Mon 8 Dec 2008
Freddie: How to do business in Washington
Categories: Housing Bubble , National Real Estate , Risky LendingFrom the AP via CNBC:
How Freddie Mac Splashed Cash to Halt Regulation
From a hefty lobbying budget to the use of free baseball tickets, Freddie Mac fended off any meaningful regulation in the years before the housing mortgage giant crashed, records obtained by The Associated Press show.
When the Washington Nationals played their first-ever baseball game in the nation’s capital in April 2005, two congressmen who oversaw Freddie Mac had choice seats — courtesy of the very company they were supposed to be keeping an eye on.
Efforts to tighten government regulation were gaining support on Capitol Hill, and Freddie Mac was fighting back.
…
The Nationals tickets were bargains for Freddie Mac, part of a well-orchestrated, multimillion-dollar campaign to preserve its largely regulatory-free environment, with particular pressure exerted on Republicans who controlled Congress at the time.Internal Freddie Mac budget records show $11.7 million was paid to 52 outside lobbyists and consultants in 2006. Power brokers such as former House Speaker Newt Gingrich were recruited with six-figure contracts.
…
The tactics worked — for a time. Freddie Mac was able to operate with a relatively free hand until the housing bubble ultimately burst in 2007.
The Grave Dancer feels what it’s like.
From the WSJ:
Tribune Co. Taps Lazard,Weighs Filing for Chapter 11
Tribune Co. is preparing for a possible filing for bankruptcy-court protection as soon as this week, according to people familiar with the matter, in a sign of worsening trouble for the newspaper industry.
In recent days, as Chicago-based Tribune continued talks with lenders to restructure its debt, the newspaper-and-television concern hired investment bank Lazard Ltd. as its financial adviser and law firm Sidley Austin to advise the company on a possible trip through Chapter 11 bankruptcy, people familiar with the matter say.
“They packed away their art collection, stored their winter clothes, got rid of the clutter and put their home on the market April 15, priced at $1.1 million. They were right in their belief that people would find the place attractive — more than 130 people have toured the house — but more than seven months later, they are still nervously tidying the house each day, living without cherished keepsakes and trying to stay patient.”
http://www.washingtonpost.com/wp-dyn/content/story/2008/12/05/ST2008120502845.html
From the Jersey Journal:
Officials acting to protect tenants
Lawmakers and state officials are looking for ways to protect tenants in foreclosed buildings from the “cash for keys” offers that are scaring many people out of their homes.
The notices, which are popping up more often in Hudson County and other areas hit hard by foreclosures, tell the tenants they will be kicked out if they do not take cash to vacate their apartments, despite a state law that forbids such evictions.
Jorge Aviles, a lawyer for the Housing Resource Center in Jersey City, brought the issue to the attention of the county Board of Chosen Freeholders at a meeting last month. In response, Hudson County Executive Thomas DeGise issued a statement warning renters to be on the lookout for such scams if their buildings go into foreclosure.
Freeholder Bill O’Dea said he approached state Public Advocate Ronald Chen at the state League of Municipalities convention in Atlantic City to urge him to take up the issue, and also notified the state attorney general and the governor’s office.
“The public advocate is already looking to file a lawsuit over this matter,” O’Dea said. That office confirmed it will make an announcement soon about the steps it will take.
…
Gregory Diebold, deputy director of the Hudson County branch of Legal Services of New Jersey, said the “clearly unethical” letters are becoming more common.
“I’d say it’s always been a trend, but now there are so many more foreclosures,” he said. There were 485 foreclosure filings in Hudson County in October, and filings statewide jumped 75 percent from a year ago, according to RealtyTrac.
“The latest federal statistics on housing prices in hundreds of local markets reveal patterns that haven’t been making the news: While on a national basis homeowners have lost more than $1 trillion in equity since the end of the boom, the overwhelming majority of markets continue to show net cumulative value growth over the past 60 months.”
“According to the third-quarter survey released Nov. 25 by the Federal Housing Finance Agency, out of 292 metropolitan markets, 273 showed positive net home values over the course of the previous five years, while 19 were negative. Nationally, the survey found prices down 4 percent over the year, but still up almost 29 percent over five years.”
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/05/AR2008120501625.html
From Bloomberg:
U.K. Antitrust Regulator to Review Realtors, Home-Sales Market
U.K. home-sales, suffering the worst slump since the early 1990s, will be investigated by a U.K. antitrust regulator to see how easily new real estate brokers can enter the market and how customers are treated.
The Office of Fair Trading said it will study how competitive the market is. It may also look at relationships between advisers like lawyers and surveyors. If the OFT finds evidence of monopolies or unfairness, it can refer companies to an enforcement investigation.
“Buying or selling a home is something most people do only a few times in their life, but it is usually the biggest transaction they will make,” John Fingleton, chief executive officer of the OFT, said in an e-mailed statement today. “We want to ensure that consumers are served well when buying or selling a home and are supported by an effective, competitive and innovative market.”
The real-estate market is under increased scrutiny as regulators examine the impact of the credit crisis on consumers. Chancellor of the Exchequer Alistair Darling and Business Secretary Peter Mandelson, to whom the OFT reports, met executives from Britain’s biggest banks last week to talk about how to implement a 1 billion pound ($1.5 billion) plan to prevent home repossessions.
From SmartBrief:
Expert: 4.5% mortgage rate won’t revive housing market
Kenneth Rosen, chairman of the Fisher Center for Real Estate at the University of California, Berkeley, warned that the U.S. Treasury’s plan to drive the mortgage interest rate down to 4.5% will not have a significant impact on the housing market. The problem is not the interest rate, he said, but “the availability of credit.” Even with a historically low interest rate, stringent lending standards and 20% down payments are enough to keep people from buying houses, Rosen said.
Re 4,
Then why do we need any stimulus? Put the checkbook away Uncle Sam. Your stats say all is well.
“The litmus test comes this week in a report on pending home sales for October, a month of economic disaster that saw investor nervousness spill over to the housing market. Pending numbers, which reflect agreements of sale, will show how badly.
In this market, the economy’s gyrations are making buyers nervous about paying any price for a house, and sellers worried that whatever they ask may not be enough to tide them over hard times.
In other words, a stalemate, reflected in the growing inventory of unsold existing homes and the lengthening time it takes to sell one of them.
Unless the stalemate is broken quickly, the Philadelphia real estate market will look like everywhere else.”
http://www.philly.com/inquirer/real_estate/20081207_On_the_House__Buyers_and_sellers_deadlocked.html
From the Star Ledger:
Surge in jobless claims taps out New Jersey unemployment fund
A surge in jobless claims has battered the fund that bankrolls unemployment benefits in New Jersey, exhausting all of the $260 million emergency infusion sent five months ago and raising the prospect taxpayers will be asked for more.
An additional subsidy early next year for the state’s Unemployment Insurance Trust Fund, either from the state or federal government, is not “a definite,” Gov. Jon Corzine said in an interview last week. But he added: “We need to be planning.”
Corzine said the fund has been overwhelmed by rising unemployment claims because lawmakers in the past diverted more than $4 billion from it to cover the cost of state aid to hospitals.
“Now the piper is coming home to roost,” Corzine said. “We have to pay that piper. We have to do that either by putting money into that system from some other place, or we’re going to have to get help from the federal government.”
With a $1.2 billion shortfall already projected in the current state budget, finding additional state money for the unemployment fund will be a challenge.
This might settle the argument about whether Wall Street will need to pay to retain talent. If the board refuses his bonus, does he walk or stay?
“Merrill Lynch Chief Executive John Thain has suggested to directors that he get a 2008 bonus of as much as $10 million, but the battered company’s compensation committee is resisting his request, the Wall Street Journal said, citing people familiar with the situation.”
http://www.cnbc.com/id/28107594
“It’s the worst-case scenario for home sellers: To endure price cut after price cut until their houses become stigmatized and hungry buyers smell blood. But how can you avoid this unpleasant scenario in today’s troubled housing markets? The answer, experts suggest, is to put your home on the market at the right price, and if it doesn’t sell quickly, cut the price deep and fast, so you won’t be caught in a downward spiral of price reductions. Not surprisingly, few sellers want to hear that advice.”
http://www.cnbc.com/id/28054976
Grim 6-
Bob Doll on CNBC is saying a drop in rates is what we need to correct the housing market… I do not agree.
From MarketWatch:
Dow Chemical to cut about 5,000 full-time jobs
Dow Chemical to cut contractor workforce by about 6,000
Dow Chemical to temporarily idle about 180 plants
Dow Chemical to close 20 facilities in high-cost locations
From MarketWatch:
3M lowers full-year EPS, slashed 1,800 jobs in Q4
Manufacturing conglomerate 3M Co. said Monday it has cut nearly 1,800 jobs in the fourth quarter as part of an “aggressive” policy to reduce costs.
Quick Jon, raise the gas tax while nobody is watching. Use the rapid price declines and price volatility to your advantage. Up it by a dime, I doubt anyone would even notice.
Crazy thing about DOW Chemical and 3M. These companies always thrived when oil was cheap as oil is main ingredient in most of their products.
Gas in Union was $1.45 this morning at Gulf and $1.47 at Delta.
Let me revise my statement, quick Jon, raise it by a quarter!
From MW:
New York Times to borrow up to $225 mln against HQ building
From the LA Times, hat tip to CR for the link:
Volcker Warns of Tough Times Ahead
I don’t know why you keep posting all this negative info. The futures are through the roof, foreign markets rallying, everyone excited about stimulus, stimulus, stimulus!!! You must not remember how successful the past stimulus has been!
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.egNKi3.nng&refer=home
On China watch..
“China is highly unlikely to devalue Yuan, Yu says”
HEHEHE Says (21):
“You must not remember how successful the past stimulus has been!”
Exactamundo. This is what allows me to sleep at night with open short positions.
http://seekingalpha.com/article/109634-two-mortgage-markets-emerging-from-the-crisis?source=email
“Two mortgage markets emerging from crisis”
#12 A continued decline in prices is what is needed. We already have low rates.
So went to Palm on Friday night, place was packed, had six jumbo shrimp and five clams as an app then had a nice 4 pound lobster followed by a great piece of cheese cake washed down by 5 V&Ts, Always great which is whey they have been around for 75 years. Only suprise was that is was very crowded. Even more amazing with no kids menu there were lots of kids in there. Waiters knew half the names of customers and most were under 40. Well anyhow when I spend the market goes up the next trading day. So watch out.
The rate that will correct all the problems in the housing market, and any other financial market for that matter, is always the current rate minus one.
Kind of like that kitch sign in a dive bar that reads, “Free Beer Tomorrow”.
I’ve given it a lot of thought and what Wall Street really needs is a benefit concert ala Farm Aid. Middle America needs a venue to hear the stories of the suffering banker: the loss of the trophy wives; kids slumming it in a mere $30K a year kindergarten; couples forced to make the tough choices between selling the beach house in the Hamptons or the ski condo in Aspen. Where’s John Mellencamp and Willie Nelson when we need them. Maybe Lee Greenwood could close the show with an All Star Jam of God Bless the USA?
Can’t wait to by the DVD of the “Live Wall Street Aid” concert.
http://online.wsj.com/article/SB122869528018886695.html?mod=googlenews_wsj
“Mark-to-Market Likely to Remain”
Federal securities regulators won’t suspend the mark-to-market accounting rule that banking lobbyists and some conservative Republican lawmakers blame for exacerbating the credit crisis, according to a person familiar with the matter.
Instead, the Securities and Exchange Commision will discuss ways to refine the rule’s applications, the person said.
You guys better work an extra hour today. $700B is not doing the job.
“Merrill’s Thain Wants $10 Million Bonus: Report”
http://www.cnbc.com/id/28107594
OT - anecdotal story. Had to go to the storage unit to pick up Christmas decorations. Was surprised at how many units had red, non-payment flags and company locks on them. I usually see a couple and this time was many more, maybe 2-3x as many.
Also, had coffee with a lawyer who was working with a company mixed up with mortgage securities and he was saying it’s been very slow, complicated to determine what entity owns the mortgages underlying different securities held. He felt it was going to take a long time to work through all of this. Not a short-term thing.
Bonus points for anyone who can do a Wall Street parody of “Do They Know Its Christmas Time”.
28. HEHEHE
And then Bono could explain to the audience how their delusions and irresponsibility are at fault for this mortgage crisis.
He could end it with “Am I buggin’ ya? Didn’t mean to bug ya. Edge, play the blues..”
28/HEHEHE-
I know ChiFi would go if Depeche Mode was on the ticket…Let’s hear some other bands/acts nominated.
I say Pink Floyd just to perform Money.
http://www.youtube.com/watch?v=Rp6-wG5LLqE
re: #28 We all need a bailout, it is time for the Americathon.
http://en.wikipedia.org/wiki/Americathon
HeHehE (28):
Warren (Jimmy) Buffet sings “Wasting away in mortgage backed security hell.”
#28-
Maybe this guy can be warm up before the show…
http://www.thehedgefundcomedian.com/
http://www.youtube.com/watch?v=ix6ybq4F_Os
“Benny and the Feds” 12-07
Re 40 - Amazing thing is that he even referred to deflation in the song back in 07.
A 60 minutes segment was aired last night on Saudi Arabia, interview with Ali Al-Naimi, the Saudi oil minister and de facto head of the OPEC oil cartel.
“Two bucks to produce a barrel of oil.”
http://www.cbsnews.com/sections/60minutes/main3415.shtml
Well our neighbor’s home popped back up on GSMLS today. Still listed at the same $499k it couldn’t sell at before. Instead of marketing specifically as a multi, it is now a “perfect mother/daughter”.
Lazy realtor put up some pretty bad pics. Do you think the crate of Depends is included in the LP?
Can you believe that this house is actually tax assessed with a value of over $650k?
http://newmls.gsmls.com/public/show_public_report_rpt.do?report=clientfull&Id=38744782_6166
December 8th, 2008 at 8:17 am
From MarketWatch:
Dow Chemical to cut about 5,000 full-time jobs
Dow Chemical to cut contractor workforce by about 6,000
Dow Chemical to temporarily idle about 180 plants
Dow Chemical to close 20 facilities in high-cost locations
About Dow Chemicals - According to one of the middle managers at Dow their policy ion the last 10 years shifter from low level R@D and manufacturing outsourcing to China to 100% outsourcing to China…
They have started with low level commodity-type projects in 1990s, saw how much money they can save , while China had built up its engineering and qualified labor force, and now 1/2 projects at Dow is Process/IP transfer to China. I kid you not.
So in effect current economical situation might be a way for Dow to move more staff to China WITHOUT BACKLASH fir it - sorry economy is bad.
I would expect to see more of this happening in the next 3-4 years as labor costs essentially stopped growing in China.
Situation in one area - US chemical manufacturing and research is quite dire. And in effect it is getting a lot worse because once chemical factory/ research facility left US it is not coming back due to Regulation and costs.
But ounce again – why would we need chemicals/plastics/adhesives/fertilizers – we have china to make it for us, right?? Just like they are making everything else we use.
BTW did talk to a BSD on Friday, he thought it was crazy that they made the three automaker CEOs drive to DC when they also made them consider a bankruptcy. Turns out when Chrysler and GM did discuss it the vulture bankruptcy lawyers all said they have to go to DC too and the bankruptcy attorney private jets were lined up at Teterboro out in NJ to be flown to DC all to be charged back to the big three. So in the end more private jets flew to DC. Stupid is as Stupid does.
TO post #43 Montclair listing
For some reason – This house and yard looks plainly UGLY to me. I wonder if it is due to badly taken pictures.
15K taxes make it look even worse.
43 gator
This example is so typically Montclair and why I have given up on the town. Not one listing in that town is worth the asking or even close imo.
Al 46 - The house and yard are plain ugly. The tax assessment is just added ridiculousness.
There are several other seniors in ugly shacks like this on our block that have gotten screwed this bad or worse through our revaluation. They used to pay 10-11k in taxes and now pay 15-16k because some moron paid $150k over list for a single family with fresh paint and viking range and some granite in 05 or 06.
I almost wish I could appeal their taxes for them.
Al,
What can I say, the Chemical Lobby is weak compared to the Automaker Lobby.
Which is more important to the American economy and national security? The Chemical industry or the Automakers?
All I am wondering about - when will NJ taxes Stop climing… At what point there will be either rebellion (won’t happen as it is FOR THE KIDS!!!) or real MASS exodus from NJ???
I like the group Chemical Brothers who did “House Music”
I also liked Chemical Bank. I even was amused when I used to eat at the very stangely named Chemical Cafeteria over at 55 Water Street.
Did Dow Chemical gives us Agent Orange?
General Motors shares up 24% in early trading!!!! Bull Market time!!!
Al,
What can I say, the Chemical Lobby is weak compared to the Automaker Lobby.
Which is a more important to the American economy? The Chemical industry or the Automakers?
Easy:
Neither…
It is Investment Companies and Banks…
43….I am a bit of a red neck so I see value there….2nd floor smoking porch…backyard with room for jalopies and a bass boat….
It’s Christmas time, it’s time for bonuses to be paid.
At christmas time, on low volume is where profits are made.
And in our world of finance, we can rob the U.S. blind!
Attach a chain to your wallet it’s christmas time
But do not complain- we’ll make sure you get some crumbs
At christmas time, this time it’s a required vacation
There’s a man outside your window
And your expecting Christmas cheer
But instead of Jingle bells, it’s the repo man who’s here.
And the only bells that ring there are the changing of your locks.
Well tonight we’ll open a can of Tender Vittles!
And there won’t be cars made in Detroit this christmas time
The greatest gift they’ll get this year is pink
Where the Union tends to show
Unemployment claims they grow
Do they know it’s Christmas time at all?
Here’s to ‘O’
raising taxes for everyone
Here’s to ‘W’
World markets have dropped a ton.
Do they know it’s christmas time at all?
‘F’ the world
‘F’ the world
‘F’ the world
Let them know it’s christmas time and
‘F’ the world
Let them know it’s christmas time and
‘F’ the world
Let them know it’s christmas time and
‘F’ the world
Let them know it’s christmas time and
‘F’ the world
Let them know it’s christmas time and
‘F’ the world
Let them know it’s christmas time
+24 points for Stu
Maryland MRIS produces its monthly report in two days. I can’t wait.
Looks like DOW is up big last night and in early trading.
#43 njgator: What an incredibly sad, dreary looking house, and incredibly over priced at 499K
55. Stu
I totally did the Boy George voice in my head on that 2nd verse.
Stu, companies have been rightsizing not firing, just a little triming the dead branches off the tree. Be positive.
AL,
NJ’s tax base is a dead man walking. As usual no one will face the facts until the patient begins to rot on the table. of course then everyone claims it was unforeseeable…
census data already shows an exodus of the prime tax base, upper middle class and upper class residents.
the snake is eating its own tail
to answer your question; when do taxes top rising? after the collapse of the state government
#52 John: Bull Market time!!!
Nah, just another short lived bull rally in a bear market.
And old “street” guy like yourself should be able to see that.
3B I live for the BULL!!!
3b,
Why do you think it is short lived? Are you expecting more bad news in the 4th Quarter? What bad news do you think will come out?
I’m seriously thinking about moving from a cash position into stocks again after 4Q earnings come out.
John,
“Stu, companies have been rightsizing not firing, just a little triming the dead branches off the tree. Be positive.”
Pure denial!
The other shoe is about to drop. Silly Palm restaurant anecdotal evidence and even manipulated government economic reports can not hide the depth and volume of this crisis. If you think devouring a 4-pound lobster is going to turn this economy around, I feel sorry for you. What was really a sub-prime issue is about to become a prime issue and our leaders’ strategies have been nothing less than cowardly and ineffective. Want me to be positive John? I’m positive that we will get pretty damn close to a depression. Our childrens’ opportunity for a prosperous future are next to zero thanks to the greed of the wall-street a-holes and the complete cowardice of our elected officials. If our founding fathers were alive today, they be slitting their wrists. I hope the lobster was good! And BTW, the Palm is complete bourgeois and a any lobster over a pound in a half tends to suck.
Essex 54 - What else screams value to you? For our 2009 tax appeal, I need to point out all the features this place has that ours does not.
With a lot of extra cash, the house could be restored nicely. It is a big lot for the area, and it is a super easy walk to the train. It doesn’t back to the tracks and the noise is fairly minimal.
Unfortunately the flip market is dead and not many people will have the cash to fix this place without a HELOC. I suspect that the kids are trying to sell this place and that mom has already been relocated to Shady Pines.
Pension Funds Beg Congress to Suspend Billions in Contributions
Pension funds at Pfizer Inc., International Business Machines Corp., United Parcel Service Inc. and dozens of other companies have joined the parade of businesses seeking relief from Congress amid this year’s economic meltdown.
Instead of money, they want legislation to suspend a federal law that would make them pump billions of dollars into retirement plans to offset stock-market losses as many struggle to find enough cash just to stay in business. They’re pressing Congress to consider the issue this week before this year’s session adjourns.
“The companies are not out there with their hand out for a bailout,” says Mark Ugoretz, head of the ERISA Industry Committee, a Washington advocacy group representing big businesses on benefit issues under the Employee Retirement Income Security Act. “This is not about money; this is about time.”
About 800 companies in the Standard & Poor’s 1500 Index have pension funds, and they were collectively $280 billion short of the sums needed to pay projected benefits as of Nov. 30, according to a study by New York-based benefits consulting firm Mercer LLC. Those 800 funds started the year with a $60 billion surplus, Mercer estimated.
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aBAw1CQXcZMg
Stu,
What are you looking for to encourage you that things will get better? Job creation? Retail sales improving? Companies to stop going under?
It seems that the economic plan proposed by O takes those things into account. The problem is he will likely have to raise taxes and increase the deficit to make that happen.
It seems that there are a lot of people betting on this to work. Do you have reason to belive that it wont other then past attempts?
66…is that electric baseboard heat? Cause that is ‘the best’ you know…clean affordable electricity.
Nicholas,
I read a great article recently on how building bridges doesn’t help the economy one iota. I’ll look for it and will link it here when I get a chance.
Ultimately, my problem is with the whole concept of stimulus. Taxing people or borrowing from their offspring to create fake jobs in hopes of encouraging consumption and restarting the cycle is ludicrous. I’m beginning to think that the entire prosperous cycle from 1980-2008 was artificially created through expanding the deficit to awful levels. The problem that everyone is ignoring is that it will eventually have to get paid back. The numbers of dollars wasted already is astonishing. Every modern crisis (healthcare, medicaid, social security, etc.) could have been fixed with the money we have already flushed down the toilet. Is a new tunnel under the Hudson gonna put food on your table? Is a new National Park in Schenectady gonna make you buy a car? The only way for us to possibly get out of this whole would require a world war. Not one of the BS Pakistan/India battles over Kashmir. It would require China or Russia or us to invade our neighbors and the battle would have to last long enough for us to change back into a manufacturing economy to support the war effort. Trust me, this is not what I’m hoping for, but it would be much better stimulus than giving laid off bankers jackhammers.
(to the tune of Winter Wonderland)
“Doorbells ring, its the season,
and you know, what’s the reason,
There’s someone out there,
who’s after his share,
Sticking out his greedy little hand!
First to come, is the doorman,
He’ll complain, he’s a poor man,
The Janitor’s next, with some lame pretext,
Sticking out his greedy little hand.
Next will come the superintendent’s visit,
He will ring your doorbell loud and long,
When you open up and ask ‘what is it?’
He just stands and sings his Christmas song.
Later on, you’ll get the cash up,
For the men who pick the trash up,
It’s nice they’re all here
Just one day each year,
Sticking out their greedy little hands”
(Bonus points for anyone who can reproduce this one for banks and auto makers)
[65] stu,
“the Palm is complete[ly] bourgeois”
Now you are really feeding the trolls, stu. You’ve outed yourself as a Red! John, Jamil and Reinvestor must be pounding away as we speak.
[65] redux
I agree though that a 4 lb lobster is ridiculous. Shell has to be opened with a hammer and the meat is likely tough and tasteless.
NJ’s tax base is a dead man walking. As usual no one will face the facts until the patient begins to rot on the table. of course then everyone claims it was unforeseeable…
That will come when our creditors cut us off. At which point, we’ll probably see some kind of federal bailout. Hopefully, it looks more like a bankruptcy where the state govt. is restructured, contracts are renegotiated, and we see greater federal oversight (anything is better than what we have now).
Unfortunately, however, a Fed bailout will probably come in the form of a loan with more debt for NJ. A dem fed govt. won’t want to upset labor interests in NJ.
Stu it is more the gene pool then the deficit that will determine your children’s future. Dang it the 4 pounders are great, it is too much work pluking meet out of a one pound lobster. Looks like a crawfish at that weight. Lets see 90% of mortgages are being paid on time. If we reposes 10% and sell them at 50% of mortgage value we have a lost of 5%, big deal. The fundementals are strong the mustard seeds are growing, it is free market capitalism time!!!! Lets throw off the shackles of mark to market accounting, UAW contracts and pension fundings and build our infrastructure.
Actually they deshell it for you and if you have to touch the shell they run over and do it for you. Last year I had the five pounder but this year do to recession we cut it 20%, next year if we are in a depresssion I will only have a three pounder.
comrade nom deplume Says:
December 8th, 2008 at 10:19 am
[65] redux
I agree though that a 4 lb lobster is ridiculous. Shell has to be opened with a hammer and the meat is likely tough and tasteless.
Stu,
The end game is a revaluation of the dollar. Inflating our way out of trillion dollar deficits is a road to Wiemar and the PTB know that.
Unless they admit the current system is a farce, then they must continue to push for inflation. In the end that inflation must be ameliorated. One of the only solution that doesn’t end in the death of the dollar is a revaluation.
Of course any such revaluation wont even be thought of until they are done inflating. And they wont be done inflating until the have inflated their way out of a deflationary depression and possibly into an inflationary depression.
#70 - stu - the entire prosperous cycle from 1980-2008 was artificially created through expanding the deficit to awful levels
I agree, although I’d state the cycle was created by devaluing the dollar.
The problem that everyone is ignoring is that it will eventually have to get paid back
They are, those paying attention are hoping we can continue devalueing the dollar so the future payments aren’t so bad. Some of us (myself included) are wondering when this game has to end and what happens when it does.
Taxing people or borrowing from their offspring to create fake jobs in hopes of encouraging consumption and restarting the cycle is ludicrous.
It is, but I don’t think this is the real purpose. The real purpose is keep the jobless off of the streets and fed. No one wants to see people starving in the streets, this takes care of that problem.
If you are of a more conspiratorial/historical mind, large numbers of unemployed and unhappy adult men are never good for the stability of a given government. Best to give them some work, even if you have to make it up.
Of course any such revaluation wont even be thought of until they are done inflating. And they wont be done inflating until the have inflated their way out of a deflationary depression and possibly into an inflationary depression.
Huh??? wouldn’t it be just one depression??
it just at some point deflation will switch to inflation and destroy remaning of infrastructure.
I have other new “idea” - how about US goverment keep on borrowing as much as it can in the next 5-10 years, once no other country wants US debt - simply default on ALL external obligations.
Ohh wait - it will make that so no other country will take us dollars and we would have to become self-sufficient (impossible at current level of oil consumption)…
Hmmm NO GO THERE.
Imagine - Saudies stopped shipping their oil to us and in 3 weeks the whole country ran out of oil… what will happen next???
Dec. 8 (Bloomberg) — The Standard & Poor’s 500 Index reached a bear market bottom more than two weeks ago and investors should begin buying the largest U.S. stocks, according to Laszlo Birinyi, who predicted the rout in financial shares.
“I’m very comfortable saying the market has made the bottom,” Birinyi, president of Birinyi Associates Inc. in Westport, Connecticut, said in an interview with Bloomberg Television. “It’s time to get out of the bunker mentality. A bull market is forming. It’s just not going to be any outsized gains over the next three to six months. With all the concerns and issues around the world, I’d be hesitant about being very, very aggressive.”
Stu,
I agree with you that deficit is not a way to get us out of our current mess, it only pushes the problem further down the road.
If manufacturing is such a problem why don’t you start a manufacturing plant here in the US? Produce something here and the problem is solved right?
I think that there are underlying issues that keep that reality from occuring though most of them center around the fact that it costs too much to produce the goods here in the USA.
I’m still looking for a reason why the O stimulus plan will not work to rescue the economy. Is housing going to suck another trillion out of the economy in the next year negating a trillion dollar stimulus package?
John,
Sounds like Birinyi is talking out both sides of his mouth. “It’s time to get into stocks, a bull is forming, but don’t be aggressive.”
So essentially it’s a suckers bull rally that’s going to end in a retest of the low.
72 comrade: “John, Jamil and Reinvestor must be pounding away as we speak.”
What the heck are you talking about??
Al:
“All I am wondering about - when will NJ taxes Stop climing”
when the h*ll freezes or people stop voting dems. the probability for both of these events is about the same.
From the Clifton Journal:
Glaxo announces local layoffs
International drug company GlaxoSmithKline will slash the workforce at its Clifton plant by approximately 30 percent as it restructures operations over the next two years.
The Clifton plant will cease supply of its brands to Japan in 2010 to concentrate on increasing supply to North and South America. The change, announced just before the Thanksgiving holiday, will result in the loss of 110 jobs at the site by the end of 2010.
The company will instead increase spending on the training and development of the remaining staff, as operations become less labor-intensive and more automated, said Clifton site director John Harrold. All job functions will be impacted in some way, Harrold said.
Harrold said the company would begin manufacturing its products locally in Japan by mid-2010. Currently, 10 percent of GlaxoSmithKline products are exported to Japan while the rest of the company’s market includes the United States, Canada and South America.
The move is the best “strategic route” for the company, said Harrold.
“Over the last year, we’ve been reviewing our business model and we really need to ensure we remain competitive,” said Harrold.
“This is all being driven through a strategic need and through cost-competitiveness and does not reflect on employees’ performance in Clifton.”
The Clifton plant produces the toothpaste brands Aquafresh and Sensodyne. The company, which is headquartered in the United Kingdom, has operated in Clifton since 1954 when it was previously known as Beecham Products, Inc. and now employs 370 people at the facility off Bloomfield Avenue. The company is one of the City’s largest employers, next to pharmaceutical company Hoffmann-La Roche.
Kettle1 (77),
I completely agree with your assessment (and have been following it since you first stated it probably a year ago) and it makes the argument for buying the shiny stuff a good one, but not until our currency is way way more deflated.
What troubles me most about infrastructure investment is how poorly the government manages projects (look at Iraq contractor spending) and who will get these jobs. I just don’t see all of these laid off service people building bridges and dams. It made sense when they were a generation away from farming, but not now. Will the government build pseudo malls for the Circuit City rejects? Will the government create a fake bank for the laid off bankers?
The only way out of this hole (IMO) is to encourage saving and investment. The banks aren’t going to lend unless the people have faith in the banks. Rewarding the banks for their deplorable behavior does not provoke our confidence in them.
This stimulus will not create any meaningful economic growth. The only thing it will do is give joe six pack the impression that their government is doing something to “solve” the problems the economy is facing. In the end you are going to see more layoffs and more bankruptcies.
Nick,
The 800 lb gorilla in the room that no one acknowledges is debt. Until bad debts are wiped from the book in one form or another our debt based global economy cannot improve.
Our current economic system requires that debt constantly be fed up the food chain.
joe sixpack is saturated in debt and doesn’t want anymore even if it was offered.
Joe is the plankton at the bottom of the food chain. If you are looking for a sign, then watch what the consumer is doing.
However, consider that american consumerism was based on a certain level of debt growth YOY that fueled economic growth. We are now seeing a decrease in wages and lifestyle across the board. How are Americans going to resume being consumers when they are facing a lower lifestyle, lower wages, and a net negative savings. They took on debt assuming a continuous increase in income. That has reversed so now Americans must reduce their debt level and start saving cash.
If you are looking for signs of a resurgence of the consumer economy then watch for the point when Americans have a net positive savings rate and are spending cash not credit.
John,
http://www.forbes.com/columnists/forbes/2007/0212/104.html
Nick
If manufacturing is such a problem why don’t you start a manufacturing plant here in the US? Produce something here and the problem is solved right?
where do you get the money from? The government cannot buy its way out of this. even if the government built the factory at some point the company must function in a normal market and there is no debt to be had. if there is no debt available then how do you expand. remember that in our economy debt is money. no debt expansion, no economic growth.
Having the government try and fuel the economy is the equivalent of an economic perpetual motion machine.
In a debt based economy, if you cannot expand debt then you cannot expand the economy. how are they going to expand debt besides stimulus packages which do not address the debt saturation issue
<i.I’m still looking for a reason why the O stimulus plan will not work to rescue the economy. Is housing going to suck another trillion out of the economy in the next year negating a trillion dollar stimulus package?
yes. even if it did not we are back to debt saturation
Stu,
You can’t encourage savings and investment by raising interest rates, that would mean pain, and this is America, and in America we can’t have pain, just success, we are the greatest nation
#86 - I just don’t see all of these laid off service people building bridges and dams. It made sense when they were a generation away from farming, but not now.
I agree. This is why I was asking about the fungibility of jobs last week or the week before.
Even with a huge infrastructure program only so many can mix concrete. What do we do with the rest?
HEHEHE,
I’m glad you understand.
Let the morons eat cake for now.
Tomorrow they will have to go to the gym.
Stu,
I completely agree with your assessment (and have been following it since you first stated it probably a year ago) and it makes the argument for buying the shiny stuff a good one, but not until our currency is way way more deflated.
I agree, but the problem is available supply. How much supply will be available when we near the end of the deflation cycle? You must run your own risk-benefit analysis on that one. I would rather buy early and hold long term, but such strategies depend on your exact goals in holding metal.
——————————
AL,
It is possible to flip from a deflationary depression to an inflationary depression or vice versus.
An inflationary depression is the Wiemar republic. A cheese burger will cost a billion $ and process rise so fast that your money is worthless in 24hrs.
for example: one ounce of gold was worth 170 marks in 1919. By 1923 1 ounce of gold was worth 87 trillion marks.
A deflationary depression is 1930’s US. no one has money. but any money you have is worth huge sums of goods
from “The Coming Currency Collapse, And What You Can Do About It.” by Jerome F. Smith, c.1980. Bantam printing Oct.1981.
In real terms, an inflationary depression is indistiguishable from a deflationary depression. In both cases production and incomes decline in real terms; in both cases liquidity problems proliferate; in both cases widespread bankruptcies occur. The distinction between a deflationary and inflationary depression is this: in a deflationary depression– production, incomes,and living standards generally all decline both in real terms and in nominal money terms; in an inflationary depression– production, incomes and living standards generally also decline in real terms while at the same time all of these [categories] show increases in nominal money terms.
Inflation depreciates the purchasing value of the official currency and simultaneously appreciaes the value of the officially abandoned real money (gold and silver). Over time the rate of fiat money issue tends to increase, causing a coincident but greater rate of depreciation in the market value of each unit and of nominally increasing total stock of paper currency. This, in turn, forces the officials to increase the rate of counterfeiting again and again in order to try to cover the soaring cost of underfunded but already budgeted programs. The process then feeds on itself and ultimately destroys the currency completely, the currency ceases to be money by anybody’s definition, and this pushes the paper money price of gold and silver into the stratosphere.”
Santa’s Top Ten Tips for Appealing NJ Unemployment Denial Letters
Tip #1: Do not miss either your initial filing claim deadline or your first appeal deadline. They are sticklers. You have twelve seconds to appeal your denial. Now me, I can make time expand and contract, so the Monday after every Christmas, when I file my claim, I do my hocus pocus and then take my time filing.
More tips will follow, since I have lots of time on my hands this year. All those IB guys are now on my “BAD” list, so I only had to make half the toys. John, you better wise up, you’re pushing it this week.
Kettle,
I’m just asking questions to help stimulate the other side of the argument. Im of the opinion that the housing collapse will continue to suck huge amounts of cash out of the economy to dwarf the size of any stimulus package.
I think you are right that the consumer is a barometer for better days. I still have family that is scarce employed.
I don’t agree with your assumption that government stimulation is equivalent to perpetual motion (impossible). I believe that there is a real tangible benefit to a positive upbeat leader who challenges people to be better. I’m hoping that O turns out to be that leader.
Having the government incentivise positives and tax negatives are an important function in a capitalist system. The problem that we have been experiencing comes from the fact that negatives were incentivized and positives taxed. That needs to change.
Don’t give tax breaks to people who move jobs overseas. Give tax breaks to companies who produce and employ Americans.
There is a balance between globalization and protectionism. I think we might have swayed too far to the globalism side.
John,
I’ve enjoyed Nobu and The Homestead and The Palm a number of times. The Palm was a big haunt of the the financial printers. All are decent, but no way near worth the cost. Also, I had a raw oyster at the Homestead that should have never been served. I will always smell an oyster before I swallow one going forward. The taste was indescribable and I’m lucky I didn’t end up in the ER. Any good joint would have smelled that oyster and would have never served it. Thing must have died weeks before.
Nick
I believe that there is a real tangible benefit to a positive upbeat leader who challenges people to be better. I’m hoping that O turns out to be that leader.
I agree, a positive leader is a key force. But the government cannot act as the primary source of capital (or debt)that fuels the economy for any period of time and attempts to do so historically have disastrous consequences
Recidivism rate at %50 for modified mortgages.
Nick,
I am an eternal optimist. But I’m not blind like some others who post here.
Tohsiro (99):
“Dugan said he was not sure why there was such a high level of re-default, pointing out that it may be because the modifications were not low enough to be affordable”
Well a duh?
The meat from the above article;
According to the OCC statistics, which looked at loans modified in the first quarter and second quarter of 2008, 36% of borrowers had re-defaulted by being more than 30 days past due and after six months, the rate was roughly 56%. After eight months, 58% of borrowers had re-defaulted.
I’d expect this accelerate in 3rd and 4th quarter.
Even with a huge infrastructure program only so many can mix concrete. What do we do with the rest?
With enough red tape & regulation, there will be lots of job opportunities. Modern infrastructure projects are hugely inefficient. There will be environmental impact studies, permits needed from legions of regulatory agencies; local, county, state & federal, with people needed to file permits and people needed to review and grant them. There will be budgets to manage (and blow), safety officers to make sure that OSHA rules are followed. Lawyers to file lawsuits and defend NIMBY lawsuits filed by people concerned about the habitat of the reticulated mud squalop. Lobbyist to push for federal spending in their neck of the woods. Engineers to study traffic flow or impacts on the power grid. And on and on. The ditch diggers are but one cog in the system.
I didn’t mean to imply that we should give tax breaks to companies that produce Americans. I’m not even sure a company like that exists :)
Stu, I think I fall into the same category.
Well, I had recently begun to think that reality might be dawning on sellers, given that the economy is so obviously grim. So I started looking at houses in earnest over the last few weeks and this past weekend put in a lowball, which in my opionion was not even that severe (15% below asking). Just heard back and the sellers didn’t even counter. They had recently cut their price (which was in no way justified by recent comps) and they felt they could get asking. We were their first bid in 4 months, by the way.
Tosh,
Worth reposting the full text..
Regulator: High number of mortgages re-defaulting
Office of the Comptroller of the Currency director John Dugan on Monday released statistics showing a high re-default rate on mortgages that have been modified in the first two quarters of 2008. “The results were surprising, and not in a good way,” Dugan told a gathering in Washington at the Office of Thrift Supervision’s annual conference. According to the OCC statistics, which looked at loans modified in the first quarter and second quarter of 2008, 36% of borrowers had re-defaulted by being more than 30 days past due and after six months, the rate was roughly 56%. After eight months, 58% of borrowers had re-defaulted. The OCC tracked the number of borrowers that re-defaulted on their mortgages after the modification was completed. Dugan acknowledged that not all re-defaulted mortgages go to foreclosure, but he argued that the number was very high. Dugan said he was not sure why there was such a high level of re-default, pointing out that it may be because the modifications were not low enough to be affordable.
The reality is our current situation mirrors that of Japan in the 90’s. The US government is now taking the same steps the Japanese took. Ask yourself how well that worked out for the Japanese? It’s 17 years later and their stock market is still making new lows.
#103 - renting - Oh, I know that. I guess the point I was making is the modern work force has very specialized skill sets and the jobs are therefore not easily exchanged.
Everyone can mix `crete, not everyone can perform environmental impact studies. There are far more of the later than the former.
Stu, I have noticed in very nice restaurants, haunts of finance people, quality has gone out the window. Food is coming out of the kitchen that should have been noticed. When you are spending $100+ per person there is no excuse for an incorrectly cooked piece of meat or food that is clearly old/spoiled. So if John had a good meal at the palm I’d be surprised because compared to how these restaurants were 6 months or a year ago they are not very good. Additionally I agree lobster really gets rubbery above 3lbs and is inedible around 7lbs.
“any lobster over a pound in a half tends to suck”
absolutely correct.
if you are going to do massive infrastructure investment, it seems to me it should be in the form of public transportation (creating new and improving existing). I think that would pay off over the long term.
HEHEH 107,
Japan had a net positive savings rate and a substantial current account surplus. we have niehter
#107 - HE - It’s 17 years later and their stock market is still making new lows.
This is what I’m afraid of. A lot of people are betting their retirements based on the idea that markets always go up in the long run…
Kettle,
And that makes these stimulus plans even more friggin’ worthless!
Stu - good work with F The World
#64 nicholas: More bad news? Of course!! More dismal 4th quarter numbers, more, and more layoffs, more financial problems.
The recession that we finally just admitted is a recession, is getting into the brutal stage.
It is amazing to me (the comment is not directed to you), that after all that has transpired, so many believe that we can just get throught this whole mess quickly.
It took years to create the mess, it will take years to fix it.
The market may be rallying, but not because of the fundamentals, and in the end that is all that matters. The fundamentals are horrible.
From Bloomberg:
Majority of Modified Loans Fail After 6 Months, Regulator Says
Most U.S. mortgages modified by lenders to help keep struggling borrowers in their homes fell back into delinquency within six months, the chief regulator of national banks said.
Almost 53 percent of borrowers whose loans were modified in the first quarter of this year re-defaulted by being more than 30 days overdue, John Dugan, head of the Treasury Department’s Office of the Comptroller of the Currency, said today in remarks prepared for a housing conference in Washington.
“The results, I confess, were somewhat surprising, and not in a good way,” Dugan said, citing a third-quarter survey his agency plans to release next week.
Lenders and loan-servicing companies have been modifying mortgages by lowering interest rates or creating repayment plans through the voluntary Hope Now Alliance. The group reported last month it helped 225,000 borrowers keep their homes in October.
Foreclosures rose to a record in the third quarter as one in 10 U.S. homeowners fell behind on payments or were in foreclosure, the Mortgage Bankers Association reported last week.
The OCC’s survey represents institutions that service more than 60 percent of all first mortgages, or 35 million loans worth $6 trillion, Dugan said.
“In general, the third quarter report will show many of the same disturbing trends as other recent mortgage reports,” Dugan said. “Credit quality continued to decline across the board, with delinquencies increasing for subprime, Alt-A and prime mortgages.”
Tosh,
The basic CFA’s mantra is that stocks have outperformed all other asset classes and averaged 10% gains over the past 50 years..yada yada yada.
Which is true, UNTIL IT’S NOT!
John Says:
December 8th, 2008 at 8:43 am
So went to Palm on Friday night, place was packed, had six jumbo shrimp and five clams as an app then had a nice 4 pound lobster followed by a great piece of cheese cake washed down by 5 V&Ts, Always great which is whey they have been around for 75 years. Only suprise was that is was very crowded. Even more amazing with no kids menu there were lots of kids in there. Waiters knew half the names of customers and most were under 40.
John: In contrast, on the way to work, I am sure I was behind the Repo Man. He had a car on his flatbed and was towing another. A relative new Audi A4 with a Williams Collge sticker on the back window and an relative new Acura TL.
Skep, the big problem is lobsters over 1.5 pounds are not cooked properly and thus are rubbery, a cold water lobster cooked properly and go as big as 3 lb and still have nice flavor and not be rubbery, above that it is not so good. I worked in a restaurant as a chef’s assistant when I was younger and we cooked a lot of lobster 2.5 lb was our standard size and they were pretty good.
if you are going to do massive infrastructure investment, it seems to me it should be in the form of public transportation (creating new and improving existing). I think that would pay off over the long term.
Is this in the best interest of the taxpayer, especially with those huge automaker loans?
I can understand supporting the auto industry, and I can see supporting mass transit, but I don’t understand how you can support both effectively.
Isn’t that a little bit like simultaneously betting on Red AND Black in Roulette?
Hmm, our luck it lands on green.
A $100 per person meal in a good place in NYC is a relic. $10 dollar drinks and $10 dollar deserts make it near impossible to make it under $100 unless you have a coupon. Most people ain’t paying out of their own pocket anyhow in these places. Also I know lots of stock brokers who don’t buy stocks for themselves. Just safe CDs and bonds. Reason being that when the stock market turns down they lose their jobs. Basically they are the S&P. In addition they usually get a contract with a guaranteed year severance. That said even if their bonds are down 20% they are holding to maturity and they have their income stream plus paychecks for a year. That is part of the reason places are still busy in spite of layoffs, however if things don’t pick up soon before the severance expires things are getting tough at the high end.
jcer– what was the cooking method on those larger lobsters (genuinely curious)? I worked in a fish market all through high school and cooked a lot of lobsters in that time (to make the various prepared lobster dishes), but we weren’t very specialized in our cooking methods.
“I can understand supporting the auto industry, and I can see supporting mass transit, but I don’t understand how you can support both effectively.”
Well, I think there is clearly overcapacity in the auto industry, so I think we should let the weakest automakers fail and direct more money to public transportation. But I guess this makes not on the side of the “american worker.”
http://www.gma.org/lobsters/eatingetc.html
for lobster lovers of all sizes [lobster sizes, that is.]
have had ‘em of all sizes…I don’t agree with most of you here.
after working locum tenens in Maine for 4 mos and taking weekly trips to Bar Harbor for lobsters — I’ve eaten piles of ‘em of all sizes…
….the guy who writes the stuff in the link above, Mr. David Dow, is correct.
sl
Hey chicagofinance that was just our new presidents stimulus plan, reposses all foreign cars.
HEHE
how many people have a 50yr investment horizon?
how many boomers are still playing the market waiting for that big rally that will send them on a world cruise for a year?
——————————
Grim,
stop making sense.the government is not bound by the laws of phiysics, space and time. They can play black and red while still making a killing
jcer 120
I agree with you.
I have had 5 pounders, cooked correctly, that were to die for.
No longer eat the tomalley (liver, green stuff) use the roe (eggs, red stuff) for sauces and pick the undercarriage (where the legs attach) for piles of extra meat for lobster rolls or ravioli stuffing.
sl
Apologies if this has already been posted, but the NYT says it’s just might be a great time to buy a house!
It May Be Time to Think About Buying a House
Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers.
Then, everyone who sat on their down payment savings accounts for a few years too long will kick themselves for not taking advantage of what may turn out to be the buying opportunity of a lifetime for those who can qualify for a mortgage.
Unfortunately, we do not know when this golden age will begin, because we will be able to identify a bottom to the housing market only with the benefit of hindsight. But as it does with the stock market, the moment will probably arrive when everyone is feeling the most pessimistic.
That moment is certainly getting closer. Housing prices have fallen drastically from their peak levels in many areas of the country. Rates on 30-year fixed-rate mortgages are already close to 5.5 percent, and this week there were suggestions that the federal government might try to drive them down to 4.5 percent, a truly incredible figure to be able to lock in for three decades.
http://www.nytimes.com/2008/12/06/business/yourmoney/06money.html?_r=2&em
Also, another interesting anecdote (at least to me) on a potential short sale I visited (I did not end up bidding). Mortgage broker/realtor couple were the sellers. They owed 689,000. Tried to do a short sale last spring for 600k, the bank refused. Then a couple of months later, bank said they would agree to do a short sale at this price. But the next bid came in at 575. Bank refused! End of summer, bank indicated that they would take this. Next bid came in at 500k in early fall. Bank refused again! Place is still for sale and if it sells it will definitely be well below 500k at this point. I can understand to a degree how sellers can be so stubborn, but the stupidity of banks and inability to recognize the trend is really mind blowing.
#68 nicholas:Do you have reason to belive that it wont other then past attempts?
Even if it works (and I believe that is douubtful), it will take years to kick in.
Again, everybody is looking for the quick fix to get consumers to spend again, which is part of the reason we got into the mess in the first place.
How much revenue does the NYT book from advertising in the Real Estate section?
#75 John:Lets see 90% of mortgages are being paid on time. If we reposes 10% and sell them at 50% of mortgage value we have a lost of 5%, big deal.
I believe you were proved wrong on that last week. You possess a very short term memory.
And if it is such a good time to buy real estate, why is the Times selling their HQ?
From the annals of Montclair waste of taxpayer dollars….
Township runs a jitney service from the Bay Street train station. Service is limited, and not timed to the train schedules.
Cost to town - $60,000. Total number of riders - 15-18
the 4.5% mortgage thing is just another toehold giving false hope to realtors and sellers. I heard it this past weekend from a realtor, “Now is a great time to buy because next spring a lot of buyers will come out when there are 4.5% mortgages.”
“If we reposes 10% and sell them at 50% of mortgage value we have a lost of 5%, big deal.”
and this 5% was leveraged 20x
#105 skeptic; Give it time. If they want to sell, they will lower the prices, otherwise, it will just sit and rot on the market.
The more denial and stuborness that sellers exhibit, the more precarious their financial situation.
#105 skeptic; Give it time. If they want to sell, they will lower the prices, otherwise, it will just sit and rot on the market.
The more denial and stuborness that sellers exhibit, the more precarious their financial situation.
********
3b– the way I look at it, 10-15% off is a done deal for 2009. So even if your asking price seems reasonable right now, I need an additional 10-15% off to get me to buy now instead of waiting another year. I really do not undestand why sellers cannot see what is coming (or more accurately, what is happening right in front of them). The best strategy for buyers right now is to wait. As a seller, you need to come up with a screaming good deal to override this.
The repo man cometh, the issue is upper end spending still happens and always happens. Even during the Great Depression there were wealthy people who were still spending money just much fewer and the lower income brackets were pushed to the brink of bankruptcy.
The US still has many good qualities, while fiscally it is a disaster I think we will get through this. i know doom is the mantra here but I think reform could help and we will get back on our feet. We do need more manufacturing but only things that require skill, technology, and good operation. That kind of manufacturing the US can compete with abroad, think China and India still cannot produce high quality automobiles. We control many technology standards, we have Microsoft, Apple, Sun, Intel, IBM, Cisco, Oracle, etc. When the world needs tech they come to us. We have an entertainment industry with sales and popularity around world. I think infrastructure investment would be a boon to the country. I think rail for passenger and goods transport is key, and can help us rely less on oil. Alternative energy research is a good idea, getting a leg up on energy independence can only help us in the long run. We need improved telecom links for a future that needs greater bandwidth. The US has many talented people in “The Service Sector” many of who could be retrained to do much of what needs to be done. I think the key is that people are flexible and if they are intelligent enough can be trained to do almost anything in a short period of time as long as they are not lazy. Oh yeah and as an engineer, we need to promote engineering/science to children it was the lethal combination of financiers, engineers, and labor that built this country. We are losing the labor and engineers rapidly and continue to need it.
Last week it was reported that we had 500K job losses for the month of Nov. If half of these people had home loans, then we are talking more home loan defaults in the future. If we continue to have increasing job losses in the months to come (some are predicting a million a month for the next 5 months), then this will be disastrous.
#137 skeotic; If the gov’t gives me a 4.50% mtg, I wil take it.
A really low fixed rate mtg, with declining prices.
#140 skeptic:The best strategy for buyers right now is to wait.
That is exaclty my plan.
if you have top credit, you can already get a conforming fixed rate mortgage below 5.5%. 4.5% would be nice, but low interest rates aren’t the problem right now.
Peter Schiff: Low Rates, Big Problems
Government and mainstream economists have erroneously concluded that the key to reversing the financial free fall can be found in stopping the plunge in home prices. (I would offer the corollary that the key to reducing injuries in auto accidents is to suspend the laws of inertia). But to accomplish the improbable task of re-inflating the housing bubble, the government appears ready to announce a coordinated plan to push down mortgage rates to just 4.5%. Of course, this is precisely the wrong solution to the housing crisis, but when it comes to bad ideas our government has been remarkably consistent.
http://caps.fool.com/blogs/viewpost.aspx?bpid=117292&t=01000420523245711617
I thought we all agreed that cheap credit and lax standards caused the problem.
How is this now the solution?
From the APP:
Corzine urges a ‘timeout’ on foreclosures
New Jersey Gov. Jon S. Corzine urged a “timeout” on foreclosures, saying keeping people in their homes is an important step in efforts to correct a “deeply troubled” market.
A three- to six-month freeze on foreclosures is needed as the “economic dominoes are picking up speed,” Corzine said today at a housing conference hosted by the Treasury Department’s Office of Thrift Supervision in Washington. Mortgage foreclosures rose to a record high in the third quarter as one in 10 U.S. homeowners fell behind on mortgage payments or were in foreclosure, the Mortgage Bankers Association reported last week.
“Housing markets and mortgage-finance markets are the fuel for this problem,” Corzine said. “We need a systematic protocol and process.”
NJGator, I always find it laughable that people claim there is no point in timing this market because you won’t know where the bottom is until it’s left you behind. I call nonsense. Anyone that waited to buy in 1990 had a good 8 years of bottom to get in at a reasonable price. I’m pretty sure that there was not a single person in the last housing bust that waited and regretted it.
From Reuters:
NJ gov Corzine says TARP not aiding on foreclosures
New Jersey Gov. Jon Corzine said on Monday that the U.S. Treasury Department’s program to inject capital into banks is not helping the fundamental problem of growing home foreclosures.
Corzine, who once led Wall Street giant Goldman Sachs, said the $700 billion Troubled Asset Relief Program (TARP) is not trickling down to relieve the slipping U.S. economy.
“The TARP plan is a piece of cloth concealing the most real and fundamental problem” of foreclosures, Corzine said at the Office of Thrift Supervision’s National Housing Forum.
…
He also said the U.S. government should announce a time out on foreclosures and should return to pre-2005 bankruptcy rules.
In 2005, a new bankruptcy law went into effect that makes it harder for consumers to prove that they should be allowed to clear their debts in Chapter 7 bankruptcy.
Anyone that waited to buy in 1990 had a good 8 years of bottom to get in at a reasonable price. I’m pretty sure that there was not a single person in the last housing bust that waited and regretted it.
Well said.
In my opinion, the only way to prevent foreclosures is just suspending Monthly Mortgage Payments for the foreseable future. That shuld fix it almost instantly. What a bunch of jokers we have..
How many times will they lie to us and claim that the fundamental problem is janitors from Newark losing their half a million dollar homes? Why won’t anyone call the game like it is? Corzine is a smart guy, he didn’t get to his position at Goldman by spewing crap like this.
grim,
banks and credit card copnaies have problems now? what happens if/when people can use chatper 7 again? does the CC industry get a side bailout with chapter 7 re-enactment
Massachusetts tried a 90 day moratorium on foreclosures this year and as soon as the 90 days were up, there was a record jump in foreclosures YoY. All it does is delay the inevitable.
153 Zieba - He’s not dumb, but he’s going to need all the vots of those Newark janitors that he can get next November while the rest of us throw him in anchor in his re-election bid.
He might also need all the dead people and Hudson County vote early and often folks that he can find.
We can fix the foreclosure problem with a moratorium on foreclosures.
However, it would leave us with a new problem: If you can’t foreclose, your secured loan begins to perform like an unsecured loan. There are only two options, sky high rates to compensate for the risk of holding a massive unsecured loan, or a complete unwillingness by lenders to lend to anyone but the most prime of borrowers.
Which is worse?
People seem to forget that tools like foreclosure and bankruptcy are solutions.
Now they are problems?
Huh?
“what happens if/when people can use chatper 7 again? does the CC industry get a side bailout with chapter 7 re-enactment?”
That’s a very good question. It will be interesting to see who holds sway in the coming administration. There’s already talk of the “liberal wing” of the Democrats feeling betrayed and the the new guy hasn’t even been sworn in yet.
Massachusetts tried a 90 day moratorium on foreclosures this year and as soon as the 90 days were up, there was a record jump in foreclosures YoY. All it does is delay the inevitable.
I expect the same to happen when the Fannie/Freddie moratorium is lifted after January 9th.
it seems that most of the houses our real estate agent takes us to look at are foreclosures. The banks have these things listed at about 15% off peak max. I’m of the opinion that prices in Jersey need to go to 30% off peak in the end, and that’s pretty optimistic compared to other housing bears. Unfortunately, most of these houses have been poorly maintained the past 10 years and most of the repairs would lead me to believe another 10% should be taken off the price. I see no one buying these homes and I wonder how long the banks plan to sit and hold empty properties.
Ritholtz on last weeks Rosy Unemployment numbers:
With the economy now in a full blown recession, and the Housing and Credit crisis getting worse, it hardly semed necessary to pile on BLS. Until Friday’s report. As bad as it was, looking beneath the headline data hows that it was worse — much worse — than reported. Consider the following:
http://www.ritholtz.com/blog/2008/12/nfp-even-worse-than-reported/
how about we just say F it and have a nice jubilee???? everyone starts at 0 debt.
“how about we just say F it and have a nice jubilee???? everyone starts at 0 debt.”
that’s the plan. Hyperinflation. Even the US government will have zero debt.
Ben,
I think the banks will hold foreclosures until the govt buys them at near full price, or they become convinced, finally, that this will never happen.
Do foreclosure moratoriums only work for liquidity-related issues? Are they meaningless for any borrower facing a solvency issue?
What could a borrower do, in 2 to 3 months, that would significantly improve their solvency position?
I can understand where a moratorium would work for a liquidity problem, eg. “I can afford the mortgage payment, I just don’t have the cash right now because of an emergency.”
But what happens when the borrower can’t afford the payment? What can they do in three months? Go out and get a better paying job? Highly unlikely. Training to put them in a better earning position? Also unlikely.
I doubt that even six months is enough to address a solvency issue.
Grim 167 - Get Corzine to personally pay off the loan?
ray, ben
if banks start selling homes for firesale prices it is a race to the bottom. As once one banks starts cutting they all must and the first to dump their holdings wins.
That also means the unraveling and a potential forcing of mark-to-market of the massive amount of derivatives based on said housing.
Greetings from a traffic light. This from the yahoo news front page (who could have EVER predicted this? Well, anyone, but that is besides the point)
Homeowners who modified loans are in trouble again (AP)
(12 mins ago):
WASHINGTON - More than half of all homeowners who had their loans modified to make the payments more affordable in the first half of the year are already in default again, banking regulators said Monday.
The new data raise questions about whether government money may be better spent on creating jobs, rather than averting foreclosures, said John Reich, director of the federal Office of Thrift Supervision office at a housing industry forum sponsored by his agency.
(snip)
Ben Says:
December 8th, 2008 at 12:34 pm
it seems that most of the houses our real estate agent takes us to look at are foreclosures. The banks have these things listed at about 15% off peak max. I’m of the opinion that prices in Jersey need to go to 30% off peak in the end, and that’s pretty optimistic compared to other housing bears. Unfortunately, most of these houses have been poorly maintained the past 10 years and most of the repairs would lead me to believe another 10% should be taken off the price. I see no one buying these homes and I wonder how long the banks plan to sit and hold empty properties.
Hey for banks it is a win-win - they have a “hard” asset on their books, and they get to write off their losses while getting money from government for having the losses.
If banks were allowed to fail we would see government’s RTC all over the place by now and housing would be a lot cheaper.
If you think you are saving buy not buying over-priced home from the bank - think again, you are just giving them you tax-dollars. It is just waiting for houses to get cheaper allows you to get hosed only once - only your taxpayer dollars.
If you buy overpriced house - than you get hosed twice - UNLESS you buy house, and default instantly - than you somewhat recoup you tax dollars given to banks but not paying rent.
“What I hear at every level of retail is that no one has ever experienced anything like this in their careers,” said Ken Downing, the fashion director of Neiman Marcus.
http://www.nytimes.com/2008/12/04/fashion/04SHOPPING.html?_r=1&em
*********
the emperor has no clothes
What could a borrower do, in 2 to 3 months, that would significantly improve their solvency position?
I think the thought was if FK is due to Job loss they will find a new one - we are still in a historically low unemployment situation… Aren’t we and getting new job souldn’t take more than a month…
Frank is struggling hiring people…. Of course he lists requirements which require a lot of education and several years of experience, but HEY - it is USA, everybody have that, don’t they??
“After eight months, 58% of borrowers had re-defaulted.”
I love this blog because I learn a new word every day!
Todays word: re-defaulted
I love the smell of a bull market in the morning.
Lending money to people you have already lent money to who have not yet paid you back is stupid.
Nick,
regarding the market. I suspect we will see a substantial rally over the next few weeks before we dropoff another cliff.
just a guess and i am not a financial guy.
HE (28)-
“Maybe Lee Greenwood could close the show with an All Star Jam of God Bless the USA?”
Thanks a buttload for that. Once I get this song out of my head, I am going to track you down and kill you like a feral dog. :)
Aren’t we and getting new job souldn’t take more than a month…
http://data.bls.gov/cgi-bin/surveymost?ln
According to the BLS, in November “Average Weeks on Unemployment” was 18.8. “Median Weeks on Unemployment” was 10.
Takes Joe Sixpack, on average, more than 4 months to find a new job. It will take more than two months for 50% of unemployed workers to find a new job.
Al (50)-
Please leave NJ. I’m begging you.
AL,
i hope you are kidding
we are still in a historically low unemployment situation
the real unemployment numbers are in the mid teens (14-16%)
Had a 7 AM meeting with a former super high-up honcho of the old AT&T.
I referred him to a PA agent. He’s leaving NJ. Has rented out his 1mm+ home in Basking Ridge and is buying a luxury townhome just across the river in PA, which will become his primary residence.
The minute that happens, he starts saving money…even with about a 300K mortgage. PA doesn’t tax pension income.
I could tell stories all day about people with talent/means/wealth who come to me almost constantly to talk about getting out of NJ.
Corzine and the fools in Trenton have no clue. The whole tax base here is eroding. And the erosion is gaining momentum.
Kettle, how many people are unemployed who want to be unemployed? I have friends from GS who ain’t looking too hard as if they find a job before they run through severance they have to give it back. Right now there are not much jobs through Jan anyhow so whey bother? With a full paycheck plus unemployment they are rolling the dice. I also know a lot of Dual Income families with kids where one got let go and with the unemployment check and no child care one is staying home. I only want to see the stat where it is a sole provider head of household who has no severance package who can’t get a job as that population is the ones really looking.
A snip from that nytimes article posted by skep.
A report released on Tuesday by MasterCard Advisors showed that sales of luxury goods fell 24.4 percent in November compared with the same month a year ago.
Does anyone think that the drop in sales is somewhat due to people not using credit cards anymore? Where are the statistics that back this up with direct retail statistics.
If you had talent/means/wealth you would not be living in dumpy NJ.
Clotpoll Says:
December 8th, 2008 at 1:18 pm
I could tell stories all day about people with talent/means/wealth who come to me almost constantly to talk about getting out of NJ.
Corzine and the fools in Trenton have no clue. The whole tax base here is eroding. And the erosion is gaining momentum.
I concur with John on the unemployment issue.
I have a sister-in-law on unemployment. She has no intention of getting a job until the benefits run out.
Stu (65)-
The Palm- including the original in NYC- is a suck-ass clip joint, with rude waiters, tough lobsters and steaks for shit.
Merrill Chief Wants $10-Million Bonus For Presiding Over $11-Billion Loss
By Zachary Roth - December 8, 2008, 1:06PM
Talk about tone deaf!
Merrill Lynch chief John Thain wants a bonus of as much as $10 million, reports (sub. req.) the Wall Street Journal.
Merrill’s compensation committee is, not surprisingly, said to be objecting, pointing out among other things that, due to the dire economic situation, other firms like Goldman Sachs — which did better than Merrill — are forgoing bonuses this year.
Merrill has lost almost $12 billion this year, and is about to be taken over by Bank of America. Its shares have fallen fom $50 when Thain took over late last year to $13.04 at close of trading Friday.
http://tpmmuckraker.talkingpointsmemo.com/2008/12/merrill_chief_wants_10_million.php
John, first NJ is no more of less dumpy than LI, Westchester, or CT. Secondly yest the idiots in Trenton are delusional and are under the impression that everyone will come here because they have to and there are few equivalent options.
Was that you with the nose to the window Friday night jingling your paper cup for change?
Clotpoll Says:
December 8th, 2008 at 1:22 pm
Stu (65)-
The Palm- including the original in NYC- is a suck-ass clip joint, with rude waiters, tough lobsters and steaks for shit.
If I was truly all that I would have a three bedroom Condo with a balcony in NYC with a nanny and a beautiful home in the hamptons. I would not be living in NJ>
In fairness to Thain, he inherited the problem and handled relatively better than people in equivalent positions at other banks.
John (190)-
No. I was at home, eating a normal-size lobster…not a 4.5 lb sea serpent that’s laced with enough mercury to wipe out a city of pregnant women.
From MarketWatch:
Anheuser-Busch InBev to cut 1,400 U.S. jobs, 6% of workforce
Anheuser-Busch InBev to cut 1,400 U.S. jobs, 6% of workforce - MarketWatch
No. I was at home, eating a normal-size lobster…not a 4.5 lb sea serpent that’s laced with enough mercury to wipe out a city of pregnant women.
I poached some pear in orange juice, cranberry, cinnamon and vanilla bean. Filled them with almond cheesecake and then served them with a sauce made from the reduced poaching liquid. Almond gelato on the side, garnished with a cinnamon stick.
It is not like we didn’t see layoffs comming once InBev bought Anheuser-Busch.
1400 job cuts are going to be made to the management at Anheuser-Busch.
So far only one of my friends has been laid off. John is right insofar as this guy doesn’t want to get a job before his severance runs out. Also, his wife works and they can get by just on her income. But now their long term plan is to leave the NYC area altogether as they do not see themselves able to make the money they once did. I am sure this is being considered by thousands of households who have no ties to this area other than their employment
#145 skpetic; I know they are not the problem I am jsut going to take them if offered.
John a Manhattan apartment is a great thing to have but the Greenwich, Westchester, or Alpine mansion on 7 acres with every amenity you can imagine is more my speed.
deal on as much as $17 billion in loans for the struggling Big Three automakers is likely by the end of the day, the White House and a top Democratic lawmaker said Monday, as progress on the aid package sent shares of Ford Motor Co. and General Motors Corp. sharply higher in afternoon trades.
Alpine is just a surburb of the Bronx
grrr. young, innocent friend just forwarded me this:
http://www.nytimes.com/2008/12/06/business/yourmoney/06money.html?_r=1&em=&adxnnl=1&adxnnlx=1228759650-p/R/hiyuwwlJWgH+ngHkSA
and said “i feel guilty. maybe i should start looking into buying a house”
i sent her a link to the case-schiller index graphed to the roller coaster. i told her she only needed to outrun her friends, not the bear. referenced the baltic dry index and told her to stockpile two weeks’ worth of food before contacting an agent.
am angry at the new york times now. it made me sound like a tinhat. grr.
More on the Anheuser layoffs, from MW:
It also will not fill more than 250 U.S. positions that are currently open and an additional 415 contractor positions will be eliminated. Most of the job cuts will occur by the end of this year, with the remainder scheduled for 2009.
“The Wall Street Journal reports that the UAW union is seeking an equity stake and a board seat in General Motors”
What a circus!
Everyone keep paying attention to the happenings in the main tent. Meanwhile, in the side show, your children are getting pick pocketed and your job is being eliminated.
Ok serious question, I see RJR tobaco bonds still floating out with a 10-11% yield, funny yield is the same for 5 years though 30 so you have to guess where long term rates are going. I am running out of corp bonds to buy as damm Paulson is fixing everything. What do you think?
Munis are still a trainwreck till at least year end with 6% tax free to be had easier than taking candy from a baby.
I’ve got an idea, why don’t we just give Chrysler to the UAW in exchange for concessions?
Breaking from the WSJ:
Tribune filed for bankrutpcy protection, pressured by high debts.
# 173 Al: Aren’t we and getting new job souldn’t take more than a month…
Yeah Al, tell that to all the high paid Wall St people laid off to date, with more to follow.
Not to mention the other employment sectors that are laying off.
Getting another job in the best of times would probably require a month. And in this environment you think it would only take a month???
Just saw a blurb that said NBC has not sold any air time for Super Bowl commericals since September, and is balking at lowering the 3 million 30 second cost per spot.
jcer (141)-
“Oh yeah and as an engineer, we need to promote engineering/science to children it was the lethal combination of financiers, engineers, and labor that built this country. We are losing the labor and engineers rapidly and continue to need it.”
Bullshit.
1. Engineering is already a dead-end job in the US. China and India produce better ones that work for a fraction of US pay scale. Why devote a penny to reclaiming a sector of the economy that’s gone forever?
2. Even if you wanted to push engineering-or any other professional career path- it can’t be mass-promoted until the US decides it’s not in our national interest to graduate millions of functional retards every year. We have long ago passed the tipping point on this, and the vast majority of work-age Americans are debt-addled, addicted zombie-bots. Until we completely reform both our fiscal, monetary and educational systems, the happy little make-work programs and massive public bailouts will accomplish nothing.
I don’t get why people are saying DC is pickpocketing out kids pockets. Ford, GM, CIT, C, SOV, NCC, Wachovia, AXP, GE, etc. the list goes on have all been bailed out. All of them at points had long term bonds going for pennies on the dollar with yields up to 30+%. If you knew they were getting bailed out and you were concerned taxes would go up and inflation would rise because of it why didn’t you open UTMA/UGMA accounts for your kids and stockpile them with 30 year bonds trading at 20 cents on a dollar with a 8% coupon?
Ford at one dollar, Citi at three dollars would have made great gifts for the kids.
They are bailing everyone out and people are jumping on the bandwagon cause they are forced too. money markets at 2% and home returns negative, roll the dice on the next bail out company and collect 200%, it is like monopoly.
3b,
And there are blank billboards everywhere you look. Get ready for the best Superbowl commercial to be NBC promoting ‘Joey’ reruns.
149, ben
thank you, just sent your quote to my young friend.
alia,
Just tell your friend to cool her heels for a while and see where the market goes. Make sure you let her know that, “Anyone that waited to buy in 1990 had a good 8 years of bottom to get in at a reasonable price. I’m pretty sure that there was not a single person in the last housing bust that waited and regretted it.”
To follow up on my happy little observation in #211, the best way to both thin the population- and create a quick path to better education and vocational advancement- is to throw a massive world war.
I think the big 3 boards should all just give the keys to the UAW and call it a day. Turn the parasite onto itself
205: stu
i just had a flash of animal farm… with the pigs sitting around the table with the other farmers…
John,
“Ford at one dollar, Citi at three dollars would have made great gifts for the kids.”
When Ford and Citi go under, will you still be playing Monday Morning Quarterback?
#183 John: I have friends from GS who ain’t looking hard as if they find a job before they run through severance they have to give it back
That is BS, they do not have to give it back, as someone who got severance form GS, I will tell YOU how it works.
If you obtain new employment while still collecting your severance, rather than being paid every 2 weeks like you would have been, your balance of your severance remaining is paid lump sum.
That is of course if they know you have obtained new employment
#185 John:If you had talent/means/wealth you would not be living in dumpy NJ.
I would dumpy NJ any day over krappy LI.
Clot,
As an engineer I resent that statement.
I thought people did not want to be an engineer for the reasons I did not want to be an engineer.
A) If you did not study in HS there is a lot of math to catch up on.
B) With keg parties and ladies all about in college who wants to study that hard.
C) Engineers don’t get the ladies in college.
D) Male Engineers get stuck working in companies that are nearly all men and nearly all middle age, not much fun for a 21 year old male graduate
E) Jobs are not always in cool trendy cities but in hick places
F) They pigeon hole you into one type of engineering forever
G) The pay is great to start but by the time you are 35 your are underpaid and have a life time of 3% raises ahead of you.
H) The hot girls don’t marry engineers.
I) I don’t even know where they sell pocket protectors and slide rules.
Went to see an open house in Washington Twsp (Bergen), nice rebuild, nice street. Asking price is $879K (mls no. 2843032). I personally think the house is probably worth around $600 - $650K.
Realtor telling us how, town is great, homes don’t lose value in THAT town, interest rates are at historic lows, etc, etc.
When will reality hit these sellers and agents?
Stu Says:
As long as senior bonds pay off, yes.
December 8th, 2008 at 1:52 pm
John,
“Ford at one dollar, Citi at three dollars would have made great gifts for the kids.”
When Ford and Citi go under, will you still be playing Monday Morning Quarterback?
“When will reality hit these sellers and agents?”
I don’t know. The realtor we used to put a lowball bid in this past weekend asked us in a half-joking way not to tell anyone how low we bid. As if it’s a big secret that the market is tanking.
clot/stu/vic, hope you sold SKF/SRS/EEV/FXP before friday.
#224 Raul; It does not have a highly regarded High School, if that means any thing to you. I would not spend that kind of money there, try Wyckoff or Allendale.
When will reality hit these sellers and agents?
“It is difficult to get a man to understand something when his job depends on not understanding it.”
-Upton Sinclair
vodka (169)-
That is the bridge abutment toward which we are hurtling at full speed.
Everything being done to “mitigate” the current condition is like pissing in the wind.
Clotpoll Says:
December 8th, 2008 at 1:11 pm
Al (50)-
Please leave NJ. I’m begging you.
I’d love to, but I can’t yet, without giving up my 401K non-vested balance/sign-up package…
Not a lot but still..
Also 401K part is getting smaller every day. (we have company mandated 401K with limited number of funds it can be invested into).
8 more months and I am obligation free. Or a layoff…..
I am afraid in 8 month getting a job elsewhere will be a huge ordeal - with all the layoffs in the chemical industry in the last 6 months…
[223] john
Slide rulers? Do they still make those?
My HS was the only tristate HS in the top 50 nationwide and I can’t even spell so take rankings with a grain of salt.
#229 grim:When will reality hit these sellers and agents?
I just believe that the denial is an indicator of just how desperate these sellers situations are, that they can be that delusional.
Thers was IMO much less denial during the last houisng bust.
John,
Your engineer post made me laugh because most of it is true.
TRUE:
A) If you did not study in HS there is a lot of math to catch up on.
B) With keg parties and ladies all about in college who wants to study that hard.
D) Male Engineers get stuck working in companies that are nearly all men and nearly all middle age, not much fun for a 21 year old male graduate
The rest was pretty much false but funny none the less.
No. I was at home, eating a normal-size lobster…not a 4.5 lb sea serpent that’s laced with enough mercury to wipe out a city of pregnant women
I had a giant mutton chop at Keen’s Chop House that night, so I guess I can’t say much about the lobster.
“SL GREEN FORECASTS `PRETTY SEVERE’ JOB, WAGE CUTS IN NYC”
Finally Hoboken apartments under 500K and lunch under 1 hour?
I make very good money, bonuses, and from what I saw engineers could still pull the hotties.
All my friends had smokin hot girl friends or wives.
NJGator Says:
December 8th, 2008 at 9:15 am
Well our neighbor’s home popped back up on GSMLS today. Still listed at the same $499k it couldn’t sell at before. Instead of marketing specifically as a multi, it is now a “perfect mother/daughter”.
Lazy realtor put up some pretty bad pics. Do you think the crate of Depends is included in the LP?
Can you believe that this house is actually tax assessed with a value of over $650k?
is the house yellow? im cheap and unrealistic … i dont know if i’d pay 450k for that. maybe the inside looks better than the pics. yard? garage?
Nick (222)-
Wasn’t directed at any good, established, well-paid US engineers. I just don’t think there’s any short-term way to grow this career path for US students right now.
Sorry. My intent was not to disparage the profession. I just think it’s another one of those things that’s going to be outsourced for a long time to come.
Almost a million dollars of ugliness.
http://www.realtor.com/search/listingdetail.aspx?loc=07070&bd=4&typ=7&sid=e62b904b486c4c50963f85674d8d20c3&lid=1104091608&lsn=6&srcnt=84#SendFc
bi (227)-
Are you kidding? I’m averaging down at levels I thought we’d never see again.
Taking the other side of that trade?
#228
Heck, I’m not really considering making an offer, even if they would sell it for $600 - 650K, which didn’t sound likely right now, I would be overextending my wife and I. And, I’m not going to do that!
241-
What a festering pile of dog crap.
Clot, honestly India and China do not produce better engineers than the US. They produce cheaper engineers, most of your technological advances are coming from engineers in the US. The truth is the best students in China and India come to the US for education and generally wind up staying here. The fact that you think engineers from India or China are better than the US is very ignorant. Given that the majority of their education system is vastly inferior to even a state university engineering program in the US, they are really a corporate wage tool. They are used to keep wages down in the US and thus are killing engineering as a career in the US. There is a huge reason that the USA has Intel, IBM, Sun, Motorola, AMD who currently lead the world on microprocessor technology only ARM from the UK is competitive and most of these companies have tried Indian and Chinese shops and have abandoned them for anything other than validation. The truth is the vast majority of tools used in engineering and design work are from the US or Europe. No the problem is that unlike Canada or Europe where engineering school is essential free and b-school is expensive, the US it is equivalent and pay upon graduation is equivalent and engineering is way harder. People frequently use logic when picking a career path and even those who are trained in engineering like my self wind up in business eventually because there is no money in engineering and it is simply more work per $ earned.
As for labor, it is gone. Everyone thinks they are entitled to something and everyone goes to college even if they are functionally retarded. Good labor is difficult to find in the US typically you need immigrants. Nobody really wants to work anymore, they want to be paid but minus the working thing.
In any event it comes down to the powers that be supporting behaviors that are beneficial to the nation. Our government has been doing anything but for the last 15-20 years. We need to get back in the business of actually making things.
Wow so many people taken my post #173 seriously…. It seems that with people so jumpy, “Tongue firmly planted in a cheek” disclaimer really necessary??
Just so you know…
My wife tried to get a job for 2 years now - in r@d Parma in NJ - no luck, And the best part - she does not count as unemployed because she left her previous job on her own!!!
NO unemployment benefits ether for the same reason.
But now she is basically unemployable in her field - one more reason not to go into science/engineering. (Scientist after 2 years of not working is a dead meat apparently.)
And with a small baby getting retail job just doesn’t make ANY sense.
Simple and nice life on one income… We can rent very comfortably, but buying ANYTHING in NJ will make us poor.
Good times:
“Tribune’s biggest unsecured creditors are its lenders, led by JPMorgan Chase Bank and Merrill Lynch Capital Corp. JPMorgan is the administrator of $8.57 billion in senior debt and holder of about $1.05 billion of that. Others include Deutsche Bank AG, New York-based investment management firm Angelo Gordon & Co. LP, hedge fund Highland Capital Management LP and Goldman Sachs Group Inc.
Barclays Capital Inc., which bought key assets from Lehman Brothers Holdings Inc., is also among Tribune’s creditors, with about $142.9 million in interest rate swaps.
Media industry players were also listed among the creditors. Warner Bros. Television is owed $23.7 million, Twentieth Television Inc. $8.1 million, Buena Vista Entertainment Inc. $6.2 million and NBC Universal Domestic Television $4.9 million.”
Seems like quite a bit of unsecured debt.
Maybe the Grave Dancer knew exactly what he was doing after all.
I agree Nick about the engineers, although I know quite a few who went to work for the big 3 auto makers who have all been laid off. No union for them. What you have agree to as true is correct, you will study while your roommates party and generally the pay starts well but is capped at 200k for an engineer and it is hard to break the cap. That being said the engineering type people I know for the most part had portfolios that are outperforming the wizard money managers at the firm I work at. Oh yeah and engineers can score attractive women.
Clot,
I agree that there needs to be stable progression in the engineering career path. I don’t find that many of my nieces and nefews like engineering, there seems to be a social stigma against it. I think only 1 or 2 out of 30 is entering a technology background. Since they like money a lot I try to incentivise them to engage in engineering, I offer them 20$ if they can answer a difficult engineering/logic based question. The question usually takes 2 hours to understand and 2 hours to answer.
Yes, because of our prosperity “brain drain” has been occuring at a phenomenal rate with the talent being pulled to the US. If you don’t get into a state funded school then your next choice is an American school. When you get here you wonder what the hell went wrong in your native country and never want to return. A lot of those that are accepted in to US schools are children of rich parents.
Clot,
“I am proud to be an American where at least I know I’m free!”
Nicholas, I mean not a lot in realative terms. Dime a dozen 9-4pm c-student bond traders are making 500K while slightly more connected and smarter wall street folks pull in five million a year. An engineer is lucky to make 200K.
Nicholas Says:
December 8th, 2008 at 2:09 pm
I make very good money, bonuses, and from what I saw engineers could still pull the hotties.
All my friends had smokin hot girl friends or wives.
# 228
don’t high school kids in Washington twsp go to Westwood high?
RE: Big 3 bailout. To add insult to injury . . .
http://www.cbc.ca/money/story/2008/12/08/gm-apology.html?ref=rss
It seems that the best argument for bailing out the Big 3 is for the prevention of vast numbers of workers from hitting the unemployment lines, further adversly impacting the economy.
But if the Big 3 were gone, wouldn’t the other Big 3 (toyota, honda, nissan) step in to fill this gap? I would expect to see them salivating at the opportunity to take over the Big 3’s market share. Thus wouldn’t this save many of the jobs that people fear would be lost?
Here we have a raging realtor and and an account who squeaks when he walks knocking engineers.
Reminds me of a lawyer joke.
A mother and son were walking through a cemetery, and passed by a headstone inscribed “Here lies a good lawyer and an honest man.” The little boy read the headstone, looked up at his mother, and asked Mommy, why did they bury two men there?
Al a perfect example of the problem, your wife would probably be good at an R&D job but because some pip squeak MBA decided they could farm that work out to india for 7k per year, there is no job for your wife. Even though the person in India is largely incompetent and was trained by the atrocious paper mill schools over there. Even in outsourcing you get what you pay for, sometimes less but never more!
jcer,
Entering the defense industry can significantly increase the caps on salary. Bonuses, just like in any other job can also become quite substantial for over-performing engineers.
“I am proud to be an American where at least I know I’m free!”
Free of working that is!
The only place I overperform is in bed
John,
You may have a point with your overpaid bond traders. But they also work on confidence thus they probably have to spend time after work kissing @ss and spending their money on moneky soots, and 17 lb lobster.
Lets see how those 500k traders are feeling after they have been laid off for 2 years.
500k/3=166k
I wear jeans to work every day and can come in whenever I want.
I don’t really know anyone who works in the defense industry. I am CompE/EE, work for a financial firm and can honestly say that these people are way dumber than any engineers I know. It was very apparent to me from even a few years ago these “Wizards” were going to get the financial system into a lot of trouble.
FYI John, accounts are too far behind engineers in the cool department. Nobody wants to be an accountant anymore.
John, 259
The only place I overperform is in [a] bed of onions?
sl
re: #259 “The only place I overperform is in bed”
Reminds me of another accountant joke.
A woman visits her accountant to file her taxes. He asks her, What’s your occupation?
The woman says, I’m a hooker.
The accountant balks and says, Oh, that’s too crass. Let’s try to rephrase it.
How about prostitute the woman suggests.
That’s still too crude, he says.
They both think for a minute, then the woman blurts out, Let’s say I’m a chicken farmer.
What does chicken farming have to do with being a prostitute? the accountant asks incredulously.
The woman answers, I raised over 5,000 c*ocks last year.
“Ask most Americans whether they’re in favor of spending taxpayer dollars to help delinquent mortgage borrowers and you’re likely to get an emphatic “No!” http://money.cnn.com/2008/12/05/real_estate/bail_outs_fair_or_foul/index.htm?postversion=2008120510
““Ask most Americans whether they’re in favor of spending taxpayer dollars to help delinquent mortgage borrowers and you’re likely to get an emphatic “No!””
Ask the same question at the end of next year and the answer might be a bit different.
Hush now baby, Momma knows whats good for you.
Why would anyone want to see middle aged engineers walking around in jeans. In face who the heck calls them jeans anymore unless you bought them from Sam Drucker.
I heard on NPR this morning that an overwhelming 60% of people polled were against a taxpayer funded auto bailout.
When the word bailout wasn’t used the numbers were a little better.
NEW YORK (CNNMoney.com) — Troubled U.S. automakers could get up to $15 billion in federal loans as soon as Dec. 15, according to a working Democratic draft of proposed bailout legislation
Maybe same day we have a 100 BP cut to zero!
John your prescience to be able to see what buttons to push are commendable. I would buy you a round if we ever drank together.
“I don’t really know anyone who works in the defense industry. I am CompE/EE, work for a financial firm and can honestly say that these people are way dumber than any engineers I know. It was very apparent to me from even a few years ago these “Wizards” were going to get the financial system into a lot of trouble.”
I heard late last year from my friend at Bear Stearns that they were hiring people exclusively based on their SAT math score. If you got an 800 in Math, they had a job for you to do all types of complex analysis. I told him that was stupid given that an 800 in SAT math only proves you can perform high school level algebra and geometry. It was clear if you had an outsider’s view of Wall St. with an inside source of knowledge that a large percentage of these firms had no clue what they were doing and were just playing a big game of hot potato with every trade they made.
From the Star Ledger:
Measure prohibits leaders from dipping into unemployment fund
With New Jersey’s unemployment benefits fund dipping dangerously low, state senators today advanced a measure that would prohibit using the account to balance future budgets.
“If we start thinking about the future a little bit we won’t run into the crises that we are facing today,” said state Sen. Stephen Sweeney (D-Gloucester), sponsor of the measure (SCR-60). “We have to start thinking about the future.”
The Senate Labor Committee held a brief public hearing on Sweeney’s measure, which would allow voters next November to consider a Consititutional Amendment that would ban diversions from employee benefit funds like the Unemployment Insurance Trust Fund, the workers compensation Second Injury Fund and the state Temporary Disability Fund.
Since 1992, lawmakers have extracted a total of $5.4 billion from those accounts to finance hospital subsidies and other budget needs.
Combined with a surge in claims prompted by rising unemployment, the Unemployment Insurance Trust Fund has burned through an emergency $260 million state deposit in five months, and is on track to trigger a $400 million business tax hike next year without addititional support.
Business lobbyists joined with labor union representatives to support the proposed constitutional amendment at today’s hearing.
SKF approaching $100…any takers?
Thinking of making myself a $100 bid.
The markets in hell of a bear market rally (although volumes are a bit low). I am glad I haven’t added to my shorts…yet ;)
Did Ameritrade change its default font to Red?
ha ha.
Hang in there Victorian.
Nicholas, I mean not a lot in realative terms. Dime a dozen 9-4pm c-student bond traders are making 500K while slightly more connected and smarter wall street folks pull in five million a year. An engineer is lucky to make 200K.
Engineer?? 200k??? HUH!!! For a a division manager’s total compensation with year end bonuses in might be in this ball-park.
Or I guess I might be very wrong on that.. If most late career Engineers at GM were making 200K - I see why GM is in financial trouble now…
As far a foreign engineers quality…
Out of 1.6 billion people with a lot better (believe me, schools in China a hard and people study hard, not party and play football on NJ manucured lawns) qualtitative/physical science skills compared to average USA high school student there bound to be a lot of smart colledge students - don’t you think???
China’s problem untill recently was that the country did not have an industrial base, and thats what you need to have pedigree in engineering…
Well they’ve got some industry now, I would say….
regarding my wife not getting a job - well some said it was her choice of quitting her job and moving with her husband after 8 month of living apart.
Ohh yea she also decided to have a baby - Now That’s a REAL career in science NO-NO..
Yo have to wait untill you are in early to mid-40th and well established and after that you “might be ok” to have a baby.
What pisses me off the most is that dirung few interviews she had, two people told her that they would hire her on a spot, but she’s got her PhD and they can only hire M.S.
I got a 792 in Math on my SATs. I still remember the question that I missed.
It was a entry level physics problem that wanted you to determine the linear velocity of a point on a spinning disk if you knew the linear velocity of a point somewhere else on the disk.
I’m not sure that Bear Sterns would have needed anything more then elementary calculus which just builds heavily upon algerbra. I’m sure that an 800 SAT student probably could have done well fundamentally. Mostly because it requires a strong work ethic to master so much material at that age.
NYC custodial engineers in the public schools make 200K with a HS equivalency and don’t have to paint higher than six feet up.
Al, as someone getting his PhD in Chemistry in a few months, they don’t hire PhDs for good reason. We are churning out PhDs that can’t open a bottle of Snapple at an alarming rate. In fact, the smartest students in my PhD program were the ones who got fed up and left with their masters degree. Believe me, I wish I did the same.
“John Says:
December 8th, 2008 at 2:54 pm
NEW YORK (CNNMoney.com) — Troubled U.S. automakers could get up to $15 billion in federal loans as soon as Dec. 15, according to a working Democratic draft of proposed bailout legislation
Maybe same day we have a 100 BP cut to zero!”
Okay, that takes care of 2009, then what?
From Am Law Daily:
Plaintiffs Win Key Rulings in Two Huge Subprime Class Actions
Looks like Gibson Dunn & Crutcher is going to have to revise its report on early trends in subprime fraud litigation. Two crucial rulings that came at the end of last week–denying motions to dismiss class actions against onetime mortgage giants Countrywide and New Century–show that the plaintiffs bar isn’t giving up and going away. In fact, if we’re going to keep our subprime-litigation-as-a-baseball-game metaphor going, you could say that the plaintiffs in Countrywide and New Century right now have the bases loaded with no outs.
Ben,
If you haven’t submitted your PhD thesis, don’t. Get a job with masters and then after a year or so submit the thesis.
“I got a 792 in Math on my SATs. I still remember the question that I missed.
It was a entry level physics problem that wanted you to determine the linear velocity of a point on a spinning disk if you knew the linear velocity of a point somewhere else on the disk.
I’m not sure that Bear Sterns would have needed anything more then elementary calculus which just builds heavily upon algerbra. I’m sure that an 800 SAT student probably could have done well fundamentally. Mostly because it requires a strong work ethic to master so much material at that age.”
I’ve met quite a few kids that fail miserably at Calculus that scored 750-800s on their SAT math. I used to tutor up to Calc 3. Calculus is glorified algebra, but you’d be surprised at the mental block that hits people who thought they were math wizards once they enter college.
I would disagree on the work ethic part. I find that the kids who were extremely lazy and still scored 800s in Math were the smart ones.
From Dow Jones:
Banks May Face Big Write-Downs On Commercial MBS In 4Q
Some of the largest U.S. and international banks may face billions of dollars in fourth quarter write-downs from commercial mortgage- backed securities, whose values took a nosedive in November.
According to data from Standard & Poor’s, nine large banks hold a total of about $121.1 billion in commercial real estate loan assets that must be marked to market. The group is led by Citigroup Inc. (C), Merrill Lynch & Co. (MER) and Barclays PLC (BCS), which each hold more than $20 billion in commercial mortgage-related securities and investments.
The banks hold these assets separately from their traditional loans, which banks typically hold to maturity. That means the firms must generally adjust the values of these non-traditional assets to reflect current values - hence the specter of write-downs.
Pine,
already in the process of doing so.
I still why don’t hire PhD on master’s position - offer the same pay, and you are getting a person with more experience…
With layoffs in all area’s of chemistry, I would assume many would be happy to take the job…
Al, a lot of union and govt places pay on grade levels and Masters or PHD gets you higher scale and then you get more pay. You get more pay even if the degree is not required so they don’t want you. Actually as terrible as this sounds it really does not make sense for a lot of women to get masters/phds is they are going to stay home with kids anyhow. That is 100K down the drain.
Grim (286) -
It is all priced in!
All SAT scores show you is how much you practiced taking SAT test.
In Effect almost any Standartized test is this way. It requires some smartness and understanding, but mostly just keep on practicing taking the tests.
That’s Why I hate IQ numbers…
Ben:
“find that the kids who were extremely lazy and still scored 800s in Math were the smart ones.”
I agree wholeheartedly.
“1. Engineering is already a dead-end job in the US. China and India produce better ones that work for a fraction of US pay scale. Why devote a penny to reclaiming a sector of the economy that’s gone forever?”
Uh, the Indian engineers I work with SUCK.
Here’s how it works, a team of 10 US engineers is outsourced. They fire 7 and hire 20 Indian engineers, saving approx 60% of the labor cost. The remaining 3 US engineers “train” the Indians, basically doing all the higher-level thinking for them. The US engineers also take on more work because “failure is not an option” and the employer suddenly has scads of leverage.
The corporations do this for profitability and for lower prices. There is no penalty, for now. But longer-term, we’re paying for those cheap cars, TVs and cell phones by gutting our professional classes.
It’s a global economy, and our middle-class is doomed. Our standard of living will necessarily need to be lowered as the developing nations are raised, there’s no other way.
Kenneth Feinberg contender to run auto bailout fund: report
I love it, he did an impossible job with the WTC fund.
Al, not to say there are not high quality engineers, yes they study very hard but the honest truth is established engineering education is sorely lacking. I have had offshore development teams in India and have interviewed many people from India and can honestly say that the level of knowledge is good, but not the taught how to systematically solve a problem part. Most(Not all but there is a big gap between the #1 and #5 schools) Indian and Chinese University’s are big on learning information not so much on problem solving. I have noticed IIT graduates tend to be very intelligent and well trained, but they want to be in the USA for more money you decide 15k or 100k. The truth is China and India send their best and brightest here, maybe they go back after making a lot of money in the US, to be managers in their native countries. That is my take on Offshoring.
I got a D in Calculus I. It was at 8:00 am and I didn’t understand a thing that the professor was saying. I wasn’t used to the rigors of college and my organization skills were abysmal. It was a real slap in the face. The professor told me that if I wanted to do anything with math and science that I should just quit and find another degree.
Often there are likely other reasons why those kids don’t perform as well in college. For one, I didn’t know that it was competetive (not everyone can get an A no matter how smart you are, and someone is going to fail).
I was lucky enough to be able to pull myself back together after something like that.
That is 100K down the drain
Well it is quite a bit less than 100K, real costs comes from lost time…. It is better to get Bachelors and go work than sit for 5 years in grad school, UNLESS you want to be a professor.
About pay-scale - I guess thats explains her Interview at UNDMJ…..
“I still why don’t hire PhD on master’s position - offer the same pay, and you are getting a person with more experience…
With layoffs in all area’s of chemistry, I would assume many would be happy to take the job…”
We’ll see. I have no clue what will happen.
D sounds good to me!!! Calculus is something of a mystery to me. Kinda like why does Fred only drive the Mystery Machine.
It’s a global economy, and our middle-class is doomed. Our standard of living will necessarily need to be lowered as the developing nations are raised, there’s no other way.
You take 300million in USA, add 2.5-2.8 billions in China/India, and get it to common denominator…
In the end people China and India will not be much better off , and USA will suck???
Numbers are against middle class in US.
Vic,
So true! It’s all priced in! UNTIL IT’S NOT!!! :))
Alright guys, I’m headed home for tonight. Enjoy your 500k job as you work late.
Fighter jet crashed in a San Diego suburb.
“why does Fred only drive the Mystery Machine.”
How do you even notice these things? Meeting John in person would be a cool. Meeting John’s parents would be THAT much cooler.
Any bets on whether we will see a 10 handle on the DOW this month?
Thanks Brint, finally someone with a similar experience! I was in charge of a team of 4 developers, we laid 3 off and replaced them with offshore workers in India. Not a good experience it took 3 months to find people with decent qualifications, then in a month and a half, one person left for a different job. We never even got them trained after 6 months cut them and now I pretty much have half of the remaining developer on my team and do most of the work myself.
These companies use H1B and Offshoring to keep salaries down. People dare not ask for more money because they are easily expendable.
“Fighter jet crashes in a San Diego suburb.”
Is John McCane accounted for?
Well the 200K engineers on this site claim they are middle class!! Our Pres thinks everyone under 250K is middle class and GM thinks 50K a year workers are middle class. Crazy
NYC, 200k is middle class!
I think 200K number came from you, John…
Victorian,
Bear market rallies are wild things.
10 is a definite possibility, but 11… no way!
Gimme a 10 handle and I am selling my house and buying 3x ultra shorts!
#306 - Story of my life
Brought contractors over from India for an on-site. Set them up in cubes, hardware, software, accounts, everything they needed to work. Covered flights, hotels, foods, car services, etc.
First day here, walk over to discuss an issue, guy is surfing Monster.
“First day here, walk over to discuss an issue, guy is surfing Monster.”
Did you promote him?
Straight up? Or lower or upper middle class.
jcer Says:
December 8th, 2008 at 3:42 pm
NYC, 200k is middle class!
“Straight up? Or lower or upper middle class.”
Does anyone here really care what group you are classified in?
Mark me down for the happy class.
I don’t see it hitting 10K but you never know. After they blow through all the short’s sell stops what’s left to carry it?
I think for the next 350 billion in TARP funds we use the Monty Hall approach, the CEOs march in and we pick the ones in the funniest outfits and with funny signs and then ask for odd things, “who has a hard boiled egg in their pocket for $500″? It would be just soo much fun.
re: #314 Suprised you gave them internet access and bathroom breaks. If you are going to hire slaves you need to treat them properly or they will revolt.
Here is a naive question: Why don’t US engineers apply for the Indian jobs?
1. You still have a job.
2. You have a job that potentially allows you to create value.
3. With the combination of education/pay - you become indispensible to your company.
Yes you have to move into sub-optimal living conditions (as compared to the US) and are paid less (as compared to the US) but this will happen anyways. Sometimes exercising choice makes us feel better about change.
indispensable
The funny thing is the faster the get this auto bill passed the faster they’ll end this rally.
#259 John: The only place I overperform is in bed
They laugh and sing and joke about it, that’s because they do without it.
#253 Raul: yes, Westwood HS
From MarketWatch:
Con-way center closures trimmed 1,450 jobs, 8% of workforce
grim (248)-
Unsecured lenders. In a huge LBO.
Further proof that anyone who deals with Sam Zell makes his first mistake when he sits down at the same table with the guy.
Zell’s already swiped his pile of the loot. Which is pretty much the whole pile.
#252 John:Dime a dozen 9-4pm c-student bond traders are making 500K
Alot less of them around now, and even less next year.
I don’t think anyone who grew up in the US could live there. It is very noisy and when are executives went over 2 people caught some kind of disease that put them out of commission for 2 months. Outsourcing doesn’t work, and they really want H1B.
200k combined income for a couple is firmly middle class in NYC, 200k single earner, no wife is upper middle.
sean (255)-
Not knocking engineers. Just think it is a dead-end for the US to encourage people to pursue it…only from a compensation standpoint.
So if your O, why would you do anything to push a rally? Why wouldn’t you push the markets up so that you can start from the bottom on your watch?
GWB will not let the system collapse. And if the market tanks you have a built in reason to break any promises that you can’t keep.
middle class is a very vague descriptive class.
lets be honest, middle to you vs middle to me is probably pretty significant.
and middle class to someone in NYC vs middle class in Omaha is not even in the same magnitude.
Actually it runs in my family, in fact we are so well hung that when Moses wanted to cross the red sea one of my great great great great great great grandfathers just whipped it out and slapped the water to part the sea. In fact he smacked the water so hard it casued a drought as it took several years for the water to come back.
3b Says:
December 8th, 2008 at 4:17 pm
#259 John: The only place I overperform is in bed
They laugh and sing and joke about it, that’s because they do without it.
OnW and the PTP want everybody to be happy at X-mas. Bread and circuses.
Clot, engineering actually creates real value and is an important thing to have domestically. Intrinsically it is more valuable than other fields because something is actually created. Engineers designed all of the buildings you go into, the roads your drive on, your car, the materials virtually everything is made of, the computer you are typing on, the systems you use to sell real estate, etc. Engineers are not disappearing, we need more, and largely they will be instrumental along with scientists in creating alternative energy and other such thing which will fuel our economy. The truth is the last 20 years of growth was on the back of improving technology, if we fail to advance and gain efficiency as well as continue to expand our lead in technology of all kind the US will be eclipsed. If we let this stuff go overseas we will be beholden to them as opposed to the reserve. I sure as hell do not want to be anymore dependent on China than we already are.
Official: China wants to put $10B in Brazil oil
China ready to invest $10 billion to help develop new Brazil oil fields, minister says
http://finance.yahoo.com/news/Official-China-wants-to-put-apf-13775084.html
I imagine that is just a beginning.
Al Says:
December 8th, 2008 at 3:28 pm
All SAT scores show you is how much you practiced taking SAT test. In Effect almost any Standartized test is this way. It requires some smartness and understanding, but mostly just keep on practicing taking the tests.
That’s Why I hate IQ numbers…
AL: Your opinion is wrong…..I took the PSAT cold and received a 206 (64V x 2 + 78M). I studied my a55 off for the SAT and scored 1440 (650V 790M) basically no f-ing difference. Most of my high school classmates were in the same boat.
Practicing can make a 900 a 1000, but once you go north of about 1100 or so (old style), you have to have the scruples to do it.
Have you ever used coupons John?
Some light reading.
http://www.vanityfair.com/magazine/2009/01/wall_street200901?printable=true¤tPage=all
I actually think that the SAT is a good test, because it really does cut to the core of a lot of stuff. I understand that it is inherently biased in many ways, but most of the people that complain about it are the ones who are always trying to work the system for what they want, and it is impossible to argue with an objective measure.
jcer - So it sounds like from your 2 posts (328/334) that engineers better figure out a way to adapt professionally by creating new technology that creates value or adapt their lifestyles to live in noisy conditions or adapt at a cellular level to toughen up against germs/viruses. I agree that engineers at least create something that can reduce suffering, improve communication, etc. As some else said - at least with the internet bubble some value was created. Who knows what was actually created with this credit/housing bubble? Only when as a nation we start creating something of value again can we get paid at the levels we are used to and continue to live in the lifestyles that the majority are now accostomed to living.
# grim Says:
December 8th, 2008 at 3:38 pm
Fighter jet crashed in a San Diego suburb.
Were the houses it it in foreclosure? If they were, this is definitely suspicious…
-Richie
123. John
“A $100 per person meal in a good place in NYC is a relic. $10 dollar drinks and $10 dollar deserts make it near impossible to make it under $100 unless you have a coupon.”
seriously, John this is just plain dopey fratboy/wallstreet dullard talk. Any NYCer worth their salt can direct you to numerous excellent eateries where two people can eat for 80 bucks or less, no problem.
The restaurants you speak of are for the overpaid dopes who still don’t understand the NYC subway system and instead sit in traffic for 30 mins for a 15 block cab ride.
242#
clot, i seriously doubt you understand this crap. look at it, IYR is still 50% off from year high but SRS down to $79 today. it is near year low. you have plenty of opportunities to average down.
>Clotpoll Says:
December 8th, 2008 at 2:14 pm
bi (227)-
Are you kidding? I’m averaging down at levels I thought we’d never see again.
Taking the other side of that trade?
I want 100bps, auto bail out and Jack Welsh to take over for fired Rick Wagnor and finally for Paulson to start backing munis with US Govt gurantees. Merry Xmas
Barbara, ok I will eat at any old dump. I like to have six mixed drinks, an appetizer, salad, main course, coffee and dessert and leave a normal 20% tip. You are saying I can do that for two for $80 bucks, I can’t do that in a diner. Name the places and I will go.
Barbara Says:
December 8th, 2008 at 4:46 pm
123. John
“A $100 per person meal in a good place in NYC is a relic. $10 dollar drinks and $10 dollar deserts make it near impossible to make it under $100 unless you have a coupon.”
seriously, John this is just plain dopey fratboy/wallstreet dullard talk. Any NYCer worth their salt can direct you to numerous excellent eateries where two people can eat for 80 bucks or less, no problem.
The restaurants you speak of are for the overpaid dopes who still don’t understand the NYC subway system and instead sit in traffic for 30 mins for a 15 block cab ride.
Chi, it is not entirely accurate but it is a very good approximate measure. Generally a person who scored vastly higher than another either had incredible work ethic or is smarter. I knew a few people who got 1580-1600 and they were indeed smart but also very good at tests. I knew one kid who was not that smart took it the first time and got 1100, study insanely hard and got 1400. So yes you can study and improve but there are inherent limitations to how much you can improve as time and everything else come into the picture. I knew someone else who got 1360 and it was as high as he could get yet was way more intelligent than the 1400 guy but could not really improve his score by studying. It is hard to use a test to judge intelligence but under the vast majority of circumstances the SAT is a valid test. I just thank god they didn’t have a writing section back when I took it, I would have only gotten into clown college as judged by my SAT II writing score(420, later 600), I had both the highest(760 Math, 770 Science) and lowest SAT II scores in my High School.
John,
you realize that most people don’t need or even want all that chit at one meal, right?
Appetizer, meal, one drink.
What you want is a special night out, and by special I mean a few times a year, not dinner on a Wednesday night.
Time lower expectations. I grew up in the 80s recession and know how to stretch a dollar.
SRS play getting crushed. Not sure how much lower I can take.
re: #346 Barbara - if all people had was one drink restaurants would not exist.
Harvard and Yale. Yeah, I’m impressed.
“A prominent U.S. lawyer who headed the 250-attorney corporate law firm Dreier was charged on Monday with perpetrating a brazen, $100 million real-estate investment fraud that targeted hedge funds.
Marc Dreier, who already was facing a charge of criminal impersonation by Canadian authorities, faces federal charges of securities and wire fraud, the office of the U.S. Attorney in Manhattan said. He was arrested late Sunday at LaGuardia Airport after returning to New York from Toronto, authorities said.
The U.S. Securities and Exchange Commission also filed civil fraud charges against Dreier, a Harvard Law School and Yale College graduate who founded Dreier in 1996.
“Our complaint alleges a stunning, brazen fraud that targeted some very sophisticated institutional investors,” said Linda Chatman Thomsen, director of the SEC’s Division of Enforcement.
A lawyer for Dreier was not available for comment.”
348. Sean.
wow, I wonder how Chinatown has made it all these years?
” I wonder how Chinatown has made it all these years?”
it is an elaborate front a la “Big Trouble in Little China”
John it is the 6 mixed drinks pushing you over as most people just have a few glasses of wine. I’ll go to delmonicos order a steak for $50, get 2 glasses of wine at $12 each, a salad for $10, a potato and asparagus for $20(generally split between 2 people). Which is approximately ~$100 per person, that tends to be what Homestead, the Palm, etc costs. At least when I go out it tends to be roughly $100 a person and you have eaten so much food you feel ready to roll out of the place.
[345] jcer,
I took the SAT in my jr. year on a whim, no prep because no one prepped back then, and scored a 1200 combined.
I didn’t think that was very good, so I thought about prepping (such as it was) for next year but my friends convinced me that 1200 was a good score and leave well enough alone.
I don’t know whether or not that was a decent score (I seem to recall that it was not a very stellar percentile) but it never mattered.
Even though acceptances were no problem for mid-tier schools (I wasn’t Ivy class and knew it), I got no financial aid whatsoever, even though the folks were lower middle class, so I wound up at State U safety school anyway.
So maybe I should have tried again. Too late now.
jcer,
go to The Flea Market in alphabet city and get a better steak with frites for under 25.
Barbara - You can eat all the steak and lobster you want in Chinatown, I however prefer to have meetings somewhere where the dismsum isn’t made up of a bunch of mystery meats and I don’t have to sit for pitches on faux Gucci bags and pass markets with rotting fish to get there.
Sean,
Just one example and again, the new NYC blood do not take the time to get to know their city,( too SCARY!) so they are fresh meat for pretentious eateries. *Shrug* I guess its ok as long as you have an expense account.
I was referring to money out of pocket, average night out meal in your belly type stuff. You know, life.
#353 So maybe I should have tried again. Too late now.
I don’t think you missed much.
3b Says:
December 8th, 2008 at 5:25 pm
#353 So maybe I should have tried again. Too late now.
I don’t think you missed much.
Uh-oh…..let’s crack out the whoop-a%% again ;-)
Today’s WSJ Editorial Column refers to Robert Mugabe as “Comrade Bob”.
Bystander Says:
December 8th, 2008 at 4:57 pm
SRS play getting crushed. Not sure how much lower I can take.
Bystander - you can sue grim to recover all of your investment losses….
At the rate the Dow is climbing, we will soon be testing 14K with unemployment at record levels. Talk about irrationality of the crowd..
Barbara, actually i tend not to eat at those places to often and it is more about the atmosphere and location when I do. Typically my weekly biweekly steak trip involves LaFusta an Argentine restaurant that serves grass fed South American beef with delicious chimichuri for a more reasonable price, reasonable wine list as well. There is one in Jersey and the original is in Forest Hills. I also frequent other good places in Jersey City area cheap Mexican food $25 for 2, cheap french $50 for 2, also bring your own which is a big savings as on many occasions I see $10 bottles of wine at a restaurant for $50. The more expensive places tend to have more flash not necessarily better food. I can get good Thai food or Chinese food in NY for cheap. Listen I frequent the meat carts on 50th and 6th, so fear doesn’t come into it, by the way best chicken and rice off a cart anywhere I’ve been. I don’t disagree with you that really good food can be had in NYC for way less than $100 per person. But I also think even at the fancy steakhouse $100 per person is about average unless you order the lobster tail, shellfish appetizer, salad, multiple sides,cocktails, and dessert for yourself like some kind of glutton. What is that like 200-250 for dinner, I hope it was on the expense account because I know very wealthy people who would not be inclined to spend that on a meal for themselves.
Chi (360)-
Just curious. Has anybody tried that stunt? and was he/she successful? That would be truly bizarre.
Cramer bleating that systemic risk is off the table.
Sounds like my signal to grab another 100 of SRS.
jcer (334)-
Thanks for opening my eyes to the wonderful products of the world of engineering. And all this time, I thought little elves in trees made IPods.
Sheesh.
Jcer, your profession has one small problem. It’s been commoditized.
This is from an article on Yahoo about that F18 jet that crashed in San Diego on landing approach.
Starts of with bla, bla, bla bla.. and then there’s this:
“The middle-class neighborhood of half-million-dollar homes smelled like a brush fire. Ambulances, fire trucks and police cars choked the streets.”
hahahahahha…
bi (342)-
Just keep getting long stuff like NLY, SPG, etc.
We’ll talk again in a few weeks.
Up days, down days…I keep coming back here.
Funny how you disappear when things are running a little goofy.
BTW, nice call on the oil.
John (344)-
This explains a lot:
“I like to have six mixed drinks, an appetizer, salad, main course, coffee and dessert and leave a normal 20% tip.”
Jeez, how do you know you have a schwanze the size of Cleveland? Can you even look down and see it? Are you pushing 300 lbs?
I hope politicians and freddie smack execs do perp walks for their roles in this disaster.
Sold out their country to see a baseball game.
Where are today’s versions of Andrew Jackson and Teddy Roosevelt?
I went to a private school that began training you for the SAT pretty much in kindergarten.
Natch, my friends and I scored super high. Also blew out the PSAT and ACHs.
In no way were any of my friends or I smarter than most kids who took the test. However, we were ace test-takers.
I used this skill to fake my way all the way thru college and not learn much of anything except how to hold massive amounts of liquor and hook up with lots of girls.
stander (347)-
Watch Cramer, Kudlow, Kneale, et al for fifteen minutes each.
Then take a look at how many pant-up redemptions hedge funds are still sitting on.
Then take a peek at the mark-to-market writedowns still coming for the big banks.
Then peruse some articles on anticipated commercial RE defaults.
Then tell me that all the above is priced in already.
#349 Nom,
I guess that guy missed the ethics courses.
stander (347)-
Then tell me how many buyers you think will buy houses at current price levels…even if interest rates get cut to 0%.
victorian Says:
December 8th, 2008 at 6:09 pm
Chi (360)- Just curious. Has anybody tried that stunt? and was he/she successful? That would be truly bizarre.
vic: I don’t want to be on the other end of the Evil Knievel who tries. Even a joke lawsuit still requires someone to call a lawyer and waste some money.
…the guy who has to claim he has a big putz, usually is one..
Here we go…the NJ Real estate, lobster cooking, stroller, schlong size, Zagat guide, standardized test taking and engineer career guide REPORT.
sl
I am a engineer and what this country needs is more creative engineers. Not just book smart, more well rounded creative engineers. I took a lot of art classes (was not that good in them but it opened me up creatively) when i was in college alongside my engineering classes. Am in my late 30s and am the founder of a company with 34 employees with clients worldwide in the consumer electronics industry. Interestingly Chinese companies are our biggest clients. Also my business is growing like crazy.
Bond yields are not confirming this rally nor is volume. News is bleak and getting bleaker. Redemptions in equity accounts continue at breakneck pace and retail is dead. Fed has no ammunition left in the way of interest rate cuts as the lending rate is effectively zero already. We are looking at a classic bear market rally and this thing will reverse any day now and will leave you feeling silly for thinking that this recent market action made any kind of sense. The DJIA is at 9000 between a low of 7600 and a major support line around 11,000. And the best indicator of all, Bi just shot his mouth off again how shorts will all get crushed. But don’t worry, we can all sue Grim if I’m wrong.
Stu (376)-
The ultimate contraindicator, bi.
stu is right and i agree.
how can this market continue ? it can’t
freedy (378)-
Cotton candy and sugar plum dreams have more substance than this joke of a market.
Classic pump before the dump.
#367 clot:Jeez, how do you know you have a schwanze the size of Cleveland? Can you even look down and see it? Are you pushing 300 lbs?
He probably has not seen his toes in 20 years.
#366 clot:Funny how you disappear when things are running a little goofy.
He runs away when the market is declinig, and has nothing to say. When it’s rising he is back saying he knew it all along, until the market declines again;wash, rinse, repeat.
#363 clot:Cramer bleating that systemic risk is off the table.
Until it is back on again, and he starts to cry again.
#358 chgo: No need to, you have your opinion, and I mine.
#356 Barbara: Agree. Lots of good inexpensive/reasonable and clean restaurants in NYC.
The rest are for the wannabe NY’ers.
Guys-
Which chart do you see to track volume - SPY?
Clot, I don’t say this often if ever, but you da man.
OT: If anybody pays for a steak out of their own pocket they’ve obviously got more money than brains (unless we’re talking about the $16 NY Strip at Rossi’s in Trenton, don’t bother with the ‘burger).
Sure if a company’s paying I’ll gladly go to Ruth’s, Morton’s, Mo’s, Sullivan’s, Brasilian BBQs etcetc, but once you’ve cooked up a good $9/lb hanger steak at home you’ll never think about wasting money on red meat in a restaurant again.
Rub it with S&P and OO, sear quickly in a hot cast-iron pan then finish in a hot oven. Potatoes of choice, roasted garlic cloves and sauteed spinach on the side with a drinkable red wine to wash it down, that’s all you need or could want.
Last Thursday, I made a great soup with the juice of one lemon, some ham and a bag of beans. I’m still thinking about it. What was it like? It was like Tostitos Hint of Lime.
That question was not on the SAT.
But it was on the $1.99 15 bean mix bag at Walmart.
Nurburgringer, spot on
I refuse to order steak out as well. I buy em at a butcher, season it with salt and 4 color peppercorns, and pan sear it on both sides in a cast iron skillet. Then throw some butter on it.
I also refuse to order lobster out. I just go to the Point Lobster Co. in Point Pleasant, bring one home, steam him, and crack him open.
Interesting. We saw an open house Sunday and it’s the best place we’ve seen so far. Asking was 600k … too bad the NEIGHBOR’S house sold for 600k in oct 2006. (incidentally, that house too, is for sale; it has one more full bathroom and is asking 617k)
thing is, they bought a place and move out this month … so let’s see how long they want to carry two mortgages. assuming it is still on the market in late jan, we’ll come in with our lowball of 525k.
(this is in bucks county)
#344 John
That meal has to be on an expense account. I can’t imagine you spending your own money for anything more than a fast food place with coupons.
# Clotpoll Says:
December 8th, 2008 at 6:27 pm
stander (347)-
Then tell me how many buyers you think will buy houses at current price levels…even if interest rates get cut to 0%.
If interest rates are cut to 0% on 30 years fixed - I would buy at current prices…. heck I would buy at 2.5 of the current prices.
RE: 389
Not being facetious, but why stop at 525K? Seems like that’s not that much of a low ball off of the 2006 comp price?
PS- Where in Bucks?
yikes (389)-
Rip their hearts out, and feed it to them.
Yes, I’m still a Realtor.
Al (391)-
And you’d be stuck in your miserable NJ house forever if you did it.
If Phony/Fraudy can even pull off the trick of grinding down the rates into the 4’s, the one thing you can count on is that it will be unsustainable.
Once the rates break upward again, prices would drop, and you’d be struggling to break even selling into a declining market of falling prices and rising rates.
Besides, I want you to leave NJ now. I can’t take another 5 years of you posting that you’re staying to protect your stake in some miserable, locked-up 401k with half-a-dozen guaranteed money-losing investment options.
http://www.smartmoney.com/investing/stocks/a-leading-bear-turns-bullish-sort-of/
Barrons interviews Barry Ritholtz of The Big Picture blog…
Reuters:
NY Times Co to borrow against building
http://www.reuters.com/article/industryNews/idUSTRE4B70ZL20081208
“The New York Times Co plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits, the New York Times reported on its website Monday.”
http://www.cato-unbound.org/2008/12/08/j-bradford-delong/liquidity-default-risk/
Brad DeLong…
Stu - Can you read this and explain it to me in “regular” language…
could someone give me a history on GSMLS 2576091
I remember it being 299000 a few months ago and I thought it sold now it looks like its back for 199000.
Thanks.
anecdote from a meeting with a consultant today:
He said he was flying first class back from Houston last week (got an upgrade) next to a nephew of one of the VPs of Toll Brothers. The guy told him that Toll few 8 employees (he was one of them) first class down to one of Toll’s 3 hunting preserves for the week. They hunted bagged a few deer and had them processed and shipped home all on the company.
Toll must not be hurting that bad.
http://calculatedrisk.blogspot.com/
Did someone post this…
Credit Suisse Forecast: 8.1 million foreclosures by 2012
Chifi,
Good idea. Can I sue you while I am at it? If I went against your short warnings most of this year, I would sitting prettier than the Queen Mother dropping a deuce.
My position is hurting but I can take it like a man.
” He said he was flying first class back from Houston last week (got an upgrade) next to a nephew of one of the VPs of Toll Brothers. The guy told him that Toll few 8 employees (he was one of them) first class down to one of Toll’s 3 hunting preserves for the week. They hunted bagged a few deer and had them processed and shipped home all on the company.
Toll must not be hurting that bad.”
I have a friend at GE with a nice expense account. He’s only been with them for about a year and is no where near an executive. I don’t even want to know what GE’s executive expense accounts are like. If the public were allowed access to the books of these companies receiving bailout money, there would be a riot by next week.
did anyone here Corzine interview on Bloomberg today? said we must stabilize housing so the derivative products don’t fall in value. at least thats what I think I heard
random as heck, just got an email about SRS hitting 81. im very tempted to get in on it.
are you guys double and triple loading up?
386, so true
I get a NY strip at Wegmans, marinate in soy sauce, fresh lemon and garlic and grill it med rare. The three of use eat two steaks total (the boy is only five) and it costs about 17 bucks
good to see omama supporting those blokes on strike in shytown.
I support the blokes too!
SAS
“If the public were allowed access to the books of these companies receiving bailout money, there would be a riot by next week”
best comment on the thread!!!
SAS
x roads (403)-
I heard it too and nearly drove off the road.
Put a floor under RE prices, and perpetuate the charade that the derivatives have a shred of value. Even the guvnor of NJ wants to keep the fairy tale alive.
We are headed toward a Biblical generation of woe.
Too bad that after the gubmint pulls every trick in the book to stabilize RE prices, there will be no buyers in line to purchase the product.
long island. not immune
http://www.newsday.com/news/local/longisland/ny-bzhome0912251169dec09,0,2429462.story
http://www.iht.com/articles/2008/12/08/europe/sex.php?page=1
“World’s oldest profession, too, feels crisis”
You knew this was coming…
…and people are thinking twice before making impulse purchases…
my question to the Gov. would be if we stabilize prices how does the next wave and or generation of home buyers afford a house?
I’m a construction worker and I can’t afford current median NJ home price so don’t tell me infrastructure stimulus package will make it all better
BTW…rockin’ GG tonight.
Blair & Serena are wack hot.
Wyndham is based in Parsippany, NJ
From the AP:
Wyndham Worldwide to cut 4,000 jobs
Wyndham Worldwide Corp., a major hospitality company which franchises Ramada, Days Inn and other hotels, said Monday it would restructure its time-share business and eliminate 4,000 jobs.
Wyndham said in a statement that it is scaling back the scope of its timeshare business as a way to cut its reliance on asset-backed securities. The company did not return a phone call seeking comment.
The job cuts represent about 12 percent of the company’s overall work force. The pullback will result in charges of up to $75 million to be taken mainly in the fourth quarter.
What is our countries elected leaders hard-on with the Russian royal family? Everytime there’s a problem for which there’s no solution the clowns in Washington always try to add some “legitimacy” by naming somebody Czar of some sh*t!
Congress sends White House auto aid plan with czar
http://news.yahoo.com/s/ap/20081209/ap_on_go_co/congress_autos
Do they think we are out here thinking “I didn’t think this crazy ass automotive bailout would work but now that they named a Czar it just might do the trick?”
I think a better title would be Auto Rasputin.
HE (415)-
They don’t need a czar. They need six pallbearers and a guy with a backhoe.
Get it the hell over with already.
I raise your Lee Greenwood one A-Ha.
…and a Rick Astley.
Besides, I want you to leave NJ now. I can’t take another 5 years of you posting that you’re staying to protect your stake in some miserable, locked-up 401k with half-a-dozen guaranteed money-losing investment options.
Hey - it is not much easier to read paranoid posts of maniacal-depressive schizophrenic who b1tch about everything and everyone, and asking for full scale armed revolt, while absolutely not meaning a word of it.
I guess even you don’t always get what you want…..
P.S. It has not being even nearly 5 years - I am glad my posts torture you so much so it seems like it has being :)
also it is kind of interesting how much you have changed your posts since 2006 - back than you have told me that Clinton area is for rich people and if I think that it is too expensive I should move to cheaper area…
Bystander Says:
December 8th, 2008 at 9:23 pm
Chifi, Good idea. Can I sue you while I am at it? If I went against your short warnings most of this year, I would sitting prettier than the Queen Mother dropping a deuce. My position is hurting but I can take it like a man.
by: Taking it like a man is whining on a public RE blog and using a text-based sucker punch on someone else?