stock-bond securities that are supposed to pay steady dividends over long periods. That has made them attractive to banks and insurers, which have viewed them as a way to get safe returns.

    The value of Fannie and Freddie preferred has dropped sharply. Fannie’s Series S preferred, for example, closed at $11.29 a share on Friday, down from $15.20 a week earlier and $25.70 at the end of 2007. Fannie and Freddie’s preferred shares remain on review for possible further downgrades, Moody’s said.

    Moody’s cited the risk that the companies will have to skip dividend payments on the preferred shares if losses deplete their capital below certain thresholds. It also pointed to uncertainty about how the preferred stock would be treated if the Treasury Department acquires stakes in Fannie or Freddie. If Treasury decided to buy preferred shares in the companies to boost their capital, it could further reduce the value of the existing preferred shares.

    Fannie has about $21.7 billion of preferred stock outstanding, based on the par value of that stock, and Freddie has about $14.1 billion. Those preferred shares are held by many U.S. insurance companies and banks.

    Ratings Cut

    Moody’s lowered preferred-stock ratings for both companies to Baa3, the lowest investment-grade rating, from A1. Standard & Poor’s Ratings Services recently made a more modest cut, taking the preferred ratings to A-minus from AA-minus.

    Moody’s kept the companies’ senior long-term debt rating at AAA, reflecting expectations that the U.S. government would make sure holders of such debt, which include many central banks and commercial banks, are repaid.

    [snip]

    In a report this week, debt-research firm CreditSights said U.S. banks “likely represent a large portion of the owners” of Fannie and Freddie preferred stock. Among the institutions that hold the preferred shares are M&T Bank Corp. and Sovereign Bancorp Inc.

    Sovereign, which is one of the nation’s biggest savings-and-loan institutions, is among the most exposed to Fannie and Freddie, according to the report. The Philadelphia-based thrift holds preferred stock in the two companies with a par value $623 million, representing 0.78% of Sovereign’s total assets. The CreditSights report estimates that a total write-off of those Fannie and Freddie assets could wipe out as much as four quarters worth of earnings. Shares of Sovereign fell 19% this week.

    Responding to the report, Sovereign said it took into account potential declines in its investments when it raised capital earlier this year. “Even in a worst-case scenario, we remain well capitalized and have a more than adequate cushion under all regulatory standards,” said Kirk Walters, the firm’s chief financial officer, in a statement.

    Representatives of M&T Bank could not be reached for comment.

    First Place Financial Corp., a thrift based in Warren, Ohio, on Tuesday announced a $1.3 million charge against earnings to reflect the drop in the value of its Fannie Mae preferred stock. The thrift has $3.3 billion of total assets.

    [snip]

    The two companies won’t run out of cash in the near term. They were still able to sell short and medium-term debt this week, though they had to pay higher interest-rate premiums than has been the norm in recent years. If they are unable to sell debt, they could borrow from the Federal Reserve, sell some of their mortgage securities, or use those securities as collateral for borrowings from other financial institutions.

    But the companies are vulnerable because they are facing large and hard-to-predict losses on defaults over the next year or two, and they don’t have substantial capital bases to absorb those losses.

    Together, the companies hold about $84 billion of capital, as defined by their regulator — less than 2% of the mortgage loans they own or guarantee. That leaves almost no margin for error at a time when falling home prices make it hard to value the collateral backing mortgage loans.

    The government is expected to protect holders of the companies’ senior debt and the mortgage-backed securities they guarantee to avoid a meltdown in financial markets. As of March 31, financial institutions whose deposits are insured by the Federal Deposit Insurance Corp. held more than $700 billion of mortgage-backed securities guaranteed by Fannie and Freddie.

    –Robin Sidel, Aparajita Saha-Bubna and Damian Paletta contributed to this article

    http://online.wsj.com/article/SB121941925852563905.html?mod=hps_us_pageone

  313. Essex says:

    310……..I am not enthused about either party….but can you point to anything Bush has done well? Add failure in Russian foreign policy to the list of defeats.

  314. Clotpoll says:

    scribe (316)-

    Thanks for that. Looks like the holders of the common are toast & the subordinated debt is next to get killed. The bleed-up is on.

  315. 1987 Condo Buyer says:

    Hey, are we all agreeing that houses/property are fraught with issues and may not be great investments?

    Me, I think I follow chifinance, I do not add my house into my net worth calculation..although I hope my house is worth $600k, no wait..$500k, or is it now $400k..whatever..the roof does not leak!

  316. Clotpoll says:

    ’87 (319)-

    Your home has some of the qualities and characteristics of an investment, but it is- and always should be- looked at as a forced savings vehicle. Short shrift is also given to the pleasures of homeownership, but when you own a nice home, intangible benefit accrues. If you feel like your home is a money-sucking pit, sell it and move. No amount of appreciation can make that feeling go away.

    The minute people start treating their homes like buying growth stocks on margin, bad things begin to happen.

    There are plenty of pluses to homeownership. However, lots of folks who bought ’01 to ’07 mistook the minuses for pluses.

  317. Mrs. PGC says:

    Bi

    Joe Biden as VP choice, looks like you’re batting 1000 as normal.

  318. lostinny says:

    Bi
    Since your predictions were wrong again, will you please stop predicting?

  319. kettle1 says:

    Bi,

    i much prefer your financial comments as opposed to your political ones. We get it. you dont like o-b-a-m-a and people with a darker skin tone scare you.

  320. Cindy says:

    (320) Clot, I view my home as stable rent. At $804.00 a month, I could not rent a comparable dwelling and in our area, rents simply keep increasing. I know when I retire, even if for some reason it does not get paid off, I can afford that rent.

    It is different there – you need to be concerned with taxes – always. Whereas CA has a 3% annual cap on property tax increases. In some areas, property taxes can be what drives fixed income folks from their places.

    Do you like water polo? A Buchanan boy, Rick Merlo scored against the Serbian team in the 5 to 10 win yesterday. (Buchanan is the high school my elem. school feeds into.)
    What with the world series of college baseball win (with several Buchanan players) for Fresno State and one of our old water polo stand outs doing well, we feel pretty proud around here these days.
    Maybe our football team will at least put up a good fight against Rutgers.

  321. lostinny says:

    Cindy
    Thank you for always adding a positive attitude to the board. It makes me, I don’t know, not so cranky in the morning.

  322. Cindy says:

    (325) Thanks lost. Always walking around with rose-colored glasses will get you, too.
    You folks are my reality check –

  323. Cindy says:

    (165) SG –

    “Many of the Laureates criticisms focused on the notion that banking has drifted from its fundamental purpose. Amid a rush to profit, “What’s been lost is the idea that a banker has some responsibility to protect the client’s interest,” said Daniel McFadden, who won the Nobel memorial economics prize in 2000 for research focused on modeling individual’s decision-making processes.

    Amen to that.

  324. lostinny says:

    Cindy
    I meant to tell you, NYC’s school system is at the end of the opt-in time to enroll in the 55/25 plan (retire at age 55 with 25 years of service). This plan allows one to collect a full pension without penalty whereas if you don’t opt-in, you have to work at least 30 years or be 62 in order to collect without early penalty.
    So, this came up on a local message board. I stated I’m not opting in as I don’t plan to retire early and I also don’t expect the pension to still be in existence at retirement time. Someone became very upset, asking me to elaborate. (We have less then 12 years in the system so retirement is a long way off for us.) I don’t know what rock he/she lives under but I gave that person a good amount of reading material. Do you feel like other teachers/staff you work with are also very sheltered/out of touch?

  325. willwork4beer says:

    Grim,

    This week’s report from the hinterlands…

    Hunterdon County Comp Killers:

    MLS#: 2522335

    8 Foxfire Lane
    Clinton Twp

    SLD: 08/28/06 $658,500
    OLP: 05/29/08 $619,000
    SLD: 08/21/08 $580,000

    DOM: 35

    MLS#: 2536427

    9 Hillside Drive
    Clinton Twp

    SLD: 05/01/03 $300,000
    OLP: 06/16/08 $299,900
    SLD: 08/21/08 $300,000

    DOM: 11

    MLS#: 2480643

    37 Maple Avenue
    Flemington Boro

    SLD: 06/06/05 $430,000
    OLP: 01/26/08 $449,900
    SLD: 08/21/08 $395,000

    DOM: 159

    MLS#: 2511579

    6 Locust Grove
    Franklin Twp

    SLD: 08/18/05 $729,000
    OLP: 04/22/08 $599,000
    SLD: 08/21/08 $547,000

    DOM: 86

    MLS#: 2443485

    32 Old River Road
    Holland Twp

    SLD: 07/26/04 $275,000
    OLP: 09/12/07 $274,900
    SLD: 08/20/08 $235,000

    DOM: 333

    MLS#: 2506215

    3 Fir Court
    Raritan Twp

    SLD: 08/03/05 $340,000
    OLP: 04/08/08 $344,900
    SLD: 08/18/08 $315,000

    DOM: 84

    MLS#: 2518546

    22 William Barnes Road
    Raritan Twp

    SLD: 03/30/05 $670,000
    OLP: 05/16/08 $609,000
    SLD: 08/19/08 $609,000

    DOM: 5

    BTW: GSMLS recorded only 20 sales this past week in Hunterdon County. Seven of those sales made this list…

  326. willwork4beer says:

    I just thought this one was kinda entertaining…

    MLS#: 2446935

    34 Potterstown Road
    Tewksbury Twp

    OLP: 09/22/07 $1,294,876

    REM: VALUE RANGE MARKETING/ SELLER WILL ENTERTAIN OFFERS BETWEEN 1,095,000 AND 1,294,876.

    SLD: 08/22/08 $965,000

  327. Cindy says:

    (328) Lost – Oh Yes. Many sheltered/ out of touch teachers here. The way our state law works, CA has to back up the pension but look where CA is headed. It is scary but I -again – try to think pretty positively.

    My district did away with the retirement plan we had in place last year. I was grandfathered into the old plan. Now, you need 30 years here as well. A friend who works for a neighboring district lost her lifetime benefits by not retiring last year.
    Districts have to change or go broke.

    Remember, I work for a non-union district even though we are pretty large (37,000 students – 5,000 employees.) I am the faculty senate member for my school – folks do ask pretty probing questions at our meetings so we may be better informed than some other union district employees. We have a balanced budget with money in reserve. (No raises for 2 years – but a balanced budget.)

    You can look us up if you want – Clovis Unified School District – pretty good test scores, too.

  328. JBJB says:

    Biden?

    Jeebus. So much for hope and change. Obama adds a career gasbag who a few months ago questioned his own experience and suitability to be POTUS. The McCain people must be ecstatic.

    Biden seems like a desperation pick, the Obama camp must have thought the election was getting away from them on the experience factor.

    This is good news for the prospect of divided government (i.e. a McCain victory), and help prevent the US becoming NJ.

  329. lostinny says:

    Cindy
    I wouldn’t be surprised if during the next contract negotiations they ask us for $$ givebacks. Our governor talks about a fiscal crisis for the state yet NYC offers police a 17% raise I think it was over 4 years- 2 of which were retroactive. If things are as bad off as they make it out to be why did they agree to that? That agreement with the police union just set a precedent that the other unions will use to bargain with.
    I don’t mean any offense, but your district seems so small. We have 1.1 million kids in the NYC system. You have 36,000 kids in your system. In the district I live in alone, there are roughly 55,000 kids k-12. There are 5 high schools. And I live in the least crowded district. Sometimes I think moving away from here would be a good idea.
    We’re used to not having raises. We often go 2 or 3 years without reaching an agreement and sometimes we don’t see any raise money that’s retroactive. While I personally think a raise starts when it’s decided upon, the unions always fight for retro money. That’s just the way it is. Another reaon we get into a financial mess.

  330. Shore Guy says:

    Condo ” I follow chifinance, I do not add my house into my net worth calculation..”

    We do the same. In addition, we exclude college savings, automobiles, and a one-month-buffer fund.

  331. Shore Guy says:

    Lost,

    Do you remember Seinfeld, when George decided to take the opposite action that his analysis said he should?

  332. Clotpoll says:

    Cindy (324)-

    I tried to play water polo once. My horse fouled the pool.

  333. Clotpoll says:

    Shore (334)-

    Costanza Theory!

  334. Cindy says:

    (332) Lost

    “I don’t mean offense, but your district seems so small.” No offense taken.

    Talk later….W/E walk time…

  335. lostinny says:

    334 Shore
    Nope sorry. Not a big Seinfeld fan.

  336. Fiddy Cents on the Dollar says:

    I, for one, would like to hear more from Barbara. We need various points of view to balance things out here. Your references to condom wrappers and meth labs are mysteriously refreshing.

    Barbara, in what part of the country are you located??

    What are you seeing in that area as far as the general real estate market??

    How ’bout the job market?? adding jobs? or are big employers leaving your state?

    Keep posting…..

  337. 3b says:

    #339 Fiddy:Your references to condom wrappers and meth labs are mysteriously refreshing.

    I ahve sen those comments posted in the past by others who come and go from here.

    I find it is typically used to justify buying over renting as if ALL those who rent live in areas infested with the above meth labs and condoms.

  338. Shore Guy says:

    Lost,

    The basic premis was that George could never do anything right. Every move he made was the wrong one and resulted in disaster. One day he decided to do the opposite of what he thought was the right thing, and his life turned around.

    It is not unlike movie critics. It matters less whether one generally agrees with a critic or not than it does with knowing whether a particular critic shares your own taste; in the one case one is in a position to foillow the advice, in the other case one does the opposite.

  339. Shore Guy says:

    Clot,

    Maybe it needs to be renamed the Costanza/Bush/Big Ben Theory

  340. Carlos Delgado says:

    Chifi,

    I know you don’t like me, but what do you think of my production of late?

    Middle of the pack batting average for my position, but #7 in total bases (1st base/NL) not to mention 26 dongs and 84 RBIs.

    As a senior member of the team, I’ll make sure we don’t let up this autumn.

    Go METS!

    PS – John, you can get Gypsy cabs near the stadium, you don’t need to arrange for a car service…

  341. Dink says:

    (328) Lost,

    Could you point me in the direction of the reading material you are referring to. My brother is about to start up in the NYC school district and I’m confident he is not aware of pension problems.

  342. Dink says:

    (328) Lost,

    Could you point me in the direction of the reading material you are referring to. My brother is about to start up in the NYC school district and I’m confident he is not aware of pension problems.

  343. lostinny says:

    341 Shore
    I see. Well I do understand George’s character to be a bit of a screw up. Although in this case we are talking about real life and real money which isn’t a laughing matter when it happens to you (anyone).

  344. Fiddy Cents on the Dollar says:

    3b: 340

    I was just referring to Barbara’s differing view of the world. The condoms and meth reference was just exaggeration for the purpose of clarity.

    If we keep shouting down everyone who brings a different viewpoint….we’re going to start resembling Freedonia in Duck Soup.

  345. lostinny says:

    345 Dink
    When I referred to reading material, I did not point to specific items that state the NYC workers or teacher’s pension system is in trouble. (We’ll be the last to know.)I am referring to the news we are constantly barraged with about the 6 billion dollar deficit NY faces, the fact that there are some districts around the country that are having trouble finding the money to pay teachers and staff, the fact that companies that used to match 401k’s have wiped them out completely. Why would NYC be immune? We are in for it, just like everyone else. What’s the saying? What goes up must come down.
    Oh and in case your brother doesn’t already know, he will be forced to pay into that early retirement plan. But for him, it’s a 55/27 rule so he will not be able to retire before 55 with 27 years of service. He’ll have to pay 4.85 percent for 10 years and 1.85 percent for an additional 17 years.
    Perhaps the powers that think the extra money being paid in will help the system along.

  346. Shore Guy says:

    Mrs Shore and I were looking at some lake property in NY. What amazed us whas that one can get a nice lakeside place, with acreage for less than 1/2 the price of the proverbial POS Cape in NJ. With rents in decent NJ towns being fairly reasonable (at least relative to overpriced homes), folks looking to buy “something” might do well to look at a weekend place out of the area. It is not the same as the Shore (good in some ways, not in others), but it is a reasonable form of ownership that can enhance ones standard of living. Even if prices drop, the “loss” is less because the prices are lower.

    It won’t work for folks looking to have access to trains and 10 supermarkets, and 20 movie screens, etc., within a 10-minute drive. Still, worth looking into.

  347. Shore Guy says:

    # 347 “Freedonia in Duck Soup”

    I once met someone who said he went to school in FRedonia; I thought he was pulling my leg until he showed me the town on a map.

  348. Fiddy Cents on the Dollar says:

    Freedonia in NY State, right??

    The town actually complained when the film was released, saying it might give their town a bad name.

    The Marx Bros replied, “Change the name of your town, it’s hurting our picture”!

  349. David says:

    I also think Barbara had a great point. I’ve been a lurker here–and sympatico–from day one, and despite having purchased a house in BC in ’07 I am not a RE bull by any means. I held out as long as I could.

    I think there are two intellectual shortcuts, to put it politely, that go on here a lot. One is the idea that a 10% or so drop in a house’s price makes the original purchase a foolish decision. The other is that living in a rented house is always an available, equivalent option.

  350. grim says:

    34 Potterstown Road
    Tewksbury Twp

    REM: VALUE RANGE MARKETING/ SELLER WILL ENTERTAIN OFFERS BETWEEN 1,095,000 AND 1,294,876.

    SLD: 08/22/08 $965,000

    Love it!

  351. Orion says:

    (353) Value Range Marketing.

    Last year I saw a house with VRM, between $839K-$999K.
    It is still for sale today.
    Wouldn’t a buyer just offer the lower asking price?
    Seems moronic marketing.

  352. Fiddy Cents on the Dollar says:

    Asbury Press article about the state’s pension accounts investing in hedge funds. Now this is downright scary….

    “New Jersey’s Treasury Department wants to put about $9 billion of the state’s $78 billion retirement accounts into the investments.

    In a period where the stock market has been slumping, the pension fund has lost money. Last year, it lost about $3.1 billion in investments.

    Also on Friday, a new analysis found that the state is even farther than believed from
    being able to pay its obligation to retiring workers in the future.

    Actuaries found that more police and firefighters than expected are retiring with
    disabilities.

    As a result, the gap between what the funds have and what they need jumped by another $550 million to a total of nearly $29 billion.”

    http://www.app.com/apps/pbcs.dll/article?AID=/20080823/NEWS/80823009

  353. I read a simliar post just the other day by Sandra Kosineck but yours is much better.

  354. ReadngtnDude says:

    REM: VALUE RANGE MARKETING/ SELLER WILL ENTERTAIN OFFERS BETWEEN 1,095,000 AND 1,294,876.

    I follow the San Diego market somewhat due to potential job relocation.

    This type of range pricing is standard there as far as I can tell. I have no idea how to read it.

    http://www.realtor.com/search/searchresults.aspx?loc=san+diego%2c+ca&ml=8&mnp=500000&mxp=600000&bd=3&bth=4&typ=2F

    RD

  355. ReadngtnDude says:

    I don’t know if this link has been shared here before, but:

    http://www.bubbleinfo.com/

    is a real hoot. It is run by a hard working San Diego realtor working the REO market.

    He’s raised the video home tour to a veritable art form. I bust a gut at least once a week watching his videos. But, he also shows the pretty ugly downside of a real market debacle. These could become the 2000’s equivalent of the Farm Security Administration photos of the 30s….

    http://www.youtube.com/watch?v=fIOMg9HWBYA

    RD

  356. Shore Guy says:

    # 358 So, id someone said to the owners “I love your house, I will give you $2 Million” does “SELLER WILL ENTERTAIN OFFERS BETWEEN 1,095,000 AND 1,294,876” mean the seller will be insulted and reject the offer?

    This range pricing is silly, unless one is also dealing with extras like including or excluding a boat, nearby land, furnishings, etc.

  357. willwork4beer says:

    # 353

    Aw shucks… :)

    Glad you liked the post.

    ww4b

  358. willwork4beer says:

    # 359

    That’s what I was thinking, not to mention the fact that they apparently “entertained” another offer that substantially lower.

    “Let’s see… do I want to pay 1.3M or 1.1M…? Heck, I’ll pay .965M…”

  359. Shore Guy says:

    Yea, but were they “entertained” by .965?

  360. tom says:

    “Yea, but were they “entertained” by .965?”

    I know I was.

  361. sas says:

    “The Greenback Blues: Something’s gotta give”
    http://www.inteldaily.com/?c=139&a=8014

  362. bi says:

    323#, what will make reps scared is an odrama-clinton ticket.
    mccane must feel odrama have made an excellent pick and even called biden to congrad him.

    by the way, how do u know my skin color is lighter than odrama’s?

  363. bi says:

    Yesterday’s politico article was right. odrama never talked to her about veep stake.
    if a person cannot unite primary opponent in his own party, how can u expect him to unite the nation to fight current crisis?

    http://politicalticker.blogs.cnn.com/2008/08/23/some-in-clinton-circle-outraged/

  364. syncmaster says:

    Small part of Franklin has big-city challenges: poverty, drugs, crime and gangs

    FRANKIN (Somerset) —It’s the part of Somerset County that nobody wants to talk about.

    Ask most people to conjure an image of Somerset County and they’re likely to picture an image of the redolent Somerset Hills and hot-air balloons floating above lush estates. They’re also likely to picture typical suburban neighborhoods of Mcmansions and SUV’s lining soccer fields on Saturday mornings.

    But they’re not likely to imagine the urbanized, sometimes mean, streets of the community that bears the county’s name.

    The Somerset section of Franklin Township, hard by New Brunswick, is one of the most urbanized communities of the county and it shares the same problems — poverty, crime, drugs, housing, gangs — that plague urban areas throughout the country.

  365. Clotpoll says:

    sync (367)-

    I can tell you some stories that will curl your toenails. I’m on the board of the foundation at Somerset Vo-Tech, and a lot of what we offer are- in a nutshell- antigang programs in the guise of vocational education.

    I still think one of our biggest accomplishments is having the Bloods, Crips, MS-13 etc all sign on to an agreement making the campus neutral turf.

    It’s especially good, given the fact that many of these kids are in culinary arts and hairdressing. Lots of knives and scissors.

  366. Clotpoll says:

    Many of these gangbangers are super-smart. It’s sad to see that the township and county will spend so little on keeping them gainfully occupied during Summer months and after school hours, yet bust the bank to catch them doing something bad and incarcerating them for as long as humanly possible. Not only is it pointless and dumb…it costs a bloody fortune.

    I say we put Cayne, Mozilo, Prince, etc. in Supermax lockup and teach the bangers how to run blackboxes. They couldn’t do any worse that the ganja-huffing Cayne, and I’m pretty sure they’d blow away the Career Builder monkeys on a pro-forma basis.

  367. syncmaster says:

    Clot,

    I believe it. My wife teaches at a Somerset County school with a gang problem and I’ve heard some interesting stories.

    Although nothing quite on the scale of an actual agreement with all three gangs – now that is scary (and cool).

  368. Clotpoll says:

    sync (370)-

    Franklin or Bound Brook?

  369. Clotpoll says:

    In case anybody missed Mike Morgan’s latest screed:

    http://tinyurl.com/57lkeb

  370. Barbara says:

    Well, I spent the day looking at some listings in a few areas today, Montclair and Princeton area. Just drive bys, not ready to deal with the usual realtor buzz. All I can say based on condition and neighborhoods is…..WTF? It still feels like 2005 to me.

    Really discouraging but at the same time, I know a few people who have put houses up in the Princeton area and they aren’t selling, offers are few.

    With property taxes, cost of single payer health insurance, car insurance, energy I wonder why we stay in this state at all. Been here all my life, sometimes it feels like a bad addiction.

  371. Sybarite101 X says:

    Barb,

    Why Montclair and Princeton? The 2 towns are so far apart and seem quite different to me. Just curious why you picked those 2.

  372. David says:

    Barbara,

    I think you mean individual health insurance. “Single payer” is a euphamism for government-paid health care, like Canada or the UK.

    If you have a spouse, consider incorporating and creating a two-person payroll. You can then apply for insurance as a small group and save about 30%.

  373. syncmaster says:

    Clot #371, pvt. Students are mostly sent by Somerset county school districts.

    Barb #373, Yeah Princeton seems to be holding up well. East Windsor is more affordable though. My wife and I drove up to Mt Olive/Hackettstown today. Neither of us had ever been up there before so we checked out Woodfield Estates and Hunter’s Brook. Woodfield in Mt Olive is freakin’ hideous. It seemed half the subdivision is ‘on sale’ and I can see why. Hunter’s Brook in H’town seemed nicer, though. Affordable, too. Hmmm.

  374. Stu says:

    Montclair and Princeton are very similar. Especially when you consider that they both have Ivy League universities.

    Princeton has eating clubs while in Montclair you might find a few people eating club sandwiches.

    I was fortunate to graduate from that prestigious Montclair ivy!

  375. Barbara says:

    David, we already are a small group. If we are saving 30% I can’t imagine anyone owns individually. Wow.
    My premiums are out of hand and my deductable for the family is very high. Then there’s the co-pay. 25 for GP and 50 for all others. Oh, and no RX.

  376. Barbara says:

    #374 we are self employed so we can be flexible with location. I love the look of Montclair best, decent schools and amazing housing stock. Princeton because of great schools and well located between both of our families. I like older homes and have been looking for a fixer upper at the right price for several years. Downtowns are also important to us.

  377. David says:

    Barbara,

    I’m right there with you. NJ and NY have the worst insurance regs anywhere. If you really want to get mad, go to a high deductible plan site and get a quote for yourself, but pretend you’re from Wyoming or some other red state.

    High deductible here ranges from nonexistent to total ripoff.

  378. Barbara says:

    David, I’ve done it just in PA! The regs are insane here. Nobody wins.
    I would love to have a high deductible with an MSA. We are a healthy family of 3 and I’m on the phone every week aruing with hospitals and BCBS over bills that our contract says we shouldn’t be getting. Long story. It is maddening.

  379. Everything's Hobroken says:

    ‘by the way, how do u know my skin color is lighter than odrama’s?’

    He must have been giving you the benefit of the doubt; clearly a mistake. Your continued vapid and reprehensible posts do not deserve his attention.

  380. Shore Guy says:

    #378 Barbara,

    We are both seld employed and pay somewhere north of $15,000 a year (more like 16) for health insurance. But we get the benefit of paying employer’s and employee’s share of social security, so that makes up for it.

  381. Barbara says:

    Shore Guy,
    ever get the feeling the system wants us all to be Walmart cashiers? I too pay into the sci-fi notion that I am Two of One :)

  382. Shore Guy says:

    Those who are truely wealthy move the $ offshore and pay little to no taxes. Those earning less than $100k pay little to no taxes. Those from $100k-$750k(and maybe a million)/year — who the sub $100k think have it made and want to have soaked in taxes, but who the truely rick laugh at — bear the heavy burden.

  383. Barbara says:

    shore guy,
    its the dangerous middle.

  384. Rich In NNJ says:

    David (380),

    David from Closter?

  385. RPatrick says:

    Shore 385

    Um around 55-60K is where all the “good” deductions phase out and thats the 25% bracket with 6.??% state on top.

    Would you care to elaborate, maybe send some links if your being honest?

  386. SG says:

    Higher Fees for Mortgages

    This month, Fannie and Freddie increased the fees they charge lenders for many loans, effectively bumping up interest rates for many borrowers who have marginal credit. The companies also tightened their policies on refinance loans that enable an owner to take cash out of a home.

    Those buying homes will have little choice but to absorb the cost. But the new policies will be felt more by those thinking of refinancing mortgages. Such loans have grown less attractive in recent months, as 30-year fixed-rate mortgage rates pushed beyond the 6.5 percent range. (As of Thursday, the average rate was 6.54 percent in the Northeast, according to Freddie Mac.)

  387. SG says:

    The Flawed Housing Bill: How We Will Pay for It

    There are several disturbing items with the Housing Bill. First is the fact that according to reports, the White House had made no plans to have an official signing ceremony for the bill, though most major pieces of legislation typically receive such treatment. It appears that that they are not impressed with it either.

    Here are a few takeaways….

    * Voluntary for lenders to allow for write off/down of debt owed in order to refinance for debt holder.
    * Uncle Sam is partner in appreciation of property once refinanced.
    * $300 billion new money to FHA to help out about 400,000 problem mortgages.
    * Increase the federal debt limit to $10.6 trillion.

  388. SG says:


    What’s the third hit on our economic head?

    By David Nicklaus
    ST. LOUIS POST-DISPATCH

    At some point, financial markets will decide that most of the losses are behind us. Risk premiums will drop to more normal levels, and it will become cheaper to finance the purchase of a house or the expansion of a factory.

    That point isn’t yet in sight. “Unfortunately, no,” said Scott Colbert, head of fixed-income investments at Commerce Trust Co. in Clayton. The most optimistic thing he can say is this: “We’re a year into this (credit crunch) and it doesn’t appear to be getting any worse.”

    It’s not getting any better, either. Colbert predicts that the crunch will last about another year, and he said we’ll probably experience at least one more “cathartic event” before it’s over. That might be a government bailout of Fannie Mae and Freddie Mac, or it might be the failure or near-failure of another large financial institution.

    Don’t be surprised, though, if another year goes by and we’re still talking about the credit crunch in the present tense.

  389. SG says:

    Fallout from Greenspan’s free-market ideology hits hard
    By STEVEN PEARLSTEIN
    The Washington Post

    The Maestro just can’t get the hang of this retirement thing.

    You’d think at 82, with a celebrated career behind him and a bank account stuffed with speaking fees and book advances, Alan Greenspan might be spending lazy summer days fly-fishing in Scotland or perfecting his watercolor technique on Cape Ann.

    But here he is, writing op-ed pieces for the Financial Times, giving interviews to The Wall Street Journal and CNBC and adding a new chapter to his recent best-seller in what looks like a desperate attempt to buff up his legacy in the face of rather compelling evidence that … well, that he screwed up big time.

    ==
    This brings us to the heart of the Greenspan Fallacy — the notion that the only way to get the benefits of free-market capitalism is to accept the inevitability of booms and busts.

    Greenspan thinks people should take out adjustable-rate mortgages because in the long run they will pay less. He believes that markets, in the long run, are self-correcting and self-regulating.

    What he seems to have forgotten is that economics is a social science, not a branch of mathematics.

  390. SG says:

    From NYTimes

    Finding the Mess Behind the Mess

    A BURSTING real estate bubble set off the Japanese recession of the 1990s, which deepened as ailing banks languished. It took Japan’s economy more than a decade to resume steady, noticeable growth.

    Will this happen to the United States? Probably not, but we may face a protracted process of recovery, stretching longer than the two or so years usually required to climb out of recession.

    ==
    The fundamental problem in the American economy is that, for years, people treated rising asset prices as a substitute for personal savings. The thinking went something like this: As long as your home’s value rose every year, you didn’t have to set aside so much from your paycheck. If your stocks went up, too, so much the better; don’t forget that the Dow Jones industrial average stood in the 800 range in 1982 and seemed to rise almost nonstop for many years.

    In addition, there are still excess homes on the market, and housing prices need to fall further. Of course, such price declines can make banks less solvent and thus worsen the credit crisis. And politicians would like to moderate this fall in prices, again prolonging the adjustment process.

    Emerging from the current slowdown isn’t just a matter of political will or smart central banking. If the recipe for success requires smooth adjustment into new growth sectors, more savings from disposable income, cleaning up the housing mess, well-functioning energy markets, and more effective financial intermediation — all in the right combinations and in the right sequences — neither the government nor the Federal Reserve can control this process. The Fed can add regulatory and monetary clarity, but there isn’t any magic bullet. Beware of anyone who tells you there is.

  391. SG says:

    From NYTimes, Long but very good article.


    In the Central Valley, the Ruins of the Housing Bust

    Hardly anyone in Merced planned very far ahead. Not the city, which enthusiastically approved the creation of dozens of new neighborhoods without pausing to wonder if it could absorb the growth. Certainly not the developers. They built 4,397 new homes in those neighborhoods, some costing half a million dollars, without asking who in a city of only 80,000 could afford to buy them all…. And, sadly, not the local folk who moved up and took on more debt than they could afford. They believed — because who was telling them differently? — that the good times would be endless.

    ===

    You know the rest of the story: a tidal wave of foreclosures, driving median sales prices down 50%. The “foreclosure price” — set by banks eager to unload distressed inventory — has become the market price; other sellers must compete by dropping their prices. A downward spiral in prices.

    A typical foreclosure price progression: “In November 2005, the house sold for $126,000. The bank, which took it back last spring, is asking $59,000. The Seattle man (a prospective buyer) offers $40,000.”

    Another foreclosure scenario: “The owners, who owe $350,000, can no longer make their mortgage payments. Mr. Seivert is negotiating to buy the house for $170,000 and then rent it back to the couple, who have jobs in the area. They will pay $1,100 instead of their current $2,600 a month.”

  392. Frank says:

    Inventory is dropping in Hoboken and Westfield. Is it a sign of turn around for the RE market?

  393. bi says:

    ODrama’s top political strategist, David Axelrod, co-owns the firm, ASK Public Strategies, that was hired by the hospital last year to sell the program — called the Urban Health Initiative — to the community as a better alternative for poor patients. Obama’s wife and Valerie Jarrett, an ODrama friend and adviser who chairs the medical center’s board, backed the Axelrod firm’s hiring, hospital officials said.

    Another ODrama adviser and close friend, Dr. Eric Whitaker, took over the Urban Health Initiative when he was hired at U. of C. in October 2007. Whitaker previously had been director of the Illinois Department of Public Health. ODrama has said he recommended Whitaker for the state job, giving his name to Tony Rezko, who helped Gov. Blagojevich assemble his Cabinet. Rezko, a former fund-raiser for ODrama and Blagojevich, was convicted in June on federal corruption charges tied to state deals.

    http://www.suntimes.com/news/politics/o bama/1122691,CST-NWS-hosp23.article

  394. bi says:

    Another OSama adviser and close friend, Dr. Eric Whitaker, took over the Urban Health Initiative when he was hired at U. of C. in October 2007. Whitaker previously had been director of the Illinois Department of Public Health. OSama has said he recommended Whitaker for the state job, giving his name to Tony Rezko, who helped Gov. Blagojevich assemble his Cabinet. Rezko, a former fund-raiser for OSama and Blagojevich, was convicted in June on federal corruption charges tied to state deals.

    http://www.suntimes.com/news/politics/osama/1122691,CST-NWS-hosp23.article

  395. SG says:

    In the Region | New Jersey
    Selling Cities Despite Bad Images

    PLACES like Newark, Trenton and even parts of Jersey City still carry the weight of reputations that soured long ago and never really recovered. Through boom times and bust and housing market highs and lows, and even as developers began seeing potential in urban locales as commuter hubs, the rap on such cities as less-than-savory places to live defied erasure, like graffiti in a hard-to-reach spot.

  396. bairen says:

    #367 & 368,

    syncmaster and clot

    I used to live in the Quailbrook section of Somerset. It was a good place for dinks. When we bought the townhouse was big enough forus and a bay if we had one while living there, and small enough to carry on one salary.

    Went back for a look see 2 months ago and was a bit shocked. Even though prices have doubled since 2000, many of the occupiers no longer look like the white collar dinks that were there back in 2000.

  397. bairen says:

    #398 bay = baby

    need coffee

  398. Cindy says:

    SG – I found both your WSJ Laureates posting #165 and #393 very interesting.
    (Especially the Laureates criticisim of bankers who lost their way and forgot their fundamental responsibility was to protect client’s interests.)

    (393) “The fundamental problem in the American economy is that, for years, people treated rising asset prices as a substitute for personal savings.” Isn’t that where Greenspan comes into the picture – leaving rates too low for too long? Folks are going to try to make a buck somehow. They couldn’t make anything saving in a CD.

    Also, What I am trying to understand now is the inflation/deflation situation. Clearly I am paying more to live day to day but on the other hand we have deflation of assets. Is Bernanke waiting for things to stabilize a bit then lower the rate? If we need to be saving, how is that going to help?

    You have been reading so much on the subject – What conclusions have you come to?

  399. Cindy says:

    (394) OMG – That is my Central Valley they are writing about – Merced is 40 min. to the north. And I thought our over-building problems were bad…

  400. Fiddy Cents on the Dollar says:

    CNN/Money.com articles this morning on “Millionaires in the Making” covers 4 couples path towards early retirement.

    http://finance.yahoo.com/banking-budgeting/article/105609/Millionaires-in-the-Making

    Interesting reading….one couple in Calif bought rental properties far from their home town.

    “For one thing, owning real estate so far away has turned into a headache. Make that a migraine: One house stood empty for nine months because of a dispute with a former tenant, and their Phoenix property has dropped so sharply in value that they now owe nearly as much as the house is worth. Carrying costs for the properties exceed the rental income they generate by $9,000 a year. Given the downturn in real estate prices, if they sold all three homes today, they’d barely break even.”

  401. bairen says:

    #402 fiddy,

    i read that article too. Maybe that’s why they only wear clothes given to them by their companies or relaties.

  402. Clotpoll says:

    Frank (395)-

    The tide is also going out, and the water level is dropping.

    Got shorts?

  403. Sybarite101 X says:

    “Barbara Says:
    August 24th, 2008 at 12:12 am
    #374 we are self employed so we can be flexible with location. I love the look of Montclair best, decent schools and amazing housing stock. Princeton because of great schools and well located between both of our families. I like older homes and have been looking for a fixer upper at the right price for several years. Downtowns are also important to us.”

    I agree, but I think there are many towns that fit a similar profile too. I’m thinking of the Rt22 train towns (Cranford, Westfield, etc…) and the Morristown Line (Madison, Chatham)… Basking Ridge is ok, school-wise, but there are huge tracts mcmansion developments, and the downtown area is very cheesy. Bernardsville may be closer to what you’re looking for, however.

  404. Fiddy Cents on the Dollar says:

    Millionaires in the Making-

    If he wanted to invest in Real Estate as a core holding….why did he choose to buy homes way out of state?? In unfamiliar, frothy markets?? With the added expenses of a property manager??

    He certainly out-smarted himself with that move.

    The common theme with all of the stories in that article was…..wait for it…..Credit Card Debt.

    The credit card companies must hate me, as I pay the bill in full every month.

  405. John says:

    Just a few thoughts, those whose wife wants them to buy should look at MLS houses that are for rent and for sale and rent them and get the right to match any sale price minus 1/2 realtor commission, if homes are still falling and you love it you can buy it for 50K less in an year and pocket 10K in interest income.

    Plus the heck with time value of money long term, my house costs me around $1,000 a month less than renting. If I live here ten years and walk away with zero appreciation after backing off the risk free rate on my downpayment and repairs I am still up $120,000. The people who bought 2003-2008 who paid more per month than they can rent it even after counting the tax deduction which means with tax deductable mortgage of 2,400 a month owning equals around 2,000 month renting will never get their money back unless the tulips bloom again and we have another mania.

    Fact of matter even in hot market never pay more than 120% to own as opposed to rent. That wipes out your tax break pretty much so you are counting 100% on appreciation.

  406. John says:

    self employed is the new term for unemployed

  407. Fiddy Cents on the Dollar says:

    Barbara-

    If you’re self-employed, do you really want to pay the premium for living close to the Manhattan employment centers?

    You could find similar enchanting towns in Monmouth county. Many with excellent schools.

  408. Sybarite101 X says:

    Fiddy,

    Thats a good point. Do you know of any non-train towns with nice downtown areas? It seems to me that most towns with decent downtowns got that way due to proximity to rail.

    Actually, Frenchtown and Lambertville come to mind, but they’re pretty remote.

  409. t c m says:

    #269- Barbara

    “No one wants to buy on at the tip of the market, but at the same time, placing bets on the lowest dip and waiting for it to happen can mean the difference between watching your children play freely at a clean and safe town park for the last 4 years VS. steering them clear of condom wrappers and crazies for 4 years.”

    Barbara, this doesn’t make sense.

    we’ve been through this “if you rent you can’t barbeque or celebrate thanksgiving stuff” – it’s one of the dumbest arguments out there. it is probably one of the reasons people overpaid for crap – emotionally they can’t move on with having a life until they “buy” a house.

  410. Maureen says:

    about the RE prices – what’s your bet ? it will rebound in :
    1) 6 months
    2) 12 months
    3) 18 months
    4) Forget it for a lifetime
    6) my head is spinning ?

  411. t c m says:

    #298 – clot

    “Don’t like today’s market? Rent a house for cheaper than you can own- in the blue ribbon train town of your choice- and keep waiting for Armageddon.”

    substitute “armageddon” with “sanity” and it’s pretty reasonable.

  412. chicagofinance says:

    The suburban rental market is very deep and undersubscribed. It is to the point that there is such selection that you need to categorize and perform due diligence. The specific point is that we found a place where the landlord is committeed to owning the property and using it as a rental. However, they keep the property meticulously maintained.

    The attitude of the landlord is one of appreciation. We are responsible and show reverence to her position and to her property. It is simple. We are watching our neighbors…foreclosure down the street, selling the Volvo and downsizing etc….suddenly people who originally viewed us the “transient renters” now see us as the savvy ones, with foresight, and an uncomplicated life. Reval? So? Property tax up? So? Fire in the kitchen (Goodfellas reference)? So?

    Of course is clincher is the Hunter is monstrously cute, so he owns the neighborhood.

    Good luck homeowners…

  413. BC Bob says:

    Chi [414],

    Bingo.

  414. Fiddy Cents on the Dollar says:

    410 :sybarite

    (I love that handle) My point to Barbara was…if she doesn’t need to commute to New York/North Jersey, why does she want to pay a premium to live close to it.

    As a self-employed person, I’m guessing she works from home (or at least local to home). Sounds like her stated need for space would require more than the lot sizes in Cranford and Westfield.

  415. bairen says:

    #414 chicagofinance

    Our new rental is 2/3rds the price to own, not factoring in the time value of money or repairs. It’s an older house that was renovated a few years ago.

    When we can buy a similar house for a monthly payment about 110% or so of renting I can see going for it, but when rent is 65% of PITI on a 30 year fixed with 20% down, why should we buy? We get to use the same library, schools, roads, etc that the home owners around us do, yet our monthly nut is a fraction of theirs. Plus if a job offers a relocation package, we don’t have to try to unload a house in a declining market.

  416. 3b says:

    #295 frank: No probbaly expiring listings for the most part. Watch and see what happens after Labor Day, for the Fall selling seasoning. Your inventory numbers will be back up.

  417. 3b says:

    #395 frank: No probbaly expiring listings for the most part. Watch and see what happens after Labor Day, for the Fall selling seasoning. Your inventory numbers will be back up.

  418. JBJB says:

    “Do you know of any non-train towns with nice downtown areas?”

    Red Bank is technically not a train town, but the >1 hr trip to Penn makes it tough for everyday commuting. Red Bank is probably the best “downtown” in CNJ, along w/ Princeton. It’s kinda like Montclair w/o out the extreme yuppism and gross over taxation. NE Monmouth as a whole is actually great if you don’t have to commute to NYC or North Jersey everyday (although it’s possible to do). It’s not over crowded (yet), taxes are reasonable, especially considering the space you can get, you have the Shore in the summer, great downtown in Red Bank, short and comfortable 40 min trip into the city via ferry. RB schools suck but there are plenty of other good nearby public districts and many private schools.

    We went back and forth for a year between NE Monmouth, NW Bergen, and Morris Co areas and came to the conclusion that NE Monmouth is such a much better value w/ a much higher quality of life. However, we are not from NJ so the ridiculous “prestige town” idea had little impression on us.

    We are also happily renting and will only buy if prices drop another 10-15% on the type of property we are looking for.

  419. JBJB says:

    “Red Bank is technically not a train town”

    Sorry, meant to write that RB IS technically a train town.

  420. Barbara says:

    411,
    you should probably read my other posts after, they explain my reasoning as clearly as I can without getting into a lot of personal detail.
    Nothing to do with Thankgsgiving.
    And the notion that your home has no emotional attachment, renting or buying,especially when you are raising a family within it is a little dellusional in and of itself.

  421. Fiddy Cents on the Dollar says:

    Again, my comments to Barbara were based on her self-employed status.

    If she doesn’t need to commute to the Big City….she doesn’t need to pay to be close to it.

  422. Barbara says:

    Fiddy,
    I like these towns because they are beautiful. Bottom line, I hate new construction, minimalls, subdivisions, splitlevels, big fat garages slapped on the front of the 4/2.5 and the general “park n’ shop” lifestyle. But I don’t want to live in Brooklyn :)

    I’m very familiar with Monmouth, all of S Jersey, Central etc. Historic (ish) housing stock in those counties do not hold a candle to Essex/Montclair area. I’ve held out not only for price, but for aesthetics. I can’t buy something i don’t like to look at.
    The fact that I don’t need Manhattan everyday is an important calculation and expense and yet another reason why I haven’t bought in. I was hoping that that nightmare victorian that few have the patience or know how to be bothered with would pop up in these hard times. So far its not happening, from what I saw yesterday prices are still not far off 2005 (last time I seriosuly was working with an agent in Montclair).

  423. Cindy says:

    James Quinn has another article @Seeking Alpha – (I like this guy.) Looming Financial Catastrophe: A Real Inconvient Truth

  424. Fiddy Cents on the Dollar says:

    Barb-

    THAT’S what I needed to hear you say. If the Victorian style is that important to you, that’s reason enough to look in the northern areas.

    In Monmouth county towns like Red Bank, Fair Haven, and even Rumson have some nice Victorian examples. Atlantic Highlands, Little Silver and Spring Lake may also offer the same. If wide open spaces is a consideration then Millstone and Upper Freehold Twp would put you out nearer to Princeton.

  425. Barbara says:

    Fiddy,
    I like Redbank and have looked there a few years ago but a lot of the older homes were kind of weenie-ish with the bad square additions slapped on the fronts and backs. I like the downtown in general but I do not know much about the schools.
    Millstone is a heartbreaker, nice hosues but no downtown and I think the schools are bad (Franklin school district?)
    I may have to give Monmouth another shot.

  426. David says:

    Rich #387, Nope. I’m not in Closter. Do I need a different nick?

  427. Hard Place says:

    Maureen – Realistically. I’m thinking 10+ years before we see 2005/2006 equivalent prices again. I’m in no rush to buy.

  428. syncmaster says:

    “More high density housing coming to Central NJ

    All references to the word P i s c a t a w a y have been replaced with P-way to avoid the word censor.

    P-way officials envision the stretch of Stelton Road near the border with Edison as a potential grand gateway to the township, lined with high-end shops and a residential transit village easily accessible to consumers and commuters.

    The cornerstone to revitalizing the area is considered to be the replacement of the Fairways Golf Center with a mix of 331 townhouses and condominiums, surrounded by stores and restaurants on the 33-acre site.

    With its location about a half-mile from the Edison train station, Morris intends to bill the development as a transit village with shuttle service to close the gap.

    Those kinds of changes will take some time and could be further slowed by a downturn in the housing market and economy, he said.

  429. Fiddy Cents on the Dollar says:

    Rumson/Fair Haven has their own high school which would be superior to Red Bank Regional.
    Rumson’s Victorian housing stock might be better preserved than any other in the county.

    And you would still have full access to Red Bank’s downtown. Red Bank likes to call itself “Hip City” and has a Starbucks to prove it!

    With Millstone and points west, you’re right….there’s no There,there as Yogi would say.

  430. David says:

    Owning over renting isn’t about barbecues and Thanksgiving. You can’t make many modifications, and you may have to vacate at a very inconvenient time because the landlord decides to sell. Those are valid noncash concerns, not emotional ones.

    I’d be interested to see some data on the rental inventory of detached single family being “deep and undersubscribed.” In my town there are three SFH for rent on craigslist. Ridgewood has three, Summit has about four. Maybe there’s a better source for data?

  431. still_looking says:

    Cindy, 425

    link? thanks! just too lazy to google today – after chasing our 3 y/o around…

    sl

  432. Barbara says:

    #430, my son loves the minigolf at Fairways.
    We were just there yesterday and he tore it up. I guess minigolf doesn’t exactly pay as much as townhouses. I shall break it to him gently

  433. Barbara says:

    Fiddy, and BRUUUUUUUCE last I heard lives in Deal

  434. bairen says:

    #432 David,

    Look at realtor.com or new.gsmls.com (this one even gives you the taxes)

  435. Fiddy Cents on the Dollar says:

    Bruce maintains a residence across the street from Rumson Country Day School for his younger kids.

    He is building a castle out in Colts Neck. This house is huge and sits on 400 acres. I can’t wait to see it when it’s finished.

  436. syncmaster says:

    Barb #434, We’re fans too. I also like the driving range. It’s a shame. They won’t stop till P-way out-Edisons Edison. I can’t wait to see how they build on the Halper farm now that they’ve said they won’t. I still believe they will.

  437. David says:

    OK, on realtor.com I found four in my town, there more in Ridgewood and other towns but it’s very hard to filter out attached and duplicate listings.

    I think renting is a smart move these days if it fits your circumstances. But it doesn’t fit everyone’s circumstances. And thats not necessarily because they’re irrational.

    My opinion is, if you don’t have to buy now, build up the biggest down payment you can. When inflation forces the Fed’s hand and mortgage rates approach double digits you’ll be in the catbird seat.

  438. Barbara says:

    Fiddy,
    I know a carpenter who is currently working on that huge house. He has sat in on meetings with the Mrs who, according to him, is insane and keeps on ripping out previous work and spending millions in redos. He said he ran into Bruce in the garage and he was just mumbling to himself, having a beer. Poor guy, LOL.

  439. Fiddy Cents on the Dollar says:

    Ha Ha That’s a good Bruce story.

    What’s a million bucks for a well-to-do guitar player….he makes that back with one night at Giants Stadium.

    You must know what 400+ acres of prime Colts Neck land is worth even in these tough times. Buy land, they ain’t making any more of that!

  440. Veto says:

    Does anyone have access to these histories in Mercer County? I’m thinking of making offers.
    10 Ivanhoe Dr, robbinsville NJ 08691
    9 Vahlsing Way, Robbinsville NJ 08691
    Many thanks in advance.

  441. Fiddy Cents on the Dollar says:

    Buon Giorno, Veto!

    I looked up the tax records of your 2 candidates. These are actually in Washington Twp.

    10 Ivanhoe last sale was 12/1/06 for $320K…might be a homeowner in trouble. How much are they asking??

    9 vahlsing last true sale was 7/01/01 for $279K with a $1 sale on 2/2005 to take wife off the deed.

    You can look others up right here…..
    http://oprs.co.monmouth.nj.us/oprs/taxboard/HeadFrame.aspx?idx=mod

  442. Laughing all the way says:

    # Barbara Says:
    August 22nd, 2008 at 5:13 pm

    Lostinny,
    I’m going to go into a lot of detail, but we are self employed and renting was not ever an option for us. We need control of the space.
    Your point is taken, just doesn’t apply to me and a lot of people who are self employed.

    In the same boat as Barbara. Self-employed here (though wife has a job in sales) and we’re cleaning up this year. Will we clean up 3 years from now? Who knows. That’s why we’re putting down 200k and trying to keep our mortgage in the 300k-350k range when we buy in the spring (rental lease is up, so we’re def buying).

    If things go sour in 4-5 or even 10 years, I’m not above taking some regular job marketing or whatever at 60k a year if I have to. One key is that we want the wife home with the kids for the first few years.

    We’re incredibly frugal and save, save, save and balance our investments.

    As for the prez race … at this point, I’m so disgusted with both parties I’m going to ‘throw my vote away’ on a third party.

  443. Veto says:

    Ciao Prego Fiddy,
    Forgot to mention that Washington Twp just changed its name to Robbinsville, i guess you figured that out already.
    10 Ivanhoe is a 3/2, owner said he bought for 400 a year ago but i guess he meant 320.
    9 Vahlsing Way is also a 3/2 and possible short sale but they’re getting offers above what they paid in 2001, so i guess they wont be short.
    Thanks again for the info, you’re a good man.

  444. Veto says:

    Fiddy, 10 Ivanhoe is asking 400.

  445. 3b says:

    #432 David 36, thirty six Single Family Homes for rent in Ridgewood as per the njmls.Seems like a good number available to me.

  446. Laughing all the way says:

    Mrs Shore and I were looking at some lake property in NY. What amazed us whas that one can get a nice lakeside place, with acreage for less than 1/2 the price of the proverbial POS Cape in NJ. With rents in decent NJ towns being fairly reasonable (at least relative to overpriced homes), folks looking to buy “something” might do well to look at a weekend place out of the area. It is not the same as the Shore (good in some ways, not in others), but it is a reasonable form of ownership that can enhance ones standard of living. Even if prices drop, the “loss” is less because the prices are lower.

    SG – How far of a drive is it? We’d love to score a second house (well, after we buy our first) in about 2011, and we want to start making a list of areas now(ish). We don’t want more than 2 hr drive though – maybe 230, tops.

  447. Barbara says:

    Fiddy,
    This carpenter quoted me some CRAZY number for this house and land. I’m actually thinking it was 60 mil. I didn’t buy it atthe time, sounded more like Saudi money, not rock star money but maybe its true.
    I just saw Bruce at Giants last month, lots of fun but his aging fan base were a little unseemly, literally throwing up drunk in front of the kids they brought with them, ack!

  448. NJCoast says:

    Barbara-

    Bruce never lived in Deal, it was Patty that lived on Monmouth Terrace on the ocean in Deal. Her family house was torn down and replaced with a Mcmansion-by-the sea.

  449. t c m says:

    Barbara-

    “And the notion that your home has no emotional attachment, renting or buying,especially when you are raising a family within it is a little dellusional in and of itself.”

    never said that there is NO emotion involved. just explaining that often people use the argument that they buy a house because they want to start their lives – as if life only starts when you have a mortgage – or worse, if you rent, you have to live in an unsafe area with, what was it?, condom wrappers and crazies?? – come on, admit it, you didn’t think that one through – to me, that’s way too emotional.

  450. David says:

    3b,

    Yeah, that’s not too bad. Although I filtered by minimum 3 BR and got 26 listings. Add minimum 2 baths and you’re down to 18. Still a pretty respectable number. 86 3BR/2bath for sale, BTW.

    You have to compare apples to apples, though. Sure you can rent for $2200 after tax money, but how much is a comp sale? There are quite a few under $500k now. If you’ve got 20% to put down your monthly after tax payment is looking pretty good.

  451. Rich In NNJ says:

    David (432 & 436),

    No, there was a David that posted from Closter. Just curious if it was him.

    NJMLS shows 21 houses for rent in Ridgewood from $1,695 to $7,500 (big jump up from 2 at $5,000).

    PS The $7,500 one WAS asking $9,995 (6 bed, 6 1/2 bath). Also available for purchase at $2,695,000 (orig. ask $3,195,000)

  452. Barbara says:

    #455
    its as if you think that blighted urban areas do not exsist in NJ. Weird. My situation is hardly unique. Many small cities in NJ that have pockets of nicer neighborhoods have been crumbling under the pressures of this weakened economy and a wave of illegal immigration. Condom wrappers and crazies are on the milder side, I won’t blow you mind with details about other weekly events like violent crime, break-ins and vandalism. Check out the crime blogs in your local paper, my post wasn’t an over reaching analogy for my housing angst, its what I live with. Nothing emotional about it.

Comments are closed.