PMI: Home prices to fall through 2009

From Bloomberg:

U.S. Home Prices Will Continue to Tumble Until 2010, PMI Says

U.S. home prices, already down 23 percent from their July 2006 peak, will continue to fall until the third quarter of next year, PMI Mortgage Insurance Co. said in a report.

Ninety-seven percent of the 381 U.S. metropolitan areas surveyed are likely to have lower home prices in September 2010, according to the Walnut Creek, California-based insurer’s Market Risk Index, which assigns a score to every region based on the likelihood real estate values will be lower in two years.

“The two primary drivers of increased risk scores across a broader segment of MSAs are the continued high level of foreclosures and rising unemployment,” David Berson, PMI’s chief economist and strategist, said in a statement.

The three-year-old housing recession has spurred a credit crisis that’s making it harder for borrowers to qualify for home loans. With home values tumbling, homeowners who are unable to refinance or sell have pushed the U.S. foreclosure rate to a post-World War II high. The lending crunch has, in turn, made it more difficult for companies to pay their bills, driving the jobless rate to a 15-year high.

Home prices will fall another 15 percent, according to economists Michelle Meyer and Julia Coronado of Barclays Capital Inc. in New York.

From PMI via PRNewswire:

PMI Winter 2009 Risk Index Indicates Broader Risk of Home Price Declines

PMI Mortgage Insurance Co., (NYSE: PMI), today released its Winter 2009 Economic and Real Estate Trends Report, and its widely cited U.S. Market Risk Index(SM). The index shows that the risk of lower house prices two years from now increased broadly across the nation — rising in 369 of 381 MSAs (Metropolitan Statistical Areas) or 97 percent — highlighting the breath of the economic and housing downturns.

PMI estimates that half of the nation’s 50 largest MSAs have an elevated or high probability of seeing lower house prices by the end of the third quarter of 2010, relative to the third quarter of 2008. A growing number of MSAs in the Industrial Midwest and along the East Coast show an increase in probability of lower home prices in two years.

“The two primary drivers of increased risk scores across a broader segment of MSAs are the continued high level of foreclosures and rising unemployment,” said David Berson, PMI’s Chief Economist and Strategist. “These factors will put additional upward pressure on risk, with increases in affordability and lower mortgage rates providing some offset.”

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133 Responses to PMI: Home prices to fall through 2009

  1. make money says:


  2. ricky_nu says:

    Ruh Roh!

  3. make money says:

    tosh, you’re the man.

  4. #4 – Purley accident

  5. Ben says:

    New Jersey, land of the free, lunch that is (for state workers), home of the brave, brave enough to run a 36 billion dollar deficit.

  6. Everything's 'boken says:

    Re 49 in previous thread
    on teacher days worked

    Cindy subtracted vacation days for non-teachers,
    but added them for herself. Is she a math teacher?

  7. kettle1 says:

    doom and gloom for the day:

    as of 2006 about 67% of all credit came from securitization, and 33% came from banks. In the current mess, securitization is mostly dead. There we have seen the fall of the IB giants from bear to GS. If we assume that 60% of the 67% securitization credit has died, and banks are hoarding the remaining cash to preserve themselves therefore reducing their 33% to only about 15%. We have now seen about 80% of previously existing credit effectively disappear as the economy continues to worsen.

    GDP could be facing a drop of 30-40%, unemployment at 20%+

    And the end result will be homes that will not sell. IF home sales are based on supply and demand but demand is based on credit being available to pay the price and a job being available to repay the loan, then housing is dead.

    Housing will never recover to 2006 highs. Look at japan. we are much worse off then japan was in the early 90’s and their housing market and stock market have never recovered.


  8. Sean says:

    Need a good laugh, and have some time to kill?

    Time to play the bailout game!

  9. Victorian says:

    C circling the drain.

  10. Anyone else hearing ugly rumors re:MS?

    I mean other than the usual; they smell/dress funny/pay retail at Bloomies. Apparently earnings are going to be brutal.

  11. Victorian says:

    So much for Europe picking up the slack in demand.

    Shipping rates hit zero as trade sinks

    Freight rates for containers shipped from Asia to Europe have fallen to zero for the first time since records began, underscoring the dramatic collapse in trade since the world economy buckled in October.

  12. kettle1 says:

    Shipping rates hit zero as trade sinks

    Freight rates for containers shipped from Asia to Europe have fallen to zero for the first time since records began, underscoring the dramatic collapse in trade since the world economy buckled in October. “They have already hit zero,” said Charles de Trenck, a broker at Transport Trackers in Hong Kong. “We have seen trade activity fall off a cliff. Asia-Europe is an unmitigated disaster.” Shipping journal Lloyd’s List said brokers in Singapore are now waiving fees for containers traveling from South China, charging only for the minimal “bunker” costs. Container fees from North Asia have dropped $200, taking them below operating cost. Industry sources said they have never seen rates fall so low. “This is a whole new ball game,” said one trader.

  13. kettle1 says:


    nice article!

  14. John says:

    Silly Game, I love to bail everyone out. Heck I would have even given Larry Flint money.

    Sean says:
    January 14, 2009 at 1:00 pm
    Need a good laugh, and have some time to kill?

    Time to play the bailout game!

  15. Victorian says:

    John –
    Are you buying C bonds. The spreads look to have blown on that baby. Certainly falls within your parameters. TBTF, right?

  16. kettle1 says:


    not just Europe, also from the same article:

    A report by ING yesterday said shipping activity at US ports has suddenly dived. Outbound traffic from Long Beach and Los Angeles, America’s two top ports, has fallen by 18pc year-on-year, a far more serious decline than anything seen in recent recessions. “This is no regular cycle slowdown, but a complete collapse in foreign demand,” said Lindsay Coburn, ING’s trade consultant. Idle ships are now stretched in rows outside Singapore’s harbour, creating an eerie silhouette like a vast naval fleet at anchor.

  17. HEHEHE says:

    Was at a Bloomberg seminar this mroning re the credit crisis. Of the 20 trillion dollars in corporate bonds about 15 trillion is held by US companies primarily banks. Citi has a ton of debt coming due in 2009.

  18. Ben says:

    “Re 49 in previous thread
    on teacher days worked

    Cindy subtracted vacation days for non-teachers,
    but added them for herself. Is she a math teacher?”

    Rofl, good catch. No amount of gorilla math will change the fact that teachers have off from late June to early September with plenty of “sick days” in between.

  19. John says:

    HEHEHE so what? Better start canceling dividends and diluting stock. Citi sale of SB is mainly going to pay off debt. They can’t roll all of that.

  20. Victorian says:

    Ket (18) –

    Looks like the BRICs will be sh!tting bricks soon. Not pretty.

  21. yikes says:

    and away we go: market down 240.

    all those “gains” that were made in Dec (per Rick Edelman, that optimistic SOB) have been just about wiped out.

  22. nwnj1 says:

    re: teachers working days

    I caught that too. Not only that, but the 4th of July is the only Summer holiday, so teachers get the rest. And two weeks of vacation is 10 days and not 14.

    The difference in the number of days worked for an average teacher relative to an average worker is between 60-70.

  23. John says:

    I stopped buying last Friday. Historically, yields are still great but I ran out of money. I got Cablvisons at 14%, Amerprise at 12%, Comerica at 13%, Genworth at 33%, M&I at 12% in the last three weeks. Talk about insanity. Mid December A rated investment grade company bonds were trading at 80 cents on a dollar. Now step back and think about that, you would need 20% of the companies to go bankrupt the very next day to break even. But wait I am getting 14% interest. So if I make it through year one I collect 14% interest so I would need 34% of the companies to go bankrupt to break even. But wait again bonds pay like 30 cents on the dollar in bankruptcy so I need even more bonds to default than that. Way too much compensation baked in. Even today I see Regions Financial and Key bank still paying 8-9%. They have TARP money, govt bought pref shares and have ability to issue FDIC backed bonds at 2%. Even better bonds are ahead of pref stock so govt would have to walk away from whole investment before bondholders get hit, 9% is a pretty good yield for that type of risk.

    Victorian says:
    January 14, 2009 at 1:06 pm
    John –
    Are you buying C bonds. The spreads look to have blown on that baby. Certainly falls within your parameters. TBTF, right?

  24. HEHEHE says:


    Just saying debt markets being what they are C really has no choice but to split itself up.

  25. yikes says:

    It was a post-9/11 idea that eventually morphed into my idea for the Compound. It is also why the ideal demographic group for the Compound are higher earning Manhattanites.

    When you saw ‘compound’ do you mean like an old school castle-type fortress with moat around it and trappings like that? or just a ‘safe house’ away from it all where you have food and supplies and weapons etc.

  26. Victorian says:

    The fact that the O administration could not wait to ask for the rest of the TARP leads to the belief that there is something big coming down the pike.

  27. hoodafa says:

    Latvia Shaken by Riots Over Economy

    Violent protests over political grievances and mounting economic woes shook the Latvian capital, Riga, late Tuesday, leaving around 25 people injured and leading to 106 arrests by the police.

    …Latvia has for years boasted of double-digit economic growth rates. But it has been shaken by the global economic downturn. Its central bank has spent a fifth of its reserves to guard against a steep devaluation in the lat, and experts expect a 5 percent contraction of the country’s gross domestic product in 2009. Salaries are expected to fall substantially, and unemployment to rise.

    More at:

  28. kettle1 says:


    to address your earlier question. I do not think that border states such as texas, new mwxico, california, are going to be fun places to be as the financial crash progresses. More people competing for fewer resources can get ugly, especially when you add in culture clash.

  29. Jersey Jim says:

    nwnj1 says:
    January 14, 2009 at 1:14 pm
    re: teachers working days

    I caught that too. Not only that, but the 4th of July is the only Summer holiday, so teachers get the rest. And two weeks of vacation is 10 days and not 14.

    Maybe Cindy should switch and become a History teacher or something?

  30. John says:

    Actually it is a lot more than that. My sister is a teacher, even on ther work days she leaves her hous at 8:30 am and is home by 3:30pm. That is 7 hours. The folks who work in the city who work just regular hours catch a 7am train in and get off the train at night at 7pm. That is 12 hours a day away from home. My sister is away from home 35 hours a week, her husband is away from home 60 hours a week. So a teacher is working 5 hours less a day, A teacher’s job is way less time than if you count just days.

    nwnj1 says:
    January 14, 2009 at 1:14 pm
    re: teachers working days

    I caught that too. Not only that, but the 4th of July is the only Summer holiday, so teachers get the rest. And two weeks of vacation is 10 days and not 14.

    The difference in the number of days worked for an average teacher relative to an average worker is between 60-70.

  31. yikes says:

    kettle1 says:
    January 14, 2009 at 12:15 pm

    was reading a report the other that said the drug lords have hired professional gun smiths and are now building their own militray grade weapons (i.e 50 cal, 240’s, machine pistols etc).

    The local police have come across several well equipped gun smithing machine shops in buildings they have raided.

    is this in the US or mexico?

  32. kettle1 says:

    Vic 29,

    Look back at make moneys post from last night. bernanke canceled a meeting with congress to run over to Switzerland for a meeting at the BIS (bank for international settlement). It does indeed seem that a buzz is building. wonder where we see the next (financial) kaboom

  33. yikes says:

    Ben says:
    January 14, 2009 at 12:20 pm
    As someone who is currently involved in academia, I’ll tell you that our current education system is doomed.

    I’m all for doom and gloom. But here, off the cuff, is what else is DOOMED in America:
    – edu system
    – real estate
    – stock market
    – middle class
    – guy who is about to take office
    – the poor
    – us health care system
    – social security system
    – 401k plan
    – american auto industry
    – the ny jets

    Other than GOLD and a couple ETFs, it’s as if there is ABSOLUTELY NOTHING GOOD is happening/will happen.

    Come on, how about a brief, 5 minute positive outlook on a crummy, cold, boring wednesday in january?

  34. Victorian says:

    Yikes (36)

    Free HBO for a year as you lay unemployed on your couch!

  35. Ben says:

    I’m all for doom and gloom. But here, off the cuff, is what else is DOOMED in America:
    – edu system
    – real estate
    – stock market
    – middle class
    – guy who is about to take office
    – the poor
    – us health care system
    – social security system
    – 401k plan
    – american auto industry
    – the ny jets

    Other than GOLD and a couple ETFs, it’s as if there is ABSOLUTELY NOTHING GOOD is happening/will happen.

    Come on, how about a brief, 5 minute positive outlook on a crummy, cold, boring wednesday in january?”

    Well, I think that the US Agriculture Industry will thrive unless Obama decides to open up page 2 of the FDR playbook and pay farmers to destroy all their crops.

    I’m also extremely bullish on our natural gas and coal industries, unless of course, we decide global warming is more important than warming our own homes.

    I’m excited at the prospect of decreasing college tuition, unless of course, the government decides to make ridiculous student loans more available to the general public.

  36. Confused In NJ says:

    36. Current Education System has been doomed since the 1970’s.

  37. Jersey Jim says:

    Come on, how about a brief, 5 minute positive outlook on a crummy, cold, boring wednesday in january?”

    GOOD NEWS! When the new NFL season begins next year the NY Jets will be totally even with all other teams in the league. (The bad news begins when they start playing that first game).

  38. Ben says:

    Plasma TVs will be cheaper this month? Is that good enough news for you?

  39. Ben says:

    another thing I caught on post 49 in the previous thread by Cindy.

    “You won’t be blogging by day or making weekday plans for the evening.”

    Hmm…apparently she is blogging by day, posting at 10:06 a.m. on a school day.

  40. Sean says:

    Ben – Don’t pick on Cindy she is a prisoner of the state of California, and is only visiting here.

  41. Clotpoll says:

    Ben (42)-

    Ease up, bub. She’s in CA.

  42. Jersey Jim says:

    More GOOD NEWS! Cindy is teaching in California rather than in NJ with your kids.

  43. Clotpoll says:

    vodka (31)-

    Culture Clash? They’re getting back together? Nifty. That Boy George could belt out a tune…

    “More people competing for fewer resources can get ugly, especially when you add in culture clash.”

  44. Clotpoll says:

    Oh…oops…never mind.

  45. Clotpoll says:

    It’s a bellwether day here when the angry denizens turn against Cindy…

    Guess the grinder needs some raw meat.

  46. Clotpoll says:

    Hey, things can get worse. Look at Marcus Schrenker.

    Such a f-up, he can’t even fake his own death right.

  47. Clotpoll says:

    Today’s bi-free day comes to you courtesy of SRS.

    Building individual fortunes on the backs of the incompetent.

  48. Sean says:

    Clot – everyone’s favorite punching bag Frank and his cohort bi haven’t made an appearance in a while. There is your bellwether.

  49. Victorian says:

    “It’s a bellwether day here when the angry denizens turn against Cindy”

    – As Stu and JCer pointed out, it is the bloated bureaucracy which is the biggest drain on resources.
    We should be directing our ire against the pension fund managers who developed these plans based on 8% project growths and put the money in riskier assets.
    Guess there is just too much anger now and very few places where it can directed without repercussions.

  50. Victorian says:

    SRS turned around the day Bi made the SRS $25 call.
    Grim should really keep a Bi ticker on the side. I would gladly pay for that.

  51. John says:

    I love that Citi Pref Stock is sporting a B rating and a 17+% yield that as a stock dividend is in the 15% tax bracket. 17% Signals a great buy or the worst buy ever.

    BAA2/BBB 172967572 CPRP CITIGROUP 8.125% PFD 2.031 12.240 Yield 17.156
    10 BAA2/BBB 172967556 CPRM CITIGROUP 8.50% PFD 2.125 12.600 Yield 17.195

  52. John says:

    You can sing real nice when you let you bandmates coat your tonsils with protein every night.

    Clotpoll says:
    January 14, 2009 at 1:44 pm
    vodka (31)-

    Culture Clash? They’re getting back together? Nifty. That Boy George could belt out a tune…

    “More people competing for fewer resources can get ugly, especially when you add in culture clash.”

  53. Stu says:

    You are all way to tough on Cindy. Teaching is a terribly difficult job with almost no reward. Do you know how much time is spent grading papers, checking homework, conferencing with parents, etc. And the role teachers play in society is probably the most important. Teachers will spend more waking hours with your offspring then you ever will.

    If you want to attack their benefits and pay because your taxes are too high, then focus on the size of the school administrations who really serve almost no purpose. Do things really change that much year over year in a school system? Check out the salaries and benefits of these administrators as well as the parties and awards they throw for themselves.

    Cut the pay and benefits for teachers and you will end up with Joe the Plumber raising your children.

  54. Stu says:

    “Grim should really keep a Bi ticker on the side.”

    Maybe not such a good idea. I doubt the server could handle the increase in traffic.

    None the less, a fantastic idea, and you are right. When SRS was at 50 and Bi made his $25 call, it has done nothing less than shot straight up. The $29 call to buy FXP was even better. Did Clot make that one? FXP is now at $46.

  55. Clotpoll says:

    vic (53)-

    Call it the Bindex:

    “Grim should really keep a Bi ticker on the side. I would gladly pay for that.”

  56. Clotpoll says:

    On second thought, the Bindex tick should be paid for by the margin clerks’ union.

  57. Clotpoll says:

    “You don’t need Windex to read the Bindex.”

  58. Stu says:

    The Bindex? We can collectively come up with something better than that.

  59. HEHEHE says:

    NY Beige Book

    Construction and Real Estate
    Housing markets in the District have been mixed but generally weak since the last report. A New Jersey industry contact reports that the market for new homes continues to weaken, reflecting an ongoing overhang of inventory, but notes some leveling off in the resale market–both in terms of volume and prices. However, the more high-priced areas nearest to New York City are still characterized as especially weak. In particular, one contact specializing in the higher end of the market reports that sales activity has slowed considerably–with buyers increasingly reluctant, many sellers are taking their homes off the market. Home prices at are estimated to be down roughly 20 percent from their peak levels of a couple years ago.

    New York State Realtors report that home sales continued to weaken in November, falling nearly 24 percent from a year earlier and that median selling prices posted double-digit percentage declines in and around New York City but were mixed across upstate New York. There appears to have been substantial deterioration in Manhattan’s housing market, based on reports from both a major appraisal firm and a large real estate brokerage. Co-op and condo sales fell roughly 9 percent from a year earlier in the fourth quarter, led by a 25 percent drop in sales of existing apartments (re-sales). In contrast, closings of newly-constructed units surged 35 percent from a year earlier, but these largely comprised contracts negotiated in late 2007 and early 2008. Based on current contracts, overall apartment prices fell by 20 percent or more from the third to the fourth quarter and the number of transactions fell sharply. Manhattan’s apartment rental market has also weakened substantially, with asking rents reported to be down across the board in November, and 2 to 6 percent lower than in June; moreover, an industry report maintains that the reported decline in asking rents likely understates the true weakness in the market, with a growing number of landlords offering concessions. The inventory of available rental units reportedly increased 17 percent between September and November, with a particularly large rise in the number of high-end listings.

    Office markets in the District were mixed in the fourth quarter. Manhattan’s office vacancy rate climbed to its highest level in two years, while asking rents fell 8 percent from the third quarter and were down 5 percent from a year earlier. An industry contact notes marked weakening in December, in particular. However, office markets in the outlying areas were steady: Vacancy rates in northern New Jersey, Westchester and Fairfield County (CT) were little changed at high levels, while Long Island’s rate fell to a two-year low; asking rents were little changed from a year ago in all these areas. Office markets in upstate New York metro areas were steady to somewhat stronger in the fourth quarter, with vacancy rates down slightly and rents up modestly overall.

  60. Stu says:

    The Bivespa?

  61. Jersey Jim says:

    I’m hoping these parents aren’t typical NJ residents:

  62. yikes says:

    re: teaching …

    yeah, why al the hate for teachers? you wall street guys choose that – long hours, maybe long commute, and if you’re good, high pay.

    teachers went for that, too – summers off, great pension, low-ish pay (depending on the state).

    what gives? is the education in need of fixing? just as wall street is, and state government, and many other jobs.

    dont hate the playa … hate the game.

  63. make money says:

    Part of Today’s Bin Ladens speach.

    The al-Qaida leader also said the world economic crisis was a sign that the United States’ power was falling apart, boasting that “the Islamic nation’s jihad is one of the main causes of these destructive results for our enemies.”

    Pointing to wars in Afghanistan and Iraq since the Sept. 11, 2001 attacks, bin Laden said al-Qaida was prepared to fight “for seven more years, and seven more after that, then seven more.”

    “We are on the way to opening new fronts,” he said, urging Muslims to “join hands with the mujahedeen to continue the jihad against the enemy, to continue bleeding them on these two fronts and on the others that are open to you.”

    “The question is, can America continue the war against us for several more decades? The reports and signs show us otherwise,” he said. He said Bush had left his successor “with a heavy inheritance,” forcing Omama to choose between withdrawing from the wars or continuing.

    “If he withdraws from the war, it is a military defeat. If he continues, he drowns in economic crisis,” bin Laden said.

  64. Stu says:

    I was thinking we might call it the ‘BI CRACK 40?’

  65. Stu says:

    Fed: Outlook for economy has darkened
    Fed’s Beige Book says recession-shocked Americans retrenched further

  66. Victorian says:

    Tosh (65) –

    I like that. When the BIX is positive, sell short. Unfortunately, the BIX is always bullish.

  67. grim says:

    From Bloomberg:

    Fed Says Economy Slowed Across the U.S., Hurt by Retail Slump

    The U.S. economy weakened further in the past month across almost all regions, hurt by a lack of credit and declines in retail sales, the Federal Reserve said in its regional business survey.

    “Most districts noted reduced or low activity across a wide range of industries,” the Fed said today in its Beige Book release, published two weeks before officials meet in Washington to set monetary policy. “Overall economic activity continued to weaken across almost all” regions, the report said.

    Today’s Beige Book underscores the picture of a downturn that both private forecasters and Fed officials predict will be the longest since the 1930s. Fed Chairman Ben S. Bernanke and his colleagues are forecast to keep the main interest rate close to zero and explore taking on more assets to unfreeze credit when they meet Jan. 27-28.

    The economy will shrink 1.5 percent this year, discouraging Fed policy makers from raising rates until 2010, according to a Bloomberg News survey of economists published yesterday. The contraction is a half percentage point more than projected last month, according to the median of 59 forecasts in the survey.

    “Growth declined slightly in the third quarter, but it is likely to record a much sharper decline in the fourth quarter,” Philadelphia Fed President Charles Plosser said today. “The first half of 2009 is not likely to be much better.”

  68. Sean says:

    Teachers get all the benefits.

    SEATTLE – Washington state law does not bar teachers from having consensual sex with 18-year-old students, an appeals court ruled Tuesday in dismissing a case against a former high school choir teacher.

  69. Clotpoll says:

    Stu (57)-

    Oh, yeah. FXP was my little Xmas present to me. Covered it yesterday to buy more SRS, though.

  70. Sean says:

    Krammer raged against the ultrashorts last night, and there have been plenty of other detractors coming out of the woodwork do to the popularity.

    So shorting is not part of the game krammer?|headline|quote|video|&par=yahoo

  71. Ben says:


    I don’t think any of us have issue with the roles and jobs that many teachers do. However, when a teacher demonstrates bad math and logic skills while comparing the work schedules with the private sector, they should be criticized. I know for a fact that there are plenty of superb teachers in every school in this state. That being said, there are way too many bad teachers as well. The good teachers in the school system do both themselves and the public a great disservice by associating with those bad teachers through their union activities or publicly defending the profession as a whole and refusing to admit its shortcomings. There’s nothing wrong with defending yourself individually. But seriously, we have tons of issues with the way the profession exists today.

    At a time when our best school districts are grossly outperformed by nearly every industrialized nation, there is no logical argument against our education system requiring a major overhaul.

    I am a firm believer that teachers play the most important role in society because I believe that the only way to solve each and every problem we face today (social, economic, moral) is best dealt with through proper education at the k-12 levels. I am also a firm believer that as a whole, our teachers in this country have failed miserably the past 30 years at their role given the amount of problems (social, economic, moral) that we face going into this year. The fact that we are ~25th in the world in reading/math only strengthens my belief.

    There’s no reason we can’t have the superb educational system that we built and operated under prior to the 1970s. There’s no reason we can’t even adopt the same systems that exist in countries around the world that are outperforming us today. The teacher’s of today are always arguing to keep the status quo, and have rarely criticized the union, the administrations, and even the people who write their textbooks they teach from. The quality of our educational system has steadily declined since the 70s. It will only get worse until we and the educational system itself admits that. We have. It’s time for others to come around.

  72. Ben says:

    “Ben – Don’t pick on Cindy she is a prisoner of the state of California, and is only visiting here.”

    Sorry, didn’t know that.

  73. grim says:

    Good timing, witness the problem:

    From the Star Ledger:

    Essex Fells superintendent charged with pilfering $22,000

    Raymond Hyman, the superintendent of the small but wealthy Essex Fells school district, was arraigned this morning on a charge of pilfering more than $22,000 in tuition-reimbursement funds to pursue a doctorate he never completed.

    The 46-year-old Hyman, who drew a $140,721 base salary as superintendent of the one-school K-6 district before his suspension last fall, turned himself this morning at the Essex County Prosecutor’s Office, said Paul Loriquet, spokesman for Prosecutor Paula Dow.

    “I have no comment,” Hyman said when reached later at his Bayonne home.

    He was arraigned in the Newark courtroom of Superior Court Judge Stephen J. Bernstein on charges of third-degree theft by deception, second-degree official misconduct and fourth-degree forgery. Bail was set at $25,000 cash or bond.

    If convicted on all the charges, Hyman could face up to 10 years in prison.

  74. grim says:

    $140k salary and the guy needs to steal $20k.

  75. HEHEHE says:

    Krammer is a clown. Like I said a co-worker bought Citi at like $10 because of that clown. He belongs in jail.

  76. Clotpoll says:

    Will take another slice of SRS, in honor of Cramer.

    What a douchebag.

  77. Ben says:

    “$140k salary and the guy needs to steal $20k.”

    Grim, that’s all they caught him stealing. I know of a Principal in this state who makes teachers raise funds to pay for everything, pockets the money, then pays it out of the school budget. The state has no idea. I sent a letter to the AG but have yet to see anything materialize.

  78. Stu says:

    “Krammer is a clown. Like I said a co-worker bought Citi at like $10 because of that clown. He belongs in jail.”

    Just like Madoff…oh wait!

  79. Clotpoll says:

    Why buy something like FXP or SRS, when you can lose money the old-fashioned way, in C…or GS…or MS?

    Love Cramer’s logic here. This is what you get from going to Harvard?

  80. Jersey Jim says:

    grim says:
    January 14, 2009 at 2:32 pm
    $140k salary and the guy needs to steal $20k.
    No problem. He should be able to just pay it back like the Treasury appointee did.

  81. Stu says:


    I just read the Kramer rant. What a complete bozo. Doesn’t address any of the advantages of the ultra shorts vs. regular shorting (margin calls, interest on margin, etc.). He doesn’t even try to explain why he feels they should be banned except that he feels the public does not understand them.

    I never trust anyone who does simply says “trust me” and does not try to explain why.

    Cramer is a criminal and should be ignored at all cost. Not only is his track record worse than the indexes (see Barron’s study) but he has no hair!

    Oh wait!

  82. Sean says:

    Gents Krammer front runs his viewers, and should be in jail, can’t prove it but the FBI should look into it further.

    His entry price is the day’s closing price BEFORE Krammer makes his pick on the air. Since the show airs after the market close, practically it is not possible to get they entry price. If Krammer issues something like a triple buy on a small cap stock, Kramer followers will actually inflate the price so that it gaps up the next day.

  83. chicagofinance says:

    Favor from board:

    There is an article on solar power in the print edition of the WSJ either today or yesterday. Can someone give me the article title and author? You probably need the print edition, because I cannot find it online. It is one page 4-6 of one of the sections.

    Thx in advance.

  84. chicagofinance says:

    Note to self: do not store Altoids in workbag….

  85. kettle1 says:

    Ben et al

    I do not see the core problem being with the teachers, but with society. A child not getting their feelings hurt because they lost a soccer game has become more important then learning how learn from a failure. We have have become more concerned with arresting a teenager who brought a butter knife to school in their lunch then whether or not the same kid has ever learned critical thinking skills. We have become more concerned wiht a group of students being able to parrot answer on a standardized test then whether they actually understand why this country was founded.

    Teachers stand out because they are the primary source of knowledge for most children and so it is easy to point o them as the failure. However the teachers are simply a mirror of the society they are part of. The are not the source of knowledge or the deficit there of. They are the means of transmission, a very important role indeed.

    The change that needs to take place, and must take place if the US wishes to maintain its legacy, is for the national culture to re-evaluate its priorities.

    instead of valuing how many headlines the latest brittney spears look a like has, how many touch downs the latest football star has, or whether your purse is some particular designer, we must return to valuing knowledge, personal accomplishment, and ethical behavior.

    While each person may interpret those ideals somewhat differently,the end result is approximately the same. And that is that the way to prosperity for an individual and for a nation is not buy winning at all costs, but by being a productive and inquisitive pamemebr of a competitive society.

    That is very different from win at all costs and 5 minutes of fame, that seem to be the mantra of the day.

    /rant of…. oh and get off my lawn you youngins!!!!!

  86. Stu says:

    I’ll be honest with you, my paper losses in SRS when the shorting ban on the financials was announced was so large that there is no way I would have paid all of the margin calls to maintain the position. Held for long-term gains as fundamentals were still there and pocketed a very pretty penny. There is a goof chance that this is about to happen again. There is no way I would have had the chutzpah to invest twice the amount of money shorting the REIT Index and then more to cover the calls. Now I’m playing with the banks money and my only regret is that I did not get to fill my position fully before the rally began. Still hoping for a Hope Slope inauguration rally boosted by a Citi bailout and a wasted TARP II that will supposedly go to Main Street instead of Wall Street.

  87. Marketwatch has a article on internal dissent at the Fed. It seems Plosser isn’t all that happy with the junk being dumped on the balance sheet.

    Now, I know this is probably just for show but it’s interesting none-the-less.

  88. make money says:

    Representative Barney Frank, chairman of the House Financial Services Committee, has introduced H.R. 384, the TARP Reform and Accountability Act, which has bypassed normal committee procedures and could come up for a vote on the House floor today.

    According to Frank, this amendment will add transparency and accountability to the TARP Act. But as is standard operating procedure for the federal government, a bill posing as an effort to tighten oversight and increase accountability only further intensifies government manipulation of the market.

    Here are a few of the harmful provisions lurking in the legislation:

    – Codifies the use of TARP funds to bail out auto manufactures and make loans to their financing arms. Congress opposed the use of the funds for this purpose during the TARP debate, and it must not be “read back” into the legislation.

    – Requires that “no less than $40 billion” of the remaining $350 billion TARP dollars be assigned to foreclosure mitigation. More government interference in the housing market to keep prices high.

    – Clarifies the Treasury Department’s authority to establish new offices to oversee the availability of consumer loans, such as student and auto loans. More government bureaucracies to supervise other bureaucracies.

    – Keeps the increase in deposit insurance coverage for banks to $250,000 permanently, which was enacted temporarily as part of TARP to stave off bank runs.

    – Increases the FDIC’s borrowing authority from $30 billion to $100 billion and allows it to obtain sums in excess of $100 billion upon the Treasury Secretary’s approval.

  89. Ben says:


    you basically agreed with everything I said. It is a societal problem. The problems of our current society can only be solved with a major overhaul of our education system.

  90. Sean says:

    That didn’t take long.

    Ban on private jets lifted from bailout program

    The Associated Press
    January 14, 2009

    Bank executives will get to fly their company jets after all.

    Financial institutions that get assistance through the $700-billion Troubled Asset Relief Program had faced a provision that recipients of the money would be prohibited from owning or leasing private aircraft.

    But Kansas is one of the nation’s centers of aircraft manufacturing, and state lawmakers complained that the provision could reduce aircraft orders, cost jobs and damage the industry’s image. So yesterday, Barney Frank (D-Mass.), head of the House Financial Services Committee and the author of the bill, lifted the jet ban. In a letter to Frank on Monday, Rep. Dennis Moore, a Kansas Democrat on the committee, wrote that the industry employs more than 44,000 in Kansas and that suppliers employ many more.

    Relinquishing the jets was part of a broader provision that included limits on executive compensation. Chrysler, GM and Ford Motor Co. executives caused a stir when they flew into Washington in private jets last year to plead their case for a bailout from Congress.

  91. kettle1 says:

    ben 94.

    almost….. we agree the issue is societal, but can you expect teachers to teach ethics and values that are primarily learned from parents?

    The change has to start form the bottom up. If parents do not give their children the basic tools they need to be critical thinkers and to value something besides consumption, and fame, then a teacher can only do so much.

    I agree that the teachers are a prime part of the system but i think that the change must start at an even lower level.

    many schools have become little more then public daycare.

    we agree in general and differ on the details

  92. DL says:

    Cramer: bald/beard. He tries hard to look like his idol; Corzine.

  93. John says:

    shorting and puts are a hard thing to do and short ETFs close the books each night and underperform due to fees. Going long is easier with large amounts of money. Unless you are doing nickle and dime moves you can’t be doing puts in excess of 100K without causing the price to rise and when you want to get out it is hard to calls without the price falling. You are moving the market both ways. Remember ADV in Options is a fraction of ADV in equities. Big players do it to hedge sometimes but can’t do it as they are moving the market.

    Here is a very stupid example of why it is hard to buy cheap options in large amounts. 1969 2 door Dodge Chargers, they used to be a marginal run of the mill collector car. Then Dukes of Hazzard started, well Dukes wrecked a car or two each eposoide so they went out to the used car market and got one or two new ones each week. Each time they did that inventory became scarcer and they drove up prices, however, showing the car on tv each week made them even more popular so now they had to compete with more collectors. Warren Buffet trying to use options would be the same result.

  94. chicagofinance says:

    kettle1 says:
    January 14, 2009 at 3:05 pm
    chifi, is it one of these stories?

    ket: thank you but no, the online search is not picking it up…I’ve seen it happen in the past…

    The article talks about several of the solar companies. Large customers in Spain and Germany due to tax breaks. First Solar being a leader due to advanced technology etc. I read it earlier and tossed the paper (yesterday’s or today’s) assuming that I could just grab it online.

  95. chicagofinance says:

    Wall Street Journal
    States Weigh Cuts to Merit Scholarships
    Budget Shortfalls Threaten Popular Programs That Aim To Keep Top Students Close to Home


    As they grapple with crippling budget shortfalls, states are weighing whether to cut back on merit-aid scholarship programs that benefit hundreds of thousands of college students every year.

    Since the early 1990s, more than 15 states have launched broad-based programs that offer students scholarships and tuition breaks based solely on grades, class rank and test scores. Supporters say such programs boost college-enrollment rates and help persuade high achievers to remain in their home states. Critics maintain that the programs siphon aid money away from students with financial need in favor of some who probably could have afforded college without the help.

    College Costs

    Some states facing budget shortfalls are eyeing cuts to merit-scholarship programs.
    [New Jersey is setting tougher eligibility standards and awarding smaller scholarships.]

    The National Association of State Student Grant and Aid Programs, an organization of agencies responsible for state financial-aid programs, says merit grants accounted for $2.08 billion, or 28%, of all state-sponsored grants awarded in its latest tally, covering the 2006-2007 academic year. That’s up from $458.9 million in 1996-1997, when merit-aid accounted for about 15% of all state grants.

    But the economic crisis has raised fears that such growth may be unsustainable, as tax revenue plunges and legislatures make drastic cuts to other state programs. And the pinch comes just as layoffs and investment losses affecting millions of families are likely to boost demand for financial aid based on need.


    Though state appropriations for higher education are often among the first items cut in a recession, most legislatures have in the past avoided tampering with merit-scholarship programs out of fear of a political backlash. Cutting them would be “a direct hit to the pocket books of students and families,” says Dan Hurley, a policy analyst at the American Association of State Colleges and Universities, a trade group.

    Tougher Standards

    Faced with a budget deficit that has grown to $2.1 billion, New Jersey recently revised its Student Tuition Assistance Reward Scholarships, or Stars. The result is a new statute, signed into law in December. It mandates tougher qualification standards and smaller scholarships for a program that aided about 5,000 students a year.

    Originally available to high-school students who graduated in the top 20% of their class, Stars covered tuition and fees for two years at a county college, as community colleges are known in New Jersey. Students who earned a 3.0 average there qualified for a second scholarship that paid for the same costs for two years at a state university.

    Now, students will have to take a college preparatory curriculum in high school and graduate in the top 15% of the class. They must maintain a 3.25 average in community college to qualify for the university scholarship, which will be linked to grades and limited to no more than $7,000 a year. Students from families earning more than $250,000 no longer qualify.

    Jane Oates, executive director of the New Jersey Commission on Higher Education, said there were educational reasons for tightening eligibility standards: About 30% of the students who got the merit awards needed remedial courses once they got to the community colleges.

    But funding was also a huge issue. A task force chosen to advise Gov. Jon Corzine on the matter estimated that, with the economic downturn, demand for the scholarships could quadruple in a single year. “That would have been devastating,” said Ms. Oates, who served on the panel.

    Feeling Betrayed

    Christine Collazo, a 20-year-old from Perth Amboy, N.J., has been attending Middlesex County College on a Stars scholarship and says she hopes eventually to become a math major at Rutgers University, where tuition and fees total $11,562 this school year. A part-time deli worker, Ms. Collazo says she will apply for financial aid and loans to help cover the costs Stars will no longer pick up. “But to be honest with you,” she adds, “I kind of feel betrayed.”

    Meagan Plichta, a visual-arts major at Middlesex, was planning to use her Stars scholarship to move on to Rutgers like her older sister, Lacey, also a Stars recipient. The daughter of a school secretary and an ironworker, she is not so sure now. “What they are offering now isn’t even comparable to what they were offering,” the 19-year-old says. “If I was offered a scholarship somewhere else out of state, I would go there.”

  96. DL says:

    Spent a day in a S.Jersey private school. State rule was anyone who coached a sport had to be on the faculty. Sat in on the geometry teacher’s class who happened to be wrestling coach. The guy didn’t know the difference between a headlock and and a trapezoid.

  97. comrade nom deplume says:

    [28] yikes

    The latter. If I needed a moat and wall, I would be in the wrong area.

    Better to be in a secure (and securable) rural area where, if need be, you can organize with the other residents to form a mini-militia. As sas and Kettle will tell you, security isn’t always about keeping everyone out, but keeping tabs on things. Also, cost of moat, wall, perimeter security, etc. too prohibitive and would defeat the purpose.

    This BTW, was another reason for being across the Delaware. In an absolute worst-case, TEOTWAWKI scenario, folks in NE PA could block the Del. river bridges and the NE Ext. exits to refugee traffic. Won’t keep everyone out—when damming a river, there is always a spillway—but it will keep the unorganized masses at bay and segregated by natural barriers.

  98. Ben says:


    I have no doubt that parents play an important role in the system as well, but the values that we’ve instilled on our latest batch of children will dry up on it’s own. They won’t care about iphones and xboxes because they won’t be able to afford them. They’ll be more concerned with food making it to the table. The Roaring 20s was filled with materialistic jerk offs. The 30s ended that mentality outright. A materialistic family that loses their house to foreclosure learns pretty quickly that they have to lower their standard of living because they have no choice. That’s why we don’t need bailouts. The market unwinding will naturally force discipline in to every family, corporation, and individual in the US. Of course, the government will never learn, but if people took the time to actually learn about real freedom and support candidates that advocate freedom, we could force the government to learn.

  99. Sean says:

    re: #102 Comrade – very true about blocking the bridges, after Katrina the residents of Gretna and other communities did just that.

  100. HEHEHE says:


    Looks like they need to sell more Smith Barneys

  101. Mike NJ says:


    She is in cali. 7:42 there.

  102. Stu says:

    Boy is Cindy gonna be surprised when she gets home tonight ;)

  103. comrade nom deplume says:

    “hope these parents aren’t typical NJ residents”

    I don’t think they are typical of anywhere.

    That said, anyone have a problem with the fact that the State seized children on the basis of what can only be inferred as the beliefs of the parents?

    Given the subject matter, I won’t hold my breath waiting for the ACLU to step in (if the kids were named Osama bin laden Campbell, ACLU lawyers would be shrieking right now), but this is a troubling portend, and one that MSM probably won’t report: the fact that states do punish people for unpopular viewpoints through child protective laws because these laws give considerable discretion to authorities to decide when childen are ‘endangered.’

    Now, they may well be endangered in a direct and understandable way, but that isn’t being reported. And given that such laws have been abused by state officials in other jurisdictions to strike at unpopular individuals or groups, it is reasonable to infer that Anne Milgram has decided that white supremacists should be punished for their views. Is it any wonder why they distrust their government?

    Makes me wonder which unpopular group they will target next?

  104. Stu says:

    For Big US Banks, Trouble Is Just Getting Started

    “Same Problems, Only Worse

    In essence, the story of 2008 will be the story of 2009, only amplified.

    That’s because the mortgage contagion will spread beyond simply the subprime group and start to hit prime borrowers as well who cannot meet their obligations due to rising unemployment and the intensifying recession.

    “Stabilizing the banks through direct capital injections was a good first step but before things can be really stabilized the government’s going to have to find a way to take the toxic assets off the books of the banks,” said Mike Carlson, a partner with Faegre & Benson’s restructuring group in Minneapolis. “Until that happens, things are not going to be able to move very quickly.””

    Sounds like the exact analysis shared by many on this Blog in early 2007.

  105. Essex says:

    So what you guys are saying is that the educational system let you down and you cannot afford to buy a home?

  106. Sean says:

    re: #103 John – I think your Citi chart has made a major scientific breakthrough.

    Very little is known about the sinking dynamics of the Titanic. The angle and path during the descent and the bottom impact look just like your chart.

  107. comrade nom deplume says:

    [104] sean,

    Wow. I had no idea about that. With 0bama organizing a new force to get around the Posse Comitatus Act, the prospect of conflict with feds looms larger.

    Fortunately, on the state level, if PA towns blocked the Delaware, NJ would have no recourse.

  108. Stu says:


    “That said, anyone have a problem with the fact that the State seized children on the basis of what can only be inferred as the beliefs of the parents?”

    Yes, but you are making a great assumption.

    I’m betting that they tattooed a swastika on one of them.

  109. John says:

    Me no lean nuthin in skool, me make lota mny an hav godde tyme

    Essex says:
    January 14, 2009 at 3:50 pm
    So what you guys are saying is that the educational system let you down and you cannot afford to buy a home?

  110. kettle1 says:

    yikes, Nom,

    moats, walls etc…..

    its more of a “walk softly and carry a big stick” philosophy. The goal is to NOT draw attention to yourself, but be capable of responding if attention finds you.

    Moats and razor wire lined walls will certainly direct attention your way

  111. John says:

    Personally, they should sieze even more children, some parents are scary. I like to sieze a hot 17 yo blonde girl to be my au poir.

    Stu says:
    January 14, 2009 at 3:54 pm

    “That said, anyone have a problem with the fact that the State seized children on the basis of what can only be inferred as the beliefs of the parents?”

    Yes, but you are making a great assumption.

    I’m betting that they tattooed a swastika on one of them.

  112. comrade nom deplume says:

    [115] kettle,

    read the full post. I said that it was a self-defeating proposition, and that if I had to do that, I would be in the wrong place.

  113. comrade nom deplume says:

    [113] stu,

    that’s right. I am making an assumption. I believe I said as much.

  114. kettle1 says:



    That said, anyone have a problem with the fact that the State seized children on the basis of what can only be inferred as the beliefs of the parents?

    i find it very disturbing, unless they have a very good reason that has nothing to do with the name or political beliefs of the parents

  115. kettle1 says:


    sorry, was meant for yikes…..

  116. Stu says:


    Not trying to pick a fight. Especially considering the size of my assumption for their seizure.

    Rest easy, I did see your inference.

  117. comrade nom deplume says:

    [120] ket


    Though a moat would be nice. Something attractive, like a series of ponds with defensible causeways. Can stock the ponds with fish so they serve double (triple??) duty. And they make a nice water hazard for the putting and chipping green nearby.

  118. Essex says:

    So it is my understanding that teaching can be grueling work requiring all kinds of management and patience….as a side note….and if this sounds like an attack it probably is….I can guarantee that the folks that blog here all day every day really are not productive busy employees/employers…while this is a fairly new phenomenon in the workplace…it is evidence of people who are 1. bored at work 2. stealing time from their employers 3. worthless / unemployed sucks on society.

  119. Sean says:

    The took the kids and for good reason most likely drugs.

    Frankly I find it more offensive that those two 25 year olds who are “permanently” disabled managed to squeeze out 3 kids in 3 years and we the taxpayers have to pay for all 5 of them.

  120. grim says:

    New thread coming, move it on up.

  121. Clotpoll says:

    stu (90)-

    Yeah, that’s the part of 2x and 3x inverse funds Cramer left out: you get to load up the truck (to borrow his words) against a whole spectrum of trash that you’d never be able to short as individual issues without the constant threat of nuclear margin calls. The use of swaps and derivatives to achieve these funds’ results is brilliant, perfectly legal and efficient (at least, efficient enough to achieve their stated purposes).

    The thing that pisses off the PTB is that these ETFs are also immune to even the worst of their skulduggery. Early on during the short sale ban, I placed a call to State Street and received courteous, understandable answers to the questions I had regarding my positions in both SRS and SKF. Based on those answers, I became confident that State Street would find a way to make the 2x ETFs track properly (which they did) and that ultimately, SRS and SKF would rocket to the moon (which they did).

    Funny. A guy like Cramer would- on one hand- tell you an outfit like State Street is one of the few “buys” in the financial sector. When the carnage is over, firms like this will end up well-positioned to take all kinds of business away from the dead dinosaur brokers. But to actually endorse one of the “better mousetraps” this company has devised to help its investors not get killed in the current environment? No way would the pundits do that.

    Cramer is no better than Madoff. Talk about an investment tool that the public doesn’t understand and that doesn’t perform as advertised: just turn on CNBC at 5, 7 and 11, and watch Exhibit A…Mad Money and its shill of a host.

  122. Clotpoll says:

    tosh (91)-

    Plosser better get with it.

    That stuff’s not junk; it’s AAA.

    Cause Benny said so.

  123. Sean says:

    Meridith Whitney on CNBC right now, saying bank stocks going down, get the hell out of bank stock, etc.

    Amex looks good at the right price etc, once the band gets back together.

  124. kettle1 says:


    that why i like the idea of monolithic earth sheltered buildings. you can build a structure that is poured concrete and has 4- 6 ft of earth on top of it that is a nice place to live, not a cave.

    I have had a chance to tour a few of these and they can be very nice if done correctly. A side befit is the only thing coming through those walls is a bunker buster.

    Oh and they can have very very low heating and cooling requirements also.

  125. Victorian says:

    Clot/Stu –

    Look at the selling on Strength page.

    No block trades for SRS.

  126. comrade nom deplume says:

    [121] stu,

    no problema. This does rile me because it is done a lot more often than people think, and it isn’t reported in MSM.

    Also, I see a very clear slant that makes pretty clear that what are considered “dangerous” conditions have a political component, and that equally “dangerous” conditions are ignored if they are common in the politically acceptable segments of society.

    Right now, that doesn’t fry my onions as I am not so outside the mainstream that I will attract the attention of the authorities.
    But, as an example, you can easily see that a left wing state a.g. (like Milgram) can determine (as some on the left have pushed) that gun ownership presents a danger to children. Because they can’t seize the guns, they seize the kids. And how about SUV ownership? After all, they can roll over.

    As you can see, this doctrine is ripe for abuse, and it is abused regularly in my opinion.

  127. Kiram says:

    I work in the retail construction business and I can honestly say this has suffered too. My company has gradually cut our office employees in half though we still are getting business from national retailers, especially real estate developers that build malls and shopping centers. The housing market may not be great but I still would encourage people to try to invest in real estate..and not necessarily in Single Family Homes. You guys should read “The Pizza Delivery Millionaire” written by Rick Vazquez..great tips, smart book and very entertaining while teaching a thing or two about real estate investing.

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