Wed 2 Sep 2009
Mortgage Bankers: Hard to do job without fast and easy money, need bailout.
Categories: Economics , National Real Estate , PoliticsFrom Bloomberg:
Mortgage Bankers Push for New Federal Loan Guarantee Program
Mortgage bankers are pushing Congress to expand the U.S. government’s support of the market by guaranteeing private-industry home-loan securities and replacing finance companies Fannie Mae and Freddie Mac.
The first step builds off the model for Ginnie Mae, the agency that guarantees payments on bonds backed by government- insured mortgages, according to a report today by the Washington-based Mortgage Bankers Association. The second part involves winding down government-seized mortgage buyers Fannie Mae and Freddie Mac and creating “two or three” new privately funded, government-chartered companies to back individual loans.
“We wanted to put forth a structure we think that has elements in it that respond to a lot of the discussion and debate on Capitol Hill,” Mortgage Bankers Association President John Courson said in an interview.
Putting the “full faith and credit” of the U.S. Treasury behind a portion of the $1.8 trillion non-agency mortgage market would help boost a once-dominant form of home-loan financing that almost collapsed in 2007 as delinquencies rose. The association, which represents about 2,400 lenders, mortgage brokers, commercial banks, thrifts and other companies, said the importance of housing to the U.S. “economic and social fabric” warrants a federal government role in mortgage liquidity.
“There’s a lot of white canvas that has yet to be painted on,” said Courson, who is also president and chief executive officer of Central Pacific Mortgage Co. in Citrus Heights, California. “. We don’t have all the answers. We just wanted to put a structure out there to guide the debate.”
…
The new structure would remove the credit risk from the mortgages and leave investors with the interest-rate risk, the association said in the report. In a separate statement, the group said the government guarantee is intended only to support “products needed to keep the secondary market for core mortgage products liquid and functioning.”
From the Philly Inquirer:
A foreclosure on hold as a couple holds on
Nick Illich, no stranger to bad news, might be on the verge of getting some good news regarding the hugely troubled mortgage on his Mayfair home.
Illich believed on Monday, after a phone call from his mortgage holder, California-based OneWest Bank, that he was about to be placed in foreclosure.
Now, bank spokeswoman Diane Henry said the foreclosure actually was on hold, pending a review required under the federal Home Affordable Modification Program (HAMP).
The voluntary federal program, which OneWest joined two weeks ago, requires that the foreclosure process be stayed, even if it was under way before the lender began participation.
That is the good news, but Illich’s interpretation of the disputed phone calls with OneWest - that foreclosure proceedings would be starting against him yesterday on one of two loans he took with OneWest’s predecessor, the now-defunct IndyMac Bancorp Inc. - took a great toll, he said.
“If I die tomorrow, I hope to go to heaven, because what I’ve gone through is hell,” said Illich, who has spent months unsuccessfully negotiating with the lender to modify the terms of first and second mortgages on the house in Philadelphia’s Mayfair section that he bought a decade ago for $73,000.
The total debt is about $128,000 for Illich, 58, and his wife, Kathleen, 52 - both of whom are disabled and get $1,700 a month in all from Social Security.
From the Chicago Tribune:
Housing market’s bottom difficult to predict
Mark Kiesel saw the real estate crash coming.
Kiesel, a managing director at investment firm Pimco, wasn’t alone in his 2006 warning of a looming housing market meltdown. But he was among those who put his money — in his case, a lot of it — where his mouth was.
Kiesel and his wife, Amy, sold their Newport Beach, Calif., house in the summer of 2006 for 20 percent more than they had paid and moved into an apartment one-fifth the size.
Now, news reports highlight signs of a real estate market bottom. And the Kiesels are still renting.
Just as experts couldn’t precisely time the bursting of the housing bubble, no one claims to know exactly when the market will hit bottom.
Plenty of pundits are weighing in with predictions on when the crisis will end, but knowing what to do is tougher than knowing what to say. For those who sold homes during the bubble, actions can be as telling as words.
“We’re not there yet,” Kiesel said, referring to the bottom in housing prices. “I plan to buy when I can get a place for 50 cents on the dollar” compared with the market peak, he said.
Kiesel turned out to be right about the housing bubble. But three years ago, he didn’t think the crash was going to be as prolonged as it has turned out to be. The Kiesels probably will stay in the apartment longer than planned, he said, perhaps even until 2011.
Nobel laureate and Princeton University economist Paul Krugman and his wife, economist Robin Wells, bought a $1.7 million Manhattan apartment recently. The residence had been listed for close to $2.5 million.
Dean Baker, a Washington economist, also bought recently. Baker began warning of a housing bubble in 2002 and got even more nervous as prices kept rising.
Baker and his wife, Helene Jorgensen, also an economist, sold their Washington apartment in 2004 and rented a place a couple of blocks away. Although they got about three times the 1997 purchase price, Baker and Jorgensen might have made more if they had held off a year or two.
“I wasn’t trying to time the peak,” Baker said, because he doesn’t think it’s possible to perfectly time markets.
UCLA public policy professor Mark Kleiman also thinks markets can’t be precisely timed.
“I’m always happy to get in late and get out early,” he said. Kleiman sold his house in 2005 and warned on his blog that real estate prices had zoomed into bubble territory.
From the WSJ:
Commercial Real Estate’s $1 Trillion Time Bomb
Yesterday I wrote about a looming crisis in the commercial-mortgage-backed securities market. But there’s another time bomb ticking away in the commercial sector: U.S. banks are holding more than $1 trillion of mortgages backed by commercial property that is fast losing value.
According to analysts at Deutsche Bank AG, as property value declines and scarce credit continue to drive commercial property developers and investors into default, total lifetime losses on banks’ $1 trillion “core” commercial-mortgage holdings, or those backed by income-producing properties, would reach between 11.6% and 15.3%, or $115 billion and $150 billion. Those expected losses would be at least as large as those on loans originated and bundled into commercial-mortgage-backed securities, or CMBS, from 2005 and 2008, a period of cheap and reckless credit, the analysts estimate.
From CNBC:
Commercial Loans Biggest Threat to Banks: FDIC’s Bair
Commercial loans are likely to be the biggest drivers of future bank failure, Sheila Bair, Chairman of Federal Deposits Insurance Corporation, told CNBC Tuesday.
Wall Street sold off sharply Tuesday on speculation that a big bank in the US or Europe may be heading for failure. Bair said investors should keep their cool, but warned that commercial loans overhang could still be a concern.
Commercial loans are “going to be a bigger driver of bank failures towards the end of this year into next year,” she said, adding that residential mortgages were still a bigger percentage of where the credit distress was right now.
Is the first time home buyer tax credit really worth it?
From Calculated Risk:
First Time Home Buyer NAR Numbers
With regards to the tax credit, what really matters is the cost per additional home sold. And as I pointed out earlier today, even using the NAR numbers, the cost per additional home sold is $43.4 thousand.
Here is the math: 1.9 million buyers qualify for the credit (the NAR estimates between 1.8 and 2.0 million) = $15.2 billion.
The NAR estimates the tax credit resulted in 350 thousand additional purchases. So divide $15.2 billion by 350 thousand = $43,000 per additional home. And the numbers will get worse if the program is extended.
U.S. AFTER HOURS MOST ACTIVE BY VOLUME
PRICE %CHANGE VOLUME
SPDR TRUST SER 1 100.06 -0.14 19184823
CITIGROUP INC 4.49 -1.10 15423577
VONAGE HOLDINGS 2.08 47.52 10793226
POWERSH-QQQ 39.27 -0.03 7502055
BANK OF AMERICA 16.31 -0.91 4778011
Vonage up 47.52%???
clot,pump and dump…
Skype dreams
Feels like the dump cycle is about to be fully engaged.
Ref 1: Article spent more time cataloguing the family’s health problems than explaining why he took out the two loans, why he has to frequently talk to debt collectors, and what he did with the money.
Couldn’t Have Said It Better
Mainstream forecasters have been predicting a return to “normal” ever since the crisis began, to no avail. Most recently, many in the rose-colored-glasses set have gotten all bulled up over the notion that the traditional seasonal jump in purchases of clothes, stationary supplies, computers, and other items before children returned to classes would confirm that the worst was over. Once again, as the The Market Ticker reveals in “Back To School? Where?” the facts prove the highly-paid prognosticators have no real clue about what is going on:
http://www.financialarmageddon.com/2009/09/couldnt-have-said-it-better.html
Mikey, back in the saddle:
TUESDAY, SEPTEMBER 1, 2009
September 1 - Trading Updates
I’ve been asked by many, to put out a list of shorts for this market. I have been very hesitant, considering how badly we were beat up by this year’s run up. But I will put out a list of 10 positions and 10 corresponding options. Options are below equities.
1 - Short FAS at $71.32 with a 10% upside stop and a target of $54
2 - Buy FXP at $11.37 with a 15% stop and a target of $15
3 - Short FITB at $10.37 with a 10% stop and a target of $6.80 - I still believe this one is a Zero without the assistance of Goldman Sachs or another slimy bankster sucking up bank dollars but doing no traditional banking.
4 - Buy GDX at $38.75 with a 15% stop and a target of $50 - also look at the GDX Jan 2011 Calls
5 - Short PRU at $47.63 with a 10% stop and a target of $27
6 - Short COF at $35.75 with a 10% stop and a target of $18
7 - Short TIF at $35.20 with a 10% stop and a target of $24
8 - Short SBUX at $18.59 with a 10% stop and a target of $9.00
9 - Buy SRS at $12.22 with a 15% stop and a target of $18.00
10 - Short KBH at $17.67 with a 10% stop and a target of $12.00
One of my favorite option plays is - Buy SZCOR - March 70 Put on SPY at $1.25
Here are a few others to correspond to the positions above:
FAS - no option for non-clients
FXP - no option for non-clients
FITB - Buy the January 2011 $20 PUT at $10.50
GDX - Buy the January 2011 $35 CALL at $10.10
PRU - By the March $50 PUT at $9.30
COF - Buy the March $40 PUT at $8.80
TIF - Buy the Feb $40 PUT at $7.40
SBUX - Buy the April 20 PUT at $3.30
SRS - no option for non-clients
KBH - premiums don’t make sense.
Here’s one topic on which Mikey is absolutely right:
How Bad is Housing? - Catfish and Cat Burglars
“A record number of mortgage defaults and foreclosures has lead to thousands of homes that owners and lenders are not maintaining. Sometimes this means the house fills with mold that can be highly toxic. Unfortunately, some idiots simply paint over the mold and sell the home As Is. That’s illegal, but it happens here in Florida. One lender actually replaced the carpet in a home, but refused to turn the electricity on. Without air conditioning, it only took a month for black mold to grow on all of the walls . . . but the carpet looked great. Bottom line . . . they save a couple hundred buck on the electric bill, and it cost them $2o,000 in mold remediation!
Catfish - On the sometimes funny side of the default and foreclosure problem are swimming pools, where local communities are placing catfish in the pools to control the algae. Actually, it’s not very funny because these swimming pools become mega-sized breeding pools for mosquitos. What is not funny is . . . the catfish will clean up the algae in the pool, but that does nothing for the mosquitoes breeding in these pools. At least the pools look good, and one shot of chlorine will take care of the mosquitoes. The catfish they are using are commonly known as “plecos” or “plecostomaus” but they don’t eat mosquito larvae. To control the mosquitoes local officials might want to think about the mosquito fish in Florida, a guppy type fish. In any event, what I am trying to point out is . . . the problem with abandoned homes is out of control and there is no serious effort to manage these homes properly.
Cat Burglars - Stealing appliances from foreclosed homes is now almost a hobby for some. A team of 2-3 guys can have a refrigerator, range, washer and dryer out within 20 minutes. One problem are homes that are simply not secured properly. Another problem are the banks refusal to use electronic lock boxes. We still don’t know why, but banks insist we use cheap $25 combo boxes. The only problem is once the code is out, anyone can get in. Now to show you how dumb these banks are. They often use the same combination on all of their properties. So once you know a half a dozen combo codes, you can get into a fair share of the foreclosed properties. Even if you don’t know the code, you can usually call the listing agent and get the code with nothing more than telling them you are a real estate agent showing the property to your client.
Cat-ostrophic - This is the cat we will be talking about when the banks finally realize they are toast because they are seeing 70-90% losses on their mortgages. Ouch.”
“Putting the “full faith and credit” of the U.S. Treasury behind a portion of the $1.8 trillion non-agency mortgage market would help boost a once-dominant form of home-loan financing that almost collapsed in 2007 as delinquencies rose.”
Comedian? How about Maiden Lane LLC as the backstop? Flip a coin, Maiden Lane I, II or III?
“We’re not there yet,” Kiesel said, referring to the bottom in housing prices. “I plan to buy when I can get a place for 50 cents on the dollar” compared with the market peak, he said.
From # 2,
Has Kiesel been with us, on the blog, since 2005?
Time to pull the plug on Citi, stop the charade.
“As long as economic growth relies on the state, you cannot talk about durable recovery,” -European Central Bank member, Yves Mersch
DL-
Two adults living off 1700 a month have plenty of reasons to be talking to debt collectors.
I’m amazed that they’ve only added 55K to the original loan over the last 10 yrs.
And the beat goes on;
“CIT Group Inc. said it was forced to defer a $22.9 million interest payment due next month after failing to meet some conditions in the debt agreement.”
http://online.wsj.com/article/SB125180644198575855.html?ru=yahoo&mod=yahoo_hs
BC (13)-
New toxic securities, backed by old toxic securities and fiat paper. What a great idea.
They should let Timmay and Bergabe share the Nobel for this one.
[214] {last thread] Kettle
I liked the shorter version: “Taxing yourself to prosperity is like a man standing in a bucket trying to raise himself up by the handle.”
[220] shore
Yes, the latest overreach by NYC. I suspect it won’t get challenged in court as smaller employers either pay or leave, and larger employers simply negotiate themselves a discount by disputing the tax and arriving at a “compromise.” Haven’t been asked any questions about it yet.
Note the conspicuous absence of bi.
Just saying.
Buy now or be a renter forever.
Yes, the Housing Market Has Rarely Looked Better
http://online.wsj.com/article/SB10001424052970204047504574386802310702622.html
“Note the conspicuous absence of bi.”
He’s short gold, targeting $650.
RE: Mold
Our friends closed on a house in Vernon in April, and they just got the mold suprise. They also found 18 leaks throughout the house. Obviously it wasn’t winterized. 2 of the 3 bathrooms can’t be used because they had to stop the water supply to them to prevent leaks. The entire basement looks like a scene from Dark Water. I don’t know what the implications are for their 2 yr old- I hope it’s too short term to be a health issue for him.
Also, 2 weeks after closing, the sole breadwinner was laid off. I felt they were really under informed as far as making such a huge decision, but it’s not my place to judge or offer opinions they did not seek. It sucks they went by the news and the 8K credit and the “great time to buy” mantra. It’s easy to do, especially in a culture where finances are really taboo to discuss amongst friends. We’re all just supposed to have everything and not question how to get it.
I just hope it works out for them.
Silera, I think it’s gone from taboo to discuss finances to a trying to keep the big secret that one gets his/her financial advice from a bunch of anonymous bloggers.
I like that James Stewart who does the Common Sense collumn in the Wall Street Journal and Smart Money Magazine just called the housing bottom today and said now is the time to buy.
http://www.bizjournals.com/pacific/stories/2009/08/31/daily12.html
hat tip to mlimplode,
Maui Prince hotel is foreclosing. Green Shoots??
“Note the conspicuous absence of bi.”
Perhaps he is trying to get his money out of Cerberus?
From a hedgie;
“Investment Banks are the scum of the earth. Always have been and always will be. These cut and paste outfits are great for providing the middle classes with decent income and providing shelter for dysfunctional people like myself and keeping us off the streets, but apart from that are a complete waste of space. But you know that already.”
re#26 - John, never mind James Stewart what does your gaydar tell you? Has the housing market found a true bottom? Or are we looking at another false bottom?
Make,
The engines are humming.
From previous thread,
Clark? Hadn’t considered that town before, interesting. Thanks.
23#, as mentioned many times here, i would not join the party which started 10 years ago. in the mean time, i will not short it either.
while a little too early, i have been anticipating stock market pull back since 2 months ago. but if you own srs/fxp over $30, probablly it is irrelevent to you.
BC Bob says:
September 2, 2009 at 8:33 am
“Note the conspicuous absence of bi.”
He’s short gold, targeting $650.
My gaydar tells me jimmy has found a false bottom, we need a real bottom. However, I think in the article he mentions the fort myers area and I think that area is at bottom. For 70K you could pick up a good house from the bank and at that price people up north can buy second homes and cabbies and hairdressers can afford them. We are no where near that up here.
Sean says:
September 2, 2009 at 8:56 am
re#26 - John, never mind James Stewart what does your gaydar tell you? Has the housing market found a true bottom? Or are we looking at another false bottom?
http://www.nypost.com/seven/09022009/business/lehman_leftovers_lift_on_wave_of_specula_187727.htm
Lehman Brothers stock up 1,000%!!!!!!! in last few weeks, from 3 cents to over 30 cents. COOL BEANS
Note the conspicuous absence of bi.”
He’s short gold, targeting $650.
BC,
It feels good to know I’m on the other side of Bi.
“COOL BEANS”
Actually soybeans are 30X the price of Lehman. Interesting times.
Too bad they did not build the Xanadu Meadowlands Mall to be like this one in China. If would be great for a remake of Logan’s Run or perhaps some paintball.
Utopia, Part 3: The World’s Largest Shopping Mall
PBS Website Video.
http://video.iptv.org/video/1218530801
“as mentioned many times here, i would not join the party which started 10 years ago.”
[33],
Party? More like a stick-in-the-mud.
Sean says:
September 2, 2009 at 8:56 am
“Or are we looking at another false bottom?”
“http://www.inspirecosmeticsurgery.com/perfect-bottoms.shtml
“Butt0ck Implants
Silicone implants made from a slightly firmer gel than breast implants are inserted into the bottom, via a small nick on the inside of the bottom cheek. The implants are inserted in-between gluteus muscle, which makes this a sore procedure to have and difficult to sit down. We recommend patients buy a swimming ring, to put onto their sofa or car driving seat, to help them sit and be comfortable. This procedure alone in America has seen one of the biggest increases in popularity for surgical treatments, with an increase alone of around 62% between 2006 and 2007. This is also one of the most commonly performed procedures in Brazil.”
Or for a cheaper version of the false bottom:
http://www.lovemybubbles.com/
You gotta love the double-o series, the CDO of undergarments:
http://www.lovemybubbles.com/OOBodysuit-blk.shtml
#24 - Silera - RE: Mold I don’t know what the implications are…
Have there been any studies actually linking mold with health problems? I’m asking because I don’t know.
It’s common wisdom that there is a link, but doesn’t make it so. Lots o’ mold is also usually indicative of other problems, like a lack of maintenance but I don’t know about any real health risks.
The ‘ARM’ pit of the housing crisis
Just two banks, Washington Mutual and Countrywide, wrote more than $300 billion worth of option ARMs in the three years from 2005 to 2007, concentrated in California. Others—IndyMac, Golden West (the creator of the option ARM, and now a part of Wachovia)—wrote many billions more. The really amazing thing is that the meltdown in California is already happening and virtually none of these loans have yet reset.
What will happen after the storm of exploding “ARMs” is difficult to know. Perhaps the government will be better at helping these (middle and upper-class) homeowners than it has been in New Orleans. Or perhaps a lot of formerly posh people will be living in the equivalent of FEMA trailers.
I like the last idea. Trailers4Mensions
What health problems can be caused by mold?
http://www.doh.state.fl.us/environment/community/indoor-air/mold.htm
Boston Fed detailing foreclosure trends in Massachusetts since 1990.
Pretty interesting. It seems the areas hit in last bust 1992 were different compared to one in 2008. Seems the bust is more on the outward in 2008. It could be also the fact that bust moves from outskirts to inside city centers. We may be in for long dark future as this hurricane moves inward.
Xanadu, xanadu…
I think it’s becoming clearer and clearer that this monster will not be opening anytime soon. If it manages to, at best, it will have unfilled sections cordoned off or walled in from the rest of the mall. This, retail experts agree, is not good for the long term viability of the complex.
They should rent sledgehammers, steel toes and hard hats. Let residents go to town on this thing.
Tip: Try not to swing at the exhaust piping that vents toxic fumes from under ground.
False bottom, my baby’s got ‘em.
Talk about bum cakes, my girl’s got ‘em.
All roads lead to Spinal Tap.
Case-Shiller Flashing The “Ultimate False Bottom” In Housing
Now, think about those that are selling these mid-to-high priced houses. It is not the person who bought from 2005-2007 on a Pay Option ARM with 5% down because they can’t sell. It is the person who bought years ago that has enough equity to dump the price, sell, and have enough left over for the down payment on the house they plan to steal in the desert.
Even with the price dump, a person who bought in 1999 for $450k — who saw their house price rise to $1.5 million by 2007 and subsequently drop to $700k — realizes a price gain and so does CS. Even though CS reduces the weighting of pair sales the longer ago they occurred — when this is all you have selling — it carries most of the weight.
The bottom line is that CS may not be accurately representing properties purchased during the bubble years that are now worth a fraction of their purchase price because they are not transacting. If they did it would put offsetting pressure on the index. But the homeowner who bought at the peak in 2005 is sure feeling the negative-equity pain from the comparable sale at $700k. So much so, he is at an exponentially greater risk of loan default and foreclosure.
sorry grim, 49 in mod (musta used the n-word (n@tionalize))
Beazer Homes to Sell Debt as Junk-Bond Returns Climb to 40%
By Gabrielle Coppola
Sept. 2 (Bloomberg) — Beazer Homes USA Inc., the Atlanta- based homebuilder, plans to sell debt after returns on high- yield bonds climbed to 40 percent through Aug. 31.
Beazer is marketing 12 percent senior secured notes due in 2017 to fund the purchase of its outstanding senior notes, the company said a statement distributed by Business Wire.
High-yield, high-risk, or junk-rated, bonds returned 40.16 percent this year as of Aug. 31, according to Merrill Lynch & Co.’s U.S. High Yield Master II index. That beats the record 39.17 percent full-year return in 1991, according to Merrill data, which goes back to 1986.
Related to the comment thread from yesterday about mowing lawns, delivering newspapers, shoveling snow…
With millions of native-born people desperate for income, those jobs presumed to be too menial are now acceptable – a point to remember in the immigration debate.
By the Monitor’s Editorial Board
With fewer jobs for Americans these days, are there fewer jobs that Americans won’t do?
The answer will influence whether Congress decides to grant amnesty to some 11 million illegal immigrants in the US, perhaps by next year.
Most illegal workers in the US are Mexicans who mow lawns, clean motel sheets, butcher hogs, pick strawberries, and otherwise toil away at tasks that, as George W. Bush once said, “Americans won’t do.” And they often are paid less than the minimum wage.
A widely held assumption in Washington’s debate about immigration is that native-born Americans avoid menial and dirty work. Laid-off autoworkers wouldn’t really wash dishes at a Denny’s or milk cows on a dairy farm, would they? Such a notion has long helped justify a flow of foreign workers into the US – or possibly an amnesty for those hiding from the law.
Recent recessions have been short enough that jobless Americans who rely on government benefits waited for a “good job” to return. But this “Great Recession” has been long and deep. The unemployment rate has doubled from 4.7 to 9.4 percent, and it may keep rising into next year. Many layoffs appear permanent as whole industries have collapsed and new fields, such as clean energy, are slow to emerge. The percentage of Americans “mal-employed” – working below their skill or education – is higher than in recent recessions.
With people desperate for income, downward mobility may be on the way up. News reports show long lines of applicants for a janitor’s job or for work at a factory after a federal raid clears out the illegal workers.
Maybe it’s a myth that Americans won’t take certain jobs. In fact, a study by the Center for Immigration Studies used 2005-07 data to look at 465 occupations. Only four had a majority of immigrants in them: plasterers and stucco masons, agricultural graders and sorters, personal appliance workers, and tailors and dressmakers.
http://www.csmonitor.com/2009/0901/p08s01-comv.html
Hawk [52],
A lower standard of living is baked into the cake. The new bull market, deleveraging. It will be long and nasty.
On CS index, I have never really understood with simple examples on how they are calculating index. The whole aspect of considering only re-sale of same house kind of throws wrench. From whatever I have read, they use some high end math to do lot of things, which at least I have never understood.
Now I get it. This is what Pret was preaching; the talented artists moving in. That guy hit the nail on the head.
“Downtown so empty an artist can afford it”
http://www.metro.us/us/article/2009/09/01/05/2652-82/index.xml?ref=patrick.net
Are Case-Shiller Home Price Gains Real?
Who is the Mid-to-High end Seller? Why Is This Important?
Now, think about those that are selling these mid-to-high priced houses. It is not the person who bought from 2005-2007 on a Pay Option ARM with 5% down because they can’t sell. It is the person who bought years ago that has enough equity to dump the price, sell, and have enough left over for the down payment on the house they plan to steal in the desert.
Even with the price dump, a person who bought in 1999 for $450k — who saw their house price rise to $1.5 million by 2007 and subsequently drop to $700k — realizes a price gain and so does CS. Even though CS reduces the weighting of pair sales the longer ago they occurred — when this is all you have selling — it carries most of the weight.
The bottom line is that Case-Shiller reports what sold, period. It is my opinion that the real estate market is so thin and bifurcated that what is selling today is not representative of the true real estate market.
It likely is not accurately representing properties purchased during the bubble years that are now worth a fraction of their purchase price because they are not transacting.
This is apparently part of a private letter to clients. If anyone has a copy and would like to share some more details, please feel free to do so in the comments section or via email.
I guess article by Mark Hanson has piqued interest in understanding CS index better.
I just discovered one way to keep your property taxes low: Move to a town with a Nuclear Plant. A family member has been looking to buy in Ocean County and realized Lacy Twps taxes are on avg half of the rest of OC. Turns our the power plant provides massive revenue to Lacy for “allowing” them to operate.
To be honest, outside of the ominous looking towers, I don’t think I would have any issues moving to a town w/ a Nuc plant.
Center for Immigration Studies => This organization is shame to its name. It is ultra right wing KKK type org, headed by non-rational thinkers.
re #57 - re: Move to a town with a Nuclear Plant.
I bet the houses upwind from the plant are more expensive.
The immigration debate is a sham. It doesn’t take a conspiracy theorist to figure out that demonizing immigrants benefits big business. They get to pay 3rd world wages, and consistently perform well and profit as the stock prices go up due to the “CEO’s Management”.
If any of these companies was paying a living wage for most Americans, Americans would do the work. If they did pay living wages, we’d all blame the workers for wanting too much in order to perform menial labor when the companies stop making a profit or we have to pay more money for strawberries.
Luckily for those profiting, we as a nation are all to happy to consistently blame down.
Also on Lacey Township and the Nuke Plant. - Flight 93 that “crashed” on 9/11 was on a flight path towards Three Mile Island.
The London Sunday Times ran a circumstantially convincing article on October 21, 2001 that Flight 93 may well have been heading for Three Mile Island. The Washington Post reported on October 30 that an Osama bin Laden associate named Salahuddin Khaled, jailed in Afghanistan, said that the September 11 hijackers should have flown into a U.S. nuclear power plant.
[61] sean,
Probably would have been a fool’s errand, as it would have been quite difficult to hit the containment building and cause a radioactive release. Immediate deaths would be low, and views of the damage would not be plastered on every front page. Easier to fly into a large, well-known and relatively easy to hit edifice.
http://www.maltzauctions.com/auction_detail.php?id=118566
stu this might be a better investment than the BK deal. I buy you plane instead.
#57. Near a nuclear power plant is not the best place for a Nompound.
re #62 - Comrade - Lat: 40.143982, Lng: -76.723302
That is the heliport on the island.
Don’t think you can plug those coordinates in to the modern NAV system on a Boeing 757?
Ten year taking a dive. 3.35%
[60] silera,
Remember, any program to address this in a liberal fashion can’t be successful without a lot more government oversight (or intrusion) into business affairs, repudiation of trade treaties, and effective trade protectionist policies that will effectively seal off foreign competition based on cheap, unregulated labor.
Otherwise, all those jobs that can be moved, will be, and you will see workers picking lettuce and peppers in Cali, to be shipped to Mexico for cleaning, cutting and bagging, then shipped back.
And, ironically, in the case of ag workers (or any piece worker), you can hire them as independent contractors. Simply bring in a bunch, tell them what you need done and how much you will pay for each bushel, and let them have at it. As long as you don’t supervise them or control their work, and they can essentially slack off if they want, you are not paying for labor, just an end result. Since this has been the way of ag and piece work comp for a century or more, any change that dramatically increases the worker’s comp also increases prices for the goods they produce, and I can’t see that their lot improves without protectionism and much more government control or regulation of business practices.
FWIW, in preparation for just such a development, and in light of current low prices and the spectre of currency devaluation, I am “stockpiling” anything that will be made more expensive by trade protectionism, new employer mandates, or outright prohibition. This includes durable goods, consumer non-durables, and ag products capable of long term storage. I have also gotten a lot of work done on the house now, just in case those cheap laborers aren’t around in the future (though I suspect that won’t be the case).
even so, what would they accomplish wiping out podunk pa.?
[65] sean
Sure, but why would they want to hit the helipad?
I reiterate, for difficulty in hitting the right spot, and for maximizing terror, a nuke plant is not a good prospect, IMHO. Though not being a terrorist (schab, silera, and Vic may disagree), I can’t speak to whether it really would be a good target.
As for a nompound, I would not want to be near one. I have been inside containment buildings and nuke plants. I know what the issues are, and I prefer to not be so close.
Comrade, don’t need to hit the Helipad or even the cooling towers, or the reactor itself. Just the holding pools for nuclear waste next to the helipad. It WILL cause a huge leak of radioactive material.
These holding pool buildings are not hardened targets
Com- I have no idea how to fix it. I know you and many may think government is the worst solution. However the “trickle down” theory of those that have spreading their wealth about via charitable contribution, taxes and economic ventures is directly contradicted by the fact that the last 30 yrs have seen an exponential growth in the income gap.
You may not agree, but at some point I question why the blame falls on unions and benefits and pensions and not on the mismanagement for which CEO’s and boards etc seem to get so highly paid for. Not just at GM- everyone in every aspect. Teachers get villified yet the superintendents are the one’s making all the money. In a less direct corollary- even the mortgage collapse reflects the sentiment.
I’m not a legislator, I just know something doesn’t smell right. I’m not stockpiling or revolting or anything. Lack of government oversite, or capitalist common sense directly led to this recession.
At some point though, we are going to start reevaluating what is valuable. People producing, being able to save and being healthy or hoping that the top 5% are nice enough to let the rest of us fight for their crumbs.
[58] sg,
Being blissfully ignorant as to the details of the immigration debate, I am curious: As that statistic sounded pretty benign, Is the CIS name really a poor effort to couch xenophobia in the cloak of questionable or fraudulent social science, or is it simply the implentation of the same filtering rule which holds that any org. that comes out on the right/conservative side of an issue, or produces data supportive of same, must, ipso facto, be staffed with klansmen and nazis?
[70] sean
Fair point. I forgot about the holding ponds.
Still, I question how much of a release you would get from that; I’m not a scientist or engineer, but I don’t know that it would give you the same effect as demolishing the containment building (which isn’t “hardened” either, but is still pretty tough). Further, while they are probably easier to hit, it still would be difficult. What is the CEP when your missile is a 737?
“Though not being a terrorist (schab, silera, and Vic may disagree), ”
Ha- you’re a lover not a fighter.
I’m happy to disagree with people and not think they’re evil or idiots. I know I read almost everyones’ posts regularly and like to be able to evaluate things through a different perspective. There’s a lot I can admit to not knowing, and this site is a great resource for some well informed opinions. CRAZY huh?
John (26)-
I like that, too.
Too bad he’s full of shit.
[71] silera,
If the goal is to eliminate the wage discrepancy so that compensation is closer to uniform across industries and titles, and to eliminate or lessen economic swings, both of which are, I believe, inherent features of a capitalist, mercantilist, or laisse-faire economic system, then there are alternatives available, and parties promoting these alternatives.
I submit that these parties are in the minority, but they have always been among us, are well represented in the media, and seem to be gaining adherents, even if the adherents don’t usually know what they are adhering to (as Norman Thomas so pithily pointed out).
I simply posit that, in any economic system, there are rules, and shifting priorities or implementing measures to distort behavior invokes those rules. What I find amazing is a belief on the part of many, including in power, that the rules somehow won’t apply this time. And part of the reason we tolerate what we believe to be inequities in certain spheres, is because we fear the consequences for stamping them out. Therefore (at the risk of being dramatic), we tolerate outrageous CEO pay because we want the capitalist system to survive and keep others employed.
It’s been fun, but I have to get back to work. Not all of us in the top 5% of earners are idle rich.
Com- if you care this is a pretty lengthy article re: Center for Immigration Studies.
http://www.splcenter.org/intel/nativist_cis.jsp
“In 2007, a year before his comments on Washington Mutual, Krikorian accepted an invitation to speak at the Michigan State University chapter of Young Americans for Freedom. It apparently didn’t bother him that MSU-YAF had been widely covered in the media for a series of nasty stunts — staging a “Catch an Illegal Immigrant Day,” holding a “Koran Desecration” competition, and posting “Gays Spread AIDS” fliers across campus. He also didn’t seem to mind being part of the same speakers series that included Nick Griffin, a Holocaust denier who heads the extremist British National Party, and Jared Taylor, who says blacks are incapable of civilization.”
Wall Street should get more comp. I have been to non financial service companies in the surburbs and all that is there are housewives, and beer bellied mid 50’s combover mid level managers. Everyone in Baseball starts out wanting to play for the Yankees and everyone in an MBA program wants to be an IB banker at GS, MS or JPM or some top notch Private Equity or Hedge Fund job. The leftovers end up in the other industries.
plume (67)-
I’m having a load of work done on my house right now, too.
I do, however, think this level of labor is soon to be wiped out.
[77] silera.
Ah, that old, reliable quantum of proof, guilt by association.
The irony is that CIS is being called out by what is arguably its counterpart on the left. SPLC is hardly what I would consider a think tank. IMHO, SPLC is one of the groups that created the filtering rule I described.
[80] clot
Only an economic upturn would do that, and I did not take you to be so optimistic. Or do you think Chairman O will seal the borders and unleash the ICE raiders?
Seriously, I gotta get back to work. Nom-baiting done for the day.
“Wall Street should get more comp.”
J,
You think, maybe, first line of business; get rid of the crutches? Just a thought.
Paulson, John not Hank, I agree. Give him the keys to the city.
From my #29;
From a hedgie;
“Investment Banks are the scum of the earth. Always have been and always will be. These cut and paste outfits are great for providing the middle classes with decent income and providing shelter for dysfunctional people like myself and keeping us off the streets, but apart from that are a complete waste of space. But you know that already.”
I’m sure I can find an expose on the SPLC. It’s hard to find completely unbiased information. I do have to say, every report I’ve read from the CIS manages to baffle me with obvious anti immigration bias.
I know we can’t legislate common sense or wave a wand and make everything equal. I don’t think we all deserve to make the same amount of money. There’s equal that I think is necessary and there’s equal that’s impossible and not beneficial. All or nothing isn’t a reasonable approach to politics. Obviously, as a nation we’ve found some type of balance- and its precarious in many ways.
Hopefully, this latest round of history will help get closer balance btw what’s the right level of government and free market. Whenever we tilt too far in either direction, things get askew. If we can expect house prices to overshoot a bit after the bubble, it’s not hard to imagine that government may overshoot as well.
plume (81)-
Nothing that complex will wipe out that level of labor…it will simply occur because demand will completely dry up.
I’m only bullish of Armageddon.
Gottendammerung, for you nancy boys out there.
veto that says:
September 2, 2009 at 11:48 am
Ten year taking a dive. 3.35%
You are EXACTLY wrong in your description.
BC (82)-
That’s cold, man. Zombies have to eat, too.
“You think, maybe, first line of business; get rid of the crutches?”
Silera, I’ve met some people from the YAF in my day and they scare me senseless. They are like nazis, and they all seem to have guns and they seem to be violent and antagonistic.
Strawman,
This should be your type of auction. The size of the rooms in your Cape Cod, are probably the same as a room at Mohonk.
http://www.absoluteauctionrealty.com/auction_detail.php?id=119471
“You are EXACTLY wrong in your description.”
Sorry chi,
Ten year ‘rate’ taking a dive…
Does that satify your ocd?
Who’s consuming besides the fed’s balance sheet?
“In Japan, the Nikkei 225 fell 2.4 per cent, the most in two weeks, to 10,280.5. Retailers were the biggest fallers as the government reported that retail sales declined for the 11th month in July, the most persistent retraction since 2003″
http://www.ft.com/cms/s/0/5cd2ac98-9778-11de-83c5-00144feabdc0.html
http://www.bloomberg.com/apps/news?pid=20601039&sid=a6uOcALm_4BQ
great new negative housing news.
I love the smell of 3.33 on the ten year treasury. The 3.33 is even taxable. Lock it in baby. Who cares you can get a muni in the ten to twenty year range for 4.8% tax free!
“Remember, any program to address this in a liberal fashion can’t be successful without a lot more government oversight (or intrusion) into business affairs, repudiation of trade treaties, and effective trade protectionist policies that will effectively seal off foreign competition based on cheap, unregulated labor.”
Yep, that liberal pinko Pat Buchanan would agree.
John.
in a world without any risk,
your post (94) would make perfect sense.
10 yr AAA MMD curve at 2.93% today.
I agree thats more after tax yield than 3.33 treas for any tax bracket.
“Who cares you can get a muni in the ten to twenty year range for 4.8% tax free!”
I would imagine that many in Fla would swap their crap for 3.3%?
We just returned this past weekend from the place we bought in South Jersey. It was a good time and we got a lot done on the house. My question is this- When did all these people from India come to NJ? They were running almost every gas station we tanked up at. Granted, I’ve been out of the country since 1984, but still, that would have been a lot of Visas to get approved.
john, this was a good article.
http://www.bloomberg.com/apps/news?pid=20601039&sid=a6uOcALm_4BQ
Yet the U.S. government still doesn’t get the big picture and indirectly discourages savings, which can ultimately create a pool of capital for lending, infrastructure improvements and small business lending.
U.S. savings and non-municipal bond interest are still taxed as ordinary income at the highest personal rates.
What’s wrong with this policy? You can’t have a healthy economy without a wealth effect. In lieu of easily tapped credit, people won’t spend freely unless they have a cash — or employment — cushion.
Since we can’t depend on real estate as a prime wealth creator — especially in an age of deleveraging — Congress needs to promote tax-free savings and rebuilding home equity if it wants a meaningful economic rebound. Otherwise the poverty effect will continue to foul up the recovery.
I don’t think that wanting to decrease obscene wage discrepancies is the same as looking for uniformity.
A capitalistic system requires striving and the hope of “getting ahead” to work well and generate entrepreneurship and innovation. There has to be a benefit at the end of the tunnel, generally financial.
On the other hand, the generation of an “upper class” that appears impenetrable and that takes care of its own regardless of results, breeds resentment and stifles that same innovative urge. Why bother striving for better if the doors to the club are closed?
Society benefits when there is financial reward for innovation, hard work or tremendous skill, but there also has to be a balance. Surgeons should be paid extremely well, in order to ensure that high quality people will enter the field. On the other hand, pay too much and it will fill up with people more interested in money than in patient care.
CEO’s walking away with golden handshakes of tens of millions of dollars after driving a company into the ground is the perfect example of a failure of capitalism. There was no reward specifically for success or a good outcome, no incentive to lead effectively and with long term forethought and the resentment and sense of futility it engenders in the general population damages society and healthy innovation.
Not about “fair” or equality, just plain old common sense.
I am talking NY muni bonds, I do see some NJ bonds at 5.3. Florida is a train wreck. I bought some 5.2% NY munis this morning. In the 40% tax bracket that is almost 8% taxable equivalent.
BC Bob says:
September 2, 2009 at 1:24 pm
“Who cares you can get a muni in the ten to twenty year range for 4.8% tax free!”
I would imagine that many in Fla would swap their crap for 3.3%?
well said lisoosh! :)
Good catch, John on the bberg article.
The U.S. gov’s current solution has been mentioned here before (can’t remember who):
“How about cash for everything”
soosh (101)-
Common sense left the building at about the same time as the bank robbers entered.
Funny thing is, the bank robbers are still there, and nobody really seems to care.
Mold cleanup makes for a fun DIY weekend project
http://www.epa.gov/mold/images/photo7.jpg
No health concerns at all.
3.33 come on savers get on your knees
Prosperity is just around the corner:
“The media’s desire to ignore this metric, which convincingly indicates that deflation is among us, despite the wanton destruction of US Dollars by Chairman Ben, is not surprising: the last thing US consumers need to know is that a dollar today may be worth less than a dollar tomorrow, and thus drive them to save even more, further crippling the Ponzi monster that the US economy has become.”
http://www.zerohedge.com/article/full-blown-deflationary-episode-coming
Soosh:
Kudos to 101.
Late last night, when we were on the income gap topic, I was going to point out how Nom liked to take it many arguments immediatelly to the extremes. This probably has something to do w/ his profession.
I too agree that there must be some sort of middle ground. Of course, I am not optimistic for any changes to be made to our current broken system. Shoot, almost all of politicians should be in jail, let alone in office.
The word heard on the streets is that another paycut is coming. Should know more in half an hour.
“The word heard on the streets is that another paycut is coming.”
But I see American productivity is way way up!
Anybody seen Exter’s Pyramid? Or, am I the latecomer here?
Capital ultimately flows down the pyramid in times of systemic crisis:
http://commons.wikimedia.org/wiki/File:Inverse_pyramid_of_John_Exter.png
what the heck does that mean?
Stu says:
September 2, 2009 at 2:18 pm
The word heard on the streets is that another paycut is coming. Should know more in half an hour.
Putting “shoot” and “politician” in the same sentence has to be subliminal.
There’s a part of me that knows middle ground isn’t coming if we continue to propogate the myth that the problems are with the many that have little, and confuse people into thinking they’re part of the few that have a lot because taxes won’t be indexed for inflation.
It’s like a we’re all part of some machiavellian social expirement.
John says:
September 1, 2009 at 2:24 pm
Stu 200K is garbage picker class in NJ if you are raising a family with 3 or more kids and a stay at home wife and own a home with sky high property taxes and a supersized 2004-2008 bubble era mortgage.
still drunk, i see. what if only raising 2 kids?
and if the mortgage was 2600?
and the taxes were 7500?
then what salary do u need o wise oracle?
/bucks, baby!
It’s official. I am now earning 11% less than I was earning in October of 2007 (the time of my last increase). No match and they used to put 3% of my salary into a 401k as a replacement to our former pension plan that was removed prior to me joining the company.
Green Shoots for me!
1 billion dollars Yikes.
Sorry Stu. I was crossing my fingers.
I think when all is said and done, I am making about 20% less than I used to be. Hourly workers were cut 4 hours per week on top of a 5% pay cut. Haven’t heard what the executives are doing, but my guess is that they will not be seeing cuts this time. Got to keep that income gap widening I suppose.
ugh, hate to get into this 200k argument again, but 200k IS a very good salary, whether its one person or both husband and wife.
as a guy who has ‘millionaire next door’ on his shelf, i’d say these are 3 keys to pulling it off, no prob:
1) dont drive new cars. used is the way to go. if you want to drive flashy, expensive, brand new cars, then yeah, 200k will be tight.
2) cooking for your family is much, much cheaper than going to a restaurant 2-3 times a week.
3) general: live within your means. dont break the budget on clothing. gift wisely, not lavishly.
and dont give me this BS - “what fun is life if you live like that?”
we’d much rather take 2 really sweet vacations a year and a bunch of weekends at B&Bs than drive around a car with a $400 a month payment or drop $1200 a month on dining out.
/rant over
Thanks Silera:
No real biggie as we save and have no debt besides the old mortgage. Just a bit frustrating, that’s all.
stu (116)-
You’ll have to steal a lot of pencils and paper to make up for that.
I have no motivation…
Where is my motivation?
-Green Day
Stu, any trade secrets you can sell to a competitor?
#116 Stu -
Sorry to hear that. Seems to be happening all around.
If it’s any solace, I can tell you in the large law firms, partners’ incomes have taken a pay cut too. I don’t know about executives in other industries.
Yikes (120): I agree with the living within one’s means theory. It just sucks to watch everyone who spent like drunken sailors get government subsidy after government subsidy to reward their bad behavior. Did you buy a gas guzzler? No problem, here’s $4,000 to replace it. Are you having trouble with your payments? Don’t worry, we won’t kick you out for at least two years. Just make sure that your neighbors keep on paying OK? Hey Wall Street, thanks for effing up the world. Here’s some money at 1% so that you can reward the ecomic terrorists with lavish bonuses. Just don’t tell nobody, OK?
#71
The income gap argument is really pointless, IMO. It is an unstoppable trend that is the result of globalization. It does not make any sense to blame rich people for it. It is beyond their control. If you as a CEO wanted to continue to manufacture your widgets in NYC like they were 100 yrs ago, you would quickly be put out of business by cheaper competition.
Taxation cannot correct it either. The money of the truly wealthy is almost 100% mobile . Plus, there are so few of them that even if you managed to redistribute 100% of their wealth it wouldn’t cause much of an improvement in everyone else’s lifestyle. Inevitably, any really big redistributionist scheme requires you to take a lot from the upper middle class which is not as appealing morally, even if you are predisposed to be in favor of redistribution generally.
Does anybody know if there any products that you can use to detect the presence of mold in a house? Such a thing would be useful before buying a house
x-underwriter (128):
Mold is pretty easy to detect with the naked eye. Especially if you are a handyman. Sagging sheetrock, stained ceiling tiles. Warped 2 x 4s and strange odors.
Stu (116)
I know the feeling. I was up in Cape Cod last week on vacation. When I got back, I was informed that all of us contractors were to take a 10% pay cut, effective three days ago.
Fortunately, I got a new job Monday that pays significantly more than I’m making now on Monday so my response was “F*CK YOU I QUIT !!!!!
IT FELT SOOOO GOOD TO TELL THEM
X- (128):
Purchase a home mold testing kit such as the ones provided by ProLabs, Enviro Check and BlackMold.Com.
stu (126)-
It won’t end until we start shooting the instigators.
#76
“And part of the reason we tolerate what we believe to be inequities in certain spheres, is because we fear the consequences for stamping them out.”
Further to this point, I think a lot of well-meaning people avoid the fact that there will always be inequities simply because we live in a world of infinite demand and scare resources. There is indisputable historical proof at this point that even if we totally eliminated capitalism, there would still be differences in wealth and opportunity; they would simply be more often determined by political connection and the gaming of the centrally planned system.
I just heard about paycuts coming to employees in ACN and Deloitte.
Stu (129)
I think there are two kinds of mold damage. Repaired and unrepaired. The repaired is the one to watch out for…some contractor slapped some new sheetrock and paint up and you’ll never tell how well it was fixed
I think if I get another paycut next year, I’m just going to cry like a baby. I don’t know how to downgrade from peanut butter and jelly sandwiches for lunch.
Will I have to give up jelly? IT’S SO EFFING dry!
Paul Farrell via Marketwatch says Democracy is dead.
http://www.marketwatch.com/story/16-credos-for-our-new-lobbyist-nation-2009-09-01
That’s what she said?
I just got a job at Fannie Mae in Virginia working on the computer systems that handle the mortgage modification program…should be interesting. I guess I’ll have to change my handle to X-NJ going forward. I’ll try and post some inside info on that mess as I get acclimated.
You guys on this board did such a good job of talking me out of staying here in NJ over the years LOL
Clotpoll says:
September 2, 2009 at 1:51 pm
soosh (101)-
“Common sense left the building at about the same time as the bank robbers entered.
Funny thing is, the bank robbers are still there, and nobody really seems to care.”
I think lots of people care, they just don’t know what to do about it.
Ever led a non-profit committee or board? Lots of talking. Lots. Or you get a bunch of people sitting around who want to “do something” and actually care a lot about the issue/program but don’t know what steps to take. You have to lay out a clear plan, assign jobs and provide regular feedback.
It’s a crisis of leadership, maybe in part due to the size of the problem. From what I see, most people feel lost and helpless, don’t believe they can make a difference and even if they do, don’t have a clear plan of action.
The extremes are better at getting people out and organized but “Tea Parties” and the current town hall shoutfests don’t really appeal to average people.
I actually think that it takes a situation getting to a greater extreme -your apocalyptic vision - for people to be forced to revolt.
Unfortunately, the way of the world.
#134 syncmaster -
Could be. A good friend of ours was with one of those and was laid off a few months ago.
Also, one of our neighbors works in IT for Vanguard. They’re also hearing rumors about paycuts. He’s not sure if it’s just fearmongering he’s hearing or actual info.
x-under #139,
Congrats! This makes you the third person I know (yes, I’m defining ‘know’ somewhat loosely here) to tell me he’s moving to VA for work in the last 2 weeks. I guess they were right, the Federal Government really is growing! I hear there is tons of IT work to be found in Fredericksburg.
#101
“CEO’s walking away with golden handshakes of tens of millions of dollars after driving a company into the ground is the perfect example of a failure of capitalism. There was no reward specifically for success or a good outcome, no incentive to lead effectively and with long term forethought and the resentment and sense of futility it engenders in the general population damages society and healthy innovation.”
Except that these people are paid according to contracts they entered into before they ran the company into the ground. The board of directors was paying for potential, not guaranteed outcome. If there was a guaranteed outcome, CEOs comp would be much higher. Same thing as a big league pitcher who signs a $50m deal and then ends up sucking.
Ellen #141,
Rumor at my workplace (which I won’t name but I’m sure grim knows from his ws logs) is this will be a no-bonus and no-profit sharing year. That’s a 20% haircut right there.
sync (142)
Not just gov’t work in VA. There’s so many companies looking for people down there it’s amazing. I was looking in NJ for another position over the last 6 months and came up with zero. I also posted my resume on Monster, etc saying my address was down there and it was insane. I was getting several emails a day for decent positions. It was like a turkey shoot, which was the primary factor in my decision to move there.
NY/NJ used to be the place for jobs but that is certainly not the case any more.
x-under #145,
Interesting! I am glad you found something you like at an even higher salary. Not to be nosy, but will you be in NoVA or a lower-cost part of the state? Also, I heard the President really put in a flat 2% COLA for all Federal employees, will this impact you?
#146 - Edit: I don’t know what the word ‘really’ is doing in there but it does not belong :)
Loans That Looked Easy Pose Threats to Recovery
Since February, default and foreclosure rates on option ARMs have passed those of subprime mortgages, according to the research firm First American CoreLogic, in part because so many subprime mortgages have already failed.
Because Mr. Clavon made only minimum payments on his mortgage, his balance has risen to $680,000 from $618,000, on a house worth closer to $400,000.
Compared with subprime loans, option ARMs are fewer but tend to have larger balances. Resets on option ARMs in recent years have often doubled the payments.
sync (146)
Position is in NoVA (Herndon) so it’s not cheap living there. At least the property taxes are 1/2 what you’d pay here.
I’m now making what I was as a contractor in 2008 plus $2/hr…not great but my current job was a 30% cut from that before their 10% cut last week.
I’m not going to be a gov’t worker, so COLA doesn’t effect me
We’re in a condo and need more living space, but I don’t want to buy a house in NJ for three reasons:
(1) I think we will still see substantial price decreases over the next year or two;
(2) single-income family here, and don’t care to take the plunge until the threat of layoffs is reduced; could also stand to beef-up the emergency fund (unfortunately, I have this urge to be responsible …)
(3) getting sick of NJ/NYC in general, that taxes, the commuting, etc., and kicking around plans to relocate elsewhere within the next few years.
Got a toddler who won’t start kindergarten until September 2012 and so I’ve been thinking about renting a single-family house in the “nicer” parts of Rahway, Avenel, or Woodbridge for a couple of years, to keep up the savings and give us time to figure out what’s what.
Despite their reputations, they don’t seem that bad, and I figure why pay for fancy downtowns and school districts populated by little Greydons (or whatever the name du jour is) that I don’t need?
Collectively there’s no better source for info about Jersey than you guys — is this a crazy plan? Any of you guys know these towns well?
Commercial Real Estate Lurks as Next Potential Mortgage Crisis
The CMBS sector is suffering two kinds of pain:
One is simply the result of bad underwriting. In the era of looser credit, Wall Street’s CMBS machine lent owners money on the assumption that occupancy and rents of their office buildings, hotels, stores or other commercial property would keep rising. In fact, the opposite has happened. The result is that a growing number of properties aren’t generating enough cash to make principal and interest payments.
The other kind of hurt is coming from the inability of property owners to refinance loans bundled into CMBS when these loans mature. By the end of 2012, some $153 billion in loans that make up CMBS are coming due, and close to $100 billion of that will face difficulty getting refinanced, according to Deutsche Bank.
http://finance.yahoo.com/real-estate/article/107635/commercial-real-estate-lurks-as-next-potential-mortgage-crisis.html
Woodbridge has some of the best elementary schools in Middlesex County. You could do a lot worse.
X-NJ #149,
Cool. Is hiring for those jobs through usajobs or is that only for Fed employees?
sync (153)
Nope, just through headhunters. I went through the regional office of the contracting company I was previously working for up here in NJ. Problem when you post on Dice or Monster is you get all these tiny po-dunk recruiters contacting you that work out of the trunk of their car. It’s a process of weeding through the garbage.
Stay Classy Jersey.
Town hall meeting in Red Bank over Health Care reform.
http://www.huffingtonpost.com/2009/09/02/wheelchair-bound-woman-sh_n_275472.html
skep-tic says:
September 2, 2009 at 2:49 pm
#71
“The income gap argument is really pointless, IMO. It is an unstoppable trend that is the result of globalization. It does not make any sense to blame rich people for it. It is beyond their control. ”
The logical extension of that argument is that a companies board should extend their CEO search overseas and end up with a a comparibly qualified Indian CEO running the company for $250k. Would save shareholders a FORTUNE.
And reduce the income gap.
what is depressing is watching “House Hunters” on HGTV when they go to some non-coastal location and people are buying 4000 sq ft houses for $3 and all expense paid trip to the Ponderosa sundae bar.
then, you reflect on your supposedly lavish and rich lifestyle, struggling to determine how you might one day afford a 3B/1.5Ba cape.
skep-tic says:
September 2, 2009 at 3:05 pm
“Except that these people are paid according to contracts they entered into before they ran the company into the ground. The board of directors was paying for potential, not guaranteed outcome.”
And what exactly prevents a board of directors from putting performance goals and standards into a contract? It’s hardly a new concept in the business world.
Your making an argument FOR a demonstration of complete incompetence by the board and a dereliction of their duty to protect the investment of shareholders.
NOT tying CEO compensation to performance is a symptom of a “good old boys club” gone rampant and has absolutely nothing to do with capitalism.
No rally into the bell. I fell a big dislocation coming on.
x (139)-
Congrats. You should short that sucker to 0.
soosh (140)-
Yeah, I sit on some charitable boards and committees. That’s actually what quickly brought me to the idea that the tree of liberty will soon need to be refreshed.
“No rally into the bell”
Clot[160],
Depends upon which sector you are watching.
Sean #155,
I had friends at the townhall in P-way. It was way better than that. Basically, the Monmouth County GOP brought in disruptors to the event at Red Bank. Shutting down debate is not only their local strategy, but their overall strategy as well. I hope they lose. I no longer even care what the bill looks like, I just want to see those insert_obscenity here’s lose.
here (150)-
Get out now. While you can.
Anyone who is able to get out, should. The ability to move in the future is not guaranteed. There are plans afoot- both intentional and accidental- to pin everyone down and enslave them to home, job, or both.
“what is depressing is watching “House Hunters” on HGTV when they go to some non-coastal location and people are buying 4000 sq ft houses for $3 and all expense paid trip to the Ponderosa sundae bar.”
House Hunters makes me seriously consider Texas for a relocation. I’d have to carry around my passport at all times to avoid a “Born in East LA” nightmare, but it might be worth it.
Also Skep, I get the contract argument but the UAW was able to make concessions and rework their contract to help GM out. I’m not seeing that kind of effort from all parties involved.
Lisoosh– they do put performance goals into these contracts. But there are usually guaranteed payment amounts as well. Most of the people who get to the CEO level have demonstrated a high level of competance in their current position– they have a lot of other opportunities and they want a guaranteed payday. These boards are trying to recruit someone they believe will be good, not just get the cheapest possible person. Sometimes the person you believe will be good turns out to suck. But while these people are being recruited, they have leverage and they usually demand guaranteed payouts.
HOV takes another beating.
http://finance.yahoo.com/q?s=HOV
sync (164)-
The “public debate” is the real distraction. There is no real debate and never was. Insurance companies are part of the cabal that owns this country.
The insurance companies will continue to fire their money cannons, and absolutely nothing will happen.
Other than guaranteeing O will be a one-term prez once this whole thing crashes and burns.
I’m already enslaved to my job because we need the insurance. I can’t risk letting my husband’s coverage lapse because his condition would then become preexisting.
I’m starting to think Obama doesn’t want a two term presidency.
[152] Thanks sync, that’s good to know. Wherever I end up, I’ll probably be outta there in a few years (either to a nicer town in NJ, or a new state … or country) before the tike hits the elementary schools, but good to know Woodbridge has some good elementary schools.
[165][166] LOL thanks for the warning! Trust me - the whole point behind the idea of renting in one of these Graydon-free towns is so that I will have the financial freedom to move where/when I choose. But for the moment, I got a good gig going and this isn’t the time to jump ship. Not just yet.
Anyone do the commute from Rahway/Avenel/Woodbridge to lower Manhattan? I’m guessing it’s about 90 minutes door-to-door from the nicer parts of these towns. But never took the NE Corridor line so not sure if that’s a delay-prone line or not.
Skep - Like this guy?
http://www.cnbc.com/id/30502091?slide=5
Think he was worth a 210 Mil severance package?
I’ve said it before–I sure has hell hope that tax credit ends and is not extended.
I want to second what someone said here the other day–I’m so sick of looking at the same crappy inventory. I’m not spending time on realtor.com or trulia much either. I’m simply getting listings generated by my realtor’s search. I can’t tell you how many are status changes on the same houses (i.e., under contracts often go back to active) or what I like to call do-overs–the same junk relisted at a lousy price. UGH!
I am not saying there is no “club” aspect to executive comp– there definitely is. But it is mainly market driven. You can look as an example to what private equity will pay a manager to come in and run a company they buy. It is usually at least as generous as what a public company would do.
Unfortunately, many UAW workers are much more easily replaced. That is why unionization is a good idea for workers generally, but unfortunately most unions do not treat the business like a partnership.
JS– it is not hard to cherry pick counterexamples to my point with hindsight. Put yourself in the position of a group of people trying to pick a leader of a massive company where you cannot predict the future.
From the day O won it everyone knew he was a one term president. If he keeps up this health care nonsense he may not even last the four years.
Silera says:
September 2, 2009 at 4:17 pm
I’m already enslaved to my job because we need the insurance. I can’t risk letting my husband’s coverage lapse because his condition would then become preexisting.
I’m starting to think Obama doesn’t want a two term presidency.
JS [173],
Quite a lineup, many of the architect’s of the bust. No pic’s of the fed. Forgot, they are an “independent” entity.
I like someone with nothing to lose in a position of power.
It’s exciting!
anyone who wants to be president should be automatically disqualified.
Hey this year all they could get is a non citizen and an old man to run. Who would want the job.
skep-tic says:
September 2, 2009 at 4:30 pm
anyone who wants to be president should be automatically disqualified.
We will get Health Care “Reform” whether we like it or not.
The O man will be pushing his health care agenda televised with a joint session of Congress next week, and then after the pomp and circumstance the Dems will push it through with a parliamentary maneuver that will allow the Democrats to pass the bill in the Senate with only 50 votes instead of 60.
Fun times, I am tuning out the TV for a few weeks. I will also be maintaining both my wife’s policy and my own for the time being, especially with a baby on the way.
Last thing I need if for the Doctors to revolt on this one, fyi the AMA does not support the bill in it’s current form.
veto that says:
September 2, 2009 at 1:12 pm
“You are EXACTLY wrong in your description.”Sorry chi, Ten year ‘rate’ taking a dive… Does that satify your ocd?
veets: give me a break….it isn’t ocd, it is the difference between showing enough respect to take your comments seriously versus dismissing you as an idiot….you want to talk finance like a gum-chewing real estate agent on kannekt or bond market analyst?
I need help.
I have a client who wishes to originate a mortgage on a real estate property on Block Island RI. Does anyone have suggestions?
Thanks for the information
#150- Here For Now
I agree —Get out now while you still can—-DON’T BUY!
“I have a client who wishes to originate a mortgage on a real estate property on Block Island RI. Does anyone have suggestions?”
I know someone in RI who went to prison for assaulting someone with a screwdriver who later transitioned to being a mortgage broker, but am guessing this is not the kind of contact you are looking for.
speaking of RI, I recently started watching “Brotherhood” on DVD and that show is really underated. I think it is as good as the first couple of seasons of the Sopranos.
Chi, please.
You accuse me of not knowing which way the ten year bond is trading and then you want to talk about respect?
Go back to your NY Post.
On a good day your posts are vague.
I know John referenced this article by James Stewart, but I didn’t see a link.
It is criminally insane, in my opinion..
Sorry if this is a repeat.
http://finance.yahoo.com/loans/article/107648/its-time-to-invest-in-real-estate.html?mod=loans-home
#158
Skep, you should have caught HHunters last night… nothing but $550k sh*tholes galore in Montclair, NJ.
[186] Not even entertaining the thought of buying right now. Only considering stepping up to a single family house to RENT for a couple of years … and looking to try to keep that cost down to a minimum as well.
Property taxes are really scary around here. The thought of signing up for a 12K annual property tax bill has no appeal right now.
I love Chi-Fi, he actually knows what he is talking about, only thing that makes me nervous is I am a washed up beach bum who rambles more than a bush man in the outback and I still have a better track record then him. Normally that would be ok but I do this for fun and people actually pay him for advice.
187 - you mean the former mayor of Providence? oh that was a fireplace log.
http://en.wikipedia.org/wiki/Buddy_Cianci
184 - If they need a mortgage, they don’t belong on Block Island
“Normally that would be ok but I do this for fun and people actually pay him for advice.”
John, i notice you slap him on the back and punch his gut at the same time but he deserves it for being so arrogant. plus he does the same to you so it only makes sense.
But your track record is out there. You might talk in run-ons and have horrible punctuation but you are obviously not putting all your effort into impressing the blog like its an interview. Besides, those that whole show is meaningless if you have nothing to say anyway. In Chi’s business i guess you get paid for impression and sounding smart, like a shoe salesman in a bad suit.
Then he nit picks at typos and thinks he is contributing to thoughtful discussion when posting things relating to bad music. How annoying.
veets: how about a fresca?
ruggles says:
September 2, 2009 at 5:07 pm
184 - If they need a mortgage, they don’t belong on Block Island
ruggles: It is interesting, there are a lot of providers out there, but many completely avoid RI. I am wondering if this fact is specific due to regs or business opportunity.
Are BOA, Chase, Sovereign a waste of time, or are they good options here?
Courtesy of Denninger:
What I bought with my $8,000 tax credit
http://money.cnn.com/galleries/2009/real_estate/0908/gallery.first_time_homebuyers/6.html
A collection of feel good stories brought to you by 3 1/2 percent down FHA loans.
This is going to end well.
#198
JS, read that this AM… some are legit, buying $100k’ish houses. But, my fav is the crane operator buying the $750k house in Cali that needs the $8k credit.
Unreal.
199 - The fact that they might qualify for the credit and are buying a 750k home is even more disturbing.
The “average” crane operator salary is
32-50K in the US according to salary.com
http://swz.salary.com/salarywizard/layouthtmls/swzl_compresult_national_SC16000126.html
The wife must be some hair dresser.
“how about a fresca?”
Chi,
You start a b!tch fight and then call truce as if you’re on the defensive.
This is getting old already.
Seriously, try to pass your time in a more constructive way.
“It is interesting, there are a lot of providers out there, but many completely avoid RI. I am wondering if this fact is specific due to regs or business opportunity.”
Chi,
RI is falling into the Narragansett. Have lenders finally caught on?
Chi -197
I submitted all paperwork with Chase to get a mortgage preapproval the first week of June.
I am still waiting. No joke.
I mean Chase IS a joke but I am not joking. They claim people who are actually buying has created such a tremendous backlog that its taking longer than normal.
Also I don’t have enough credit cards so it had to go to an underwriting committee. Thanks Amex.
I am not paying for the pre-app because Chase’s affiliation with my company results in a waived fee but still. THREE MONTHS for a preapproval!!!! F them.
seneca (203)-
A good lender should be able to run a pre-approval in about 20 minutes.
JS (198)
“The rate goes to 4.5% the second year and caps after that at 5.5%, about $1,900 monthly, which we should be able to swing as our earnings go up.”
Do you think they came up with that phrase or was it put in their head by the realtor? They can’t even make the payments on their current income in 3 years…sounds like a great freakin’ idea
This country has an unlimited supply of morons.
This country has an unlimited supply of morons.
X [205],
Kind of sums up the last 8 years.
201.veto that says:
September 2, 2009 at 6:09 pm
Chi, You start a b!tch fight and then call truce as if you’re on the defensive. This is getting old already.
Seriously, try to pass your time in a more constructive way.
Dude: You get to ream me out twice, and also an extra free shot calling me OCD. All I did was explain myself. You are the c-cksucker. You smacked the sh!t out of me twice, and now you complain about it? WTF?
You made a comment that would make you sound like a stupid ignorant sh!t to anyone in finance. Sorry I corrected you.
veets: let me clarify that one a bit, so people will appreciate what I am saying.
The stock AT&T has a current dividend yield of 6.30% based on Yahoo just now….stock price of $25+.
Tomorrow the stock goes up $2 to $27+ and you comment “AT&T taking a dive. 6%”
No….it’s flying through the roof…
I need more advice….Montefiore in the Bronx….bad neighborhood? Is there anywhere around the hospital to crash, or should I just stay in Manhattan or Westchester?
205
Pay cuts and pink slips are what people are getting and this couple are anticipating being able to afford a mortgage on higher future earnings. The future with the unaffordable monthly payment is only three years away for them . If they have a baby they will immediately be unable to make the mortgage because of the child care bill. I wish I could sit them down and say “make sense!”
re:209
Montefiore is not in the best of areas. I was born and lived in bronx and can’t even recall a hotel to stay but maybe there is. I would recommend westchester as a better place to stay (or nyc)