JP Morgan: Bottom only 5% away

From HousingWire:

Home prices still poised to drop 5% by early 2012, say JPMorgan analysts

JPMorgan Chase stuck to their outlook Friday, forecasting home prices in the U.S. could plunge another 4% to 5%, before reaching a bottom in early 2012.

Analysts at the bank originally lowered their prediction on future home prices in June. If prices continue to fall at this rate, they will be down 37% from their peak when they finally reach a bottom.

JPMorgan Chase analysts said a drop in distressed home sales activity buoyed prices a bit in the past few months, with the CoreLogic home price index rising for the third straight month in June, edging up 0.7%. Tighter underwriting standards across the board remain a challenge, with many borrowers unable to qualify for loans.

“Without a fundamental improvement in the demand-supply imbalance, both seasonality and distressed sales may turn against us in the coming winter and push home prices lower,” Chase analysts said.

Even though more consumers are turning to rental properties, JPMorgan said rising rental prices could eventually push potential homeowners off the fence, encouraging them to buy properties.

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83 Responses to JP Morgan: Bottom only 5% away

  1. Mike says:

    Good Morning New Jersey

  2. grim says:

    Locusts descend on foreclosed properties, stripping them of cabinetry, fixtures, copper … fruit???

    From the NY Times:

    At Vacant Homes, Foraging for Fruit

    As she does every evening, Kelly Callahan walked her dogs through her East Atlanta neighborhood. As in many communities in a city with the 16th-highest foreclosure rate in the nation, there were plenty of empty, bank-owned properties for sale.

    She noticed something else. Those forlorn yards were peppered with overgrown gardens and big fruit trees, all bulging with the kind of bounty that comes from the high heat and afternoon thunderstorms that have defined Atlanta’s summer.

    So she began picking. First, there was a load of figs, which she intends to make into jam for a cafe that feeds homeless people. Then, for herself, she got five pounds of tomatoes, two kinds of squash and — the real prize — a Sugar Baby watermelon.

    “I don’t think of it as stealing,” she said. “These things were planted by a person who was going to harvest them. That person no longer has the ability to. It’s not like the bank people who sit in their offices are going to come out here and pick figs.”

    Of course, a police officer who catches her might not agree with Ms. Callahan’s legal assessment. And it would be a rare bank official who would sign off.

  3. Confused In NJ says:

    Victory Gardens?

  4. grim says:

    Hey Obama, I’ve got your shovel bulldozer ready project right here. Post a notice, give 90 days, take it and tear it down.

    From WNYC:

    What Happens When No One Wants to Own a Place?

    Throughout New York state, local governments are trying to figure out who to hold responsible for the upkeep of thousands of foreclosed residential properties. These properties can get run down and pose a risk to public safety. But thanks to the complicated world of mortgage backed securities and mortgage servicers, it can be almost impossible to find out who actually is responsible for the property.

    Most often, when there is news about the foreclosure crisis, it is a story about numbers. But four years ago, Senator Jeff Klein came face-to-face with the reality of the crisis when he followed up on a constituent complaint about a Throggs Neck foreclosure.

    “There were squatters living in an abandoned property that was now owned by a bank, due to foreclosure, and it became a drug den for local youth. It had pit bulls,” Klein said.

    What Klein found was so alarming he decided to get a law on the books that would force banks to take responsibility for the physical condition of the foreclosures.

    Klein’s law has been on the books since 2009, but whether it’s working as intended is an open question. Klein recently came to 2321 Prospect Avenue in the Bronx to push for stricter enforcement by the city of his law. Back in April, a 12-year-old boy and his parents died there in a fire. They were tenants in an illegally subdivided foreclosure that no one wanted to claim ownership of. Klein said his law was specifically drafted to insure that banks maintain the proprieties they foreclose.

    “My legislation requires that lending institutions or banks maintain these properties just as any other home owner would have to maintain these properties, and it kicks in at the time of foreclosure,” Klein said.

    Today, 2321 Prospect is boarded up and covered in garbage.

    The lawyer for Domingo Cedano, the last person to hold the title, told WNYC that Cedano walked away from the property four years ago. His name still appears on City records. The foreclosing party, the Bank of New York Mellon, said it’s only a trustee for investors in mortgage backed securities that included Cedano’s original mortgage. When asked by WNYC about who was responsible for the physical condition of the building, Mellon offered up Vericrest, the mortgage’s servicer.

    Vericrest denied that it had a property maintenance role, but records indicate it has paid the property tax bill.

  5. grim says:

    From the Star Ledger:

    Rebounding New Jersey housing market backslides on economic turmoil

    In the last three months, the housing market in New Jersey was slowly starting to stabilize — at least, in the sense things had stopped getting worse.

    After tumultuous years that included a double-dip in home prices nationwide, median sale prices for the second quarter this year ranged from rising 5.6 percent in the Atlantic City region to falling 5.1 percent in the Edison area, compared with last year, according to the National Association of Realtors.

    But then, within the last two weeks, whatever hope industry leaders had for the market’s stabilization came crashing down.

    “There’s been a lot of fear and uncertainty involving the health of the economy and the wild ride on Wall Street,” said Greg McBride, a senior financial analyst with Bankrate.com, the personal finance website. “It doesn’t engender the type of confidence that is needed for people to go out and make big-ticket purchases, like buying homes.”

    “Really what’s occurred is the housing market has lost everything it had going for it in the last three months — it lost all its momentum,” said Jeffrey Otteau, real estate analyst and president of the Otteau Valuation Group in East Brunswick.

    From a financial standpoint, little has changed. Mortgage rates even went down slightly — last week, the average 30-year fixed mortgage interest rate was 4.46 percent, compared with 4.54 percent the previous week, according to a survey by Bankrate.com. The record low of 4.42 percent occurred in October and November last year.

    “None of the fundamentals have changed from two weeks ago,” Otteau said, “except fear.”

    All the uncertainty is hurting the already precarious push-pull relationship between home buyers and sellers. Buyers feel they are being brave by making an offer on a house, but sellers — worried they have already lost so much value — are hesitant to accept an offer in the hopes a better one will come next — or they squabble over items like who pays for repairs.

    “Sellers, in the last week or two, don’t seem to be as keenly aware of the effects that all of the downbeat news we’ve had might be having on the buyer pool,” said Roberta Baldwin, an agent with the realty company Keller Williams NJ Metro Group in Montclair.

    Buyers who are facing life changes like marriage or children and need a new house have been hanging onto hopes the market would turn around, but many are starting to realize that may not happen any time soon.

    Newlyweds Caitlyn and Tom Adamo started shopping for a house in February, knowing they wanted to own rather than rent after their wedding in July. They were drawn to the market because of low mortgage rates and what they thought would be low prices. But they miscalculated.

    “It was kind of surprising,” said Caitlyn Adamo, an elementary-school teacher in Montclair. “Because of the economic times, we thought there would be more people wanting to sell and willing to go a little bit lower, but there really wasn’t.”

  6. Confused In NJ says:

    Cohan: End The Moral Rot on Wall Street

    http://www.bloomberg.com/news/2011-08-15/ending-the-moral-rot-on-wall-street-part-2-william-d-cohan.html

    Very accurate & succinct assessment

  7. Neanderthal Economist says:

    JPM used to asterisk the ny metro market to allow for further price correction compared the us market overall, I wonder if they still do that?

  8. Stench of death, historical-style:

    “For our closing post of the day we once open the floor to Sean Corrigan who proves that just when we thought all historical comparisons to the current deplorable economic miasma have been used up, a new one springs up, this time perhaps the one most indicative not so much of the past but of the future. Indeed, if history is any indication, and it is, America’s catastrophic and untenable position is worse than even that of one Louis XIV, better known as “The Sun King”, whose rule set the stage for the downfall of the French monarchy and which ultimately culminated with the French Revolution of 1789. For arguably the best indication of historical parallels to the present, and yet another confirmation that there really is nothing new in this world, especially in the world of central planning of monetary affairs, we present the following summary of the practices of Louis XIV which is verbatim applicable to the actions of the current central planning cartel: “The administration of the finances appears to have practised a subtle and ingenious tactic… [and] by modifications in the monetary unit, attempted to influence economic phenomena. Changes… were made to prepare for the issue of loans or to audit the circulation of the treasury notes, or to regulate exchange, to modify the balance of trade… to effect a redistribution of wealth, to influence the price level of commodities, perhaps to attenuate economic crises and famines…” It may come as a surprise to some that the very same type of central planning that Bernanke, and his central banking brethren, are trying to inflict (and failing) upon the world, was the same that was attempted on so many occasions in history, most poignantly, and catastrophically in the late stages of the French monarchy. And unfortunately, that’s just the beginning of the parallels.”

    http://www.zerohedge.com/news/sun-chairman-whats-future-prologue-and-why-second-french-revolution-coming-america

  9. Comrade Nom Deplume says:

    (8) meat,

    Which is why the nompound is best situated in a rural state without a population likely to join the future version of the Red Guard.

  10. spyderjacks says:

    What rubbish! This is even more convoluted than the daily exhortations of doom and despair this blog so entertains!! Next we’ll see posted how the Spanish inquisition was the only real attempt to bring order against the chaos of the dark ages… All hail the Republic(ans)! All hail the Tea Party! Too bad the Bible didn’t have more to say about economics – we’d have our playbook for success! I just wish our President was more “kingly”. I’ve been to Versailles – the outbuildings look better than the White House! Could we at least get some gold leaf on the columns?

  11. Comrade Nom Deplume says:

    (10) spider,

    Now that response was convoluted. Was that intentional?

    I don’t think zerohedge was supposed to be literal. For someone with a history degree, I thought you could appreciate the perspective.

  12. Happy Renter says:

    (4) “There were squatters living in an abandoned property that was now owned by a bank”

    So in other words, it was just a typical American Dream Family ™ waiting for their principal reduction and government-subsidized interest rate before coughing up one thin dime for “their” home, right?

  13. grim says:

    We have one up on the French, the White House has plumbing. Are they still urinating and defecating in the back halls at Versailles?

  14. (4) grim,

    I love that idea. Too many homes in my opinion. Instead of tearing down trees to make way for another house why not tear down an old house and rebuild?

  15. Morpheus says:

    comrades:
    Any one have experience with a saiga 12 gauge? Looking to add to the gun collection. Like kel tec KSG, like the Saiga, and like mossberg. any recs? Purpose of the shotgun is home defense and maybe clays. But if I have to choose a use, home defense is primary.

  16. Anon E. Moose says:

    Nom [84, yesterday]

    Comrade Nom – Presidente Para Vivo!
    Viva Nom! Viva Nom!

  17. Anon E. Moose says:

    Nom [40, yesterday]

    “Against a backdrop of ongoing angst regarding release of tax guidance, an important idea has surfaced in the tax compliance literature. Prominent tax compliance scholars have argued that the strategic use of tax law uncertainty may cause taxpayers to report higher tax liability. While these arguments have strong economic appeal, this Article counsels against their acceptance. “

    Everything old is new again.

    Rearden: “But, after all, I did break one of your laws.”

    Ferris: “Well, what do you think they’re there for?”

    Ferris Continues: “Did you really think that we want those laws to be observed? We want them broken. You’d better get it straight that it’s not a bunch of boy scouts you’re up against . . . We’re after power and we mean it. You fellows were pikers, but we know the real trick, and you’d better get wise to it. There’s no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What’s there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted – and you create a nation of law-breakers – and then you cash in on guilt. Now that’s the system, Mr. Rearden, and once you understand it, you’ll be much easier to deal with.”
    -Ayn Rand, Atlas Shrugged

  18. BC Bob says:

    “None of the fundamentals have changed from two weeks ago,” Otteau said, “except fear.”
    [5],

    None of the fundamentals have changed since 2008 except a crack addicted [stimulus] stock market.

  19. Comrade Nom Deplume says:

    (86) cobbler,

    Thoughtful take on tax policy but I think there is a lot of room for improvement there. Your plan would create significant distortions.

    As for losing my last job due to O, my billing fell through the floor in 2010. I guess you would have me blame Bush.

  20. Comrade Nom Deplume says:

    (16) moose,

    Gracias. Si, se puede.

  21. BC Bob says:

    “None of the fundamentals have changed from two weeks ago,” Otteau said, “except fear.”
    [5],

    WASHINGTON (MarketWatch) — Manufacturing activity contracted in the New York region in August for the third straight month, according to the Empire state survey released Monday by the New York Federal Reserve Bank. The Empire state index worsened to a negative 7.7 in August from negative 3.8 in July. Readings below zero indicate deterioration, with higher numbers of firms reporting that conditions had worsened. The new orders index fell to negative 7.8, while the shipments index improved to 3.0.. A reading of expected conditions six-months ahead plunged to 8.7 in August from 32.2 in July. This is the lowest level since February 2009.

  22. Juice Box says:

    BC how about this little diddy from NBER?

    A new study by the National Bureau of Economic Research shows 50% of Americans would struggle to come up with $2,000 in a pinch, for example in the event of an unanticipated car or home repair, a large medical bill or legal expenses.

    http://money.cnn.com/2011/05/24/news/economy/americans_lack_emergency_funds/index.htm?iid=EL

  23. Ben says:

    22, Juice Box

    this has been the case for years. The same people who bought homes the past 2 years are the same people who are a fender bender away from default on payment. I went into the payroll office the other day at work because I did not receive a paycheck I was supposed to in July. The woman thought I was in dire need of the money by tomorrow. I had to convince her that this was not urgent and that I was just making sure it was actually sent out.

    I’m also supposed to get reimbursed for a summer training course I took part in last week. My employer is paying for it. When talking about reimbursement, they were telling me about how much I can spend for lunch and what qualifies for reimbursement. I looked at them and told them “I’m not looking for you to buy me lunch”. I got the distinct feeling that most people in the same position, figuring out who’s paying for their lunch is their primary concern above anything else.

  24. Juice Box says:

    re # 23- Ben – re: one fender bender from default.

    My BIL just bought a home in a Michigan suburb with a 3.5% down FHA where he borrowed from his 401k for the down payment. The new assessment just came back 36% above the purchase price. He now thinks he is flush because he now has almost 50k in equity, meanwhile I am paying for his nearly 100 year old grandma to fly into his wedding so she does not have to endure a 17 hour car ride where they will have to strap her to the roof if something happens just like the Griswold family’s did to Aunt Edna.

  25. Happy Renter says:

    [18] BCBob you are forgetting that we have had a fundamental change since 2008: Hope, with a side of Green Shoots.

  26. seif says:

    oh, i see…it is the banks fault that these guys defaulted! silly bank!

    “In June, Simon Bloom, the attorney for Graves and Rogers, argued in a court filing that the default was the bank’s fault because it lent the pair the money knowing full well they couldn’t pay.”

    http://tpmmuckraker.talkingpointsmemo.com/2011/08/tea_party_rep_bank_should_have_known_i_wouldnt_be_able_to_repay_22_million_loan.php?source=patrick.net

  27. Anon E. Moose says:

    Spyderjacks [10];

    Too bad the Bible didn’t have more to say about economics – we’d have our playbook for success.

    Well, the bible does say that God and the Church could squeak by on a 10% income tax [tithe]. If the bloated government managed to trim itself down to that I (and many others) think we’d all be much better off. If it was that much smaller of a slice, I wouldn’t even much care what they spent it on. The Socialists and their sychophants could squabble amongst themselves over the scraps.

  28. Juice Box says:

    Err bible is crystal clear on money and interest and debt and poverty which will fit well into todays memes against excessive debt and debt forgiveness IE bailing out the poor underwater bag-holders. Whomever picks up that meme could very well win the next election, not so sure Obama or Bachmann would be willing to but Ron Paul sure as heck hasn’t changed his tune on the subject although he has not used religion in his political workings.

  29. Ben says:

    27, Moose

    there is a growing segment of the population (mostly from academia) that truly believes everyone should be paying 50% of their income in taxes so we can have all these glorious services.

  30. chicagofinance says:

    The date of conception comment is the keeper……

    Subject: KEEPING A STRAIGHT FACE AS A COURT REPORTER

    These are from a book called Disorder in the American Courts, and
    are things people actually said in court, word for word, taken down and
    now published by court reporters that had the torment of staying calm
    while these exchanges were actually taking place.

    ATTORNEY: What was the first thing your husband said to you that
    Morning?
    WITNESS: He said , ‘Where am I, Cathy?’
    ATTORNEY: And why did that upset you?
    WITNESS: My name is Susan!
    ____________________________________________

    ATTORNEY: What gear were you in at the moment of the impact?
    WITNESS: Gucci sweats and Reeboks.
    ____________________________________________

    ATTORNEY: Are you sexually active?
    WITNESS: No , I just lie there.
    ____________________________________________

    ATTORNEY: This myasthenia gravis, does it affect your memory at all?
    WITNESS: Yes.
    ATTORNEY: And in what ways does it affect your memory?
    WITNESS: I forget..
    ATTORNEY: You forget? Can you give us an example of something you
    forgot?
    ___________________________________________

    ATTORNEY: Now doctor , isn’t it true that when a person dies in
    his sleep, he doesn’t know about it until the next morning?
    WITNESS: Did you actually pass the bar exam?
    ____________________________________

    ATTORNEY: The youngest son , the 20-year-old , how old is he?
    WITNESS: He’s 20, much like your IQ.
    ___________________________________________

    ATTORNEY: Were you present when your picture was taken?
    WITNESS: Are you shitting me?
    _________________________________________

    ATTORNEY: So the date of conception (of the baby) was August 8th?
    WITNESS: Yes.
    ATTORNEY: And what were you doing at that time?
    WITNESS: Getting laid
    ____________________________________________

    ATTORNEY: She had three children , right?
    WITNESS: Yes.
    ATTORNEY: How many were boys?
    WITNESS: None.
    ATTORNEY: Were there any girls?
    WITNESS: Your Honor, I think I need a different attorney. Can I
    get a new attorney?
    ____________________________________________

    ATTORNEY: How was your first marriage terminated?
    WITNESS: By death..
    ATTORNEY: And by whose death was it terminated?
    WITNESS: Take a guess.
    ____________________________________________

    ATTORNEY: Can you describe the individual?
    WITNESS: He was about medium height and had a beard
    ATTORNEY: Was this a male or a female?
    WITNESS: Unless the circus was in town I’m going with male.
    _____________________________________

    ATTORNEY: Is your appearance here this morning pursuant to a
    deposition notice which I sent to your attorney?
    WITNESS: No, this is how I dress when I go to work.
    ______________________________________

    ATTORNEY: Doctor , how many of your autopsies have you performed
    on dead people?
    WITNESS: All of them.. The live ones put up too much of a fight.
    _________________________________________

    ATTORNEY: ALL your responses MUST be oral , OK?
    What school did you go to?
    WITNESS: Oral…
    _________________________________________

    ATTORNEY: Do you recall the time that you examined the body?
    WITNESS: The autopsy started around 8:30 PM
    ATTORNEY: And Mr. Denton was dead at the time?
    WITNESS: If not , he was by the time I finished.
    ____________________________________________

    ATTORNEY: Are you qualified to give a urine sample?
    WITNESS: Are you qualified to ask that question?
    ______________________________________

    And last:

    ATTORNEY: Doctor, before you performed the autopsy, did you check
    for a pulse?
    WITNESS: No.
    ATTORNEY: Did you check for blood pressure?
    WITNESS: No.
    ATTORNEY: Did you check for breathing?
    WITNESS: No..
    ATTORNEY: So, then it is possible that the patient was alive when
    you began the autopsy?
    WITNESS: No.
    ATTORNEY: How can you be so sure, Doctor?
    WITNESS: Because his brain was sitting on my desk in a jar.
    ATTORNEY: I see, but could the patient have still been alive,
    nevertheless?
    WITNESS: Yes, it is possible that he could have been alive and
    practicing law.

  31. Anon E. Moose says:

    Con’t [27];

    The Socialists and their sychophants could squabble amongst themselves over the scraps.

    … and the Capitalists would sell it on pay-per-view! Everybody wins!

  32. 3b says:

    #21 BC: Just a soft patch, just a soft patch;Larry the K says so.

  33. BC Bob says:

    “meanwhile I am paying for his nearly 100 year old grandma to fly into his wedding so she does not have to endure a 17 hour car ride where they will have to strap her to the roof if something happens just like the Griswold family’s did to Aunt Edna.”

    Juice,

    Hilarious.

  34. BC Bob says:

    “Just a soft patch, just a soft patch”

    3b,

    Quicksand is also soft.

  35. Kettle1^2 says:

    Morpheous

    Re saiga 12

    I
    my brother has one and loves it. I don’t believe that they are legal in their standard configuration in NJ.

  36. Comrade Nom Deplume says:

    (31) moose,

    Why would I pay for that? I get MSNBC for free.

  37. Comrade Nom Deplume says:

    (29) Ben

    Growing? I’ve been hearing that for decades.

  38. Comrade Nom Deplume says:

    CNBC about to air segment on why renting is in vogue.

  39. A.West says:

    Moose,
    I thought of the same scene in Atlas Shrugged when I read the original news on tax ambiguity.

  40. Barbara says:

    29. Ben

    “here is a growing segment of the population (mostly from academia) that truly believes everyone should be paying 50% of their income in taxes so we can have all these glorious services.”

    Ben, if you do the math….fed, state, property, consumer, various fees for permits, driving, etc most of us are paying at least 50%. The difference? We aren’t getting much at all for it. At least in Europe they get those services.

  41. A.West says:

    Re the Bible on economics.

    The Bible is basically anti-economics, anti-life on earth.
    Fortunately for them, Christians in most of the developed world have learned how to compartmentalize, and take their material well-being way more seriously than would otherwise be the case.

    The current batch of Repugs are more disgusting than usual, especially given their back to god anti-intellectualism. Ron Paul is only occasionally useful as a gadfly, he’s no executive. Where did the Forbes, DuPont wing of the Repubs go?
    Too bad H.Clinton isn’t running for office. The least bad politics I can envision right now is her as Prez, with Repubs barely controlling congress.

  42. Anon E. Moose says:

    Bugger the Currency update:

    http://www.nationalreview.com/corner/274653/leading-indicator-john-derbyshire

    Leading Indicator
    August 15, 2011 11:51 A.M. By John Derbyshire

    Went to the ATM to get some cash. Pressed the button for $200. Got four fifties. That’s the first time I’ve ever had anything but twenties from an ATM. Time to buy a wheelbarrow?

  43. Comrade Nom Deplume says:

    (42) moose

    Got metal?

  44. Al Mossberg says:

    Im waiting for another margin hike on the honest money. I better get it.

  45. Kettle1^2 says:

    Morpheous

    I have heard people rave about the but also curse it. It may be too new of a gun to tell yet. The keltec is NOT NJ legal in it’s standard configuration. Things like pistol grips, folding/collapsable stocks, and certain capacities are no-no’s. Keltec supposidly plans on selling a specific NJ legal version but I don’t believe it has been put on the market yet.

  46. chicagofinance says:

    WSJ
    NY TRANSIT
    AUGUST 15, 2011

    Downgrade Fears Sparked Move on Tolls .
    By ELIOT BROWN And ANDREW GROSSMAN

    Fear of a potential downgrade by a credit-ratings agency helped fuel the proposal by the Port Authority of New York and New Jersey to raise tolls and fares on bridges, tunnels and PATH trains, said people familiar with the matter.

    Port Authority officials told members of its board earlier this month that the agency’s debt would likely be downgraded within a year if it didn’t significantly cut spending on construction and repair projects or raise new revenue, said people familiar with the matter.

    In January, Moody’s Investors Service assigned a negative outlook to the Port Authority’s credit, saying a downgrade could result if the agency’s debt continued to grow faster than its revenues. Moody’s currently rates the Port Authority’s debt Aa2, its third-highest rating.

    “We see some pressures because of the amount of debt they’re taking on and the general sluggishness of the regional economy,” Maria Matesanz, an analyst at Moody’s, said in an interview.

    To be sure, the agency’s financial situation is considered far from dire, and the other two major credit agencies, Fitch and Standard & Poor’s, haven’t assigned a negative outlook for the agency.

    A downgrade would likely add millions in borrowing costs for the agency, which relies heavily on debt to fund its construction-heavy budget. To avoid triggering a downgrade, it has drafted plans to cut scores of projects—from repaving projects at ports to small repairs to the PATH system—if it doesn’t receive a toll increase. The Port Authority is jointly controlled by Govs. Chris Christie of New Jersey and Andrew Cuomo of New York.

    In hopes of avoiding that, a toll and fare increase has long been on the table in Trenton and Albany.

    In fall 2010, the agency was in discussions with the Christie administration, Mr. Cuomo’s transition team and the staff of outgoing Gov. David Paterson about a $2 toll increase, people familiar with the discussions said. But the authority, which rarely acts publicly without the support of the governors that control it, proposed a toll increase of $4 earlier this month.

    Messrs. Cuomo and Christie immediately condemned the size of the increase but didn’t rule one out, making it appear likely that a smaller increase will be implemented.

    The steep proposed hikes give both governors room to lower the increase while still giving the Port Authority funding it needs for projects such as the World Trade Center.

    Faced with declining revenue since the 2008 financial crisis, the agency has already had to cut or defer numerous projects, slicing about $5 billion from its 10-year capital budget and reducing staff. Both governors have said the agency should look at further cost-cutting measures. When the proposal was released, the pair issued a rare joint statement, saying government agencies “must carefully and effectively manage their finances at this difficult time.”

    A set of public hearings is slated for Tuesday on the proposal. A vote by the agency’s board is planned for Friday.

    Tolls last rose in 2008, with off-peak-period E-ZPass rates going from $4 to $6 and peak rates going from $5 to $8. Before that, tolls and fares hadn’t gone up since 2001.

    In all, the agency’s general obligation debt load—that which is paid for with fares and tolls and other fees—is expected to be $15.2 billion this year, a jump of more than 50% from 2007. At the same time, money from tolls and airport fees has fallen well below expectations, and operating revenue has grown less than 15% in the same period.

    The growing debt comes as the cost of rebuilding the World Trade Center, which the authority owns, has soared by billions amid overruns on the complex project. Further, the agency agreed last year to provide hundreds of millions in additional support to private developer Larry Silverstein to help him build two of his three planned towers on the trade center site.

    “The World Trade Center clearly has been like this albatross,” said E.J. McMahon, a senior fellow at the conservative-leaning Manhattan Institute. “That’s driven as much by the politics imposed on the site as it is by the Port Authority itself.”

    Mr. McMahon said the Port Authority’s projections for traffic on its bridges and tunnels were likely too optimistic for the time they were done: January 2008, near the beginning of the economic slowdown. Decisions about how much debt an agency can bear are largely based on its expected revenue.

    Other factors also are driving the toll increase. For much of its history, the Port Authority has been a cash cow for the two governors who control it, providing funding for popular regional projects. Now, both governors have proposed tapping the authority to pay for even more of the region’s aging infrastructure.

    In January, Mr. Christie proposed using $1.8 billion in Port Authority funds that had been earmarked for a Hudson River rail tunnel for road projects in Northern New Jersey. New York’s Metropolitan Transportation Authority wants help in filling a hole in its capital plan: The Port Authority would buy buses and rail cars, then lease them to the MTA for a nominal fee.

  47. BC Bob says:

    Happy 40th Birthday, fiat. One can only imagine what the next 40 will bring?

    http://www.youtube.com/watch?v=iRzr1QU6K1o

  48. chicagofinance says:

    chicagofinance says:
    Your comment is awaiting moderation.

    August 15, 2011 at 1:13 pm
    The End Is Nigh (Clot 2011 Initiative Edition):

    For those about to quaff … AC/DC wine is due soon

    Hard-living rockers might not automatically make consumers think of fine wine, but “For Those About to Rock” legends AC/DC are lending their name to a new line.

    The Australian band has entered into a partnership with New South Wales, Austrailia-based winery Warburn Estate to produce four bottled varieties, named after some of their hits — AC/DC “Back in Black” Shiraz, AC/DC “You Shook Me All Night Long” Mosc-to, AC/DC “Highway to Hell” Cabernet Sauvignon and AC/DC “Hells Bells” Sauvignon Blanc.

    According to a fan website they are not the first rock band to launch a wine collection, with past trailblazers reportedly including KISS, Motorhead, Whitesnake and Warrant.

    Steve Donohue, general manager of buying for the Woolworths Liquor Group which will sell the line, told Australian Associated Press that it was a “no-brainer” to sell the wine nationally.

    “This is a world-wide phenomenon and a first in the marketplace,” he said.

    One of the highest grossing bands of all time, AC/DC survived the death of original singer, Bon Scott — who died in London in February 1980 after a night of heavy drinking — to rack up more hits with his replacement Brian Johnson.

  49. WickedOrange says:

    Law 101 … never ask a question you don’t already know the answer to.

  50. Al Mossberg says:

    Barry Soetoro is live in Minnesota with an audience of public indoctrination teachers.

    Those lazy t_t suckers need to get back to work. What kind of working age man has Monday off to watch an illegal alien speak? Maybe I will make an offer to Harper up in Canada. He can take Minnesota and we will take Alberta.

  51. Simply Ravishing HEHEHE says:

    “Stop coddling the super-rich” – of course he says this AFTER we bailed his @ss out with TARP.

  52. Ben says:

    40 Barbara,

    according to MSM and anyone that talks about tax rates, the only tax that counts is the income tax. I’m pretty sure that over half the population doesn’t even realize how much tax they pay at the pump.

  53. Comrade Nom Deplume says:

    I have postulated here before that I thought it would be good politics for the GOP to make some concession along the Buffett lines on tax rates in exchange for a host of other things. The debt ceiling debacle was a great time to do this because it would have taken the tax issue off the table for 2012 elections, made the GOP look reasonable and statesmanlike, and given Barry only a limited victory.

    Now it will be impossible since any compromise on taxes would appear to give Barry a solid victory, something the GOP doesn’t want to give him. The Supercommittee is not configured for compromise, but it would be a shame if it did not try to get some limited tax hike on the super rich (sorry, 250K earned income is not rich, let alone super rich) in exhange for making all other brackets permanent and reforming the estate tax (should be treated like a cap gain for noncharity bequests).

    Won’t hold my breath though.

  54. Comrade Nom Deplume says:

    [48]

    “According to a fan website they are not the first rock band to launch a wine collection, with past trailblazers reportedly including KISS, Motorhead, Whitesnake and Warrant.”

    So that’s what you’ve been putting in your cellar.

  55. Comrade Nom Deplume says:

    This is the sort of scholarship that some on this board (Fabius, schab, chime in here) would adopt as gospel.

    http://bedbuffalos.blogspot.com/2011/08/does-business-tax-climate-affect.html

    The author notes that, contrary to what may be conventional wisdom, business-unfriendly states like NY don’t drive off entrepreneurs. Rather, the opposite is true; that entrepreneurs more often will come from high tax jurisdictions.

    Notably, the author doesn’t make the same inferential leap that an Obama acolyte makes with Clinton tax hikes. Good for her. But there was a glaring omission in her analysis regarding entrepreneurs and their seeming obliviousness to high tax states.

    Anyone care to venture a guess as to what was missing and why it is important?

  56. Al Mossberg says:

    Obama approval rating at 40%. A new low for his administration.

    Last time he hit approval lows he pulled the capture Osama Bin Laden fairy tale out of his ass.

    Perfect time for an orchestrated false flag?

  57. Comrade Nom Deplume says:

    [57] Al

    Didn’t you read the op-ed in the Times? Buffett’s opening a new front.

  58. Anon E. Moose says:

    Nom [56];

    How about the ‘entrepreneurship’ score measuring where business start, not where successful businesses grow (or where they fail)? Its one thing to start a business in NY or NJ and suffer the slings and arrows when you’re making $200k. When you’re making $200MM (or even $20MM, still small-mid size business by most standards — particularly Wall Street’s), the Carolinas or Tennesee start to look alot more attractive.

  59. cobbler says:

    nom [19]
    I don’t think anything could be as distorting, unfair and anti-growth as the current tax code.

  60. yo'me says:

    last 10 min.Pump or dump

  61. Comrade Nom Deplume says:

    [59] moose,

    Actually, I was thinking even simpler. Most start ups are unprofitable. Consequently, it matters little where you start it since you are likely not paying any tax on revenues until the business is established.

    And then, yes, I would look at metrics such as whether the business survives, or if it is either bought and moved out of state, or whether the owners move it.

    Finally, and this just occurred to me, the comparison itself is bogus because nearly all entrepreneurial businesses are service sector, and typically need to be near their customers. So it makes sense that NY has a lot of start ups and entrepreneurs. All those new restaurants, car services, dog walkers, home stagers, nail salons, nursing homes, etc. need to be near their customers here in the most densely populated section of the nation.

    So I think we have pretty much blown away any suggestion of correlation = causation in that piece.

  62. Comrade Nom Deplume says:

    [60] cobbler,

    As I said, your ideas were thoughtful, and some of them I liked although I would tweak them somewhat. Others would create incentives to restructure business affairs in certain ways. IMHO, tax policy wonks focus too much on horizontal and vertical equity (which they promptly disregard anyway), and not enough on using the code as a means of directing behavior. I don’t mean directing at a micro level, or revising the code to redirect us every few years, but big picture directing: Job creation, resource protection, simplicity and self-reporting, etc. Big picture stuff of a sort that will never change so we can create a code that insures certainty.

    Won’t happen in my lifetime though.

  63. Fabius Maximus says:

    This could cause me to push out my GOP prediction out to 2024.

    Ed Rendell: “It’s going to be Hillary” in 2016
    http://www.cbsnews.com/8301-503544_162-20092686-503544.html

  64. Fabius Maximus says:

    Ellory didn’t get a pony for christmas, she got a unicorn!

    http://www.nj.com/news/index.ssf/2011/08/five_nj_towns_among_top_100_sm.html

  65. Neanderthal Economist says:

    30 Chi, hillarious.

  66. morpheus says:

    kettle:

    Kel tec KSS should be legal in NJ. Barrel length is long enough. NJ assault weapons law covers semi-auto, not pump shotguns.

    As to the folding stock, my kel tec su-16CA has it, but you cannot fire it when it is folded. If you could, then it would be illegal.

    NJ gun laws suck.

    Been rained out for last two weekends, thus, no range time. Hopefully, this saturday I will fire shotguns and rifles and pass my qualifications. Fun times.

    Saiga or kel tec KSG. At least the saiga is available…for now.

  67. morpheus says:

    ‘KSG’ not KSS

  68. NJGator says:

    Gloomy with a chance of rain(watch the whole clip)…

    http://abclocal.go.com/wabc/html5/video?id=8305760&pid=null&section=null

  69. Mikeinwaiting says:

    If you follow this link & look at the last two charts you will find the N.Y. area has the most price declines for both 1 month & 3 months & the second largest inventory increase for those periods in the 10 city composite, interesting.

  70. toomuchchange says:

    40 – Barbara

    You bring up something I’ve thought about for over 20 years. The last time I looked the difference we paid in taxes vs. Europe was significant but they seem to get so much more for their money than we do.

    It’s been my suspicion for years that Americans were being grossly ripped off without, somehow, ever realizing it.

    Thanks for pointing this out and making me feel less alone. It seems that those of us who look at the numbers, the costs and benefits, the pluses and minuses and are willing to use such an analysis as a guide for future action is amazingly small. The much bigger groups seem to be the “let’s keeping on doing what we’ve always done” gang, as well as the “those people overseas are ______ and anyway they don’t know crap” club.

  71. Barbara says:

    73. toomuchchange

    Fine, patriotic Americans have the courage to accept the rip off and the strength of character to live with the consequences. Its better to overpay and get nothing for it than go all socialist, amen?

  72. Mikeinwaiting says:

    Yes Veto 66, thought so to. Chi thanks for the laugh, only one all day . Been one of those.

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