From WalletPop:
1. El Centro, California
2. Cleveland, Ohio
3. Detroit, Michigan
4. Las Vegas, Nevada
5. Oklahoma City, Okla.
6. Los Angeles, California
7. Phoenix, Arizona
8. Newark, New JerseyWhere to start for one of the worst cities in America? Newark has been likened to Detroit, but with its own political and social dysfunction. More than a quarter of its population lives below the poverty line, the state has the most Superfund toxic-waste sites in the nation, and Newark Mayor Cory Booker is trying to close a $70 million budget deficit by cutting items like toilet paper. Non-uniformed city workers will soon start working four-day workweeks, which won’t make it the first city to cut employee hours, but at least Booker has said he won’t raise taxes.
Booker has brought the city a long way since being elected in 2007, but he still has a long way to go. While crime in the city has been reduced, it still remains a major issue. A recent spate of shootings has reminded residents of the city’s long history of violent crime.
…
9. Miami, Florida
10. Memphis, Tennessee
Deed in lieu!! And you thought it was only home owners that walked away!
From the WSJ:
Colony Capital To Hand Over Xanadu Deed To Lenders
A group led by Colony Capital will hand over the deed Monday to lenders of the $2 billion Xanadu project in New Jersey, according to a source familiar with the situation.
The move was expected and marks the end of the road for Colony’s group, that includes Dune Capital Management, in one of the most high-profile retail developments of the real-estate boom. A representative from Colony declined to comment.
One of the Colony group’s biggest obstacles was replacing $500 million in financing that was cut off as a result of the bankruptcy filings of its original lenders, Lehman Brothers Holdings Inc. Construction on the entertainment and retail project halted in early 2009.
About Time.
#1 grim
Did anyone post the piece from the Star Ledger where they asked people to come up with photoshop designs for Xanadu.
I think the CC should be amended to show him giving a 1 finger salute to the racetrack.
http://www.nj.com/ledgerlive/index.ssf/2010/08/meadowlands_xanadu_gets_a_make.html
Its bad tht $1.8 seems to be mere pocket change these days.
Freddie seeks $1.8bn from US Treasury
Home loans bail-out now totals $148.3bn
http://www.ft.com/cms/s/0/801221f4-a3c3-11df-a100-00144feabdc0.html
Damn right, it’s about time. I was sick of hearing my mother tell me how her friend is going to get rich with her Newark properties.
From the WSJ:
San Francisco Fed Paper Warns Odds of Recession Rising
The risk the U.S. economy could fall back into recession is on the rise.
A new report from the Federal Reserve Bank of San Francisco warns the economic outlook “is likely to deteriorate progressively starting sometime next summer.” Over the shorter run, the paper, written by Travis Berge and Oscar Jorda, argues the odds of falling into recession are relatively low. But over the next two years it appears the odds are only slightly better than even that an already-tepid recovery will continue.
The paper, published Monday, arrives just ahead of a potentially drama-filled Federal Reserve monetary-policy meeting. For many months now, market participants have gone into these gatherings fairly confident of the outcome, expecting policy makers to stick to their zero% interest rate stance amid pledges to keep interest rates low for an “extended period.”
San Francisco Fed Paper Warns Odds of Recession Rising
A new report from the Federal Reserve Bank of San Francisco warns the economic outlook “is likely to deteriorate progressively starting sometime next summer.” Over the shorter run, the paper, written by Travis Berge and Oscar Jorda, argues the odds of falling into recession are relatively low. But over the next two years it appears the odds are only slightly better than even that an already-tepid recovery will continue.
Mr Hyde
You might have an average home price of 100K which seems cheap but if you have to front 80K and have substantially lower wages then now, that could still be expensive.
Is that a vote for some serious deflation? I can’t help but think that would be the natural course of things if the FMacs crumble and the Feds can’t come up with a solution to prop up the market. Makes for a real chill when just thinking about buying in.
Libtard
Since one can’t make an accurate determination of what is best for their situation, one is better off closing their eyes and ears and just diving in head first… The imprudent have no means of helping out the prudent. Better to err in the direction of greater financial upside. No?
I guess that parallels the whole discussion about folks to stop paying mortgages and basically squat for a year or longer, at what ends up being the public expense… yet it takes a certain amount of gumption for those who aren’t against the wall to do such a thing. Given that we’ve been diligently saving for about a decade now to gather a decent DP, embracing the possibility of losing all of that or more in a blink feels as appealing as walking into a wood chipper… it just feels wrong, even if past/current behavior of the govt points to bailout.
Shore Guy
When prices reflect what I believe to be reality, I will be happy to say things are well with the world.
My heart agrees… but having begun looking at the market starting in the early 2000s, and not seriously until 2005/6, my psychological baseline is fairly high. I don’t have the confidence that many here have to look at a house and know value. Of course I’d love more for less, as would anyone. But that’s just a pipe dream – I just don’t want to be taken for a sucker and it’s pretty hard not to feel that way on the buying side these days.
Anon
I think your observations are another vote for going small – get the hell out of NYC MSA.
Besides the NYC job, for some reason my family ended up settling in northern NJ; while there are lots of other places in the country I’d be happy to live in (and where I could much more easily afford), this is really where I need to be for now. Whether it makes sense to buy… well, I guess living in a rental apt in NYC can get really tiresome.
From HousingWire:
Analysts Warn Home Sales and Prices Not Yet at Rock Bottom
Home sales have yet to hit the trough of the recession, according the US Housing Market Monthly report by Capital Economics released Monday. Further, the economics firm states that pending home sales will do little to push home sale numbers higher. In fact, the number of pending home sales is so diminished, down 32% in the wake of the tax credit expiration, that existing sales will only dip in the coming months as these mortgage agreements are finalized.
Analysts at Moody’s Investors Service agree, stating that the odds of a near-term double-dip recession increased to one in four from one in five predicted this spring. If this double-dip happens, Moody’s estimates home prices will fall along with sales — an estimated 20% before stabilizing in early 2012.
http://www.housingwire.com/wp-content/uploads/2010/08/Screen-shot-2010-08-09-at-11.49.17-AM1.png
5% decline if no double dip, 20% if we do.
Could builder bring homes to Xanadu?
The owners of Minneapolis’ Mall of America — who for several months have expressed interest in taking over the dormant Xanadu project — were rejected in an effort eight years ago to construct 5 million square feet of housing at the Meadowlands Sports Complex.
“You could develop a mini-city with as many as 5,000 people living there,” Hanson said. “You have … rail there now, which would support that type of project.”
A 2.3-mile rail link to the Pascack Valley line was opened in 2009.
“In today’s world, I can’t deny for a minute that anything is possible,” East Rutherford Mayor James Cassella said of potential housing being built at the state-owned 750-acre sports complex. “I would have some major issues with that, although there are people at a certain level who couldn’t care less what the local mayors are saying. I think most, if not all, of the [Meadowlands-area] mayors would oppose it, though.”
I don’t agree with the deeper prediction in 9 & 10, sorry folks.
The drivers of home prices haven’t appreciably improved, post recession. In fact, nothing much has changed. Double dip? We never stopped being in a housing recession.
That said, dip or no dip, my prediction is of approximately 5-8% additional decline in home prices for this area, followed by a long hard period of flat prices (4-5 years).
Matt Simmons dies of heart attack
Matt Simmons, founder and former head of Simmons & Co. International, died on Aug. 8 at his home in Maine of an apparent heart attack.
Simmons earned the respect of his peers with his successful energy investment bank, as well as a name for himself with his fearless and brazen predictions on the future of energy. His 2006 book “Twilight In The Desert” brought the term “peak oil” into the mainstream and ruffled more than a few feathers at home and abroad.
1. Grim,
Coincidentally, I was just brushing up on F. 982 and the corresponding Pub. Lots of interesting stuff in there.
I’m pissed. Memphis (my hometown) deserves to be at least 4 or 5 on that list.
Memphis definitely has the creepiest, most violent and most senseless murders, along with Detroit-like levels of uninhabited areas inside the city limits.
In fact, Memphis beat Detroit and Cleveland to the implementation of bulldozing entire vacant neighborhoods.
Finally, the Grizzlies are a capital crime against the sport of basketball.
So I’m guessing no autopsy on Matty Simmons?
For those who think dog racing is the only rigged game in town:
“And so it continues: since we first posted Nanex’ report on quote stuffing two months ago, and the follow-up analysis, the firm’s images of visualizable HFT algorithmic “crop circles” have appeared everywhere, from the pages of Huffington Post to The Atlantic. Which is terrific, as it further raises public awareness of the fact that no matter what one does, the market is now merely a computerized playground in which human traders have no chance of even breaking even in the long run, as the adversary uses consistently illegal means (intentional bid stuffing) to extract every last penny from whoever is left trading. In order to keep the public’s, and the SEC’s ADD-addled attention on this matter of major significance, we present the latest patterns of illegal computerized quote stuffing as further glaring evidence that the regulators have given up trying to restore any sort of credibility in the market (and people wonder why ICI reports 13 consecutive weeks of mutual funds outflows). Our only hope is that someone will be clever enough to reverse engineer the pattern generators in these algos, and to punish the HFT operators who day after day leave their fingerprints all over the biggest crime in capital market history with complete impunity.”
http://www.zerohedge.com/article/algorithmic-crop-circles-redux-rise-stock-market-machines-part-2
The interesting thing about this article is the US now allows US citizens to maintain non US citizenship, so what do they expect?
US engineer convicted of selling secrets to China
By MARK NIESSE and AUDREY McAVOY, Associated Press Writers Mark Niesse And Audrey Mcavoy, Associated Press Writers – 2 hrs 5 mins ago
HONOLULU – A federal jury convicted a former B-2 stealth bomber engineer Monday of selling military secrets and helping China design a stealth cruise missile.
Noshir Gowadia was accused of pocketing at least $110,000 from China, which he allegedly used to pay the mortgage on a multimillion-dollar oceanview home he built on Maui’s north shore.
Gowadia, who has been in federal custody since October 2005, faces life in prison when he is sentenced in November.
The 66-year-old gave China a design for a cruise missile component and then showed its effectiveness when compared to United States’ air-to-air missiles, according to federal prosecutors.
“This verdict sends a very clear message that no, you can’t do that, and we can take care of our business here in American courtrooms when that happens,” Assistant U.S. Attorney Ken Sorenson said.
Gowadia’s defense attorneys argued during the nearly four-month trial that while it’s true he gave China the design for the cruise missile exhaust nozzle, he based his work on unclassified, publicly available information. Gowadia plans to appeal.
“Mr. Gowadia is obviously disappointed with the verdict. He felt that he hadn’t committed a crime,” said his attorney Birney Bervar.
Gowadia was convicted on 14 of 17 counts, including conspiracy, violating the arms export control act, tax evasion and money laundering. He was acquitted on charges of knowingly communicating national defense information.
The decision came after six days of deliberations at a federal court in Honolulu.
“Mr. Gowadia provided some of our country’s most sensitive weapons-related designs to the Chinese government for money. Today, he is being held accountable for his actions,” said Assistant Attorney General David Kris. “This prosecution should serve as a warning to others who would compromise our nation’s military secrets for profit.”
Gowadia helped design the propulsion system for the B-2 bomber when he worked at Northrop Corp., now known as Northrop Grumman Corp., between 1968 and 1986.
Prosecutors argued that Gowadia helped China design a cruise missile exhaust nozzle that would give off less heat, allowing the cruise missile to evade infrared radar detection and U.S. heat-seeking missiles.
They said Gowadia traveled to China between 2003 and 2005 while designing the cruise missile and used e-mail to arrange payment for his work.
Gowadia’s defense attorney, David Klein, told jurors it was true the engineer designed an exhaust nozzle for China. But he said Gowadia’s design was “basic stuff” based on information that was already publicly available.
Prosecutors also charged Gowadia with attempting to sell classified stealth technology to the Swiss government and businesses in Israel and Germany.
During the trial, prosecutors presented evidence that Gowadia used three foreign entities he controlled, including a charity purportedly for the benefit of children, to disguise the income he received from foreign countries.
Born in India, Gowadia moved to the U.S. for postgraduate work in the 1960s and became a U.S. citizen about a decade later. He retired from Northrop for health reasons in 1986, two years before the B-2 made its public debut.
He moved to Maui in 1999 from the U.S. mainland where he had been doing consulting work after retiring from Northrop.
The case is one of a series of major prosecutions targeting alleged Chinese spying on the U.S.
In March, Chinese-born engineer Dongfan “Greg” Chung was sentenced to more than 15 years in prison after he was convicted of six counts of economic espionage and other federal charges.
Investigators learned about Chung while probing Chi Mak, a defense contractor engineer convicted in 2007 of conspiracy to export U.S. defense technology to China. Mak was sentenced to 24 years in prison in 2008
To be fair, Obama should restore all house equity, mortgage or no mortgage. He shouldn’t penalize those prudent enough to support the economy by paying cash. Or Conversely, he shouldn’t subsidize anyones equity.
[13] juice,
Is it my imagination, or have a lot of hedgies, rich folks, and others that have been a thorn in the administration’s side, died in the past year?
[6] grim
“A new report from the Federal Reserve Bank of San Francisco warns the economic outlook “is likely to deteriorate progressively starting sometime next summer.”
Hope and Change!
Not died. There is no “D” grade.
They have Passed.
Nom the guy prob made a fortune shorting BP I wound not be surprised if some Granny from the UK spiked
His drink or maybe he was snorting lines like Billy Mays.
Re: article link below – so if they do the quantitative easing thing – excess bank reserves get no interest from Fed & Uncle Sam buys a bunch of consumer loans and mtg backed securities – do banks really want to lend in this environment -even if they get even less interest on their excess reserves, won’t they take it? Do they really want to do more consumer loans and mortgages given no job growth, no job security and what will probably be a decline in home prices of at least another 5% in the next 12 months? I don’t get it, seems like the impact of any quantitative easing will be minimal at best. Why do it?
http://www.nytimes.com/2010/08/10/business/economy/10fed.html?_r=1&hp
TSTL:
“The annual World Sauna Championships in Finland have ended in tragedy with the death of one of the finalists.
Russian Vladimir Ladyzhensky and his Finnish rival, Timo Kaukonen, collapsed after suffering severe burns. Mr Ladyzhensky later died in hospital.
The event requires participants to withstand 110C (230F) for as long as possible. The men managed six minutes before judges noticed something amiss.
Its chief organiser said all the rules of the event had been followed.
Continue reading the main story
“Start Quote
It is not so unusual to have 110 degrees in a sauna. A lot of competitors before have sat in higher temperatures than that”
End Quote Ossi Arvela Organiser, World Sauna Championships
“All the rules were followed and there were enough first aid personnel. All the competitors needed to sign in to the competition with a doctor’s certificate,” Ossi Arvela told reporters in Heinola, where it was held.
Half a litre of water was added to the stove inside the sauna every 30 seconds, and the last person remaining was the winner. There was no prize other than “some small things”, he told the Associated Press.”
http://www.bbc.co.uk/news/world-europe-10904691
Nomad (24)-
The banks will just buy Treasuries with their excess reserves. Complete and utter bullshit.
The corpse of the economy is now beginning to stink, and TPTB is dumping lime on it and spraying air freshener. Oblivion is nigh.
My fellow Realtors still laugh at me when I call FHA the world’s largest garbage can. However, methinks I will get the last laugh (or the first seat on a plane out of this festering carbuncle of a country):
(Business Insider, Aug. 9)– “Although the FHA was essentially a non-factor in facilitating the housing boom, its standards for providing mortgage insurance have been extremely lax to say the least.
During his appearance before the House of Representatives this past March, the FHA Commissioner, David Stevens, submitted detailed written testimony which pointed out that 6.2% of the entire insured loan portfolio had been issued to homebuyers with FICO scores below 500. Really. That is roughly 360,000 insured loans which were provided to owners with FICO scores less than 500. Keep in mind that the accepted standard for subprime mortgages during the bubble years was a FICO score lower than 620. More than 37% of these loans are now at least 60 days delinquent, in foreclosure, or in bankruptcy.
Compounding the problem, between 2001 and 2008 the FHA provided a program known as seller-funded downpayment assistance (SFDP). It allowed non-profit consumer advocacy groups to “donate” the 3.5% down payment to low-income buyers seeking an FHA insured loan. The seller was often a home builder who “contributed” the funds to the non-profit which passed it on to the buyer.
The program was riddled with fraud. Many of the non-profits were really tools of the builders. To cover their costs, the builders simply jacked up the price of the home. In 2006, the Commissioner of the IRS called these mortgages “scams” which “damage the image of honest, legitimate charities.” After mounting criticism, the program was finally ended in 2008. The FHA actuarial report issued in 2009 calculated that the program had cost the Agency nearly $10 billion in losses.”
http://www.businessinsider.com/fha-insured-mortgages-a-disaster-2010-8
A good portion of the FHA loans made to borrowers who required the FTHB credit to afford the home will perform similar to the DAP loans above.
I’ve heard of a number of deals, and seen one personally, where the buyers borrowed down payments from family or friends with the intent of paying it back once they refiled their amended 2009 tax returns to claim the credit days after closing. These will probably be the worst of the bunch.
So Doom, the quant easing doing something when they don’t know what to do or throwing Sh_ t against the wall hoping something will work. Seems like they are firing the last bullet. Would think after the mid-term elections the downward spiral will accelerate. Still wonder if there will be some type of massive collapse – maybe I should learn how to buy / trade distressed debt.
Continuing my wait to purchase a home …. maybe next summer.
fha, another scam agency . what a world we live in .
Seems like they are firing the last bullet.
Really? Because from my perspective they still own the arsenal.
QEII will just prop up stocks for a few months at best. They’d be better off waiting for the market to tank before doing it as they’ll get a bigger move up on a percentage basis.
HE (32)-
Didn’t you get the memo? Greenspan said the best way for the economy to recover is to throw a great big stock rally.
Really.
I wouldn’t be the least bit surprised to see the Fed do nothing today and wait for options expiration to spring QE lite. Bergabe loves to f*ck the options traders.
They kill Simmons and leave Greenspan walking, go figure. Of course Greenspan works for Paulson & co so I guess a stock market rally wouldn’t hurt him would it?
Speaking of basketball, how about the return of Isiah Thomas?
What the heck is Dolan doing sleeping with Isiah?
Can we get John Paulson to buy the Knicks?
I think it should give the unemployed a great deal of hope when a guy who failed in every position he held in an organization and who got sued and found guilty of sexual harrasment and eventually fired is rehired by the same organization.
Back from vacation and I am now stuck in a massive traffic Jam by the airport. WTF are they doing to RT 78?
For some reason Newark showing up as one of the 10 worst places to live reminded me of I of Newton from the Twilight Zone revival during the 80’s. Link is 8 mins of fun.
http://www.bloomberg.com/news/2010-08-10/-buy-and-bail-homeowners-get-past-mortgage-hurdles-from-fannie-freddie.html
Here’s a new term on me “Buy and Bail.”
Monmouth County Open Public Records site now shows deeds dating back to 1976. Previously they only showed records back to 1996.
Anyone have a recent quote for a top credit 20% down 30-year mortgage rate or a 10% down for that matter? Just want to work up some numbers in my head.
BTW, looked at a property in GlenRidge where the owner runs a tropical fish business out of their home. There were 1,500 discus in the basement. Nearly every bedroom in the home was filled floor to ceiling with empty cardboard boxes with Styrofoam inserts. The master bedroom had an open bathroom. There’s nothing like asking Gator to listen to me drop a deuce at 2am! It’s one thing to stage a home, it’s another to make absolutely no attempt to make it convenient for a potential buyer. This one will sit unless Quagmire comes to the open house.
http://www.housingwire.com/2010/08/09/analysts-warn-home-sales-and-prices-not-yet-at-rock-bottom
Some say we aren’t there yet…
I think it should give the unemployed a great deal of hope when a guy who failed in every position he held in an organization and who got sued and found guilty of sexual harrasment and eventually fired is rehired by the same organization.
His failure preceded his Knicks tenure as well. He inherited a Pacer’s team that was fresh off an NBA finals appearance and produced nothing but 8th seed first round exits before Larry Bird returned to fire his butt. Even before that, he bought the CBA and bankrupted it and produced nothing for the Toronto Raptors as their president.
make (37)-
If Paulson owned the Knicks, he’d have them throw games and bet them to lose on the money line.
OTOH, if you were an owner who wanted your team to tank games, what better team to make it look normal than the Knicks?
What the heck is Dolan doing sleeping with Isiah?
Can we get John Paulson to buy the Knicks?
Are you serious? Paulson would construct a roster of 12 NBDL players and go to Vegas and place bets against them.
rofl Doom, great minds think alike at the same time…
Cindy (41)-
“Buy and Bail” is old hat. Did a short sale on one three years ago.
The borrower stripped 240K of equity out of the dump, paid cash for a house in Charlotte and skipped NJ.
Stu (43)-
This is both troubling and very funny.
BTW, after watching my wife’s Caesarean (and snapping a pic of her assorted guts being moved out of the way), a little turtle-time rumbling is no big.
“There’s nothing like asking Gator to listen to me drop a deuce at 2am!”
Silliness About the Risks of Deflation
Tuesday, 10 August 2010 05:05
Reporters continually discuss deflation as there something magical happens if the rate of price growth crosses zero and turns negative. This is silly. The point is that a lower rate of inflation raises real interest rates at a time when we want lower real interest rates. We can’t lower nominal rates below zero, so any decline in the inflation rate right now is bad news.
In this sense, 0.5 percent inflation is worse than 1.5 percent inflation. The situation gets still worse if the this goes to a negative inflation rate of -0.5 percent. But the drop from 0.5 percent to -0.5 percent is no worse than the drop from 1.5 percent to 0.5 percent.
This is important to understand because the fixation on deflation implies that somehow everything is okay as long as our inflation rate is still positive. That is not true, the economy is suffering from an enormous output gap leading to tens of millions of people needlessly facing unemployment or underemployment.
Dean Baker
Doom 50 – Stu watched the doctors scrub my uterus out with a sponge after my c-section. I still want a door and walls on my bathroom.
If I want to spend the night in a high roller suite, I can do that in AC for free.
The borrower stripped 240K of equity out of the dump, paid cash for a house in Charlotte and skipped NJ.
I did that in 2004.Stripped 80% of appraised value,left 20% for equity,bought a brand new house down the shore for cash.Mortgaged house is now 10% under water.Did not skipped yet,house is 10 min away from Rutgers,kids are using it instead of a small dorm room.
#50 after watching my wife’s Caesarean (and snapping a pic of her assorted guts being moved out of the way)
#52 Stu watched the doctors scrub my uterus out with a sponge
You know, there are certain things I don’t think I’ll ever be ready for.
Eww.
http://www.marketwatch.com/story/the-jobless-recovery-wont-go-further-without-jobs-2010-08-10
“Commentary: Productivity drop shows an American worker stretched to the limit.”
“The Jobless Recovery Won’t Go Further Without Jobs”
Huh? Then it wouldn’t be a jobless recovery! It is a recoveryless recovery…
I’m so confused…
Nom [20]
Is it my imagination, or have a lot of hedgies, rich folks, and others that have been a thorn in the administration’s side, died in the past year?
Why do you think they haven’t closed the death tax loophole yet? Truly wealthy get cover to die now with powerful carrot and stick incentive to stay dead. I predicted a extraordinarily high number of notable ‘deaths’ this year because of it.
Is Any Job Better Than No Job?
Employers shouldn’t be surprised that Americans won’t take their crummy, low-wage jobs.
http://www.slate.com/id/2263335/
Great article! There are several things we must avoid in order to become financially stable and not retire broke. An interesting article on this subject is:
Worse Financial Decisions You Can Make To Guarantee Bankruptcy During Retirement!