Not everyone benefits when loans are modified

From the Wall Street Journal:

Investors Hit BofA Loan Modifications

Bank of America Corp.’s decision to embark on an $8.4 billion home-loan-modification program to settle charges brought by state attorneys general against Countrywide Financial Corp. was hailed as a milestone when the deal was announced this fall. But apparently nobody talked to one group that will shoulder much of the settlement’s costs: investors who hold securities backed by Countrywide mortgages.

ow, some of those investors are crying foul, adding to the confusion over what is becoming a central issue in efforts to resolve the wave of foreclosures that is at the root of the global financial crisis.

J.P. Morgan Chase & Co. and Citigroup Inc. recently announced foreclosure-prevention programs that aim to reduce interest rates, extend repayment schedules and, in the case of Citigroup, reduce loan amounts, to help borrowers keep their homes. But the programs have focused primarily on loans wholly owned by those companies because they feel they have more authority to rework those mortgages.

More than $2 trillion in mortgage loans were packaged into mortgage-backed securities and sold to investors by Wall Street, according to Inside Mortgage Finance. But opinions vary regarding the degree to which these mortgages can be modified.

Under terms of contracts with investors, mortgage companies generally have the authority to rework loans when it is likely to benefit investors. But just how much authority the mortgage companies have is open to debate.

Modifications also can benefit some bondholders at the expense of others. Reducing a borrower’s loan balance, for instance, may hurt holders of the riskiest piece of a mortgage securitization more than investors who bought securities that had higher credit ratings.

Last week, a group of about two dozen investors met in New York with attorneys at Grais & Ellsworth LLP, who believe they may have grounds to sue. Attorney David Grais told them that Bank of America was conflicted when it agreed to the settlement because Countrywide was both the originator of the mortgages and the servicer of the securities. “This is penalty shifting,” Mr. Grais said.

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281 Responses to Not everyone benefits when loans are modified

  1. grim says:

    From MarketWatch:

    Home Depot’s quarterly sales down 6.2%

    Home Depot Inc. reported net income of $756 million, or 45 cents a share, for the third quarter ended Nov. 2, down from $1.09 billion, or 60 cents, earned in the same period last year. Quarterly sales generated by the Atlanta-based home-improvement retailer fell to $17.78 billion from the prior year’s $18.96 billion, as comparable-store sales sank 8.3%. Excluding an extra week in the year-earlier third quarter, comp-store sales would have been down 7.1%, Home Depot said. Both customer transactions and average ticket were lower in the latest quarter, as “the housing and home improvement markets remain challenging,” said Chairman and CEO Frank Blake.

  2. grim says:

    From Bloomberg:

    BlackRock to Cut Jobs for First Time as Fund Industry Contracts

    BlackRock Inc., the largest publicly traded asset manager in the U.S., is cutting jobs for the first time in its 20-year history as slumping financial markets force the mutual-fund industry to shrink.

    Dismissal notices will be issued this week, the New York- based company said yesterday in a memo to its 5,500 employees, a copy of which was obtained by Bloomberg News. The number of people and positions affected weren’t disclosed. Bobbie Collins, a BlackRock spokeswoman, said details wouldn’t be made public until after the end of the year.

    “Times like these require fiscal discipline,” the unsigned memo said. “We expect it of the companies in which we invest and we must expect it of ourselves.”

  3. grim says:

    Grim is tickled pink to have finished his last MBA project last night and to be giving his last presentation tonight.

    What a wonderful environment to have just finished an MBA (conc: Finance) in!

  4. grim says:

    Green Light!

    From CNBC:

    Dutch Insurer May Buy Thrift to Get US Bailout Funds

    Dutch insurer Aegon said it may buy a small U.S. thrift company to qualify for potentially more than $1 billion in U.S. government support, sending its shares down more than 8 percent.

    “This is part of our strategy to ensure Aegon has the strongest capital position possible,” said Aegon spokesman Greg Tucker. “If Aegon is eligible, we would seek the minimum range of funding possible.”

    The range was 1 to 3 percent of its $125 billion in U.S. assets, he said, and the application was for the so-called Troubled Asset Relief Program (TARP) which the U.S. government has used to help banks hit by the credit crisis.

    Red Light!

  5. Cindy says:

    Grim- (3) Talk about “on the job” training!

  6. Cindy says:

    https://news.fidelity.com/news/ArticlePageFragment.jhtml?key=/pf/content/content/economy/housing-reality-test.shtml

    “Housing Supply Side Needs a Reality Test”
    originally WSJ – 11/17

    “If the government fails to address oversupply, the result could be zombie companies or even a zombie economy along the lines of Japan during the 1990’s.

    Housing is one example. There is currently more than 10 months of home inventory. Homeowner vacancy rates are at historic highs of about 2.8%, compared with pre-bubble levels of 1.7%, according to the census bureau.

    Yet still they build. Data due out this week are expected to show that housing starts fell to a seasonably adjusted annual rate of 800,000 in October, according to Credit Suisse.

    Housing construction levels are back to where they were in the early 1980’s. But it still begs the question: Why?

    Clearly there is always going to be some activity in some parts of the country. And projects take time to work through the system. But Merrill Lynch economists suggest, only half jokingly, that the Treasury should impose a moratorium on home building. “It sounds like lunacy, but we have to destroy the housing capital stock to help put a floor under the market,” he said.

    …painful as it is for jobs, capacity must come out of the system…

    Whoa – a moratorium on building – They could always do one of those agricultural subsidy deals where they PAY a farmer not to plant a crop….

    Or…before you can build a new sensible 1500 sq. ft. starter home you must tear down a Mc Mansion?

  7. Cindy says:

    http://www.nakedcapitalism.com/2008/11/senator-grassley-targets-goldman.html

    Thought some folks might like this one…

    “Senator Grassley Targets Goldman-Treasury conflict, Net Operating Loss Gimmie.”

    “The September 30 “notice” by the tax authorities, which fall under Treasury jurisdiction, altered a section of the tax code that had previously prevented tax-motivated acquisitions of loss-making corporations. In effect, the notice eradicated a limit on the amount of taxable income an acquiring bank could deduct after a takeover.”

    “Paulson’s hubris is breathtaking. The IRS (and by extention, the Treasury) administers the tax code. It doesn’t write it. And trying to claim changing the tax code is in the Treasury’s authority is a remarkable bit of executive overreach.”

  8. Cindy says:

    (3) Congratulations Grim!

    Pray tell – What is the subject – title – of your presentation tonight?

  9. Clotpoll says:

    chifi (108, yesterday)-

    Don’t laugh. That corpse is a better credit risk than half the people that walk thru our door:

    clot: Would you be willing to originate a mortgage for a corpse? It did have an income stream…….

    http://news.yahoo.com/s/ap/20081118/ap_on_re_us/decaying_corpse

  10. afe says:

    congrats Grim.

  11. Cindy says:

    @7

    “A senior Republican senator is seeking an investigation into potential conflicts of interest among former Goldman Sachs executives serving at the US Treasury and whether any officials exceeded their authority by implementing a controversial tax change without the approval of Congress.”

    Better late than never…

  12. Cindy says:

    Clot – I have been mulling over the sale of the foreclosure next door. (Owner occupied – thank heavens…) It sold for $179,000. – I bought in 1999 – closed 2000 @ $115,000. So – 64,000 difference over 8 years is 8,000 a year or about a 7% return. The bank ate over $100,000 on that one. Really, all I care about at this point is that an actual owner is now living there who plans to stay and can afford the house.

  13. Cindy says:

    http://www.reuters.com/news/globalcoverage/housingmarket

    Did anyone post this? Lots of data..

    “Freddie Mac could lose $20 – $40
    billion in 2009: Friedman”

  14. House Hunter says:

    congrats Grim!

  15. BC Bob says:

    JB,

    Congrats. Now go build a model, mark to soberism not fantasy.

  16. BC Bob says:

    OT;

    Son of Sam last week, today the Kool-Aid drinkers, 30 years ago.

    http://www.msnbc.msn.com/id/27743208/?GT1=43001

  17. Cindy says:

    http://www.tickerforum.org/cgi-ticker/akcs-www?post=71657

    What was sold to Congress? $350B to bail out foriegn investors/speculators????

    That admission – caught on tape – so to speak…

  18. Essex says:

    Congrats Grim…although if it aint a top 20 school you might be in trouble…unless of course there is a backlash toward the ‘smart’ folks who got us into this. P.S. My thought…start your own bidness….

  19. Stu says:

    Way to go Grim.

    I entered the job market in a similar economy. Best I could do in 1995 was $18,000/yr. I made fake rail passes and rented a room in a frat house to make ends meet. Ended up being some of the best years of my life. I lived in Clifton then ;)

  20. John says:

    Grim congrats now you join the most hated group in america, maybe we can have a summer wall street picnic and invite the NAR, UAW and TARP People.

    So it appears the automakers will get a 25 or 50 billion ten year loan at 5%. Will be structured so it is even senior to outstanding bonds so Govt gets first crack at everything in a bankruptcy. Govt can sell ten year bonds at 3.75% to get the money to loan out. GM cost savings all kick in during 2010 and 2011 so if after that the economy is strong and it looks like GM still can’t make it lets just pull the plug then. If it survives US makes a lot of interest income for ten years plus GM pays a lot of taxes over ten years while US avoids massive hit to budget and unemployment in 2009.

  21. Cindy says:

    http://www.atimes.com/atimes/Japan/JK19Dh01.html

    BC – something else on the “yen carry trade” you told me to watch. How about “Obama Bonds.” – Asia Times

    “Yen-denominated US Treasuries would reduce currency risk for Janpanese and Chinese buyers of U.S. Treasuries,” said Fukui. “If concerns over US Treasuries continue to grow, no one will want to buy them. Yen-denominated Treasuries would make it easy for foreign investors to buy them.”

  22. Clotpoll says:

    Some guy on CNBC, openly accusing PPT of buying S&P components on down days. Chief economist of BAC calls the conversation “silly”.

    Is the cat now out of the bag?

  23. Clotpoll says:

    Oct 10th and 28th trading sessions being called suspicious by this guy. Who is he???

  24. Cindy says:

    Grim – Sorry @ 22 – in mod – from Asia Times – proposing “Omama” Bonds…..Yen- denominated…

  25. BC Bob says:

    Clot [22],

    That cat has been out of the bag for awhile. Of course the PPT buys S&P’s. Do you think everybody at that Caribbean trading firm lays on the beach all day?

  26. NJCoast says:

    #22
    They must have screamed in Steve Liesmans ear to shut that guy up because Steve immediately started discrediting him.

    Congrats Grim. Best wishes for your presentation!

    Ani Difranco at The Count Basie Theatre tonight.

  27. 3b says:

    Congrats grim, now give yourself a break, and take some time for you.

  28. Clotpoll says:

    BC (25)-

    We’ve known the score for a while…but I never thought I’d hear it on CNBC. You should’ve seen the look on all their faces. Pure panic, like somebody told them they’d all just drunk pure melamine.

    The best part was when they cut to Santelli. He was just laughing. Said something to the effect that the PPT had gotten the “plunge” part right, but not so good on the “protection”.

  29. John says:

    http://www.nytimes.com/2008/11/18/opinion/18brooks.html

    Good article about the formerly middle class.

  30. Barbara says:

    Observations on north and south jersey mls:
    I usually look in Montclair and Collingswood once a week, been doing this for a couple of years now and I have physically looked at houses in both areas for 3 years (stopped last year).

    Collingswood, a south jersey town that has enjoyed a “hot” market compared to other S. Jersey towns finally shows a serious reality check in new listing’s asking price. I’d say about 30-50K lower than just two months ago.

    Montclair still has plenty of crack head asks but mostly from old listing that I have been looking at for 6 months or more. Some new listings are finally coming down, although not nearly enough given the property tax situation in that town and the impending raising to come in the years ahead. Still, I was seeing a 50-60K or so reduction in newer listing.
    No stats, strictly eyeballing it. YMMV.

  31. Sean says:

    BOA takes US bailout money and doubles down in China.

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ax0plIpzNUy0

  32. BC Bob says:

    “The best part was when they cut to Santelli. He was just laughing. Said something to the effect that the PPT had gotten the “plunge” part right, but not so good on the “protection”.”

    Clot,

    I wish I saw that one.

  33. Confused says:

    Good Morning,
    I’m sure you’ve heard this plenty of times before but I couldn’t find anything that resembled my situation online so far. I’m new to this site and I am in need of some advice. I live in Middlesex county and am looking at a house I’d like to buy. The seller came down 30,000 off their asking price and is willing to make any neccessary repairs. I feel like I have no concept of how far the housing prices may or may not still fall. Please let me know what you think if you don’t mind. Thanks….

  34. Barbara says:

    33. Confused

    Town, beds/baths and original ask? I’ll give you my opinion although I’m not an expert. Some people on this board are so stick around :)

  35. BC Bob says:

    Clot,

    Speaking of protection. I would imagine that they would have their guns loaded at the 7,900-8,100 level in the Dow. That’s one ugly chart pattern, a consolidating triangle.

  36. Confused says:

    Spotswood, it is a townhouse with 3 bedrooms 2.5 baths built in 1996. one car garage no basement. Original asking was 295,000. There are 2 others going for about 5,000 more but with way more upgrades. This one is in great move-in condition, just a little more outdated.

  37. comrade nom deplume says:

    With all this doom and gloom, a small but happy NJ property story for once.

    Today, it snowed. Just a flurry but I always loved the first flurry of the season. My daughter was glued to the window, watching the fat flakes drift down.

    As I strolled to the station in Brigadoon (its a long walk) enjoying the crisp, snowy air, a BMW 5 Ser. stopped next to me and the driver asked if I wanted a ride. Naturally, I accepted and made it easily to the 8:01 train.

    It was a thoughtful gesture, made all the more so by the fact that this guy went out of his way–he wasn’t going to the train station. Nor did he know I was a recent arrival in Westfield. He simply did it to be nice.

    When he learned I was new in town, he welcomed me and proceeded to ask about kids. We learned that we each had a child in the kindergarten together.

    As nice as his gesture was, especially in this mean time, and in a state not known for its warmth or generosity (especially in traffic), it was not unique. We call Westfield “Brigadoon” which is a mythical place that no one leaves. Indeed, this became apparent why when we bought our house. The sellers moved just a few blocks away. And that experience was not unique–I almost bought a different house and that seller wasn’t leaving the town. And another house I considered was sold by a person who also relocated within the town. So it is true that no one leaves Brigadoon, and ours appears to be no exception.

    We pay a premium (a hefty one to be sure) to live in places like Brigadoon and say it is for the schools, or the downtown (and, admittedly, for the cachet, though Brigadoon doesn’t seem to want to be another Summit or Millburn). But since I moved there, I have found unfailingly nice, helpful and genuinely welcoming neighbors, and kindness from strangers. It seems to help justify the premium we have paid.

    And in a sense, David S.’s gesture of a ride wasn’t special because it was unexpected or unique. It was special because it wasn’t.

    I suppose the cynic in me will resurface at some point, and I will have reason to complain about Brigadoon. But for now, the people are nice, the kids are well-behaved, the lights are going up on the huge pines near the station, and I feel just a bit better about taking the plunge into home ownership in New Jersey.

    At least until I get my tax bill.

  38. Barbara says:

    36.
    when you say “going for” do you mean they already sold or is that just the current list price? An important distinction.
    My first thoughs are Spotswood and Old Bridge area has seen rabid new construction over the last 10 years, and there may be a glutch of townhouses in that area. Still, 265,000 for 3 bedrooms and 2 baths is certainly a discount compared to prices just a few months ago, however I like many on this board are holding back a bit until 2009 to buy because we think the market has quite a bit further to drop.

  39. Clotpoll says:

    BC (35)-

    Every retest of those lows seems to produce a Vi@gra bounce. I know I’ll kick myself when the trend breaks under that support line (which will inevitably happen), but days like today are the ones I’m happy to sit on the sidelines.

    The HP and Home Depot reports today might get things moving to the upside. I smell sucker rally.

    I guess any rally now can be deemed a sucker rally.

  40. Barbara says:

    38 Comrade
    Clearly he was just trying to hook up.
    Perv. ;P

  41. BC Bob says:

    Clot [40],

    In other words, you’re flat and nervous as hell. Certainly know the feeling.

    Well if it occurs, line broken, that’s OK. Wait for the eventual bounce and sell against that line. Old floors become new ceilings.

  42. Trader says:

    40

    If it lasts more than 4 hours a financial advisor should be consulted

  43. Confused says:

    no they’re sitting at 300,000 because from what I heard they still owe that much so they can’t accept any less. I know it is really difficult to gauge but just as an example for someone new to all this, if that house is asking 295,000 and agreed to take 265,000, how much further do you think they’re value will drop in the coming months if we step away…..

  44. Barbara says:

    44. Again, just my opinion but you could be 20K in the hole by next spring if you bought now at 265K.

    Hopefully some others will respond too and help you out.

  45. Stu says:

    BC Bob, Clot,

    Been on the sidelines for a while as I missed this latest drop from 9.5 on the DJIA to where we are currently. I anxiously wait for the next BMR. It’s no fun to be in a cash position ;)

  46. SG says:

    One house transaction history near my street in Bridgewater,

    10/31/1996 $140,000
    04/28/1999 $185,000

    Last month Foreclosed at $189,000

  47. NJGator says:

    38 Nom – Geez, are you going all kumbayah on us?

  48. Sybarite says:

    Confused,

    Look at some recent sales, if possible. Ideally in the same complex, but also in nearby complexes for some ideas. Typically condo/townhouses prices react quickly to the market, but I have a feeling there is still some more room to fall in the next year – year and a half.

    Although NJ may not be experiencing as direct a hit as other places in the US, I don’t see how RE could possibly stop dropping in the near to medium term.

  49. Barbara says:

    Confused,
    adding….if you said the townhouse was located in Metuchen or East Brunswick I’d probably say it was a good deal at 265,000 based on quality of schools, downtown and train access (metuchen).

  50. Victorian says:

    Hey Clot! Just for you man –

    “In the latest fashion statement out of Italy, soccer players are dropping their shorts to score goals.
    Catania, a team in the country’s top division, unveiled the new look while taking a free kick. The players lined up in a wall and dropped their shorts in an effort to block the goalkeeper’s vision.

    The Sicilian team carried out the maneuver to perfection Sunday. Three players dropped their shorts practically to their knees so Torino goalie Matteo Sereni couldn’t see the kick by Giuseppe Mascara, who scored during Catania’s 3-2 victory. …”

    http://sports.yahoo.com/sow/news?slug=ap-italy-shortsdown&prov=ap&type=lgns

  51. 3b says:

    #49 sybarite: NJ may not be experiencing as direct a hit as other places in the US,

    I would say after this year, we are going to have our own direct hit to real estate in NJ.

  52. Clotpoll says:

    nom (38)-

    My daughter’s team (N Hunterdon) played box lacrosse v Brigadoon on Sunday. For the entire 30 minutes, the Brigadongs whined to the ref, played like gorillas and delivered several head-high cross checks…one to my daughter. I’d consider it an isolated incident, were it not for the fact that I’ve dealt with this same thing 2-3 times a year when the club soccer team I coach plays them. This thing hit a new level last week, when a goodly number of Brigadoon High students and soccer players took to Facebook, calling out N Hunterdon’s top scorer in a very nasty fashion (I’d never even looked at Facebook before, but my daughter noticed the thread and pointed it out to me). All it accomplished was getting a far-superior Brigadoon team knocked out of the state tournament by a team that wouldn’t have been half as motivated had the Brigadongs left well enough alone.

    It’s probably just the sports…and that kind of behavior from kids should be curtailed by adult supervision and coaches…but it doesn’t reflect well on the town, especially when the vast majority other central NJ towns don’t engage in this stuff.

  53. Confused says:

    The most recent example I found was the house next door which is an end unit, more updated and more space overall, which sold for 295,000 beginning of August. There is nothing more recent and that was before our Wall St. meltdown began….

  54. Clotpoll says:

    vic (51)-

    Wow. The trend in the top levels is to try to do things that interfere with the keeper’s vision, but this is too much.

    I’m pretty sure there is nothing in the laws of the game that prohibits this.

    Thanks…

  55. Stu says:

    Confused,

    I agree with Barb. Next year could be the big drop year for housing in the NY/NJ area. I would wait at least until next summer, but if your wallet can handle the potential hit and you plan to stay there for 15 years, then you should buy it now. Problem is, everyone says they will stay there for 15 years and then they are moving 5 years later ;)

  56. John says:

    game on

  57. Confused says:

    Yeah I don’t want to be that guy….. I’m pretty young and I think it’d be great to start with real estate so early but I just want to be careful about it and avoid causing myself more harm than benefit. Here’s another dumb question, what would you say are some pretty obvious signs of when we hit rock bottom?

  58. RentinginNJ says:

    If [GM] survives US makes a lot of interest income for ten years plus GM pays a lot of taxes over ten years while US avoids massive hit to budget and unemployment in 2009.

    I think the risk of not bailing out GM is overstated. GM, the dems and UAW all act as if GM will simply cease to exist and millions will loose their jobs if GM fails. In reality, GM will seek bankruptcy protection under Chapter 11, they will restructure, they can get in a new management team and they can shake off unsustainable legacy UAW contracts. I’d rather see a more limited bailout, if any, after bankruptcy (maybe the gov can backstop warranties so people still but their cars).

    A bailout now will simply allow an unsustainable business model to survive a little longer. It will be a wealth transfer from taxpayers to people who make $125k per year with lifetime benefits to pop the ashtrays into cars.

  59. John says:

    Watch out next time he may want you to pay and you may end up with both tennis elbow and a sore throat.

  60. Clotpoll says:

    Thanks, John. That’s a heartwarming holiday sentiment.

  61. Sybarite says:

    59

    Agree; which US industry will be the next to beg for a handout? I’m surprised the homebuilders haven’t become banks yet.

  62. Clotpoll says:

    syb (62)-

    Lots of HBs have mortgage divisions. Wouldn’t be a stretch to turn them into bank holding companies.

  63. John says:

    The Daily Municipal Comment November 18, 2008 by Michael E. Lane
    Another indication of the weakness in the economy is the Producer Price Index released this morning, which showed that prices paid to producers declined the most on record, 2.8%. Municipals have steadily gained ground the past few days as Treasuries have rallied in face of the declining equity markets. The new issue calendar continues to see heavy demand from both retail and institutional clients.

  64. BC Bob says:

    Is Schiff a secret blogger on this site? Very entertaining, especailly Ben Stein touting Merrill at $76, around the 6.25 min.

    http://www.youtube.com/watch?v=2I0QN-FYkpw

  65. Sastry says:

    Nom [#38]

    I used to joke about people calling the South as “friendly and warm”, that they are friendly and warm only if one “belonged” there.

    I’ve had a weird experience downtown Westfield about ten years ago — I got lost on my way to New Providence and tried to park my car on the street to get some directions… Got honked at, and when I did eventually go to a store to ask for directions, they said, sneeringly, “Go to Rhode Island”…

    Everything is in the eye of the beholder :)

    S

  66. RayC says:

    Nom, Clotpoll, Sastry,

    Can’t we just all agree that people everywhere s#ck?

    I have been renting (renting!) in Westfield for 2 years and everyone has been nice, the neighbors who have lived there forever et al.

    I have also spent almost a month total in Paris on 2 separate trips, and no (that’s right, zero) incidents of snobbery. Anything is possible.

    Of course, I grew up and lived in NYC, and I think it is one of the friendliest cities going. So yes, I guess it is all in the eye of the beholder. Now GET OUT OF THE LEFT HAND LANE YOU YAHOO I”M RUNNING LATE!!! Sorry,don’t know where that came from.

  67. John says:

    5 series is a great car to give strangers a ride in as long as it has the fold down seat option and the X package. With the fold down seat option you can easily push the body directly into the large trunk and with all wheel drive you can get far enough off road to dump the body. A miata or a mini would be much safer to take rides in from strangers.

  68. Fiddy Cents on the Dollar says:

    Big 3 Automakers – here’s the gubmint’s bailout offer….We’ll give you $20K for every hybrid car that you sell. We’ll deduct $30K for every Tahoe/Yukon/Denali/Escalade that you sell.

    That’s the best and final offer. The gubmint doesn’t want to own your stock or hold your bonds.

    Innovate!

  69. Outofstater says:

    GM has an ad on the AOL home page that is an entire package of links to mobilize America to save the auto industry. Gag me with whale blubber.

  70. Hard Place says:

    John,

    With the fold down seat option you can easily push the body directly into the large trunk and with all wheel drive you can get far enough off road to dump the body.

    Mind of a psychopath at work. Do you write for the show “Dexter”.

  71. Clotpoll says:

    Blog comment from one of our local kings of RE:

    “In addition, get creative about extracting more cash from your home. An obvious way is to rent out the basement or a room.”

  72. Clotpoll says:

    Ray (67)-

    I usually despise generalizations about towns, regions, ethnic groups, etc. However, when I see the same behavior in the same place- repeatedly- I begin to draw conclusions.

    Youth sports is also a venue where you get to learn a lot about what communities are really like. I never cease to be surprised, mostly to the upside. However, Brigadoon stands out as a glaring exception.

  73. Clotpoll says:

    Anybody watching Barney and Klink getting into the rough trade?

  74. grim says:

    #68 – Comment of the Day!

  75. RentinginNJ says:

    With the fold down seat option you can easily push the body directly into the large trunk and with all wheel drive you can get far enough off road to dump the body.

    Do you like Huey Lewis and the news?

  76. Clotpoll says:

    Now Bergabe is getting grilled about collateral quality at the window.

  77. comrade nom deplume says:

    [68] John

    I wasn’t exactly worried. Besides being incurably suspicious (and as a cop brat, I have a pretty good radar for trouble), I think I am big enough and mean-looking enough to make any perv or homicidal maniac think twice about whose blood will stain the leather seats.

    [41] Barbara,

    That actually happened to me in college—hitched a ride on campus and got propositioned. Then as now, I didn’t look like a pushover, and the dweeby driver wasn’t about to get physical with the scruffy 6 foot guy in the leather jacket. I politely declined his offer of oral sex, and he politely accepted my declination, left me off at my destination, and proceeded to look for gratification elsewhere.

    [67]RayC

    “Rhode Island”? Don’t get that one!

    I had a similar take on Paris and France, having spent a month there on two trips as well. No incidents of snobbery. Quebec City OTOH, was snob central.

    And you’re right that NY’ers get a bad rap for rudeness. Of course, being a Bostonian, I still have to say You S@ck! but don’t take it personally.

  78. grim says:

    From Bloomberg:

    Home Prices Tumble in 80 Percent of U.S. Cities on Foreclosures

    Home prices fell in 80 percent of U.S. cities in the third quarter, a record spurred by distressed foreclosure sales across the country.

    The median price of a U.S. home fell 9 percent in the third quarter from a year earlier and distressed sales accounted for at least a third of all transactions, the Chicago-based National Association of Realtors said today. The price fell in 120 U.S. metropolitan areas, rose in 28 and was unchanged in four, a record for the study, which started in 1979. U.S. sales of single-family houses and condominiums rose to 5.04 million at a seasonally adjusted annual rate, up 2.6 percent from the second quarter.

    The financial turmoil sparked by the collapse of the U.S. subprime mortgage market has caused $996 billion of losses for banks, lenders and insurers. U.S. companies slashed 1.4 million jobs in the last six months, the biggest reduction since 1975.

    “Housing is front and center of the financial crisis,” said Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania. “So long as house prices are declining and foreclosures mounting the financial system will struggle and the economy will be in recession.”

    Forecasters say home values will continue to drop through next year. The S&P/Case Shiller home price index that tracks 20 cities may tumble as much as 14 percent in 2008 and 7.8 percent in 2009, Freddie Mac, the world’s No. 2 mortgage buyer after Fannie Mae, said in a report this week. Combined sales of new and existing homes probably will fall to 4.87 million, down 35 percent from the record 7.46 million sold in 2005, McLean, Virginia-based Freddie Mac said.

  79. PGC says:

    Here’s a long shot.

    Barney and Klink to survive into the O administration. They’ll be picthed as continuing on a plan that seems to be working for the economy. It would be to dangerous to replace them at this point.

  80. Clotpoll says:

    Congressman now asking Bergabe if all his suits are made of Tyvek.

  81. kettle1 says:

    The big 3 are dead. NONE of the Big Three are salvageable in their current forms. Who has the money to buy 17 million cars/ year? not americans. Who needs 17 million new cars per year?
    The big 3 need sales of about 15 million to stay afloat and the foreign manufacturers need about 12 million to stay afloat. We are going to see car sales drop below 10 million for at least a few years — and neither is anyone reliant on the Big Three to stay in business. That’s more then 10 million jobs out the door.

    The only thing that could possibly be done to make the big 3 worth make any government money, is to have them retool and rebuild the railroad infrastructure of the US.

    That one action creates productive jobs, building a value added product that the nation has a need for. Our railway systems are really 3rd world.

    Whats scary is, if you think detriot is bad now, wait until the big 3 die.

  82. grim says:

    From the NAR:

    Metro Median Prices

    Q3 YOY Median Price Changes
    Allentown-Bethlehem-Easton, PA-NJ -10.1%
    Atlantic City, NJ -8.9%
    New York-Northern New Jersey-Long Island, NY-NJ-PA -5.0%
    New York-Wayne-White Plains, NY-NJ -4.5%
    NY: Edison, NJ -3.9%
    NY:Nassau-Suffolk, NY -9.9%
    NY: Newark-Union, NJ-PA -1.7%
    Trenton-Ewing, NJ +4.2%

  83. John says:

    I find this story hard to swallow

    That actually happened to me in college—hitched a ride on campus and got propositioned. Then as now, I didn’t look like a pushover, and the dweeby driver wasn’t about to get physical with the scruffy 6 foot guy in the leather jacket. I politely declined his offer of oral sex, and he politely accepted my declination, left me off at my destination, and proceeded to look for gratification elsewhere.

  84. grim says:

    From CNBC:

    Metro Home Sales Prices Fall 9% in Third Quarter

    Existing U.S. single-family homes prices in metro areas fell 9.0 percent in the third quarter compared with the same period last year, the National Association of Realtors said on Tuesday.

    Home values fell in 120 of 152 metropolitan areas, while four were unchanged and 28 metros experienced increases.

    “A pattern of sharply higher sales in areas with large price declines is well established,” said Lawrence Yun, chief economist at the National Association of Realtors.

    The trade association said 35-40 percent of home transactions in the third quarter were distress sales that either took place through foreclosure or short-sales where the holder of the mortgage agrees to take a loss.

  85. comrade nom deplume says:

    [73] clot,

    Thanks for the buzzkill.

    As for your kid, I just cannot speak to that issue. My 5YO hasn’t high-sticked anyone yet.

    It is a concern in that I had her in youth soccer in Summit, and the parents there seemed to have no problem with their kids displaying base tendencies. Since the people in Summit were generally more obnoxious, I figured that the parents were either oblivious to their kids behavior or sanctioned it. Next year in Brigadoon, when she is in local sports programs, I will get to see firsthand I suppose.

  86. kettle1 says:

    Clott, BC

    WIll the fall of citi be the bomb that sets off the next big drop?

    As of june 30, the carried about 34 Trillion in total derivatives and had a credit to capital ration of 258.

    The pure size and interconnectedness within derivatives would seem to be beyond the ability of Col Klink and friends to abrogate

  87. Victorian says:

    This is fcuking criminal!

    “Can you give me your definition of a financial institution”?
    HP – “I cannot.”

    Arrogant prick!

  88. comrade nom deplume says:

    [85] John,

    Funny. Just because you had to give it up doesn’t mean I did.

    (FWIW, it is a true, and rather insignificant, story. Kinda shook me up at the time though.)

  89. max says:

    look lets face it. they lie, and the american public is to stupid to do anything about it.

    wait till corzine shows up,, in his pin strips and white teeth,, he’ll lie and
    the american public will continue to go along with it.

  90. max says:

    grim: please post the hope hotline #

    we need change and hope over here

  91. Tom3000252001 says:

    30 reasons for Great Depression 2 by 2011 !!!

    http://www.marketwatch.com/news/story/Well-Great-Depression-2-2011/story.aspx?guid={B28B49B5-EFD1-4941-B57E-A2BA1545BA09}&dist=SecMostRead

    I think we are almost there…hold on to your horses folks!!!

  92. comrade nom deplume says:

    [66] Sastry

    That isn’t to say I haven’t had similar experiences in Brigadoon, and have gotten out of my car to shout down some typical NJ drivers. Being true NJer’s, they feel entitled and mouth right back until you invite them out of their car for a more personal discussion. I expect this everywhere in the Northeast and I am never disappointed.

    But, as Clot said “when I see the same behavior in the same place- repeatedly- I begin to draw conclusions.” And on the whole (so far), the amount of goodwill I have seen thus far in Brigadoon has been repetitive, which is a pleasant surprise.

    I will take it for as long as it lasts.

  93. kettle1 says:

    anyone still want to argue that the US is solvent?

    http://tinyurl.com/5z9oo3

  94. NJGator says:

    It’s Lonely If You’re An FSBO

    For sale by owner (FSBO) properties are few and far between in Montclair, where 6% of the purchase price (or 5% if you’ve got a realtor willing to negotiate) is the going rate for getting your house sold. Here’s one at 26 Oxford, mentioned in a piece about going without a realtor in the New York Times this weekend. Owner Boris Schaefer has dropped the price from $689,000 to $649,000 for the five-bedroom colonial. Tell us whether you’d ever attempt (or have attempted) to FSBO.

    http://www.baristanet.com/2008/11/its_lonely_if_youre_an_fsbo.php#comments

    http://www.nytimes.com/2008/11/16/realestate/16cov.html?_r=1&scp=1&sq=FSBO&st=cse

  95. BC Bob says:

    WASHINGTON (MarketWatch) – A simmering closed-door debate between top government officials over the priorities of the government’s financial market rescue package spilled out into public on Tuesday.

    Treasury Secretary Henry Paulson and Federal Deposit Insurance Corp. Chairwoman Sheila Bair clashed in public over whether to use some of the $700 billion package to aid homeowners at risk of foreclosure. Bair on Friday unveiled a $24.4 billion proposal aimed at blocking 1.5 billion mortgage foreclosures, however Paulson said he would not pay for it as part of the $700 billion bank Troubled Asset Relief Plan plan.

    “The root cause of the current economic crisis [is] the failure to deal effectively with unaffordable loans and unnecessary foreclosures,” Bair said to lawmakers at a House Financial Services Committee TARP oversight hearing.

    http://www.marketwatch.com/news/story/Paulson-Bair-clash-over-aid/story.aspx?guid=%7BA0624746%2DC7E0%2D4A27%2D9BF0%2D4E30D504F8ED%7D&dist=hplatest

  96. comrade nom deplume says:

    [48] Gator

    you know better than that!

  97. NJGator says:

    It’s Lonely If You’re An FSBO

    For sale by owner (FSBO) properties are few and far between in Montclair, where 6% of the purchase price (or 5% if you’ve got a realtor willing to negotiate) is the going rate for getting your house sold. Here’s one at 26 Oxford, mentioned in a piece about going without a realtor in the New York Times this weekend. Owner Boris Schaefer has dropped the price from $689,000 to $649,000 for the five-bedroom colonial. Tell us whether you’d ever attempt (or have attempted) to FSBO.

    http://www.baristanet.com/2008/11/its_lonely_if_youre_an_fsbo.php#comments

  98. BC Bob says:

    kettle [96],

    Not I.

  99. Sastry says:

    nom [#94]…

    As I said, one incident, ten years ago. So, it could be an outlier…

    The main advantage of NJ, I tell my friends, is that people are rude, but they are equally rude towards everyone, and there in lies the greatness of NJ :)

    S

  100. NJGator says:

    Re 100 – I’ll buy a drink at the next GTG to the first person who can identify Stu’s Baristanet handle on this thread.

  101. grim says:

    Texas is prime!

    Deadbeat Homeowners Tap Texas Bankruptcy Laws to Duck Creditors

    Homeowners fleeing underwater mortgages in California and Florida know where to come up for air: Texas.

    “Texas is an extremely friendly place to live if you owe money and do not want to pay,” said Marjorie Britt, a bankruptcy attorney with Britt & Catrett PC in Houston. “If you have a lot of money and even more debt and want to shelter your assets, you can live fairly normally.”

    Distressed borrowers can hang on to luxury cars, a primary residence, paychecks, retirement accounts, and even jewelry that creditors might claim elsewhere, Britt said.

    A still-robust job market draws nonresidents trying to get away from houses worth less than what they owe on the mortgage, said Jay Westbrook, a business-law professor at the University of Texas in Austin. These newcomers find employment, buy a home in Texas, and mail lenders the keys to the house they abandoned.

    Texas bankruptcy filings involving delinquent out-of- state mortgages increased by at least a third in the past year, said Jan Northrup, a lawyer with Hughes Watters Askanase and a bankruptcy trustee in the U.S. District of Southern Texas. Many involve people who moved from Florida, California, Colorado or Arizona, she said.

    “We’re especially seeing people who were using their credit cards to pay their mortgages, hoping their houses would sell, who were just digging themselves deeper into a hole,” Northrup said.

  102. John says:

    girls soccer is sponsored by the GLB clubs as it is a great way to grow their carpet munching ranks.

  103. kettle1 says:

    BC 98

    panem et circenses

    the house is on fire all around us, and we are still arguing over who gets the TV remote tonight…..

  104. kettle1 says:

    BC,

    as you said, a race to the bottom…

    Competitive currency debasement is now underway with the US, UK , China, and now Japan all giving away money in economic stimulus plans. One irony is that Japanese citizens don’t want the money

    Free Money? In Japan, Most Say They Will Pass.
    http://www.washingtonpost.com/wp-dyn/content/article/2008/11/12/AR2008111202797.html?sub=AR

    Japan is having trouble giving away a free lunch. To perk up the fast-shrinking economy, Prime Minister Taro Aso announced late last month that his government would give everybody money. A family of four would get $600.

    Then the trouble — and the confusion — started. Should rich people get it? How rich is rich? Who decides who is rich, and how long will it take to decide?

    Kaoru Yosano, the minister for economic and fiscal policy, said that perhaps the rich should not get any money.

    Then his finance minister, Shoichi Nakagawa, said that figuring out who is too rich for a handout would create an excessive workload for local governments.

    Now it turns out that voters do not want the money.

    Sixty-three percent said they think that a handout is unnecessary, according to a poll published Wednesday in the Asahi, a national daily. Every age group opposes it, as does a majority in Aso’s ruling party, the poll found.

  105. PGC says:

    13%taxhike? I’ll have a Bud.

  106. Stu says:

    PGC:

    If you stick around long enough at Baristanet, you will eventually witness my arguments with various town council members and the mayor. It’s all good fun.

  107. PGC says:

    #110 Stu

    I just looked for the longest post that was negative.

    Start lobbing lawsuits at them. That might make things interesting.

  108. John says:

    STP which was owned by the Studebaker Packard Corporation makes a fine lubricant and is also suffering do to higher commodity costs and the recession. Can they get in on the auto bailout? I mean if CIT, Amex, GS and Morgan Stanley are banks is it any more far fetched that STP is an auto maker? Heck they use the lubicrants on car hinges all the time.

  109. John says:

    When I am in Japan a good dinner is $600 so big deal.

  110. kettle1 says:

    How does a bailout save GM? The burn 2 billion/month and have said they run out by the end of dec 08.

    The government would then have about 4-5 weeks left to hand GM a check. But how much? 25 billion is being tossed around. Even if GM gets the entire 25 billion, thats only 12 months of operating expenses, and the 25 billion is supposed to be for all 3 of the big 3.

    GM cannot survive at sales of only 10 million cars/yr.

    If they are serious about bailing GM out they need substantially more money then 25 billion

  111. Victorian says:

    Paulson is getting b1tch slapped big time!

  112. Stu says:

    Bankruptcy is the only answer to the big 3. This will result in a much smaller 3 that will fit the current supply and demand levels.

    I expect them to not just get bailed out, but for the total cost of the bailout to be around 100 billion. Now that we are in the Paulson era, what is another 100 billion?

  113. reinvestor101 says:

    Why do they let Ron Paul say anything? The man is a communist

  114. John says:

    Bankruptcy is dumb for GM, does not solve problems and gets expensive lawyers and judges involved. The three CEOs, bondholders, banks on the hook for their credit lines and UAW need to be locked in a room and not let out until everyone gives up something big. Then govt should lend them money one time that is more senior than the bondholders and if it does not work let them go under and leave all current bondholders and stock screwed.

  115. Sybarite says:

    I just don’t understand why we need all of the GM divisions: Caddy, Buick, Chevy, GMC, Hummer, Saab, Pontiac, Saturn

    I imagine they could consolidate those brands into a few critical ones and streamline their operations. Maybe even replace saturn with Opel. Some of the newer Saturns are based on European Opel designs and are actually prettly slick.

  116. Mike NJ says:

    NJGator,

    Re: 102

    I am friends with the guy and his wife trying to sell the place in Park Slope. I had no idea they were unable to sell their first place though. Thanks for the article. Talk about the wrong time to be holding two mortgages. I am scared sh*tless and I am only holding one!

  117. kettle1 says:

    BC,

    Japanese economists now believe that the US will be forced to issue Treasury securities denominated in yen in order to attract Japanese buyers.

    http://www.atimes.com/atimes/Japan/JK19Dh01.html

    “The issuance of foreign currency-denominated US Treasures would reduce the perceived risk of holding the debt. ”

    Isnt that also somewhat suicidal at this point for the US? That is one of the primary factors that brought iceland down correct?

  118. kettle1 says:

    BC ,

    one more for you. Bergabe’s plan to monetize debt

    http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm#fn8

  119. Hard Place says:

    re101

    Why do they let Ron Paul say anything? The man is a communist.

    What planet do you come from? From what I have heard from Ron Paul, he is far from that. Oh my mistake, you still think RE is a good investment.

  120. MJ says:

    I pushed a little to get payoff 20% of my mortgage, so I can get rid of PMI. However, Countrywide wants to make sure if my house is still worth the purchase amount ( which it is not ). How can I get an estimate of the current valuation ( other then look at recent selling prices)?

  121. Hard Place says:

    John,

    Bankruptcy is dumb for GM, does not solve problems and gets expensive lawyers and judges involved. The three CEOs, bondholders, banks on the hook for their credit lines and UAW need to be locked in a room and not let out until everyone gives up something big. Then govt should lend them money one time that is more senior than the bondholders and if it does not work let them go under and leave all current bondholders and stock screwed.

    What you just proposed is a restructuring, which would be best served under a bankruptcy.

  122. ben says:

    Ron Paul is as much of a communist as Joseph Stalin was a libertarian.

  123. Hard Place says:

    I just don’t understand why we need all of the GM divisions: Caddy, Buick, Chevy, GMC, Hummer, Saab, Pontiac, Saturn

    Get rid of Buick. Same market as parts of Caddy/Chevy. Get rid of Hummer, can be part of GMC. Get rid of Pontiac, same cars as parts of Chevy/Caddy. Get rid of Saturn, same cars as Chevy.

  124. still_looking says:

    can someone please get the glans out of Barney Frank-licker’s mouth…

    .. it’s difficult to understand him.

    sl

  125. LeeS says:

    Grim, congrats! Hope you fulfill you’re desires now that the studying has been completed.

    On another note, anyone have any advice for a systems admin working at Citi in the Investment Bank. I’ve heard oppurtunities are few and far between for SAs and I figured it may be prudent to stick a finger in the wind. Thanks.

    P.S.
    Regarding the townhouse… I held out until last year on buying a home, thanks to advice found here. I was able to get a 3BR 1.5 bath in Roselle Park for $325,000. The same house now should go for $300,000 and I’m sure by next year will be around $275,000. I don’t think you need to place any urgency on buying now. Rates are staying low, and prices are continuing to slide down. I firmly believe unemployment will reach 8.5%, more if you take out part time employees who took jobs simply because there wasn’t anything out there. Lookup John Crudele from the NY Post, very interesting explanation for the labor statistics and how off they are.

  126. reinvestor101 says:

    He’s against us protecting ourselves and want us to remove the military bases we need. He hates the US dollar and can’t wait until there’s another reserve currency. He’s outside of the mainstream and wants to dictate and impose his views on everyone. Yes, he’s a commie, so deal with it.

    Hard Place Says:
    November 18th, 2008 at 11:54 am
    re101

    Why do they let Ron Paul say anything? The man is a communist.

    What planet do you come from? From what I have heard from Ron Paul, he is far from that. Oh my mistake, you still think RE is a good investment.

  127. John says:

    Re 125, nope. I am saying lets do it. Bankruptcy is a boondoggle for attorney fees and is drawn out. I like FDIC style with SOV and NCC with a load shotgun.

    Buick is a funny brand, no one buys it but they are always rated extremely high in consumers reports, have great safety and low insurance prems. Buick is much more reliable than Toyota or Honda yet people buy Toyota and Honda as they perceive it is more reliable.

    Saab, Pontiac and Hummer needs to be sold or folded.

    Saturn is a quirky little line that does actually attract previous small foreign car owners and is a very popular brand for women. I don’t know if those customers would buy a chevy.

    Interesting I read an article that stated that customers like myself who only buy during employee pricing deals are just as bad as people who never buy american cars. If I only buy when they are selling at no profit or a loss and I really helping them.

    Summer of 2005 I bought my employee priced GM truck with no trade in, no extended warranty and for cash. Never had a problem with it and it runs great.

    Same summer BMW/Mercedes were selling similar vehicles for 100% more and with huge lease related fees. GM made no money in 2005 and it is easy to see why. However the rich east coast west coast people forget that in the middle of the country people don’t make much money and have to drive long distances to work. For 28K a year crowd the Ford Focus you curse brand new at 13K with GMAC low financing and low interest is what kept those people moving. I spent eight weeks in Milwaukee once and the employee lot was loaded with American cars that cost between 10K and 20K brand new.

  128. RU says:

    #127 I agree, GM makes too many cars that all look the same but sell under different labels. Chevy trucks and GMC trucks are exactly the same. Get rid of GMC and put it them all under the Chevy label. Saturn is starting to do the same with their SUV’s. They are the same as the Chevy models. Ford has the same problem with Mercury and Lincoln. They need to get rid of the Mercury division and keep the Lincoln label as their luxury division. They also need to make the cars a little different than the Fords other than adding fake wood trim. They could save money by using the same frame but they need to tweek the body a little.

  129. NJGator says:

    The house was assessed in 06 at $495k. The market has gone nowhere but down since then. The owners are looking for a 30% premium over their peak level purchase.

    If they find a buyer at that price, send em to me. I have a few bridges I’d like to sell.

  130. NJGator says:

    Oppe 133 – meant to post that onto the baristanet thread. I am not multitasking very well today.

  131. comrade nom deplume says:

    [56] stu

    “Problem is, everyone says they will stay there for 15 years and then they are moving 5 years later”

    So true. When we looked at a gorgeous house in McLean VA (not a McMansion, but a very nice house in a great town), I told the missus, no unless we are committed to this area. She emphatically said yes. Less than 2 years later, after she lost her job and 9-11 happened, she wanted to move for a new job. Fortunately, we sold at a nice profit. And when she wanted a new place in Philly, I said no unless we know that we can sell it quickly if need be since you have wanderlust. We bought a small rowhouse and when we did move (surprise!), we made a nice profit.

    Now we are in NJ, and I said no unless we are here 20 years. She said yes. We’ll see.

  132. Hard Place says:

    John – on GM bankruptcy.

    nope. I am saying lets do it. Bankruptcy is a boondoggle for attorney fees and is drawn out.

    Do a pre-packaged bankruptcy. In & out everyone wins, except for stockholders who deserve to lose out for supporting a worthless company. Minimizes fees for the vulture lawyers.

  133. BC Bob says:

    nom [135],

    The wife’s a flipper.

  134. John says:

    Govt would have to lend the money to do chap 11. No bank is giving GM any more money.

  135. chicagofinance says:

    Clotpoll Says:
    November 18th, 2008 at 8:36 am
    Some guy on CNBC, openly accusing PPT of buying S&P components on down days. Chief economist of BAC calls the conversation “silly”.
    Is the cat now out of the bag?

    Clotpoll Says:
    November 18th, 2008 at 8:37 am
    Oct 10th and 28th trading sessions being called suspicious by this guy. Who is he???

    Clotpoll Says:
    November 18th, 2008 at 8:47 am
    BC (25)- We’ve known the score for a while…but I never thought I’d hear it on CNBC. You should’ve seen the look on all their faces. Pure panic, like somebody told them they’d all just drunk pure melamine.

    The best part was when they cut to Santelli. He was just laughing. Said something to the effect that the PPT had gotten the “plunge” part right, but not so good on the “protection”.

    BC Bob Says:
    November 18th, 2008 at 8:51 am
    Clot, I wish I saw that one.

    http://www.cnbc.com/id/15840232?video=931599105&play=1

  136. Stu says:

    No bank has any money to give. All they have is what Paulson’s gives ’em. So does it really matter if the bailout comes from the Fed or via bankruptcy?

  137. ben says:

    “He’s against us protecting ourselves and want us to remove the military bases we need. He hates the US dollar and can’t wait until there’s another reserve currency. He’s outside of the mainstream and wants to dictate and impose his views on everyone. Yes, he’s a commie, so deal with it.”

    Rofl, you mean increased border security isn’t protecting ourselves? He doesn’t hate the US dollar. He wants the dollar to be defended. He’s against Bernanke/Paulson destroying the dollar, which they are doing. You are clueless.

  138. Hard Place says:

    Govt would have to lend the money to do chap 11. No bank is giving GM any more money.

    Been done before w/ Chrysler, but pre-bk. Let ’em go under. bondholders get leftovers. sorry about your trade if this happens.

  139. NJGator says:

    135 Nom – You will move again in less than 20 years. But only to another house in Brigadoon.

  140. Hard Place says:

    Govt should stand at the table in the pre-pack with a big stick. Creditors, mgmt, unions, lawyers will have to get along. Fastest way to a restructuring.

  141. Al says:

    A queation – In case of big 3 Bankruptcy what happens with their pension liabilities??

    I assumne pension gets transfereed to a Pension Benefit Guaranty Corp, right??

    Also what would happen if state of NJ declared Bankruptcy?? the same??

    and in addition it is interesting that for people retired at 65 years old (E.g. NJ state officials, BoE members, aschool administrators and such: The maximum insurance benefit in 2009 is $54,000 for those who retire at age 65 and elect payments as a single life annuity.

    So what happens with NJ pernsionf os 150K+++?? Granted if tehy have retired at 75 the max pension is:

    A worker who claims early at age 45 can receive a maximum benefit of $13,500, while someone who works until age 75 maxes out at $164,160.

    And finally since PBGC is not taxpayer-financed. Funds come from a combination of insurance premiums paid by companies with pensions, assets of pension plans taken over, and investments. But your plan is insured even if your employer fails to pay the required premiums.

    It is possible that the next big shock will come from PBGC’s failure… Thats why I believe goverment will try to avoid a single big 3 Bankruptcy and ANY COST.

    Anywaya, talking about domino-s effect…

  142. Hard Place says:

    RE101,

    You’re polarizing his positions.

    He’s against us protecting ourselves and want us to remove the military bases we need.
    He doesn’t want us to play global supercop. I’m all for that.

    He hates the US dollar and can’t wait until there’s another reserve currency.

    He looks for the govt to practice fiscal prudence.

    He’s outside of the mainstream and wants to dictate and impose his views on everyone. Yes, he’s a commie, so deal with it.

    You are right, he is outside the mainstream. His is the voice of reason you find little of in the government. If that’s being a commie, sign me up.

    Comrade Hard Place.

  143. Al says:

    As far as people asking about weither to buy a hosue or not: – nobody knows your full situation: Job stability, job geografic location – are you really tied to NJ – if you can get similar paying job in other state – DO IT!!!

    Since economical state of NJ is quite unsettling right now – look into relocating.

    In addition: You Know keep looking – once day you will find the house which will be Ideal for you. But remember buy a house as a plce to live and not as investment.

    In my opinion prices in NJ are not supportive of buying an investement properties, right now, it might become more favorable later on if rents raise significantly. As it looks right now you start by losing money and you will keep losing money.

  144. NJGator says:

    Al – do any NJ state employees retire at 65? Everyone I know with a public job retires between 55 and 60.

    My private company is one of the few left that still offers a DB pension, but I have to stick it out until 65 to get any real value out of it.

  145. grim says:

    From MarketWatch:

    U.S. Nov. homebuilders’ index record low in all 4 regions

    U.S. Nov. NAHB index falls to record-low 9 vs. 14 Oct.

  146. BC Bob says:

    WASHINGTON (MarketWatch) – U.S. home builders have never been as anguished about their industry as they were in early November, with their monthly market index gauge plunging five points to a record low 9, the National Association of Home Builders reported Tuesday.

    “We are in a crisis,” said Sandy Dunn, chairman of the NAHB, and a builder from Point Pleasant, West. Va. “If there’s any hope of turning this economy around, Congress and the administration need to focus on stabilizing housing.”

    “All three of the NAHB index’s components were at record lows in November. The index for current sales fell from 14 to 8, the index for buyers’ traffic fell from 11 to 7, and the index for future sales was steady at 19.”

    http://www.marketwatch.com/news/story/residential-builders-sentiment-hits-record/story.aspx?guid=%7B799BEFE8%2D54F4%2D47DA%2DBE23%2DE5F9FC01FA3E%7D&siteid=bnbh

  147. John says:

    It should soar, he is a chump.

  148. Hard Place says:

    Al,

    A queation – In case of big 3 Bankruptcy what happens with their pension liabilities??

    I assumne pension gets transfereed to a Pension Benefit Guaranty Corp, right??

    I think it depends. If company can reorg and still pay pension than it may not get transferred to PBGC. Who knows maybe some of the obligations get reduced in order for the plan to continue. If company has to be liquidated, than PBGC covers what it can.

  149. SG says:

    Economic Outlook: Worst Recession Since 1930s Is Possible

    Former Federal Reserve governor Laurence Meyer, sharing his forecast to the group of 100 CEOs, said the economy is on track for the second-worst recession since World War II. “There is a risk that it would be the steepest decline in the post-war period,” he said.

    Without further action on monetary and fiscal policy, the economy faces “a lot of downward momentum right now” with an annualized 4% decline in economic output in the fourth quarter and 2% in the first quarter before struggling back to growth. Mr. Meyer, vice chairman of forecasting firm Macroeconomic Advisers, said the unemployment rate would peak at 8% to 8.5% by the end of next year.

    What would make it worse? The housing correction could run longer than anticipated, equity prices could decline sharply or credit conditions could continue to deteriorate, Meyer said.

  150. 3b says:

    #150 BC Bob: Prices will fall,and continue to fall, until they reach levels that are affordable, and if they overshoot on the down side, than so be it.

    Only when that happens can we talk about a housing/economic recovery.

    Funyy how nobody was anguished on the way up, and those who voiced concern about the sustainability of the madness were ridiculed as fools.

  151. John says:

    My tax free Muni bond of the day!

    Coupon Rate 5.625 %
    Maturity Date 10/01/2025
    Price 91.107
    CUSIP 927676JN7
    Quantity Available 15,000
    Call Date 12/18/2008
    Call Price 101.000
    Yield to Call 47.09 %
    Yield to Maturity* 6.500 %

  152. John says:

    How much does GM need? At a minimum, we estimate GM would need $14 billion to bridge itself
    through 2009. This does not include the $7.5 billion owed to the VEBA in 2010 or any amounts
    necessary to replenish GM’s capital expenditure budget ($3 billion a year) to protect its long-term
    competitiveness. If the government were to grant a bridge loan to GM, it is possible that the UAW
    would at least agree to defer the 2010 VEBA payments because, at least initially, the existing UAW
    VEBA should be sufficient to fund retiree healthcare payments until early in the next decade.
    However, it is also feasible that the government would wish to fund the VEBA to protect the UAW and
    bolster GM’s liquidity beyond 2009. All in, assuming the government funded the $7.5 billion VEBA
    payment, the total bailout requirement would exceed $21 billion by our estimates.

  153. Hard Place says:

    On Bloomberg’s Buffet article. Probably a temp blip. I think the reporter nailed this one on the head.

    Buyers of the credit-default swap protection on Berkshire may include the companies that stand to gain if Buffett loses on the stock bets, said Matthews. They may be hedging their gains against Berkshire by entering into separate agreements to ensure they recover some funds if Berkshire is unable to pay, he said.

  154. SG says:

    Nouriel Roubini dose for today,

    Transcript of Talk at AEI seminar on the “The Deflating Mortgage and Housing Bubble, Part IV: Where Is the Bottom?”

    The other observation is that while we’re talking about subprime mortgages and housing, I think there’s a growing recognition that this was not just a subprime mortgage problem, where there much more generalized asset bubble and credit bubble in the economy. It was subprime, it was near-prime it was prime mortgages, there were massive excesses also of underwriting in commercial real estate, the boom in the indebtedness of the household sector included also unsecured consumer credit like credit cards, auto loans, student loans with all this other excesses in the corporate sector [25:00] coming from LBOs that should never have never occurred, financed by these leveraged loans, a trillion-plus LBO with a debt to equity ratio that didn’t make any sense. Excesses of borrowing also by municipalities — in the last real estate recession muni bonds were trading like junk bonds because there were many municipalities going belly up, the same thing is going to happen right now.

    So when you add it all up as you remember I’d estimated that the losses would be at least $1 trillion, and more likely close to $2 trillion, and at that time people thought I was exaggerating but of course a few weeks later IMF came with an estimate of $945 billion, then Goldman Sachs $1.1 trillion then John Paulson said $1.3 trillion, then IMF revised their estimate to $1.4 trillion. Most recently Bridgewater Associates said that the losses are going to be $1.6 trillion, so we don’t know how large they are going to be. What we do know is that the $1 trillion number at this point is not the ceiling, it’s just barely a floor, and the losses are going to be much more.

    And there is also implication for, of course, for the TARP program and the recapitalization of the banks, because if all these losses are going to occur, the idea of injecting only $250 billion into the banking system, the financial system is going to do the job, I think is very far-fetched. I think the eventual number is going to be more like $600 or $700 billion, especially now that it is not just the banks, but also broker-dealers, insurance companies — soon enough the financing arms of GMs and GEs and … you name it, and whatever.

  155. SG says:

    Nouriel Roubini: Yes. I think that the capital needs of the financial system are going to be much more than the $250 billion. I thought that even originally the TARP as an idea of buying at high prices toxic assets was a bad idea if you look any history of systemic banking crisis, in most cases the way you recapitalize the banks is by injection of public capital either common shares or preferred shares or sub-debt — it’s really the exception, the idea of buying toxic assets. [40:00] So I think most of it is going to be used for that and maybe we’ll have a TARP II at this point. It may be needed to buy more stuff to recapitalize more. I would not exclude that.

  156. John says:

    http://www.hsx.com/about/whatishsx.htm

    now that I am out of real money I trade on the hollywood stock exchange

  157. Sean says:

    Here are the conditions in the latest Auto bailout legislation for 7 year loans.

    For U.S. automakers who wish to participate in this program, the House Democratic Leaders’ legislation insists on specific measures to qualify for emergency loans:

    * Short-term Operating Plan – The automaker must submit a short-term operating plan that describes the intended use of the loans, including the commitment of resources to develop a long-term restructuring plan and repayment of the loan to taxpayers with interest.
    * Long-Term Restructuring Plan – By March 31, 2009, loan recipients must submit to Treasury an acceptable restructuring plan for long-term viability and international competitiveness, including meeting enhanced fuel efficiency standards and for advanced technology vehicle manufacturing, and restructuring of existing debt.
    * Executive Compensation and Corporate Governance – All executive compensation restrictions from TARP apply to loan recipients for the duration of the loan plus the following additional restrictions:
    o No bonuses to employees making more than $200,000 (which Treasury will adjust for inflation).
    o No golden parachutes under any circumstances.
    o No compensation plan that could encourage manipulation of reported earnings to enhance compensation.
    * Warrants – Treasury must obtain warrants from each loan recipient (or economic equivalent in the case of a privately held firm) equal to 20 percent of the loan or such greater percentage as may be determined by Treasury in consultation with the Oversight Board.
    * Dividends – Recipients may not pay any dividends for duration of the loan.
    * Acceleration of Repayment for Failure to Comply – If a company receiving a loan fails to prepare an acceptable restructuring plan, the Treasury can demand accelerated repayment of the loan.
    * Terms of Loans:
    o Term: 7 years (or longer as may be determined by the Oversight Board).
    o Interest Rate: 5% for first 5 years and 9% thereafter.
    o Super Seniority: All other obligations and liabilities of a recipient will be subordinate to the loan—putting the taxpayer in the first position for repayment.
    o No prepayment penalty.

    http://www.house.gov/apps/list/press/financialsvcs_dem/auto_005_xml.pdf

  158. SG says:

    Assembly OKs four Corzine economic stimulus bills

    TRENTON – The Assembly took on the growing economic downturn Monday, passing four of the stimulus bills Gov. Jon S. Corzine called for in his joint address to the Legislature last month.

    Bills passed by the Assembly provide for $12.5 million in housing and foreclosure aid, a $3,000 grant per new hire to businesses that keep the person on the books for a year, $22.5 million in food, energy and heating assistance, and a homestead rebate expansion that raises the eligibility threshold.

    The bills generally passed with almost unanimous Democratic support and Republican opposition that grew and shrank depending on the issue.

    While Democrats generally supported the bills as necessary responses to the economic crisis, Republicans generally opposed spending money during an ongoing economic downturn.

    Corzine announced last week that state revenue would fall $1.2 billion short of current budget expectations, while next year’s revenue could fall as much as $5 billion short.

  159. SG says:

    #163 in mod

  160. Stu says:

    Don’t look now, but the U.S. markets are set to close at record lows.

  161. grim says:

    Kabooom!

    From MarketWatch:

    Many modified mortgages become troubled again

    Sheila Bair, chairman of the Federal Deposit Insurance Corp., proposed modifying 1.5 million mortgages to prevent foreclosure on Tuesday.

    However, changing home loans like this doesn’t always prevent problems, according to Lender Processing Services, which processes mortgage payments and tracks roughly 39 million of the 50 million outstanding home loans in the market.

    The FDIC has already modified more than 5,000 delinquent mortgages owned or serviced by failed lender IndyMac and Bair’s proposal is modeled on this. Under the IndyMac program, eligible homeowners have been offered more affordable monthly payments by reducing interest rates on the loans, extending amortization and deferring principal due.

    “Industry evidence indicates that in a majority of instances loan modifications simply delay the timeline from default to foreclosure but don’t prevent them from taking place,” Nathaniel Otis and William Clark, analysts at KBW, wrote in a note to investors on Tuesday.

    Of the IndyMac mortgages modified by the FDIC so far, 25% went delinquent after just one post-modification payment and more than half were delinquent again after several post-modification payments, Lender
    Processing Services told the analysts.

    The company’s internal models suggest that the number of foreclosures will continue to rise through 2010 before peaking in 2011, the analysts added.

  162. John says:

    where can I get a $199,999.99 job at GM with a 500% bonus?

  163. Veto says:

    The Historical Record on the Bubble
    WSJ November 18, 2008

    You might have noticed that there’s been a lot of gnashing of teeth lately along the lines of, “Why oh why didn’t we recognize the housing bubble?” Such sentiments are dotted with bits of triumphalism from others who decree, “I was one of the few who saw the bubble.”

    Let’s go to the record.

    While home prices didn’t peak until some time later, housing activity as measured by new home sales peaked in July 2005. That was also when shares of homebuilders peaked.

    A Factiva search of the top 50 newspapers in the U.S. returns 268 stories referring to a housing or real-estate bubble in 2003. In 2004 that number increases to 369 and in 2005 it swells to 1,608. Going month by month in 2005, there’s a steady increase in “bubble” stories in the first part of the year, coming to a peak in June.

    This isn’t to say that reporters somehow “got” the bubble when nobody else did. Reporters’ main job is to report, and if they’re writing more stories about a housing bubble, it’s probably because more people are saying that there is one. Indeed, 81% of respondents in an online WSJ.com poll in May 2005 said they thought the U.S. housing market was in a bubble. Most of the people who responded “yes” thought the bubble would keep growing.

    …It is one thing to say that hardly anybody saw the bubble. It is quite another to say it was generally recognized, yet nobody did anything to stop it and nobody recognized just how bad the fallout from the eventual bust would be. – Justin Lahart

  164. John says:

    is it rate cut time yet?

  165. Sean says:

    re: #166 John most of GM’s back office is now in India, unless you speak fluent Hindi I doubt you are going to get a job there. Earlier this year we hired a recently laid off GM employee but he left after only 2 months, and did not say where he was going. I first thought he might be going back to Michigan to burn down his house and shoot his old boss but it turns out he landed a job down in Virgina working for the spooks.

    He was so underwater in his home that he was commuting from Michigan to NYC while here at my company.

    Perhaps all houses should be built on wheels and you only rent the lot you park it on. This way you can move around as needed. Oh wait they do that in North Carolina already, we just don’t have 90k of those mobile homes here in NJ.

  166. BC Bob says:

    John,

    They have already eased. The effective fed funds rate is approx .35-.40. Maybe the best solution is to pay us to borrow.

  167. comrade nom deplume says:

    [143] gator,

    Knowing how bad off this state is financially, if I sold in Brigadoon but had to remain in the area, I would rent. At that point, the girls will be old enough to be settled in school and would not have to worry about a new town/state.

    That would give me flexibility to avoid being a NJ bagholder. I would be subject only to income tax, and if that spiked, I could just change my residence to PA and take advantage of the state tax compact.

    I think NJ is in for a miraculously hard fall, and I am going to vote for any bond issue that puts the day of reckoning off indefinitely. I haven’t reviewed the new legislation to see if bond refundings are exempt from the new election requirement, but if they are not, look out.

    If rollovers are not exempt, folks will reflexively vote against new bond issues but when old issues come due, the state will have to pony up, and undoubtedly Trenton will pay back the folks that took away their toys by hiking their taxes.

    So I say, roll her over, roll her over, roll her over, and do it again. At least until I get clear of the state.

  168. SG says:

    Layoffs loom like dark clouds over Silicon Valley

    There goes Silicon Valley housing bubble.

  169. John says:

    Rate cuts are symbolic but I love them anyhow. Back to back rate cuts are more fun than going to a Briss for twins.

  170. Sean says:

    re: #171 – Comrade aren’t renters in Brigadoon shunned as is they have leprosy? I don’t think you will be getting your free “rides” to the train if you are a renter in town after all people will think you are poor and a leper!

    re: bonds lol! NJ will be selling off the Turnpike, Parkway, Atlantic City Express way and their share of the Port Authority to make ends meet. I can’t wait to see the protests/riots down in Trenton when the gov’t slackers find out they aren’t getting raises, have to contribute to health care and can no longer join the 20 and out program for retirement.

  171. 3b says:

    #174 Comrade aren’t renters in Brigadoon shunned as is they have leprosy?

    Yesterday’s loser (renter), today’s trendsetter.

  172. John says:

    New York Sends Letter to AIG Seeking Information on Bonuses

    By David E. Rovella

    Nov. 18 (Bloomberg) — New York Attorney General Andrew Cuomo sent a letter to American International Group Inc. seeking information on any executive bonuses or salary increases the insurance company plans on paying out at year’s end.

    In a letter today to AIG Chairman and Chief Executive Officer Edward Liddy, Cuomo asked the New York-based company to be “completely transparent,” noting that AIG has received $150 billion in federal “rescue financing,” according to a copy of the letter provided by Cuomo’s office.

  173. Barbara says:

    Board poll:

    NJ, Why Do We Stay?
    Go.

  174. NJGator says:

    Nom 171 – NJ is like the roach motel. You can check in, but you can’t check out.

  175. Barbara says:

    I will go first.
    I have rental property here. I have a small extended family all of which live here and I want my kids to know their cousins.
    I do like the ethnic diversity, makes for good restaurants and I love the excellent restaurant culture in this state. Its not a minor thing for me, I really like exotic foods.
    I like living and raising my kids close to the greatest city in the world. My hope is when they are in their early teens they can go into the city by themselves and take classes, have fun and soak it all in to make for a generally urbane upbringing.

    This rambling list is shorter than my hate list, but has some heavy hitters in there.

  176. BC Bob says:

    Financial Crisis Balance Sheet
    Government Entity Sum in Billions of Dollars

    Federal Reserve

    (TAF) Term Auction Facility 900

    Discount Window Lending
    Commercial Banks 99.2
    Investment Banks 56.7
    Loans to buy ABCP 76.5
    AIG 112.5
    Bear Stearns 29.5
    (TSLF) Term Securities Lending Facility 225
    Swap Lines 613
    (MMIFF) Money Market Investor Funding Facility 540
    Commercial Paper Funding Facility 257
    (TARP) Treasury Asset Relief Program 700

    Other:
    Automakers 25
    (FHA) Federal Housing Administration 300
    Fannie Mae/Freddie Mac 350

    Total 4284.5

    http://www.cnbc.com/id/27719011

  177. Sybarite says:

    Barb,

    I’ll second those reasons, and add a decent job base for science/biotech/pharma industries.

    Although there is a trend of such industries leaving, for the time being they are here and jobs seem to be plentiful if you are a motivated, ambitious professional.

  178. Victorian says:

    Anybody take a look at SHLD lately? Our next bank in the making.

  179. Zack says:

    PPT will be busy this afternoon to make sure 8000 on the Dow holds. When they are throwing 700 billion $$, a 30-50 billion $ of S&P is chump change if it calms investors that a floor is being established. Its all about perception..

  180. still_looking says:

    7 handle on its way….?

    sl

  181. CB in SJ says:

    I grew up in North Edison in the 1970s but had a number of friends from Brigadoon. I remember that they tended to be somewhat aloof but always had very good drugs.

  182. John says:

    Because everytime I take a trip it reminds me of how much better it is here. There is a 100 times as much to do here as most vacation places I visit and the salaries are much higher here. Plus what a thrill to have the honor of working in NYC!!! In Milwaukeee or Pittsburgh where I had clients I was ready to shoot myself after three days at their companies in the middle of nowhere.

    BTW PPT does not buy or sell stock you knuckleheads.

  183. scribe says:

    Veto, #167

    I think that by 2005, a lot of people had recognized the bubble as a bubble.

    But it still wasn’t generally known or understood how bad lending standards had become – where all of this was coming from.

    What’s hard to wrap your mind around is how lending standards went completely overboard because the banks could off-load the loans via securitization.

  184. Sean says:

    srs and skf on a tear.

  185. Nicholas says:

    I was in Berlin, Germany a week ago and as I was leaving I saw a guy street sweeping with a Joe Dirt mullet.

    It made me laugh.

  186. Sybarite says:

    Nick,

    Mullets have gotten strangely popular in Europe, for some odd reason.

  187. John says:

    At five bucks a share fire Pandit. The experiment is over.

  188. Stu says:

    We stay in NJ because we are just plain crazy. It must be all that radon in our basements that have altered our ability to make good judgments I suppose.

  189. comrade nom deplume says:

    [174] Sean,

    Leprosy? So? I don’t care what others think.

    [178] Gator,

    Brigadoon is a nice town, but there are others, and I don’t want to be in the building when NJ implodes. So as soon as the reason for being here ends, I’m gone.

  190. Stu says:

    Clot:

    You still gonna ring the opening bell today?

  191. Clotpoll says:

    Stu (196)-

    Don’t like SRS or SKF trading in the 190s. I’m out for today.

  192. Clotpoll says:

    John (187)-

    Yeah, right. Whatever. BTW, are you Becky Quick?

    And, Kennedy got done by a lone nut.

    “BTW PPT does not buy or sell stock you knuckleheads.”

  193. implosion08 says:

    Can anyone recommend any good books or websites that discuss Japan in the 1990s? Their issues, what was tried, and the results? Seems like I might want to see the parallels and the differences to play this right. Thanks.

  194. schabadoo says:

    Glad I’m not in Charlotte…

    http://www.thatsracin.com/news/story/21102.html

    “As the NASCAR season ends Sunday, the likelihood of widespread layoffs has sent a shudder through the Charlotte region, home to roughly 90 percent of race teams.”

    ” A 2005 UNC Charlotte study placed that employment at almost 20,000, and estimated the industry’s economic impact at more than $4.5 billion a year.

    In recent days, though, the prospect of job cuts has caused anxiety in the region and cast a pall over the season finale in Homestead, Fla., where team owners and drivers say their sport, like many other industries, has been dragged down by the economy.”

  195. syncmaster says:

    Because I have a job I like here.

  196. Nicholas says:

    I love NJ because I don’t have to live there but since the company I work for is based there I still get pension benefits.

  197. John says:

    How did she get that job, I mean she is just a local Rutgers gal with crooked teeth.

    Clotpoll Says:
    November 18th, 2008 at 3:46 pm
    John (187)-

    Yeah, right. Whatever. BTW, are you Becky Quick?

  198. Clotpoll says:

    schab (200)-

    There goes the pork rind industry, too.

  199. DuckVader says:

    # implosion08 Says:
    November 18th, 2008 at 3:50 pm

    Can anyone recommend any good books or websites that discuss Japan in the 1990s? Their issues, what was tried, and the results? Seems like I might want to see the parallels and the differences to play this right. Thanks.

    ————-

    Some of my friends have recommended Saving the Sun by Gillian Tett. I have a copy but it has been languishing in the bin; I’ll try to read it the next time I get on an 18-hour flight.

  200. NJGator says:

    205 Clot – I think the pork rind industry needs a bailout. Nothing says America like pork rinds. They’re too symbolic to fail.

  201. Clotpoll says:

    Has Mitchell left us? Usually he chimes in after 5-6 posts about NASCAR, NC, tractor pulls, pork rinds and overweight trailer chicks in spandex.

  202. chicagofinance says:

    OK – I now have prima facie evidence that this guy is an ignorant jacka%%.

    Nassim Taleb Says Portfolio Theory is `Hogwash’
    Nov. 7 (Bloomberg) — Nassim Taleb, author of “The Black Swan: The Impact of the Highly Improbable,” talks with Bloomberg’s Tom Keene and Ken Prewitt about quantitative finance, the failings of business schools and his investment strategy.

    http://media.bloomberg.com/bb/avfile/Economics/On_Economy/vCheV1KoaJAw.mp3

  203. chicagofinance says:

    To be clear, he talks as if he is offering up some dramatic insight….

  204. schabadoo says:

    Has Mitchell left us?

    The chum’s in the water, but nothing so far.

  205. Sybarite says:

    NJ is better than NC.

  206. tom3000252001 says:

    Fannie Mae told by NYSE it doesn’t meet listing standards

    Fannie Mae shares have closed under $1 over 30 consecutive trading days ending Nov. 12. Fannie needs to notify the NYSE on how it will regain compliance by Nov. 26!!

  207. reinvestor101 says:

    I’m not polarizing jack, the man is ridiculous which is why Bernanke cut him off in mid discussion. What the hell does Ron Paul know about anything? He should stick with being a damn doctor and shut his trap when it comes to discussing anything re: the economy. He’s just another Dr. Doom like his sidekick Peter Schiff. I don’t doubt that these guys want things to collapse so their short and precious metals positions pay off.

    I don’t trust either one of them. They’re both communist influenced and subversive.

    Hard Place Says:
    November 18th, 2008 at 1:08 pm
    RE101,

    You’re polarizing his positions.

    He’s against us protecting ourselves and want us to remove the military bases we need.
    He doesn’t want us to play global supercop. I’m all for that.

    He hates the US dollar and can’t wait until there’s another reserve currency.

    He looks for the govt to practice fiscal prudence.

    He’s outside of the mainstream and wants to dictate and impose his views on everyone. Yes, he’s a commie, so deal with it.

    You are right, he is outside the mainstream. His is the voice of reason you find little of in the government. If that’s being a commie, sign me up.

    Comrade Hard Place.

  208. RentL0rd says:

    A friend who grew up in NJ and lives in GA has this to say –

    In GA (Atlanta), everyone is so nice to each other that they wait for the other person on the road to get ahead of them.. each waiting for the other to get in front, but nobody going forward.

    In NJ, we just show the finger and move on.

    In NJ traffic flows :)

  209. Sean says:

    Chicago – If Michael Lewis hits the circut again and writes another book Nassim Taleb will be out of a job. Nobody but Frank wants a washed up quant.

    FYI, Taleb stated last week he was 10% in the markets and 90% in cash, all those thoughts of random events and dreams of black swans keep him from investing.

  210. Sean says:

    re #213 tom3000252001 They can just move over to the NASDAQ.

  211. Nicholas says:

    Oil Futures – December delivery 54.70$

  212. Nicholas says:

    http://biz.yahoo.com/rb/081118/business_us_markets_oil.html

    A Reuters poll of analysts ahead of weekly U.S. inventory data due Wednesday forecast a 900,000-barrel build in crude stocks, a 300,000-barrel rise in distillate stocks and a 900,000-barrel increase in gasoline inventories.

  213. chicagofinance says:

    Sean Says:
    November 18th, 2008 at 5:02 pm
    Chicago – FYI, Taleb stated last week he was 10% in the markets and 90% in cash, all those thoughts of random events and dreams of black swans keep him from investing.

    S-Man: His fits the profile of the hot-headed quant reject with an axe to grind. He is more about generating some type of messiah status so people can join his crusade rather than bringing something new and innovative to the table. Of all of these characters, the only one that has shown me any consistent credibility is the Roubinator….he also comes across as the most genuine…..the only way the Taleb could be a bigger azzhole was if he were Russian.

  214. Al says:

    the only way the Taleb could be a bigger azzhole was if he were Russian.

    Huh?? Why russian, why not Afgani or Ukranian or Belorussian or French??

    Are you a racist??

  215. Nicholas says:

    “I will cut your heart out with a spoon”

    “Why a spoon?”

    “Because it is dull you twit”

  216. Al says:

    RentL0rd Says:
    November 18th, 2008 at 4:59 pm
    A friend who grew up in NJ and lives in GA has this to say –
    In GA (Atlanta), everyone is so nice to each other that they wait for the other person on the road to get ahead of them.. each waiting for the other to get in front, but nobody going forward.
    In NJ, we just show the finger and move on.
    In NJ traffic flows :)

    I wish you wre in the car with me today at around 8AM on 1@9… YOU WOULD “FLOW” IN NJ TRAFFIC WITH ME FOR 7 MILES…. IT TOOK 45 MINUTES!!!

    I had an important meeting at work, good think I left an hour early. Still hardly made it to work on-time.

  217. Mitchell says:

    Citigroup to cut another 53,000 employees
    Banking giant struggling to steady itself after suffering big losses

    Citigroup, widely seen as the sickest Wall Street bank, will make some of the most severe cuts in the history of U.S. business — 53,000 jobs — as it tries to slash costs and get back to basics before it’s too late.

    The cuts, which will leave Citi about 20 percent smaller, are the latest step in a stunning remaking of the American banking landscape since the financial meltdown, an upheaval that has included the demise of storied investment houses and the conversion of others into commercial banks.

    Citigroup CEO Vikram Pandit met with employees Monday and laid out the bank’s strategy in stark terms: “We are a bank. What does a bank do? A bank takes deposits and puts them to work by investing and making loans.”

    rest here
    http://www.msnbc.msn.com/id/27719673/

  218. stu says:

    Mitchell,

    You can post a story about Citibank to try to run cover, but we all know it was the earlier Nascar posts that brought you out from your hole.

  219. Sastry says:

    About living in NJ…

    I did my grad studies in NJ, and been here for over 15 years. Most of my friends are here. I am in a University, so I guess I find NJ to be quite liberal :)

    The short answer is on the lines of the answer for “why do you play soccer?” — “my friends play”.

    S

  220. Clotpoll says:

    tom (213)-

    Here comes the reverse split.

  221. jcer says:

    NJ has a lot of fine qualities, that aside the quality of our government, cost of living, and stability of our economy are questionable at best. Most people from metro NY cannot leave the area as most other parts of the US drive them crazy!

  222. PGC says:

    NJM dividend checks came out today.

    I love my car insurance.

  223. Clotpoll says:

    Mitchell, have you developed a taste for Cheerwine yet?

    It took me years. Tastes good when you’re hung over, though.

    That and some re-heated Brunswick stew…good eatin’.

  224. Clotpoll says:

    Screw it. Baiting Mitchell is too easy.

  225. Mitchell says:

    #225 Stu.

    Try as I might I cannot accept Nascar. In a way I wish I could because my mother in law is going to a party soon that all the top drivers will be at. Whether I like Nascar or not they do some very generous things.

    After living in NJ and driving on the parkway I kind of feel I could give a good 85% of them a run for their money. But my car would need a horn and a way to flash my high beams. Giving the finger might deduct points too.

  226. PGC says:

    I wonder what happens when the big sponsorships come up for renewal.

    Shall we have a dead pool.

    Allstate (Official Insurance)
    AMD (Official Technology Partner/Official Microprocessor of NASCAR/ The Official Semiconductor Technology of NASCAR)
    America Online (Official Internet Service Provider/Instant Messenger/E-mail)
    APlus (Official Convenience Store)
    Bank Of America (Official Bank, Checking, Savings, Credit/Debit, Mutual Funds and Security Brokerage)
    Best Western (Official Hotel)
    Budweiser (Official Beer)
    Callaway Golf (Official Golf Ball)
    Checkers/Rally’s (Official Drive-Thru & Official Burger)
    Chevrolet (Monte Carlo) (Official Pace Car, Official Passenger Car)
    Coca-Cola (Official Soft Drink)
    Combos (Masterfoods) (Official Cheese-Filled)
    Craftsman Tools (Official Tools)
    Dasani (Official Water)
    Daytona USA (Official Attraction)
    Diageo (Official Wine)
    DIRECTV (Official Partner of NASCAR)
    Dodge Charger (Official Passenger Car)
    Domino’s Pizza (Official Pizza Company)
    DuPont Performance Coatings (Official Finish)
    Duracell (Official Alkaline Battery)
    Eastman Kodak (Official Imaging Partner)
    Enterprise Rent-A-Car (Offical Rent-A-Car Company)
    Featherlite – Vantare (Official Trailers & Luxury Coaches)
    Ford Trucks (Official Truck)
    Freightliner (Official Hauler)
    Gillette (Official Shaving Product)
    Goodyear (Exclusive Tire Supplier)
    Housby (Semi-tractor Distributor)
    Ingersoll-Rand Company (Official Security Partner)
    Kellogg’s (Official Breakfast Food/Cereal)
    M&M’S (Masterfoods) (Official Chocolate of NASCAR)
    Minute Maid (Official Juice)
    NicoDerm (Proud Sponsor of NASCAR)
    Office Depot (Official Office Supply/Products Provider)
    Oral B (Official Oral Care Product)
    Old Spice (Official Antiperspirant & Deodorant)
    Pedigree (Masterfoods) (NASCAR Fans’ Best Friend)
    POWERade (Official Sports Beverage)
    Sirius (Official Satellite Radio Partner of NASCAR)
    Sony (Official Consumer Electronics)
    Sprint NEXTEL (Official Series Sponsor)
    Sunoco (Official Fuel)
    The Home Depot (Official Home Improvement Warehouse)
    Tissot (Official timekeeper and Official Watch of NASCAR)
    Top-Flite (Official Golf Clubs)
    Toyota (Official Partner/Manufacturer)
    Tylenol (Official Pain Reliever of NASCAR)
    UPS (Official Delivery Service)
    USG (Official Partner of NASCAR)
    Visa (Official Card)

  227. PGC says:

    This could be a bigger index than the NNJ Leasetracker.com BMW 3 Series repo numbers

    The NASCAR ultra Short (X2 if the car manufacturer goes under).

    Valvoline
    U.S. Army
    Little Debbie
    Sprinter Trucking/Sunny D Manufacturing
    NOS Energy Drink/SKI/SBM
    Shodeen Inc. Toyota Certified Used Vehicles Bill Davis Racing 3M
    Bad Boy Mowers
    Jack Daniel’s R
    AT&T Mobility
    M&M’s
    Miller Lite
    Front Row Motorsports
    The Guitar Hero World Tour/Target
    Germane Red
    National Guard/AMP Energy
    Office Depot
    Motorcraft
    Digital TV Transition
    Jim Beam
    DuPont
    FedEx Express
    Shell/Pennzoil
    Mobil 1 P
    Lowe’s/Kobalt Tools
    Budweiser
    DEWALT
    GoDaddy.com
    All Sport
    Liberty Medical
    The Home Depot
    Romeo Guest Construction
    Miccosukee Resort & Gaming
    Front Row Motorsports
    Marathon American Spirit Motor Oil
    Crown Royal
    Kellogg’s/CARQUEST
    Johns Manville/Menards
    Juicy Fruit Slim Pack
    Furniture Row Racing
    Alltel
    GEICO
    AAA
    Haas Automation
    UPS
    State Water Heaters
    Hellmann’s
    DLP HDTV
    DEI/Principal Financial Group
    Target
    Red Bull
    The Home Depot
    Bass Pro Shops/Tracker
    NAPA AUTO PARTS
    Camping World/RVs.com

  228. Mitchell says:

    #231 Lets see Clot what did I do this past week.

    Spent last weekend fishing in North Myrtle beach on a private pier. My wife almost caught a shark. Great little weekend for the wife and kids. Little out of season but it was free to stay at a friends condo.

    Watched the Panthers game from a private booth with former co-workers. Sadly it was Detroit but there are still a few more games to go to. All compliments of former BOA co-workers.

    Will be spending a good portion of time at the Bobcats games because my buddy (Retired NJ cop) works the arena. Sure they aren’t great but its an open bar booth. I also get to park in the arena and hang out in places of the facility only employees get to go. I should go and watch checkers games and I passed to see the trans Siberian orchestra because the wife and I have plans this Thursday.

    Yup clot sucks to be me. Off to drink my cheerwine and sit in my trailer.

  229. Sean says:

    Mitchell you were baited and reeled in hook line and sinker. Don’t say you don’t miss NJ.

  230. Roy G Biv says:

    Why I stay:

    It stinks, therefore I am [still here]

  231. New in NJ says:

    Why NJ?
    -My job is here
    -Proximity to NYC
    -Pretty decent cultural environment
    -Proximity to Ironbound (wife is Brazilian)
    -Proximity to Gunnison

    Why would I leave?
    -too f’n cold for too much of the year

  232. Pat says:

    I miss NJ.

    As I rest quietly in the pastoral Mid-Atlantic, use guys are the straw through which I draw gulping caffeinated puffs of vagrant Parkway gases.

  233. Pat says:

    And a big cheer for J.B., MBA.

  234. jamil says:

    $40 oil is coming..

    Oil groups expect $40 barrel – CNOOC head

    A recent meeting of the national oil companies in Beijing had predicted oil prices would fall to about $40 a barrel, Fu Chengyu, chief executive of China National Offshore Oil Corporation, told a conference in Barcelona.

  235. lostinny says:

    Congrats Grim. Best of luck presenting tonight.

  236. Sybarite says:

    Bi is a prophet.

  237. Outofstater says:

    #215 Traffic flows in Atlanta – we just do “my turn, your turn.” The rule is you let just one car in ahead of you, then the guy behind you lets one car go ahead of him. And, you ALWAYS remember to wave thank-you. This is the south after all, and if you are anything but unfailingly polite, well, people might say, “his mama didn’t raise him right” which is, of course, the worst thing you can say about someone. I still miss Jersey’s highest art form though – busting chops.

  238. Outofstater says:

    #239 Y’all watch out – we might need to have an intervention – Pat’s gone all poetic on us.

  239. RentL0rd says:

    #223, Al did you show the finger and ride on the shoulder.. the NJ way?

    All things are relative.. I had 2hr commutes to work in GA. I dont drive half as much in NJ.

    #202 is the best reason to love NJ though.

  240. Clotpoll says:

    Mitchell (235)-

    Please give a howdy to all the woodtick babes at that Hooterville-version-of-Starbucks coffee joint you like so much.

    If you come across any squirrel dumpling recipes, please post them here.

  241. Al says:

    # RentL0rd Says:
    November 18th, 2008 at 8:33 pm

    #223, Al did you show the finger and ride on the shoulder.. the NJ way?

    All things are relative.. I had 2hr commutes to work in GA. I dont drive half as much in NJ.

    #202 is the best reason to love NJ though.

    There is really not much of a shoulder on 1@9 in Rahway/Linden

  242. Outofstater says:

    #247 Now, Clot, be nice. Not everyone can have a bumper sticker on the back of his pickup that says, “I Eat My Roadkill.” (John, be quiet.)

  243. Essex says:

    235…at least my sister finally sold the manse in Davidson…..thank the lord. It took over a year.

  244. Clotpoll says:

    stater-

    I forgot to ask Mitchell if you can still get burley tobacco products in NC.

    That stuff’s like smoking wet cat fur.

  245. Al says:

    WHy Am I inn NJ:

    I did not listen to my wife – she was hating the Idea of moving to NJ from Colorado, but I got a job offer and said: how bad can it be, it is still US…

    Still here due to job contract – I will be giving up too much in 401k/sign up bonuses, if I quit before 3 years…

    I had no idea that 80K+ starting base salary puts your family into “poor” category in NJ.

    Also hoped for wife to get a job in Biotech/Pharma – no luck.

    We had a baby, she took a year off and after that.
    Right now it is impossible in NJ to get a job as for EVERY position open there are literally thousands of applicants laid-off from Pharma/chemical industry.(from my own recruiting experience)

    My job is grea, but chemistry R@d salaries are not significantly higher here compared with any other area of a country.

    Unless NJ will become a lot cheaper (and find a way to control RE taxes) I will be out of here the moment I have decent offer from elsewhere once my contractual obligations are complete.

    NJ is great if you are “Rich.” (Family income above 250K) For middle class it doesn’t make sense to stay here if you can get similar income elsewhere.

  246. Comrade Nom Deplume says:

    Rentolord

    Some of that NJ traffic just flowed into my wife’s car.

    (228) Jcer

    From what I observed, the metro NY’ers drive the rest of the country crazy too.

    I recall a story in law school that some guy in GA put a restrictive covenant on his property, forever barring heirs, successors and assigns from selling the land to anyone from NY (not clear if he meant city or state). Now that is hatred.

  247. sas says:

    Congrats on your MBA.

    Now go off and ininvent yourself.

    SAS

  248. sas says:

    WHy I stay out here?

    A) getting married 5x never helped
    B) I travel many times through out the years, hard to have a true “home”
    C) Grandkids out here.

    But, I plan on moving to CO in the near future.

    SAS

  249. Essex says:

    252….You would think an income above $250k would qualify as rich and in any state west of PA and east of CO it might….but think about this….rich is a whole new ballgame out here….rich is deep money….it used to be Wall Street money….and it used to be millions….those days are numbered if not over….

    Why am I here? Geezus I don’t know but somehow I bought in hook line and sinker…..

  250. Essex says:

    SAS…5 times….my lord. Ever hear “why buy the cow when you can get the milk for free???”

  251. Clotpoll says:

    I’m out of here the second my youngest graduates HS. This place is out of control.

    The insanity of the way NJ is taxed and governed outweighs any possible benefit that accrues from living here.

  252. sas says:

    5 times….my lord. Ever hear “why buy the cow when you can get the milk for free?”

    I’ve heard it all.

    I’m just a sucker for smooth skin I guess:)

    SAS

  253. Pat says:

    I just wanna know why you never went Morman (yes, I know) so you could just marry Juanita, too.

  254. sas says:

    “I just wanna know why you never went Morman (yes, I know) so you could just marry Juanita, too”

    Mormon! me. no way.

    I’m a one women man.

    SAS

  255. sas says:

    “Juanita”

    yeah right. I’m not scared of much, but to get on Juanita’s bad side. yikes!

    SAS

  256. sas says:

    “Congrats on your MBA.
    Now go off and ininvent yourself”

    opps…

    that should read, reinvent yourself.
    Go outside, and discover new things, go to new places, meet new people, get yourself a hot date, seize the moment bloke!

    SAS

  257. Essex says:

    meh…I will probably stick around as long as the work life / home life thing pans out…if it all goes to hell I will downsize to a little Apt…and spend a few months of every year somewhere really cheap, warm….and fun.

  258. Essex says:

    P.S….and the first thing that will go is the Bimmer……! I will find and old square back VW….

  259. sas says:

    “That stuff’s like smoking wet cat fur”

    like that one time, out on the Cam Lo.

    What a peach that was…..

    SAS

  260. Al says:

    Is it a New Worlds Successful business model??

    http://www.msnbc.msn.com/id/27789400/

    you know my company is looking for a “High Growth Industry” to invest in….

  261. Pat says:

    Remember, the tools. Do the tools, not the trade.

  262. Yikes says:

    # chicagofinance Says:
    November 18th, 2008 at 4:40 pm

    OK – I now have prima facie evidence that this guy is an ignorant jacka%%.

    Nassim Taleb Says Portfolio Theory is `Hogwash’
    Nov. 7 (Bloomberg) — Nassim Taleb, author of “The Black Swan: The Impact of the Highly Improbable,” talks with Bloomberg’s Tom Keene and Ken Prewitt about quantitative finance, the failings of business schools and his investment strategy.

    http://media.bloomberg.com/bb/avfile/Economics/On_Economy/vCheV1KoaJAw.mp3

    Enjoyed Black Swan. great recommendation from Grim.

  263. chicagofinance says:

    You are in the 28-31 set. You wouldn’t understand.

  264. Steve says:

    Clot,

    I think you jinxed us with all your talk about breaking trend lines, literally right before this latest slippery slope…after that, the SKF rocketship took off with afterburners! D*mn!!

    quick! where’s Bi!

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  266. DUBAI, United Arab Emirates – Citigroup ‘s chairman is hinting the banking giant will announce more job cuts Monday, and isn’t ruling out the possibility executives will follow peers at Goldman Sachs and forgo bonuses. Various reports

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    (RTTNews) – The value of the controversial $700 billion financial rescue program has

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