HAMP FAIL

From Bloomberg:

U.S. Foreclosure Prevention Program to Fall Short, Watchdog Panel Finds

A U.S. Treasury program aimed at preventing 3 million foreclosures is likely to fulfill less than a third of its goal, a congressional watchdog reported.

The Treasury’s homeowner aid effort is “ineffective” and has failed to hold mortgage companies accountable, the Congressional Oversight Panel for the Troubled Asset Relief Program said in a report released today.

“The program has turned out to be a lot smaller and have a lot less impact on the housing market than we expected,” said former U.S. Senator Ted Kaufman, the chairman of the panel.

The Home Affordable Modification Program, or HAMP, pays lenders and servicers to rewrite loan terms for borrowers who can’t make their current mortgage payments. Since its 2008 creation, HAMP’s goal of preventing 3 million to 4 million foreclosures “has been repeatedly redefined and watered down,” the panel said.

“If current trends hold, HAMP will prevent only 700,000 to 800,000 foreclosures,” a small portion of the 8 million to 13 million foreclosures expected by 2012, said Kaufman, a Democrat from Delaware.

The Treasury will spend only about a fourth of the $50 billion it allocated for the program in 2009, according to the Congressional Budget Office.

“For this reason, Treasury’s reluctance to acknowledge HAMP’s shortcomings has had real consequences,” the TARP panel found. “Absent a dramatic and unexpected increase in HAMP enrollment, many billions of dollars set aside for foreclosure mitigation may well be left unused. As a result, an untold number of borrowers may go without help.”

Homeowners are dropping out of the program at a faster rate than they’re joining it, the Treasury reported last month. The number of borrowers aided by HAMP grew to nearly 520,000 in October, up 23,750 from a month earlier, while 36,300 dropped out after failing to make their modified payments.

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139 Responses to HAMP FAIL

  1. grim says:

    From Bloomberg:

    Pixie Dust Loses Magic as Foreclosures Slam Utopian Disney Town

    Walt Disney Co. built Celebration, Florida, as an idealized version of a circa-World War II small town, where litter-free streets are lined with white picket fences and front porches entice neighbors to sit after dinner.

    Now, there’s trouble in the 16-year-old paradise set within earshot of the nightly fireworks at Walt Disney World Resort.

    Celebration’s foreclosure rate is about double the state’s pace as homeowners who paid a premium for a vision of utopia fall behind on their mortgages. Earlier this month, a resident on the verge of losing his house shot himself after a 14-hour standoff with police. Three days before that, the town had its first murder when a man was bludgeoned with an ax.

    “A lot of people bought homes in Celebration thinking Tinker Bell had sprinkled the town with pixie dust,” said Michael Olenick, chief executive officer of mortgage-data firm Legalprise Inc., referring to the character in Disney’s “Peter Pan” movie whose magical dust allows people to fly as long as they think happy thoughts. “Reality is hitting hard.”

  2. grim says:

    From the Courier Post:

    Assembly passes housing overhaul legislation

    The latest incarnation of the ongoing overhaul of New Jersey’s affordable-housing law was passed narrowly Monday by the Assembly, though its prospects of becoming law seem bleak.

    Though the bill eliminates the Council on Affordable Housing, as Gov. Chris Christie wants, Department of Community Affairs Commissioner Lori Grifa told an Assembly committee last Friday that Christie wouldn’t sign the bill. Regardless, the Assembly voted 43-32 to send its proposal to the state Senate.

    “We finally have got it together in terms of affordable housing and housing in general for people in the state of New Jersey,” said Assemblyman Jerry Green, D-Union.

    “New Jersey has changed,” Green said. “There shouldn’t be any place in New Jersey that any of us should not be able to live.”

    Republicans said the bill would make a bad affordable-housing system worse. Assemblywoman Amy Handlin, R-Monmouth, said it would force some towns bracing for a 2 percent cap on property tax increases to also cope with an influx of housing.

    “If we pass this bill, it will send a very clear message — not the message we want to send, that we have compassion for needy people, but that we have a complete and utter disregard for the fiscal health and the stability of our communities,” Handlin said.

  3. grim says:

    From CNBC:

    Why Care About Negative Equity?

    Just because you owe more on your mortgage than your home is worth doesn’t necessarily mean that you are no longer able to afford your mortgage. For many Americans who bought their homes during the housing boom, little has changed for them financially other than what the appraiser has determined on paper.

    What has changed are attitudes, and attitudes can be dangerous.

    22.5 percent of U.S. borrowers were in a negative equity position on their homes at the end of Q3, according to a new report from CoreLogic .

    That is actually an improvement from Q2, but only because many severely underwater homes went into foreclosure in the quarter, thereby taking them out of the pool.

    The authors of the study warn that deteriorating home prices now will likely push the percentage back up in Q4.

    The definition of home ownership, at least according to the Census, includes homeowners in a negative equity position. “However, homeowners in negative equity are not likely to behave similarly to homeowners with equity, because their financial interest (the equity) has disappeared and has only a small prospect of returning soon, given price trends,” note CoreLogic authors. Underwater borrowers are more likely to behave like renters, which means they’re not going to invest much in home improvement. They are also more likely to walk away from their commitment, although not in the waves some had predicted.

    So what happens if you take those underwater borrowers out of the homeownership equation? It pushes the homeownership rate down to 56.6 percent, down 10 percentage points from the current reported rate, according to CoreLogic. That rate was over 69 percent during the housing boom.

  4. Mike says:

    Good Morning NewJersey

  5. Mike says:

    Number 1 Welcome to Wally World

  6. xroads says:

    i wonder how many homeowners put 0 down? and therefore didn’t have equity to begin with

  7. x (6)-

    You have to toss in all recent-vintage FHA borrowers and all the 5-10-85 Einsteins from about 2002 forward. Many of those people walked out of their closings underwater.

  8. As for me, my 20% DP went up in smoke the old-fashioned way: drip by drip.

  9. cooper says:

    “If current trends hold, HAMP will prevent only 700,000 to 800,000 foreclosures,” a small portion of the 8 million to 13 million foreclosures expected by 2012

    in the end HAMP will help 300,000 out of 18 million
    less than 2%

    whats the final total cost of HAMP?

  10. Death to Dimon. Death to JPM.

    “In the latest example that virtually every conspiracy theory is almost always inevitably proven to be fact, the Financial Times reports that JP Morgan, the firm targeted by thousands of “tin foil hat” wearing, conspiratorially-oriented “gold bugs”, has cut back on its US silver futures. “JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal.” And in what can only be considered an unprecedented victory for all those who have over the past year agitated to putting JP Morgan out of business, most recently spearheded by the likes of Mike Krieger and Max Keiser, by forcing a massive short squeeze on its commodities trading desk, we learn that “the decision by JPMorgan was an attempt to deflect public criticism of the bank’s dealings in silver, a person familiar with the matter said. The person added that the bank’s position in silver would from now on be “materially smaller” than in the past.” Of course, the latter is pure and total bullshit: as Bart Chilton indicated over the weekend, it is JP Morgan who at one point or another (and possibly very recently) controlled as much as 40% of the silver market, via a massive short. Attempting to make others believe that this short could be covered without pushing the price of the silver metal to over $100/ounce is an indication of either how stupid JPM believes the general population to be, or just how desperate the firm is to end the ongoing short squeeze onslaught. Either way, we are confident that this first unprecedented confirmation that a) JPM is indeed massively short silver and b) that it is hurting bad, will merely redouble efforts to put the world’s biggest financial company out of business.”

    http://www.zerohedge.com/article/jp-morgan-admits-defeat-cuts-silver-short-position-proves-millions-conspiracy-theorists-abso

  11. coop (9)-

    Who cares? Our kids and grandkids will have to pay for it.

    Suckers.

    “whats the final total cost of HAMP?”

  12. Phillies deliver kill shot to both Mets and Yanks.

    Yaaaaay!!!!

  13. D2b says:

    Not without a right handed bat. Phils still have too many left handed hitters that can not hit left handed pitching.

  14. D2b says:

    Not without a right handed bat. Phils still have too many left handed hitters that can not hit left handed pitching.

  15. Fast Eddie says:

    “A lot of people bought homes in Celebration thinking Tinker Bell had sprinkled the town with pixie dust,” said Michael Olenick, chief executive officer of mortgage-data firm Legalprise Inc., referring to the character in Disney’s “Peter Pan” movie whose magical dust allows people to fly as long as they think happy thoughts. “Reality is hitting hard.”

    Apply that same logic to the f*cking id1ots who got duped into buying sh1t boxes in “prestigious” Northern Jersey.

  16. freedy says:

    but eddie, “we’re close to the City”

  17. safe as houses says:

    I wonder how long before people in prestigious north jersey towns who are upside down stop paying the mortgage and squat for a year or 2? It happened in nice areas of California, why would we be different?

  18. safe as houses says:

    #15 Fast Eddie,

    After the last legal resident abandons that place, it can become a suburban blight attraction. Just load the tourists onto buses and have some actors running around spray painting buildings, doing pretend drivebys, and other nefarious activity. Charge $12 a head and give them all the soda and junk food they can shove down their throats.

  19. ditto says:

    ““There shouldn’t be any place in New Jersey that any of us should not be able to live.”

    Is that written in the New Jerzey Constitution?

  20. safe (17)-

    It started in Franklin Lakes three years ago. Eventually, every prestigious town will be hit.

    No one will be spared. No one.

  21. Mike says:

    How long before the renters catch on and realize the courts are so backed up with foreclosures why not just jump on the bandwagon and stop paying the rent

  22. ditto (19)-

    Obviously, you didn’t get the message that “feelings” and “the public good” trump rule of law in NJ.

    I think we should move 5,000 lower-income people without cars to Holland Twp, tell them all to get jobs and find a way to work every day and film it all as a reality show.

  23. mike (21)-

    I know a Realtor who deliberately rented a home he knew was starting into the FK process. He paid his deposit and the first month’s rent…and hasn’t paid another penny in rent. He’s going on his second year there.

    The landlord tries to get him to pay, but he threatens him with something after every attempt.

  24. I know of another Realtor- the owner of a company- who rented a condo from one of his own agents, who didn’t tell him the place was being foreclosed.

    He ended up having to move out because of the FK, and then the agent quit his office, owing him money to boot.

  25. ditto says:

    Does this mean I can now camp in Oprah’s backyard in Alpine?

  26. ditto (25)-

    If you stay there long enough, she’ll probably give you a car to make you leave.

  27. safe as houses says:

    #20 Lamar

    Homeowners now have to worry about keeping their jobs, and that their neighbors keep paying the mtg.

  28. Someone please explain to me how a person can make his way through law school, into a practice, and onto a state Supreme Court…and not understand that people with low/moderate incomes actually PREFER to live within walking distance of shopping and transportation.

  29. safe (27)-

    Better to worry about stuff like that than issues like securing the perimeter.

    That’s coming, BTW.

  30. me@work says:

    Nom, thanks (re yesterday’s post)

    Can’t write much now — but will check back later regarding hospitals etc.

    sl

  31. JJ says:

    Its true, when I lived in Queens being walking distance to the boedega, OTB, Lotto, drug dealer and the gyspy cab stand was very important

    Lamar Asperger says:
    December 14, 2010 at 9:03 am

    Someone please explain to me how a person can make his way through law school, into a practice, and onto a state Supreme Court…and not understand that people with low/moderate incomes actually PREFER to live within walking distance of shopping and transportation.

  32. Confused In NJ says:

    19.ditto says:
    December 14, 2010 at 8:50 am
    ““There shouldn’t be any place in New Jersey that any of us should not be able to live.”

    Is that written in the New Jerzey Constitution?

    Seems like escalating property taxes in many towns renders that moot, as people are forced to sell homes they can no longer afford, even if there is no mortgage.

  33. Of course, now the only people moving into NJ are low/moderate income, who need proximity to everything and place enormous demands on public services.

  34. leftwing says:

    “New Jersey has changed,” Green said. “There shouldn’t be any place in New Jersey that any of us should not be able to live.”

    I’ll take one of those hidden far back off Blue Mill Road, in time for Christmas, please.

    Idiot.

  35. chicagofinance says:

    FOOL

    Lamar Asperger says:
    December 14, 2010 at 8:51 am
    safe (17)-
    It started in Franklin Lakes three years ago. Eventually, every prestigious town will be hit.
    No one will be spared. No one.
    http://www.youtube.com/watch?v=lc9bA-hvqHU

  36. Juice Box says:

    rofl – was just handed a resume of an out of work politician looking for a job.

  37. Does his resume say there’s nothing he won’t do?

  38. leftwing says:

    Just sent the following email to Christie. I’m not necessarily a fan of his but hopefully it gets some aide’s attention and gives him some powder to derail this junk. Plus it will be good entertainment value if he decides to go after this dolt Green as hard as he did the water dude he drove out of his job.

    Christie’s email is through his website.

    http://www.nj.gov/governor/contact/

    I used the dropdowns ‘Housing’ and then ‘Affordable Housing’ and referenced ‘Assemblyman Green’ in the topic.

    My email:

    “New Jersey has changed,” Green said. “There shouldn’t be any place in New Jersey that any of us should not be able to live.”

    The quote above is attributed to Assemblyman Green regarding affordable housing in NJ.

    I am on my local Board of Adjustment. COAH was a an unmitigated disaster.

    How do people believe or rationalize this type of thinking? Didn’t we spend a generation or two fighting this collectivism?

    Until the connection between personal responsibility and outcomes is re-established this State will continue to go down the toilet.

    Please shut down this idea and Green. And if you can’t, I will take one of the houses hidden from view off Blue Mill Rd. in Harding, in time for Christmas, please.

  39. Juice Box says:

    The Commerce Department reported that retail sales rose for the fifth straight month in November.

    Inflation?

  40. Bystander says:

    30 yr. fixed now near 5%. How many price reductions in the past month? 3 out 100 homes in the area I bagholders.
    was looking. Reductions were in 1% range. Seems like the sellers are playing chicken now. We’ll see bagholders.

  41. freedy says:

    just received word that a guy was looking at a house in a high end Bergen county
    home priced in the 725 range. house needs work. Seller said to have mentioned he would
    take his beating and get out. house is worth in my opine about maybe 600k.

  42. sas says:

    thought the title to the the thread said “hemp fail”

    SAS

  43. sas says:

    pixie dust? (first post).

    is that the same as muffin dust? you know… the stuff that falls into the toaster.

    SAS

  44. Same as angel dust…the stuff that makes bikers go on violent sprees.

  45. Not even noon…but my disgust with the RE industry is renewed yet again.

  46. Anon E. Moose says:

    Lamar [23, 24];

    Keep them coming. I love when the guardian of the guild extolls its virtues.

  47. Almost in time for a nice 11 AM dram…

  48. moose (46)-

    Fcuk off. Doesn’t Scrooge need you to dun some orphans or something?

  49. Outofstater says:

    #40 Yep. Saw a sign at a BoA branch in the grocery store this morning – 30 yr fixed at 4.8%. Two foreclosures in our neighborhood still sit.

  50. safe as houses says:

    ‘N.J. is home to three of nine counties nationally with poverty rate below 5 percent, survey reveals”

    http://www.nj.com/news/index.ssf/2010/12/nj_is_home_to_three_of_nine_co.html

    And the winners are Somerset, hunterdon, and Morris. Weird how Somerset real estate is dropping faster then the nicer towns in Union and Essex. Maybe the thrill of commuting 2 hours each way, combined with memories of $4 gas have something to do with it? Or the joy of paying 550k fora pos cape/ranch/small split to have propane cooking gas and hot water, septic, electric or oil heat for a 50 plus year old house that needs 100k of work is gone?

  51. sas says:

    “‘N.J. is home to three of nine counties nationally with poverty rate below 5 percent, survey reveals”

    you should goto the Indian counties out in south dakota. talk about poverty.

    SAS

  52. Juice Box says:

    Yup inflation.

    Retail Sales and Producer Level Inflation Heavily Influenced by Rising Energy Costs

    http://www.mortgagenewsdaily.com/mortgage_rates/blog/188412.aspx

  53. Shore Guy says:

    ““There shouldn’t be any place in New Jersey that any of us should not be able to live.””

    I will take a place in Mantoloking, east of 35 please. Where do I get my voucher?

  54. cobbler says:

    No kidding – sh1t transplants… As if we hadn’t had enough of those already, mostly of the oral kind.
    http://news.yahoo.com/s/ap/20101214/ap_on_he_me/us_med_healthbeat_stool_transplants

  55. sas says:

    “Retail Sales and Producer Level Inflation Heavily Influenced by Rising Energy Costs”

    doesn’t matter much.

    electric is still cheap (for now).

    SAS

  56. safe (50)-

    Simpler answer than that: all the white collar, NJ-based jobs (pharma, telecom, insurance, banking and financial services support) have all died or gone away…never to come back.

    2011 will be the year of former millionaires on food stamps out here.

  57. New term for 2011: luxury squatting.

  58. cobbler (54)-

    Amazing how many people who have an extended stay in hospitals or nursing homes die of c-diff. Pretty much 100% deadly and virtually incurable.

  59. A.West says:

    Poverty rate under 5% means no big ghetto towns. So far I like my move from Union County (Scotch Plains) to Somerset County (Bridgewater). Union county had Plainfield to the West, and Elizabeth to the East, and when you got called to jury duty in Elizabeth that wasn’t fun. My new house is near Pingry and plant-eating-deer are a bigger concern than criminals in my neigborhood. I don’t love my neighbors though, and taxes are too high. I only need to go to NYC less than 5% of the time for conferences, so daily commute to NYC isn’t my priority.

  60. sas says:

    “New term for 2011: luxury squatting.”

    lol, free wi-fi included.

    SAS

  61. A.West says:

    The only hope for these 3 low poverty counties is for Christie’s reforms and tax cuts to happen. There are still lots of office buildings around here, lots of pharma and consumer products hq, probably built when NJ was a lower-tax state. If they close, the attraction of the area dies. I wouldn’t mind my company ownership moving our whole office from NJ to Wyoming, Texas, or Florida, even if I lost $200k on selling my home, I could recoup that in just a few years living in a lower-cost, lower tax state.

  62. Juice Box says:

    re: #61 – moving our whole office from NJ to Wyoming, Texas, or Florida.

    Ha, how about China, India, or South Korea?

  63. 30 year realtor says:

    A fellow used house salesman was commenting on how high current inventory levels are. He went on to say that he has noticed a pattern of recently expired listings not returning to to MLS (as has been typical in the past). The fear is that the expireds are waiting out the holiday season and will be listing in droves for the Spring.

    Combine the influx of expireds re-listing to the knot in the foreclosure stream releasing and we will have record inventory levels. A perfect storm!

  64. chicagofinance says:

    JJ: Some of these bond marks are unbelievable…..fuk me!

  65. 30-year (63)-

    Shit. I thought the last 24 months were the perfect storm. What term do you use to describe something beyond even the current festival of pain?

  66. I figure if I hold four jobs, I might be able to slow my financial descent to a level just below terminal velocity.

  67. JJ says:

    what are you talking about the wide bid ask prices or the fact that places have not really marked to market clients holdings so clients don’t realize if they sold that 20 year muni marked at 99 they would only get 89?

    I am in hold mode, I am still fully invested, but out of margin. Don’t hold anything I can’t hold to maturity.

    The low coupon 100 year bond stuff from a few months ago, wow, did that get hammered in under 90 days

    chicagofinance says:
    December 14, 2010 at 11:48 am

    JJ: Some of these bond marks are unbelievable…..fuk me!

  68. jj (68)-

    What??? Only banks get to mark to fantasy??? I want my pony, too!!!!!

    “what are you talking about the wide bid ask prices or the fact that places have not really marked to market clients holdings so clients don’t realize if they sold that 20 year muni marked at 99 they would only get 89?”

  69. Juice Box says:

    re: # 69 – suspending mark to market was sold as a way to calm the markets, and to prevent further bailouts and draw private money back into the markets again. We all see how well that worked out.

    I am running out this afternoon to shave my chest, buy a kimono and some geta shoes. Might as well look the part if we are going to turn completely Japanese.

  70. sas3 says:

    Are wash rules not applicable for profits? Got a forced loss following Sun’s acquisition that I want to write off against gains in S&P.

    The wash sale rule states that if an investor sells a stock for a loss and then buys back the same stock within 30 days, he cannot deduct the original capital loss. http://www.ehow.com/about_5318461_wash-sale-rule.html

    “Wash sale rules are not applicable to stock that is sold at a gain and repurchased within the relevant restricted time periods.”
    http://www.anchin.com/pdf/SecurityPrimer-2009.pdf

    S

  71. JJ says:

    nope, just stale prices, example a 2001 issue 30 year in 2031 that has not traded in three months still priced at 102

    Lamar Asperger says:
    December 14, 2010 at 12:31 pm

    jj (68)-

    What??? Only banks get to mark to fantasy??? I want my pony, too!!!!!

  72. Confused In NJ says:

    58.Lamar Asperger says:
    December 14, 2010 at 11:15 am
    cobbler (54)-

    Amazing how many people who have an extended stay in hospitals or nursing homes die of c-diff. Pretty much 100% deadly and virtually incurable.

    WASHINGTON (AP) – A superbug named C-diff is on the rise, a germ that so ravages some people’s intestines that repeated tries of the strongest, most expensive antibiotic can’t conquer their disabling diarrhea.

    Now a small but growing number of doctors are trying a last-ditch treatment: Using good bacteria to fight off the bad by transplanting stool from a healthy person into the sick person’s colon.

    Yes, there’s a yuck factor. But reports of several dozen cases in a medical journal and at a meeting of the nation’s gastroenterologists this fall suggest that with no more inconvenience than a colonoscopy, people who have suffered C-diff for months, or longer, can rapidly improve.

    “This is the ultimate probiotic,” says Dr. Lawrence Brandt of New York’s Montefiore Medical Center, who has performed 17 of the procedures.

    Yet it’s much more complex: An entire bacterial neighborhood is transplanted, almost like an organ transplant minus the anti-rejection drugs, says Dr. Alexander Khoruts of the University of Minnesota. He took a genetic fingerprint of the gut bacteria in a woman left emaciated after eight months of severe C-diff. Not only did the diarrhea disappear after a fecal transplant, but that normal bacteria mirroring her husband’s _ the donor _ quickly took root in her recovering intestine.

    Here’s the caution: Fecal transplants haven’t been studied in the way that science requires to prove they work _ by comparing similar patients given either a transplant or more intense antibiotics. History is full of failed treatments that doctors thought promising until they were put to a real test.

    “There’s very good reason to think this fecal transplantation, or bacteriotherapy, might work, but it needs to be proven before everybody starts to do it,” stresses Dr. Lawrence Schiller, a gastroenterologist with the Baylor Health Care system in Dallas. He followed reports on the treatment at the American College of Gastroenterology’s recent meeting, but hasn’t joined the fledgling trend.

    C-diff, formally named Clostridium difficile, has become a menace in the nation’s hospitals, and can spread outside of them, too. Some patients suffer just mild diarrhea, but others, especially older adults weakened by previous illness, can develop a more severe condition called colitis. There aren’t precise counts but some government estimates suggest C-diff may be responsible for as many as 15,000 deaths a year.

    Up to a third of patients experience a second infection, and some go on to suffer recurrent bouts. Those worst-case patients are put on increasingly strong doses of the powerful antibiotic vancomycin for weeks, even months, at a time, treatments that Brandt says can cost $2,500 or more with each try.

    But because antibiotics kill good germs as well as bad ones, the C-diff can bounce back inside a colon now depleted of the hundreds of species of bacteria that are supposed to live there.

  73. Shore Guy says:

    Does that count for organ donation?

  74. Shore Guy says:

    It hardly seems heroic.

  75. leftwing says:

    Had a house on the market. A lot of traffic, a couple of offers that we thought could be better. Withdrew the listing Nov 15, got two calls from people who had looked at it. One met us on price. Out of attorney review, inspector through last week, appraiser just today.

    Just received another call.

    Short term, the move in rates may stimulate activity. A potential 200bp increase creates a different incentive when the starting point is 4.0% than if it were, say, 6.5%.

  76. relo says:

    1: One of our neighbors moved there. That place gave me the creeps.

  77. Juice Box says:

    Buffet on Gold.

    Boston College students were picked to attend based on the questions they said they would ask Mr. Buffett. At the Q&A, Buffett discussed Berkshire’s culture, the difficulty of collecting on some derivatives contracts, and said that an investment in gold is “an investment in fear.”

    “If you put all the gold in the world together it would be 67 feet on each side and be worth about $7 trillion dollars,” Buffett said, according to Radin’s notes. “I could look at it, and it would look back at me. I don’t view this as a good investment. I could buy all the farmland in the U.S. for $6 trillion dollars and have $1 trillion left for walking around money. Buying gold is not an investment; it is an investment in fear.”

    http://blogs.wsj.com/deals/2010/12/14/warren-buffett-treats-business-students-to-lunch-and-poses-for-christmas-card-photos/

  78. Zhang Fei says:

    jj: nope, just stale prices, example a 2001 issue 30 year in 2031 that has not traded in three months still priced at 102

    Are muni ETF NAV’s based on stale prices? If so, the so-called discounts to NAV are a mirage.

  79. Sterling Grey Matters says:

    Confused and Lamar –

    Is the C-diff solution kinda like a sn+ff film in reverse?

    (So sorry – this was an “I couldn’t stop myself moment.” You know, kind of like that scene in the cave in Monty Python and the Holy Grail when Joseph of Arimethea carved “AAAaaargh….” on the cave wall as his last dying word.)

  80. Succubus says:

    Lamar i am coming for you tonight……wahoooooooo

  81. chicagofinance says:

    65.Lamar Asperger says:
    December 14, 2010 at 12:00 pm
    30-year (63)-
    Shit. I thought the last 24 months were the perfect storm. What term do you use to describe something beyond even the current festival of pain?

    Shit transplant

  82. chicagofinance says:

    There is something called matrix pricing…..
    Matrix Price
    An estimated price or value for a fixed-income security. Matrix prices are based on quoted prices for securities with similar coupons, ratings, and maturities, rather than on specific bids and offers for the designated security. The name “matrix price” comes from the practice of interpolating among values for similar instruments arranged in a matrix format. These model prices must be used with care and with understanding that a specific position may be highly illiquid.

    79.Zhang Fei says:
    December 14, 2010 at 3:16 pm
    jj: nope, just stale prices, example a 2001 issue 30 year in 2031 that has not traded in three months still priced at 102

    Are muni ETF NAV’s based on stale prices? If so, the so-called discounts to NAV are a mirage.

  83. chicagofinance says:

    sas: gains can be washed, just not losses; why would the government want to prevent you from paying taxes today?

    71.sas3 says:
    December 14, 2010 at 12:46 pm
    Are wash rules not applicable for profits? Got a forced loss following Sun’s acquisition that I want to write off against gains in S&P.

  84. chicagofinance says:

    You suck man…..I am getting some March 2009 & September 2008 prices…..sucka!

    68.JJ says:
    December 14, 2010 at 12:22 pm

  85. JJ says:

    Basically how DTC gave end of day pricing to bonds that have not traded in awhile by finding similar bonds, with same rating and maturity, averaging those prices and assigning that price to a bond that is to be pledged as collateral that has not traded in a long time.

    Munis are illuquid in the senses that some bonds only trade once or twice a year. The price given is a guess at best.

    chicagofinance says:
    December 14, 2010 at 3:27 pm

    There is something called matrix pricing…..
    Matrix Price
    An estimated price or value for a fixed-income security. Matrix prices are based on quoted prices for securities with similar coupons, ratings, and maturities, rather than on specific bids and offers for the designated security. The name “matrix price” comes from the practice of interpolating among values for similar instruments arranged in a matrix format. These model prices must be used with care and with understanding that a specific position may be highly illiquid.

  86. JJ says:

    What are you buying, I am not to scared to jump in a bit. Give me ball park maturities and YTM you are getting on some munis.

    I see this one with a triple AAA S&P rating. Not so shabby
    I also saw a sick PR A somthing rated zero sporting a 7% YTM this morning.

    EW YORK ST URBAN DEV CORP REV ST PER 04.50000% 03/15/2037INCOME TAX REV BDS EMPIRE STATE DEV
    Basic Analytics
    Price (Ask) 87.277
    Yield to Worst (Ask) 5.414%
    Yield to Maturity 5.413064%
    chicagofinance says:
    December 14, 2010 at 3:30 pm

    You suck man…..I am getting some March 2009 & September 2008 prices…..sucka!

    68.JJ says:
    December 14, 2010 at 12:22 pm

  87. JJ says:

    I am still not pulling trigger, still got to go out to till 2037 to get 5.4% AMT free on a high grade NY muni. I want 6% to go out beyond 25 years. Short end still has no bargains.

    Action Buy
    CUSIP 650035GL6
    Description NEW YORK ST URBAN DEV CORP REV ST PER 04.50000% 03/15/2037INCOME TAX REV BDS EMPIRE STATE DEV CORP ST FAC AND
    Quantity 25
    Coupon 4.500
    Maturity Date 03/15/2037
    Trade Date 12/14/2010
    Settlement Date 12/17/2010
    Order Type Price Limit at 86.500
    Time in Force Fill or Kill
    Trade Type Margin
    Limit Price 86.500
    Price w/ Concession 86.600
    Effective Yield 5.466926

  88. juice (78)-

    The greatest financial mind of our time, completely corrupted by Goldman Sack, the USG and his own maniacal self-interest.

    Where Buffett sits is where he stands: we should always remember he has written giant puts underneath the market. If the public’s “fear investment” in gold gains enough traction, he dies a pauper.

  89. sas3 says:

    Clot, Buffet got a sweet deal with GS in 2008 that no one else got. 10% yield plus warrants. At times it all seems like a rigged game.

  90. sas3 says:

    Chifi.. thx for the clarification. I would eventually pay NJ taxes if I don’t cancel my losses with unrealized gains. Feds let the loss carryover, which gives me a 3k deduction for lifetime :)

  91. Anon E. Moose says:

    Lamar [89];

    You simply can’t allow for the possibility of disagreement. Yes, Buffet invests in and owns controlling interest in revenue producing enterprises. He does not make his living brokering the sale of dead assets — like gold, as just one example that leaps to mind. Hence, his defintion of what constitutes an investment, particularly a good one, might be different that a professional middleman. His definition of an investment is something that gives a regular return on invested capital.

    A more main street defnition of ‘investment” is something that is worth more than you paid for it. Hence people who think that a lottery ticket, the roulette wheel, the stock market and the housing market are all roughly equally viable investment vehicles. Unless you’re in manufacturing, there is only one way to make money on gold, that’s to sell it to someone else for more than you paid for it. It doesn’t pay interest, it doesn’t earn a profit, and putting aside the aforementioned manufacturing, it doesn’t put out a product or service. There may be many good and valid reasons why the price of gold will go up, but none of them matter to the purchaser if there isn’t a bevy of people competing to buy his precious at more than what he paid for it when he needs or wants to sell.

  92. Anon E. Moose says:

    sas3 [90];

    Buffet had the cash they desperately needed, and confidence in them was quite low. Wall Street’s version of a payday loan.

  93. chicagofinance says:

    JJ: I have to be careful what I disclose, so I will just describe some of the situations:

    One is a monetized revenue stream and the credit is on the lower part of investment grade, but because of the short-dating, the credit risk is actually much lower. It trades as a 12, but is par callable at 6 and is a sinker at par. I know someone that had part of their tranche retired earlier this year at par and now the damned thig is trading at 85. The yield to worst is 5.45% NJTF…..sick!

    I also am eyeing a pair of zeroes of the same agency credit. One is a 13 and the other 15. Issued 5 years ago and trading below OID!!!!

  94. JJ says:

    I see 2006/2007 muni zeros with no rating downgraders since issuance trading at below original issuance price in spite of fact we have had a million rate cuts in last three years.

  95. Fast Eddie says:

    A slump in government-backed mortgage bonds that’s sent yields to the highest level since May is threatening a recovery in the U.S. housing market, which had been bolstered by record-low borrowing costs.

    And all those Option ARM resets are still to come.

    10….. 9….. 8….. 7….. 6…..

  96. Anon E. Moose says:

    Fast Eddie [96];

    Here’s the artwork to go with that:
    http://3.bp.blogspot.com/_pMscxxELHEg/S41iYJmDurI/AAAAAAAAHpo/DfLns3uE_J8/s1600-h/SNLCreditSuisse.jpg

    Bear down, Bridget…

  97. safe as houses says:

    #96 Fast Eddie,

    but none of those option arms are in New Jersey. :P

    Actually, I thought most of those option arms were on the West Coast, AZ, Las Vegas, and Florida.

  98. moose (92)-

    I never said a word about gold as an investment. Gold is money, especially in the absence of any other competing, credible currency. All markets in the US are so completely rigged and manipulated on a daily basis that investment- as you define it- is impossible. Today’s markets are, in fact, populated by gamblers who have conned themselves- or been conned- into thinking they are investors. Of course, the biggest gamblers of all are the ones rigging the game: the Ben Bernank, Eraserhead and Brian Sack.

    Gold is also a proxy for the general belief in fiscal and monetary policy. We all know how that one’s working out.

  99. Fast Eddie says:

    Moose [97],

    It’s a f*cking Rembrandt!

  100. Fast Eddie says:

    safe [98],

    How silly of me! We’re insulated! ;)

  101. Fast Eddie says:

    It never ends, does it. Over 12 grand in property taxes and a price tag to gag for:

    http://www.realtor.com/realestateandhomes-detail/River-Edge_Nj_07661_M57646-81309

  102. safe as houses says:

    #102 Fast Eddie

    Dude, it’s got aluminum siding. Easily worth 100k right there.

  103. onthebrink says:

    Reporting in from Ridgewood:
    Saw a house that had its first House Open this past sunday – it already has a offer on it. My realtor was not surprised – she said inventory in Ridgewood is low and so the houses prices even remotely closed to sensibly are going fast. The sub million houses do seem to flying off the shelves, despite the increase in rates (or because of?)
    No housing meltdown here, (though prices have adjusted,) demand seems to be stable. Go figure…Maybe Ridgewood is really the exception?!

  104. Fabius Maximus says:

    First Bonehead and now Palpatine. Pass the Kleenex for the GOP GirleyMen

    Mitch McConnell chokes up during Judd Gregg’s goodbye
    http://www.politico.com/news/stories/1210/46385.html

  105. Fabius Maximus says:

    #102 Fast Eddie

    Are you treading on 3Bs turf! He is the king of digging up the RiverVale TurdBlossoms.

    Are those High efficiency Window AC units?

  106. Fast Eddie says:

    onthebrink,

    All brand new Ridgewood homeowners must memorize the lyrics below as part of the contract:

    When you wish upon a star
    Makes no difference who you are
    Anything your heart desires
    Will come to you

    If your heart is in your dream
    No request is too extreme
    When you wish upon a star
    As dreamers do

  107. Fabius Maximus says:

    #105 onthebrink

    I have said all year that Ridgewood is holding up. They have been turning over 5 or 6 properties a week all year, across all price ranges.

  108. Neanderthal Economist says:

    105. Banks hoarding of 5 million homes is working. The intention is to push prices back up, will look like inflation did it. Then they’ll go after gold, slaughter all the bugs.
    They’ll back into this recovery if they have to.

  109. Fast Eddie says:

    Fabius,

    That’s River Edge above. Rivervale is only for the high-falutin, grandiloquent types! :)

  110. Fabius Maximus says:

    Slight correctiion, only two or three at the end of November, but the start of the month there was a banner week.

    http://www.buyinginbergen.com/sales-archive/11-14-10.php

    Ridgewood 290 HILLCREST RD B/L 4 3 $515,000 CARDINAL & FINCH REALTY LLC OUTSIDE BROKER

    Ridgewood 560 FAIRWAY RD COL 3 2 $690,000 COLDWELL BANKER RIDGEWOOD WEICHERT REALTORS RIDGEWOOD

    Ridgewood 860 BINGHAM RD COL 4 2 $695,000 TERRIE O’CONNOR REALTORS/RIDGEWOOD PROMINENT PROPERTIES SOTHEBY’S INTERNATIONAL REALT

    Ridgewood 612 UPPER BLVD COL 4 2 $705,000 WEICHERT REALTORS RIDGEWOOD ERA/DOUGLASS REALTORS

    Ridgewood 655 WITTHILL RD COL 4 2 $785,000 COLDWELL BANKER RIDGEWOOD TARVIN REALTORS

    Ridgewood 620 MORNINGSIDE COL 5 3 $850,000 TARVIN REALTORS COLDWELL BANKER RIDGEWOOD

    Ridgewood 70 N HILLSIDE PL COL 4 3 $1,200,000 COLDWELL BANKER MAHWAH COLDWELL BANKER RIDGEWOOD

    Ridgewood 231 PHELPS RD COL 5 4 $1,260,000 TARVIN REALTORS TARVIN REALTORS

    Ridgewood 34 N MURRAY AVE COL 6 5 $1,600,000 COLDWELL BANKER RIDGEWOOD TARVIN REALTORS

  111. brink (105)-

    Step right up. Marks like you are hard to come by.

  112. gluteus (109)-

    It all works. Until it doesn’t.

  113. Essex says:

    115. I’ve said the very same thing. To the letter.

  114. relo says:

    105: A relative had the distinction of attending the CHAT program recently. Rumor has it that Ridgewood was well represented.

  115. Neanderthal Economist says:

    Santelli: Clarity from Fed? No. Inflation? Yes.

    How can a program that was designed to drive rates lower be deemed a success if rates are now sharply higher? Why is there so little clarity from an entity that is now among the largest holders of Treasury securities?
    The goal of Chairman Bernanke and the Federal Open Market Committee was to monetize the growing U.S. debt and generate future inflation. On the last score….generating inflation….I think time will prove the Fed highly successful.

    http://www.cnbc.com/id/40664581

  116. David Stockman, going off on Ratigan’s show:

    “We have had a Fed engineered serial bubble, that has created the appearance of wealth, that has caused people to consume beyond their means through borrowing, and that has flushed the income and wealth of our society up to the top, as a result of the Fed turning the financial markets into a casino. These are pure casinos, they are not capital markets, they are not adding to the productive capacity of our economy, they simply are a bunch of robots trading with each other by the millisecond as a result of the Fed giving them zero cost overnight money, and giving them all kinds of hand signals on what to front-run.”

    http://www.zerohedge.com/article/must-watch-stockman-explain-ratigan-how-thirty-years-america-spent-enough-debt-lbo-itself-an

  117. onthebrink says:

    Does anyone here live in Bergen county and looked in Ridgewood before buying elsewhere? Im looking at other towns to buy in since Ridgewood is looking like a cr*pshoot.
    Allendale has even higher taxes than Ridgewood.
    Upper saddle river has a demographic skewed signficantly to the 200K plus earners.
    Ho-ho-kus is as overpriced as Ridgewood .

    Like the racial and economic diversity of Ridgewood. Also that its close to Garden State and 287 and has a train station. But dont want to live in POS in order to live there…

  118. onthebrink says:

    Lamar (114): Then how do you explain (112) Fab. Max. post?

  119. Fast Eddie says:

    You gotta hand it to the Fed and Wall Street though; they’ve brought organized crime to a level unimaginable just a few years ago. It reminds me of a Hyman Roth quote:

    Here we are, protected, free to make our profits without Kefauver, the goddamn Justice Department and the F.B.I. ninety miles away, in partnership with a friendly government. Ninety miles! Michael, we’re bigger than U.S. Steel.

  120. Fabius Maximus says:

    #115 Clt,

    If the Pinanta is still dishing candy, the kids will keep beating it.

  121. Fabius Maximus says:
  122. Fast Eddie says:

    onthebrink,

    What the f*ck kind of diversity are you finding in Allendale and Upper Saddle River? You want diversity? I have a nice house for you located on Grafton Avenue in Newark that’ll be easy on your pockets. They embrace diversity so much there that at the closing, they give you a glock nine as a house warming gift.

  123. Juice Box says:

    Lamar – any illusion will do, hope springs eternal at the Fed.

  124. relo says:

    124: Oh, to be young again.

  125. relo says:

    125: There is a diverse mix of whites in these towns, homey.

  126. Fabius Maximus says:

    #120 onthebrink

    Have a chat offline with grim. You can identify the good towns and then start hunting out the value nuggets. They are there.

  127. Fabius Maximus says:

    I watched the video and all I can think of is Pulp Fiction.

    http://www.cnn.com/2010/CRIME/12/14/florida.meeting.shooting/index.html?hpt=T1

  128. grim says:

    What the f*ck kind of diversity are you finding in Allendale and Upper Saddle River?

    Lots of folks with Irish ancestry, a bunch of Italians, couple of Germans, can’t forget about the Poles and Russians representing the eastern bloc, a good mix of Asians, and rounding out the mix is a dash of Hispanic.

    City-data says there are even 31 residents of mixed race.

  129. Juice Box says:

    Re: Ridgewood – more baby killers than anything else in the burbs like Ridgewood, at least Newark has day care and classes for high schoolers try finding that in your train town!

  130. grim says:

    If Celebration has axe murderers, nobody is safe.

  131. relo says:

    Everyone in Ridgewood has the surname Jones.

  132. Juice Box says:

    Rev Run MJ Blige, Jason Kidd, and the Dice Man live in Saddle River.

  133. Fast Eddie says:

    grim,

    Any town that doesn’t have an ongoing homicide investigation is not diverse. :)

  134. Fabius Maximus says:

    Still trying to process the latest note from from my kids kindergarden teacher. I think I will bump, “move to Canada or back to Europe” higher up the list.

    Dear Parents,
    Today we had our first “Lockdown Drill” for the school year. As part of the lockdown drill the principal makes an annoucement on the loudspeaker and the students are gathered in a corner of the classroom, sitting with thier head down … silent. The classroom door is locked, lights turned off and blinds are shut. We all remain sitting quietly until the principal/pol1ce let us know it is over. Your child may come home and talk about this so I just wanted to let you know. We will be doing a lockdown drill or evacuation drill once a month.

  135. NJGator says:

    Looking Ahead To 2011: What Will Happen To Montclair’s Real Estate Market?

    A look at what sellers can expect

    Only a year ago, home sellers were hoping for an uptick in the real estate market in 2010. But, so far, those hopes haven’t materialized.

    If anything, there’s been a definite erosion in property values in Montclair in 2009 and 2010 compared with 2006 municipal revaluations—as much as 20 or 25 percent in cases where the house wasn’t judged to be in a good location or didn’t have the requisite upgrades demanded by today’s fussy buyers, said Roberta Baldwin, a real estate agent with The New Keller Williams NJ Metro Group.

    “Of course, the ‘showpiece’ houses still did well and continue to do well, but I think the biggest change, aside from steady price erosion, has been in the nature of today’s buyers,” she said. “People willing to purchase homes today are bearing down on sellers during the inspection period.

    “Issues that were overlooked previously are now front and center—underground oil tanks; antiquated knob and tube wiring; water seepage issues in basements; crumbling walkways and chimneys; and old fireplaces, plumbing, roofs, gutters,” she said. “I called one reliable chimney guy five times this week before getting a call back to do an estimate. He said they’re inundated by buyers who want invasive reports.”

    Baldwin said that today’s buyers are seeking as close to perfection as they can get, even in old houses.

    “They want to project ahead five to 10 years, get the work done now at the sellers’ expense to protect themselves against future infrastructure repair,” she said. “It’s a shocker to many sellers to see inspection letters that have 18-20-25 items, all of which the buyers want repaired or replaced.”

    Jeffrey G. Otteau, president of Otteau Valuation Group Inc., an East Brunswick appraisal and consulting firm, has said New Jersey house prices could drop another 6 percent in 2011.

    Because of this, Baldwin said a candid discussion with sellers about market realities is an absolute necessity.

    “Sellers often say they ‘don’t want to give their house away’,” she said. “But after two or three weeks, if a house is sitting with no takers, with the instant feedback we can get now, the reductions must be made. Yet we have seen too many sellers stall at their own unrealistic number; when they finally do reduce, they are merely chasing the market down.”

    Baldwin said that over the last two years—”more than I can remember at any time in my 15 years in real estate”—the cost of living and taxes in Montclair have been primary on buyers’ minds.

    “So unless we, as a town, find ways to preserve the fabric of Montclair life, we won’t necessarily be able to count on the same level of buyer enthusiasm that we’ve had in the past for what the town represents,” she said. “Luckily for us, Montclair’s historic vibrant social and cultural fabric runs deep, but I don’t think we present and future citizens can take it for granted.” 

    In the end, she said, it remains to be seen whether 2011 will be the year when the market turns around.

    But other agents voiced a sunny opinion.

    “I think the market will pick up … everyone is waiting to see what Congress does. The indecision is thwarting movement—however everyone expects the interest rate to slowly increase and that might spur buyers and sellers to think more positively, and to take advantage of the low rates now,” said Adriana O’Toole, a broker with Montclair Realty.

    http://montclair.patch.com/articles/looking-ahead-to-2011-what-will-happen-to-montclairs-real-estate-market

  136. brink (121)-

    I don’t doubt the transactions; I doubt the intelligence of the buyers.

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