Freddie and Fannie own almost 100,000 foreclosed homes

From Inman:

Fannie, Freddie REO inventory swells

Fannie Mae and Freddie Mac boosted loan modifications by 76 percent in the last three months of 2008, but nearly doubled their inventories of real estate-owned properties over the course of the year as the companies eschewed short sales and seized properties faster than they could sell them.

During the last three months of 2008, loan modifications were approved for 23,777 loans owned or guaranteed by Fannie and Freddie, a 76 percent increase from the previous three months.

But over the course of the year, the mortgage giants repossessed about eight homes for every short sale they conducted.

Fannie and Freddie’s loan servicers agreed to 16,718 short sales in 2008, while the companies repossessed 145,183 homes, their annual reports showed.

By the end of the year, the companies were saddled with real estate-owned (REO) inventory of 92,884 homes — nearly twice the 48,123 properties on hand at the end of 2007.

Although Fannie Mae was able to sell 64,843 repossessed homes in 2008, it acquired 94,652 through foreclosure, leaving it with REO inventory of 63,538 homes at year end — an increase of 152 percent from the end of 2006.

Freddie Mac sold 35,579 homes in 2008, but repossessed 50,531. The company’s REO inventory ballooned from 14,394 homes at the beginning of the year to 29,346 homes by year end — a 334 percent increase from the end of 2006.

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367 Responses to Freddie and Fannie own almost 100,000 foreclosed homes

  1. grim says:

    From Calculated Risk:

    Housing: Two Bottoms

    But some readers are confusing a bottom in housing starts with a bottom in pricing. It doesn’t works that way!

    There will be two distinct bottoms for housing:

    1) First single-family housing starts and new home sales will bottom.

    and then followed some time later …

    2) Prices for existing homes will bottom.

    Just about every housing bust follows this pattern. The bottom in prices could be a year, or two, or more away. It is way too early to try to call the bottom in prices. House prices will almost certainly fall all year and probably next year too. Prices will continue to fall. Prices are not at the bottom.

  2. grim says:

    From the Press of Atlantic City:

    Real estate slump may help some save on property taxes

    ew Jersey homeowners pay the highest property taxes in the nation, and many will be paying more than they should this year.

    That’s because the assessed value of properties for tax purposes may be significantly higher than their current value as a result of falling home prices.

    This is especially true for municipalities where a revaluation of properties was conducted at or near the peak of the real estate bubble, according to attorney Michael Sklar, a partner with the firm Levine Staller here.

    “Atlantic City is a case in point because the reval occurred close to the top (of real estate prices),” Sklar said Tuesday. “That’s why taxpayers need to take a look at their assessments, and if they’re too high, they should really consider filing an appeal.”

    And if an appeal is warranted, they had better file it with their county board of taxation soon. Appeals must be in the hands of the county board of taxation by April 1.

  3. grim says:

    From the WSJ:

    Cracking a Valuable Homebuyer Credit

    The recently enacted economic-stimulus law contains an unusually attractive new tax break for many homebuyers — if they can only figure out how it works.

  4. Cindy says:

    http://www.doctorhousingbubble.com/

    Sorry Grim – I’m just going to answer a few comments from last night, then I’ll shut my trap.

    Revelation – Dr. Housing Bubble does not believe CA will see a bottom until 2011. We hit the moon here and then fell precipitously. The homes that were owned by speculators hit the market first. Many retrenched and have decided to stay put. Now I only see the occasional for sale sign where I live. As unemployment spreads, so do the “for sale signs.”

    I was being selfish too. I’ve learned so much about the economy from this site. I didn’t even know who Nouriel Roubini was until I read about his ideas here.

  5. DL says:

    “Just because there’s a recession doesn’t mean that people aren’t buying million-dollar homes.
    Make that a $7.678 million condo, the one on the 46th floor at the Residences at Two Liberty Place that went to settlement today for the highest price ever paid for a Philadelphia condominium, Realtors in the city agree.”

    http://www.philly.com/inquirer/home_top_left_story/20090318_Sky-high_condo__record-high_price.html

  6. DL says:

    “Housing starts surged a surprising 22.2 percent in February over January’s levels, the Commerce Department reported yesterday. Economists attributed part of the spike to bad weather in December and January that delayed construction.”

    “One should not make too much noise over the 88.6 percent jump in starts in the Northeast or the 58.5 percent jump in the Midwest,” said IHS Global Insight economist Patrick Newport. “The percentage jumps were huge because the levels have fallen so low.”

    http://www.philly.com/inquirer/business/20090318_After_a_bad_Jan___Feb__permits_up_22_.html

  7. Cindy says:

    Curmudgeon –

    “Do I get a Cindy smackdown now?”

    Smackdown – Man – Never my intent. Am I a ” dead horse beater?” Never my intent.

    Sorry to both Revelation and Curmudgeon. Yours are very valid points. I know whenever Grim has R/E news he posts it.

    Again, I come here for current news on the economy as a whole and R/E markets in general. Whatever I now know about the economy, I learned here.

    I rarely post these days. Mostly reading and searching for news on the web. If I find a good article, I share it. I wish there were more on housing but banking and the economy seems to have taken center stage for now.

  8. DL says:

    “New Jersey sued executives and directors of Lehman Bros. Holdings Inc. yesterday, alleging that misrepresentations by the now-bankrupt Investment bank resulted in losses of $118 million to the state pension system. With its lawsuit, filed in Superior Court in Mercer County, New Jersey added to a flood of litigation spawned by hundreds of billions in investment losses related to the credit crisis that has crippled the U.S. economy since 2007.”

    http://www.philly.com/inquirer/business/20090318_N_J__suing_Lehman_Bros__over_pension_losses.html

    How much can you hope to recover from a bankrupt firm?

  9. Cindy says:

    http://online.wsj.com/article/SB123730459869257121.html

    * * * * WARNING * * * * * * *

    About the economy – Current news on AIG outrage.

    “The bonuses have crystalized public anxiety over the economic downturns and frustration at the government bailouts…”

  10. grim says:

    How much can you hope to recover from a bankrupt firm?

    Zip.

    But if you can prove wrongdoing on the part of the executives, might you have a case for recovery?

  11. renter says:

    Cindy,

    This may have been posted but I like this web site for articles about housing.

    http://lawprofessors.typepad.com/land_use/

  12. Essex says:

    5. Who says the Arts don’t pay….

  13. DL says:

    Grim,
    The closer I get to buying, the more I’m convinced I’ll need a realtor who is experienced in dealing with bank owned properties. Anything you can post to shed light on a process that potentially involves multiple parties is greatly appreciated. For example, if Freddie and Fannie own the homes, what is the role of the loan servicers in negotiating a short sale?

  14. Seneca says:

    Good to see our NJ officials are working to keep us safe.

    N.J. officials propose ban on Brazilian wax

    A state proposal to ban genital waxing, known as a Brazilian wax, was prompted after two clients of a New Jersey salon were injured and hospitalized, according to a report by the Philadelphia Daily News. One client filed a lawsuit.

    New Jersey officials say that current law allows for the waxing of the face, neck, arms, legs and abdomen. Genital waxing has never been allowed, according to the report, but the legal language was unclear.

    http://www.nj.com/news/index.ssf/2009/03/nj_assembly_proposes_ban_on_pa.html

    …before you reply to this, someone on the nj.com comments section already went with “I blame Bush” so…

  15. Cindy says:

    http://www.washingtonpost.com/wp-dyn/content/article/2009/03/17/AR2009031703565.html
    Washington Post

    Grim (10) – This article points out that the only folks worth keeping around at AIG are those ” employees who are working to extricate AIG from 2 trillion worth of outstanding contracts…”

    Why do they even need to “retain” the top execs?

    Renter @ 11 – Thanks – I’ll check it out.

  16. about says:

    any tips is finding preforeclosures or foreclosures in areas like cranford, new providence, westfield, or mountainside? Should i go straight to the county clerks office? Is this a viable way of finding a house?

  17. Cindy says:

    http://www.sacbee.com/topstories/story/1708314.html

    Novice investors turn repos into rentals

    Lots of this going on. Folks who would rather have the income from a rental than reenter the stock market. They have cash – the prices have come down so much that the costs/rent income now pencil out.

  18. fat tony says:

    Just got a letter from Corzine. He is reneging on my son’s 2008-09 Bloustein Scholarship. Apparently, and for the first time, it is being awarded on a basis of need as well as academic qualifications. Hopefully his university will kick something in.

  19. Dissident HEHEHE says:

    “Sorry to both Revelation and Curmudgeon.”

    Why are you apologizing? It’s a blog. RE is part of the economy. Moreover its a part of the economy that’s directly affected by the flow of credit, which is itself directly impacted by these “esoteric” derivatives, government mismanagement, current trade deficits etc. It’s all part of the same pie.

    I skip over all kinds of stuff on this blog everyday, usually the political stuff, but even I dip my toe in that from time to time. Moreover I am grateful for the breadth of the information that is made available obviously by Grim but also by many of the other posters.

  20. Dissident HEHEHE says:

    “fat tony says:
    March 18, 2009 at 7:41 am
    Just got a letter from Corzine. He is reneging on my son’s 2008-09 Bloustein Scholarship. Apparently, and for the first time, it is being awarded on a basis of need as well as academic qualifications. Hopefully his university will kick something in.”

    Somehow I don’t think Carla Katz’s full ride to Seton Hall’s Law School will be impacted by the state’s budget problems.

  21. grim says:

    The closer I get to buying, the more I’m convinced I’ll need a realtor who is experienced in dealing with bank owned properties.

    Once the property is owned by a bank, it is typically marketed by an agent. At this point, even though it is a REO, it would be treated as a normal transaction (of course, exceptions may apply). For properties in rough shape, as-is, or not having a CO, you may need someone with a skill-set that can help guide you through that.

    For example, if Freddie and Fannie own the homes, what is the role of the loan servicers in negotiating a short sale?

    Irrelevant, once the property is REO, you deal with the bank as the seller. Since the underwater borrower no longer owns the home, there is no longer short-sale possibility.

    I’d argue that the potential for bargain is better with REO than with a short-sale.

    However, properties that make it to REO status are typically in rougher shape than those sold short.

    Prior owners tend to be very rough on the properties when they exit.

  22. Dissident HEHEHE says:

    “How much can you hope to recover from a bankrupt firm?”

    Grim is correct; basically if you are not a bondholder you get nothing. If they can show fraud or misrepresentation they can go after the execs, who depending how high up they are, may be covered by D&O insurance or have indemnity provisions in their employment contracts. There’s probably no D&O but if they win and there’s an indemnity provision they could get back some pennies on the dollar as a judgment creditor. Absent that there could be individual liablility on the execs part but in that case its still likely to be pennies on the dollar but there’s the additional satisfaction of sticking it to the snake oil salesmen.

  23. Dissident HEHEHE says:

    Citigroup’s top economist tapped for Treasury post
    Citigroup chief economist Lewis Alexander to become counselor to Treasury Secretary Geithner

    http://finance.yahoo.com/news/Citigroups-top-economist-apf-14671442.html

    You can’t make this sh*t up

  24. grim says:

    Was in a wreck of a REO in Kinnelon on Sunday.

    Purchased for near $700k during the bubble years, was abandoned by the owners.

    Plumbing froze, house flooded. The place is a total wreck, needs to be gutted at the minimum. Ever see hardwood floors warp? The dining room hardwood has speed bumps almost 6 inches high. Of course, you might miss that when you are staring at the missing ceiling, and the missing floor in the bedroom above.

    If it doesn’t sell by summer, it’ll need to be knocked down, the mold problem will be tremendous.

    Current asking is somewhere around $400k. You are basically buying a 1.5 acre lot for $400k and getting a shack for free.

  25. grim says:

    You can’t make this sh*t up

    Goldman ran the Bush administration, Citigroup runs the Obama administration.

  26. Cindy says:

    Grim – Short sales are almost encouraged here – Isn’t that person to person? That way the house doesn’t fall into disrepair – someone is always living there.

    How bad a hit does a short seller take on their credit?

  27. grim says:

    Grim – Short sales are almost encouraged here – Isn’t that person to person?

    Yes, but the transaction requires lender approval. After all, the seller is asking the lender to take the loss.

  28. victorian says:

    “Citigroup runs the Obama administration”

    Rubin still pulling strings? He and Summers go back a long way, no?

  29. Shore Guy says:

    On a positive note:

    My windows are open and the yard is full of singing songbirds. Welcome to spring.

  30. Shore Guy says:

    As for the number of Fannie and Freddie properties, they may own them but they do not seem to be marketing them.

  31. Cindy says:

    (27) Grim – As I reported – maybe a year ago – It took a long time for the banks to come around here. They held out and held out as the price just kept dropping. Finally, they figured out, today’s price was going to be better than tomorrow’s.

  32. Dissident HEHEHE says:

    I guess he was just getting the jump on his Citi colleagues in becoming a full-fledged government employee.

  33. Shore Guy says:

    HEHE,

    Chasing that govt. pension.

  34. grim says:

    Citigroup chief economist Lewis Alexander to become counselor to Treasury Secretary Geithner

    Sorry to harp on this, but does anyone else here see something inherently wrong with this?

    The chief economist of an almost-failed bank taking a leadership position in government?

    Is this man qualified to do anything but fail?

    How about the chief economist of AIG? He wasn’t available for this position?

    Someone needs to nominate Madoff for an SEC Chair position.

    This isn’t a kleptocracy, this is an absurdocracy.

  35. Dissident HEHEHE says:

    Grim,

    This hire ranks right up there with the NY Fed hiring Bear’s former head of risk management after Bear failed.

    It’s frigging mind boggling. It’s like they only hire people who are going to tell them what they want to hear which is everything is going to be just fine, nothing to see here, move along.

  36. Shore Guy says:

    Grim,

    You miss the point. Government is not supposed to make a profit. He is very qualified on that point.

  37. Cindy says:

    (34) Grim – “How about the chief economist of AIG? He wasn’t available for this position?”

    LOL

    Nobody with any brains wants to get within two feet of this mess.

  38. grim says:

    From MarketWatch:

    U.S. Feb. consumer price index up 0.4% vs. 0.3% expected

    U.S. Feb. core CPI up 0.2% vs. 0.1% expected

    U.S. CPI up 0.2% in past year, core CPI up 1.8%

  39. Dissident HEHEHE says:

    On a related note, I wonder how large of a bonus Citi paid Mr Alexander last year so as not to have his “talents” poached by a competitor.

  40. Sean says:

    Nobody wants to work for Geithner, hense they have to go to the well of failed banks, and hire ex-Fed employees and failed economists.

    Quote from a 2007 PBS interview: “I think that’s not going to spill over more broadly into the economy, and so I think we’re going to have a normal kind of housing cycle that’s going to last through the middle of this year,” Mr. Alexander said in a 2007 interview on PBS.

  41. renter says:

    RE:
    Shore Guy says:
    March 17, 2009 at 7:26 pm
    “Did you see my link on Sunday night? ”

    I did and about a year ago I raised the issue here. One day driving around an “exclusive” subdivision in the burbs itstruck me that at some point the places would be divided into apartments and the yards would look like junk yards.

    I tend to think that many folks would prefer to have a decent place in a city, close to work (with all the entertainment, no need for driving, etc) and also have a placein the country for weekends and vacations, like people used to do. The suburbs are neither fish nor foul and the commutes they require and the constant need to drive to do anything may rapidly lose its luster

    ________

    Old Article entitled: The Next Slum that agrees with you
    http://www.theatlantic.com/doc/200803/subprime

  42. cooper says:

    Grim, Did you ever hear of an “as is ” verified commitment from a bank for a bank owned prop? If so can you explain?

  43. bi says:

    just for your info. economists in banks work independently. they are more like a faculty in universities. while they do provide banks general view on current economy, they are not responsible for the company p&l.

  44. Frank says:

    “Fannie, Freddie REO inventory swells”

    Fannie and Freddie’s delinquencies are at 3%. You call this a recession?

  45. Frank says:

    #34,
    I have met Citigroup chief economist Lewis Alexander few times, very nice guy, but clueless.

  46. Shore Guy says:

    “they are not responsible for the company p&l”

    bi,

    The problem is that no one at the banks seems to have been in charge of P & L; well, aside from their own.

  47. grim says:

    any tips is finding preforeclosures or foreclosures in areas like cranford, new providence, westfield, or mountainside?

    Monitor the Sheriff Sale listings for Union Co. Although I’d recommend against bidding at foreclosure auction. Too many variables, too much uncertainty, and too much risk.

    As for REO, you can monitor the REO sites (the links have been posted here in the past), or you can have an agent query listings marked as “short sale” in the MLS. The local MLS systems now require agents to mark short sales as such, so finding them them via query is easier than it was in the past.

    Is this a viable way of finding a house?

    Sure, as long as you have patience are flexible about choices.

    IMHO, in my experience, many aren’t patient enough, nor are they flexible enough.

  48. Frank says:

    Mortgage Originator Midweek Thoughts:
    -Today’s refi index was the Altoids print -‘curiously strong’
    at 4,498 vs last week’s 3,471 and prior 3,063. But the up 30%
    was supported by my supply which was +37% lst wk.
    -This weeks volume -5% thus far.
    -Do not have a strong feeling for the refi volume surge- mtg
    rates have been stable at 5% +/-⅛%.
    -Capacity? We were pushing the seams when refi index hit 6,500 for 2 consecutive weeks. Warehouse lending (primarily used by
    non-bank entities) continues to disappear.
    -30yr 4%s only 8% of volume. When that grows to >30% it seems
    like chaos follows.

  49. 3b says:

    #44 bi: Whatever. The point is he was the Chief Economist for an almost failed entity.

    It just does not look good. Appearances confidence buidling etc. matter.

  50. randy says:

    As BC Bob would say….

    Sell?!!? Sell to who?!

  51. Frank says:

    RPX futures are calling for -30% decline
    NY Bid Offer Change HPA Current Index
    Dec 09 170.00 180.00 0.00 -35.36% 243.440
    Dec 10 160.00 170.00 0.00 -39.06%
    Dec 11 160.00 170.00 0.00 -39.06%

  52. Shore Guy says:

    “he was the Chief Economist for an almost failed entity.”

    And this differs from the Treasury Dept. how?

  53. grim says:

    just for your info. economists in banks work independently. they are more like a faculty in universities. while they do provide banks general view on current economy, they are not responsible for the company p&l.

    Completely incorrect.

    They are responsible for providing accurate and realistic economic forecasts and analysis.

    Should their forecasts run contrary to strategies being employed by the firm, it is their responsibility to work in conjunction with management and risk to ensure that those risks are hedged appropriately, or not taken at all.

    Meteorologists at NASA are responsible for the forecasting the weather on a few Florida beaches, but nobody really cares about what they are saying. Right?

    If Mr. Alexander provided forecasts in-line with what everyone at Citi wanted to hear, and not in-line with reality, he should be fired.

    If he did, and nobody listened, it means that Mr. Alexander was not sufficiently forceful to get the point across, which is just as critical of a fault. The position requires the ability to not only formulate an opinion, but to be able to communicate that point effectively. If that means resigning from the position because the firm won’t listen, so be it, it must be done.

    So which is it? Was he inept or was he a yes-man?

  54. bi says:

    54#, grim, you are confused that position with risk managers. in short, economists in banks are just some talk heads and marketing tools.

  55. Cindy says:

    (55) – Oh great – That’s just what we need more “talk heads and marketing tools.”

  56. grim says:

    I have no pity for those who go along with a scheme, only to claim ignorance of it after the fact.

  57. Frank says:

    #55,
    grim is correct, Lewis was responsible for providing forecast to senior management of Citi and they traded on it.
    Based on Lewis’ forecasts Citi moved into CDOs big time. I tried to convince Lewis that housing is going down, but he would not listen.

  58. Shore Guy says:

    “marketing tools”

    Yea, they were a bunch of tools alright. “I vas only a clerk.”

    Perhaps we need a new version of Spandau Prison for all these economic Albert Speers.

  59. Painhrtz says:

    Speaking of Short sales anybody have previous sales info on this place address would be nice also.

    MLS#2660176

    Since we got a dog and are out more the wife and I are finally getting sick of our neighborhood. It is one thing to hole yourself up in your apartment and pretend the outside rif-raf don’t exist. It is another thing to actually interact with them. So we are going to get off the fence.

    Grim, any recommendations on realtors who have no problem offering lowballs northern BC Morristown area.

  60. comrade nom deplume says:

    Saw this on Roubini this morning:

    “Countries that relied on readily available capital to finance their current account deficits are particularly vulnerable. Furthermore, capital outflows pose the risk that governments may react with some type of capital controls or barriers to the exit of foreign investments.”

    He was talking about emerging market countries now seeing massive capital outflows. But how many of you read this snip and, in light of things like our new “exit tax”, soak-the-rich initiatives, the reporting and withholding provisions now being discussed in Congress, and the coming cruxifiction of the AIG bonus recipients, thought it described the U.S.?

    In light of our latest lurch toward mob rule, I would think long and hard about investing capital in the U.S. were I a foreign investor. Not without the risk premiums you would seek if you were, say, investing in Russia or Venezuela.

    That goes for american investors as well. Of any sort, and in any asset or income source. We now have to build in expropriation risk premiums, and immovable capital, like real estate, is especially vulnerable.

  61. borat obama says:

    grim for preside t

  62. borat obama says:

    Hi fi veee

  63. grim says:

    MLS#2660176

    979 Crystal Lake Terrace

    But it looks like it may be going into attorney review.

    Wow, the price looks darn good to me, but that is based on the pictures.

    Asking was $439k, making more sense now, a short sale.

    Double wow, was purchased in 2005 for $605k.

    Who said BC was prime?

    I’d put money on that place having received not only multiple offers, but going for more than “asking” (not that it really means much given the 605k sale in ’05).

  64. bi says:

    if i worried about the market value of my home after purchasing, i would wait until one of these happening:
    1) dow reached 9000 and traded in that range for 1 month;
    2) monthly job loss reduced by half to 300K range and stayed there for at least 3 months;
    3) the inventory of existing homes does not increase for 3 month in row.

  65. Cindy says:

    (57) Grim

    “I have no pity for those who go along with a scheme, only to claim ignorance of it after the fact.”

    Sounds a bit like my post last night at #89 – Arthur Levitt and the Commodity Futures Trading Commission.

    “Mr.Levitt says he now regrets that decision. Mr. Greenspan and Mr. Rubin were “joined at the hip on this, he said” “They were certainly very fiercely opposed to this and persuaded me that this would cause chaos.”

    Regulation would cause chaos – go figure.

  66. zieba says:

    Frank,

    Was the applying for the Mexi-quant position at your hedge fund?

  67. Painhrtz says:

    Grim thanks, thought the same thing definately right priced for Franklin Lakes based on the condition in the pics. Thanks for the help.

  68. Shore Guy says:

    bi,

    Anyone who lacks a full year’s worth of expense (including emergency expenses and mortgage and tax) money in the bank AFTER downpayment and closing costs, is crazy to buy in this environment. Prices are at best flat, and, at worst falling. If one loses one’s job, and lacks sufficient cash on hand, one is asking for a severe economic thrashing.

  69. PGC says:

    21 grim

    you may need someone with a skill-set that can help guide you through that.

    I keep meaning to write up a doc for you on this. Most agents will not have gone through an REO, so finding an agent with experience may be difficult. But a good agent will take that in their stride. In an REO, it is more important to have a good lawyer and home inspector than an agent.

    The funny part about my REO purchase was that my agent was a real Type A control freak. She was bouncing off the walls because most of the discussions were between the two lawyers and she was not copied on the correspondence.

  70. Shore Guy says:

    I just LOVE this “feature” I saw listed on a property in NC: Flood Plain. Ummm, ummm, ummmm. I can become a cattail farmer.

  71. grim says:

    From the Star Ledger:

    Walgreens plans to buy N.J.’s Drug Fair, close 11 stores

    Walgreen Co. plans to acquire the Somerset-based Drug Fair company, closing at least 11 of the stores and putting the Walgreen’s name on others, according to a memo distributed to Drug Fair employees this morning.

    On Tuesday, 47 people were fired at the company’s corporate offices and pharmacists were notified at stores that Walgreens intends to close.

    The 55-year-old Drug Fair company has 50 drug stores and about a dozen Cost Cutter general merchandise stores in the state. It employs nearly 1,700 people.

  72. grim says:

    But a good agent will take that in their stride. In an REO, it is more important to have a good lawyer and home inspector than an agent.

    Bang, dead on.

  73. Shore Guy says:

    “She was bouncing off the walls because most of the discussions were between the two lawyers and she was not copied on the correspondence.”

    Property ourchase AND a floor show.

  74. grim says:

    From the Star Ledger:

    Dozens fired at Drug Fair’s Somerset HQ

    Nearly 50 employees at Drug Fair’s corporate headquarters in Somerset were fired and four more pharmacies were closed yesterday, according to interviews with four workers. The job cuts came just days after the company abruptly closed a pair of stores.

  75. zieba says:

    Grim,

    You said the Franklin Lakes property is starting to make more sense. Best guesstimate what this house may sell for if it is listed again in 2011?

  76. Aardvark says:

    Who Is the Predator and Who Is the Prey?

  77. Shore Guy says:

    Well, at least the CPI does not point to deflation. On the other hand, rising prices as incomes and net worth sink can’t be good. It is good to not be Fed Chair on a day like this.

  78. grim says:

    Grim, Did you ever hear of an “as is ” verified commitment from a bank for a bank owned prop? If so can you explain?

    Usually see that on poor condition bank-owned propertoies, but what you describe is usually two different conditions.

    1) Property is as-is. The bank isn’t going to repair the property. IMHO, this isn’t any reason to eliminate the inspection contingency on a contract. Like PGC mentioned above, you want the best inspector you can buy here. You need to know the problems that exist, but that doesn’t mean you can use them to argue for a lower price or for repair credits, etc.

    2) Bank wants verification of financing or cash on a cash-only deal. Many times this is key when dealing with a property that is in rough shape with no CO. Buyers will likely find it impossible to find a lender that will lend on a property without a CO, or that needs extensive work prior to a CO being granted. Many REOs are being listed as cash-only deals not because the bank really cares (eg “It’s all cash at closing”) but because they know a non-cash buyer won’t be able to get financing for the property. Exception here is individuals that can secure construction loans (rare nowadays) or loans secured by other assets/properties.

  79. HEHEHE says:

    Op-Ed: Will Troubles Abroad Stop a Countertrend Rally?

    Circumstances in Europe (EZU), Latin America (ILF) and China (FXI) are much worse than statistics are currently implying, and worse than the vast majority of US analysts and market participants realize. As the negative data from these countries start to hit the wires over the next few weeks and months, this will send global financial markets into the financial crisis’s second phase, which will be accompanied by the realization that things are actually worse outside the US than in the US itself. International events will therefore become the primary driver of developments in financial markets.

    http://www.minyanville.com/articles/index/a/21686

  80. DL says:

    Grim, PGC, others; Obviously, I’m still learning what the right questions are and lack of knowledge is a disadvantage. An Army General once told me to answer the question he should have asked instead of the one he asked. Appreciate the insights.

  81. Shore Guy says:

    Nom,

    Here you go. Ideal for a nompound. Enough rooms for privacy, close to water for fishing, and enough land for a victory garden.

    http://www.realtor.com/realestateandhomes-detail/Falmouth_ME_04105_1100290674

  82. 3b says:

    grim/rich: If one of you guys get a chance, can you please provide me with sales history and taxes for the following 2 listings.

    njmls# 2909478 and 2911244. Thanks.

  83. Stu says:

    ChiFi: From your request from last night…

    “OT: I want to develop a 3 hour class on fundamental equity valuation.”

    Here is a good start although it’s for dummies.

    http://biwiki.editme.com/aboutinvesting

    wikinvest dot com is a fantastic source as well.

  84. make money says:

    “Citigroup runs the Obama administration”

    Rubin still pulling strings? He and Summers go back a long way, no?

    Grim, Vic,

    Don’t get mad, get even. Buy Citi bonds and their common. Watch thi sbe the best investment for the next four years.

  85. Shore Guy says:

    Does anyone here have anyexperience with the north-east part of Maine, the Eastport area.

  86. comrade nom deplume says:

    [83] Shore,

    Love it. Course, if I had an extra 5 mill doing nothing, I wouldn’t need a nompound.

  87. Shore Guy says:

    Nom,

    Who needs money? All you need is the right leverage.

  88. Shore Guy says:

    Nom,

    Much less expensive, but very isolated, for good and ill:

    http://www.realtor.com/realestateandhomes-detail/Isle-Au-Haut_ME_04645_1094893368

  89. Stu says:

    Frank:

    “I have met Citigroup chief economist Lewis Alexander few times, very nice guy, but clueless.”

    So let me guess. Did he order the medium fries from the regular menu when the small fries were available on the dollar menu?

  90. Mrb says:

    Me thinks Obama just threw Tim under the bus

  91. comrade nom deplume says:

    [90] shore

    Good luck farming that puppy.

    If you are interested in Maine, we should GTG and I can put you in touch with my BIL, who owns what is currently the family Nompound in western Maine. Also, Mrs. Deplume has traveled extensively in Maine and can give insights. Has Grim given you my email?

  92. Stu says:

    Grim…did you read this interview with Lewis Alexander that I posted here last night?

    I don’t think he is neither a yes-man nor inept. Like all of the other crooks on Wall Street, I think he knew exactly what he was doing.

    http://www.pbs.org/nbr/site/onair/gharib/070228_gharib/

  93. 3b says:

    #94 Stu: how long do yout hink before Geithner is gone, or does he survive this?

  94. Shore Guy says:

    “Me thinks Obama just threw Tim under the bus”

    He did that yesterday when the WH expressed “full support” for him.

    What’s tha Lassie? Timmy is stuck in a well? Let’s just leave him. C’mon inside girl and have some Milkbones.

  95. comrade nom deplume says:

    [92] mrb

    I see no news. Is that a prediction or did something hit the wires?

  96. HEHEHE says:

    Geithner – the Treasury’s answer to FEMA’s Brownie

  97. Stu says:

    Geithner…removing him would cause instability in the markets. He will get to stay. But does it really matter?

  98. Sean says:

    Treasury International Capital, or “TIC,” report shows capital outflows.

    Net foreign purchases of long-term securities were negative $43.0 billion. This means that foreigners were selling both long dated bonds and equities.

    http://www.chrismartenson.com/blog/funding-nightmare-us/15148

  99. Jim says:

    69. Shore Guy says:
    March 18, 2009 at 9:38 am
    bi,

    Anyone who lacks a full year’s worth of expense (including emergency expenses and mortgage and tax) money in the bank AFTER downpayment and closing costs, is crazy to buy in this environment. Prices are at best flat, and, at worst falling. If one loses one’s job, and lacks sufficient cash on hand, one is asking for a severe economic thrashing.

    Shore,
    I totally agree but I don’t think most Americans have stashed the cash away to cover one years worth of expenses. Based on that recent survey question that came out within the past couple of weeks most families would be very lucky to survive a month if they lost their job.

  100. grim says:

    From the Star Ledger:

    N.J. among the worst states for business, CEO survey says

    New Jersey is bad for business, and it’s getting worse, CEOs surveyed said.

    The state ranks fourth worst – behind California, New York and Michigan – as a place for businesses to thrive, and it’s been slipping, according to a Chief Executive magazine survey.

    In 2006 and 2007, New Jersey was in the sixth-worst spot, but last year dropped to number five, and this year now ranks fourth.

    “Our survey, year-over-year proves that those states with the worst records continue to practice the same policies that alienate businesses,” the magazine’s editor in chief, JP Donlon, said in a statement. “As the nation’s economic problems continue to snowball and an increasing number of states experience budgetary problems, state governments ought to take a hard look at their taxation and unionization policies if they want to turn the page and attract new businesses and capital to their provinces.”

  101. make money says:

    [C] Citigroup shares rise 25%, to $3.15

    I’m begging to think that C will outperform shiny.

    I’ve bought a little over 25K worth of C and I’m up more then double. Instead of selling and and taking my family to disney I’m beginning to think that maybe I should be adding to this position.

    Any thoughts based on above C and Larry Obama connection.

  102. Clotpoll says:

    grim (54)-

    See why people call for bi to be muzzled?

  103. comrade nom deplume says:

    [100] sean

    But that was offset by Chinese buying of treasuries, and even Mortensen notes that.

    Like he said, however, if they ever stop buying, watch out below.

  104. Shore Guy says:

    I have not checked the e-mail yet. I will later tonight.

    I have two things tugging at me with respect to possible land in ME. First, there are some very nice places on the ocean, well, bays, with lots of frontage and several acres that would make great summer places, especially in retirement. The other is that there are some decent plots of land inland that could be farmed in a pinch, although the growing season must be like 3-weeks long.

  105. grim says:

    From the Star Ledger:

    Retail vacancy rises in N.J. as stores close

    Retail vacancy along central and northern New Jersey’s main shopping roads nearly doubled this year as bankrupt and flailing retailers closed stores, leaving large, empty spaces, a survey out today shows.

    About 7.8 percent, or 4.38 million of 56.30 million square feet, of existing retail space along the corridors studied was vacant, according to the January survey by Old Bridge commercial real estate firm R.J. Brunelli & Co. That’s up 85 percent from last year’s 4.2 percent vacancy rate.

    The survey did not include malls.

    The last time the retail landscape looked this bad was in 1992, when the firm tallied up an 8.2 percent vacancy rate.

  106. Clotpoll says:

    grim (80)-

    Am beginning to see some banks willing to finance their own REO.

    Good thing. The investors have dried up for FHA-203 and other rehab loans.

  107. Clotpoll says:

    Stu (85)-

    I’d think about that class if ChiFi taught straight from Benjamin Graham.

    Especially since his most famous adherent, Mr. Buffett, went off the reservation.

    I’m pretty sure Graham wasn’t an advocate of selling naked puts up under major market indices.

  108. comrade nom deplume says:

    [102] grim

    I noted this from the article: “Texas has consistently ranked as the best place to do business . . .”

    One early thought for what eventually evolved into the lifeboat property scenario (and eventually the nompound) was to hold property in a state that, in the event of secession/breakup, would be a haven from US strife and debt, and would be a magnet for business from the old Former 48. Texas was first on the list of likely survivors (so was Alaska but it has much less to commend it economically).

    I can’t help but wonder if Texas is successful at attracting and retaining business in part because of strategic positioning in case of a dissolution. That is to say, have corporations and wealthy individuals drawn the same conclusion and hedge their bets by having a basis for Texas “citizenship” and does Texas reinforce that in some subtle way?

    Tail wagging the dog, I know, but I can’t help but wonder. Shore, maybe you should consider Texas for your lifeboat. Then, in the event of dissolution, you would already have your green card.

  109. Stu says:

    As someone who bought near the peak and is only above water due to a great purchase price (good karma payback) and having put 20% down. I can unequivocally say that I wish I had not made this purchase and those purchasing now should think twice as well to avoid the same mistake I made.

    I would like to purchase a second home early next year, but not if the economy does not show signs of recovery. I have learned my lesson. I figured a 20% or so discount in September of 2004 would offer me some significant downside protection. Well we are once again appealing our property taxes and we will be asking for a new assessment pretty darn near 20% off our original purchase price when you factor in the improvements we have made.

    And now Guv Corslime is planning on removing what few sheckles of tax breaks that homeowners currently receive.

    Buy with care…and be aware that 50% from peak is now a very real possibility. Some will argue that it did not go up as fast here as quickly as it did in Nevzona or Florcali, but these states don’t have a powerful guvner who is doing everything in his power to make businesses and residents leave in mass while not making a single solitary cut to the government payrolls.

  110. 3b says:

    #107 grim: Can you take a look at post #84 when you get a chance. Thanks.

  111. Clotpoll says:

    make (86)-

    Dunno. GS hit it big by bucket-shopping and taking the other side of their recommended trades.

    Seems like C just takes all their clients down with them.

    “Don’t get mad, get even. Buy Citi bonds and their common. Watch this be the best investment for the next four years.”

  112. Clotpoll says:

    3b (95)-

    I think Geithner should pull his house off the market.

    MIght be moving back in pretty soon.

  113. Clotpoll says:

    Shore (96)-

    What’s that funny smell coming out of the well?

  114. Shore Guy says:

    “Geithner…removing him would cause instability in the markets.”

    I spit-out coffee all over the leyboard, now replaced, when I saw this. I just LOVE the market stability we currently have.

    We have become a bunch of risk-averse wimps; please, please, please spare us any pain even if it means not solvintg the cause of our problems. The foot is green and black, folks. We either cut it off or lose to the knee. If we avoid the pain of cutting off the rot, it wil only spread. It is time to re-grow-up; we were once grown-ups but something went very wrong. Life is hard, it is full of risks, and sometimes it hurts. Deal with it.

  115. Stu says:

    Nom,

    Texas? Well I guess if the s doesn’t hit the fan, your vacation spot as a fallback/alternative is out the window. Also, drought/water could be an issue as well. On the bright side, there will be great Tex/Mex and BBQ options and an endless availability of illegal workers.

  116. Shore Guy says:

    Clot,

    Compost.

  117. Shore Guy says:

    keyboard, even

  118. Clotpoll says:

    plume (110)-

    Texas #1 for business.

    Texas #1 for executions.

    Therefore,

    lots of executions = good business climate

    Note: I am channeling bi and Frank simultaneously.

  119. Shore Guy says:

    “doing everything in his power to make businesses and residents leave in mass while not making a single solitary cut to the government payrolls.”

    Stu,

    What kind of heartless person advocates cutting jobs in the middle of a recession?

  120. #107 – On a completely anecdotal note… The number of commercial buy/lease signs I’ve seen in NJ in the past few weeks has increased dramatically. I can say the same for the Stamford CT area.
    Almost all have been for small places (think mom and pop sized).
    Again this is just an observation so take it for what it is.

  121. Shore Guy says:

    “Buy with care…and be aware that 50% from peak is now a very real possibility. ”

    And, if one buys today at tomorrow’s price, one is paying with more-expensive dollars than tomorrow’s.

  122. 3b says:

    #114 clot: I think as the year progresses, due to all the initial missteps,and those sure to follow, that there will have to be casualities in the O administration.

    And I believe young Tim will be the first one.

  123. Clotpoll says:

    Move on…nothing to see here:

    TRENTON, N.J. (AP) – New Jersey Gov. Jon Corzine’s e-mails to his ex-girlfriend will remain private.

    The New Jersey Supreme Court said Wednesday that it will not to hear a case trying to force release of the e-mails.
    Republican Party leader Tom Wilson had wanted Corzine and his staff to make public e-mails they exchanged with Corzine’s former girlfriend, Carla Katz.

    Katz is the leader of a public employee union. She and Corzine dated before he became governor. Both were involved in negotiating the most recent contract between public worker unions and the state, though neither was at the bargaining table.

    The Supreme Court’s decision not to take the case effectively ends the litigation that threatened to spill into the governor’s re-election campaign.

  124. Shore Guy says:

    “Tail wagging the dog, I know, but I can’t help but wonder. Shore, maybe you should consider Texas for your lifeboat. ”

    I don’t think there is anything that could persuade me to move to Texas.

  125. waters says:

    “Was in a wreck of a REO in Kinnelon on Sunday.

    Purchased for near $700k during the bubble years, was abandoned by the owners.”

    Must have been the same place that caught my eye online. Too bad– it looked like it was once a very nice home.

  126. Clotpoll says:

    Protesters are in the House AIG hearing. They have placards and are calling for Timmay’s job.

    How the hell did these people get in?

    sas, are these people plants?

  127. Shore Guy says:

    CLot,

    White House staff, actually.

  128. 3b says:

    #122 toshiro: I am sseing that too.

    And in my town the administration is talking about commercial redevelopment as the answer to staggering increases in property taxes over the last few years. In fact they have been talking about it for the past 6 or 7 years.

    And not a shovel has been turned yet, in fact there is absolutely no coomercial interest.

    And we are right next to Paramus, which is shutting stores left and right.

    Talk about delusional.

  129. Stu says:

    “the governor’s re-election campaign”

    What a complete waste of time and money. I hope Jon wastes more than Paulson did on Tarp I. I can’t wait to see Cody and crew squirm as NJ turns RED due to Corslime’s ignorance. Time to invest in NJ101.5?

  130. Victorian says:

    If you take a different look at the stock market, even though the prices of stocks are rising, the value is not.

    The stock market rally is being fueled by the falling dollar.

  131. comrade nom deplume says:

    [117] stu

    That was why it was an “early” thought. It only makes sense if (1) you are certain of a SHTF event, and (2) you are certain of secession.

    I am not convinced of a high probability of TSHTF, and much less so that Texas will ever secede. In fact, I have said here repeatedly that I think it inconceivable unless the SHTF, the USG is on the verge of collapse, and there is no other option to prevent being dragged down with the rest of the country. Since I am not willing to bet on that outcome, and as I hate hot, flat places anyway, TX is out.

    So no need to look at hydrology maps.

  132. comrade nom deplume says:

    [120] clot

    Now there’s a syllogism that I never thought of.

  133. Clotpoll says:

    plume (134)-

    Mama didn’t raise no dope. :)

  134. grim says:

    Must have been the same place that caught my eye online. Too bad– it looked like it was once a very nice home.

    Let me know if you want to see it, I’ve been looking for a reason to go back there with a video camera.

    Would make for a great youtube video.

  135. Shore Guy says:

    Searching for information on Downeast Maine, I came across the following. It is good for a grin, if nothing else:
    Remember the “Yes Pecan” flavor Ben and Jerry created in honor of Obama?

    Well in the spirit of “bi-partisanship” here are a few flavors in honor of George Bush.

    Grape Depression
    The Housing Crunch
    Abu Grape
    Cluster Fudge
    Nut’n Accomplished
    Iraqi Road
    Chock ‘n Awe
    Wire Tapioca
    Impeach Cobbler
    Impeach Mint
    Heck of a Job, Brownie!
    Rocky Road to Fascism
    Death by Chocolate… and Torture
    Freedom Vanilla Ice Cream
    Chocolate Chip On My Shoulder
    Credit Crunch
    Country Pumpkin
    Chunky Monkey in Chief
    WMD?.licious
    Bloody Sundae
    Caramel Preemptive Stripe

  136. Clotpoll says:

    Surprised bi hasn’t been here, making a call for a rate cut straight to 0%. Why bother leaving a .25% “range”?

    More important, I wonder if Bergabe has already tipped off GS, JPM and C that the Fed will be buying long-dated Treasuries?

    I would imagine that Bergabe will also need to give them a heads-up on when they’ll need to quit shorting the 2 yr T-note, too.

  137. Shore Guy says:

    Nom,

    Even if all that came to pass, those of us from the Northeast who were inclined to retreat to Tx would: 1) stand out like an albino in Jamica, and 2) would soon thereafter be turned into cactus compost by some local who wanted our space.

  138. Clotpoll says:

    Is there anyone here who does not believe that the Fed is working in complete collusion with the big banks?

    If so, please state your case.

  139. make money says:

    Is there anyone here who does not believe that the Fed is working in complete collusion with the big banks?

    If so, please state your case.

    Through in O admin in that case too.

  140. Shore Guy says:

    Coordination, Clot, Coordination. Coordination. Collusion is such an ugly word. Accurate, perhaps, but ugly.

  141. Subprime Man says:

    Take a look at a house in Upper Saddle River. I don’t have the MLS number with me. Originally listed for 1.6 million, now selling for 689,000. Take a look at the realtors ® picture. She needs a sun tan.

  142. grim says:

    I will say that I’m enjoying the quality of the discussion today.

  143. sas says:

    alot of doublespeak coming out of the press.

    anger over giving out bonuses = defending receiving bonuses.

    “AIG head shares US anger of bonuses but backs them
    Chief of failed AIG says he shares public anger over big bonuses but defends them as binding”

    http://finance.yahoo.com/news/AIG-head-shares-US-anger-of-apf-14678234.html

    SAS

  144. lena says:

    I want to know when are people going to start protesting and rioting? When are we going to stop being so FEARFUL (everyone is living in such a state of fear, we are all going to die young from that type of stress….) and demand the average citizen is helped??

  145. scribe says:

    I’ve been getting daily calls about a person who’s been using my phone number, who is now in collection.

    The gamut ranges from Chase Home Mortgage and Capital One to – mysteriously – a sargent from the transit police.

    No other signs of identity theft. Looks like this person needed a phone number for a bunch of applications so she made one up and just happened to hit on mine.

    Every time I tell one of these people: “you have the right number, but there’s no such person here. do a reverse directory and check the name and address on the phone” … they talk about recording the phone conversation for “quality control purposes”

  146. sas says:

    When will we see a real article about fraudulent inducement by Fannie & Freddie?

    oh thats right, no such thing.

    say, can you give me that MLS# for .. ..

    thanks,
    SAS

  147. Stu says:

    Why is a bonus binding and all of the benefits promised to me and 10% of my salary not?

    I’m seeing the same thing with the Montclair populace. They all want to see the BOE not take increases except for those promised raises that were negotiated in prior contracts.

    I just don’t get it!

  148. Shore Guy says:

    “When are we going to stop being so FEARFUL ”

    People lack fear when they have great power and wealth or no power and wealth. The ones who have fear, and are inclined not to act up or step out of line, are those who have a little something but are afraid of losing it. Once people start losing everything, they will act out in ways that surprise even them.

  149. skep-tic says:

    may have already been discussed, but here is why CPI is BS:

    “Housing, which accounts for 40% of the CPI index, was unchanged. That index hasn’t risen since July 2008. Rent increased 0.1%, as did owners’ equivalent rent.”

  150. grim says:

    From the Record:

    1 in 5 agencies considering layoffs, survey says

    One in five New Jersey law enforcement agencies are considering layoffs due to economic conditions, according to a survey released today by the New Jersey State Policemen’s Benevolent Association.

    Local governments have already told 325 officers they will be laid off in the coming months, and association president Anthony Wieners said 297 positions have been eliminated in the last three years.

    “Government’s number one responsibility is to provide a safe and secure environment for all its residents,” he said. “My feeling is, the streets should be dirty before they’re unsafe.”

  151. Shore Guy says:

    “Why is a bonus binding and all of the benefits promised to me and 10% of my salary not?”

    Stu,

    Because you are a small fish, and the folks who are getting the bonuses spend as much on a new car each year as you earn. Hence, they deserve it and you should just squeel like a pig.

  152. kettle1 says:

    RE AIG bonuses.

    I think that the outrage was probably intentional. You dont want all that anger festering under the surface. Better to chose a scape goat and purposefully direct the anger away from more sensitive operations like funding all of the various banks and hedge funds through AIG.

    By stirring up anger over bonuses with a few well placed news stories the PTB control where the anger is directed instead of trying to keep it suppressed and then having it pop out somewhere potentially unexpected and much more damaging.

  153. grim says:

    So what Mr. Wieners (PBA President) is saying is, is that sanitation workers should be laid off before police officers.

    Didn’t someone here say something about SHTF when unions are pitted against unions?

  154. #130 – 3b – And we are right next to Paramus, which is shutting stores left and right.
    Which raises a very good question. In addition to all of the excess residential housing built, what are we going to do with all of the excess commercial space?
    I’m sure some of it will be re-occupied, eventually. But how much of it is going to end up being nothing more than ruins?

  155. Shore Guy says:

    “One in five New Jersey law enforcement agencies are considering layoffs ”

    And they are planning to spend more onovertime, maybe?

  156. kettle1 says:

    Oh, and on AIG bonuses…

    There are numerous ways to address the bonuses from what i have read, that could be done fairly quickly. but then people might start to look else where

  157. Shore Guy says:

    Municipal service consolidation is the key. We can keep all the beat cops, etc., and eliminate many managers by consolidating services amongst municipalities.

  158. kettle1 says:

    Grim,

    I would rather see the cops go then the garbage men…..

    Tosh,

    already underway… Some commercial space near me that has been empty since they finished construction a year ago is beginning to show signs of decay….

  159. #155 – The interdepartmental fighting with regards to lay-offs has huge potential for fun. Teachers vs police vs transit vs etc.

  160. jmacdaddio says:

    I love how the Star-Ledger article made it seem as if the Drug Fair and Cost Cutters closing is a shock. Anyone with a couple of spare brain cells could walk into one of those stores and quickly figure out that the end was near for the chain – poor lighting, badly organized shelves, surly cashiers.

    I drove down Route 18 in East Brunswick two nights ago. The plaza I shopped in hosted a Circuit City and a Linens and Things. I would say about 25% of the retail space on 18 is shuttered – I have no idea how those small travel agencies and nail salons stay afloat.

  161. Shore Guy says:

    Does anyone “up North” notice your cops looking like Yakuza? At the Shore many of them are pretty frightening looking, even without weapons.

  162. Rich In NNJ says:

    3b (#84),

    2909478
    ACT $575,000 4/8/2008
    PCH $549,000 6/18/2008
    W-C $549,000 8/19/2008 (Withdrawn)

    ACT 3/2/2009
    Taxes: $11,582.32

    2911244
    No previous sales history

    ACT 3/11/2009
    Taxes: $10,164.92

  163. Pat says:

    Post office is cutting overtime with no plans to staff up at some branches. No link.

    Things are getting serious when you can’t stand around and BS with the guy at the PO every day but Saturday.

  164. #160 – Ket – Some commercial space near me that has been empty since they finished construction a year ago is beginning to show signs of decay…

    I’ve got the same by me. There was still left over commercial stuff from the early 90’s and this boom happened.

  165. 3b says:

    #156 toshiro:I’m sure some of it will be re-occupied, eventually. But how much of it is going to end up being nothing more than ruins?

    We have ruins already. The larget commercail area we have is the old Hoofman Koos furniture site, right off Rt 4. They went out of business, and the owners threw out the other stores in hopes of redevloping the property. They have been trying to secure a major commercial tennant for over 3 years.

    This was supposed to be the center of the redevelopment in town.Nothing.

    A couple of months ago they tore all the buildings down, and put a fence around it.

    Won’t redevelop without a major commercial tennant.

  166. kettle1 says:

    SHore,

    At leats the Yakuza are real business men and not just thugs.

    Its a wiper problem of the militarization of law enforcement. Those 2 fields should normally be widely separated and that line has become very blurred.

    Soldiers make poor police and police make poor soldiers. Mix the 2 and you get the worst of both worlds

  167. RGB says:

    Does someone have previous sales info or the listing history on MLS#5495948.

    Thanks for all of the info on this site… my wife and I have delayed buying a house for two years now thanks to this site.

  168. Victorian says:

    “Better to chose a scape goat and purposefully direct the anger away from more sensitive operations like funding all of the various banks and hedge funds through AIG.”

    Kettle (154)-
    Nail meet Head. If they seriously wanted to do something about AIG – spin the company off into 2 divisions – the insurance division and the hedge fund. Let the hedge fund die, and ask the people who bought CDS without taking into account counterparty risk go pound sand.
    Seriously, why is the taxpayer funding the speculative adventures of GS? Wasn’t Llyod Blankfein the only non-govt entity present in the discussions of the AIG bailout with Hank and BB? My outrage has been drained with this episode. Unfortunately, the common man will never be presented with this story.

  169. HEHEHE says:

    This is what all municipal unions fear:

    Judge Rules Vallejo Can Void Union Contracts

    In a groundbreaking ruling as well as a rare victory for common sense and the overall good of taxpayers,

    http://globaleconomicanalysis.blogspot.com/2009/03/judge-rules-vallejo-can-void-union.html

  170. 3b says:

    #164 Rich: Thanks as always for the information.

    I do not know if you remember but that 4 bed 2 bath room cape I was talking about (Bogert Rd) a few weeks ago listed at 319K, closed for 325K. (Fairly quick closing too)

    Not surprised it went a little over asking, pretty decent house, and at a 2002 price level!!

  171. We have ruins already. The larget commercail area we have is the old Hoofman Koos furniture site, right off Rt 4.

    I had forgotten about Hoofman Koos, haven’t been in that area for a while.
    What do we do with all of these? There’s a bunch by me with more to come. Empty strip malls, empty movie theaters, empty big boxes too. It has a kind of “Dawn of the Dead” charm to it, but that wears thin after a while.

  172. Stu says:

    “Unfortunately, the common man will never be presented with this story.”

    They’ll be presented with it, but they will choose to focus their interest on more important things, such as American Idol. It’s no wonder that we are being ‘looted’.

  173. Stu says:

    “What do we do with all of these?”

    Homeless shelters?

  174. 3b says:

    #173 Well it is going to be intersting to say the least to see what happens in my town.

    Because all of the massive spending over the lst few years was justified by the fact that we were going to have all this redevelopment to pay for all of this spending.

    So, we spent the money, but now no redevelopment. Ooops!! Now what?

  175. Sean says:

    AIG bonuses are bait and switch for the real issue Credit Default Swap regulation. There is a bill pending that has passed committee.

    More info below. be sure to write your Rep and Senator.

    http://www.minnpost.com/community_voices/2009/02/04/6377/join_rep_peterson_in_solving_the_credit-default-swaps_mess

  176. kettle1 says:

    Stu, Tosh

    Leave them all up and turn NE NJ into the premier urban warfare/police action training center to the worlds police/military forces. We can then capture all of the money that drunk cops and soldiers spend in the evening!!!

    We can even have Boeing and co set up shop in the area to sell their latest and greatest toys to said training forces.

  177. Sean says:

    Michael Hudson has more on the AIG bait and switch.

    http://www.counterpunch.org/

  178. jim says:

    Maybe this is part of O’s Master Plan for the Redistribution of Wealth (MPRW). Express utter shock at the AIG bonuses. Get the working class public behind you and allow them to believe it is acceptable to increase the excise tax up to 90% to take that money back. Then later on down the road increase taxes on the wealthy like you were planning to do anyway. By that time the outraged public has accepted the strategy and the so called wealthy will be taxed to death and out of luck.

  179. grim says:

    Judge Rules Vallejo Can Void Union Contracts

    Lord knows we’ve got lawyers here, any opinions?

  180. Silera says:

    “One in five New Jersey law enforcement agencies are considering layoffs ”

    Yesterday, the story was that precincts were understaffed and burdened due to Iraq deployments.

    http://www.northjersey.com/news/nation/iraqcops031709.html

  181. grim says:

    what are we going to do with all of the excess commercial space?

    While Xanadu is an ugly mall, it would make for a very pretty state prison.

    We could turn the ski slope into a kind of Sisyphusian day labor camp.

  182. Shore Guy says:

    Jim,

    How cynical; and you may have hit the nail on the head.

  183. Nicholas says:

    I was milling around some real estate websites looking for homes and I saw something that struck me as funny. Not that I would be looking for this type of housing but it is becomming clear to me that something is still wrong.

    I hope you guys enjoy this:

    One townhouse on Canterbury Ridge is under contract at 151,000$. I cannot be sure that is the selling price but I can only imagine that it is lower then this list price.

    http://homes.longandfoster.com/Real-Estate/PropertyDetails.aspx?MlsCompanyID=2&MlsNumber=HW6979602&Add=9278-CANTERBURY-RIDING-#58,Laurel,MD-20723

    Another house on the same street is still for sale and is listed at 276,000$. Same number of bedrooms and bathrooms.

    Apparently having a tree out front of your house causes the house value to drop by 125,000$. Who knew?

  184. HEHEHE says:

    Grim,

    It’s a legit decision. The bankruptcy courts have allowed this in the airline bankruptcy’s. That’s the major fear of the UAW.

  185. Stu says:

    Victorian,

    Want your stomach to churn? Look at C’s stock price. Remember, it was on the dollar menu a few weeks ago.

  186. Stu says:

    Nicholas,

    The more expensive property has the lower tax assessment as well. I suppose you pay a higher premium up front for the lower taxes?

  187. Sean says:

    Liddy said AIG is still holding 1.6 Trillion in Derivatives, they paid the retention bonuses to prevent a further blowup.

    Sounds like a gun was put to Liddy’s head.

  188. 3b says:

    #188 Stu:Remember, it was on the dollar menu a few weeks ago.

    And it may be back on the menu in another few weeks.

  189. HEHEHE says:

    Speaking of real estate:

    Embattled AIG puts headquarters on sales block

    http://news.yahoo.com/s/ap/20090318/ap_on_bi_ge/aig_headquarter_sale

  190. jmacdaddio says:

    For a good laugh check out http://www.deadmalls.com although it doesn’t have a lot of NJ content, there are interesting narratives on Forrestal Village in Princeton and on another mall that is now the Wal-Mart in North Brunswick. I’m thinking about writing up an entry for Xanadu to be ready for that boondoggle’s opening.

  191. Herring123 says:

    Regarding Vallejo,

    You’ve always been allowed to reject collective bargaining agreements in chapter 11 – this isn’t new. You just need to jump through the hoops proscribed in section 1113 of the Bankruptcy Code. What’s new here is that the hoops in 1113 don’t apply in municipal bankruptcies under chapter 9, so it’s much easier for towns to get out of collective bargaining agreements than for companies in chapter 11.

  192. zieba says:

    from the rumor mill:

    “Brokers Recalling Loaned Shares in Citi

    Since this morning Bloomberg reports that major brokerages have been calling in the loaned shares that have been used for legitimate short sales in Citigroup.

    This in part explains the rally in Citi today, as the shortsellers cover their positions ahead of a 2:30 PM deadline today by which they must return the borrowed shares.

    It does seem rather calculated, particularly its conjunction with the Federal Reserve announcement.

    We have not seen this in the general news, just on the Bloomberg TV analyst reporting.

    There is the implication that this is a calculated market operation being conducting among big traders and the major brokerage houses who hold the shares for borrowing from customer accounts. Marketwatch seems to imply that this is being precipitated by ‘the authorities.’

    Nice timing to help bolster the financials after the FOMC announcement. This has the Larry Summers/Robert Rubin touch.

    It would be a good thing indeed if the Obama Adminstration did something meaningful to curb naked short selling and enforce the existing regulations. But if they are doing so for only their favorite companies, then this is not market regulation, it is crony capitalism and insider trading.”

  193. Ben says:

    why would you want to turn Xanadu into a prison. Turn them into apartments!

  194. zieba says:

    Why would anyone voluntarily live in that dump?

    It truly is hideous, I’m all for modern design but this job was a disaster.

  195. RentinginNJ says:

    Fed will begin buying U.S. Treasuries

  196. Victorian says:

    “Then later on down the road increase taxes on the wealthy like you were planning to do anyway.”

    Look at his actions and not his words. I am now firmly in the camp that Obama is a sell out and is just a more eloquent version of Bush. He talks a good game but all his actions w.r.t economy point to the fact that he is beholden to the same interests as Bush was.

  197. kettle1 says:

    Vic,

    The banks own obama, down to the short and curly’s

  198. Seneca says:

    Market is on speed right now.

  199. Clotpoll says:

    Get ready for the complete destruction of America.

    They really are this stupid.

  200. Clotpoll says:

    Must suck to be born today.

    Today’s child = tomorrow’s slave

  201. Sean says:

    This is pretty big news, and a game changer.

    Quote:
    Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.

    Release Date: March 18, 2009

    For immediate release

    Information received since the Federal Open Market Committee met in January indicates that the economy continues to contract. Job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending. Weaker sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment. U.S. exports have slumped as a number of major trading partners have also fallen into recession. Although the near-term economic outlook is weak, the Committee anticipates that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth.

    In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.

    In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months. The Federal Reserve has launched the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses and anticipates that the range of eligible collateral for this facility is likely to be expanded to include other financial assets. The Committee will continue to carefully monitor the size and composition of the Federal Reserve’s balance sheet in light of evolving financial and economic developments

  202. why would you want to turn Xanadu into a prison. Turn them into apartments!

    I’m going to go very lowbrow and suggest paintball. Huge indoor mall shootouts.

  203. 3b says:

    So the Fed acknowledges that we are in a deeper hole Buying 300 billion, removing the bit about a recovery in 2009 from their statement) than they were prepared to admit in past months, and of course the market rallies 100 points.

    But this is NOT good news, and the markets may need a day or 2 to realize this.

  204. HEHEHE says:

    The initial move on Fed day is typically a head fake.

  205. kettle1 says:

    3b

    the current move by the FED is the exactly the sort of action that will cause a sudden and rapid hyper-inflationary event once deflation peters out in a few years.

  206. Hubba says:

    AIG bonus issue is just an other circus fro the sheeple. A diversion let’s say.

  207. Sean says:

    The Fed buying Treasures is a stampede in the making to hard assets.

  208. veto says:

    http://tinyurl.com/c92yp9

    CS NY Metro Price to Northeast Census Median Asking Rent

  209. Clotpoll says:

    Had to turn on Cramer. He’s so juiced, he’s practically having a seizure.

    That’s how you know this whole thing will end very, very badly.

    The Fed just locked in the next depression.

  210. C Dawg says:

    Hyperinflation – Here we come!!! I plan to pay off my student loans in one check. Thank you Ben!!!

  211. chicagofinance says:

    Clotpoll says:
    March 18, 2009 at 11:45 am
    Stu (85)- I’d think about that class if ChiFi taught straight from Benjamin Graham.
    Especially since his most famous adherent, Mr. Buffett, went off the reservation.
    I’m pretty sure Graham wasn’t an advocate of selling naked puts up under major market indices.

    clot: I was considering creating a valuation class using the enterprise value of Depeche Mode. I would build the components of the revenue line, cost structure, cost of capital and a SWOT analysis. Additionally, we would build a set of proformas to securitize royalty streams (similar to the “Bowie Bonds”).

  212. Clotpoll says:

    Fed had three philosophical choices from which to choose:

    – Keynesian

    – Austrian

    – Zimbabwean

    Of the three, they made the choice I fully expected.

  213. 3b says:

    #210 sean: cCan you expand/explain on that thought?

  214. Ben says:

    that was the scariest move in gold I’ve ever seen.

  215. Victorian says:

    Holy Jeebus!!

    Take a look at Glod and the long bond!

  216. 3b says:

    #208 kettle: didn’t I tell you Kudlow said deflation is off the table?

  217. Shore Guy says:

    “Fed will begin buying U.S. Treasuries”

    And then will forgive the loans later on by burning them. This becomes the USG funding its budget with, as George Costanza might have said, “NOTHING!”

  218. 3b says:

    #218 victorian: And the dollar!!

  219. Hyperinflation – Here we come!!!

    Hyperinflation only works if the inflated currency makes its way to employees paychecks.

  220. implosion08 says:

    I hate ultrashort ETFs.

    I don’t want to buy more ultrashort ETFs.

    I want to be done with ultrashort ETFs.

    I want to be long, dumb, and happy.

    But I have no choice. None at all.

    And my infant son is blissfully unaware of what is happening to his future.

  221. chicagofinance says:

    OT: Going to MSG tonight….check these tix

    Court 14 – Row A

    Behind the Knicks bench….
    http://www.nba.com/media/knicks/0708_ssubseatinga.pdf

  222. Justin says:

    Can someone explain the problem with the Feds buying 300B Treasury Bonds?

    I don’t see the connection that everyone else is making.

  223. Sean says:

    re#216 3b – The Fed’s announcement today to move into monetizing long term debt (buying debt issued by the US Treasury themselves with money created out of thin air) they will not only put the dollar under pressure but the existing Treasuries held by foreigners will likely hit the market. Foreigners will dump those treasuries along with the dollar which will cause a giant stampede away from our american safe haven into hard assets.

  224. HEHEHE says:

    Justin,

    They are monetizing debt. They are buying treasuries with money created out of thin air. This debases the dollar and leads to inflation. If they continus in this manner it will likely lead to hyperinflation down the road.

  225. 3b says:

    #227 hehe: Yeah, but now we can have 2% mtg rates YIPEE!!!! sarcasm/off.

  226. kettle1 says:

    3b,

    Deflation still has a solid 2+ years left behind it unless TPTB decide to just pull the plug on the whole deal, which isnt going to happen short of nuclear war.

    That is why the switch from deflation to hyper-iniflation will be so devastating. The economic whiplash will wipe out a huge number of people and businesses.

  227. 3b says:

    #229 kettle: Oh I agree. I just want to splinter Kudlow.

    And I am trying to devie a strategy going forward from here.

  228. Justin says:

    #227 HEHEHE:

    Thanks for the info.

    Will this start the bond market down the road to crash-ville, like I’ve read a bunch about?

  229. Clotpoll says:

    3b (230)-

    Strategy, in one sentence:

    Buy all the gold you can get your hands on.

  230. Clotpoll says:

    Justin (231)-

    Yes, but don’t worry. Bill Gross will be OK.

    “Will this start the bond market down the road to crash-ville, like I’ve read a bunch about?”

  231. Sastry says:

    #227 and #228…

    Basically, the impact of this is the current interest rates on savings accounts are plummeting (I saw ours at FNBOdirect go from close to 6% to about 2.15% today) — makes a big difference if most of the money is in savings accounts and one doesn’t have good luck (common sense) with stock markets [I lost my shirt (rather shorts) shorting Fannie Mae and Lehman — on the same day; aided by Mr. Margin and Ms. 4x Daytrade Buying Power! — 25% movement wipes out the account…]

    I hope there won’t be a sudden asset inflation in addition to high interest rates [while savings rates/CD rates lag a bit behind].

    S

  232. Shore Guy says:

    One would only do this if there were no willing buyers out there, no?

  233. Stu says:

    ChiFi:

    “Behind the Knicks bench….”

    And there is the problem. Now if you were behind the Celtics or the Lakers bench, hoowah.

  234. 3b says:

    #232 clot:Buy all the gold you can get your hands on.

    And real estate? Bid 50% off??

  235. Sastry says:

    One question in relation to home buying: If there is a chance of hyper inflation (that is too strong a word though… may be high inflation is appropriate), does it make sense to take a bigger loan than normal. I am not sure, but with implied negative fed rates, would the mortgage rates go down?

    S

  236. Stu says:

    Gold still climbing

  237. C Dawg says:

    222, Tosh – I heard you, but if hyperinflation doesn’t make it into employees’ paychecks we are all screwed beyond repair. Either way…whatever. It’s gonna happen anyways.

  238. HEHEHE says:

    Kettle,

    You are right but $300B is a pretty huge first step and you know it’s just the first of many

  239. 3b says:

    #240 cdawg: I do not see how it makes it into employee paychecks any time soon, while we still have dramatically rising unemployment.

  240. Justin says:

    #233 Clotpoll:

    Ok, I follow. Thanks.. Can someone now explain how the 30yr bond yield relates to mortgage rates?

  241. C Dawg says:

    242 3b – Oh, no way it will happen soon. I’m guessing a couple or few years down the road.

  242. Stu says:

    “does it make sense to take a bigger loan than normal?”

    Considering that defaulting is being rewarded and paying on time is being punished, I would try to put down as little as possible. FHA all the way!

  243. Sean says:

    re#243 Short answer is is none. There is no direct correlation between the 10 yr treasury and the 30 year treasury and mortgage rates of any kind. There is no loan that uses the 10yr or 30yr as an index.

  244. Justin says:

    #247 Sean:

    I know there is no _real_ connection but everyone seems to relate the two.

  245. kettle1 says:

    Sastry,

    the question is can you carry the debt through the next few years of depression before we see inflation? With rampant unemployment that is going to get worse, the challenge becomes, one of whether you are able to avoid default long enough for hyper inflation to step in and allow you to escape the debt?

    ————————–

    HEHE 241

    yes
    That is the same as betting it all on black because there was a run on black the last few spins of the wheel. you may clean up, but you may want to assess whether or not you have a backup plan for an unexpected loss of income or general default on your part.

    Hyperinflation will take longer then most people think to show up, as the big players such as the US, Japan, China, Europe, will all be pulling the strings to delay such an event.

    With most of the big players on board, such a delay could last longer then most could hold out for the inflationary turn.

  246. kettle1 says:

    oops

    Sastry,

    the question is can you carry the debt through the next few years of depression before we see inflation? With rampant unemployment that is going to get worse, the challenge becomes, one of whether you are able to avoid default long enough for hyper inflation to step in and allow you to escape the debt?

    That is the same as betting it all on black because there was a run on black the last few spins of the wheel. you may clean up, but you may want to assess whether or not you have a backup plan for an unexpected loss of income or general default on your part.

    Hyperinflation will take longer then most people think to show up, as the big players such as the US, Japan, China, Europe, will all be pulling the strings to delay such an event.

    With most of the big players on board, such a delay could last longer then most could hold out for the inflationary turn.

    ————————–

    HEHE 241

    yes

  247. C Dawg says:

    kettle – You hit the nail right on the head. You just have to hold on until then.

  248. Al says:

    toshiro_mifune says:
    March 18, 2009 at 2:31 pm
    why would you want to turn Xanadu into a prison. Turn them into apartments!

    I’m going to go very lowbrow and suggest paintball. Huge indoor mall shootouts.

    I was thinking just that!!!

    It would be great for painball matches – biggest arena in the world!!

    You can imagine 200×200 teams slugging it out – lots of fun…

  249. Clotpoll says:

    Diana Olick tossing cold water on the agency paper buyback.

    As with the first time around, the savings won’t be passed on to borrowers.

    As if there are really any borrowers to begin with.

  250. Clotpoll says:

    Olick-

    Fed moves “will not save the dismal Spring market”.

    Expect Diana Olick to be fired from CNBC soon.

  251. Clotpoll says:

    Justin (243)-

    They don’t. There’s a much closer correlation that traditionally exists between 10 yr Treasuries and mortgages, but those correlations have lately been obliterated.

    Since last Fall, margins and pricing in mortgages has been Alice in Wonderland-type stuff. And, in the worst possible way.

  252. Stu says:

    Clot…

    You have been so right on the deflation/inflation call for so long. It is impressive.

  253. Clotpoll says:

    Anybody out there who refi’d in the past few weeks feel like a bit of a sucker?

    Sorry. I can’t help it.

  254. Poser says:

    Clot,
    re: gold – you mean the physical stuff or etf’s and such?

  255. Victorian says:

    In case of hyperinflation, your mortgage might go down to 1% of your total expense, but food/energy will be the other 99%. Be careful what you wish for.

  256. Clotpoll says:

    3b (237)-

    Bid? 50% off? How could a sane person even fashion a bid while swimming in this piranha-filled tank of fetid, toxic water?

    I’m a lifetime RE guy. If I can’t value the asset, how can John Q?

  257. Clotpoll says:

    If you are a seller of RE, you lose.

    If you are a buyer of RE, you lose.

    Great market, eh?

  258. zieba says:

    http://3.bp.blogspot.com/_H2DePAZe2gA/ScFKZoIdHAI/AAAAAAAAIsA/-EyJxECevDQ/s1600-h/WheelbarrowBen.JPG

    Nice moves on the euro currencies today.

    When I left a loaf of bread cost 200,000 zlotys.

  259. zieba says:

    Q for the board,

    Are there any gotchya pitfalls I should be on the lookout for when considering a safe deposit box?

  260. kettle1 says:

    C Dawg 240,

    We are set to see a nasty inflationary depression. We are in stage 1. stage 1 being a deflationary downslide and the destruction of excess debt. stage 2 will be the switch to hyperinflation. during stage 2 people will have taken measure to protect themselves from the deflationary trend and governments will be fighting deflation and all of that just as very high / hyperinflation rears its head and wipes out a large % of those who were still holding on. Stage 3 is a long slow slog through inflationary depression until a new financial system that has characteristics such as being either partially gold backed or some other constraint on excess fiat currency is put into place. We will probably see a major war at some point during step 3, if for no other reason then a nation would rather go to war then eat itself from them inside out as it is starved for financial and real resources and its population becomes restless.

  261. Sastry says:

    Kettle1 #249:

    So, the question is as follows:

    If there are enough savings, is it better to pay just 20% and keep the rest in a CD or something?

    For comparison, the loan rate is 4.7% (with 1% point). The advantage is that the savings will give protection against short-term set-backs. And longer term, if inflation kicks in, we are still paying 4.7% on a bigger loan. Also, if the savings rates stay low for an extended period of time, we could pay a big chunk again.

    Disadvantage in short term is that the best rates we get for CDs (e.g., 1-year CD is 3.5%).

    Is 1.2% of interest difference in interest rates justifiable by the insurance to have? Though having liquid cash can be tempting at times [see, a great good deal with Citi trading at 30 bucks and a dividend yield of 10%!!].

    S

  262. Sastry says:

    Is 1.2% of interest difference in interest rates justifiable by the insurance [as in peace of mind] to have?

  263. kettle1 says:

    Vic 259,

    bingo!

    ————

    Stu,

    I hate to be nitpicky, but i believe that i was one of the first here to argue deflation.

    not to take away from clot of course,

  264. Clotpoll says:

    poser (258)-

    Depends on how you feel about the chances of the paper gold market’s collapse. Which, to me, seems to be too damn great.

    In that case, the physical’s the ticket.

    Of course, what do I know? I took a beating in SRS today, so bi will tell you I’m an utter fool.

    At least, an utter fool until 9:30 AM tomorrow.

  265. kettle1 says:

    Sastry,

    That depends on your own assessment. Remeber i am just a highschool janitor.

    Though in the scenario you propose, and assuming that a home purchase is a given, then i would put out as little cash as possible and hold as much cash as possible.

    The goal is not return ON capital, but return OF capital.

    In my perfect world, i would wait out the deflationary slide for another 1 – 2 years and then buy for cash, in an environment that is at minimum not as tax hostile as NJ is.

  266. comrade nom deplume says:

    [252] Al

    And its great practice for urban unrest!

  267. Stu says:

    Kettle1…then props to you. Doesn’t really matter who made the call. What matters is if people are prepared to listen to it.

  268. Sastry says:

    If nothing, I will be able to tell stories to my daughter about how fast the world has changed from the time she was born (mid ’07). I hope she won’t feel guilty, especially since she will be paying for it [I hope through taxes rather than a greatly decreased overall quality of life].

    S

  269. 3b says:

    #272 sastryI hope through taxes rather than a greatly decreased overall quality of life].

    Same thing.

  270. kettle1 says:

    Clot,

    last i checked you could collapse the paper gold market for about 6 billion or so.

    We should setup our Antigua operation and find a few columbian investors. Buy the physical, then collapse the paper.

  271. C Dawg says:

    Vic 259 – Good point. Hopefully my alpaca farm will fare well until then.

  272. Clotpoll says:

    sastry (272)-

    There will be both runaway taxes and a subsistence lifestyle awaiting your daughter.

    Be sure to thank your gubmint and banking system.

    Then again, no sweat. By the time your kid is deep into debt serfdom, you’ll be dead anyway.

  273. Clotpoll says:

    vodka (274)-

    Honest to God, I think it would be easier than the Hunt brothers’ cornering of the silver market.

    There WILL be a failure-to-deliver event. I just can’t guesstimate when.

    Although I think we got a lot closer to it today.

  274. Clotpoll says:

    If there is justice on this Earth, GS will also be central in the failure-to-deliver.

  275. Sastry says:

    Kettle1 #269…

    “in an environment that is at minimum not as tax hostile as NJ is…”

    Coming from an immigrant, it may sound strange, but… I love NJ :) [At least for now, I can’t visualize my life else where, including my hometown in India].

    “I would wait out the deflationary slide for another 1 – 2 years and then buy for cash”

    When the inflation begins, wouldn’t it push up prices of all hard assets (including RE)?.

    S

  276. Stu says:

    “If there is justice on this Earth, GS will also be central in the failure-to-deliver.”

    Problem is, justice is bought with GS dollars.

  277. Poser says:

    thanks. I always thought physical gold would be the safest when the worst of everything happens.

  278. Clotpoll says:

    vodka (274)-

    “We should setup our Antigua operation and find a few columbian investors.”

    I think by the time we can get things set up, we’d want to be working with Mexican drug cartels. Hell, why set up in Antigua? They may be in control of Cancun by then.

    So, we bet on sovereign defaults while simultaneously crashing the gold market? Sounds like a plan.

    Do you read a lot of Ian Fleming?

    We also probably want to devise an “exit strategy” in case our trade turns against us. Something tells me our investors will probably decide to recoup their losses by starting with our spleens.

  279. Sastry says:

    Clot #278:

    Goldman will use their political connections to get a bailout “for someone else, we don’t need it since we are perfectly hedged” and then collect the bailout money.

    There is and will be no justice with companies like Halliburton and Goldman. Common people are like sheep on a farm for them — they can slaughter us and eat, and strongly believe that they haven’t done anything wrong, since they are higher up in the food chain.

  280. Clotpoll says:

    Stu (280)-

    In the coming world, justice will be purchased with hot lead.

  281. kettle1 says:

    279 sastry,

    when the inflation begins, wouldn’t it push up prices of all hard assets

    yes, but i think we see inflation at 2 years at the earliest. i think it could be much longer. too many unknowns for a better guess at this point.

    If it looked like inflation was about to ignite you could always buy earlier then you planned. Cash is king in a deflationary environment.

    besides this is probably a good environment to be highly mobile in.

  282. Sastry says:

    #282 Clot…
    We also probably want to devise an “exit strategy” in case our trade turns against us. Something tells me our investors will probably decide to recoup their losses by starting with our spleens.
    —–

    Everyone wears a lot of 24k gold jewelery. May be we have to “perform” while wearing the jewelery :)

    S

  283. HEHEHE says:

    Check out this beauty:) Not an owner but wish I was

    http://finance.yahoo.com/echarts?s=AUY#symbol=AUY;range=1d

  284. Clotpoll says:

    Sastry (279)-

    To my mind, RE is not a hard asset.

    I’ve always maintained it is sui generis. Class by itself, with its own rules and quirks.

  285. Sastry says:

    Kettle #285…

    Thanks. Good points. I have always been mobile, so I didn’t value that aspect as much as I should have…

  286. HEHEHE says:

    Actually the miners pop looks steeper than the GLD.

  287. kettle1 says:

    clot

    Do you read a lot of Ian Fleming?

    We also probably want to devise an “exit strategy” in case our trade turns against us. Something tells me our investors will probably decide to recoup their losses by starting with our spleens.

    who hasnt read fleming?

    Already thought of the exit strategy…..

    But really, if we are going to be forced to live in a world run by thieves, why not play their game?

  288. jim says:

    263. zieba says:
    March 18, 2009 at 3:48 pm
    Q for the board,

    Are there any gotchya pitfalls I should be on the lookout for when considering a safe deposit box?
    —-
    Zieba,
    Make sure the box is big enough for the purpose you need it for. I have one that I have some handguns stored in as well as important paperwork. Depending on the type of account you have at the bank, you may be able to get a discount on your yearly fee if you keep an account with a higher minimum balance. You’ll have piece of mind knowing your ‘stuff’ is there when you need it. I haven’t had any problems with my box and I’ve had it since 2004.

  289. Clotpoll says:

    Dammit, vodka, now you’ve gotten this song stuck in my head:

    The surf was easy on the day I came to stay
    On this quiet island in the bay
    I remember a line of women all in white
    The laughter and the steel bands at night

    Now the americans are gone exept for two
    The embassy’s been hard to reach
    There’s been talk and lately a bit of action after dark
    Behind the big casino on the beach

    The rules are changed
    It’s not the same
    It’s all new players in a whole new ball game

    Last night I dreamed of an old lover dressed in gray
    I’ve had this fever now since yesterday
    Wake up darling they’re knocking the colonel’s standing in the sun
    With his stupid face the glasses and the gun

    I know what happens
    I read the book
    I believe I just got the goodbye look

    Won’t you pour me a cuban breeze gretchen

    I know a fellow with a motor launch for hire
    A skinny man with two-one shoes
    Cause tonight they’re arranging a small reception just for me
    Behind the big casino by the sea

    I know what happens
    I read the book
    I believe I just got the goodbye look

    -Donald Fagen

  290. Sastry says:

    Clot #288…

    I have this thought of some subversive technology that can make current form of housing obsolete. For example, some nano-fiber based “intelligent home” that is very strong, extremely configurable on demand. Sort of a multi-story tent on steroids and attached to a powerful computer. It sounds like a star trek scene, but there are so many things that we see now that were unimaginable a century or two ago.

    That said, timing these things is not at all something I am good at!

    S

  291. Clotpoll says:

    Drat. 293 moderated.

  292. Shore Guy says:

    As the lyrics say:

    It’s the end of the world as we know it.

  293. kettle1 says:

    ZIeba, Jim

    depends on what you want the safe deposit box for.

    would anyone be surprised to see an Executive Order 6102 redux

  294. Sastry says:

    #287 and #290…

    Check Sun Micro’s pop [80% pop]. I am an owner (been for way too long), and I wish I weren’t!!

  295. Clotpoll says:

    sastry (294)-

    You really shouldn’t do mescaline until after the sun goes down. :)

  296. kettle1 says:

    Sastry

    someone built and has been working on a machine that can essentially print a home in the same method that a “rapid prototyper” can, using a concrete material and laying in wiring and ductwork at the same time.

  297. 3b says:

    #285 kettle: Don’t forget unending, ever increasing property taxes. I would not value RE as gold/silver, other hard assets.

    It is not readily saleable,and the transaction costs are steep.

    However, do you think realtors will be sceaming that people better buy now, becasue in a couple of years time that 500k POS Cape thats now 489K will be 1.5 million?

    Would anybody care,would anybody want it at that price?

  298. Ben says:

    “In case of hyperinflation, your mortgage might go down to 1% of your total expense, but food/energy will be the other 99%. Be careful what you wish for.”

    Victorian, you can easily use land to produce food. In the coming years, you’ll find a large percentage of Americans reducing their food costs by simply growing their own food.

  299. make money says:

    Victorian, you can easily use land to produce food. In the coming years, you’ll find a large percentage of Americans reducing their food costs by simply growing their own food.

    Majority of americans can’t cook. What make syou think they can actually grow food?

  300. jim says:

    296. kettle1 says:
    March 18, 2009 at 4:24 pm
    ZIeba, Jim

    depends on what you want the safe deposit box for.

    would anyone be surprised to see an Executive Order 6102 redux

    kettle1,
    What is Executive Order 6102?

  301. Stu says:

    “What is Executive Order 6102?”

    Oy vey!

  302. A.West says:

    Bernanke has promised there would be no deflation, and it looks like he’ll follow through. If he prints enough, fast enough, he might even get to keep his job for Obama.

    The reason why the Fed/Treasury buying government debt is inflationary is as follows:
    In Zimbabwe and historical hyperinflationary countries, governments printed the money, then paid their bills with it. It’s how they make sure they (the goverment) are first in line in the economy’s claim on resources.

    The difference between this and when the Fed buys debt is mostly formality. It provides some deniability about the government is really doing. First the govt spends the money it doesn’t have, issues an IOU on one piece of paper (bonds), and then has the central bank issue some money to buy the IOU. It even sends some trading revenues to the government’s I-banking servants.

    The Zimbabwean method is actually more honest. The debt monetization method can actually create weird short term movements and uncertainties, as it manipulates markets further while debasing currencies long run. The same ultimate purpose exists though – ensuring that the govt gets first dibs on economic resources, and tricking some people into thinking they have more wealth than they really do. The economic actors closest to the printing presses do the best.

  303. Ben says:

    I don’t know if confiscation is the cards. They originally did it so the government could take possession of all of our gold. As far as I know, they wouldn’t need to do that again because they still have most of it. On the flipside, there is the risk that they have been secretly dumping it onto the market the past 30 years to keep the price suppressed.

  304. Sastry says:

    Kettle1 #299…

    On a related note, I am so impressed by the synthetic diamond industry. For the first time, diamonds are becoming affordable, and don’t require price fixings and the small matter of suppressing people of some nations.

    Clot #294, I’m a bit excited… Found out my FICO scores for the first time and they are very good (800+), and my peanuts amount of JAVA stock (daughter’s education fund) almost doubled. And for the first time, my wife and I feel that we can afford a house that we like.

    Beats mescaline…

  305. make money says:

    Clot,

    last i checked you could collapse the paper gold market for about 6 billion or so.

    We should setup our Antigua operation and find a few columbian investors. Buy the physical, then collapse the paper.

    Kettle, Clot,

    Christopher Wallace to my ears.

  306. make money says:

    Executive Order 6102?

    that’s exactly why I trust Australia more then USA!

  307. jim says:

    While looking for Executive Order 6102 on the web I found this on Wikipedia-

    Although the U.S. Treasury did not seize safe deposit box contents it nevertheless came into possession of a large number of them due to bank failures. During the 1930s over 3,000 banks failed and the contents of their safe deposit boxes were remanded to the custody of the Treasury. If no one claimed the box it remained in the possession of the Treasury. As of October, 1981, there were 1605 cardboard cartons in the basement of the Treasury each containing the contents of an unclaimed safe deposit box.[

  308. HEHEHE says:

    “We should setup our Antigua operation and find a few columbian investors. Buy the physical, then collapse the paper.

    Kettle, Clot,

    Christopher Wallace to my ears.”

    Will you be knighted like Sir Alan Stanford?

  309. jim says:

    I wonder what kind of shape my bank is really in that has my safety deposit box? Why do I always learn something on this blog that deflates me?

  310. Clotpoll says:

    westy (306)-

    The Fed as a variation on Ponzi. Love it.

  311. kettle1 says:

    make,

    your a Notorious BIG fan?

  312. Clotpoll says:

    sastry (307)-

    I’d sell that JAVA pronto. Not much more pop left in the IBM buyout news.

  313. kettle1 says:

    HEHE

    dont want a title, keep your head down and stay low to the ground.

  314. Clotpoll says:

    HE (311)-

    I would just settle for people calling me Goldfinger.

  315. skep-tic says:

    #199

    “I am now firmly in the camp that Obama is a sell out and is just a more eloquent version of Bush.”

    is this a backhanded comment for W?

  316. kettle1 says:

    clot

    1. borrow 6 billion from “investors”
    2.buy 6 billion in gold futures
    3. Short paper gold
    4.buy physical
    5. demand delivery of 6 billion in gold futures, watch the paper market collapse, clean up on your shorts and make a hasty retreat to an undisclosed location along with your new substantial personal fortune.

  317. comrade nom deplume says:

    I really like when politicians pop off. The collection of quotes from folks like Rangel will make the upcoming lawsuits interesting:

    “”A serious attack has been made on our economy and the country and because of its uniqueness, the normal way in which you would respond has been very, very limited,” Rangel said when asked about setting aside his usual opposition to retroactive tax increases. “The depth of the damage that has been done requires very unusual and unique retaliation.”

    Can you say “bill of attainder”? When the government makes the argument that the bill is not punishment, so it can’t be a bill of attainder, plaintiff’s counsel will be able to call congressmen to the stand, and impeach them with quotes like that one. I’d take the exec’s cases for costs, just for the publicity value.

  318. Clotpoll says:

    vodka (320)-

    My moderated #293 is the words to “The Goodbye Look” by Donald Fagen. Highly apropos.

  319. Clotpoll says:

    vodka (320)-

    We’d make so many enemies by pulling off this stunt that we’d be dead within two days of its completion.

  320. kettle1 says:

    CLot,

    the US government would not let the paper gold market collapse. You would see US gold reserves being handed over to COMEX in a “Bailout”

  321. Clotpoll says:

    plume (321)-

    Just mind-boggling stupidity. To me, it’s scary that the first idea these dolts have to get the bonus money back is to pull something a guy like Putin would.

    Very indicative of their mindset. Don’t be surprised when they decide to apply all that “brainpower” to take out John Q.

  322. Clotpoll says:

    vodka (324)-

    What if it turns out all the US’ gold reserves are sitting in China?

  323. kettle1 says:

    CLot,

    I think that the big players would bailout the paper gold market, possibly by delaying delivery and doing a back room exchange. Other wise they could quickly loose what influence they have over the markets in general.

    That doesnt mean the price wouldn’t still go up, just not through the roof.

  324. make money says:

    Kettle,

    touch my chedar, feel my beretta!

  325. Shore Guy says:

    Well, this makes the buying of USG paper seem like chump change:

    http://www.washingtonpost.com/wp-dyn/content/article/2009/03/18/AR2009031802283.html?hpid=topnews

  326. make money says:

    Shore 327

    It’s funny how they are specific with the 1.2 trillion number but never mention th eprice they pay.

    I bet they’re paying at least 90 cents on the dollar if not making them whole.

  327. Shore Guy says:

    Well, it all makes sense now. The goal is to get the Dow up above where it was at some selected point and they don’t care that the value wil be destroyed due to devalued currency, because they will point to a single improved number and are convinced the public will say “Yea! We have been saved!” without realizing it now costs $15 to buy milk.

  328. Shore Guy says:

    Make,

    They may well be paying 1.25 on he dollar, to help make them feel confident to lend.

  329. Shore Guy says:

    “Edward Liddy says he doesn’t want to share the names of executives who have received bonuses, saying that he fears for their safety.”

    FRom a photo caption at Wash Post

  330. Shore Guy says:

    “Hello. 9-11. Please deposit $.50, then state your emergency.”

    http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=12539871&ch=4226713&src=news

  331. Shore Guy says:

    You guys all been taken away by the Obama Youth, or some other anti-capitalist group?

  332. Clotpoll says:

    make (328)-

    Is that from Mutant Ninja Turtles?

  333. Clotpoll says:

    Shore (335)-

    There’s a car parked up the block every day at sundown, but the guy in it told my neighbor he was selling surfboards out of his trunk and not to worry.

  334. Sastry says:

    “…without realizing it now costs $15 to buy milk”

    On the plus (no pun intended) side, we will, on average, be more less obese!

    S

  335. Shore Guy says:

    At least here is one less reason to bend over, not that B.O. wont find some other reason for us to do so:

    “By Madison Park (CNN) — A decade-long study following more than 75000 men found that prostate cancer screenings led to more diagnoses but did not reduce the number of deaths from the illness”

  336. Clotpoll says:

    Bummer. Vodka’s really into fat chicks.

  337. comrade nom deplume says:

    More support for shiny:

    “Paulson, the hedge fund manager who became a billionaire by betting against subprime mortgages, bought a stake in AngloGold Ashanti, a South African gold miner, from Anglo American yesterday. Paulson has added aggressively to his gold holdings lately, which already include a $450 million stake in Kinross Gold Corp, according to Dow Jones.

    Paulson joins David Einhorn, who infamously bet on the demise of Lehman Brothers and reported stakes in the SPDR Gold Shares ETF and the Mkt. Vector Gold Miners ETF last month.

    These hedge fund whales are making these bets despite the fact that gold has proven itself to be a long-term loser since 1970.”

  338. Clotpoll says:

    plume (341)-

    Ignore those two guys’ moves at your own peril. Wow!

  339. comrade nom deplume says:

    [338] clot,

    Huh? Fat chicks? I have met Mrs. Kettle, and she is a looker.

    Now you are gonna wanna come to a GTG, just to check.

  340. kettle1 says:

    Nom,

    thanks.

    Was that clot an imposter? where do fat chicks come into this?

  341. Clotpoll says:

    plume (343)-

    If my wife even thought I was checking out other women, she’d gouge my eyes out.

    Come to think of it, she may do it anyway.

  342. Shore Guy says:

    When milk costs $15 do we get free govt cheese?

  343. Hannibal says:

    MMMMMMMM fat Chicks!

    Fat Chick, would you care to join me for some Fava beans and a nice Chinati?

  344. scribe says:

    Shore, #337

    I think those news stories are really irresponsible.

    What the studies are talking about is men above a certain age – I think it’s 75.

    My brother had a physical this time last year, and his PSA was slightly elevated. They found cancer in several sites, and he’s in his early 50’s. He had the whole thing removed, or the prognosis would have been 10 to 15 years.

    One of our uncles died of prostate cancer 20 years ago at the age of 77. The last 6 months were truly horrifying.

    DO have that screening every year.

  345. Shore Guy says:

    I think Gary may look better in a skirt than she does. Oy!

  346. Sean says:

    re#331 – Shore Guy – Liddy was reading threatening comments to AIG employees at the Financial Services meeting today, most likely culled from the internet chat boards.

  347. Kettle1 says:

    scribe,

    premptive prostate removal a new fad?

  348. scribe says:

    And now, back to our regularly scheduled program:

    From Brian, at PropertyShark.com, this just came in via email.

    grim, did you get this one yet?

    —————–

    Greetings,

    The February 2009 New Jersey Foreclosure Report is available now for New Jersey press and media. Please let me know if you would like a copy of the report and/or if you would like to speak with our CEO Bill Staniford on Thursday for comment on the foreclosure situation in New Jersey.

    Key takeaways from the report:

    • There were 601 new foreclosures scheduled for auction in New Jersey in February 2009, which is down 23% from January 2009 (783) and down 24% compared to February 2008 (793).
    • Essex, Middlesex, Ocean, and Union counties had the most new foreclosures in February 2009. Essex County (79) had the highest number of new foreclosures scheduled in February 2009.
    • Newark had the highest number of foreclosures among cities in New Jersey, while Jackson Township had the highest foreclosure rate per household.
    • Newark topped the list with 37 new foreclosures, followed by Paterson with 29, and there were 24 new foreclosures in both Elizabeth and Trenton.
    • Jackson Township had the highest rate of foreclosures per household with one in every 1,090 homes scheduled for auction, followed by Plainfield with one in every 1,164.
    • Union County had the highest rate of foreclosures per household with one in every 3,002 homes scheduled for auction in February 2009. Passaic County followed with one in every 3,151 homes
    scheduled for auction, and Atlantic County had one in every 3,167.

  349. comrade nom deplume says:

    [346] shore,

    Government Cheese. That was the name of one of my favorite garage bands from the ’80s. Don’t think they went anywhere.

  350. Clotpoll says:

    Sean (352)-

    Not from here. Nobody here would ever do that. :)

    “Liddy was reading threatening comments to AIG employees at the Financial Services meeting today, most likely culled from the internet chat boards.”

  351. scribe says:

    kettle,

    They test the individual cells. It was very aggressive – on a scale of 1 to 10, a 7. So there wasn’t any question – remove the whole thing. Age was a factor, too.

    That is – when cells are that aggressive, showing up in multiple sites, but still – apparently, hopefully – contained within the prostate – at a relatively young age – remove the whole thing.

  352. Sastry says:

    Clot #354, and Sean #352

    Liddy should then also read some of the outrage posts.

    Actually, if we can find out who was there at the other end of the “hedging” that Goldman did, that would be great. I am sure it will have some links to the well-connected people.

    I think they should bring in Spitzer to take on the bankers. He was “if you see kay” ing well-paid women, and not the general public. Was listening to him on WNYC today. Good guy.

    S

  353. Shore Guy says:

    Liddy can go ahead and read all the threatening messages he wants. The one with piano wire was interesting. The folks who have been given OUR money were tone deaf to how this would sound and have earned whatever anger is directed their way. The names WILL come out and whether or not some nutcase actually goes after any of them (after all, addresses, etc. are so freely available online, it would not take a real brain to find one of them), I suspect there will be some sleepless nights and some looking over shoulders for a few weeks, maybe longer. Ahh, the cost of unearned money.

  354. Clotpoll says:

    Shore (362)-

    All those guys at AIG who blew up the world should be cooling their heels in a Supermax somewhere. Talk about “feeling threatened”…

  355. Shore Guy says:

    Clot,

    Supermax would be kind compared to what they really deserve.

  356. Hobokenite says:

    So I’m wondering what inspired the round of “Bonus guarantee” contracts in March of 2008………

  357. borat obama says:

    last one…hiee fiveeeee

Comments are closed.