From the Star Ledger:
N.J. budget deficit grows to $1B for current fiscal year
The state today said it is facing a $1 billion hole in this year’s budget — a shortfall five times bigger than previously disclosed — and will cut funding for schools, municipalities, higher education, hospitals and pension plans to help close the gap.
A Treasury spokesman said the state collected $412 million less in taxes than expected through October.
“It is going to be a gut-wrenching experience,” said Bill Dressel, executive director of the New Jersey League of Municipalities.
The crunch has already led to a disagreement with Gov.-elect Chris Christie, who has called for spending freezes. On Tuesday, Corzine and Christie clashed over emergency funding for food banks and soup kitchens.
…
That revelation is the latest budget problem facing New Jersey as it grapples with fallout from the deepest economic downturn since the Great Depression. Two days after he lost the election, Gov. Jon Corzine said the state needed to find $400 million in savings to cover shortfalls that included $190 million in anticipated taxes that did not materialize.In addition, the state already will start off next fiscal year’s budgeting process with an $8 billion hole, according to a report from a nonpartisan legislative office.
The depth of the state’s current $1 billion shortfall was not revealed until today, when it was included in a required statement sent to Wall Street bond investors. It means officials now have to tell people who were expecting money they will not be getting it.
…
It is the second straight year the state has been forced to make mid-year budget adjustments to deal with revenue shortfalls in the billions.
From the APP:
N.J. budget deficit could reach $1.5 billion
New Jersey’s budget problem worsened in October, with a $222 million shortfall that exceeded its deficit in tax collections from July, August and September combined.
In a prospectus sent Wednesday to prospective bondholders, the state says its deficit could be $1 billion. It said that could be closed in part through “up to $400 million actions affecting major cost centers, including: school aid, municipal aid, higher education, hospitals and the state contribution to the pension plans.”
However, the 5.1 percent, $412.7 million year-to-date tax shortfall would, if maintained over the course of the next eight months, leave collections almost $1.5 billion behind budget.
Odds are it won’t, as tax collections fluctuate. Sales tax revenues are greatly influenced by the Christmas shopping season; income taxes could see a bump from Wall Street bonuses, but that won’t be known until April and May.
From New Jersey Newsroom:
As N.J. budget shortfall grows, local, school aid at risk
With the deficit for the current 2010-11 state budget growing toward $1 billion, the outgoing Corzine administration could be forced to cut aid to cities, towns, schools, and hospitals as well as state contributions to public employee pension plans.
The grim outlook became public Wednesday in a state report sent to Wall street bond investors.
“Largely due to continuing revenue shortfalls and the need for supplemental appropriations, the projected deficit by the close of the current fiscal year (June 30) is now estimated at $1 billion,’’ said Sen. Barbara Buono, chairman of the Senate Budget and Appropriations Committee. “Obviously, many worthy and deserving programs that are in need of state funding will have to make do without it. We have no choice – there simply isn’t enough money to sustain our current state budget, let alone any additional spending proposals.’’
Lender turns developer? I guess with $70 million on the line with little hopes of payback, why not?
From the APP:
N.Y. firm to step in as Asbury developer
A New York-based real estate investor who is owed at least $70 million in loans made to beachfront developer Asbury Partners is about to step in as the city waterfront’s next master developer.
The company, iStar Financial Inc., “is assuming the membership of Asbury Partners. They will be the successor redeveloper,” said Tim McDonough, a consultant with Roseland Advisors and the mayor of Hope Township in Warren County, who will assist iStar in its new role. “They will be taking over whatever obligations Asbury Partners has.”
“We’re just changing the partners, if you will, who make up Asbury Partners,” said McDonough, who just finished up a year as president of New Jersey’s League of Municipalities. “There will be no change in the land that would be a concern of residents of Asbury Park.”
Asbury Partners owns 70 to 80 properties, nearly all on the waterfront blocks, many waiting for future development, according to city tax records.
From NJBiz:
Unemployment continues to push up office vacancy, report says
Office vacancy levels in New Jersey are continuing to rise amid mounting job losses in office-using industries, according to the fourth-quarter office market report from Marcus & Millichap, a real estate investment services firm.
More than 157,100 employees lost their jobs in the Garden State in the last 12 months, compared to 9,100 workers added in the previous year, the firm said. Of the jobs eliminated in the past year, 70,200 were office-using positions, with the most severe reduction in the professional and business services sectors, which have shed 54,000 jobs in the past 12 months, according to the report.
As demand for space has fallen, office vacancies in New Jersey have increased to 17.7 percent year-to-date, with the rate expected to rise to 18.2 percent by the end of the year, according to Marcus & Millichap. The firm predicts that asking rents will dip 0.7 percent, to $25.47 per square foot, this year, and effective rents will decline 5.3 percent, to $20.55 per square foot.
From the Washington Post:
Fannie Mae to tighten lending standards
Fannie Mae, the giant mortgage finance company that helps shape lending guidelines, plans next month to raise minimum credit score requirements and limit the amount of overall debt that borrowers can carry relative to their incomes.
The changes are the latest in a series of crackdowns by the mortgage industry and could surprise some prospective home buyers. The industry is rolling back loose lending standards that led to the mortgage meltdown and the subsequent economic crisis. But the fear is that if the industry becomes too restrictive, it will freeze out too many borrowers and impede an economic recovery.
…
Starting Dec. 12, the automated system that Fannie Mae uses to approve loans will reject borrowers who have at least a 20 percent down payment but whose credit scores fall below 620 out of 850. Previously, the cut-off was 580.
Also, for borrowers with a 20 percent down payment, no more than 45 percent of their gross monthly income can go toward paying debts. Fannie declined to disclose the previous threshold, except to say that it was higher. The company will raise the level to 50 percent in cases with “strong compensating factors.”
…
Brian Faith, a Fannie Mae spokesman, said these limits reflect the company’s recent experience. Loans to people with credit scores below 620 fell seriously behind at a rate approximately nine times higher than other loans purchased in the same period, Faith said. Loans taken out by borrowers with lots of debt also suffer higher levels of serious delinquency, he said.
“It’s not enough to help borrowers buy a home — we must also ensure that they can stay in the home over the long term,” Faith said in a statement.
JB: Revelation…
From the Record:
Homeowners feel pinch
Nutley homeowners are struggling in the current economic climate, seeking relief from heavy property taxes and some even facing foreclosure.
Township residents submitted 67 property tax appeals in 2009, 37 regular appeals and 30 from residents represented by a lawyer. This year’s number is up from 50 from the previous two years. In 2006 Nutley saw a huge spike in appeals, a total of 155, the same year as the state-mandated revaluation.
“It’s a combination of the economy and an increase in taxes,” Nutley Tax Assessor George Librizzi said about the moderate increase.
…
Last year, the township executed a compliance plan which lowered the taxes on approximately 1,800 homes, Librizzi said. The township is constantly managing and analyzing swings in the market to keep prices accurate, he added.
Happy Thanksgiving everyone!
Leslie Appleton-Young?
Good grief, she was a cheerleader of Lereah proportions. Remember all the hooplah over the “soft-landing” in real estate? Yes, that was her.
Her idiotic comments during the bubble likely swept hundreds (if not thousands) of Californians into economic doom.
From Bloomberg:
California Housing Market Turns Corner, Realtors Say
California, one-time hub of subprime mortgage lending and the nation’s leader in home foreclosures, has turned the corner toward a housing recovery, according to the state Association of Realtors.
…
“California has hit and passed the bottom of this real estate cycle,” Leslie Appleton-Young, vice president and chief economist of the Los Angeles-based Realtors group, said in a statement today.
From Newsday:
Homeowners in clear after judge throws out mortgage
Last Thanksgiving, Greg Horoski and his wife faced foreclosure. Thursday, they celebrate the holiday in the East Patchogue home they now own outright, thanks to a State Supreme Court justice’s ruling to cancel their mortgage because of a bank’s failure to act in good faith in working out a foreclosure alternative.
…
A Suffolk judge awarded a Long Island family their East Patchogue house, wiping the slate clean on their mortgage debt and ruling that the bank holding their home loan had acted in a manner “so completely devoid of good faith that equity cannot be permitted to intervene on its behalf.”
In a terse, no-holds-barred decision rendered Nov. 19, Suffolk County Supreme Court Justice Jeffrey A. Spinner blasted the actions of IndyMac Mortgage Services, a division of OneWest Bank F.S.B., and its representatives – and awarded the home to Diana J. Yano-Horoski and husband Greg Horoski.
The decision came after a series of state-mandated, pre-foreclosure settlement conferences between the lenders and borrowers of subprime loans.
pinner wrote in his decision: “It was celeritously made clear to the Court that Plaintiff had no good faith intention whatsoever of resolving this matter in any manner other than a complete and forcible devolution of title from Defendant.”
The lending institution, represented at a hearing on Sept. 22 by Karen Dickinson, regional manager of loss mitigation for IndyMac, asserted Yano-Horoski owed a debt in excess of $525,000 – and “freely concedes” that the property was worth “no more than” $275,000, Spinner wrote.”
From the Record:
Bergen, Passaic food pantries serving record numbers
Food pantries in Bergen and Passaic counties are seeing record numbers of people at their doors this year, many of them former middle-class residents who can no longer fend for themselves.
…
As of October, 439,200 New Jersey people were unemployed, and 274,457 were receiving food stamps.
Food stamp applications increased when 26-week jobless benefits for many people were exhausted in August, a state spokeswoman said. A federal measure extending benefits by 14 weeks took effect last Monday.
is it too early to call NJ a complete Welfare State.?
Good morning everyone and Happy Thanksgiving! One of the things I’m grateful for is the njrereport and I just threw a few bucks in the tip jar to show my appreciation. Thanks, grim!
Thanks for the donation!
Wonder how many pumpkin lattes Frank will make today.
Green Bay-Detroit today has the potential to be the worst NFL game ever.
Good Thankgiving all!
Dubai default threat rattles world stocks
Nov 26
Global stock markets tumbled Thursday on mounting anxiety over a debt default request by Dubai and tighter lending conditions in China, analysts said.
“We have two major factors weighing on equities and other risk markets: Dubai’s call for a moratorium on its debt repayment to May and more stringent capital adequacy requirements for Chinese banks — but Dubai is bigger,” David Morrison, an analyst at financial betting firm GFT, told AFP.
As equities sank heavily, investors sought safety in the bond market and gold, which struck yet another record high point.
“It’s causing a mini flight-to-quality as US, European debt gets bought as a relative safe haven,” noted Morrison.
Barclays Capital analyst Paul Robinson warned that the issue of Dubai could contribute towards a “serious” pullback in global stock markets.
http://www.breitbart.com/article.php?id=CNG.172a2f217acbdb6e4e9b446773ee0f1c.a1&show_article=1
HAPPY TURKEY DAY ALL
#13 The Detroit Lions have a long and storied history of suckitude. It’s not bad, it’s TRADITION.
Had the Indians given the Colonists a donkey instead
of a turkey , we would all be enjoying a nice
piece of ass today!! Happy Thanksgiving!!
Nation Failure Thursday?
#3But the fear is that if the industry becomes too restrictive, it will freeze out too many borrowers and impede an economic recovery.
It the boorowers don’t qualify or can barely afford the mtg they are supposedly qualified for, they are not going to help sustain a so called economic recovery.
Happy Thanksgiving to all!!!
previous posts:
Thanks for the advice. I will continue to learn. Nice when we talk about real estate instead of TEOTWAWKI.
Happy Thanksgiving: I am thankful that my wife is a great cook!!
the end is neigh
A boffin at the Bulgarian national Space Research Institute has stated that not only are aliens living among us, but that they object strongly to “immoral behaviour” by humanity – such as causing global warming. “Unnatural” acts such as use of cosmetics and “artificial insemination” are also frowned upon by the extraterrestrial visitors.
Luchezar Filipov, deputy head of the space institute at the government’s Bulgarian Academy of Science, made these startling assertions to Bulgarian media earlier this week.
http://www.theregister.co.uk/2009/11/26/bulgarian_space_boffin_aliens/
Happy Thanksgiving all.
Appears there might be a touch of ergot in the Bulgarian rye harvest this year.
markets tanking on this dubai problem
futures free fall ,,,
“Also, for borrowers with a 20 percent down payment, no more than 45 percent of their gross monthly income can go toward paying debts.”
Car loans, CC debt, PSE&G bills, property taxes, cable, phone, medical bills, car insurance, commuting cost and 16 other things I fail to mention and yet, a 3bd/1.5bth piece of sh1t still will command 500K in a town where a stray bullet won’t come through the living room wall. I’m done trying to figure it out.
Happy Thanksgiving all.
freedy[26],
Persian Gulf borrowers cds thru the roof, Vietnam drops its dong [You can’t even make that up] and Swissie CB selling its currency. Happy Turkey Day.
Risk is way underpriced and there’s a worldwide currency war brewing. You can only mask the problems for a period of time. Fun times ahead.
Wishing everyone a Happy Thanksgiving from Manzanillo, Mexico!
#29 BC I guess we can eliminate the Dubai from the Dubai, Mumbi, or goodbye exoression.
The Washington Post ran another front page editorial in which it complained that “the dollar is down.” Of course getting the dollar down is the only way to reduce the size of the trade deficit. This should be a conscious policy of the Obama administration. It is not obvious why anyone would complain this policy.
The article also asserts that: “the national debt is oceanic.” The oceanic debt is much smaller than it has been at prior times in the country’s history and smaller than the debt of other countries relative to their economies. It would be interesting to see what adjectives the Post uses for these larger debts.
–Dean Baker
Happy Thanksgiving to Everyone!
May your tables be full of bounty, surrounded by loved ones in good health, with happiness, prosperity and security.
sl
Happy Thanksgiving to all!
A total collapse many had been expecting last Thanksgiving seems to be postponed indefinitely; we are slowly sliding down the hill and have enough time to look around…
There is nothing better than a full belly and a roof over your head. –Essex
#14
Ironic that a country that will put foreigners in debtors prison wants to renege on the loans it got from abroad.
Oil should get creamed ,if Dubai needs to raise capitol
ugh. too. much. food.
sl
The Debt Built up
Db
Dubai has limited ability to significantly affect oil price. Storage is full as is and their reserves are heavily depleted. The don’t have the slack capacity to flood the market on their own
Cost of insuring Dubai’s debt soars
Investors’ fears about the future of Dubai saw the cost of insuring $10m of the emirate’s debt rocket today to $535,000 (£325,000), from $435,000 the day before. The cost of insuring the debt against default had been $320,000 prior to the announcement that Dubai World, the country’s main holding company, was seeking a standstill on its debt repayments, according to Markit, a financial data provider.
The effect of the halt to debt payments will be mostly felt in the Persian Gulf economies. The harm done to emerging markets from the debacle and the loss of confidence in risky assets may slow economic recovery, according to Richard McGuire, a strategist at Royal Bank of Canada. “These credit incidents will further underpin risk aversion and concerns on counter-party risk that will limit lenders’ appetite to return to the market, and you could argue that there could be a limited recovery from here, as credit channels remain constrained in the UK and the US.”
At least we can count on bergabe to support high energy prices through devaluing the $. Too bad he doesn support the $
Sri Lanka buys 10 tonnes of gold from IMF
WORLD FOREX:Dollar Plunges Below Y85; First Time In 14 Years
The breach of Y85.00 is significant because that mark has widely been considered a possible trigger for Japanese dollar buying intervention – which hasn’t occurred in more than five years. It also opens the way for bigger falls, with the next target likely at Y83.00, said Yuji Saito, head of the foreign exchange group at Societe Generale.
Analysts and dealers said the dollar could be heading in coming sessions to the post-war low of Y79.92 marked in April 1995, according to EBS, though concern over possible intervention could offer some support for now.
Finance Minister Hirohisa Fujii said it would be possible to take appropriate steps in the market. Fujii also called the current dollar-yen slide ???one-sided,??? and said it would be abnormal if it continued. Previously, Fujii has suggested abnormal movements would be a condition for any intervention.
A stark warning from Dubai
Dubai’s problems stem from the surreal happenings in real estate there, with the place being home to the world’s tallest tower and the biggest man-made islands.
But if Dubai was a real estate bubble waiting to burst, other emerging markets, too, are overextended. Analysts have been warning about Eastern Europe, with their high foreign currency borrowings and dependence on exports.
Emerging market stocks have moved up sharply and are priced for perfection. Any disappointments or shocks could send them down. The dollar carry trade, too, can be a double-edged sword—any spike in risk aversion and the dollar will strengthen and leveraged bets on emerging markets will be wound down.
To be sure, Dubai’s problems may be entirely local. But Vietnam, another darling of emerging market investors, is also facing problems. And finally, while Dubai may be facing severe overcapacity in housing, China, the big daddy of all emerging markets, is also facing overcapacity in a host of industries, made worse by huge growth in credit.
Watch out for Japan-style US recovery – SocGen
Societe Generale has noted striking similarities between the economic woes experienced in Japan from 1990 and the current economic turmoil in the United States.
In its 68-page report entitled: Worst Case Scenario, the French bank noted that the ballooning public debt, the property bubble and banking crisis that has been witnessed over the past two years echo that of Japan in 1990.
There are other similarities too, according to the research, when a 10-year period is measured, such as the corporate debt crisis, stock market crash of 2000-2001, and the low interest rates now being witnessed.
Daniel Fermon, product manager for Societe Generale and lead researcher of the report, said the report is not to be interpreted as a forecast but is purely a worst case scenario for clients.
Happy Thanksgiving:
wonderful turkey soaked in a salt water brine with spices. very tender and moist. Also, we tapped the belgian saison: very spicy and peppery. Think that is from the grains of paradise added to the brew kettle. Yummy!
Too much food and too much wine.
Re #47…i always wanted to do a salt brine on my turkey, never got my act together enough to make it happen…Happy Thanksgiving to all and i am beyond full…
now go shopping…ugh
“Im thankful for our prudent state and local government”
This is the same as saying, “Thanks for nothing.”
It looks like some former Nj officials have either moved to india or put on a seminar for how to bilk the government via now-show jobs:
http://news.bbc.co.uk/nolpda/ukfs_news/hi/newsid_8380000/8380010.stm?
London banker salaries come into question:
http://news.bbc.co.uk/nolpda/ukfs_news/hi/newsid_8380000/8380284.stm?
Mississippi justice system from the BBC:
http://news.bbc.co.uk/nolpda/ukfs_news/hi/newsid_8377000/8377236.stm?
Everyone passed out from Tryptophane (sp?)?
Don’t worry, shut up, sit down, go with it and be happy.
ping pong
It’s alright ‘cos the historical pattern has shown
How the economical cycle tends to revolve
In a round of decades, three stages stand out in a loop
A slump and war then peel back to square one and back for more
Bigger slump and bigger wars and a smaller recovery
Huger slump and greater wars and a shallower recovery
You see the recovery always comes ’round again
There’s nothing to worry for, things will look after themselves
It’s alright, recovery always comes ’round again
There’s nothing to worry for if things can only get better
There’s only millions that lose their jobs and homes and sometimes accents
There’s only millions that die in their bloody wars, it’s alright
It’s only their lives and the lives of their next of kin that they are losing
It’s only their lives and the lives of their next of kin that they are losing
Don’t worry, shut up, sit down, go with it and be happy.
The psychotic, angry, southern Wall Street commentator is back.
Warning: most words are curses.
http://www.youtube.com/watch?v=KWu-efNN8PM
BC Bob, he advises maxing out the credit cards to buy gold, and then default.
Hi NJ,
Get all money out ASAP… dollar down further… don’t be part of the planned U.S. ” dumb buyers ” Dubai Doom while we are all out buying garbage tomorrow… UK Media says entire event was plannned around our ” anticipated ” ignorance of the meltdown over the holiday… Also trading mysteriously stopped for three hours in UK… due to glitches… or the fact that Dubai World owns a large stake in the London exchange… Be guided accordingly… but its too late… Gldmm fix is in… too busy volunteering to clean up plates in NYC soup kitchen before any food was served, and instructed no camera.. no interviews… do we all feel ” shoooo sheeellleeed” yet ???
The Dubai Debt Deferral….
Hong Kong down 5 %
HSBC down 8 %, my god…
C goes to 1.90 ??
Futures down over 180 pts dow
Dax open – down 2% 2 minutes in
HSBC will implode…
FAZ baby FAZ… remember Esssstraaaada…
Oh Yeah Dubai now on Holiday for today… Bend and stretch, and bend… bend… bend…
Oh yeah Pakistan just told Obam. that more troops would not be welcomed… don’t do it… what can we put on at 8pm on tues. ??
I love being up at 3:07am
Mantalooky…
Holiday Wine Trail Weekend is here! In case anyone wants to take a break from “the sky is falling” state of mind. http://www.Newjerseywines.com
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