Fed: Northern NJ Home Prices Down 20-25%

From the Federal Reserve:

Beige Book – Second District–New York (Includes NJ)

Construction and Real Estate

Housing markets in the District have generally weakened since the last report. Virtually all contacts emphasize that there has been little activity in recent weeks and that it is too early to gauge the impact of the recent financial crisis on the market; there were frequent mentions of both buyers and sellers being in a “wait and see” mode. A contact monitoring New Jersey’s residential construction sector reports that both new home sales and new construction activity were exceptionally weak in August and that prices have continued to decline, with builders increasingly offering steep discounts.The inventory of homes on the market remains fairly high, though two contacts note that many sellers are discretionary and would take their homes off the market before reducing the asking price substantially. A number of contacts in northern New Jersey estimate that single-family home prices are down 20 to 25 percent from their peak levels; one contact notes somewhat steeper declines in prices for townhouses and condos. Housing markets on New Jersey’s Gold Coast (near Manhattan), where both multi-family development and apartment sales and prices had been showing some resilience, are reported to have weakened recently.

New York City’s co-op and condo market also showed signs of softening in the third quarter: prices were still reported to be up slightly from a year earlier, but lower than in the second quarter. Moreover, sales activity weakened noticeably, and the inventory of unsold units, though still fairly low by historical standards, was up an estimated 35 percent from a year ago. Manhattan’s rental market was steady to somewhat softer in September: on average, rents were running 4 to 5 percent lower in September than a year earlier, while the inventories of available rental units and the vacancy rate have been relatively stable.

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283 Responses to Fed: Northern NJ Home Prices Down 20-25%

  1. grim says:

    Is there anyone left standing that still thinks this is a “subprime” problem?

    From Bloomberg:

    S&P Reviews $280.1 Billion of Alt-A Mortgage Debt

    Standard & Poor’s said it may downgrade $280.1 billion of Alt-A mortgage securities, the most that the ratings company has identified in a single announcement for bonds backed by the loans.

    The debt may be cut in part because S&P has boosted estimates for losses on each foreclosure on Alt-A loans with at least five years of fixed rates to 40 percent, from 35 percent, the New York-based company said today in a statement.

    Securities downgrades may boost the capital needs of holders such as banks and insurers, and force some investors to sell debt. Rating companies have been stepping up downgrades on mortgage bonds backed by loans other than subprime or second mortgages amid tumbling home prices and soaring late payments.

    “There has been a persistent rise in the level of delinquencies among the Alt-A mortgage loans supporting these transactions,” S&P analysts Scott Davey and Ernestine Warner said in the statement.

  2. grim says:

    Sure Jon, but you forget we’re broke.

    From the Star Ledger:

    Corzine wants to invest in N.J. banks, aid troubled homeowners

    Gov. Jon Corzine today will propose a broad stimulus package designed to protect the state against the global financial crisis.

    With the state’s economic footing and his own political fortunes on the line, the Democratic governor is scheduled to address both houses of the state Legislature at noon at the Statehouse in Trenton. He is expected to speak for about 20 minutes in the Assembly chambers, which will be filled with economists, lobbyists and others eager to hear the former Goldman Sachs CEO’s plans.

    Corzine plans to propose investing $250 million from the state pension fund in community banks to spur lending to small businesses, and directing $45 million in state funding to homeowners facing foreclosure, officials said Wednesday.

    The infusion of pension funds would boost banks’ liquidity, helping local businesses to obtain the credit they need to operate, according to administration and legislative sources familiar with the governor’s proposal.

    The state Economic Development Authority would play a matchmaking role between borrowers and banks, and the deposits from the pension fund would be insured, said the officials, who requested anonymity because they were speaking in advance of the governor’s address.

    Help also would be offered to about 1,500 New Jerseyans in danger of losing their homes to foreclosure, through two initiatives that would spend $45 million from the state Housing and Mortgage Finance Agency to stabilize neighborhoods, according to Sen. Raymond Lesniak (D-Union), chairman of the Senate Economic Growth Committee.

  3. grim says:

    From Bloomberg:

    Losing Las Vegas Shows How Americans Crap Out in Housing Casino

    Leigh Sogoloff, who spends her evenings lap-dancing at Rick’s Cabaret Vegas on Procyon Street, says she’s making half her income of a year ago.

    “You don’t shop, you don’t buy stuff you can’t afford,” the 36-year-old Sogoloff said between dances at the Las Vegas club. She has postponed buying a house and is reading Deepak Chopra for advice on increasing her wealth. “I know how to save money. I’m not a dumb stripper.”

    The city that sold Americans on the dream they could lay down a small wager and walk away millionaires is reeling from speculation in the housing market that helped bring down Wall Street. The quick profits that so easily spread from Nevada to Florida, just as casino gambling has migrated to 37 states, are now proving what happens in Vegas rarely stays in Vegas.

  4. grim says:

    From the Star Ledger:

    N.J. job losses reflect Street’s crisis

    New Jersey lost another 3,900 jobs last month, bringing the total number of jobs lost so far this year to more than 20,000, the state Department of Labor reported yesterday.

    The job losses in September included 1,900 in the financial services sector, reflecting for the first time New Jersey’s fallout from the collapse of Wall Street. Despite the job losses, the state’s unemployment rate dipped slightly, dropping to 5.8 percent, from 5.9 percent.

    “Today’s employment report underscores that New Jersey’s employment situation, like the nation’s, continues to be negatively impacted by weakness in the financial, credit and housing markets,” said labor commissioner David Socolow.

    For the first three quarters of the year, New Jersey’s payrolls are down 21,100 jobs through September, closely mirroring the national trend, the Labor Department said.

    “Financial services jobs are clearly the biggest drag right now,” said Sean Maher, an analyst who follows New Jersey at Moody’s Economy.com, a consulting firm in West Chester, Pa. “They have already contracted pretty sharply over the past year, and I think those losses are going to continue given the recent turmoil in the financial markets.”

    Moody’s Economy.com estimates up to 100,000 jobs in financial services will be lost in the New York area, up from the 60,000 loss projected just a month ago. Household income losses will be even more severe, as the industry accounts for about 10 percent of employment but 25 percent of income in the New York area, the research firm said.

  5. sas says:

    wait a minute?

    I thought real estate always goes up?
    Better buy now or be priced out forever?
    Those Wall St. bonuses?

    ha ha,
    someone has bad gas.

    SAS

  6. sas says:

    Lemon brothers..
    ha ha ha

    I’m still laughing at you….you saps!

    SAS

  7. sas says:

    ok, I better put my tie on and goto work.

    SAS

  8. grim says:

    From the NY Times:

    Home Prices Seem Far From Bottom

    The American housing market, where the global economic crisis began, is far from hitting bottom.

    Home prices across much of the country are likely to fall through late 2009, economists say, and in some markets the trend could last even longer depending on the severity of the anticipated recession.

    “The No. 1 thing that drives housing values is incomes,” said Todd Sinai, an associate professor of real estate at the Wharton School at the University of Pennsylvania. “When incomes fall, demand for housing falls.”

    In New York and other cities that rely heavily on the financial sector, economists expect that job losses will increase and that pay heavily tied to year-end bonuses will decline significantly.

    One reliable proxy of housing values — the ratio of home prices to rents — indicates that in many cities prices are still too high relative to historical norms.

    The current housing downturn is much more national in scope and severe than any other in the postwar period, partly because of the proliferation of risky lending practices. Today, foreclosures are running ahead of the downturn in the economy, a reversal of previous housing slumps.

    “We are in uncharted waters,” said Brian A. Bethune, an economist at Global Insight, a research firm.

  9. Clotpoll says:

    grim (2)-

    Don’t worry, Jon…you’re gonna be Klink’s replacement:

    “With the state’s economic footing and his own political fortunes on the line, the Democratic governor is scheduled to address both houses of the state Legislature at noon at the Statehouse in Trenton.”

  10. SG says:

    NJ mapping $52M foreclosure response plans

    State officials sought and got advice from housing and community development groups Tuesday on how New Jersey should distribute $51.5 million in federal emergency funds to help neighborhoods shellshocked by the foreclosure crisis.
    Advertisement

    The state Department of Community Affairs must meet a series of tight deadlines in order to get the money. It has to submit a final plan to the federal government by the end of November, decide which projects to fund by late winter, and have all the money used, or obligated, within 18 months.

    “The program is very specific. It is not to prevent foreclosures, but deal with the negative effects of foreclosure,” said Community Affairs Commissioner Joseph Doria Jr.

  11. SG says:

    N.J. job losses reflect Street’s crisis

    Report shows financial sector gets hit hard, but state still fares better than rest of country
    Thursday, October 16, 2008
    BY SAM ALI AND DUNSTAN MCNICHOL
    Star-Ledger Staff

    New Jersey lost another 3,900 jobs last month, bringing the total number of jobs lost so far this year to more than 20,000, the state Department of Labor reported yesterday.

    The job losses in September included 1,900 in the financial services sector, reflecting for the first time New Jersey’s fallout from the collapse of Wall Street. Despite the job losses, the state’s unemployment rate dipped slightly, dropping to 5.8 percent, from 5.9 percent.

    “Today’s employment report underscores that New Jersey’s employment situation, like the nation’s, continues to be negatively impacted by weakness in the financial, credit and housing markets,” said labor commissioner David Socolow.

  12. SG says:

    NJ Housing market remains weak

    By ED MOORHOUSE
    Burlington County Times

    A real estate expert delivered a stark assessment of the New Jersey housing market last week to a group of business leaders from Burlington County.

    The badly battered housing market is expected to bottom out over the next two years, he said, but will not make a full recovery before 2015.

    “It appears that we will hit bottom on this housing market sometime between the second quarter next year and the second quarter in 2010,” Jeffrey Otteau told more than 200 people attending the annual Burlington County Chamber of Commerce Committee of 50 dinner meeting Thursday night at the Merion in Cinnaminson.

  13. bairen says:

    I’m seeing preforeclosure and short sales being listed in towns like Summit and Warren.

    I’m still seeing some fantasy at the peak pricing too, but I do see a lot of homes being listed for 20% or more less then comps in Spring of 2007.

  14. SG says:

    Linens ’n Things throws in the towel

    HACKENSACK, N.J. — Linens ’n Things, the Clifton, N.J.-based housewares retailer, has run out of options and is expected to get the approval in Bankruptcy Court on Wednesday to immediately begin going-out-of-business sales.

    Linens on Tuesday canceled a planned auction of the company, saying it had received no qualified bids other than a $475 million offer from a consortium of liquidation companies. A hearing in U.S. Bankruptcy Court in Wilmington, Del., to approve that bid is scheduled for Wednesday afternoon.

    If the bid is approved, liquidation sales could begin as early as Thursday, said a spokesman for Linens.

    The going-out-of-business sales at the Linens stores will hurt sales at rivals such as Bed Bath & Beyond, Target and Kohl’s in the near term, but in the long term those retailers will benefit, said Joseph Feldman, a retail analyst with the Telsey Advisory Group in New York.

  15. bairen says:

    #14 “comps” should be “list prices”

  16. SG says:

    http://leadernewspapers.net/modules.php?name=News&file=article&sid=8503

    Now, towns are facing a looming Dec. 31 deadline to submit plans on how they plan to address their affordable housing constitutional obligations.

    This is the rare argument where both the local towns and the Department of Community Affairs, which manages COAH, are both right. Affordable housing for low- and moderate-income households is an important goal and crucial commitment. In today’s struggling economy, salaries are dipping while cost of living is skyrocketing, and the government must respect those on the lower rungs.

    However, to expect the already jam-packed local towns of Southern Bergen County to squeeze even more room into their perimeters is a bit unrealistic. With the ongoing development of the Meadowlands Xanadu complex and the new stadium for the New York Jets and Giants, the local area will have to compensate for that construction.

    If East Rutherford builds its police station, affordable housing must be taken into consideration, and for a small borough, that can be difficult.

    As reported in July, local municipalities will have to build the following to meet COAH regulations: North Arlington — 23 units; Carlstadt — 72 units; East Rutherford — 120 units; Lyndhurst — 128 units; Wood-Ridge — 171 units; and Rutherford — 87 units.

  17. sean says:

    Joe the Plumber said this morning on a CBS news interview when he asked O a tough question he got a tap dance almost as good as Sammy Davis Junior.

  18. HEHEHE says:

    Merrill 3Q loss widens on mortgage-related charges

    NEW YORK – Merrill Lynch says it third-quarter loss widened as it took more than $12 billion in charges from the sale of mortgage-related investments and fallout from the continued credit crisis.

    http://news.yahoo.com/s/ap/20081016/ap_on_bi_ge/earns_merrill_lynch

    Yeah they are worth $31 a share.

  19. Aardvark says:

    Good Morning! I need a fix – does anyone have a few comp killers to post… ?

  20. Cindy says:

    http://www.washingtonpost.com/wp-dyn/content/article/2008/10/14/AR2008101403343.html?sid=ST2008101403344&s_pos=

    “What Went Wrong” How did the world’s markets come to the brink of collapse? Some say regulators failed. Others claim deregulation left them handcuffed. Who’s right? Both are. This is the story of how Washington didn’t catch up to Wall Street.”

  21. stan says:

    Re#3-

    36 year old stripper in vegas? Cue John, stage left

  22. grim says:

    From MarketWatch:

    15-year fixed mortgage 6.40% vs 5.95% last week: Bankrate

    30-year fixed mortgage up over half point to 6.74%: Bankrate

    Mortgage rates post biggest increase in 21 years: Bankrate

  23. Cindy says:

    http://www.cq.com/document/display.do?dockey=/cqonline/prod/data/docs/html/news/110/news110-000002974781.html@allnews&metapub=CQ-NEWS&binderName=latest-news-binder&seqNum=5

    “The Commodity Futures Modernization Act of 2000 (PL106-554) which governs trading in energy and agricultural futures, left credit default swaps unregulated.”

  24. Stu says:

    When I was on the cruise last week, a fellow investor suggested shorting transports due to the lack of credit required to ship cargo. I said he was crazy as the price of oil will help compensate for the problematic credit issues. In retrospect, it was probably not the worst call. How is everyone doing on their SRS?

  25. Let’s see here, what’s in the news this morning…Citi loses another $3bil, well nothing unexpected there I suppose.TED spread is still sky high, although down a little. Probably going to take a bit more to see any movement on that.
    Gordon Brown’s calling for a return to Bretton-Woods, that’s encouraging.
    Ahh, here we go. Harley-Davidson 3Q profit drops. Now there’s some good news! If I get one thing out of this crisis please let it be the end of every midlife crisis suffering, unimaginative, suburban a-hole buying a hog. Please!

  26. NJGator says:

    Hard to feel bad for Joe the Plumber. As a plumber, in the future his is one of the few American jobs that can’t really be outsourced. He’s sitting in a pretty cushy position, no matter how much he pays in taxes.

  27. BC Bob says:

    TAF, TSLF, PDCF, CFFF, etc.. Have any of the captains of the ship taken the pulse of the passengers? The enablers are providing the pushers with a vast array of supply. Problem is the drug addicts have overdosed. You can give the banks all you want. You can’t force them to lend nor consumers to borrow. When will one of the masters step up to the plate and address the demand side of the equation?

  28. Yikes says:

    damn. rates are jacking up that quickly? fudge.

    by february, they might be 10%. dammit.

  29. Stu says:

    * Citigroup posts another loss amid credit woes- AP
    * European markets drop after Nikkei slump- AP
    * Fear and loathing over economy spreads- AP
    * Hershey’s 3Q profit doubles on lower costs- AP
    * Continental Airlines posts 3Q loss on fuel costs- AP
    * Insurer UnitedHealth reports 3Q profit drop- AP
    * Nokia 3Q profit falls 30 percent, revenue slips- AP
    * Merrill 3Q loss widens on mortgage-related charges- AP
    * Oil falls to 14-month low on bad US economic data- AP

    Well, at least the recession has not slowed the demand for chocolate milk and candy bars.

  30. grim says:

    Crunch finally starting to hit the mortgage market?

    From MarketWatch:

    ankrate: Fixed rates post biggest weekly jump in 20 years

    Fixed mortgage rates posted the biggest one-week jump since April 1987, according to Bankrate Inc.’s survey released Thursday. The average conforming 30-year fixed mortgage rate jumped to 6.74% from 6.20% a week ago, while the average 15-year fixed mortgage rate rose to 6.40% from 5.95% a week earlier. Adjustable mortgage rates also increased, with the average 5/1 ARM soaring to 6.61% from 6.21%.

  31. AntiTrump says:

    Saddled With Debt, Some Decide to Torch Vehicles

    http://www.washingtonpost.com/wp-dyn/content/article/2008/10/12/AR2008101202255.html

    Are homes next?

  32. Stu says:

    yikes,

    “by february, they might be 10%. dammit.”

    You can always refinance when the rates drop. Consider it a reverse option arm where after three years, the rates reset downward.

  33. NJGator says:

    Riding on NJT this morning, my train stopped fo a few minutes directly in front of the Harrison Plaza Condominiums (lovely location right adjacent to the elevated NEC tracks, but not walking distance to Penn, but likely to PATH). Banner still proudly proclaims ‘100% Financing Available’.

  34. grim says:

    ‘100% Financing Available’.

    You missed the disclaimer below..

    “* To those who don’t need it.”

  35. SG says:

    Commentary: Paulson’s pick doesn’t instill confidence

    If Kashkari is on the job, does anyone think Treasury will be driving a hard bargain with Goldman on its mortgage assets? And while we’re on the subject of Goldman, under what criteria did Goldman and Morgan Stanley qualify as two of the nation’s nine strongest financial institutions? Just wondering.

    But Kashkari’s record looks more like a failure to launch. He’s advised Paulson on security and other issues at the Treasury Department since 2006, which would have been a good time to start thinking about the consequences of the housing market bubble bursting. It does not take an egghead to connect the dots and conclude that mortgage defaults would have an impact on the derivatives built from them.
    Instead, Kashkari urged U.S. banks to start a covered-bond market like they had in Europe. They probably would have, had they not been edging toward collapse.

  36. John says:

    Pretty much we get wild swings near bottom, big deal, another 1,000 down another 500 up maybe we hit 7K or even 6K who knows who cares. 50% of Americans don’t own stock and a large part of the others have it in retirement accounts they don’t need to touch right now. In regards to real estate and I was reading paper today and someone said people who soley purchased real estate as a method to make money must be punished. A home is the cornerstone of the nuclear family to put down roots for long term. It is not a speculative investment to quickly become a millionaire, those who bet the farm to leverage out to max to afford a home they really could not afford should be punished for their reckless behavior.

    Wealth comes in many forms, we have 401Ks, cash pensions, cars, household goods, savings accounts, FDIC CDs, Muni bonds, Corp Bonds and Stocks.

    Real Estate and Stocks are long term investments 10+ years a properly diversified person can draw down savings and let CDs mature in a pinch and spend interest income off the illiquid CDs.

    If a fool cashed out his 401K and took all his cash and bought a million dollar home with 100K down at a leverage of 10 to 1 that relied on a dual income hoping it would quickly shoot up in value loses his home, well he should lose his home. With a 100K downpayment he should have bought a 500K home at most. The same fools preached NEVER buy a car, we lease as we need the cash flow to invest in stocks and RE. Well those fools have two leased cars in driveway and no job, plus that 800 a month on the lease could have been used to pay down principal before their 3/27 flipped.

    One of these fools I tried to convince to buy a CPO Mercedes (used) instead of leasing a new one for three years as payment is the same and god forbid if at end of three years you are unemployed at least you will own the CPO at the end or you could sell it for a few bucks. I got attacked when I get a new one I want a new one I don’t want to drive around in someone elses used car, hey lady you don’t own a leased car, showing off a leased car is like renting a caddie from enterprise for a wedding and showing it off. Very low brow stuff.

  37. Stu says:

    NYT:

    Next Victim of Turmoil: Your Salary

    http://finance.yahoo.com/career-work/article/105959/Next-Victim-of-Turmoil-Your-Salary

    “The bigger factors are probably some combination of the following: new technologies, global trade, slowing gains in educational attainment, the rise of single-parent families, the continued decline in unionization and the sharp increase in inequality, which has concentrated income gains at the top of the ladder. Your political views will probably determine the relative weights that you assign to those causes. Economic research hasn’t yet definitively answered the question.”

  38. Cindy says:

    http://www.washingtonpost.com/wp-srv/business/risk/players.html

    “Key players in the battle over regulating derivatives”

    “The size and nature of the market create a potential for systemic risk to the nation’s financial markets that require vigilance by federal regulatory authorities.”

    Brooksley E. Born; Chair, Commodity Future Trading Commission, 1996-1999

    These credit default swaps have my panties in a bunch. They could have done something – and just flat didn’t.

  39. BC Bob says:

    “50% of Americans don’t own stock and a large part of the others have it in retirement accounts they don’t need to touch right now.”

    John,

    Back to this rant?

    Which side of the bed today? On Monday, we had hit the low, everybody you knew put 100% into the market. Today only 50% of the population own stock. That’s fantastic. Are you righty one day, lefty another? Better question? What % of the population have a job/wish they had a job? Most troubling, 70% of the population “own” RE. How’s that asset been performing lately?

  40. NJGator says:

    35 Grim – Forgot to look for that! When Stu and I were in LA, we had dinner with friends of his that used to have credit so bad that they would get secured credit cards and the bank would shut them down. They just bought a loft condo in downtown LA this year. They found a bank to finance them with no money down. I kept asking Stu to find out who held the mortgage so we could short them.

  41. Tom3000252001 says:

    Jobless claims down. Hiring back on Wall St…Check this out folks!!!

    http://www.metacafe.com/watch/1189405/job_market_2009/

  42. John says:

    Brooklyn Home Prices Drop as Banks Cut Jobs and Curb Lending

    By Kathleen M. Howley

    Oct. 16 (Bloomberg) — Brooklyn home prices tumbled 5.6 percent in the third quarter as Wall Street job losses reduced demand for real estate in the New York borough across the East River from lower Manhattan.

    The median sale price for a home in Brooklyn fell to $510,000 from $540,000 a year earlier, according to a report issued today by New York-based real estate appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. The number of sales tumbled 38 percent to 2,298.

  43. bklynhawk says:

    renter/44-
    No, and tell them to throw in the Grand Piano!

  44. Clotpoll says:

    grim (24)-

    Mortgage ops in my office have ground to a halt. Rates going the wrong way…fast. Pipeline filling up.

    We just keep shorting REITs and loading up on SRS. For some of those guys, it’s the only $$$ they’re making.

  45. yome says:

    #18 $250,000 is taxable income,no? (not gross income)That is after all the tax deductions.

  46. Clotpoll says:

    stu (26)-

    My current SRS play is to day-trade it. Jump in when things look down, then punch out in the last 5 minutes before the closing bell.

  47. Clotpoll says:

    BC (28)-

    You wonder how the British banks can meet the mandate of mortgage lending at their 2007 pace.

    Sounds like a sure-fire way to put cheap money in the worst possible hands.

    Of course, somehow or another, this practice will re-ignite here, too.

  48. Clotpoll says:

    SG (36)-

    Covered bonds?

    BWAHAHAHAHAHAHHAHAHAHAH!!!!!!!

  49. kettle1 says:

    dug through some of the FED and Treasury data last night. Interesting stuff….

    JPM-Chase currently hold 90 trillion in derivatives. The top 25 banks hold 180 trillion in derivatives.

    Derivatives (Billions)

    08Q2
    Futures & Forwards 23,582
    Swaps 114,170
    Options 28,914
    Credit Derivatives 15,469
    TOTAL 182,135

    http://tinyurl.com/45mbgr

  50. Clotpoll says:

    BC (40)-

    Can you imagine this guy as your firm’s bean counter?

  51. Stu says:

    renter (44),

    Looks like flood zone potential. Check the FEMA maps.

    Millstone River is a flooder. I just don’t know where.

  52. syncmaster says:

    From MyCentralJersey.com:

    SAYREVILLE —The Sayreville Economic and Redevelopment Agency (SERA) closed on the sale of the largest section of the former National Lead site Wednesday, and repaid to Middlesex County $32 million of the approximately $42 million it borrowed.

    The proposed development, which will take place over a period of approximately 10 years, will include a 2.5-plus mile public access waterfront promenade, marina, new firehouse and EMS facility with equipment, community theater, municipal building annex and more than $18 million for the Board of Education should any additional school construction be required.

    In addition, 2.6 million square feet of retail space, 600,000 square feet of office space, up to five hotels and up to 2,000 age-targeted residential units will be constructed on the site.

  53. syncmaster says:

    … one contact notes somewhat steeper declines in prices for townhouses and condos.

    I concur. Townhouses in my P-way neighborhood which used to go for 360-380 in 2005 are today down to 275 (latest sale).

  54. Stu says:

    Clot:

    Most people do daytrade SRS.

    I’m not sure what you call what I do, but I have a large position since last August. I have done a little trading around that position since then, both times making > 75% gains. Have always bought between 80-100 and sold between 135 and 155. It does swing wildly both up and down, but be very careful. It would not surprise me if Paulson feels commercial REITS are the next group to bailout. When the shorting ban on financials occurred, SRS hit 62 I think. My paper losses were much larger than I was comfortable with, especially considering that I had potential long term gains of 80% that rapidly became long term losses in the order of 25%.

    Day trading is a tough game. Saw too many people get hammered in the tech bubble burst to believe it to be an effective way to invest. I’ll stick with my strategy of investing in long-term economic trends. Add Linens and Things to the next large block of unrented commercial real estate. Consumer discretionary is gonna get hammered, we just have to wait a while for it to show up on the REIT balance sheets. It may take a while though, as commercial leases are often 5 years or more. Of course, once liquidation occurs, the rent will stop being paid. Expect a lot of REITs to stop being REITs as their dividend sources dry up. Good luck and enjoy the ride.

  55. kettle1 says:

    In addition, 2.6 million square feet of retail space, 600,000 square feet of office space,

    NJ has the demand to actually utilize this??? Who is going to be doing the shopping, those crazy cash heavy europeans?

  56. renter says:

    Stu,

    Thank you!

  57. Stu says:

    Guardian.UK:

    Paulson tries again
    Unlike the UK plan, the revamped American bail-out puts banks first and taxpayers second

    http://www.guardian.co.uk/commentisfree/2008/oct/16/useconomy-usa

    “For all the show of toughness, the details suggest the US taxpayer got a raw deal. There is no comparison with the terms that Warren Buffett secured when he provided capital to Goldman Sachs. Buffett got a warrant – the right to buy in the future at a price that was even below the depressed price at the time. Paulson got for the US a warrant to buy in the future – at whatever the prevailing price at the time. The whole point of the warrant is so we participate in some of the upside, as the economy recovers from the crisis, and as the financial system starts to work.”

  58. Clotpoll says:

    stu (56)-

    Klink is not a real estate guy, nor- like most bankers- is he a supporter. Keep in mind that the banking industry has wanted for years to run roughshod over the Commerce Clause and enter RE brokerage of all types. Not surprisingly (although it’s never mentioned publicly), Shrub has always supported this idea.

    I think REITs provide an excellent scapegoat for Klink and fit into his general game plan of blaming RE every time something goes awry in his diabolical scheme to impoverish the US forever. I foresee no imminent bailout for the REIT sector, and the finance/mortgage elements of SRS have been dead men walking for months.

    I can even imagine that Klink feels like hastening the collapse of the REIT sector might allow banks to get into the game…giving his cronies a new growth opportunity once the worst of the current troubles is behind us.

    I think it’s a sound play on any sector to ask the question, “what’s in it for Klink and his buddies?”. If there’s future gain for these crooks by letting something die, Klink will let it die. RE fits right into that worldview.

  59. Stu says:

    For those not aware, rivers, railroad tracks, highways and power lines are all bad news when purchasing non-section 8 housing.

  60. Victorian says:

    Which hedge fund blew up today?
    Check out the action on Gold.

  61. Cindy says:

    Can we clain “The jig is up?”
    Put a 3 month hold on Credit default swaps?
    Do a Bretton Woods deal?
    Have everyone show their hand – decide who stays -who goes?
    Sort of an international effort at transparency?

  62. Hobocondo says:

    There is a condo at Maxwell Place that has been on the market for a few months at least.

    In August, it was priced at $869K.

    In September, the price was increased to $879K.

    What would be the logic in that? The owner is also a realtor, by the way.

  63. Clotpoll says:

    vodka (58)-

    It’s hard to fill an 8-unit strip mall in NJ right now. Even the ones at full occupancy, you can bet 2-3 tenants are in arrears.

    These giant empty office & warehouse shells will have trees growing inside them pretty soon.

  64. Diane says:

    Is Joe the Plumber making over 250K a year?

  65. Clotpoll says:

    Cindy (64)-

    Har! These people will lie and steal until the bitter end.

  66. Hard Place says:

    JPM-Chase currently hold 90 trillion in derivatives. The top 25 banks hold 180 trillion in derivatives.

    Yes from an absolute perspective that is a scary number. I took a look at your link and I think the more reasonable figure is to look at are the columns to the right, the bilateral netted current exposure, potential future exposure and total credit exposure. Bilateral netted, sounds like the current mark to market of their portfolio. Potential future exposure is probably a statistical measure of exposure if trades move in the direction creating a loss. Not sure what to make of credit exposure, yet without reading the details.

    Where exactly did you find the data on the Fed & Treasury website?

  67. Hard Place says:

    Above is for kettle1’s post 51.

  68. Cindy says:

    (68) Clot – I know – forget trying to solve problems – shut up and go to work –

    Will do-
    Have a great day.
    Man – what a mess….

  69. Philly Fed reporting:
    Employ Index @ -18 vs -0.9 Sep
    Prices paid 7.2 vs 31.5 Sep
    New Orders -30 vs 5.6 Sep
    Business Conditions -37.5 vs 3.8 Sep
    Chances of Phillies choking…..

  70. Stu says:

    “In August, it was priced at $869K.

    In September, the price was increased to $879K.”

    Realtor owns it? Perhaps their arm is adjusting upward? As well as their middle finger.

  71. Hard Place says:

    There is a condo at Maxwell Place that has been on the market for a few months at least.

    In August, it was priced at $869K.

    In September, the price was increased to $879K.

    That’s for price appreciation. 1.15% a month or about 18.7% annualized. Didn’t you know real estate prices always goes up?

  72. Stu says:

    Philly sports teams and the post-season spend time together once every 25 years. They are due.

    It’s funny because all of their teams tend to finish near the top with regularity.

  73. John says:

    Of the 70% of people who own real estate people who bought before 1-1-00 this is just a paper loss, people who plan to live in homes till they die this is meaningless, people who bought in 2000-2008 who sold another home for a big gain this is also no big deal and young people who bought modest first homes or coops they can afford this is no big deal.

    It is a big deal for a first time home-owner who bought in 2000-2008 and leveraged themselves to the max, it is a big deal for people who used exotic IO and Neg Am loans with nothing down, it is a big deal for soon to be retirees who did not save for retirement and planned on selling mcmansion at huge profit, it is a big deal for people who cashed out all their equity on adjustable rate loans.

    Falling RE is a great thing for people renting who avoided the bubble, families who want to trade up as their trade up house falls 2 dollars for ever one dollar their starter house falls and it is a great thing for a Bergan or Nassau County parent with kids between 18-26 who live at home and future plans were to move down south or out west as they could not afford a home of their own in Bergan or Nassau County. If a parent has four kids who in the next few years all plan on buying a house every dollar drop in the parents home value saves his kids four dollars.

    So it seems to me falling real estate effects the most irresponsible class of people. By propping up real estate values we just lock large families in their pos starter capes and price out our children and grandchildren from buying a home near their grandparents.

    Oh well I guess so zero down no income no problem Jose the gardner can stay in his toll brothers mcmansion we might as well subsidize irresponsible homeowners, I guess our grandchildren can move to Jose’s former mud hut in Mexico one day if they have too.

    BC Bob Says:
    October 16th, 2008 at 8:57 am
    “50% of Americans don’t own stock and a large part of the others have it in retirement accounts they don’t need to touch right now.”

    John,

    Back to this rant?

    Which side of the bed today? On Monday, we had hit the low, everybody you knew put 100% into the market. Today only 50% of the population own stock. That’s fantastic. Are you righty one day, lefty another? Better question? What % of the population have a job/wish they had a job? Most troubling, 70% of the population “own” RE. How’s that asset been performing lately?

  74. #77 – This is a massive deal for everyone who was using MEW as a substitute for income gains, i.e. most of the middle class. Stop looking at purchases and look at what was happening in refi’s.

  75. grim says:

    From Bloomberg:

    U.S. Industrial Production Fell 2.8%, Most Since 1974

    Industrial production in the U.S. fell in September by the most in almost 34 years as hurricanes and an aircraft strike combined with the credit crunch to weaken manufacturing.

    The 2.8 percent decrease in production at factories, mines and utilities exceeded forecasts and followed a revised 1 percent decrease in August, the Federal Reserve said today. For the third quarter, output fell at an annual rate of 6 percent, the biggest decline since 1991.

    Last month’s decline in output was the biggest since December 1974. Industrial production was forecast to fall 0.8 percent after a previously reported 1.1 percent drop, according to the median estimate of 73 economists surveyed by Bloomberg News. Projections ranged from a gain of 0.1 percent to a drop of 2.8 percent.

    Factory output, which accounts for about four-fifths of industrial production, fell 2.6 percent after a 0.9 percent decrease the prior month.

  76. #79 – MEW = Mortgage Equity Withdrawal, or cash-out refinancing. Sorry for my lack of clarity.

  77. grim says:

    Keep in mind Philly Fed covers portions of Central and Southern NJ.

  78. SG says:

    FDIC Head Bair Rips Bailout: Where’s Love For Consumers?

    “Why there’s been such a political focus on making sure we’re not unduly helping borrowers but then we’re providing all this massive assistance at the institutional level, I don’t understand it,” [Bair] said. “It’s been a frustration for me.”

  79. grim says:

    From MarketWatch:

    Philly manufacturing activity deteriorates in Oct.

    Conditions in the manufacturing sector in the Philadelphia region deteriorated significantly in October, the Federal Reserve Bank of Philadelphia reported Thursday. The Philly Fed diffusion index fell to negative 37.5 in October from positive 3.8 in September. Readings below zero indicate contraction. The decline was much larger than expected. Economists were expecting the index to drop to negative 5.0.

  80. Shore Guy says:

    “Stu Says:
    October 16th, 2008 at 8:46 am
    NYT:”

    Stu,

    I have been a regular reader of the Times since I was in high school. That said, it strikes me that the paper is becoming less a paper of record and more like Pravda.

    As for the 36 year old stripper, I have never had a lap dance, but, were I inclined to do so, I suspect that I would be looking for such a form of entertainment from one with fewer years in the business. Experience must count for something but…. One would hope that she has a plan for exiting the business in a few years. There is just something unsettling about the thought of a lap dancer working long enough to collect social security.

  81. skep-tic says:

    this comparison to the Buffet deal is misguided. Buffet has a totally different motivation than the government.

  82. RayC says:

    Toshiro

    Now that homeowners are underwater you can change that to MEOW – Mortgage Equity Over Withdrawal. And I’m a dog person.

  83. skep-tic says:

    “Keep in mind that the banking industry has wanted for years to run roughshod over the Commerce Clause and enter RE brokerage of all types.”

    what does the commerce clause have to do with it?

  84. #85 – I suspect that I would be looking for such a form of entertainment from one with fewer years in the business

    There are few things sadder than old strippers.

  85. skep-tic says:

    #61

    clot– I’m sorry, that is just a completely bizarre and totally unsubstantiated post.

  86. Shore Guy says:

    “The Philly Fed diffusion index fell to negative 37.5 in October from positive 3.8 in September”

    JUst wait and see what pressure THAT puts on household income in the southern portion of NJ. Inasmuch as manufacturing tends to pay much better wages than retail and service jobs, one suspects there will be outsized belt tightening and a concurent spending reduction as we enter the holiday buying season. Lump of coal for JC Penny and such stores, and gain for Target perhaps?

    As to your query earlier, Grim, about whether anyone still views this as a subprime issue. I suspect that that perception is still widely held on Capitol Hill and in statehouses around the country. Folks so want this to be over so they can get on with life. As a society, we have such short-term attention spans that anything that cant be addressed within a week or two-week period seems beyond our abilities.

  87. Stu says:

    “There are few things sadder than old strippers.”

    Unless of course, you are into that kind of thing. :P

  88. John says:

    At her age she should start working the brothels.

    Stu Says:
    October 16th, 2008 at 10:27 am
    “There are few things sadder than old strippers.”

    Unless of course, you are into that kind of thing. :P

  89. Shore Guy says:

    Okay, Stu, since you have had your finger on the pulse of the Market reently, 79XX before the close tomorrow?

  90. Pat says:

    Shore, the Vegas strip caters to an older client. How many 50-60 year old guys feel comfortable watching an 18 girl who looks like their grandkids?

    http://www.usatoday.com/life/people/2008-07-13-tempest-storm_N.htm?loc=interstitialskip

  91. grim says:

    From the Miami Herald:

    To cut losses, homeowners consider default

    Among the frustrated is Amy Kaye, 74, who described herself as ”ridiculously” upside down on the one-bedroom condo conversion she bought in 2005 near The Falls in South Miami-Dade for about $160,000. Kaye said she was denied help from Countrywide because she was paying on time.

    ”Ultimately, I’m going to have to game the system and stop making payments because the only relief applies to people who are not paying,” Kaye said. “How can you honestly blame [people for doing it] when they are in a situation where their property is outrageously overpriced?”

    Two years ago, Justin Miller paid $600,000 for a Fort Lauderdale condo, which he estimates has slipped $100,000 to $150,000 since, based on recent sales in his building.

    ”It’s going to take 10 years to recover that money,” said Miller, 28, a mortgage broker. “The purpose of buying a home is tax deductions and building equity, and when you are $100,000 behind you’re throwing that money in the toilet.”

  92. All Hype says:

    Dow down 175. Someone go get the PPT out of bed. We are heading for another 500 point down day.

  93. Shore Guy says:

    ouch, last time I saw the Dow was up, now it is down 200. Maybe we see 79xx today. More good news for lower housing prices.

  94. 3b says:

    #76 John: What is your point? We are all of the belief that falling real estate prices is actually a good thing int his environment, as the the gains were not sustainable, and have created far more damage than good.

  95. Shore Guy says:

    “said Miller, 28, a mortgage broker. ‘The purpose of buying a home is tax deductions and building equity, and when you are $100,000 behind you’re throwing that money in the toilet.'”

    Boy, am I stupid. I thought Mrs. Shore and I bought a home to live in, to rear children, and to provide a location for family events. I knew we had it all backwards, that is probably why we are not upside down. Stupid, Stupid us.

  96. kettle1 says:

    Hard place

    http://www.occ.treas.gov/ftp/deriv/dq298.pdf

    My point was more towards the general magnitude the situation. Ultimately only a small amount of the derivatives may go bad, such as mortgages which are something on the order of 2-3% default i believe. These banks are leveraged to astronomical heights. I am not suggesting that JPMChase is going to loose 100 trillion, But the risk associated with these instruments was underestimated. No one may no the final outcome, but the higher you fly, the further you have to fall.

    When your total derivatives exposure is 66 times your assets, and you credit exposure is 400% of your assets, its concerning.

    have i misinterpreted something?

  97. Victorian says:

    “Stupid, Stupid us.”
    Shore –
    Have you made your daily donation to the bailout fund yet?
    The number of tellers are increasing.

  98. Shore Guy says:

    Grim, Barin, et al.,

    Do you have any historic data on home prices/demand for SFH relative to overall indebtedness, or, in recent years, to market indices?

  99. Pat says:

    Can we discuss the following analytical dilemma?

    Let’s say that for at least the last four years, a citizen-thinker has believed that there was a bubble in real estate.

    It follows that the person expected a correction with all the accompanying financial distress. The person believed that eventually, taxes would increase, and advised financial planning for that eventuality, if others also believed in a bubble.

    Therefore, the citizen-thinker obviously believed that decision makers were incompetent as proven by the fact that those decision makers did not take action to stop or unwind the bubble.

    Some of those same decision makers are implementing banking changes. The citizen-thinker currently believes that the decision-makers are best suited to steer the banking system through the impending changes.

    Does this series of beliefs involve contradictions, failure of logic, and/or a statement of reversal of prior beliefs, or is there no relationship between past performance and current ability?

  100. Shore Guy says:

    Victorian,

    Yesterday was 10-15, the day we always file our final tax returns for the prior tax year. We have made many families’ contributions to the various bailouts, and stimulus packages going to the people who planned poorly or made bad bets.

  101. Shore Guy says:

    “the higher you fly, the further you have to fall.”
    Or, if one hits escape velocity, one goes into orbit. Perhaps that is what they hoped for, reaching heights in perpetuity. (There oughta be a law.)

  102. Victorian says:

    Pat (103)-

    Maybe we all stopped whining, we will not see contradictions.

  103. Victorian says:

    Maybe “if”. Damn, this recession is exacting a toll on my grammar.

  104. Yikes says:

    where’s the rally?

    down 222??

  105. skep-tic says:

    #103

    “Let’s say that for at least the last four years, a citizen-thinker has believed that there was a bubble in real estate.”

    OK

    “It follows that the person expected a correction with all the accompanying financial distress. The person believed that eventually, taxes would increase, and advised financial planning for that eventuality, if others also believed in a bubble.”

    DISAGREE WITH CONCLUSION. IT IS A QUESTION OF MAGNITUDE OF FALLOUT

    “Therefore, the citizen-thinker obviously believed that decision makers were incompetent as proven by the fact that those decision makers did not take action to stop or unwind the bubble.”

    AGAIN, CONCLUSION DOES NOT FOLLOW. BUBBLES EMERGE IN MARKET ECONOMIES FROM TIME TO TIME. WHETHER THERE IS A MEANS TO INTERVENE IN THE MIDST OF A BUBBLE IS DEBATEABLE.

    “Some of those same decision makers are implementing banking changes. The citizen-thinker currently believes that the decision-makers are best suited to steer the banking system through the impending changes.”

    THERE IS DIFFERENCE BETWEEN EX ANTE AND EX POST ACTIONS. POLICY MAKERS ARE CURRENTLY DEALING WITH GENUINE CRISIS WHEREAS PRIOR TO COLLAPSE IT WAS THEORETICAL. ANY EX ANTE ACTIONS WOULD HAVE BEEN ATTENUATED BECAUSE THEY WOULD HAVE HAD TO PREDICT FUTURE EVENTS.

    “Does this series of beliefs involve contradictions, failure of logic, and/or a statement of reversal of prior beliefs, or is there no relationship between past performance and current ability?”

    NO

    (please note that I only used caps to highlight my responses– not trying to be rude and think the questions are legit)

  106. Rich In NNJ says:

    Frank?

    Come on, where’s the “everything is on fire, real estate, retail, jobs” post?

    I’m getting nervous… maybe EVERYONE else was right and you were wrong?

    Noooooooooooooo………

  107. Stu says:

    Shore Guy:

    7900 on the dow tomorrow easy. Slight chance on seeing it today.

    I expect the market to continue gyrating with great volatility between 7.5K and 10K all the way until signs of a bottom are in place in housing. In the near term, expect Fridays to be bad and Mondays to be good based on continued BS meetings such as the G7 ministers this past weekend.

    Of course, timing the market is impossible. Much smarter to make money by following longer term trends or finding arbitrage opportunities. Just make sure you take some gains along the way like I did yesterday at 135 on SRS. It’s at 145 today, but it easily could be sub 100. Can’t be greedy. I only bought those shares on Friday sub 100.

  108. BC Bob says:

    “Come on, where’s the “everything is on fire, real estate, retail, jobs” post?”

    Rich[110],

    He meant to say the fire was torching the industry to the ground. It’s a raging inferno, soon to be smoldering.

  109. Yikes says:

    the ego on roubini!

    http://gawker.com/5063986/credit-crunchs-dr-doom-is-a-facebook-stalker

    I had to escape NYC as my Barron’s interview (http://www.rgemonitor.com/roubini-monitor/253240/) on $2 trillion of losses made the markets swoon last week and angry mobs of investors were chasing me.

    So life is a beach here and am studying Beach Economics and the IELs (International Elites of Leisure) with a grant from the Institute for Advanced Vacations; hard job but somebody gotta do it.

    This coming Sunday August 17th the New York Times Magazine (http://www.nytimes.com/pages/magazine/index.html) will publish a long profile article (4 pages and 3000 words) about me. So beware of markets shivering the next day.

  110. Secondary Market says:

    Are there any RE Brokers in PA on the board? I’m hoping to get some help compiling data on the Center City Philly market. Despite the recent Fed news and overall collapse around- Philly agent propaganda is still extremely strong. Go Phils!

  111. Victorian says:

    BC Bob –
    Have you every bought gold futures on the Comex and taken delivery?
    There appears to be a huge disconnect between paper and physical.

    P.S.- I am not a gold bug, just curious as to the drivers behind such action.

  112. Stu says:

    Who would have ever guessed that the VIX would surpass the price of a barrel of oil?

    Vix 79
    Oil 71

  113. Cirrus says:

    Somebody much smarter than me purchased a crude $50 put a few months ago. It was laughable at the time.

    $69.89 /bbl a minute ago…

    Methinks OPEC is pondering how they can quietly turn off the spigots?

  114. Hard Place says:

    kettle1,

    In some aspects yes there is a misinterpretation. You nailed it on the head with the importance of the counterparty risk. 4x’s your capital is a big number, but of course that is only should all your counterparties go bankrupt. That is a major reason the Fed moved on Bear Stearns and AIG. They are big derivatives players.

    To say that total notional of derivatives represents a possible exposure is a gross mistatement, bordering on negligent. While it may measure gross leverage it is highly inaccurate, you have to take the net figure into account. For example, $10mm long on a 10 year bond and $10mm short on a 10 year bond, what is your risk? Not $20mm. The closest might be the chart’s potential future exposure. Depending on the bank’s risk methodology they may measure up to 2-4 standard deviations as a potential exposure. Of course markets can and have moved outside that extreme, but it is just a measure of the possible outcome.

    Hope I didn’t muck up that explanation…

  115. r says:

    Not to steer the thread off of the multiple topics being discussed here other than real estate, but I found this posted in a local Jersey Shore weekly.

    Notice that the towns with most of the foreclosures are some of the crappiest in the county. I contend that these areas received a lot of attention from investors during the boom years and that they are now the first to be thrown overboard. (When your primary house is in Little Silver or Fair Haven and your investment in up-and-coming Long Branch is now underwater, you always default on the Long Branch house before the Little Silver house.)

    In addition, these areas no doubt attracted a lot of no money down types of first time buyers since it was the only housing stock that was affordable.

    “The foreclosure crisis is hitting Monmouth County, with monthly foreclosure rates almost double what they were last year.

    According to the Monmouth County Sheriff’s Office, the county had a total of 57 foreclosures in January 2007. One year later, the number of new foreclosures doubled to 114. In August 2007 there were 47 foreclosures in the county and in August 2008 there were a total of 82 new foreclosures.

    The towns with the highest number of foreclosures thus far this year are Howell, Manalapan, Freehold, Long Branch, Asbury Park, Keyport and Union Beach. Locally, Millstone has six 2008 foreclosures, according to the sheriff’s office.”

  116. Yikes says:

    Joe the Plumber was a republican plant, maybe.

    http://gawker.com/5064474/who-is-joe-the-plumber

    (there’s flimsy evidence that is at least worth looking into if you live in cleveland)

  117. BC Bob says:

    Vic [114],

    I trade the futures but have not taken delivery. I know many who are taking delivery. It much more expensive on the physical markket.

  118. Stu says:

    My plumber drives a Ferrari.

    Perhaps Joe the gas station attendant might have been more appropriate?

  119. Stu says:

    “It much more expensive on the physical markket.”

    But how else can one have a ‘treasure bath’?

  120. Victorian says:

    BC Bob (124) –
    So, one can make a nice profit by taking delivery and selling the physical.
    What is preventing people from doing this? I am sure many are aware of this disconnect.

  121. skep-tic says:

    #122

    r– I think that makes sense. in a down market, a disproportionate share of the sales should come in the top areas that have proven their ability to hold value relative to the more marginal areas. so the top areas have more of a support than elsewhere and a more ready exit for sellers who are distressed (making foreclosure less likely).

  122. kettle1 says:

    Hard place 117

    I understand….

    My question thought is, isnt the pure magnitude of their total derivatives a potential issue?

    to use your example “$10mm long on a 10 year bond and $10mm short on a 10 year bond”

    Lets grossly simplify and say 45 trillion long and 45 trillion short. AT this point i would imagine that the problem is not the derivatives themselves, so much as the plays have reached such a staggering level that you see disproportionate fluctuations in the market. By having such large positions, i would think that you are greatly increasing the total downside potential of the market.

    You have a single company that has become a very large point of failure. I know that this is one of the primary points in the bailout. But the solution is to reduce the mammouth size of the positions, not just hand them cash.

    Am i still missing the point?

  123. RayC says:

    OK, I have a comp killer for you. 41 Carol Rd in Westfield. It is a beautiful house, on the north side of town on a quiet street in the best school district. Sold October 3rd for $500,000.

    A neighbor who has been in the house told me that it is in great shape, both bathrooms have recently been redone, true move in condition. Knockdowns were selling for $600 – $700 in this area. According to nj.com the taxable value for the house is $753k.

    The Beige Book did not lie…its just taking time.

  124. Stu says:

    The Beige Book doesn’t lie RayC. It’s the unemployment and inflation numbers that I question with great curiosity.

  125. Justin says:

    Could someone give me some information on..
    Listing Number: 2838289 from NJMLS.

  126. Pat says:

    http://www.cnn.com/

    I, too, questioned the existence of Joe T. P. last night.

    But it looks like he’s another bold guy.

    Maybe P can hire him for flush maintenance.

  127. Stu says:

    From a random IT Blog:

    Check out the date:

    September 5, 2006 – 4:05 P.M.
    You don’t need IT to predict option ARM implosion

    Some banks have found a way to use information technology to dramatically increase the risk to mortgage borrowers while at least partially insulating themselves from the pending damage. Is this good business? BusinessWeek’s cover story, Nightmare Mortgages, tells how banks have sold – and are still agressively selling — option adjustable rate mortgages to customers who are least able to pay for them.

    Banks are getting better than ever at using predictive analytics techniques to accurately determine which applicants are most likely to default on a mortgage. But instead of declining to give such loans and maintaining their high standards, they’ve spread the net wider to even more riskier applicants. Why? Option ARM loans are highly profitable and with more accurate tools to predict default rates they can give those loans to broader populations of less creditworthy applicants. As long as the overall portfolio is profitable, who cares? Some borrowers will default, others will suffer mightily to make payments – and banks overall will benefit.

    Or will they?

    Option ARMs give the buyer an ultra low initial rate for a short period, then drastically adjusts the rate upward for the rest of the loan. So someone who would pay $3,455 for a 30-year 7.5% loan of $500,000 gets an option ARM with an initial payment of just $1,608.20 per month – less than the accruing interest. That’s added to the mortgage so that after 29 months when the initial period ends the borrower must pay $4,107.86, according the story.

    Option ARMs were designed for the wealthy who wanted some flexibility in when they would pay their mortgage during a given year but banks began hawking them to moderate income families when prices went out of sight, further inflating the housing bubble. Most option ARMs were sold by independent brokers, who were paid high commissions. That provided an incentive for brokers to sell option ARMs over other, less profitable types of loan instruments and in fact not all brokers fully explained the terms to less sophisticated borrowers. Some unscrupulous brokers even sold option ARMs to people who were trying to refinance to a lower payment, according to the Business Week story. Instead, when the introductory period ended, they ended up with a monthly payment that was even higher than their original loan. Banks also liked option ARMs because accounting rules allow them to book the entire $4,107.86 per month as earnings even though they’ve only received $1,608.20 per month. The problem with that, according to the story, is that many of those loans will never be repaid. It’s also clear that banks dropped their lending standards way too far in search of easy money and that the markets were all too eager to buy those notes no questions asked.

    Now option ARM borrowers are finding that the devil’s bargain is coming due. Here’s the really irritating part: Because many banks have distributed those to investors in the broader financial markets they are unlikely to pay heavily for generating these poorly underwritten mortgage notes. But their customers will pay in two ways – some borrowers will lose everything. But the broader economic damage will come from the housing bubble these practices helped to create. There is no doubt that the housing correction will last longer than it would have had banks not followed these practices.

    But banks will also suffer. Some still hold large numbers of these loans in house and may be hurt. But as the defaults come in and gain publicity the loose and shady practices of some independent mortgage brokers in the past few years are likely to give the entire industry a black eye – and could lead to more regulation and new accounting restrictions. Especially in an election year.

  128. kettle1 says:

    Cirrus 120,

    All the oil producers are hurting right now. Real cost of oil production is probably in the range of 90 – 100 per barrel. The reason that oil is/can sell for less then the real production costs is that there is a significant amount of legacy infrastructure that the production is based off of, the gulf of mexico (GOM) is a good example of that.

    A significant amount of that infrastructure is near or past is expected service life. Oil prices have been low compared to real production cost for a while and the oil companies have been neglecting infrastructure maintenance and upgrades.

    The end result is a reduced total production. The reason is that even though the oil may be their it is not financially supportable to extract it. Once again the GOM is a good example. A percentage of the total production coming out of the GOM is from decades old rigs that are still producing put would be to expensive to replace (their production rate is to low to offset replacement costs).

    The last 2 hurricanes coming through the gulf damaged a number of the legacy rigs and destroyed a few of them. This is production that will likely never be replaced.

    The real impact of the current low prices is that they longer they are low the longer that maintenance and upgrades are put off. The longer they are put off the more they cost when finally done. Its an inverse relationship. The cheaper the oil the less you can extract. You quickly enter and to some point we already have a condition of receding horizons. Increases in production do not make up for the increase in operational costs.

    That exact issue is the main devil inn the details of north american natural gas. The cost of extraction is increasing as fast or faster then the rate of production of north american natural gas from unconventional deposits.

    The catch 22 for OPEC is that prices are dropping at the same time demand is. By increasing prices with reduced production it is likely they are accelerating demand destruction, some of which is permanent.

    think of it as the conundrum faced by economics in a deflationary period. the situation is very similar.

  129. RayC says:

    Stu,

    I was only talking about the ” that single-family home prices are down 20 to 25 percent from their peak levels; one contact notes somewhat steeper declines in prices for townhouses and condos. ”

    I’m sure when they look at some numbers they say “Criminy! we can’t publish those, the DOW will drop 40%!!”

  130. renter says:

    #122
    People with children are buying a house but more importantly they are buying a school district. Those of us with children have few areas to choose from.

    Academics try to quantify this with articles like:

    How Much Is a Neighborhood School Worth? by Bogart, William T.

  131. Stu says:

    COLA for SS was 5.8%

    Calculate this vs. your annual wage increase.

    Obviously, we need to cut taxes on the wealthy.

  132. DL says:

    Still looking at early retirement next year. At this rate we may pay cash and forego the mortage entirely.

  133. kettle1 says:

    BC

    Consumer debt is only 2.5 trillion. As we discussed, why not just have the government bailout the consumer? pay off all consumer debt, instead of helping the banks. Then everyone can go back to shopping!!!!

    http://3.bp.blogspot.com/_lsF4HSdqo04/SPbBI2HjfvI/AAAAAAAAAtE/DU87DP5Qbbw/s1600-h/consumer+debt.bmp

  134. John says:

    Best part of a recession is you get really good music, club scene gets better and NYC gets that nice gritty feel I like. Get rid of the big box stores and starbucks and Hermes. Lets get TS and Meat Packing back to the 1980s and early 90s when it rocked, Loved west 23rd street back in the day when you could see sid vicious vomiting blood in the gutter next to a couple of 5 dollar trannies.

  135. Clotpoll says:

    skep (92)-

    Separation of banking and commerce. Up until shilling for the bailout, NAR’s biggest lobbying effort was to prevent this.

    Grann-Leech-Bliley, in its original form, opened the door for banks to enter RE brokerage, but NAR managed to bribe enough of Congress to squelch it.

  136. John says:

    Even better, lets shoot everyone who is way in debt sell their assets and redistribute the wealth.

    Consumer debt is only 2.5 trillion. As we discussed, why not just have the government bailout the consumer? pay off all consumer debt, instead of helping the banks. Then everyone can go back to shopping!!!!

  137. Clotpoll says:

    skep-

    My posts may strike you as bizarre, but I generally try to base what I say in some sort of fact or reality.

  138. skep-tic says:

    “pay off all consumer debt, instead of helping the banks. Then everyone can go back to shopping!!!!”

    except none of the stores will exist since there would be no financial infrastructure left to fund their inventory and employees. and the consumers wouldn’t have paychecks, credit cards or ATMs. so they would be momentarily solvent with no cash coming in.

  139. Clotpoll says:

    yikes (116)-

    Where do you think Roubini goes to soak up the sun? Libya?

  140. Clotpoll says:

    stu (119)-

    Those November 60 .vix calls sure taste good…

  141. Clotpoll says:

    vic (127)-

    It’s all fun and games, until the failure to deliver. ;)

  142. skep-tic says:

    #143

    clot– I believe the mechanism is still in place for financial holding companies to enter into real estate directly if they wanted to in connection with wealth management as a related service to the other financial services they offer. The Fed would have to agree to this change, but it does not seem like a huge stretch to me. my understanding is that FHCs can already operate in this business indirectly via merchant banking portfolio companies.

    but the bigger point is that I do not see entering into RE brokering as being a huge priority for bankers right now. In my opinion, right now RE agents should be more worried about new regs aimed directly at them rather than at competition from outside their industry

  143. skep-tic says:

    I have never been to a “club.” Do you have to wear Dakar Noir to get into one of these?

  144. SG says:

    Yardeni: Cutoff of hedge funds driving market mayhem

    From Yardeni’s daily email blast:

    Godfather Hank Paulson gave hedge funds the kiss of death at a dinner with Lehman’s CEO on April 12, 2008. After the dinner, Dick Fuld sent one of his Lehman colleagues an email listing six “takeaways.” The fourth item was: “4-they want to kill the bad HFunds + heavily regulate the rest.” (See link below.) I’m not sure what a “bad” hedge fund means. In any case, Bazooka Paulson started gunning them all down when he let Lehman fail on September 14. That seriously disrupted their suppliers of cheap funds, i.e., Wall Street’s prime brokerage dealers. On Sunday, September 21, Goldman Sachs and Morgan Stanley received permission from the Fed (in record time) to get bank charters. On Monday of this week, Paulson forced the nine biggest banks to sell the Treasury non-voting preferred shares. It was an offer they were not permitted to refuse. He gave them $125bn in capital and made it very clear that they should lend to auto and home buyers and businesses.

  145. Hobokenite says:

    Hobocondo,

    “There is a condo at Maxwell Place that has been on the market for a few months at least.

    In August, it was priced at $869K.

    In September, the price was increased to $879K.

    What would be the logic in that? The owner is also a realtor, by the way.

    I think that says it all. Do you know the unit #? I’ll bet that unit goes into FC, or a short sale.

  146. kettle1 says:

    skep,

    except none of the stores will exist since there would be no financial infrastructure left to fund their inventory and employees.

    why not? the money is coming from the tax payer? why not pay ourselves first? I am sure that there are a few enterprising business people who would love to fill that void!

    I am not actually serious about the suggestion, but its the only way to restart the consumer culture. besides, it makes about as much sense as what they have been doing so far.

    SL

    $30 oil would be very bad for the long term production capacity of oil. But i welcome it. Its a great opportunity. I would become the make money of oil… All in

  147. skep-tic says:

    kettle– not saying anything you don’t already know, but it’s not just about dollars. it’s about maintaining an infrastructure that funnels the dollars into business. obviously, a lot of banks have sucked at executing this over the past few years, but there is no ready replacement for them.

  148. Hobocondo says:

    153 – The unit is 215.

  149. grim says:

    From MarketWatch:

    Downey Savings to Close Wholesale Loan Department

    Downey Savings and Loan Association, F.A. today announced that it will close its Wholesale Loan Department and the loan processing centers supporting that Department, effective immediately. Downey Savings will also contract its Retail Loan Department. These changes will affect approximately 200 employees.

  150. grim says:

    From HousingWire:

    S&P Warns on $351.7 Billion of Alt-A RMBS

    Standard & Poor’s Ratings Services said Wednesday that it had placed ratings on 5,536 classes from 456 U.S. RBMS transactions backed by Alt-A mortgage collateral issued in 2006 and 2007 on review for likely downgrades.

    Perhaps most telling is that the mortgages involved aren’t short-term resets: S&P said that most of the Alt-A transactions now under review are collateralized by fixed and long-reset hybrids (meaning rates are fixed for five or more years from origination dates). In aggregate, the affected classes represent an original par amount of approximately $351.7 billion; that total is $280.1 billion in current balance.

    Driving the likely downgrades is yet another update to loss severity projections by the rating agency, which said it now expects average loss severity on affected mortgage deals to be at 40 percent rather than the previous threshold of 25 percent.

  151. skep-tic says:

    “Perhaps most telling is that the mortgages involved aren’t short-term resets:”

    so I wonder if the losses are being driven by underwater homeowners simply walking away

  152. SG says:

    Rescuing the banks – But will it work?

    From The Economist print edition
    Meltdown may have been averted. But the crunch is not over

    Companies are perhaps the biggest concern of all, even though firms have borrowed less than consumers. Default rates remain low but are bound to climb as the economy worsens. This wave of corporate failures will add further stress to the battered CDS market. And, as governments focus their efforts on bailing out the banks, non-bank sources of financing are becoming more fragile. The costs of issuing commercial paper, a form of short-term debt heavily used by companies in America, will fall once a Fed facility for purchasing commercial paper is up and running on October 27th. Even so companies may well have to draw on uncommitted credit facilities with banks, expanding the size of bank balance-sheets.

    “The idea that there will be a reboot of lending is not credible,” says George Magnus, an economist at UBS. Financial calamity may have been averted, but the world economy is still cooking up something very nasty.

  153. HEHEHE says:

    Kettle,

    Oil and gas stocks getting slaughtered again. At what point do these hedge funds/mutual funds no longer have positions to unwind.

  154. House Hunter says:

    Home Prices Seem Far From Bottom….”In hard-hit areas like California, Florida and Arizona, the grim calculus is the same: More and more homes are going up for sale, but fewer and fewer people are willing or able to buy them.”
    http://www.cnbc.com/id/27215011

  155. HEHEHE says:

    take that back, quick bounce back

  156. kettle1 says:

    HEHE

    Just a guess on my part, pure speculation…….

    But i think that a fair amount of the unwinding of the hedge funds and mutual funds has occurred already, but not all. I think that the drops we are starting to see now are more of a “flight to safety” type move. people had jumped into commodities earlier in the year and those have started to tumble. Opec has been talking about supporting oil at 90-100. Oil and gas sounded like a somewhat more stable place then. But combination of forced unwinding and deflationary action on commodities (both related actually)has acted to kill the demand side of the equation.

    Worst case scenario, i see oil hitting 30, but a more probable floor of 50.

    Dont celebrate yet. Oil that low will accompany a very serious economic malaise. The drop to 50 and below will probably hit when the current effects of the american and European slump trickle back to India and china. China faces a huge manufacturing surplus and that slowdown in their manufacturing sector could the the initiator for energy demand destruction.

    russia is about to get rocked due to their revenue stream falling off a cliff just as they have increased liabilities and an infrastructure in need of extensive repair.

  157. John says:

    “The No. 1 thing that drives housing values is incomes,” said Todd Sinai, an associate professor of real estate at the Wharton School at the University of Pennsylvania. “When incomes fall, demand for housing falls.”

    I don’t know if I agree with that, maybe at starter level. But everyone I hang with still has a job but we are all scared of losing our money by buying a house before the market has hit bottom so none of us are buying. Plus just mention you are buying a house at a cocktail party and 40 people will surround you intervention style to talk you out of it.

  158. skep-tic says:

    “European home buyers and investors used to be big in Manhattan. Buoyed by a strong euro and pound, embolde ned by a wide selection of new-development condos and verdant credit markets, the Europeans virtually invaded the borough to the point where their very presence became shorthand for the real estate market’s success….

    “Those days are over. On Oct. 10, the euro fell to $1.3579, its lowest level against the dollar in 14 months…

    “According to Jonathan Miller, president and chief executive of appraisal firm Miller Samuel, foreign buyers, including many from Europe, make up approximately a third of Manhattan’s new-development condo buyers.

    “Commercially, foreign investors accounted for 40 percent of Manhattan’s investment sales volume in the third quarter, according to brokerage Cushman & Wakefield

    “It’s this take-away factor that worries brokers and sellers and others, the idea that—poof!—away could go some of the city’s most active investors and home-shoppers. The possibility of a European slump, coupled with a dour Wall Street economy, has some analysts rightly concerned. “The fact is,” Mr. Miller said, “two of the biggest drivers of the past several years are not expected to show up in the way they have in the past in 2009.””

    http://www.observer.com/2008/real-estate/manhattan-shed-pounds

  159. grim says:

    From MarketWatch:

    Home builders’ confidence tanks in October

    The doom and gloom mood in the U.S. home building industry worsened in October as fears about credit availability sent the home builders’ sentiment index down to a record low, an industry trade group reported Thursday. The National Association of Home Builders/Wells Fargo index fell three points to 14 in October, two points below the previous low, NAHB said. The survey has been conducted monthly for 23 years. “Not surprisingly, builder confidence has taken a heavy hit from the recent financial market crisis,” said Sandy Dunn, president of the NAHB and a builder from Point Pleasant, West Va.

  160. skep-tic says:

    any RE pros here familiar with this?

    “a number of large real estate firms have, out of self defense I suppose, pooled their cash and struck a deal with those banks that are still lending. The firms act as mortgage bankers rather than brokers and loans are getting done (for non-real estate customers as well as buyers, fyi).”

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

  161. grim says:

    From Bloomberg:

    U.S. Homebuilder Confidence Index Fell to Record Low in October

    Confidence among U.S. homebuilders slid in October to the lowest level since record-keeping began in 1985, a sign the crisis in credit markets may deepen the worst housing recession in a generation.

    The National Association of Home Builders/Wells Fargo index of builder confidence decreased to 14, less than forecast, from 17 in September, the Washington-based association said today. A reading less than 50 means most respondents view conditions as poor.

    The meltdown in worldwide financial markets that has clogged credit and sent U.S. stocks plunging is likely to worsen the economic slump. Home sales and construction will probably keep dropping as access to loans is restricted, weighing on growth well into 2009.

    “Tight credit standards, rising unemployment and the potential for further home-price declines will continue to dampen housing demand and the still significant housing inventory overhang will continue to weigh on construction activity,” Stephen Stanley, chief U.S. economist at RBS Greenwich Capital Markets in Greenwich, Connecticut, said before the report.

    The builder confidence index was forecast to fall to 17 this month from an originally reported reading of 18 for September, according to the median estimate of 41 economists surveyed by Bloomberg News. Projections ranged from 15 to 20.

  162. grim says:

    skep,

    Texas hedge?

  163. kettle1 says:

    To cut losses, homeowners consider default
    Some struggling homeowners are being tempted to default on purpose in order to qualify for mortgage relief from the federal government or their lenders.

    http://www.miamiherald.com/business/story/728184.html

  164. kettle1 says:

    unexpected consequences….

    REYKJAVIK, Oct 15 (Reuters) – Iceland has food stocks for about 3 to 5 weeks, but needs quickly to restore a proper foreign exchange market so importers can get back to normal business and avoid shortages, importers said on Wednesday.

    Since crisis broke out on the north Atlantic island of 300,000 people, involving the government taking over the top three banks, suppliers to Iceland have cut credit to importers. Some have also demanded pre-payment for goods.

    Though the central bank has said it has foreign reserves for eight to nine months of food, importers said a cash injection from abroad was the only solution to avoid shortages.

    They said Iceland imported about a half of its food products, but produced its own dairy products and meat.

    “The government has to get some currency in to back up the crown and build up credibility again,” said Oli Johnson of the OJNK food importer, one of Iceland’s biggest.

    “As soon as we can show we can pay without restrictions, things will open up again,” Johson said. “Hopefully they plan to solve it in the next few days.”

    He said Iceland on average had stocks of about 3 to 4 weeks.

    The problem for importers was uncertainty about whether they would get foreign exchange, which they now have to apply for under a rationing system begun by the central bank.

  165. skep-tic says:

    “Texas hedge?” ha! yes

  166. kettle1 says:

    By Peter Schiff
    October 10, 2008

    If you are a mortgage holder who is either struggling with crushing payments, bitter for having overpaid for your home during the bubble, or who has extravagantly refinanced when prices were rising, the government’s landmark $700 billion bailout package has an important message for you: stop making your mortgage payments . . . immediately. Furthermore, if you believe that with some planning and sacrifice you may be able to meet your mortgage obligations, the government’s message is clear: relax, don’t bother.

    http://www.signonsandiego.com/uniontrib/20081010/news_lz1e10schiff.html

  167. Yikes says:

    # Stu Says:
    October 16th, 2008 at 9:56 am

    For those not aware, rivers, railroad tracks, highways and power lines are all bad news when purchasing non-section 8 housing.

    Major LOL
    we saw a sweet house with a pool recently, drove by, and power lines were within a mile, and viewable from the backyard.

    we contemplated asking for 75k off (i think it was a 550k place), but then we read about power lines and completely moved on.

  168. Stu says:

    Power lines within a mile wouldn’t trouble me so much. If the wires ran directly through my backyard, then I might be concerned.

  169. MJ says:

    We went under contract yesterday!

  170. Victorian says:

    174 (Ket)-
    I think I am going to buy a house 5X my income this weekend and try to get laid off next week. Finally, max out my credit cards on Thanksgiving weekend.

  171. Hobokenite says:

    kettle1,

    “Worst case scenario, i see oil hitting 30, but a more probable floor of 50.”

    Alright, what have you done with the real kettle1?????

  172. RayC says:

    My car is 14 years old and leaking a little oil, so this is good news. For $70 bucks I can run it forever.

  173. skep-tic says:

    hey everyone who is so concerned about weimar-hell, what do you make of the latest inflation numbers? lies?

  174. Comrade Nom Deplume says:

    [176] Stu

    Brokers tried to get us into a house in Chatham with exactly that. High tension power lines ran right over the side yard, and it was not a large lot.

    The funny thing was that the owner put in a pool. Right under the power lines!

    Wouldn’t be funny if it wasn’t true.

  175. kettle1 says:

    Hobokenite:

    shocking, i know. I do think these prices are dangerously low. Until i become a billionaire oil magnate or dictator (benevolent of course) of the North American Union (NAU), i have no say in oil prices.

    Dont worry, my long term outlook hasnt changed.

  176. kettle1 says:

    Vic,

    the fall of the US empire…

    1. housing bust
    2. bank bust
    3. Credit card bust
    4. state budget bust
    5. retirement funds bust
    6…….
    7. PROFIT!!!! (how much for the Washington memorial?)

  177. schabadoo says:

    Joe the Plumber said this morning on a CBS news interview when he asked O a tough question he got a tap dance almost as good as Sammy Davis Junior.

    Joe the Plumber actually has no plumbing license, is a registered Publican, does not make $250k, is not buying any business, is apparently related to Charles Keating, and has a tax lien out on him.

    Why does it seem like so much more obvious lying is going on this year?

  178. kettle1 says:

    Rayc,

    I know you are kidding but……

    it takes 7 – 10 years to bring a new oil well to full capacity. With oil prices currently low and dropping, new oil and gas projects are being shelved as they do not make sense financially. When prices jump back up in 2 years or so and people scream for more oil there wont be a spigot to just turn on. They will have to develop the oil and gas projects that were put on hold and you then have a 5-7 years lag until the net effects of the increased supply hit the market

  179. ben says:

    skep-tic, there’s not doubt inflation numbers would temporarily cool off. The problem with the government inflation numbers is that they never went up in the first place while Gas went from 30 bucks a barrel to 145 bucks a barrel. That’s insane. If you used the formula for how we calculated inflation before Clinton was in office, our numbers would have already been in double digits. And those numbers were massaged as well. That’s how scary it is.

  180. kettle1 says:

    an interesting yet pointless list:

    off-shore Goldman accounts in the Cayman Islands:

    Scadbury Funding Limited Cayman Islands

    Scadbury II Assets Limited Cayman Islands

    GS Killingholme Cayman Investments Ltd. Cayman Islands

    GS Killingholme Cayman Investments II Ltd Cayman Islands

    Forres Investments Limited Cayman Islands

    GS Funding Management Limited (1) Cayman Islands

    GS Capital Funding (Cayman) Limited Cayman Islands

    Goldman Sachs Investments (Mauritius) I Limited Mauritius

    Goldman Sachs LLC Mauritius

    Tiger Strategic Investments LTD Mauritius

    MLT Investments LTD. Mauritius

    JLQ LLC Cayman Islands

    Goldman Sachs (Japan) Ltd. British Virgin Islands

    GSEM Bermuda Holdings, L.P. Bermuda

    GS Equity Markets, L.P. Bermuda

    Goldman Sachs (Cayman) Holding Company Cayman Islands

    Linden Wood, LTD. Cayman Islands

    Goldman Sachs Credit Partners L.P. Bermuda

    Goldman Sachs Specialty Lending CLO-I, LTD. Cayman Islands

    Amagansett Funding Limited Cayman Islands

    Amagansett II Assets Limited Cayman Islands

    GS European Funding I LTD. Cayman Islands

    GS Funding Europe II Ltd. Cayman Islands

  181. kettle1 says:

    Skep,

    No wiemar action for 2 – 3 years yet

  182. Stu says:

    schabadoo,

    Wasn’t there a republican plant where a drug pusher or some other dude was arrested on the steps of the white house so he could be used in a speech later that day? It’s all very fuzzy right now. I am more senile than Reagan!

  183. gary says:

    A number of contacts in northern New Jersey estimate that single-family home prices are down 20 to 25 percent from their peak levels.

    BWAAHHAAHAAHHHAAAAAAHHAAA!!!! Are you f*cking kidding me or what!? What a load of sh*t!! Let’s all take a ride this Sunday to some open houses and blow this theory to smithereens!!!

  184. MJ says:

    @schabdoo

    He is also not registered to vote — perhaps because he’s a convicted felon.

  185. skep-tic says:

    ben– isn’t the other view that oil prices were not really a product of inflation? besides, the drop was broad:

    “Though lower oil prices were a big part of the CPI, the flat reading was much more than just energy. Transportation prices fell 0.6% on the month as both airline fares and new car prices dropped, the latter reflecting very weak demand in that sector.

    Housing-related costs fell 0.1% for a second-straight month, the first back-to-back decline since 2001. Clothing prices also fell.”

  186. schabadoo says:

    With oil prices currently low and dropping, new oil and gas projects are being shelved as they do not make sense financially.

    And if any money was spent on this, people would scream about reckless spending and tax increases.

  187. skep-tic says:

    quote is from the WSJ

  188. Yikes says:

    BC Bob Says:
    October 16th, 2008 at 11:23 am

    Vic [114],

    I trade the futures but have not taken delivery. I know many who are taking delivery. It much more expensive on the physical markket.

    Would you really get a delivery of GOLD at your house? Or send to a PO Box?

  189. kettle1 says:

    schab,

    money spent on developing oil and gas would increase tax revenue not reduce it. I am talking about private companies spending money on such activities. the same applies to government controlled oil and gas.

  190. MJ says:

    take that back. he’s deadbeat registered asshat.

  191. Escape from New Jersey says:

    The new plan for prosparity in NJ. Buy a house you cannot afford and hope to be one of the 1,500 to win the Johnny C house give away program.

    http://www.nj.com/news/index.ssf/2008/10/william_perlmanthe_starledgerg.html

  192. John says:

    The worst part about cheap metals is the wife’s will all want gold and plat jewlery come Christmas time.

  193. Stu says:

    Nice job vetting Joe the unregistered racist plumber by the M team again. This guy is truly dangerous. I don’t think that O is a god, but M seems a lot like W. Either your with me or against me. You don’t make a lot of friends that way and as the US empire crumbles, it will be friends (probably of the Asian persuasion) that we will need a helping hand from.

  194. Clotpoll says:

    skep (151)-

    There’s absolutely no way into RE brokerage for banks right now. No ifs, ands or buts. They cannot have an active agency relationship with a buyer or seller.

  195. Stu says:

    Yahoo Finance:

    2:41PM JP Morgan Chase: Moody’s comments on JPMorgan Chase’s 3Q08 results (JPM) 38.37 -0.17 : Moody’s said JPMorgan Chase’s poor third quarter 2008 results were not surprising considering JPM’s exposure to investment banking, residential mortgages and credit cards, and the difficult market conditions that these businesses face. Moody’s does not expect a quick resolution to its negative outlook on JPM’s rating. Characteristics that support JPM’s high ratings, nevertheless, remain in place. These include a very broad franchise, prudent liquidity profile and strong capital. Moody’s added that JPM’s capital position will get stronger as a result of the $25 bln investment in preferred stock by the US government. The rating agency cautioned that if JPM’s earnings remain deflated because of poor market conditions, JPM may need to revisit the size of its common dividends.

  196. MJ says:

    i immediately thought joe plumber was fishy because 1) he talked about a hypothetical if he bought a business, not one he owns already [doesn’t that risk the deal? invite competition? ruin his bargaining stance] and 2) a business that pulls in 280k doesn’t pay out 250k in taxable w-2 income, not by a long shot 3) it’s pretty clear that any business that pulls in 280k would vastly benefit from Obama’s proposals, not even mentioning the improved ability of customers to buy its services.

  197. MJ says:

    i immediately thought joe plumber was fishy because 1) he talked about a hypothetical if he bought a business, not one he owns already [doesn’t that risk the deal? invite competition? ruin his bargaining stance] and 2) a business that pulls in 280k doesn’t pay out 250k in taxable w-2 income, not by a long shot 3) it’s pretty clear that any business that pulls in 280k would vastly benefit from O’s proposals, not even mentioning the improved ability of customers to buy its services.

  198. JBJB says:

    Funny, I was just reading about this Plumber Joe thingy and he is already being smeared by Obots. How dare he pose a question to The One! I guess this is what we have to look forward to.

  199. MJ says:

    gold proving to be lousy place for storing wealth.

    high inflation in USD looks to be at least a year or so away.

  200. rhymingrealtor says:

    NJgator,

    Thanks for reminding me I wanted to check out status of sales at the Beautiful Harrison Bridge Plaza just ouut of curiosity because I see them almost daily and they look empty accept for an office. What I found was 11 active units and 4 under contract, I did not find any sold. It looks as if there can’t be anymore than 15 units and 5 street level office or stores This current list ranges from 299,900 to 367,900 the Original list prices ranged from 380 to 463. I too noted the 100% financing sign.
    They will all be rentals soon for 1/2 to 1/3 cost of owning

    KL

  201. skep-tic says:

    what was interesting to me about the debate last night was that, obviously, O is a much better speaker than M, but occasionally O would slip and you could see the very left wing guy he is peek out from behind the veil of moderation he has cloaked himself in.

    Dan Henninger has a good column on the WSJ opinion page today about how M really lost the election in the week the bailout bill was passed by appearing erratic. That was what sent me over the edge w/r/t him and based on this I do not think he is the best choice in this election.

    but with O, I think we are really taking a chance that this guy will resist his root instincts which are grounded in the very left wing. hopefully he has the sense to try to stay in the middle as clinton did

  202. BC Bob says:

    “gold proving to be lousy place for storing wealth.”

    MJ,

    Not if you are spread. Check the spreads; inter commodity, currencies, equities. Gold is a big winner.

  203. John says:

    M’s only chance is to get the The Thirteenth Amendment overturned in the next 19 days.

  204. kettle1 says:

    chart of housing prices. not an unexpected trend, but it shows some nice magnitude…

    Not mine

    http://3.bp.blogspot.com/_9ZzZquaXrR8/SPeNTomP0mI/AAAAAAAACSc/CYxufdswK8E/s1600-h/CI1.jpg

  205. r says:

    Stu – Is everyone with a policy difference with Obama a racist?

    I don’t recall Joe the Plumber saying anything derogatory about O or his race. He could have easily been discussing the matter of being over taxed with Pelosi or the Clintons.

    For the record, O is an articulate Al Sharpton without the funny hair. Call me a racist, you would have anyway.

  206. Nicholas says:

    Rally on?

  207. schabadoo says:

    ket
    money spent on developing oil and gas would increase tax revenue not reduce it.

    Oh I agree.

    But just try and spend it; the howler monkeys to start screaming immediately.

  208. skep-tic says:

    #212

    kettle– interesting. so that chart suggests a 50% drop from 2005 prices would put us back in line. so maybe another 30% left to go

  209. Nicholas says:

    From Mrs Maria Elena Fernandez,

    I am the above named person from Philippine. I am married to Mr. Rodolfo FERNANDEZ who worked with Philippine embassy in Kuwait for nine years before we left to Philippine where he was re-appointed as a navy officer before his untimely death in the year 2005.

    We were married for eleven years without a child. He died in his home country Philippine after a brief illness that lasted for only four days. Before his death we were both born again Christian. Since his death I decided not to remarry or get a child outside my matrimonial home which the Bible is against. When my late husband was alive he deposited the sum of $7.3Musd (Seven Million Three Hundred Thousand U.S. Dollars) in cash concealed in a trunk box and deposits it with a Security Company in Abidjan Cote d ivoire (West Africa) which he declare and register it as family valuables.

    Recently, my Doctor told me that i have serious sickness which is cancer problem. The one that disturbs me most is the high blood pressure sickness. Having known my condition I decided to donate this fund to a church or individual that will utilize this money the way I am going to instruct herein. I want a church or individual that will use this fund for orphanages, widows, propagating the word of God and to endeavour that the house of God is maintained. The Bible made us to understand that Blessed is the hand that giveth I took this decision because I do not have any child that will inherit this money and my husband relatives are not Christians and I do not want my husband’s efforts to be used by unbelievers. This is why I am taking this decision to contact you.

    I am not afraid of death hence I know where I am going. I know that I am going to be in the bosom of the Lord. Exodus 14 VS 14 says that the lord will fight my case and I shall hold my peace. I do not need any telephone communication for security purpose until this mission is accomplished.

    With God all things are possible. As soon as I receive your reply with full assurance of your assistance, I shall give you the legal proof of this matter and contact of the security company in Abidjan where he deposited the trunk box. I will also issue you an authority letter that will prove you the present and legal beneficiary of this trunk box (fund). I want you and the church to always pray for me because the lord is my shepherd. My happiness is that I lived a life of a worthy Christian. Whoever that wants to serve the Lord must serve him in Spirit and Truth.

    Hope to receive your reply. mariafx@msn.com

    Remain blessed in the Lord.
    Yours in Christ,
    Mrs Maria Elena Fernandez

    REPLY:

    Dear Mrs Maria Elena Fernandez,

    I am sorry to inform you that America is broke. We will need to secure not only your letter of assurance, and proof of this trunks existance but we will also need the address of this ‘counting house’ so that we can bankrupt it too.

    On a side note, we are also sorry to inform you that we have watched “Dateline 20/20, To catch an ID theif” and know that you are really a Nigerian man with a bad accent so sending us un-christian photos of you in a bathing-suit will not be enough. We will need a one-year paid subscription to internet pron site of our choosing.

    Thanks,
    Ben Bernake

  210. John says:

    400!!!!

  211. kettle1 says:

    Skep 215.

    The question is how far do we overshoot. giving the economic down turn there is the potential for a fair overshoot on the down side. i think we could see a 60-70% drop from the peak when you include overshoot, before returning to mean.

  212. Qwerty says:

    RE: “Joe the Plumber” exposed? Fraud?

    Nonsense. He’s a citizen who asked a question of a man running for national office. His party affiliation is irrelevant. And not all working plumbers are “licensed.”

    As can be expected, the union lackey (unions favor who?) helpfully cited by the NY Times tried to disparage Joe.

    Said The Messiah to Joe: “I think that when you spread the wealth around, it’s good for everybody.”

    No one forced The Messiah to make that statement — he made it of his own free will, with cameras in full view and rolling all around him.

    Someone was “exposed” in this exchange, but not Joe.

  213. SG says:

    Something is wrong, the comments don’t appear anymore.

  214. SG says:

    #222 in mod.

  215. Sean says:

    re: oil don’t bet on $30 a barrel

    Oil consumption in the U.S. has fallen by 1.8 million barrels a day (b/d) or nearly 9 percent as compared to last year due to a combination of high prices, a slowing economy, and the shortages resulting from the hurricanes that tore up Gulf coast production and refining last month. During September, however, Chinese imports increased by 2 million b/d as Beijing took advantage of the low prices to start building its strategic reserves -so much for falling American demand.

  216. Hobokenite says:

    And yet oil prices are still falling….

  217. stu says:

    Qwerty:

    I would say that YOU were revealed!

    Would you be offended if a spectator asked of McCane at a campaign stop how the navy managed to let him continue flying planes after he crashed three of them? Who’s answer do you think would have been more truthful? At least O has the tendency to answer honestly, which is something that you obviously can not respect.

    Keep supporting the Laffer curve. When all is said and done in the collapse of the US empire, this flawed economic policy will probably be named the primary culprit.

  218. Nicholas says:

    I don’t understand what “SF Detached: Next 6 months” means.

    Is it some kind of average for the next six months, a regression of sorts?

  219. Nicholas says:

    It is also not clear what the numbers on the left mean.

    Sure, I understand that more is better and less is worse but I need some sort of comparison on this chart.

    It also makes no sense to have “SF Detached: Present” = 50 since I cannot do a reverse look up and say that 50 equals the amount of SF Detached: Present.

    Terrible Chart

  220. Richie says:

    You don’t have to be licensed to be a plumber.
    You don’t need to be a member of a union to be a plumber.

    Nothing shocking in either case.

  221. Imus says:

    The high end towns are still pretty flat. Those of you waiting to purchase, who are waiting for a 50% drop, may miss out on good buy opportunities. Don’t drink the cool aid…

  222. skep-tic says:

    Imus– do you mean asking prices in high end towns are flat? If so, I agree. But asking prices are not particularly relevant at this point

  223. Nicholas says:

    I think that the real shocker that people are looking at in Joe Plumber’s case is not that any of these individually are a big deal but taken as a whole he falls very short of being a role model.

    1. He hasn’t gone through an apprentice program.
    2. He isn’t a licensed plumber.
    3. He has failed to pay his taxes and has tax liens.
    4. He wants to own a plumbing buisness that will make him ficticious amounts of money in the next four years.

    It just adds up to some guy being a heckler with no vested interest in his question.

    He probably shouldn’t be a role model for the Republican party.

  224. skep-tic says:

    Does it really matter if Joe the Plumber is legit or is a fictional character? I thought it was the latter when I heard him mentioned during the debate. The point of him is that people who make above $250k are going to get hit hard by Mr. O. Maybe this is necessary in a broad sense, but many people are too nonchalant about squeezing this group of people, O included.

  225. skep-tic says:

    for the record, even the $250k number is off. it is less if you are single

  226. Jamey says:

    69:

    Like the former marina/condo developments in the northern end of Hoboken, ca 1991.

    Only who’s gonna come to their rescue now?

  227. Jamey says:

    Welp, did it: turned cash into real-estate by paying off my mortgage in full, 25 years in advance (well, not exactly: I bought in ’98 and refi’d in ought-three).

    Now at least, should the ax fall, I’ll have a pretty clear idea of what I’ll need to live each month (before Leonia taxes head through the roof…).

    Funny aside on Joe the not-quite plumber: in a non-election year, a non-election year, John McCain only speaks to plumbers through a member of his household staff.

  228. Jamey says:

    Welp, did it: turned cash into real-estate by paying off my mortgage in full, 25 years in advance (well, not exactly: I bought in ’98 and refi’d in ought-three).

    Now at least, should the ax fall, I’ll have a pretty clear idea of what I’ll need to live each month (before Leonia taxes head through the roof…).

    Funny aside on Joe the not-quite plumber: in a non-election year, a non-election year, Sen. Johnmick Cane only speaks to plumbers through a member of his household staff.

  229. Jamey says:

    233: in Toledo, apparently you do.

    But at least we can agree that you have to pay your taxes, which Joe neglected to do. So is he Patrick Henry, or just another phony suckling at the teat of the welfare state?

  230. Jamey says:

    236:

    Actually, Nicholas, Joe’s CV makes him eminently qualified to be a role model for the GOP.

    To which I say, better Republicans, please.

  231. d2b says:

    What I find amazing, if not downright arrogant is that Plumber Joe may be related to Keating. On a night when M attacks O because of Ayers?

  232. Yikes says:

    MJ, had you been looking for a house long? i got the impression you put your boots on last week and here you are on the verge of a purpose.

  233. John says:

    Wow they are bailing out the muni bond insurers, if that happens watch yields fall and prices soar, before the news I saw some 7% tax free munis this morning. That is insane once in a lifetime tax free AAA rated yields. Everyone into the pool!!!!

  234. 3b says:

    #245 John: Pathetic, simply pathetic.

  235. Clotpoll says:

    Jamey (240)-

    Surprised nobody has mentioned the uncomfortable relationship that exists between Repubs and plumbers since the Nixon years.

    This crew of plumbers knew how to get the job done!:

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

  236. 3b says:

    #234 Imus: Well look who is back, and still very much in denial. Who will be buying in all those high end towns?

    What a state of denial you are in. The worst financial crisis in years, and you still hold on to the desperate notion that prices in so called high end towns are/will not decline. Perhaps rather than making an empty statement you might enlighten us as to how we could possibly be missing out on so called buying opportunities.

    You are the one drinking the Kool-Aid.

  237. Clotpoll says:

    Don’t feed the troll.

  238. alia says:

    still looking in montclair, still looking in the same price range. a *lot* more not-so-nice multiple unit bldgs are appearing in my price range suddenly.

    it looks like they are new lists, not stale ones that have cut their price.

  239. PeaceNow says:

    Doesn’t it make you wonder about the intelligence of the Republicans that they didn’t make sure to vet Joe before making him a cause celebre?

  240. Shore Guy says:

    “for the record, even the $250k number is off. it is less if you are single”

    Indeed, and it only applies to income taxes, not payroll taxes. Soon BO will be in a position to lift the cap on payroll taxes and they will apply to income above $109k, which, last time I checked, is far less than $250k.

  241. Cindy says:

    http://www.sacbee.com/latest/story/1320567.html

    “California Bond Sale Complete”

    “The success of the deal far surpassed all expectations,” Lockyer said.

    $3.92B individual investors
    $1.08B institutions

    3.75% on 1.2B maturing 5/20
    4.25% on $3.8B maturing 6/22

    Yeah! I get paid this month!

  242. Shore Guy says:

    “occasionally O would slip and you could see the very left wing guy he is peek out from behind the veil of moderation he has cloaked himself in.”

    By the end of January, maybe February, BO will peel back that trenchcoat, which he is using to conceal his far-left-wing philosophy, and expose his ultra liberalness for all to see — shocking many who thought he was something other than what he is.

    Those of us who have been fortunate enough to make a few bucks better start learning how to squell like pigs and hope some Republican member of the Senate has the ability to weild the Senate rules like Burt Reynolds used his arrow in Deliverance. Or, to paraphrase Betty Davis, “Fasten your seatbelts, its going to be a bumpy presidency.”

  243. Shore Guy says:

    “Yeah! I get paid this month!”

    Always a good thing.

  244. chicagofinance says:

    kettle1 Says:
    October 16th, 2008 at 11:34 am
    Hard place 117 I understand….
    My question thought is, isnt the pure magnitude of their total derivatives a potential issue?
    You have a single company that has become a very large point of failure. I know that this is one of the primary points in the bailout. But the solution is to reduce the mammouth size of the positions, not just hand them cash.
    Am i still missing the point?

    ket: I am supposed to lay off, but “yes” you missed the point completely. You are treating this measure as if it were some algebraic function……ultimately, if you draw any conclusion from a mammouth sized notional other than “man…they gots somes mammouth sized notional” you make yourself appear as a feckless abject clown….

  245. Cindy says:

    (256) Shore
    “Always a good thing.”
    And – Good for capitalism in general-No?

    I mean we had a sale and they were gone in a week. That’s a huge level of individual investors.

  246. chicagofinance says:

    skep-tic Says:
    October 16th, 2008 at 12:21 pm
    I have never been to a “club.” Do you have to wear Dakar Noir to get into one of these?

    skep: I think I have some Drakkar in the medicine cabinet. Only wear one shot to 1/2 a shot AT MOST….

  247. chicagofinance says:

    BC Bob Says:
    October 16th, 2008 at 3:27 pm
    “gold proving to be lousy place for storing wealth.”
    MJ, Not if you are spread. Check the spreads; inter commodity, currencies, equities. Gold is a big winner.

    Bost: what about mean reversion?

  248. Victorian says:

    yay! Looks like the Red Sox will be packing their bags tonight. Go Rays!!

  249. HEHEHE says:

    Good News! Good News! Republican Whip was just on Bloomberg. He has informed us this is not a bailout, it is an investment in our economy! Kudos to the talking points writer. Very nice.

  250. kettle1 says:

    ChiFi

    you missed the point completely. You are treating this measure as if it were some algebraic function……ultimately, if you draw any conclusion from a mammouth sized notional other than “man…they gots somes mammouth sized notional

    well, then thank you for the clarification :)

  251. BC Bob says:

    “Bost: what about mean reversion?”

    Chi,

    If you are locked in at much higher prices who cares? In adddition to that, if you are spread, long/short, and side A [long] of the trade is down $1 and side B [short] is down $2, mean reversion is not pertinent.

    I never said it wasn’t going to be volatile. I’ve been banging the table, regarding buying protection, for the past year.

  252. NJGator says:

    I have seen plenty of price declines in the high end towns. Just this week I got a 100k price reduction for a renovated home on a walk to train cul de sac in Millburn. Place is still overpriced, but much less so now.

  253. Hard Place says:

    kettle1

    Lets grossly simplify and say 45 trillion long and 45 trillion short. AT this point i would imagine that the problem is not the derivatives themselves, so much as the plays have reached such a staggering level that you see disproportionate fluctuations in the market. By having such large positions, i would think that you are greatly increasing the total downside potential of the market.

    You have a single company that has become a very large point of failure. I know that this is one of the primary points in the bailout. But the solution is to reduce the mammouth size of the positions, not just hand them cash.

    Am i still missing the point?

    What you keep referring to is the counterparty risk should that large player fail. Which is what the Fed/Treasury is trying to avoid. Yes one largely levered counterparty could have dire ramifications to the market as all their counterparties will now have credit exposure on their books along with having to find a replacement. When the problem is the company goes from an A rating to default practically overnight, than yeah, handing cash over may be the solution. Unwinding the positions is something that needs to be done over time, without causing major shockwaves in the market. Though seems like there are already some shockwaves in the market. If some of the larger players went under, than the whole system probably caves in.

  254. Yikes says:

    5 years ago to the day, probably in about an hour, aaron boone beat the red sox with an extra inning homer.

    so awesome.

    too bad lame you tube doesn’t have the video. blame MLB, those commies

  255. NJGator says:

    Stu and I easily scored a primo parking spot right next to the entrance to Saks tonight at Short Hills. The recession has arrived.

    Incidentally, I think Stu may be the very first person lured to the Short Hills Mall by the $6 Johnny Rockets coupon in the Entertainment book.

    Lil Gator enjoyed his very first chocolate shake, which was his reward for being such a brave boy while getting his newly state mandated flu shot.

  256. Yikes says:

    Grim, what about a GTG in AC? It’s easy as sh*t to get a free room at Borgota in these times … we could gamble and booze heavily and talk real estate.

    that’d be kick ass.

    give it some thought, boss

    last time i was there, hit the blackjack tables at 230 am and turned 200 into 1600 in about 90 mins … the secret is asking for black chips and pocketing them as you accumulate them. discipline

  257. stu says:

    GTG in AC would be awesome. I could probably get two rooms for free from the HET empire due to my vice (video poker) which is actually the best game in the house. Sometimes it’s worth over 100%, but you better learn optimal strategy!

    Anyone else interested in an AC GTG?

  258. stu says:

    Yikes,

    I could teach you more tricks of the trade in gaming the casinos than you could shake a stick at.

  259. MJ says:

    @Yikes:

    Been looking since 2005 when I got married.

    Figured we’re not getting any younger, daughter needs to start school soon, nice houses are no longer being built except to spec for specific clients, and I can no longer trust a builder and his suppliers to stay in business if I hire one to build for me. Hence, now is my time to pick up a bargain.

  260. Dink says:

    Stu, which casinos in AC have full pay video poker?

  261. PGC says:

    #268 NJGator

    I even surprised myself at times on where that Entertainment book has taken me. Although I will never bring me back to Medieval Times.

    As for the flu shots, we object to all vaccines on religious grounds. We filled the objection with the school district.

  262. PeaceNow says:

    Shore Guy–#253

    “Indeed, and it only applies to income taxes, not payroll taxes. Soon BO will be in a position to lift the cap on payroll taxes and they will apply to income above $109k, which, last time I checked, is far less than $250k.”

    I’ve read this through many times, but fail to see your point. My understanding of payroll taxes is that they’re the employer payroll deductions for social security, disability, etc. Maybe I’m confused, but it would appear you’re trying to compare two different animals.

  263. Shore Guy says:

    Peace,

    When the government reaches into a citizen’s pocket and takes the citizen’s money it is a tax. The payroll tax is a tax every bit as much as the income tax is; just calling it a deduction does not change the nature of the reduction in the citizen’s wealth. And, that “deduction” the employee sees is but 1/2 of the total, as the employer pays the other 1/2 — unless, like me, one is self-employed, at which point the citizen pays the full 15 percent himself/herself. This money goes to support the retirement of current retirees. Disability is somewhat different inasmuch as it is essentially insurance.

  264. Mikeinwaiting says:

    Here you go 13 rooms, taxes about 8k under 400.
    http://newmls.gsmls.com/public/show_public_report_rpt.do?report=clientfull&Id=37283106_11260

    The race to the bottom continues in the hinterlands of Vernon. Still can’t get anyone to come up this far. Better for me as I sit in my rental & wait. In 2 years they will be ripe for the picking,that is if I’m not in my camos hunting to eat.

  265. Clotpoll says:

    Shore (255)-

    If I wanted to live in a soci@list country, I’d pick one with good soccer.

    We are so f*&ked.

  266. sam2008 says:

    Real estate is a legal term (in some jurisdictions, notably in the USA, United Kingdom, Canada, and Australia) that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is stationary, or fixed in location.
    =======================================
    Sam
    FSBO

  267. TREY says:

    How Realtors Destroyed the Economy – 1 Joanna at a time

    http://uk.youtube.com/watch?v=Hv9hSLtEwOM

  268. TREY says:

    read http://finance.yahoo.com/real-estate/article/105964/Home-Prices-Seem-Far-From-Bottom

    _Home Prices Seem Far From Bottom
    by Vikas Bajaj
    Friday, October 17, 2008

    provided by
    The New York Times

    NYT101608.jpg
    J. Emilio Flores for The New York Times

    The American housing market, where the global economic crisis began, is far from hitting bottom.

    Home prices across much of the country are likely to fall through late 2009, economists say, and in some markets the trend could last even longer depending on the severity of the anticipated recession.

    In hard-hit areas like California, Florida and Arizona, the grim calculus is the same: More and more homes are going up for sale, but fewer and fewer people are willing or able to buy them.

    Adding to the worries nationwide are rising unemployment, falling wages and escalating mortgage rates — all of which will reduce the already diminished pool of would-be buyers.

    “The No. 1 thing that drives housing values is incomes,” said Todd Sinai, an associate professor of real estate at the Wharton School at the University of Pennsylvania. “When incomes fall, demand for housing falls.”

    Despite the government’s move to bolster the banking industry, home loan rates rose again on Tuesday, reflecting concern that the Treasury will borrow heavily to finance the rescue.

    On Wednesday, the average rate for 30-year fixed rate mortgages was 6.75 percent, up from 6.06 percent last week. While banks are moving aggressively to sell foreclosed properties, the number of empty homes is hovering near its highest level in more than half a century.

    As of June, 2.8 percent of homes previously occupied by an owner were vacant. Nearly 1 in 10 rentals was without a tenant. Both numbers are near their highest levels since 1956, the earliest year for which the Census Bureau has such data.

    At the same time, the number of people who are losing jobs or seeing their incomes decline is rising. The unemployment rate has climbed to 6.1 percent, from 4.4 percent at the end of 2007, and wages for those who still have a job have barely kept up with inflation.

    NYT101608-2.jpg
    Marc Serota for The New York Times

    The number of empty homes is near a 52-year high. At left, a house in foreclosure in Deerfield Beach, Fla.; and at right, homes for sale in the Ladera Ranch neighborhood of Orange County, Calif.

    In New York and other cities that rely heavily on the financial sector, economists expect that job losses will increase and that pay heavily tied to year-end bonuses will decline significantly.

    more

  269. stocks says:

    “ I have a hedge…

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