Glut of foreclosed homes waiting to hit the market

From CNN/Money:

Flood of foreclosures: It’s worse than you think

Housing might be in worse shape than we think.

There is probably even more excess housing inventory gumming up the market than current statistics indicate, thanks to a wave of foreclosures that has yet to hit the market.

The problem: Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale. The volume of this so-called ‘ghost inventory’ could be substantial enough to depress already steeply falling prices when it does go on the market.

“That’s not good news,” said Pat Newport, an analyst with IHS Global Insight. “[Excess] inventory is the biggest problem in housing these days, and it leads to lower housing prices, which leads to more foreclosures.”

RealtyTrac, the online marketer of foreclosed properties, recently discovered that it has far more foreclosed properties listed it its database, which the company compiles using courthouse records, than there are listed in the multiple listing services (MLS) maintained by real estate agents.

“Either lenders are overwhelmed and can’t get these properties back on sale quickly” said RealtyTrac spokesman Rick Sharga, “or they’re deliberately slowing down.”

The chief problem is probably system overload: Lenders are just not prepared to handle the sheer numbers of foreclosures that they have on their books. Banks took back about 860,000 in 2008 – more than twice the number in 2007 – according to RealtyTrac. Before the housing crisis hit, it took only about a month to get a bank-owned foreclosure on the market.

Lenders still insist they try to act as swiftly as possible. According to Tom Kelly, a spokesman for Chase (JPM, Fortune 500) Mortgage, their goal is to cut their losses on these homes, which are expensive to maintain, as fast as possible.

But banks might hold back listings in areas where they already have lots of homes for sale in order to avoid flooding the market, according to Michael Youngblood, a financial analyst and founder of Five Bridges Capital, an asset management company.

“If lenders have a significant number of properties in a limited area, they may want to stagger putting them back on the market,” he said.

Bank-owned properties are in worse condition than ever because the foreclosure process is taking longer than ever. As much as a year can pass between the time a borrower first misses a payment and the final auction sale, according to Youngblood. During that time, houses often deteriorate because owners have neither the money nor the incentive to maintain them. Some disgruntled homeowners may even deliberately damage homes before they leave.

“According to our servicing folks, it’s taking more time for lenders to get properties in saleable condition,” said Mechem.

The phenomenon of a growing ghost inventory doesn’t promise to get better anytime soon, as long as the rate of foreclosures continues to ravage the market. There were more than 3.1 million foreclosure filings in 2008, according to RealtyTrac.

Said Sharga: “I don’t see how we can avoid another 3 million in 2009.”

This entry was posted in Foreclosures, Housing Bubble, National Real Estate. Bookmark the permalink.

181 Responses to Glut of foreclosed homes waiting to hit the market

  1. Stu says:

    Frist. Oh please oh please!

  2. Young Buck says:

    I just read this on cnn.com & thought, “I wonder if it’s been posted on njrereport.” You’re fast Grim!

  3. Ben says:

    please, by all means, flood the market.

  4. grim says:

    Plenty of backlog in Haughty Bergen County.

    http://www.bcsd.us/sheriff_sale.aspx#sales

  5. SG says:

    Peter Schiff: Let the Housing Market Crash

    What’s your take of the Fed’s moves to engineer lower mortgage rates?
    It is a bad thing. They are trying to maintain high home prices by keeping interest rates low. That’s how they want to create more affordable housing. What’s a much more efficient way [to create more affordable housing] is to let home prices fall so that houses become more affordable because they are cheaper. And so people don’t have to borrow as much money to buy a house. These low interest rates are only temporary. They can’t stay down here.

    So, what would you advise policy makers to do?
    They should do nothing. They’ve done enough damage.

    By how much do you think home prices are going to fall this year?
    They are not going to fall as much as they should because the government is attempting to artificially prop them up. But the problem is, the more they do that, the greater the oversupply, because they are enabling more home building. We shouldn’t be building homes right now. But because the government is artificially subsidizing the home building industry and home prices, more supply is being added to a saturated market.

    Like a true capitalist!!!

  6. Clotpoll says:

    What’s this “capitalism”?

  7. Clotpoll says:

    Failure Friday!

  8. grim says:

    Alpharetta? Or did the FDIC shut all those down already?

  9. comrade nom deplume says:

    [8] grim

    Didn’t that one fail already?

  10. SG says:

    NYTimes,

    Home Refinancing Hobbled by Variety of Obstacles

    One of the biggest stumbling blocks for many people is their plunging property values, which have erased all or most of the equity in their homes. Others cannot meet the increasingly stringent credit requirements, which either disqualify them or increase their costs.

    “Refinancing is a very difficult proposition right now,” said Mike Stoffer, president of Stoffer Mortgage in North Canton, Ohio. “The loss of equity and tighter credit standards are making it difficult for a lot of people to refinance.”

    Major banks and mortgage brokers agree that the number of qualified borrowers has dropped significantly. By some brokers’ estimates, only 30 percent of applicants in certain markets are actually closing on their refinancing applications. In contrast, in the first half of last year, about 60 percent of applications were approved, according to the Mortgage Bankers Association.

  11. comrade nom deplume says:

    [263] Gator, previous thread

    Hey, at least you weren’t sprinting into the stores at night. I lived in Arlington during the DC Sniper. I did a lot of bobbing and weaving in those days.

  12. gary says:

    Everyday I get bunch of listings focused mostly on Bergen County and everyday I shake my head in disbelief at the bloated, ridiculous prices these fat, stup*d f*cking bastards think they’re going to get for the sh*t hole they call a house. Walnut paneling, green rugs and formica from 1973. Good luck.

    I’d love to smack the sh*t out of anyone not bidding 20% below the current asking for ANY of these dumps.

  13. comrade nom deplume says:

    [1]Stu

    Becomes a man, by being Frist.

  14. grim says:

    Co-worker who goes out running in the early AM told me he saw a Cadillac Escalade delivering the town paper this morning.

  15. SG says:

    gary: I have stopped looking at MLS at least 1 year ago. The only place to look is Sheriff Foreclosures listings.

  16. SG says:

    US EQUITIES WEEK AHEAD: 4Q Results, Fed Meets, Davos Starts

    NEW YORK (Dow Jones)–Next week is the busiest in the fourth-quarter earnings season, with more than a third of Dow Jones Industrial Average components and a quarter of the Standard & Poor’s 500 Index posting results.

    With the Federal Reserve’s benchmark interest rate near zero, its policy-making arm will spend much of its mid-week meeting reviewing the wide range of new lending and asset-purchase programs the Fed has introduced.

    On Friday, the government will report its first number for the fourth-quarter gross domestic product, which is expected to be down 5.4%, the worst …

  17. kettle1 says:

    posted already????

    The World Won’t Buy Unlimited U.S. Debt
    By PETER SCHIFF

    Barack Obama has spoken often of sacrifice. And as recently as a week ago, he said that to stave off the deepening recession Americans should be prepared to face “trillion dollar deficits for years to come.” But apart from a stirring call for volunteerism in his inaugural address, the only specific sacrifices the president has outlined thus far include lower taxes, millions of federally funded jobs, expanded corporate bailouts, and direct stimulus checks to consumers. Could this be described as sacrificial?

    http://online.wsj.com/article/SB123266988914308217.html

  18. kettle1 says:

    RIP: Credit as Money
    by EUGENE LINDEN

    The drumbeat over the Obama administration’s plans to fix the banking crisis has reached fever pitch. Over the past week, what appears to be a carefully choreographed series of leaks has raised expectations that the administration has something very big planned (my guess is that it would’ve been announced today, but for the delay in Timothy Geithner’s confirmation as Treasury Secretary). Various newspapers and blogs have speculated on the details, some of which would be truly dramatic. Examples include: An omnibus take-over of a raft of banks; a process that would include wiping out existing shareholders; converting debt to equity to avoid the new N-word (nationalization); the FDIC providing a backstop for deposits; and, to restore trust in bank balance sheets, the establishment of a new entity to buy, hold, and trade trillions of dollars in now-suspect bank assets.

    http://www.minyanville.com/articles/jpm-bac-banks-crisis-jpmorgan-obama/index/a/20758

  19. Sean says:

    Grim on Bergen Sherrif’s list.

    19 ROXBURY DOWNS upper saddle river NJ

    Click the Bird’s eye.

    http://maps.live.com/?q=19+ROXBURY+DOWNS+upper+saddle+river+NJ&mkt=en-US&FORM=BYRE

    Nixon spent his waning days around the block from this one stealing candy from the neighborhood children.

    Got any info on this one?

  20. skep-tic says:

    Gary– I would ask your agent to stop sending you listings unless he/she knows that the seller is motivated (and can explain why). Most listings are not really for sale

  21. kettle1 says:

    EU states monitor spread of civil unrest

    EU member states are “intensively” monitoring the risk of spreading civil unrest in Europe, as riots over the economic crisis erupt in Iceland following street clashes in Latvia, Lithuania, Bulgaria and Greece. The worst street disturbances for 50 years struck Reykjavik on Thursday (22 January), as police streamed a hardcore of a few hundred anti-government protesters in the early morning with pepper spray and then tear gas after an earlier crowd of around 2,000 gathered outside the Althingi, the country’s parliament, to demand the government resign.

    http://euobserver.com/843/27460

  22. SG says:

    Financial crisis: just how big is Britain’s toxic debt?
    An army of accountants is combing through the books, trying to establish just how much the toxic assets of the bailed-out banks are actually worth. At stake, says the Government, is the future of Britain’s economy.

  23. grim says:

    Sorry, but I think Geithner calling China a “manipulator” was unintentional, an accident.

    Especially since that was a completely unacceptable forum for making that accusation. Yes, we all know they manipulate, but the prior administration stopped short of actually uttering the “M” word in public. No way the O-administration would have chosen that forum to demonstrate their position.

    Geithner screwed up. Unfortunately, now they are stuck playing this set of cards.

    Kind of like Michelle picking the same decorator that Thain did. O coming out and making an indirect statement about Thain’s excessive spending? Ooops. Wonder if the $35k chamber pot cabinet was paid for with TARP funds, maybe they can have it moved right into the White House.

    Rookie mistakes?

  24. Ben says:

    rofl, Rogers calls the UK out on their BS. Apparently, some people were mighty pissed about what Rogers said on the Pound.

    He told them to put their money where their mouth is.

    “If they object to my comments and think the pound is going up they should buy the pound. If they think the City of London is going up they should buy the City of London. If they think the UK is going up they should buy the UK. I can’t prove I’m right but the markets will tell us in five years”

    http://blogs.telegraph.co.uk/angela_monaghan/blog/2009/01/23/jim_rogers_attack_on_city_gets_angry_riposte_

  25. grim says:

    Fannie and Freddie have had a moratorium on Sheriff Sales for at least two months now.

    Unfortunately, it expires in 8 days.

  26. Sean says:

    re#18 kettle1 – now you see why the Senate Finace committee glossed over Geithner’s “misktakes”. Word is he and Summers have been holed up in the Treasury offices for over a month crafting the mother of all RTC bailouts.

    The ink may already be dry on FIRREA II.

    One of my predictions from 2007, was that we will have a repeat of the 1989 legislation.

  27. NJGator says:

    Nom 11 – Had a friend who used to work at Paul Weiss. She has another friend from her associate days who has a major martyr complex and lives to be miserable. When we all went to Miami for a girls weekend to celebrate our friend’s 30th birthday, this woman spent two whole hours complaining to me that one of the partners used her as a human shield when they were in DC for business during the sniper attacks. Oh the indignities of big law!

  28. grim says:

    Got any info on this one?

    Purchased on 11/17/2005 for $860,000. Given a judgement amount of $748,648 it does appear they put some cash down. I don’t have the mortgage history, so I don’t know if there are any second liens.

  29. SG says:

    Who Pays America’s Highest Property Taxes?
    Forbes.com staff, 01.23.09, 02:00 PM EST
    With the highest annual levies, these 25 counties eat up homeowners’ incomes the most.

    Those living in Little Falls, N.J., should be so lucky. Property taxes in Passaic County, which includes Little Falls, eat up 8.5% of homeowner median incomes. In fact, Passaic property taxes are the highest in the nation. Rounding out the top five: Union County, N.J. (8.1%), Essex County, N.J. (8.1%), and Westchester County, N.Y. (7.8%).

    Going over the list, it seems pretty much all NJ county are in top 25. Well, we are ahead in somethings at least.

  30. BC Bob says:

    “Sorry, but I think Geithner calling China a “manipulator” was unintentional, an accident.”

    Then again, has Reed Smoot entered the bldg?

  31. grim says:

    Then again, has Reed Smoot entered the bldg?

    Trying to be optimistic in the new year.

  32. Ben says:

    http://pics4.city-data.com/ctrends/ctr13190.png

    Hoboken Sales drop 75% from 3rd quarter to 4th quarter. Where’s the recession?

  33. BC Bob says:

    By the way, Geithner didn’t say that he thought China was a “manipulator”. IMO, he knew exactly what he was saying.

    “President Obama — backed by the conclusions of a broad range of economists — believes that
    China is manipulating its currency [and the] President has pledged as president to use aggressively all the diplomatic avenues open to him to seek change in China’s currency practices…”

  34. Clotpoll says:

    grim (33)-

    Wake me when the B52’s are over Beijing.

  35. Clotpoll says:

    If the Chinese are currency manipulators, what does that make us?

  36. Clotpoll says:

    Why can’t I get the phrase “ongoing criminal enterprise” out of my head?

  37. skep-tic says:

    #30

    that list is ridiculous. CT is a tax haven compared to NY and NJ

  38. BC Bob says:

    “If the Chinese are currency manipulators, what does that make us?”

    Clot,

    They learned from the best. What are we complaining about, they pegged their currency to ours, before increasing their bands.

  39. Sean says:

    If Reed Smoot comes back do I get to have more than one wife?

    Gotta love those mormon church rules.

    If any man espouse a virgin, and desire to espouse another, and the first give her consent, and if he espouse the second, and they are virgins, and have vowed to no other man, then is he justified; he cannot commit adultery for they are given unto him; for he cannot commit adultery with that that belongeth unto him and to no one else.
    And if he have ten virgins given unto him by this law, he cannot commit adultery, for they belong to him, and they are given unto him; therefore is he justified. …
    [T]hen shall she believe and administer unto him, or she shall be destroyed, saith the Lord your God; for I will destroy her; … if she receive not this law … she then becomes the transgressor; and he is exempt.

    Disclaimer (I can only handle one wife now, more than one will surely send me to an early grave).

  40. skep-tic says:

    Recent American history is basically “MC Hammer: Behind the Music” writ large.

  41. make money says:

    The pound is a currency with no underpinning and should fall against the dollar and the euro, says Jim Rogers, chairman of Rogers Holdings and co-founder of the Quantum Fund with George Soros.

    He says his view reflects the UK’s dire economic situation: “It’s simple. The UK has nothing to sell.”

    Mr Rogers says the two main pillars of support for sterling have been North Sea oil and the strength of the UK financial services sector, in particular, the City of London’s role.

    But Mr Rogers says just as North Sea oil is running out, so London’s standing as a financial centre is set to suffer: “I don’t think there is a sound UK bank now. At least, if there is one I don’t know about it.”

    “The City of London is finished, the financial centre of the world is moving east. All the money is in Asia. Why would it go back to the west?” says Mr Rogers.

    Mr Rogers thinks the pound is more vulnerable than the dollar or the euro.

    He says the UK housing market is arguably in a worse state than that of the US, given pockets of strength in the US and prices that are sliding across the board in the UK.

    Meanwhile, he says, the UK is in worse shape economically than the eurozone, where most countries are not big debtors and do not run huge trade deficits. “If the UK discovers more North Sea oil, I might change this view,” he says. “But I don’t see that happening.”

  42. make money says:

    from 43 above,

    This is what happens when you keep parts of the cow to buy milk.

    Eventually there is nothing left to sell.

  43. kettle1 says:

    What’s really wrong with Sterling?

    How bad is this fall in the pound? In a word: hideous. Measured against a basket of other currencies – the best way in this globalised era to test a currency’s strength – the pound has fallen in the past year by around a quarter. This is more than any previous devaluation in the past century – greater even than in 1931, when, under Ramsay MacDonald, the UK was forced to abandon the gold standard and saw the pound plummet by more than 24 per cent against the dollar. Greater than after Black Wednesday and the abandonment of the Exchange Rate Mechanism; worse than in 1967, when Harold Wilson was forced to make an extraordinary televised statement to the nation claiming that the “pound in your pocket” would not be worth any less after his devaluation.

    http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4318572/Whats-really-wrong-with-Sterling.html

  44. make money says:

    Did anyone hear anthing about California. Where they able to raise capital or are they still on schedule to default on February 1st.

  45. kettle1 says:

    grim,

    45 in moderation

  46. Essex says:

    BOHICA

  47. make money says:

    Meanwhile, Schwarzenegger has ordered that most state workers take two days off per month without pay — equivalent to about a 10% pay cut. The governor also ordered most state offices — including all DMV field offices — to close on those two days. The order is being challenged in court by labor unions.

    The state has also halted payments of bond money for more than 5,300 public-works projects.

    http://suzieqq.wordpress.com/2009/01/17/california-controller-suspending-welfare-checks-tax-refunds-student-grants-on-feb-1st-2009/

  48. sas says:

    ? this a joke?

    “Talking pets: Obama’s guru wants animals to sue you”
    http://tinyurl.com/9tbfsc

    *Obama’s “regulation czar” Professor Cass Sunstein wants animals to be able to sue.

  49. kettle1 says:

    make,

    No money for Cali yet!!!!!!

  50. kettle1 says:

    we should start a new game….

    name this nation….
    http://static.seekingalpha.com/uploads/2009/1/22/saupload_lithuania_photo.png

    ignoring the web address, every week we post an image and you have to guess which nation!

    with 4 or 5 euro nations now seeing such protests, this game could get difficult quickly

  51. HEHEHE says:

    Clips of that Rogers interview are on Bloomberg. It’s pretty funny stuff. Basically says “What can I tell you? Britain doesn’t make anything people want to buy? The North Sea oil is diminishing. What else you got?”

  52. kettle1 says:

    the full extent of deflation is going to sutrprise many…

    from mish:
    US banks levered cash to loans at 25:1 and liabilities at 33:1 at the credit bubble peak. The long term historic average ratios are about 5-7:1, and 7-10:1 respectively.

    Moreover, historically, the ratio of real estate loans to cash averaged 1.25 to 2 (!!!) on a sustained basis, whereas the ratio at the unprecedented hyper-leveraged point in 2007-2008 reached 12-13:1, with real estate loans as a share of all bank loans reaching almost 60%. Real estate loans/GDP topped out at 26-27% (!!!).

    Were the banks’ cash ratio to “unreal” estate loans to return to the historically sustainable range, banks would either need to (1) triple and quadruple their cash assets from $1T to $3T-$4T and/or (2) write down real estate assets commensurately or a combination thereof.

    Wells Fargo is loaded to the rafters with eventually non-performing residential and commercial real estate loans in the US Pacific Northwest the last region of the country to enter the Kuznets Cycle bust to date.

    Consider what virtually no growth in real estate loans combined with a tripling or quadrupling of banks’ cash assets means to the real estate market and US overall investment, consumption, government receipts, and payrolls going forward.

    The negative effects of bank liquidation and reverse leverage risk outright systemic collapse.
    http://globaleconomicanalysis.blogspot.com/

  53. kettle1 says:

    did everyone go home?????

  54. Barbara says:

    repost from other thread

    Just another Friday afternoon in NJ:
    Saw no fewer than 3 people throwing gobs of fast food liter out of their SUVs while driving with an attitude. One was a City employee in a city truck.

    A couple kids under 5 walking around busy streets with no adults, just by themselves.

    Called 911 after cars were piling up at a Rt 18/Rt1 car wash (gotta shine the rims, yo) and were literally stopped in line on a lane in rt 1. 911 operator was actually friendly (ist time ever) and sent out an officer. Problem was cleared up, yay me!

    Stopped in a McDs ladie’s room because kiddo had to go. Won’t describe what I saw in there but lets just say that Armageddon is too lenient a punishment.

    about 1hr on the road.

  55. nj escapee says:

    our public access mls here in the conch republic has advanced far beyond 201, 908, 732. we have drop down menus available for short sales and foreclosures. welcome to the new real estate marketplace!!

  56. renter says:

    Isn’t that the craziest place for a car wash on 18/1? I’m surprised there isn’t an accident there every day.

  57. Barbara says:

    58 renter.
    They have to be politically connected thats a death trap

  58. This is just sad; Mondo Kim’s going out o’ business.
    Probably not directly related to the recession so much as “bitorrent beats paying for stuff”. It will be missed though and was the kind of place that made NYC NYC.

  59. lostinny says:

    60 Tosh
    How I loved that place years ago. Wow. I am sad now.

  60. #61 – It was a very cool place. I bought a copy of Tetsuo: The Iron Man when I was in about 8 months ago.
    It wouldn’t be too bad if a similar place replaced it. But they’re not, or at least haven’t been.
    All the kind of cool, weird, off-beat, only in NYC stores that have disappeared over the past 8-10 years have been replaced by banks and Starbucks. All that’s left in Manhaattan is the same crap you can find in any mall.
    Hopefully, the economic shake-up will allow the odd-balls back.
    Bring back places like the Magickal Childe, Mondo Kim’s and Butterfly’s. Downtown is just not downtown without them.
    I apologize for the rant, but I’m feeling old and cranky.

  61. lostinny says:

    Is Love Saves The Day still there? I’m in the city so infrequently I don’t know anymore. I was not a fan of Magikal Childe. However, Enchantments is still there. Speaking of which, (no pun) I should make a visit there next time I get mah hair did. Every time I’m down there, I feel like I don’t even know where I am. It has been yupified beyond belief. I agree about the mall like feel. It’s really just not the same.

  62. yikes says:

    living in –

    Since I’m not from PA, i have no issues with “Pennsytucky” or comments like that. On that front though, I have noticed NJ folks are more territorial than any I have ever met.

    Took my first job in NJ right out of college and i had asked a couple of the young guys about going into the city to party.

    They looked at me like i had three heads. “City sucks! It’s filthy. It’s a cesspool. It smells.”

    So i went to Hoboken with them. At the three bars, it was like a 7:1 guy to girl ratio and that was my last visit to the hoboken bar scene. this was like 8 years ago.

    i never understood their dislike for NYC.

  63. Is Love Saves The Day still there?
    That’s a good question… I’m pretty sure I remember it being open about a year ago, but I could be wrong… Ahh, per google it looks like it’s closing.

    I was not a fan of Magikal Childe
    Not everyone was. The store’s people and vibe turned some off. But if you were a properly disaffected youth in the 80’s it was a must stop shop.
    They also had a very friendly store cat, which is always a plus in my book.

  64. Barbara says:

    62. imo manhattan has been culturally dead for at least 10 years. Its like an outdoor Shorthills Mall now.

  65. #66 – That’s about right. If I were going to pick one event as the start point it would be the arrival of Rudy (I’m not stating a causation just a correlation). The past 6 or 7 years things really accelerated though.

  66. Barbara says:

    tosh
    I agree
    Rudy was a mixed bag for Manhattan. I give him a lot of credit for making it a livable city again but it came at a high price (no pun).

  67. grim says:

    From MarketWatch:

    Freddie Mac to ask Treasury for billions in additional funds

    The Federal Housing Finance Agency, Freddie Mac’s conservator, will ask the Treasury Department for additional funds of up to $35 billion from the Senior Preferred Stock Purchase Agreement, the mortgage giant said in a regulatory filing Friday. Based on a preliminary evaluation of its fourth-quarter operations, Freddie Mac’s management believes that it will need $30 billion to $35 billion to offset the impact of operating losses as well as other items that could affect the company’s net worth. Freddie Mac has already drawn $13.8 billion under the $100 billion agreement.

  68. yikes says:

    anyone see CBS news tonight?

    depressing little report on a guy who lost his financial job on WS (standard and poor).

    he’s applied for tons of jobs and only gotten like 6 interviews. IN NINE MONTHS.

    wife had to go back and get a job in nursing or something.

    my wife and i looked at each other – let’s save more than 6 months living expenses. our goal will be a year.

  69. yikes says:

    gee whiz, guys, that kids discussion earlier today was a bit disturbing. we dont have kids yet, but as a guy who grew up playing sports, i sure as hell want my kids to play sports and be active and make friends.

    and i’d like to get involved in coaching them if time permits.

  70. yikes says:

    wearing my naive hat:

    Clotpoll says:
    January 23, 2009 at 2:54 pm

    What no one seems to understand is that they actually WANT inflation. Coming on the heels of what’s about to pass, it will wipe out the middle class forever and sheeplize the entire population.

    what is the gain of wiping out the middle class? having more people who don’t pay taxes?

  71. grim says:

    From HousingWire:

    Cram-Downs Will Drive MBS Downgrades, Analysts Say

    Key industry analysts have been raising a red flag in the past few weeks regarding the possible impact of a plan that would allow bankruptcy judges to modify the terms of mortgages during debt restructuring, suggesting that allowing so-called cramdowns to take place will likely lead to further significant write-downs in an already battered secondary mortgage market — leaving banks with even larger-than-expected holes on their balance sheets.

    Analysts at Bank of America, while suggesting on Jan. 13 that such provisions would likely lead to a spike in bankruptcy filings, also said that aspects of the proposed bankrupcy law would serve to limit potential investor losses. In particular, the legislation as proposed establishes a floor on how much debt could be crammed down by a judge, while the fact that all assets must be disclosed to the court in filing for bankruptcy would prevent borrowers from going BK purely to obtain a lower payment.

    Nonetheless, many analysts remain concerned. Bloomberg’s Jody Shenn noted in a Jan. 12 story that analysts at Keefe, Bruyette and Woods projected that the cram-down legislation would speed losses to most MBS investors, driving downgrades anew and placing banks under renewed capital pressure.

    There are other issues to be considered here, of course, that are more nuanced. Among them is the role of private mortgage insurers, who generally will not cover losses tied to a borrower bankruptcy.

  72. grim says:

    Who got TARPed?

    http://www.treas.gov/press/releases/reports/012209cpptablets01.pdf

    $193,791,036,000.00 – Capital Purchase Program
    $40,000,000,000.00 – AIG
    $20,784,024,131.00 – Auto Industry
    $40,000,000,000.00 – BOA and Citi
    $5,000,000,000.00 – Some more for Citi
    ——————
    $299,575,060,131.00

  73. yikes says:

    kettle1 says:
    January 23, 2009 at 2:57 pm

    the problem/challenge is that regardless of how you do it, the rapid removal of large amounts of money from the economy can cause a very sudden drop in economic activity.

    I have heard that targeted interest rate increases would be one menthod. I dont see how that would remove money fast enough. As its possible that they may need to pull money out almost as fast as they have put it in.

    you’re telling me that all that is separating us from hyper-inflation is a logical method on how to remove all the money they have pumped in the system?

    THAT’S IT? i have little or no faith in government … but i find it hard to believe that this GREAT (lol!) team obama has put together can’t answer this.

    oops, then again, we’re talking about the government …

  74. grim says:

    You read that right…

    One hundred ninety three billion, seven hundred ninety one million, thirty six thousand dollars.

    Sorry, forgot a hundred billion.

    That is:

    Two hundred ninety nine billion, five hundred seventy five million, sixty thousand, one hundred thirty one dollars.

    My math might be wrong, who knows. Does it really even matter?

  75. grim says:

    And this doesn’t include the FDIC backed debt issued by GE, BOA, Citi, and JP.

    That comes to $76 billion.

  76. lostinny says:

    I was not a fan of Magikal Childe
    Not everyone was. The store’s people and vibe turned some off. But if you were a properly disaffected youth in the 80’s it was a must stop shop.
    They also had a very friendly store cat, which is always a plus in my book.

    If I remember correctly, several of the staff were Satanists. As a matter of fact, one of them lived across the hall from my friend in college. It was not the best atmosphere to be around to say the least.

  77. grim says:

    And then we’ve got the costs associated with nationalizing Fannie and Freddie. And of course, Indymac. That has got to be another $150 billion there.

  78. kettle1 says:

    Yikes

    who ever solves that problem successfully would be worthy of being listed as one of the preeminent financial minds in history.

    The rapid withdrawal of cash from the market tends to have a nasty little side effect of crashing the market.

    think of that cash as the blood in your circulatory system. If you suddenly remove a substantial amount of blood from your body, your blood pressure will rapidly drop, you enter shock and risk death.

    The same thing can happen to the economy

    the task is to remove blood fast enough to keep your rapidly accelerating heart from exploding but without causing a sudden drop in blood pressure.

    even simpler: the task is to substantially reduce the amount of gasoline being fed to an engine without causing it to slow down or stall, all while the engine is running

  79. bairen says:

    [Excess] inventory is the biggest problem in housing these days

    That’s odd. I thought excessive prices and arm resets were the biggest problems.

    But what do I know.

  80. kettle1 says:

    Yikes,

    by removing a middle class you have an entire society of cheap hourly workers who have little real influence and a few wealthy elite who have all the influence. Think China. Such a society makes the wealthy, the truly wealthy, i.e 100’s of millions+ even more powerful as well as the political leaders. Such a society concentrates the control and power at the top.
    An egalitarian society does the opposite and concentrates power at the lower levels of society

  81. kettle1 says:

    yikes,

    the hard part is to remove the middle class without getting strung up by the rioting hordes along the way.

    thats where the american entertainment machine comes i n. a functionally lobotomized population is much easier to control and less likely to rise up as long as the have oprah and american idol.

  82. kettle1 says:

    Grim 75

    AIG has actually been given about 150 billion now if you include all of the government money it has

  83. grim says:

    Can someone please provide me a history of mls #: 2838258. Thank you.

    Sent you the listing details, no in-depth history to provide.

    Worth noting that they’ve received a Lis Pendens on their mortgage..

    LisPenden
    $301,000
    4/3/2008
    US BANK NA 2007-A2

    I believe there may be a Sheriff Sale scheduled on the Bergen County Sheriff’s website:

    http://www.bcsd.us/sheriff_sale.aspx#sales

    The listing is:

    Sheriff Number: 763243
    Scheduled sale date: 3/27/09
    Address: 761 PARK AVENUE OAKLAND
    Judgement Amount: 317635.82

    I think the listing is incorrect, there is no 761 Park Avenue in Oakland, there is one however, in Oradell.

    The judgement amount looks correct based on the Lis Pendens of $301,000. The additional $16k may be missed payments since the 4/3 Lis Pendens and perhaps additional fees.

  84. grim says:

    Looks like the current owners got hooked on home equity.

    Started small with a $50,000 loan from Bank One in December of 2003. Refied that with a $135k with Centex Home Equity in September of 2005. Not to be outdone, they went for the whopper in December 2006, with a $301k loan from Freedom Mortgage.

    Freedom subsequently sold the loan to someone who pooled it into a trust, US BANK NA 2007-A2 (U.S. Bank NA is the servicer/trustee), which is who filed the lis pendens on 4/3/2008 (and likely the Sheriff Sale as well).

  85. Clotpoll says:

    tosh (67)-

    Best things that can happen to Manhattan:

    1. Bring back Robin Byrd and Al Goldstein on Public Access.

    2. Allow Times Square to go to hell. Dealers, pimps and all.

    3. Arm cabdrivers.

    4. Allow everything south of Houston to become creepy and weird again.

    5. Funnel open-air drug dealers back into Alphabet City.

    6. Burn down South St. Seaport (before GGP does it).

    7. Encourage the Mafia to re-enter the city.

    8. Allow tagging on the subways.

  86. Clotpoll says:

    yikes (72)-

    Don’t worry. That conversation was way bent…and not at all indicative of reality.

    I’ve been coaching for several years now, and I’ve never had a problem.

  87. Clotpoll says:

    yikes (73)-

    More people who are totally in debt, too busy to learn, too tired to care…and very easy to control.

  88. Clotpoll says:

    PTB’s idea of the ideal middle class:

    – hardworking
    – indebted
    – trapped in one place
    – tired
    – stupid
    – compliant

  89. james says:

    Guns and ammo. It is coming.

  90. Clotpoll says:

    vodka (85)-

    You and I both know that AIG, alone, will suck up more than a trill before it’s all over.

    And, of course, it won’t ever be over…as AIG will live longer than syphilis.

  91. james says:

    “This country has nothing to fear from the crooked man who fails. We put him in jail. It is the crooked man who succeeds who is a threat to this country.”
    Memphis, TN, October 25, 1905

  92. kettle1 says:

    clot 93

    sounds like a personal problem, might want to talk to SL and get some antibiotics before it eats your brain……

    ;)

    otherwise, yes…. does that mean we all get free Ins from AIG????

  93. james says:

    John Thain should have known the rules.

  94. james says:

    The F-ing anger is eating me up. What is it going to take before we wake the F up!

  95. Barbara says:

    James,
    I wish the media could somehow ascertain the weekly cocaine budgets of these CEOS.
    I’ve had personal experience with cokeheads and these guys fit the bill to a T. Also, watch the documentary from a few yrs back (after Enron scandal) called ‘The Corporation.’ It pretty much makes clear that the corporate world is sociopathic by nature and therefore only sociopaths can make it up the ranks.

  96. alia says:

    you know, i keep thinking about the little rubrics Cindy posted a few days ago from Ruby Payne’s book.

    one of the distinctions was:

    if you’re poor you value relationships
    if you’re middle class you value hard work and individual accomplishment
    if you’re upper class you value your network of associates (i paraphrase rampantly)

    i keep thinking that the poor and the rich have much more in common (since the “extended network of associates” is just “relationships” writ more extensively)

    while the rich and the poor are working on relationships and networking, the middle class thinks the best thing it can do is work as individuals.

    as long as you (whoever you is) stigmatize unions as working class and networking as upper class snobbery, the middle class won’t get anything.

    we need some middle class solidarity.

    just sayin’

    (ps: and this reminds me of the whole renting thing. who rents? the poor–and the wealthy.)

    see? i brought it back to real estate! yea, me!

  97. grim says:

    Don’t post full text, link and snippet will do.

    Makes my thumb hurt from scrolling the blackberry wheel.

  98. Barbara says:

    88.
    Clot, you for got the squeegee guys

  99. kettle1 says:

    James,

    if you look at history (minored in it in college, bit of a history nut) revolutions generally need 2 things, peaceful or otherwise. A disgruntled population and a disaffected intelligentsia.

    for example, the american revolution wouldnt have happened without the likes of Adams, franklin, and thier contemporaries. they were the brainis of the beast

    until people get pissed enough that TV no longer subdues them nothing is going to happen.

  100. Barbara says:

    kettle, maybe when they have to cancel the cable and internet in order to feed the family, then we will have a revolution.

  101. grim says:

    The F-ing anger is eating me up. What is it going to take before we wake the F up!

    I bet you that if a Wall Street bank pulled a credit line to Nascar that shut them down, you wouldn’t see sit-ins, you’d see riots.

  102. grim says:

    #103 – I think we’re on the same page.

  103. Barbara says:

    105. Grim
    I’m canceling HBO this month, I’m getting there ;)

  104. kettle1 says:

    alia,

    sweet so that means i am either poor or wealthy…… wait………hmmmmmmmm….. :( …………… AAHHHHH i am wealthy and super smart, as per the stats from grims website, i have a post rad degree make 100K+ and have 1 or less child, and i am asain or caucasian

  105. kettle1 says:

    Barb 103,

    nope, why do you think they have so many HD channel for free “over-the-air” now with just a DTV receiver box that is subsidized by the federal government. You have to keep the newly poor distracted (ooohhhhhh shiney!) or they might get ideas.

    Not a joke

  106. Barbara says:

    108.
    point taken, but isnt it all network only? Being limited to network only viewing is enough to send me out into the streets with something hurty.

  107. Harry P Ness says:

    Can’t wait till the ghost house(s) hit the market & drive prices down further. Waiting for the day when banks want to unload a house at any price. I don’t even waste my time with agents or the gmls. Deals are coming – be patient.

  108. Barbara says:

    110. except that the house you buy next to the other ghost house will have squaters and crackheads that you have to deal with.
    Everything comes at a price.

  109. Clotpoll says:

    vodka (102)-

    If you wipe out the intelligentsia entirely, you can’t ever have a disaffected intelligentsia.

    That’s Job #1 for the PTB right now.

  110. Clotpoll says:

    Barb (111)-

    Looks like a newb.

    They stick out here like a sore thumb now. Know the price of everything and the value of nothing.

  111. Clotpoll says:

    Claim your stake in S@d@m and G@morrah Heights now!

  112. kettle1 says:

    barb,

    dont know, not to sound cheesy, but i dont really watch TV. i have an old 19 inch from college that gets used once or twice a month otherwise collects dust in the corner

    although this would make a nice PC monitor….

    http://tinyurl.com/cd2ula

    for work of course

  113. Barbara says:

    113. Clot
    This happened to my yrs ago in Asbury Park. So many bargins, so many grand houses, so many crackheads. I’ve made some gutsy home purchases that have worked out but I walked on Asbury. Crooked deals and no end in sight crime wise. Every summer I take a drive through just to confirm that I made the right decision, no regrets so far.

  114. Barbara says:

    my = me

  115. kettle1 says:

    clot barb,

    Harry has a point. The “neighbor” problem is as simple as a can of gas and a match.

  116. Barbara says:

    kettle, might as well move into Camden, that’s been the strategy there for years. Knock down exsisting ghost houses, leave the rubble. Looks like downtown Beirut now.

  117. kettle1 says:

    clot 112,

    then that wpuld suggest that blogs such as this one probably have their own little watch list at the NSA/FBI/CIA/DHS…..

  118. grim says:

    Although I know a few who put up with the drugs and crime in Manhattan and did pretty well.

  119. grim says:

    Hmm. Don’t mistake that as a recommendation of Asbury or Camden.

  120. danzud says:

    Sorry to bust your bubble about NASCAR grim but only the teams have credit lines and not NASCAR Inc. Besides, NASCAR has huge TV contracts for a couple more years anyhow.

  121. kettle1 says:

    Primeminister of Iceland runs for the hills. note that the parliment building has been under siege by protestors for several days now…..

    The country’s central bank estimates international investors own up to IKr400bn ($3.2bn, €2.5bn) of Icelandic bonds and has warned it should be prepared for a “massive currency outflow” once the krona is fully refloated.

    (code for hyperinflation?)

    from FT

    Iceland’s embattled prime minister resigned on Friday citing medical reasons and called an early election for May, a move that could prompt a dramatic shift to the left after a 20-year experiment in free market economics.

    Geir Haarde said a medical examination had revealed he had a malignant tumour of the oesophagus. He will have surgery abroad at the end of January or early February. Elections had been scheduled for 2011.

    http://www.ft.com/cms/s/0/a0158f64-e95b-11dd-9535-0000779fd2ac,dwp_uuid=70662e7c-3027-11da-ba9f-00000e2511c8.html

  122. Cindy says:

    http://www.sacbee.com/capitolandcalifornia/story/1563773.html

    Make @ 46
    “Did anyone hear anything about California?”

    “Democratic State controller John Chiag announced Wednesday that he will refuse to carry out Gov. Arnold Schwarzenegger’s order to cut state worker pay in February unless a judge demands that he do so.

    Labor unions have sued Schwarzenegger and Chiag in an attempt to block the governor’s furlough plan. Sacramento Superior Court Judge Patrick Marletto is scheduled to hear the case Jan.29, and attorneys hope the judge will resolve whether the governor can legally implement the furloughs.”

    Basically, Chiang is saying only the legislature has authority over worker pay and others are arguing that the governor called a state of emergency so he has the right to call for furloughs.

    I guess we have to wait until 1/29. Or…..are they really just piddling around hoping for TARP funds to come through…

  123. Cindy says:

    Alia (99) Don’t buy the book. I felt it was biased – almost classcist. I know it is meant to help me understand the economically needy students I work with, but you cannot compartmentalize people…it has an interesting viewpoint – but not a recommended buy.

  124. grim says:

    Friday!

  125. grim says:

    From the FDIC:

    http://www.fdic.gov/news/news/press/2009/pr09007.html

    First California Bank, Westlake Village, CA, Acquires the Insured Deposits of 1st Centennial Bank, Redlands, CA

    1st Centennial Bank, Redlands, California, was closed today by the California Department of Financial Institutions, which then appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First California Bank, Westlake Village, California, to assume the insured deposits of 1st Centennial.

    As of January 9, 2009, 1st Centennial had total assets of $803.3 million and total deposits of $676.9 million, of which there were approximately $12.8 million that exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.

    The cost to the FDIC’s Deposit Insurance Fund is estimated to be $227 million. 1st Centennial is the third bank to fail this year, and the first in California since Downey Savings and Loan, F.A., Newport Beach, was closed on November 21, 2008

  126. DISSIDENT HEHEHE says:

    “then that wpuld suggest that blogs such as this one probably have their own little watch list at the NSA/FBI/CIA/DHS…..”

    Oh I don’t doubt that in the least. They’re probably just waiting for the right moment to snatch all of us and send us to some secret CIA prison for reprogramming. Forced to watch reality tv 24 hours a day. Fed by IV’s of high fructose corn syrup. I think Clot is going to be put in a padded cell and have to listen to God Bless The USA until his mind snaps.

  127. Cindy says:

    http://www.msnbc.msn.com/id/28749159/

    We have been hit pretty hard here with the samonella outbreak (60 cases and counting.) They added more products to the list today. Kids in my room bring those Austin crackers to school – lots of Wal Mart products. This should have the connection to the web site that lists all the products.

  128. Clotpoll says:

    Cindy (125)-

    Shaping up to be quite an ugly game of chicken.

    If this is what CA does, I can’t imagine what it will be like when NJ is facing the same situation.

    Which we will.

  129. Clotpoll says:

    HE (129)-

    That reference to that hideous song has moved you higher on my action list. ;)

  130. Clotpoll says:

    I’ve noticed that Knob Creek tastes better in a down market.

  131. alia says:

    cindy,
    that’s a shame. another teacher friend this morning said he had read a different book by her and was disappointed by it… so that’s two negative recs. oh well.

  132. Hard Place says:

    Co-worker who goes out running in the early AM told me he saw a Cadillac Escalade delivering the town paper this morning.

    I can’t believe I just read that. I delivered papers when I was 12 using pedal power.

  133. BC Bob says:

    “Barbara says:
    January 23, 2009 at 9:02 pm
    110. except that the house you buy next to the other ghost house will have squaters and crackheads that you have to deal with.
    Everything comes at a price.”

    http://www.telegraph.co.uk/news/newstopics/howaboutthat/4315866/New-Age-squatters-take-over-30m-Park-Lane-mansions-with-views-of-Hyde-Park.html

  134. Cindy says:

    http://www.accessdata.fda.gov/scripts/peanutbutterrecall/index.cfm

    Here’s a better site RE: peanut butter recalls…You can check by product name.

  135. Cindy says:

    (132) Clot

    “Shaping up to be quite an ugly game of chicken.”

    What a mess. The Reps said “no taxes” but I don’t think they can hold out any longer….

  136. bairen says:

    #137 BC Bob,

    How will the RE agents spin that one? Eclectic/Creative group home brings another dimension to the local charms?

  137. Cindy says:

    (134) Clot

    Having a glass of S/K/N – Screw Kappa Napa – Sauvignon Blanc

    Stays in the fridge – has a …screw top.

  138. BC Bob says:

    “Goldman Sachs stars lose their luster amid crisis”

    “John Stein, president and co-founder of investment firm FSI Group in Cincinnati perhaps says it best: “They are not cut from a different cloth than anyone else on Wall Street.”

    “The Goldman feet of clay is the way I look at it,” said Nancy Bush, an analyst at NAB Research, referring to the one-time “masters of the universe.”

    http://www.reuters.com/article/ousiv/idUSTRE50N02W20090124

  139. BC Bob says:

    Bairen [140],

    The Duke of Westminster welcomes diversity. The guy in the pic looks like Clot’s rocket launcher technician.

  140. Cindy says:

    http://online.wsj.com/article/SB123258284337504295.html

    Did you folks see this – Barney Frank making sure OneUnited in Boston got TARP funds? You’d think there’d be a big stink about it.

  141. Cindy says:

    (BC) 143

    “The guy in the pic liiks like Clot’s rocket launcher technician.”

    BC – The first question Clot asked me here over a year ago is if I knew how to use a rocket launcher.

  142. Clotpoll says:

    BC (142)-

    Just more swimmers exposed as naked as the tide rolls out.

    Funny. I’d still put Cramer near the top of the GS dud list. He has the ear of millions of people every day. To me, that makes him almost as dangerous as Cash & Carry.

  143. Clotpoll says:

    Cindy (144)-

    Most members of the House think Barney Frank is both intelligent and knowledgeable about economics.

    Hard to raise a stink in that pack of zombies.

  144. Clotpoll says:

    BC (143)-

    Righteous hat that dude’s got.

  145. Cindy says:

    Clot – I just looked up Knob Creek (thinking it was a wine) and it is a fine bourbon I see.

    The site I hit said “temporarily out of stock.”

    Small batches – you bought them out?

  146. Clotpoll says:

    You don’t think those squatters smoke marijuana cigarettes, do you?

  147. Cindy says:

    (150) Ya think?

  148. Clotpoll says:

    Cindy (149)-

    “Small batches – you bought them out?”

    Only in my dreams.

  149. Clotpoll says:

    Uh oh. Just found out that Pelosi’s hubby is in commercial RE.

  150. Clotpoll says:

    Hoo boy. And things are just now getting tough in Spain.

    Please, refrain from Generalissimo Franco jokes:

    (goal.com, 1-18-09)- “Real Madrid will face a fine after a small group of fans were reported by the referee for making f@scist gestures and for f@scist chanting during the club’s victory against Osasuna on Sunday.

    Alfonso Pérez Burrull included the incidents in his report after the game as he stated that some supporters behind one goal were waving flags with “extremist or radical symbolism”.

    The matchday official wrote that there were “chants making reference to the gas chamber, death to Osasuna and f@scists forever” and said that there were also gestures and signs “of a f@scist nature”.

    Madrid have had trouble in the past with a group of their radical fans called the ‘Ultra Sur’ and were fined €9,780 after television showed some of the crowd barracking black players and making Nazi salutes during the visit of Bayern Leverkusen in the Champions League in 2004.

    Santiago Bernabéu was the setting when the England national football team faced a barrage of racist chanting and monkey noises after an incident involving Luis Aragonés, also in 2004.”

  151. Barbara says:

    137 BCBob
    wow, reminds me of Rude Boy. White Riot, a Riot Of My Own. I wonder when the squaters will be coming back to DUMBO. Maybe they already have.

  152. All Hype says:

    Clot (154):

    The unemployment for younger workers in Spain is quite high. Will be interesting to watch this year.

  153. kettle1 says:

    hype ,

    unemployment for young sppanish workers is about 29%.

    cant find the link right now, will look for it.

    overall unemployment is approaching 20%. i dont know how cooked their numbers are though

  154. kettle1 says:

    Spain Facing ‘Exceptional’ Hardship

    Youth unemployment is a particular worry in the country, the member state with the highest rates of young jobless, already on 29.4 percent. Spanish youth describe themselves as “mileuristas” – the Spanish for the low figure of €1,000 they earn every month – echoing militant Greek youth which calls itself “the €600 generation.”

    http://www.businessweek.com/globalbiz/content/jan2009/gb20090120_590280.htm?chan=globalbiz_europe+index+page_top+stories

  155. chicagofinance says:

    WSJ
    ARTS & ENTERTAINMENT JANUARY 24, 2009 Essay

    The Hidden State of Culture

    New Jersey often brings to mind pollution and shopping malls, but it’s an epicenter of artistic talent

    New Jersey is America’s secret treasure-house of culture.

    If that strikes you as a proposition out of an absurdist play, consider a sampling of the gifted figures who have either come from Jersey or made a home there: Bruce Springsteen (N.J.’s state songbird); Frank Sinatra, Frankie Valli; Walt Whitman, William Carlos Williams, Allen Ginsberg; the painters George Inness and John Marin; the photographer Alfred Stieglitz; Stephen Crane, Philip Roth, Junot Díaz; and David Chase, creator of “The Sopranos.”

    California? Too much fantasy, too much hazardous sunlight and too much obsession with software and hard bodies. New York City? Too much reality, too little sunlight and too much obsession, period. Everywhere in between? Riches, to be sure, but no place has New Jersey’s tightly packed diversity, its quick changes from urban to country, from mountains to coast, from gritty to gorgeous.

    Of course, think “New Jersey” and cultural epicenter doesn’t immediately spring to mind. Instead, the name summons up unsparing caricature: grime, gangsters, pollution, ugly highways, Byzantine shopping malls, Saharan parking lots and a level of culture somewhere between troglodyte and troll.

    Even the nickname “Garden State” seems to be something like a defensive reaction meant to fend off ridicule. In 1954, when the state legislature passed a bill adding the sobriquet to license plates, garbage disposal had long been a crisis in Jersey. Not only did the tiny state lack sufficient space for discarding its waste, but it had become a dumping-ground for garbage from other states. Gov. Robert Meyner vetoed the bill, writing, “I do not believe that the average citizen of New Jersey regards his state as more peculiarly identifiable with gardening for farming than any of its other industries or occupations.” The state legislature promptly overrode his veto, and the rest is license-plate history.

    New Jersey’s small size has a lot to do with both its much-inflated deficiencies and its virtues. A lot is packed into limited territory. Urban squalor is squeezed up against dairy farms; picturesque villages right out of a New England landscape are a sneeze away from sulfurous factories and malodorous highways. For a lot of people, caricature of the state’s deficiencies is an efficient way to reduce its multifaceted nature to a clear meaning.

    The jumble of contrasts is, on the contrary, the source of Jersey’s remarkable harvest of talent. It drives certain people to either build a unified artistic sensibility out of the divisions around them, or to create art unhindered by a narrow identity.

    At the same time, you can refine Jersey’s countless dimensions into two polarized elements: industrial and pastoral. The struggle for dominance between them is at the heart of the American drama — the Civil War, for example, or the urban/agrarian friction that has shaped the schism between liberal and conservative to this day. It could be that Jersey is so representative of America’s original strife that dismissing the state as a crude and unlovely place is a good way to sweep certain national anxieties under the rug.

    But New Jersey’s fractured personality is the very reason for its (hidden) cultural preeminence. After all, no less than one-fifth of this heavily industrialized and densely populated state is taken up by the Pine Barrens, a gigantic primeval forest of pine and oak buried like the unconscious in southern Jersey. Even in Newark’s black ghetto, the young writer Leroi Jones (Amiri Baraka) could imagine that “the invisible mountains of New Jersey linger where I was born.” Paul Robeson — Phi Beta Kappa scholar, athlete, law-school graduate, actor, singer — might not have thrived in a less faceted place.

    Then, too, there is the particular way Jersey is positioned next to New York. Unlike Long Island and Connecticut, from where you have to drive through New York City’s boroughs or Westchester to get to Manhattan, you go from Jersey straight into the glittering towers of Gotham, which confront you dramatically no matter what approach you take from the Garden State. For New Jerseyans, Gotham exists as ever-present aspiration, temptation and either haunting or competitive contrast. That could be why you find Queen Latifah’s wild, river-spanning energy in Philip Roth’s antic intensity and vice versa. And perhaps why Dionne Warwick sings “Promises, Promises” with such robust pathos. “Things that I promised myself fell apart…”

    So why all the antipathy toward a place that is also the first colony to ratify the Bill of Rights, that contains numerous beautiful towns and villages, that boasts an ocean, mountains and a vast forest among its natural wonders, and that has more horses per square mile than any other state?

    The glee that New Yorkers take in belittling their neighbors to the west is especially energetic. There are two reasons for this. First, people living in New York City are convinced that without New Jersey blocking their view, they would be able to see the rest of the country. Second, New Jerseyan Aaron Burr killed New Yorker Alexander Hamilton in a duel, the tragic consequence of negative remarks that Hamilton made behind Burr’s back at a dinner party (probably something like: “Burr, that moron from New Jersey”). That Hamilton was gunned down on a Weehawken, N.J., cliff overlooking Manhattan’s spectacular streets — and not, say, on Fifth Avenue — only added insult to injury. New Yorkers have a long memory.

    But these local grievances do not explain why New Jersey’s worth eludes the rest of the country. Angus Kress Gillespie, a professor of American Studies at Rutgers University, accounts for the national scorn in two words: “The Turnpike.”

    The New Jersey Turnpike, that is, a 148-mile, 4- to 12-lane monstrosity that snakes from the state’s southeast corner north to the George Washington Bridge through some of the meanest terrain in the civilized world: macadam deserts; belching smokestacks that make Gary, Ind., look like a Scottish pasture; trucks roaring on every side of you as though you were strapped to the bottom of a Boeing 737 during takeoff; strip malls that go on and on like the laughter of a lunatic.

    Because it is the very essence of America’s ugly industrialized and commercialized underside, the New Jersey Turnpike has impressed itself on the national imagination more than any other element of the Garden State. Bruce Springsteen’s genius has been precisely to take that negative image and infuse it with positive energy.

    “Springsteen has made the Turnpike’s blighted landscape a source of almost cinematic drama,” said Jim Cullen, the author of “Born in the USA: Bruce Springsteen and the American Tradition.” “He transformed it into the vivid setting of riveting journeys that finally matter more than the city glimmering across the Hudson.”

    Springsteen’s isn’t the only artistic vision that has drawn a universal meaning out of the Garden State’s more sordid particulars. Mr. Chase, the genius behind “The Sopranos,” chose Essex County as the setting for his extraordinary tale of lust, greed, vanity and pride among a group of small-time gangsters, thus bestowing on the third state the mythic timelessness that Thomas Hardy once conferred upon the English heath.

    Mr. Chase himself was born in North Caldwell, N.J., in the very environs where Tony Soprano and his colleagues live and do business. As a child during the late ’40s and early ’50s, he made regular car trips with his family to visit his grandmother in Westchester. To his young eyes, New Jersey’s half industrial, half naturally wild landscape was “a magical vision of a huge mystery,” he said. Gazing out at it, he was “completely transfixed.”

    The mystery was, specifically, the Meadowlands, a 28-square-mile swath of marshland in northeastern New Jersey, a stone’s throw from Manhattan. At the time when Mr. Chase ogled it from the backseat of his family’s car, the teeming swamp had not yet become the giant landfill it is today. Industrialized pockets vied for space with rivers, rushes and wildlife. Even as a teenager, taking the bus into the city to film school from his parents’ home in North Caldwell, Mr. Chase remembers looking out over the “rivers like glass, the miles after miles of reeds in the water, and the factories” and thinking, “this is America, strong and big. The brute beauty of the factories, the winking airports, made me feel alive.”

    Call this sense of enchantment an outgrowth of the “Parkway,” as opposed to the “Turnpike,” dimension of the state.

    The Garden State Parkway, that is, a 173-mile meandering highway stretching from the southernmost tip of New Jersey at its coastline to its northern border with New York state — a winding road with capacious lanes; a broad, verdant, tree-filled island running down (much of) its middle; wooded boundaries; limited entrances to prevent congestion; bans on trucks, billboards and any kind of commerce along its way; gentle curves designed to keep drivers from being lulled to sleep; and — naturally, in the home state of Sinatra and Springsteen — “singing shoulders” that make the wheels rumble if a drowsy motorist starts to drift from the road.

    The Garden State Parkway is something like the fulfillment of the modern dream of harmony between nature and technology — where rivers like glass meet winking airports. If the car is one big part of America’s soul — Springsteen: “The girls comb their hair in rearview mirrors/And the boys try to look so hard” — then the Turnpike and the Parkway reflect two basic aspects of American existence: our unflinching approach to the practical facts of life, and our irrepressible romantic tendency to try to transform them.

    In his epic poem, “Paterson,” William Carlos Williams spoke for the factual Turnpike when he famously wrote: “No ideas but in things.” Williams’ fellow Patersonian and disciple, the Parkway mystic Allen Ginsberg, took the side of Parkway romanticism when he referred in his epic poem, “Howl,” to “nowhere Zen New Jersey” (“nowhere” being a compliment for Ginsberg). No wonder Philip Roth called his memoir of growing up in Newark “The Facts” — and then proceeded to undermine them.

    Most of the greatest Jersey cultural figures combine Turnpike and Parkway characteristics, as if New Jersey embodied those two aspects of American life long before the construction of its asymmetrical arteries.

    George Inness, America’s first great landscape painter, made pictures that were both more immediate and real than those of his predecessors, and at the same time more personal and introspective. Alfred Stieglitz, born in Hoboken, pushed realism in photography to new limits, even as he was perfecting a hazy, impressionistic style. In his novel “The Red Badge of Courage,” Stephen Crane — Newark, Port Jervis, Asbury Park — pulled off the near-impossible feat of using dreamlike language to make war shockingly actual.

    When Marlon Brando — whose breakthrough film, “On the Waterfront,” took place in Hoboken — started to run out of steam in the ’60s, Neptune, N.J.-born Jack Nicholson came to the rescue of American film. The young Mr. Nicholson was tenaciously Turnpike in his abrasive explosions, and profoundly Parkway in his dreamy outcastness. From there, realism in American acting had two places to go: Parkway calmness and integrity (Meryl Streep, Bernards High, class of 1967); or Turnpike disorientation and bizarreness (Tom Cruise, Glen Ridge High, class of 1980).

    “Integrity,” in fact, is a word you hear a lot when people talk about Springsteen’s music or Mr. Chase’s artistic vision. Maybe it’s because New Jersey politics is known to have a certain Turnpike quality that an idealistic, Parkway conception of integrity looms large in New Jersey’s collective imagination.

    Among other things, integrity in Jersey terms means not judging by appearances. Frankie Valli: “Ahh, ah-ah-ah-ahh (Rag doll, ooh)/I love you just the way you are.” Springsteen: “You ain’t a beauty, but hey you’re alright/Oh and that’s alright with me.”

    No wonder Tony Soprano can’t stop thinking that redemption is right around the corner, though his temperament keeps him right where he is, stuck in his own nature.

    Seeking something like a unifying vision of New Jersey, I asked Mr. Cullen what he thought Springsteen, the Turnpike alchemist, might ask Tony Soprano, the Turnpike product who is also haunted by ducks, bears and other forms of Parkway nature. “I understand you,” Mr. Cullen said, “I sympathize with you, I kinda even like you. But your fatal embrace of your sickness is killing what you love.”

    And what question does Mr. Chase imagine that his creation — sprung partly from his boyhood desire to plumb the mystery hidden in the lights and rushes of the Meadowlands — might pose to the state’s epic warbler, if Tony were to meet Bruce in some warp of space and time? “He’d ask him for concert tickets,” Mr. Chase said.

  156. Pat says:

    That was weird.

    It made me write a poem about a bunch of Jersey crush valor losers.

  157. Sean says:

    Anyone been in touch with 3b?

  158. chicagofinance says:

    lost: where are you?

    Depeche Mode Simpson characters!
    http://i238.photobucket.com/albums/ff186/juniorhalo/depechemode.jpg

  159. lostinny says:

    163 ChiFi
    I was sleeping. Nice. I didn’t know Martin was related to Side Show Bob.

  160. kettle1 says:

    sleeping????? i am still at work :(

  161. lostinny says:

    Kettle
    I’m afraid to ask what you’re doing there.

  162. kettle1 says:

    working……

  163. kettle1 says:

    had to shut down the buildings boiler to do certain testing. so we had to do it over night and am now doing the data entry to make sure we passed.

  164. kettle1 says:

    did prep work for the testing during regular hours yesterday and then bean the fairly involved testing process after 1st shift left at 4pm.

  165. kettle1 says:

    yea baby, rockin out to a little trance!!!! now i just need some X and will be flying high!!!!

  166. kettle1 says:

    hey SL

    did you know that a few thousand mg of vitamin c can prevent malasie after effects of X in a majority of people. it appears to somehow protect you from serotonin overload….

  167. kettle1 says:

    hmm, might need to go to sleep……

  168. lostinny says:

    Kettle,
    Yeah I think sleep would be good. BTW, I’m pretty sure I remember all the X heads drinking lots of OJ. Now I know why.

  169. kettle1 says:

    sl

    better off popping a couple of the thousand mg vitamin c capsules you buy in the store…..

  170. Cindy says:

    http://www.centralvalleybusinesstimes.com/stories/001/?ID=10955

    Well, the CA numbers are in:

    Statewide unemployment 9.3%
    Last year 5.9%

    Unemployment – Fresno County (where I live) 13.2%

  171. kettle1 says:

    morning cindy :)

  172. grim says:

    New thread!

  173. Harry P Ness says:

    (113)They stick out here like a sore thumb now. Know the price of everything and the value of nothing.

    wake up & smell the misery. Value? What value does a house bring that was purchased in 05 -07 and is now under water. Worth less, neglected, needs work & more importantly no one wants it.

  174. BC Bob says:

    “Springsteen: “You ain’t a beauty, but hey you’re alright/Oh and that’s alright with me.”

    Chi [159],

    I just lost it. Love it, thanks for the post. That was my line down the shore, DJais, at 2:00 AM. LMAO.

    My fav;

    “There’s an opera on The Turnpike”

    -Jungleland

  175. ProfitFu says:

    Read what ProfitFu has to say at ProfitFu.com. It makes more sense than ever.

  176. Bill Cash says:

    I just stopped by your blog and thought I would say hello. I like your site design. Looking forward to reading more down the road.

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