Welcome to Fall

From the NYT:

A Cool Summer for Housing

THE fall real estate season is under way, and the school of hard realities is in session.

“The sales data is telling us nothing good,” said the market analyst Jeffrey G. Otteau. “Going into the end of the year, the trends are overwhelmingly negative in New Jersey: lagging home sales, declining prices, an inventory buildup — and everything in place to indicate the foreclosure rate will continue to rise.”

Mr. Otteau is the president of the Otteau Valuation Group, which collects contract sales data in 21 counties.

The August report showed a severe three-month-long dip in sales pace over the previous year, occurring in what has traditionally been the strong spring-to-summer period. “Now we are in the throes of fall,” he said, “when sales are always slower, and the general doldrums just grow more intense.”

Mr. Otteau said he remained loyal to the real estate maxim that local market situations differed.

But based on the “truths inherent in the data,” he predicted, no county, community or neighborhood in New Jersey would be unaffected by the overall market’s downward slump heading into 2011.

“Sales will remain sluggish, and home prices will go through a second round of declines, across the board in the state,” he said. “What will vary by market is the degree, the magnitude and depth of the weakening.”

In the August report, Mr. Otteau described the May-June-July period after the expiration of the federal home-buyer tax-credit program as “the weakest in six years — making it clear that the housing market is unable to sustain itself without additional stimulus.”

But, he added, “What is so troubling about the picture here in New Jersey is that housing trends tend to be a leading indicator of what will happen in the overall economy.”

Because “this recent relapse in the housing market follows 11 consecutive months of rising home sales,” which had the effect of helping stimulate other economic activity and employment, Mr. Otteau predicted that “going forward, if the housing market continues to lag, the reverse pattern can be expected.”

“Due to the close relationship between unemployment, home prices and mortgage delinquency,” he said, “foreclosure rates would rise further later this year.”

This entry was posted in Economics, Foreclosures, Housing Bubble, New Jersey Real Estate. Bookmark the permalink.

146 Responses to Welcome to Fall

  1. Fabius Maximus says:

    First

  2. yo'me says:

    That’s so done.Put the fork and slice it.
    Frist mf’kr

  3. Essex says:

    Sell or Rent. Well now….the choice is yours. But then will Buffy have playdates?

  4. grim says:

    But based on the “truths inherent in the data,” he predicted, no county, community or neighborhood in New Jersey would be unaffected by the overall market’s downward slump heading into 2011.

    Didn’t we try to tell Jeffery this in 2005?

  5. crossroads says:

    I don’t think I’ve ever seen Mr Otteau so “Grim”?

  6. Mr Wantanapolous says:

    “Sales will remain sluggish, and home prices will go through a second round of declines, across the board in the state,” he said. “What will vary by market is the degree, the magnitude and depth of the weakening.”

    The depths of the decline will be much deeper and the duration of the bust will be longer than most, including Jeffrey, can imagine. If reversion to the mean is the final outcome, the NAR should then march down Broadway. The mean trendline will be busted, like a knife thru butter. It’s been this way for 3,ooo years. This market will not be spared, nor is it different.

    We are almost 3 years into this recession, depression, and jobs continue to be lost, wages are stagnating and hours worked are at post war lows. In normal recessions, at this point in time, we would be creating 300-500K jobs per month and GDP, real, would be averaging 5-6%. Unfortunately, this is not a normal recession. It’s a once in a lifetime, balance sheet bust.

    By the way, Sept in LBI is the best. I knew there was something about Jersey that I loved.

  7. Mr Wantanapolous says:

    “Didn’t we try to tell Jeffery this in 2005?”

    JB,

    He looked at you like you had 2 heads. Then again, when I was dumping everyone thought I owed Clot’s bookie a bundle.

    I think all newbies should go back into the archives; 2005-2006. It’s quite entertaining.

  8. Simply Ravishing HEHEHE says:

    So which one of you was planted by Blackwater to post on this website?

    http://cryptogon.com/?p=17703

  9. Salty Steve says:

    This seems like a great time to buy a forclosed beach property in Wildwood.

    The supply is rediculous.

    What do you think of this place? It is 1 block from the beach and has 3 beds 2 baths. It just seems like it would be a good deal if you could bring the price down to 150-170k.

    http://www.realtor.com/realestateandhomes-detail/305-E-Montgomery-Avenue,-Unit-F_Wildwood_NJ_08260_1121929291

  10. 250k says:

    Barbara (151 from yesterday’s thread)

    Not everyone wants to be like Elton John just because they have $$$.

    The person I am referring to is more your “millionaire next door” type. I don’t want to publically “out” the guy so I am emailing grim the details and he can confirm:

    >> The guy buying the 2 mil house is a mid tier employee
    Wrong in this case. He heads up one of the largest IB groups at the bank. The Managing Directors report to him and he most certainly is not a mid-tier employee.

    >> He earns a nice salary
    I don’t see his paycheck but I am relatively sure its a fat one.

    >> has a good education
    standard Harvard MBA

    >> but holds a position and title with a questionable future
    I will concede this point to you. I suppose anyone is at risk these days though, ain’t they?

    And for what its worth, the wife’s no slouch either.

    I like your posts and the info you share and you seem to be a lovely person. But I think many among Grim’s readership are burying their head in the sand when it comes to the truly wealthy and just how much wealthier they have become even during this financial crisis. They like to congregate around each other and Westfield is one of the places they do so. (The Coach Store and Lucky Brand jeans are more important to the kids by the way, not so much the adults. Short Hills Mall is just 20 minutes away for the higher end needs.)

  11. Fabius Maximus says:

    Not really buying what JO is saying. I think it is still local and while some areas have dropped more or less than others, Every area will find their new floor if they are not already there. Not all floors will be equal. Ridgewood may be 5% from peak, Lodi may be 40% from peak.

    Overall I think we have stabalised and will hold this pattern for a while. Back in 2007 there were only a few of us here calling end of the recession for Q4 2008. We are in 2010 and the double dip that some people have been looking for has not shown up and I’m not sure it will. I said that nearly all the dead wood would be gone by the start of 2009, if they weathered the storm at that point, they were over the worst. Since then they have been repairing balance sheets and locking in low term debt at low rates. When you have JJ screaming that he’s scrapeing the barrel to find reasonable grade corp debt with good coupons, it shows how far the stable companies have come. Yes there will still be failures, for the same reasons that real estate never goes to zero.

    Someone posted the graph of standard deveiations of house prices since 1980. What is interesting to note, is that back in the 80’s bubble, at the end, it kept half that standard deviation gain. While you might not have been able to give away NYC co-ops, at the end, overall the drop was less than the rise. This time round some of the bubble gains will to be given back, but overall the return to mean will not happen. At this point we have just flattened at half, some say it was the tax credit, I say the credit did not have that big an impact and the leveling out was due anyway.

    Families like companes have repaired the balance sheets, if you have made it to this point, there is a fair chance you have weathered the storm.

  12. grim says:

    I know who you are talking about.

    You make it sound like he’s buying at the peak, he’s lived in town a while. He did very, very well on his old house by the way, I had a client who was somewhat interested, but we never got to take a look. I’ve shown a number of his neighbors homes to clients/blog regulars. He didn’t pick up and move from Manhattan and drop $2 in town, he sold his old place for $1.5. Hell, the new place is probably a better value dollar for dollar than his old.

  13. 250k says:

    Clot (149/150 from yesterday’s thread),

    >>Reversion-to-mean and blow-off tops/bottoms are proven characteristics of markets
    >> (the non-rigged types, at least). They are not matters of belief, confidence or faith.

    I DON’T think its different this time. I believe we will revert to the mean BUT the mean based on a trendline that includes this most recent bubble. Not the flat one that conveniently excludes the past 6-7 years. Based on the full trendline, we don’t have much further to drop to hit equilibrium. Will we actually pass equilibrium and drop even further? I don’t know. You said it yourself, this is a “rigged” market.

    >> it will seem like a king’s ransom in 4-5 years.
    So the $800k house today will be $600k in 4-5 years? OK. Only time will tell.

    >> owning a home is a big minus when TSHTF
    Point taken. Stay agile. I will be sure not to drive towards Plainfield when TSHTF.

  14. 250k says:

    grim (12)
    >>You make it sound like he’s buying at the peak,
    Not sure how you inferred that from anything I wrote. The only point I was trying to make to Gary in my post was that for some people, losing a few hundred thousand dollars, while not cause for celebration, is not entirely painful.

    There are actual people out there with real money in the bank. Remember when Blankfein asked their employees not to flaunt their bonuses in August 2009? Well, its been a year and the money is burning a hole in some folks wallets.

  15. Jim says:

    ,

    grim (or anyone else) ,
    Can you give me any information on 912 main st bayville? Any ? .financial history
    is it a foreclosure? how much money is owed on it?
    what is the history?
    thanks for any help you can give me

  16. grim says:

    I dont have access to Monmouth/Ocean MLS, but I believe a few folks on here do, I’m sure someone will chime in.

    I only have the basics, purchased for $235k in 2004.

  17. Mike says:

    Salty Steve Any ocean front deals like that one?

  18. Fabius Maximus says:

    If the TSHTF thats when you would see true socialism in this country. It is easier to survive in a pack of many than a pack of a few.

    The worst place I could think to be would be behind the walls of Noms Gluch with a bunch of overarmed people with a sense of entiltlement that they think their gold and guns give them. With one eye on their gold and one eye on the others, how will they sleep at night. The likes if the local militia will wait them out and pick them off if they don’t destroy themselves from within.

  19. Fabius Maximus says:

    #14 250K

    Its just like selling the house you bought for 500K for 400K. If the 100K comes out of 300K gains on a 1030 transfer or a fully paid off house, it hurts the pride most of all.

    Not everyone is underwater and mortgaged to the hilt with maxed out debt.

  20. yo'me says:

    If your mortgage balance is more than what you owe.your under water.If you paid cash and the value is less than what you paid for, “—-” ?

  21. yo'me says:

    Ever since the Reagan administration, supply-side economics has been at the core of Republican economic philosophy. Every GOP candidate, at every level of politics, has to swear allegiance to the theory if he or she hopes to retain credibility with the party base.

    In a post yesterday, we took a look at the theory as it illustrated in the Laffer Curve. Now it’s time to look at how the theory has worked in practice, focusing on the two separate experiments with supply-side economics that we’ve run in the past 30 years.

    The first began with the Reagan tax cuts in 1981 and ran to 1993. The second began in 2001, with passage of the Bush tax cuts. And in between of course, we had the Clinton administration, which took a very different approach. In 1993, President Clinton pushed a major tax hike into law in order to close the deficit, the very antithesis of supply-side theory. And by the end of his term, the deficit had indeed been eliminated, if only temporarily?

    So how do we gauge the effectiveness of supply-side theory in practice? I propose we look at three specific measures:

    The core claim of supply-siders is that tax cuts spur investment, so we’ll look at growth in private investment;
    Supply-side theory also claims that tax cuts increase government revenue, so we’ll look at whether that actually occurred;
    And since growth in gross domestic product is the ultimate aim of any economic policy, we’ll include that in the analysis as well.

    http://blogs.ajc.com/jay-bookman-blog/2010/09/15/the-laffer-curve-in-real-life/

  22. yo'me says:

    Private investment:

    After the ‘81 Reagan tax cuts, private nonresidential investment over the next seven years grew at an annual rate of 2.8 percent.
    After the ‘93 Clinton tax hike, private investment over the next seven years grew annually at 10.2 percent.
    After the 2001 Bush tax cut, private investment grew annually at 2.7 percent.
    (Data source: CAP/EPI study, Sept. 2008,, based on Bureau of Economic Analysis data.)

    Federal revenue:

    From 1981-1993, federal revenue increased by 20.7 percent over 12 years.
    From 1993-2001, federal revenue grew by 46.6 percent over 8 years.
    From 2001-2009, federal revenue decreased by 13.9 percent. (Even if you don’t include the deep recession year of 2009 — you might say we’re invoking the mercy rule — revenue increased just 3.3 percent over the eight years of Bush’s presidency.

    (Source: OMB Historical Table 1.2)

    GDP growth

    From 1981-1993, real GDP grew by an annual average of 2.97 percent.
    From 1993-2001, real GDP grew by an annual average of 3.56 percent.
    From 2001-2009, real GDP grew by an annual average of 1.56 percent.
    (Source: U.S. Bureau of Economic Analysis)

  23. Nomad says:

    For all you pension experts, are taxpayers on the hook for unfunded public & gov’t pension obligations? This article talks about returns on funds going from 8% to 7.5% which is a joke and when you get to a realistic rate of return, the total liability goes through the roof. Who actually cleans up the pension mess or is the game kick it down the road until it implodes. Thanks,

    http://online.wsj.com/article/SB10001424052748704358904575477731696162858.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

  24. Mike says:

    Working for a large fortune 500 company I don’t get a fraction of what these public and government employees receive and I’m suppose to help fund them. It’s give back time get it.

  25. Comrade Nom Deplume aux maison says:

    [18] minimus

    I agree that in the event of TSHTF, you will see socialism, but it will be limited to urban areas and blue states. It will also result in far less socioeconomic diversity in the socialist areas. Those with means will migrate to red states, and between the polarized populations and the general economic conditions, you will also see the other “s” word—secession. I expect that the mountain states and Alaska go first, with a number of ag states west of the Mississipi close behind. You may also see fragmentation of separate states as conservative rural areas break off. Expect the fracture lines to break not only along populations, but also between natural resource and agricultural areas, power and energy supply areas, and water sources. The worst case scenario for you is that you wind up in an MSA that has no independent power, fuel, or food, and the surrounding conservative areas have ring-fenced you.

    The wild card is, of course, whether the president tries to accomodate to prevent breakup or sends in the troops. With the latter, I can easily envision a scenario where the feds win the battle but lose the war—once this genie is out of the bottle, the resulting economic damage will inevitably result in collapse, both economically and politcally.

    As for which side of the front I want to be on, I will take the side with food, fuel, water, and traditional american values, not the new Greece. As for your impressions about how this society could possibly exist without socialist thought, well, we did pretty well without too much of it for over 200 years. I like my chances.

  26. Mr Hyde says:

    Hehe

    I’m the blackwayer plant

  27. Mr Hyde says:

    250k

    I don’t remember how long you’ve been around the blog but the question you possed yesterday about how far down we go relative to “reversion to mean” has been addressed by myself and others such as VetoThat.

    I will update my charts on those points and post them tonight or first think tomorrow. FYI. Some of the regular posters have been addressing that question since 2007 and earlier

    if your curious search for posts by “kettle1” and “veto that”. I don’t know what ever happened to veto but him and I did some good work together on those very points

    Mr Hyde = kettle1

  28. Essex says:

    Just bought three sets of window bars for the manse. One room is below ground level. Double paned gas permeated glass so it take some work to get inside. Anyhow. Extra piece of mind. Lots of very hostile faces on the white men in the Home Depot first thing this AM. Rage is the new “black” (fashion statement not racial)

  29. Essex says:

    Went to Temple in Livingston also, geezus that place give me the major league creeps.

  30. Comrade Nom Deplume aux maison says:

    [18] minimus

    Remember too that there are strong economic incentives for secession under your scenario. It isn’t just about bible thumpers with guns. Opportunistic state PsTB will see the opportunity to realize significant savings and strengthen their long term economic prospects by repudiating the U.S. debt. Yes, there will be a lot of short term pain, but the pain will exist regardless, and there are those in some states that feel that they will bob to the surface faster when they aren’t chained to the Titanic’s rails.

  31. Comrade Nom Deplume aux maison says:

    [28] essex

    Seeing as you regularly mock us doomers and survivalist types, why the bars? Feeling your area isn’t as safe as it used to be?

  32. House Whine says:

    24- ditto that. But now replace the “working for a large Fortune 500 company” for working for a small business. No pension plan, no 401 k, and not very many vacation days. Oh, and no sick days to speak of. At this point in my life, it’s not of great consequence to me given the support I have from spouse. However, I don’t get how my co-workers are going to ever make it as they approach retirement age.

  33. Comrade Nom Deplume aux maison says:

    [23] nomad,

    All comes down to the plan document(s) and state law. The state is on the hook if there is a guarantee of payment, either contractually or under state law. Otherwise no.

  34. House Whine says:

    29- Essex. Can you kindly elucidate? Creeps, in what way? I haven’t been back to that area in awhile and I am really curious.

  35. Mr Hyde says:

    Nom,

    you have a build-a-bear invite in your e-mail

  36. Mr Hyde says:

    Hows this for a sneak peak at whats in store for us here in NJ with pensions!!!

    To understand why Fort Worth’s pension system is such a financial disaster, look at one month’s list of recent retirements.

    In January, a 53-year-old policeman retired with an annual benefit of $90,312 for life, plus $256,000 in a lump sum payment. Another policeman, 57, got almost $74,000 annually, plus $313,000 in a lump sum. A 54-year-old firefighter got an annual pension of $90,130, plus $178,000 in cash.

    With an average age of 50 for the police and 54 for the firemen in this group, they’re likely to spend more years in retirement than they worked. An analysis for the City Council, presented in July, projected that the retiring policemen would collect $3.1 million in pension pay……

    …..Except that the city is on the hook for all the promised benefits. Taxpayers will have to pony up hefty contributions for years, even generations, and the city may have to cut services to afford it. The pension for city employees is currently projected to pay out $432 million more than it brings in over the next 30 years.

    And that’s the optimistic scenario. If investment returns average 7 percent, rather than the dreamy 8.5 percent in the assumptions, the unfunded liability could approach $1 billion.

    http://www.star-telegram.com/2010/09/04/v-print/2445012/fort-worth-pension-bubble-will.html

  37. Mr Hyde says:

    Who here thinks any pension fund will see anything NEAR 7% ?!?! I wonder if they ran those numbers with a 3% or 5% rate of return?

  38. Essex says:

    31. I am noticing a real shift in the whole vibe . What ‘s more i recently shaved my beard and tooling around in the bimmer seems to elicit more hostility than in weeks past . I also want to be able to sometimes nap with the windows open and that’s the only way to do it in complete safety.

  39. Poltroon says:

    plume (25)-

    The first state that secedes is the one I’ll be living in.

    Unless I’m already in Chile.

  40. 250k says:

    Hyde [27]

    I’ve been following this “report” since Fall of ’06. I recall fondly your work with Veto with regard to charting the reversion to the mean. ( I take long breaks from this place though so I didn’t know that you were now going by Mr. Hyde.)

    I have been referencing this spot to see how prices are reverting to the mean.
    http://mysite.verizon.net/vzeqrguz/housingbubble/

  41. Poltroon says:

    sx (40)-

    I thought I was the only person who nodded out in his car in the middle of the day.

  42. Confused In NJ says:

    39.Mr Hyde says:
    September 18, 2010 at 1:51 pm
    Who here thinks any pension fund will see anything NEAR 7% ?!?! I wonder if they ran those numbers with a 3% or 5% rate of return?

    3% would be a realistic number for the next 10 years. Regarding aforementioned retirees, the only way their pensions are viable is if you reintroduce Slavery into the Private Sector and appropriate 100% of all Private Sector assets from the neveau slaves.

  43. Essex says:

    29. Well I am from flyover county so i tend to be a little biased against the east coast juden. That and as i stood there in the sanctuary looking for my wife i noticed about 80% of the people were glancing around or actually eye balling me. Must be hard up for new members. I thought that even the young people looked old. Many had really crappy looks on their faces. We have a kid in religious school there and the child went to three years of pre school and while their education department is top notch someone told my wife that since she hadn’t bought a ticket this year at $100 each (they’ve always been Free) she could not stay while the child was in services this year.

  44. Mr Wantanapolous says:

    [14],

    Sharks on WS, who kill for fractions of basis points on a day to day basis, whistling dixie regarding a 300k loss? You are delusional. It’s amazing how market dynamics changes one’s attitudes, based on where they sit. The bulls have shifted from RE only appreciates, to it will never decline in “prime ” towns, to a 300K loss is of no consequence.

    Obviously you never traded with these sharks. Every day they are judged by the scoreboard. Shrug off a 300K hickie, never.

  45. Mr Wantanapolous says:

    250K [42],

    Following since 06? Under what name?

  46. Fabius Maximus says:

    #25 Nom,

    two hundred years ago you had the rural areas built around the church. A new area was settled, the first thing erected was the church which served as a school The community revolved around the church and if you didn’t take part and tried to got it alone, you withered on the vine.

    We have talked secession before. If Texas wants to seceed, fine let it. Saddle it with ts share of the debt and then cut it off as a trading partner. Let them trade with Chavez and Mexico.

  47. gary says:

    250k,

    How long have you been a homeowner in Westfield?

  48. Essex says:

    43. Hilarious!

  49. Essex says:

    43. Best shut eye I’ve had in weeks.

  50. Comrade Nom Deplume aux maison says:

    [48] febus

    Do you really think Texas or any other state will assume a portion of the US debt? That defeats the prinicipal purpose of seceding.

    Poltroon,

    It would have to be a movement, with several states all going in that direction at once. Otherwise, too easy to either marginalize or buy off the individual state.

  51. Poltroon says:

    Happy New Year, bitchez!

  52. reversion to the mean says:

    The year 2010 is the trough of the latest cycle, which provides a timely bias-free data point to calculate a mean to compare to earlier cycles. In the New York area, based on S&P/Case-Shiller data, prices have reverted to the mean.

    Residential real estate cycles are between 18 and 19 years long. Home prices peaked in May 1988 and peaked again in May 2006 – the complete cycle period was 18 years. Home prices troughed in April 1991 and March 2010, a period of slightly less than 19 years.

    During both complete cycles, home prices in the New York area rose 5% in nominal terms and 2% in real terms.

    The latest complete cycle period matches the previous one. In the New York area, based on S&P/Case-Shiller data, we can conclude 1) the mean cycle period is 18 years and 2) the mean growth rate of home prices in real terms is 2% per year.

    Unwise commentators will profess that home prices are above the mean home price-to-median income ratio. However, these claims are flawed because they ignore the fact that real estate is a superior good: Higher income households spend a higher proportion of their incomes on real estate. That’s why homes — using misleading metrics such as home price-to-median income ratio — appear expensive in high income markets such as New York and San Francisco and appear inexpensive in lower income markets such as Cumberland County, New Jersey, and West Virginia.

  53. Fabius Maximus says:

    #52 Nom

    Do you really think they are getting out the door net cash positive with all that natural resource? Texas and Alaska are the only ones with worthwhile natural resources and feasible trade routes, most of the Red states are land locked and on the gvmt teat anyway . They would need the equivalent of the Berlin Airlift to survive.

  54. Mike says:

    artificially inflated prices to realistically inflated prices similar to a bunch of teenagers paying $500.00 for a $75.00 ticket to see a hot group in town

  55. Fabius Maximus says:

    For those in Bergen Co. I finally made it over to Bathazars Factory shop in Englewood. Holy Sh1t, I haven’t tasted baked goods like that in a long time. Well worth the trip.

    http://www.balthazarbakery.com/wholesale/retail.php

  56. Outofstater says:

    #55 The red states grow the corn, soybeans and wheat and produce the beef, chicken, pork and milk. Most of their residents have at least a passing understanding of how to grow food, if only a large kitchen garden. I think it would be awhile before they’d need a Berlin Airlift.

  57. Mr Wantanapolous says:

    [54],

    RE a superior good? What a bunch of BS. On a long term basis it has appreciated at/near the rate of inflation. Now add the cost to carry; it’s wrapping up the rear. Both stocks and bonds have proven to be a much better vehicle. Come to think of it check this out;

    http://investmenttools.com/median_and_average_sales_prices_of_houses_sold_in_the_us.htm#re_div_gold

  58. 250k says:

    Get To Know Me!

    Mr. Want (47)
    Long time listener, first time poster.

    Gary (49)
    I am a renter. Been looking to buy since 2006. I have narrowed it down to Westfield and been following the market here for as long as I have been looking.

    I believe that you, like others in this forum, assume I own and therefore am a RE Bull in hopes that I don’t lose my shirt. Nothing could be further from the truth. I would love nothing more than to see the million dollar colonials on Bradford drop to 500k but it ain’t gonna happen. Prices rose, they fell and will continue to fall. I am not suggesting they have hit the floor, will go sideways or rise anytime soon.

    Simply put, I don’t think they are going to drop another 30% from here in Westfield. I have my own equilibrium point where waiting to save that last few percentage points on the drop isn’t worth the wait. Go back and read my posts. I have not posted anything that would prove the Westfield market is immune to the RE bubble bursting. The pom-pons in my hand are a figment of your imagination.

    I thought differing opinions were welcome here yet I have been called delusional because I don’t believe there will be a RE apocalypse in certain towns. I don’t think I am alone in my belief that in certain markets, you will never be able to get a non-crapshack for a song but the regulars discourage anyone from offering a counterpoint and immediately dismiss any non-bearish opinion as coming from a troll. (Unless its posted by a “character” like Reinv101, in which case the satire is acceptable.)

    Bullies the lot of ya! I shall now cry in my glass of warm milk and write in my pink satin diary of my woe.

  59. Mr Wantanapolous says:

    OOS [54],

    Beans will soon be in the teens. Reversion [#54] should chart Soybeans/RE. It will be a pummeling. Actually, any grain, soft, meat, metal, or material will blow out RE. On top of that, these are don’t carry an albatross. So much for RE cycles.

  60. Mr Wantanapolous says:

    250k [60],

    I thought 50.5 was here for entertainment purposes?

  61. Fabius Maximus says:

    #58 outofstater

    The independent farming sector barely exists and most of it is dependant on the multinationals to take their product. If the states split the meager revenue they get will drop further as agribusiness will have to pass on the extra costs for shipping across the borders. Think Nigerian oil.

  62. Fabius Maximus says:

    #60 250K

    If you have been listening for that long, you what to expect. A lot see the worst in everything. More are just in a feedback loop feeding off each other. And if you’re not with, you’re against.

  63. Yikes says:

    Montana GOP policy: Make homosexuality illegal

    http://m.apnews.com/ap/db_16026/contentdetail.htm?contentguid=Px8VCatI

    ELENA, Mont. (AP) – At a time when gays have been gaining victories across the country, the Republican Party in Montana still wants to make homosexuality illegal.

    The party adopted an official platform in June that keeps a long-held position in support of making homosexual acts illegal, a policy adopted after the Montana Supreme Court struck down such laws in 1997.

    The fact that it’s still the official party policy more than 12 years later, despite a tidal shift in public attitudes since then and the party’s own pledge of support for individual freedoms, has exasperated some GOP members.

  64. Confused In NJ says:

    In the early 1970s, activists campaigned against the DSM classification of homosexuality as a mental disorder, protesting at APA offices and at annual meetings from 1970 to 1973. In 1973 the Board of Trustees voted to remove homosexuality as a disorder category from the DSM, a decision ratified by a majority (58%) of the general APA membership the following year. A category of “sexual orientation disturbance” was introduced in its place in 1974, and then replaced in the 1980 DSM-III with Ego-dystonic sexual orientation. That was removed in 1987. Nowadays the research and clinical literature demonstrate that same-sex sexual and romantic attractions, feelings, and behaviors are normal and positive variations of human sexuality and the longstanding consensus of the behavioral and social sciences and the health and mental health professions is that homosexuality per se is a normal and positive variation of human sexual orientation

  65. Mr Wantanapolous says:

    Fab [64],

    Feedback loop? F-Ing hilarious.

  66. Fabius Maximus says:

    #21 Yo”me
    Reagan and the laughing curve pretty much sum up why I could never pull the handle for the GOP. From that people assume accuse me of left of center, which is far from the truth.

    You can sum up Reaganomics as, Tax cuts for the higher end paid for by deficit spending and. The middle to lower get shafted by the likes of TEFRA and doubling of the gas tax. Anyone wonder shy GWHB got his bal1s nailed to the wall by “No New Taxes”

    GWB said that his tax cuts would be paid for by returning the (Clinton) surplus back to the payers. Did anyone turn around and say why not use the surplus to pay of the debt that has accumulated. It’s like saying to Carrie Bradshaw, use that bonus check to pay off some credit cards, don’t use it for a shoe shopping trip to Barneys.

    Even today we get the GOP line that extending the Bush tax cuts is not an issue, as the country does not have taxing problem, it has a spending problem. Here is a fcuking question, Who was the last Republican president to reduce spending. The GOP talk a good game.

  67. Mr Wantanapolous says:

    Fab [68],

    Double Dip? Dip # 1, GWB, Dip # 2, O. Nuff said.

  68. Mr Wantanapolous says:

    You are just a tool for the string pullers who have created a college rivalry theme, donkeys/elephants. Who’s the biggest ass?

  69. chicagofinance says:

    Mr Wantanapolous says:
    September 18, 2010 at 2:11 pm
    250K [42],

    Following since 06? Under what name?
    pret

  70. Mr Wantanapolous says:

    Chi [71],

    That dolt was carried out of NY the same way he arrived, on a turnip truck. Though, he/she would rank in the top 10 of NJRER posts; the most ludicrous.

  71. Fabius Maximus says:

    #69 Want.
    Don’t think so. GWB #1 yes But he pulled out the credit card to backstop the slide, O just continued the Tab for a while.

    Will the tab default, No Way. It would take out Japan, China and most of the smaller nations with it. Good example of MAD.

  72. Fabius Maximus says:

    #70 Want

    Because I hate the Elephant, doesn’t mean I ride a donkey.

    To use a Clot metaphor, I think the choice is more do I want a punch in the face or gunshot to the chest.

  73. Mr Wantanapolous says:

    Fab [73],

    I take no sides. That said, O is GWB on steriods. Great for my pocket, sheet for the country, will accelerate the sunset.

  74. Mr Wantanapolous says:

    Chi,

    250K is this idiot?

    pretorius says:
    January 25, 2008 at 8:52 pm

    Remember back in September you responded to one of my posts by predicting “30-50% layoffs”at Bear? Are you willing to stand by that prediction today?

    NJRER Classics.

    Chi,

    By the way, I was way off base on that call. I never imagined a 2 would be slapped on that arse.

  75. Politely says:

    250k (60),
    I remember when the blog was less apocalyptic, but in both good and bad times, people can get roughed up in here. I miss the feuding with that Hoboken blog/forum (kanekt or something like that?).

  76. still_looking says:

    Arrrrh. Off to swashbuckle the pit ahoy mateys, it’s “Talk like a Pirate” day!

    Shiver me timbers! [Spongebob Squarepants theme song here…]

    sl

  77. yo'me says:

    Book ’em Danno!

  78. grim says:

    From the Record:

    Little stigma for commercial real estate owners who default on mortgages

    As tenants cut back on space in a sprawling warehouse in Wood-Ridge last year, the property’s owner did what many strapped homeowners have done: stopped paying the mortgage.

    By August, the 2.2-million-square-foot site — a former World War II bomber engine factory owned by New York real estate company Cammeby’s International Inc. — was in foreclosure. The balance on the mortgage backed by the property: $42.5 million.

    As the recession continues to weigh on commercial real estate, owners of office buildings, industrial sites and shopping centers around the country, including North Jersey, are increasingly defaulting on their mortgages and walking away.

    The roster of landlords who have defaulted include real estate giants Vornado Realty Trust and Mack-Cali Realty Corp., according to loan documents filed with the Securities and Exchange Commission. The delinquency rate for borrowers of commercial mortgages involving New Jersey properties has jumped to 7.65 percent last month from 0.52 percent in August 2008, according to Trepp LLC, which tracks loans bundled into commercial mortgage-backed securities, or CMBS.

    But unlike homeowners, who may face a stigma — not to mention a wounded credit score — for defaulting on their mortgages, commercial real estate owners face different expectations.

    Commercial owners have stopped making payments in so-called strategic defaults to get servicers to negotiate modified loans. But if a commercial property’s value significantly sinks below what is owed on a mortgage, it may make business sense to cut losses and drop the keys in the mail. Commercial mortgages are often “non-recourse” loans, meaning lenders cannot go after borrowers’ assets if they fail to repay.

    “It’s never a good thing to not fulfill your obligation as a borrower,” said Michael Knott, a managing director at Green Street Advisors, a California-based real estate industry analysis firm. “But if it’s a limited instance with minimal longer-term repercussions and it’s a property that’s deeply underwater, it can be the right business decision to walk away.”

  79. grim says:

    From the Street:

    ISN Bank of New Jersey Fails

    New Jersey regulators on Friday closed ISN Bank of Cherry Hill on Friday, bringing the total number of bank failures for 2010 to 120.

    SN Bank was undercapitalized since the fourth quarter of 2008, when a net loss of $2.2 million pushed the institution’s Tier 1 leverage ratio down to 3.70% and its total risk-based capital ratio to 6.87%. These ratios need to be at least 5% and 10% for most banks and thrifts to be considered well-capitalized by regulators. The capital ratios need to be at least 4% and 8% for most to be considered adequately capitalized.

  80. Mike says:

    250K Any certain area in Westfield that you like? What do you think about any of the surrounding towns?

  81. yo'me says:

    Having the world’s reserve currency gives the U.S. the advantage in this race to the bottom. But the destruction of the world’s reserve currency threatens to end the Era of Globalization, Pomboy concludes, and with it the quality-of-life-enhancing disinflation and productivity that it brought.

    http://online.barrons.com/article/SB50001424052970204770404575498020140414474.html?mod=BOL_hpp_highlight

  82. Confused In NJ says:

    74.Fabius Maximus says:
    September 19, 2010 at 12:46 am
    #70 Want

    Because I hate the Elephant, doesn’t mean I ride a donkey.

    To use a Clot metaphor, I think the choice is more do I want a punch in the face or gunshot to the chest.

    The choice is more like a gunshot in the front of the head, or another gunshot in the back of the head.
    Either way you’re are toast. You don’t ride the Donkey, O made it clear the Donkey rides you.

  83. Roy G Biv says:

    Need a spreadsheet to help me figure out interest on a small loan I made to a relative. They [a 20-something, for a car] only make random payments but I want to keep track of the 5% interest I am charging them [okay I really am not trying to make a profit, but want them to be held accountable – would give them a blood transfusion if I needed to but as i said trying to teach responsibility]. So anyone know/have a template of such ??? Thanks.

  84. Poltroon says:

    biv (86)-

    Google around for amortization charts (there are lots of them out there; some will allow you to run pre-payment scenarios or do calculations with accelerated principal or interest payments). Or, go to Staples and buy an old-fashioned amortization book.

  85. Poltroon says:

    A very long-winded way of saying that the gubmint is lying to us:

    “A funny thing happened on the way to American central planning: normal distributions became abnormal. To wit – the classical, Gaussian distribution chart, which lies at the basis of all modern statistics and offshoots thereof, such as quant theory, apparently is not good enough for the wonderful data aggregators and distributors at the all important Bureau of Labor Statistics, which is in charge of such key economic metrics as the unemployment rate, CPI, PPI, home sales, and virtually everything that tends to have a huge headline impact on stock futures (because let’s face it, nobody trades during regular hours anymore). Curiously of the 25 or so data items tracked by the BLS, the vast majority have been revised over 50% of the time over the past decade. All, that is, expect for the most important, and politically critical ones: the unemployment rate (easily the only number the vast majority of the population understands), and consumer prices (which is the only number to direct impact the federal budget). In other words, as the chart below demonstrates, while the BLS has the track record of a blind and retarded monkey throwing a dart at a wall full of numbers when presenting initial economic data, something which Gaussian distributions would say is perfectly normal when running a $13 trillion economy, it has perfected confidence intervals and data estimates when dealing with the most economically sensitive and critical data. Whether the BLS has hired the same oracular prop traders that allowed Goldman to lose money on zero days in Q1 when calculating some numbers (but not others), or whether the BLS just spews forth what some excel model dictates (possibly the same used by Moody’s that would crash upon imputing negative growth assumptions), while pretending to use traditional “ecostat” sampling, estimating and adjustments may be worthy of far more debate than currently afforded. Because the last thing an increasingly more cynical American public would want to believe is that the government is, gasp, lying to it.”

    http://www.zerohedge.com/article/tale-two-distributions-or-are-these-economic-numbers-bls-now-openly-makes

  86. New in NJ says:

    I recently found a downloadable, Excel-based amortization spreadsheet – free for personal use – that has a column for extra payments.

    http://www.vertex42.com/ExcelTemplates/loan-amortization-schedule.html

  87. gary says:

    It never fails. Every Sunday I look in the RE section of The Record and they always feature a house that was sold in a week at or above the listing price. What’s the purpose? Buy now or be priced out forever? Create a sense of urgency among the uneducated masses? You’ll never find another one like the one you’ve been eyeing and you’ll kick yourself everyday into infinity? Should I go get my checkbook and run out the door in my jammies?

  88. freedy says:

    Grim: The Record is a lib rag. Does this mean that Bergen C prices can’t fall?

  89. Shoe Guy says:

    Welcome my friend. Welcome, to the machine.

  90. Comrade Nom Deplume aux maison says:

    [82] mike

    There are areas in Brigadoon that I would not buy in, even at reduced prices. Better to buy in another town because you don’t get the value for taxes and cost that you would elsewhere. As a rule, the closer you are to the center of town, the better, although some areas out from the center are quite nice. No way I would look hard on 22, above Springfield Ave., or in the very southern part of town near Clark.

    I find my neighborhood near Wilson School to be quite nice, and not too far removed from downtown. Not the “best” area, probably 2nd Tier as Brigadoon goes, but perfect for us.

  91. Comrade Nom Deplume aux maison says:

    Fabius,

    Saw your posts. Naturally, I don’t agree with all of what you post, but I see your points. I think we disagree on the effects that certain inputs or events will have. It is a reasonable disagreement, and as it is purely academic (I am on record as saying it aint ever gonna happen), it is fun but that is about it.

    I do think that a serious push toward secession would be beneficial. It would fail in the end, but it would serve notice on TPTB that their policies need tweaking.

  92. Comrade Nom Deplume aux maison says:

    [81] grim

    Wow. DOBI got off its collective butt and actually did something?

    If DOBI didn’t close it down, FDIC would have.

  93. Confused In NJ says:

    Powell admits he’s a criminal:

    WASHINGTON – Former Secretary of State Colin Powell says illegal immigrants do essential work in the U.S. and that he has firsthand knowledge of that — because they fix his house.

    A moderate Republican, Powell urged his party on Sunday to support immigration generally because those who come from abroad are, in his words, “what’s keeping this country’s lifeblood moving forward.”

    Powell said a path to legal status should be offered to illegal immigrants because they do work that needs to get done.

    At his own house, he said on NBC’s “Meet the Press,” illegal immigrants are always around when he needs work done.

    He did not specify whether he hired them directly or they showed up with contractors.

  94. Comrade Nom Deplume aux maison says:

    Morpheus and Willworkforbeer (and Hyde):

    Time to get serious about some homebrewing, and would like a brewing GTG so that I have someone holding my hand as I have not done this in over 12 years.

    Would like some advice on some brews to start now, perhaps for the holidays, and whether to go mail-order or go to a store (the only one near me, U-brew, doesn’t sound like it is nearly as worthwhile as Brewer’s Apprentice, but Freehold is a bit of a drive for me).

    Anyway, let’s discuss. nomdeplumenj@gmail.com

  95. Essex says:

    Open house down the street today. Home on the market for well over a year. Typical ugly non-updated exterior. Completely vintage interior. Buy now!!

    On a completely unrelated note. Crap shack down the street. Also up for grabs. New landscaping technique….they halfed all of the hedges in the yard. Neat look. Like forks extending into space in a neat line around the place.

    Finally a third starter home is on the block. This one with an addition began by a relative and “finished” by a noted siding installer. Oh the humanity.

  96. Essex says:

    Then there’s this:

    WASHINGTON (MarketWatch) — Economists don’t expect many bright spots in the economic data in the coming week that will highlight the gloom of a newly-crippled housing market and a factory sector that is running out of steam after leading the recovery.

    http://www.marketwatch.com/story/housing-data-not-expected-to-sparkle-2010-09-17

  97. Comrade Nom Deplume aux maison says:

    FYI:

    IRS still has not published the quarterly expatriate report as required by law.

    If that number is under 200, there’s no way I am going to believe it.

    Yes, Virgina, the administration is actively manipulating the electorate.

  98. Comrade Nom Deplume aux maison says:

    Here’s another piece of trivia that suggests car sellers expect buyers to be worried about rioters in the future: Acura is advertising a wide screen backup camera, and the ad features an SUV running a cone slalom at high speed—backwards.

    The subtle message is the same when SUV purchases went into hyperdrive after the LA Riots. Buy our car so you can evade the maurading hordes.

    Fabius: Seeing as you will be staying in the urban zone during a SHTF event, you may want to consider getting one.

  99. Comrade Nom Deplume aux maison says:

    [97] confused

    I seriously doubt that Powell goes over to Annandale to find illegals to work on his house. My guess is that the crews that do his garden or re-roof his house are full of illegals and he strongly suspects it.

    Not sure if that violates any laws. I tend to doubt it.

  100. Comrade Nom Deplume aux maison says:

    Chrysler ads directly appealing to the folks that are refusing to buy Chrysler and GM on principle. Wonder if it will work.

  101. Mr Hyde says:

    Nom

    just name the time & date

  102. Comrade Nom Deplume aux maison says:

    [105] hyde

    Will do, but would like to get WW4B or morpheus on board as they are the resident brewmeisters on this board. I always defer to superior knowledge.

    Fabius or schab—don’t even think of going there.

  103. Al Gore says:

    Billionaire gold vigilantes are forcing the LBMA to deliver the goods. “They wont stop until the Anglo bankers are dead and denutted. The raids will continue every 10-14 days until their fractional scheme is dead.”

    http://www.youtube.com/watch?v=IDuZmmz3dqg&feature=player_embedded#!

  104. Comrade Nom Deplume aux maison says:

    Gotta go, but for anyone not watching this game, the Boys are suddenly looking good.

  105. House Whine says:

    97- I like Powell. He is a man with common sense and I wish he were in charge.

  106. Mr Hyde says:

    Nom

    of course, I will be the uneducated laborer of the group.

  107. willwork4beer says:

    98/106 Comrade Nom

    Morpheus is the man you need. He’s the brewer, I’m just a craft beer groupie.

  108. Essex says:

    Red red wine….my current beverage of choice….except Blanton’s.

  109. morpheus says:

    “you like me, you really like me!”

    Ok, probably a date after 10/5 and on a weekend. I am willing to bring the all grain equipment and show you how easy it is. This assumes the firm does not give me an unexpected gift of another trial that totally F**Ks my schedule.

    BTW: I step down as the resident expert. In brewing my belgian trippel which is into its 3rd week of fermentation, I orginally forgot to take the original gravity (OG) reading before I added my yeast starter. Since I modified the original receipe, I had to estimate the OG. I have never failed to do this before this brewing attempt. I guess that having the wife expressing displeasure at how long the process was taking and how I still had to give my boy a bath must have distracted me.

    nom: lets chat.. . .what all grain batch would you like to do. once we figure out lbs of grain and mashing schedule, we need to figure out how much water we need to use. I have a program for that.

    If we do this and we are off on our mashing temperatures. . . . .ain’t no problem. My first all grain batch was off by 6-8 deg. F and the batch was still very tasty.

  110. morpheus says:

    BTW: I am reaching the point where I would rather drink homebrew than commercial offerings.

  111. morpheus says:

    Btw:

    Sorry I have not been posting. Been doing too much work and watching aussie rules football finals playoffs.

  112. Marilyn says:

    The question is honestly how are these pensions all going to be paid?? Can they be paid? With all the towns and the article in the Star Ledger saying there is 466 paid police depts. add teachers and state workers , is it impossible????? My friend who is pretty smart thinks its not, they think they will eventally have to be offered “X” amount on the dollar. What do you thinK? How can the state promise this? Can these all be paid in 20 years? Tell me your opinion. Thanks Marilyn

  113. 250k says:

    chifi(71)
    >>Following since 06? Under what name?
    >> pret

    Yeah, I am the f*cking Rich Little of NJ RE Report posters.

    Politely (77)
    Nietzsche would have a field day with this group.

    Mike (82)
    Easier to identify the parts of town I am uninterested in. Lamberts Mill Rd SW border, no. North of Brightwood, no. NE of Woodland or Gallows Hill, no.
    Nom in 94 is on the money. Close to center of town commands a hefty premium. Easily a 100k markup vs. similar homes on the outskirts of town, even with oil tanks.

    I looked at Mountainside and Scotch Plains but eliminated both. Cranford is still appealing but the homes I like there tend to be the older ones in the flood zone and I am not sure I feel like watching my furniture float once a decade. The post-war homes close to Cranford’s downtown are very meh.

    Did you hit any of the open houses today?

  114. Mr Hyde says:

    Marilyn 117

    how are these pensions all going to be paid??

    they cant and wont! However the issue will not be discussed until there is no other choice. A % buyout of sorts is the only option.

  115. Sas3 says:

    #110… The stink of yellow cake will stay on Powell forever.

  116. Terrific work! This is the type of information that should be shared around the web. Shame on the search engines for not positioning this post higher!

  117. House Whine says:

    110- I know, you are right. All he can do is move forward.

  118. Essex says:

    117. I think the money was shifted illegally. I think the money is owed the people who are employed in these key positions. This is an issue of obligation and legality. Binding law.

  119. Essex says:

    Go ahead “marilyn” and let mayhem rule. Educate your own kid. Take care of your own “law enforcement” and let me know how it works out.

    FLAME ON BITCHES>

  120. Al Gore says:

    124.

    “Educate your own kid”

    You mean indoctrinate? I dont want dumb _ss public employees teaching my kids anything. Stupid in. Stupid out.

  121. chicagofinance says:

    colts neck real estate update: one of the two foreclosures on my cul-de-sac now sports a hedge that has been shaved into the shape of a phallus…..since it is the second house in a development of about 25, there is no way to avoid the entire group seeing it….

  122. Shore Guy says:

    ” I like Powell. He is a man with common sense and I wish he were in charge”

    I have a great deal of admirtion for Powell, and it is a shame the way Bush used him at the U.N. I suppose he could have resigned, rather than give the address to the Security Council. Goodness knows Christy should have when faced with hostility towards the EPA and the White House pushing junk science.

    Still, I like Powell and thinl he has far greaterpresidential skills than either BO or W. That said, I don’t see him ever running. There seems to be some issue with his wife that he does not want exposed and he is too liberal for R primary voters.

    It is the nation’s loss.

  123. Shore Guy says:

    Chifi,

    I guess they took up an interest in topiary.

  124. Shore Guy says:

    Did anyone catch the Chinese telling Timmy to go jump in the well?

    http://www.bbc.co.uk/news/mobile/business-11362913

  125. dan says:

    Of course we’ve been overpaying the police. A perfect example of how society has been hanging on by threads which are now getting plucked away.

  126. Essex says:

    125. I guess that whole Pledge of Allegiance thing is a deal killer for you.

  127. dan says:

    Which leads to the question, what will the unintended consequences be when we cut the teachers, firemen and cops pay?

  128. Confused In NJ says:

    123.Essex says:
    September 19, 2010 at 6:55 pm
    117. I think the money was shifted illegally. I think the money is owed the people who are employed in these key positions. This is an issue of obligation and legality. Binding law.

    Bullpucky, criminal legislators stole from the Public. Those legislators need to be tried & executed and the Pensions rolled back.

  129. Essex says:

    134. really?

  130. Essex says:

    133. The good ones find work elsewhere (teachers). More houses burn (firefighters)

  131. Essex says:

    The highway’s jammed with broken heroes on a last chance power drive. Everybody’s out on the run tonight but there’s no place left to hide.

  132. Mocha says:

    Most people don’t NEED the police. They are nothing more than a thin deterrence whose true purpose is not to prevent crime but to investigate it. I’ll take the volunteer ambulance, professional paramedics, volunteer firefighters, and my 9mm. If I can’t get out of immediate trouble with that lineup than police (regardless of how much you pay them) won’t help either.

  133. Mocha says:

    Anyone that puts the safety of themselves and their loved ones in the hands of public employees is setting themselves up for disaster. Look no further than what happened in CT for proof. Give me a dog and a mossberg. Outcome/chances would have been markedly better.

  134. Essex says:

    Just be careful there Mocha. And God bless.

  135. Essex says:

    A hundred years ago, eight and a half per cent of American seventeen-year-olds had a high-school degree, and two per cent of twenty-three-year-olds had a college degree. Now, on any given weekday morning, you will find something like fifty million Americans, about a sixth of the population, sitting under the roof of a public-school building, and twenty million more are students or on the faculty or the staff of an institution of higher learning. Education is nowhere mentioned in the Constitution; the creation of the world’s first system of universal public education—from kindergarten through high school—and of mass higher education is one of the great achievements of American democracy. It embodies a faith in the capabilities of ordinary people that the Founders simply didn’t have.

    It is also, like democracy itself, loose, shaggy, and inefficient, full of redundancies and conflicting goals. It serves many constituencies and interest groups, each of which, in the manner of the parable of the blind men and the elephant, sees its purpose differently. But, by the fundamental test of attractiveness to students and their families, the system—which is one of the world’s most ethnically diverse and decentralized—is, as a whole, succeeding. Enrollment in charter schools is growing rapidly, but so is enrollment in old-fashioned public schools, and enrollments are rising at all levels. Those who complete a higher education still do better economically. Measures of how much American students are learning—compared to the past, and compared to students in other countries—are holding steady, for the most part, even as more people are going to school.

    So it’s odd that a narrative of crisis, of a systemic failure, in American education is currently so persuasive. This back-to-school season, we have Davis Guggenheim’s documentary about the charter-school movement, “Waiting for ‘Superman’ ”; two short, dyspeptic books about colleges and universities, “Higher Education?,” by Andrew Hacker and Claudia Dreifus, and “Crisis on Campus,” by Mark C. Taylor; and a lot of positive attention to the school-reform movement in the national press. From any of these sources, it would be difficult to reach the conclusion that, over all, the American education system works quite well.

    The school-reform story draws its moral power from the heartbreakingly low quality of the education that many poor, urban, and minority children in public schools get. This problem isn’t new, and the historical context is important: one of the cornerstones of Lyndon Johnson’s Great Society was the Elementary and Secondary Education Act of 1965, which for the first time directed substantial national funding to schools attended by these children. (George W. Bush’s No Child Left Behind was technically a tweak to Johnson’s law, and Barack Obama is incorporating his education-reform ideas into another tweak.) The gap in educational achievement between black and white children narrowed during the nineteen-seventies and eighties, and has been mainly stuck since then, but it’s misleading to suggest that the gap is getting bigger.

    Read more http://www.newyorker.com/talk/comment/2010/09/27/100927taco_talk_lemann#ixzz102iFN8Vp

  136. Essex says:

    Cont’d

    It should raise questions when an enormous, complicated realm of life takes on the characteristics of a stock drama. In the current school-reform story, there is a reliable villain, in the form of the teachers’ unions, and a familiar set of heroes, including Geoffrey Canada, of Harlem Children’s Zone; Wendy Kopp, of Teach for America, the Knowledge Is Power Program; and Michele Rhee, the superintendent of schools in Washington, D.C. And there is a clear answer to the problem—charter schools. The details of this story are accurate, but they are fitted together too neatly and are made to imply too much. For example, although most of the specific charter schools one encounters in this narrative are very good, the data do not show that charter schools in general are better than district schools. There are also many school-reform efforts besides charter schools: the one with the best sustained record of producing better-educated children in difficult circumstances, in hundreds of schools over many years, is a rigorously field-tested curriculum called Success for All, but because it’s not part of the story line it goes almost completely unmentioned. Similarly, on the issue of tenure, the clear implication of most school-reform writing these days—that abolishing teacher tenure would increase students’ learning—is an unproved assumption.

    In higher education, the reform story isn’t so fully baked yet, but its main elements are emerging. The system is vast: hundreds of small liberal-arts colleges; a new and highly leveraged for-profit sector that offers degrees online; community colleges; state universities whose budgets are being cut because of the recession; and the big-name private universities, which get the most attention. You wouldn’t design a system this way—it’s filled with overlaps and competitive excess. Much of it strives toward an ideal that took shape in nineteenth-century Germany: the university as a small, élite center of pure scholarly research. Research is the rationale for low teaching loads, publication requirements, tenure, tight-knit academic disciplines, and other practices that take it on the chin from Taylor, Hacker, and Dreifus for being of little benefit to students or society.

    Yet for a system that—according to Taylor, especially—is deeply in crisis, American higher education is not doing badly. The lines of people wanting to get into institutions that the authors say are just waiting to cheat them by overcharging and underteaching grow ever longer and more international, and the people waiting in those lines don’t seem deterred by price increases, even in a terrible recession.

    There have been attempts in the past to make the system more rational and less redundant, and to shrink the portion of it that undertakes scholarly research, but they have not met with much success, and not just because of bureaucratic resistance by the interested parties. Large-scale, decentralized democratic societies are not very adept at generating neat, rational solutions to messy situations. The story line on education, at this ill-tempered moment in American life, expresses what might be called the Noah’s Ark view of life: a vast territory looks so impossibly corrupted that it must be washed away, so that we can begin its activities anew, on finer, higher, firmer principles. One should treat any perception that something so large is so completely awry with suspicion, and consider that it might not be true—especially before acting on it.

    We have a lot of recent experience with breaking apart large, old, unlovely systems in the confidence of gaining great benefits at low cost. We deregulated the banking system. We tried to remake Iraq. In education, we would do well to appreciate what our country has built, and to try to fix what is undeniably wrong without declaring the entire system to be broken. We have a moral obligation to be precise about what the problems in American education are—like subpar schools for poor and minority children—and to resist heroic ideas about what would solve them, if those ideas don’t demonstrably do that. ♦

  137. Marilyn says:

    Essex, I have no kids.

  138. Essex says:

    143. Sorry to hear it. Kids are amazing.

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