Predictions 2013!

This is becoming a tradition around here, so here we go again! You know how this works, break out the crystal balls and prognosticate.

Ground Rules

Review the Predictions 2012! thread, and if you did make a prediction, please post it here so we know how you did (please do not skip this step). Predictions provided should either be for June 30th, 2013 or December 31st, 2013, please specify.

Provide justification for your forecast, where applicable (unless you are just making it up, if so, state that).

You may provide any caveats and/or assumptions that your forecast is based on.

You need not provide a forecast for all categories below.

Where applicable, forecasts are judged against the surveys/reports listed.

Real Estate
National
Existing Home Sales – NAR
Existing Home Price – S&P Case Shiller HPI
Existing Home Price – OFHEO HPI

New Jersey
Existing Home Sales – NAR/NJAR
Existing Home Price – S&P Case Shiller HPI
Existing Home Price – OFHEO HPI

National New Home Sales – NAHB
Median New Home Price – NAHB

Commodities
Energy (Oil, NatGas)
Metals (Gold, Silver, Copper)

Equities
United States
International Developed Markets
Emerging Markets

Mortgage Financing
30-Year Fixed – Freddie Mac PMMS
15-Year Fixed – Freddie Mac PMMS

Macroeconomic
10y Treasury
Fed Funds Rate
National Unemployment Rate
New Jersey Unemployment Rate

Oddball
Anything else you’d like to make a prediction about.

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242 Responses to Predictions 2013!

  1. grim says:

    From the WSJ:

    Is a Housing Recovery Finally on the Way?

    Home prices finally hit a bottom in 2012. So will 2013 be the year of recovery or relapse?

    Shadow inventory is shrinking. Banks could begin to increase the pace of foreclosed-property sales in markets with large backlogs, but they’re unlikely to deluge the market.

    Rising prices could boost demand. Buyers now have something they haven’t had in the past few years—urgency. Increases in both prices and rents are beginning to change consumer attitudes about home purchases.

    Housing inventory should hit a bottom. Builders are ramping up new construction, and price gains could lead more would-be sellers to test the market.

    Credit standards should stay tight. While rising prices could serve as a tailwind, new regulations may lock in some of the defensive underwriting posture while impending capital rules may lead banks to pare their lending footprint.

    Prices should stay in positive territory, but the economy is key. Job growth hasn’t been great, yet it has been strong enough to nudge the housing market forward. If it continues, the experience of the past year shows that the sector’s many challenges—tight credit, high levels of underwater borrowers and elevated foreclosures—can be overcome.

    But any renewed weakness in job growth could put housing back into the stall that it found itself in between 2010 and 2011. If lawmakers can’t agree on a series of spending cuts and tax increases, that could crimp demand or damage confidence. There’s also still the potential for a renewed recession from the euro-zone crisis.<

  2. Xroads says:

    Grim
    How about a having a jersey shore and long island category

  3. grim says:

    Wow! The mega mansion at 2 Margo Way closed yesterday for $9 million under the last ask of $29,000,000.

    http://www.trulia.com/property/3054701274-Single-Family-Home-Alpine-NJ-07620

    This one hit the market last year at a whopping $34 million.

    Wonder if the upcoming capital gains hikes played a role.

    Property taxes? $90,502 in 2013. At least you get Chris Rock as a neighbor for this price.

  4. The Original NJ ExPat says:

    Froth

  5. The Original NJ ExPat says:

    [3] Ooh – It has an intercom system.

  6. grim says:

    I believe this was from a radio interview with Rock:

    I will give you an example of how race affects my life. I live in a place called Alpine, New Jersey. My house costs millions of dollars. Don’t hate the player, hate the game. In my neighborhood, there are four black people. Hundreds of houses, four black people. Who are these black people? Well, there’s me, Mary J. Blige, Jay-Z and Eddie Murphy. Only black people in the whole neighborhood. So let’s break it down, let’s break it down: me, I’m a decent comedian. I’m a’ight. [applause] Mary J. Blige, one of the greatest R&B singers to ever walk the Earth. Jay-Z, one of the greatest rappers to ever live. Eddie Murphy, one of the funniest actors to ever, ever do it. Do you know what the white man who lives next door to me does for a living? He’s a fucking dentist! He ain’t the best dentist in the world…he ain’t going to the dental hall of fame…he don’t get plaques for getting rid of plaque. He’s just a yank-your-tooth-out dentist. See, the black man gotta fly to get to somethin’ the white man can walk to.

  7. Essex says:

    6. That dentist that lives next door to Chris Rock didn’t get there by just yanking teef.

    I think his rant just exposes how we overcompensate entertainers (at least the elite entertainers ) .

  8. Ernest Money says:

    The Klan will start a chapter in Alpine.

  9. Ernest Money says:

    …thus will begin the white trashing of prestigious BC.

  10. Essex says:

    Perhaps ’13’ will be the year Americans put all of the guns to work that they’ve been stockpiling. It will certainly be another year spent in doors legs up with a book and a drink.

  11. Ernest Money says:

    Gold will hit $2,000 by June 1.

  12. Essex says:

    We go over the cliff and people finally snap realizing their government is broken. Chaos ensues. Good times.

  13. Juice Box says:

    Alpine “sucks”and it is about 1/3rd Asian these days, so if Chris Rock wants to complain it should be about them since few of them improve the property inside or out. I can picture the 80s decor still in those homes from when I spent my time there. What I mean by “sucks” FYI is in High School I dated a few girls from that town and they all “sucks” we even crashed the Holy Angels dance once and barely escaped with our manhood attached.

  14. Essex says:

    Prediction: Richard Branson will send a spaceflight loaded with celebs into space. Something will go horribly wrong. The losses include Ashton Kutcher and Russell Brand. It’s the story of the month.

  15. Mike says:

    Good Morning New Jersey

  16. Mike says:

    Hope For The New Year Twas’ 11 days before Christmas, around 9:38
    when 20 beautiful children stormed through heaven’s gate.
    Their smiles were contagious, their laughter filled the air.
    They could hardly believe all the beauty they saw there.
    They were filled with such joy, they didn’t know what to say.
    They remembered nothing of what had happened earlier that day.
    “where are we?” asked a little girl, as quiet as a mouse.
    “this is heaven.” declared a small boy. “we’re spending Christmas at God’s house.”
    When what to their wondering eyes did appear,
    but Jesus, their savior, the children gathered near.
    He looked at them and smiled, and they smiled just the same.
    Then He opened His arms and He called them by name.
    and in that moment was joy, that only heaven can bring
    those children all flew into the arms of their King
    and as they lingered in the warmth of His embrace,
    one small girl turned and looked at Jesus’ face.
    And as if He could read all the questions she had
    He gently whispered to her, “I’ll take care of mom and dad.
    “then He looked down on earth, the world far below?
    He saw all of the hurt, the sorrow, and woe
    then He closed His eyes and He outstretched His hand,
    “Let My power and presence re-enter this land!
    “”may this country be delivered from the hands of fools
    “”I’m taking back my nation. I’m taking back my schools!”
    then He and the children stood up without a sound.
    “come now my children, let me show you around.”
    excitement filled the space, some skipped and some ran.
    all displaying enthusiasm that only a small child can.
    And I heard Him proclaim as He walked out of sight,
    “in the midst of this darkness, I AM STILL THE LIGHT.”
    Written by Cameo Smith, Mt. Wolf, PA

  17. Essex says:

    16. ….and then he waved his magic wand and the delighted children all had ponies…!

  18. grim says:

    13 – Only in the lower tiers, the big spenders these days are Russian mobsters looking for houses for their mothers.

  19. Mike says:

    17 Cruel

  20. Essex says:

    19. …and then magical Jesus opened his bejeweled cupboard and lo and behold, smores! The children giggled in their heavenly home as below on Earth their parents descended into madness and suicide….

  21. grim says:

    20 – Signed you up for Jews for Jesus

  22. Essex says:

    Sign me up for Agnostics for Personal Responsibility and Sanity…..

  23. Essex says:

    Prediction: 2013 will see the Country finally tire of the endless ‘happy dog videos’ where their damaged owners return from combat. Demand for videos of said owners melting down into PTSD induced rages will be the new meme.

  24. Comrade Nom Deplume in the packed powder says:

    When did Essex start channeling Ernest?

  25. Comrade Nom Deplume in the packed powder says:

    Or is he channeling dope? Hard to tell with such rapid cycling.

  26. Essex says:

    24. Ernest and I agree on more than we disagree.

  27. Essex says:

    I’m channeling me.

  28. zieba says:

    16 is creepy.

  29. Essex says:

    Caught a very cool flick last night. “Winter Bone”

    And no it wasn’t cause I was homesick.

    (Flyover Country, suspense flick)

  30. Essex says:

    Prediction: 2013 will literally set a new record for civil lawsuits filed on behalf of the victims of the Newtown Massacre. This rush will eventually bankrupt Connecticut and lead to new legislation designed to lead to Torte reform.

  31. Essex says:

    Dude I am just getting started.

  32. Essex says:

    Prediction: 2013 JJ finally, finally finally sees the LIGHT and moves the NEW JERSEY. Realizing that he can get a place a stone’s throw from Bruce and still make the late Ferry home every night……

  33. Comrade Nom Deplume in the packed powder says:

    [27] essex,

    Your doctor suggested increasing your lamictal by 50 mg.

  34. Juice Box says:

    Essex – Conn isn’t New Jersey, they have had reforms since the 70’s. To sue the State a claims commissioner has to approve it in Conn, who’s decisions can only be appealed to the State House. There will be lots of pressure from both sides and little movement for a long long time.

    http://www.ctpost.com/local/article/Suing-the-state-Not-unless-he-says-yes-2795012.php

  35. Juice Box says:

    re: #34 – based upon his artwork, he needs to take a stroll in Branch Brook Park or Watchung Reservation.

  36. Ben says:

    My predictions:

    Democrats try to increase taxes and increase spending for the year.
    Republicans try to reduce taxes and increase spending for the year.

  37. zieba says:

    Housing recovery takes hold in earnest. All housing indices and tracking figures end 2013 higher, and Grim is confirmed as having caught the bottom. JJ’s posting activity fades. Hoover era crap shacks continue trading hands at the ask. Mid-year Gary inexplicably stops posing. Real estate taxes increase across the board. OT payments to civil servants also increase across the board. The fed tapes over….everything and twists to infinity! Gary eventually returns to posting post stroke, but his activity is limited to repeated imprints of the letter f. Gold bounces between recent lows and 1K. Rex Ryan keeps his job and with new coordinators installed and the Jets start Sanchez under the explanation of him being the best man for the job.

  38. Ernest Money says:

    Let’s keep working the celebrity death in outer space meme.

  39. Ernest Money says:

    Mark Sanchez will go back to dating 16 y/o girls. Mysteriously, his game will improve.

  40. Ernest Money says:

    Rex Ryan will be caught painting his wife’s toenails in a Youtube video. Mysteriously, this will not improve his ability to coach.

  41. Essex says:

    My doctor works out of a van by the river.

  42. Ernest Money says:

    Some liquor company will develop a vodka that tastes like human blood.

    It will be a hit.

  43. Libtard at home says:

    I predict the entire stock market will take off when Apple reports their holiday quarter. That’s all I got. Oh, and the fiscal cliff will be all but forgotten come January 1st.

  44. POS cape says:

    29 Essex:

    I remember that one, talk about white trash! Made me never want to leave Bergen County.

  45. Painhrtz - Not like you can dust for vomit says:

    Prediction clot is going to predict doom and gloom 3b will finally find a house and be called a bagholder by clot

  46. scribe says:

    I’m not around much, but I’m still not clear on why Gary is selling his house when he’s having such a hard time finding a new one.

    Gary?

  47. cobbler says:

    Prediction: it will get harder to tell some posts from robospam, and vice versa.

  48. chicagofinance says:

    2013 Prediction: I will buy a Buy Buy Baby gift card for Jayne and mail it to the address I was given last week.

  49. Comrade Nom Deplume trying out the new iPad mini says:

    I predict that everything I think I should predict but don’t have the stones to call will happen anyway, leaving me both right and foolish.

    If I had JJ’s sack, I’d be a frigging billionaire.

  50. Ernest Money says:

    pain (46)-

    We’ve had six years of pretty much non-stop gloom and doom. Only 44 more years to go.

  51. Fast Eddie says:

    scribe [47],

    The reason why I sold before buying? It’s because I let my guard down for a nano second and allowed the housing “experts” to once again, prove how much of a bunch of f.ucking m0rons they really are. I was told that NO ONE takes contingencies because there is so much demand.

    I figured I’d play along not realizing that the fat stup1d bastards selling their piece of sh1t houses are still stuck in phase 2 of the Kübler-Ross model. My house sold within a few days and I’m left looking at dank, moldy, p1ss-reeking, cabbage-reeking, unwanted, unpainted, cluttered, filthy, soggy, flooded pieces of sh1t in the mid 600s.

    Anyone that buys a house with a “6” handle and can’t immediately move into it, got snookered and swindled.

  52. Fabius Maximus says:

    The best use of these spare bunkers and silos.
    http://www.youtube.com/watch?v=qwlATf9xse4&feature=player_embedded

  53. grim says:

    The reason why I sold before buying? It’s because I let my guard down for a nano second and allowed the housing “experts” to once again, prove how much of a bunch of f.ucking m0rons they really are. I was told that NO ONE takes contingencies because there is so much demand.

    Good luck negotiating with a non-contingent seller if you are submitting a contingent offer, and your house isn’t on the market, let alone under contract.

    I can show you plenty of asking price offers that were rejected outright by sellers because they realized the buyers either weren’t serious (if you submit a contingent offer on a house, and your property isn’t even listed, you are not serious, you are looking for a scenario where not only do you get to have your cake and eat it, but you want to eat everyone else’s cake too) Realize that a seller accepting a contingent contract from a buyer who isn’t even marketing their property yet is like the seller giving them a free option to buy with no risk, yet agreeing to bear all the risk that the deal doesn’t close.

    If the buyer is actually serious about buying a house, but hasn’t yet listed or sold their existing house, the only other real option is to submit a non-contingent contract to buy and risk being stuck with paying two mortgages until they can sell the old place. In this case, the buyer is bearing all the risk. Is this better? And yes, people do this, this isn’t as rare as you might expect in this area and price range.

    IMHO, the ideal case is for the move up buyer to secure a contract BEFORE they buy, thus moving the risk to the first-time buyer, who if has the option to extend their lease or go month-to-month, might be willing to bear the risk in exchange for getting what they feel is a good deal. This is the least risk scenario for everyone, and pretty much everyone in this case will view it as a “win”. Given, of course, that everyone can execute in a reasonable timeframe.

    If you thought that inventory was bad now, what happens when you exclude the portion of viable inventory where sellers won’t consider contingencies?

  54. Fast Eddie says:

    grim,

    I don’t disagree with a word you said but I guess my charm wouldn’t be enough to convince a seller that my house would sell on my terms… and fast! Anyway, let’s hope this is all a moot point and there’s a light at the end of the tunnel. :)

  55. JJ's B.Se says:

    I predict the Jets will win the superbowl

    kate upton will suck every ounce of fluid from my body after the superbowl parade

    Dow will be up 10K points.

    RE will crash. I will buy a mansion in alpine with a pappa john coupon and some loose change from my sofa cushion.

    Hillary Clinton will finally wear a dress in 2013 to a white house event and the stink from her bush will kill Obama and Biden and she will be our next President.

  56. Fast Eddie says:

    grim,

    If the buyer is actually serious about buying a house, but hasn’t yet listed or sold their existing house, the only other real option is to submit a non-contingent contract to buy and risk being stuck with paying two mortgages until they can sell the old place. In this case, the buyer is bearing all the risk. Is this better? And yes, people do this, this isn’t as rare as you might expect in this area and price range.

    My cousin did this and I was holding my breath for him. It wouldn’t be an option for me.

  57. grim says:

    58 – Not a single worthwhile property on that list.

  58. JJ's B.Se says:

    Ok here are my financial predictions.

    Munibonds will be a good bet in 2013. The tax exemption wont get touched. Plus with tax free income, higher tax rates, low defaults and low cost to buy and no cost to sell if hold to maturity. They will do good.

    RE will rise in 2013, but factoring cost to buy, maintain, property taxes, insurance and inflation you are just breaking even. Good long term buys and inflation hedge. Unless you are doing cash sandy deals hard to make a killing short term.

    S&P after dip early Jan will go on to a 5-10% year

    Long term treasuries and investment grade bonds will not do great in 2013. Any wiff of inflation could be a big sell off, yet hardly any upside.

    Ibonds, floating bonds, etc. Anything adjustable may do good.

    Gold, Oil, etc commodities could do well, put 10% here.

    Cars/Retail stocks may have a good year. Homebuilders priced to perfections, may be big pull back.

    Mortgages are rangebound for year.

  59. JJ's B.Se says:

    Now you sound like your clients

    grim says:
    December 31, 2012 at 8:52 am

    58 – Not a single worthwhile property on that list.

  60. grim says:

    Maybe 30yr can chime in here, since that’s more up his alley, but an auction of a “bank approved short sale” doesn’t make any sense to me. When banks approve a short sale, they’ll put a non-negotiable price tag on it, which basically makes all of these “auctions” nothing more than a reserve price circle jerk still bound by a contract with the non-bank seller. *Especially* when you advertise the auction with unrealistically low starting bids that are in all likelihood a tenth of the amount that the bank would actually consider for a sale. Calling this marketing activity an “auction” is a far far stretch, it’s more like a ploy to attract gullible buyers who think they are somehow getting a deal here. Factor in all of the above and the fact that the buyer is going to be paying a 5% premium to the “auction” house for the luxury of being able to purchase some of this choice inventory?

  61. yome says:

    If you think inventory is bad now , wait a few years more when more unkept unmaintained homes come to market. Homeowners dont have extra cash to put in the house unless the banks start giving equity loans.

  62. Essex says:

    Kate Upton. I married a chick with that body. Still love it after 20 years.

  63. JJ's B.Se says:

    Also Grim it is unrealistic for RE agents to say 2012 was a good year for real estate.

    Normally, you keep assets in three main buckets, stocks, bonds and real estate with a little bit in cash and commodities.

    When you count in transaction costs. RE was worst of three main investments in 2012.

    Basically I could have paid $7.95 commission and made 15% in stocks.

    Paid $7.95 commission and bought a high yield bond fund and made 16%

    Paid 20K to close and made -1.9% in NJ per Case Schiller.

  64. chicagofinance says:

    Who posted that article about Gen Y and their struggles? The gist was that Gen Y would not have anywhere near the life and success of their parents…..he is another great example….
    http://www.nypost.com/p/news/local/manhattan/bombmaking_in_the_village_LoRDqNzP02SDZyfC1pLVXN

  65. 30 year realtor says:

    Grim #63 – makes no sense to me either…

  66. grim says:

    When you count in transaction costs. RE was worst of three main investments in 2012.

    Why would you consider transaction costs each year? Do you liquidate your portfolio every December 31st and repurchase everything on Jan 1?

    What exactly are the transaction costs for a purchase? Assuming you are paying cash (as you would in the other two cases), your transaction costs (not including pre-pays, etc) would be a grand or two, at most.

  67. JJ's B.Se says:

    I can put 100K in a S&P ETF for $7.95
    Same 100K down on 400K house. would have cost 20K for closing, 20K misc to move in odds and ends, moving truck, utilities, minor repairs. Then I would have 12K in taxes and 10k in mortgage interest plus home prices in NJ unlike rest of country fell 1.9% last year, which would be around 8k loss on homes.

    So I would have lost 8k on home and had transaction costs and maint of 62k. Total loss would be 70K of a 100K investment in year one. Sure you anualize it when you sell it.

    But compared to fund up 15%, my investment would be 115K at end of year minus 7.95%

    Over long term NO ONE in history of United States has made money in RE. Going back to the deal to buy Manhattan, RE keeps up with inflation after costs are factored in. You appear to make money as there is forced savings and tax breaks. It is a great hedge. But bottom line this plain old bond fund I own would have killed real estate over last decade.

    We had lost decade for stocks AND realestate. Basically the last good deals on homes near me was in the few weeks after 9/11 in 2001. But March 2002 RE was a bad investment compared to bonds. Kinda like in the 1990s RE was a bad investment next to stocks. Too much luck involved in investing that is why eggs cant be all in one basket. Most folks put every cent they could afford in RE in the period of Summer 2003 to Summer 2008 and that ended up badly. Re should never really be more than 1/3 of your net worth. Most people cant do that and RE is too much of net worth.

    Fidelity® Capital & Income Fund

    Symbol: FAGIX

    1 Yr +16.42% 3 Yr +11.28% 5 Yr +9.06% 10 Yr +11.88%

    grim says:
    December 31, 2012 at 9:31 am

    When you count in transaction costs. RE was worst of three main investments in 2012.

    Why would you consider transaction costs each year? Do you liquidate your portfolio every December 31st and repurchase everything on Jan 1?

    What exactly are the transaction costs for a purchase? Assuming you are paying cash (as you would in the other two cases), your transaction costs (not including pre-pays, etc) would be a grand or two, at most.

  68. JJ's B.Se says:

    Actually I do liquidate my portfolio every year pretty much. 2009/2010 I hit junk bonds hard, 2011 I hit munis hard, 2012 hit stocks hard till last few weeks and now back to munis. If houses were liquid we would have all hit sell button in spring 2008, we cant with a home as transaction costs are so high.

    grim says:
    December 31, 2012 at 9:31 am

    When you count in transaction costs. RE was worst of three main investments in 2012.

    Why would you consider transaction costs each year? Do you liquidate your portfolio every December 31st and repurchase everything on Jan 1?

  69. grim says:

    I can put 100K in a S&P ETF for $7.95
    Same 100K down on 400K house. would have cost 20K for closing, 20K misc to move in odds and ends, moving truck, utilities, minor repairs. Then I would have 12K in taxes and 10k in mortgage interest plus home prices in NJ unlike rest of country fell 1.9% last year, which would be around 8k loss on homes.

    So, let me get this straight, in the S&P ETF case you tape together all of your account statements into a tarp which you than use to construct a tent to house you and your family?

    Look, I get what you are staying, but who is saying that we should be looking at housing as an investment vehicle? It’s fine if the financials don’t make sense in someone’s cases, but making comparisons with other asset classes without taking into account the cost of shelter in that case is silly.

    So, for example, $7.95 isn’t the transaction cost, it’s $39,007.95 that is your transaction cost in the ETF case. Why? $3000 a month rent, plus $3000 commission on the rental, plus the $7.95 trade. In the ETF case, you didn’t make a penny, you lost 1/3rd of your investment to transaction costs.

  70. Anon E. Moose says:

    Grim [63];

    *Especially* when you advertise the auction with unrealistically low starting bids that are in all likelihood a tenth of the amount that the bank would actually consider for a sale.

    I went to two of those REDC (aka, auction.com) auctions. I at least got some chuckles from reading the terms and conditions before going. ‘Auctioneer may bid on behalf of the themselves and/or the seller.’

    The only liveable property (~4k SQ — with an au pair suite, nach — on 2-3 acres of fairly nice hilltop land overlooking a reservoir in the Hudson Valley, neighborhood comps at the time (’08-’09? I forget now) were about $650k. This was a corner lot, more land than the comps, maybe a little bit bigger. Opening bid in the $2’s, in 10 seconds it’s ‘bid up’ to $500k, and then the action really starts. Ended up selling to an Asian couple, their realtor in tow (there was 1% or 1.5% offered, I think), for $680k gavel, plus 5% buyer’s premium. Some deal.

    When doing my due diligence on the property I found it was owned by a couple that won the powerball lottery. *shrug* Go figure.

    Calling this marketing activity an “auction” is a far far stretch, it’s more like a ploy to attract gullible buyers who think they are somehow getting a deal here. Factor in all of the above and the fact that the buyer is going to be paying a 5% premium to the “auction” house for the luxury of being able to purchase some of this choice inventory?

    Yep. Its a circus, right down to the tuxedoed ‘helpers’ juicing the bidders with their calls and hand gestures.

    There was one moment where there was an actual bidding war, and apparently the losing bidder didn’t get the memo that he lost. Auctioneer moves on to the next property and the disgruntled bidder was told from the podium “Thank you, sir, we couldn’t have done it without you!”

  71. JJ's B.Se says:

    I did not have to buy a house. For most folks anyone with two kids or less a cheap two bedroom apt will do. If worried about getting priced out pick a rent stablized unit.

    And yes you can live well off your statements. My buddy sold his huge soho condo last spring at a profit of over one million, locking in the 15% tax rate. He paid 650K for it in the spring of 2000 and owned it outright. After taxes he got around 1.5million which he invested in a balanced mix of stocks, bonds and cash. He was able to rent a nice rent stablized large two bedroom doorman building walking distance from work for $3.500 a month. No more car, heat bills, repairs, RE taxes, expensive homeowners insurance etc. So far he had cleared over 15% on his investments as he bought around June sell off time. So his rental costs are around 44K a year and his interest/dividends/ cap gains are around 125K a year. Owning made no sense anymore. He is looking for a Hampton house deal now, reo fixer upper, will pay cash, then do the mortgage afterwards and fix up. That way he has his RE hedge.

    Home Ownership is a pure luxury item. I had a rent controlled place in NYC and a fully paid off coop before I bought my house. I could have kept both if I wanted. Coop had $550 main, one bedroom in Manhattan has $825 rent. Heck I could have rented my NYC apt out a few nights a month and covered both costs.

    I was homeless for like a few weeks after storm. Guess what all five of use in a small hotel and one car did just fine.

    I would dump my house, but now that I got cheap flood insurance and fixed it up, what is point. I am also trying to get taxes lowered due to storm damage. If I can get RE taxe down to 7k, and homeowners/flood to 2k at 9K a year I cant find anything cheaper. Plus who wants my house right now. I used up the lifetime FEMA check on house by my stupidity of not having flood insurance so next owner needs it as next storm they aint getting bailed out when they have no flood insurance. .

    grim says:
    December 31, 2012 at 10:11 am

    I can put 100K in a S&P ETF for $7.95
    Same 100K down on 400K house. would have cost 20K for closing, 20K misc to move in odds and ends, moving truck, utilities, minor repairs. Then I would have 12K in taxes and 10k in mortgage interest plus home prices in NJ unlike rest of country fell 1.9% last year, which would be around 8k loss on homes.

    So, let me get this straight, in the S&P ETF case you tape together all of your account statements into a tarp which you than use to construct a tent to house you and your family?

    Look, I get what you are staying, but who is saying that we should be looking at housing as an investment vehicle? It’s fine if the financials don’t make sense in someone’s cases, but making comparisons with other asset classes without taking into account the cost of shelter in that case is silly.

    So, for example, $7.95 isn’t the transaction cost, it’s $39,007.95 that is your transaction cost in the ETF case. Why? $3000 a month rent, plus $3000 commission on the rental, plus the $7.95 trade. In the ETF case, you didn’t make a penny, you lost 1/3rd of your investment to transaction costs.

  72. Ernest Money says:

    chi (67)-

    Gotta say I love their taste in personal armaments, though. Go big, or go home:

    “Police also found a flare launcher, which is a commercial replica of a grenade launcher; a modified 12 gauge Mossberg 500 shotgun; ammo; and nine high-capacity rifle magazines, the sources said.”

  73. Ernest Money says:

    Bomber chick’s mom is a Realtor. Go figure.

  74. Ernest Money says:

    “modified” Mossberg 500 = sawed-off, pistol grip

  75. Peace, Love, Dope says:

    Prediction 2013:

    The impending doom many expected grows smaller and smaller in the rear-view mirror.

  76. Ernest Money says:

    Put down that pipe, dope.

  77. Peace, Love, Dope says:

    79 – excluding champagne what are your 3 biggest sellers in the days before NYE?

  78. JJ's B.Se says:

    Mark Gregory – Realtor/Serial Killer

    Mark later graduated from Florida State University. After graduating from college, he raced cars and worked as a chef at a French restaurant. He also worked as a staff photographer for some magazines before switching to photographing models in Miami. Five years prior to the events of Charm and Harm, he formed a real estate agency with his best friend, Hank Bloomberg. He frequently traveled in his line of work, sometimes even abroad. He somehow managed to obtain the following during his travels:

    Ca 20 different suits of different make, color and quality, as well as a mechanic’s overall,
    Ca 20 different pairs of shoes,
    Catalogues for uniforms for law enforcement, construction workers, janitorial, etc.,
    A wide assortment of watches, wallets and ID cards, and
    A hand-drawn picture of himself pasted into a pamphlet with see-through plastic pages with different hairstyles and beard styles

    Having access to all these items, combined with his mastery of disguise and skills of manipulation, made it possible for him to adapt to every situation when buying and selling property. Sometime prior to Charm and Harm, in Tampa, Florida, Mark snapped and tortured his girlfriend, Stephanie Seagraves, who was married to another man and kept it a secret from him, before killing her. After he tortured and killed three other Tampa women, two of which were old business contacts and the third an old workmate, Sarasota FBI was able to connect him to the murders with DNA evidence. He was then somehow able to evade capture and abduct Nicole Wegener, presumably torturing her all the while. Nicole’s abduction led to the BAU being called in.

  79. Comrade Nom Deplume in the packed powder says:

    [80] dope,

    Don’t know about clot’s product flow but I had to be one of his biiger buyers b4 I moved.

    Gotta get to clot’s again soon. Cellar is running low; under 5 cases now.

  80. Peace, Love, Dope says:

    82 – do you drink more, less or same being out in the sticks?

  81. JJ's B.Se says:

    Oh Tannenbaum Oh Tannenbaum, even in Germany on Christmas day this guy gets press.

    The New York Jets fired Mike Tannenbaum as general manager and said Rex Ryan would remain as coach after a 6-10 season.

  82. BearsFan says:

    Grim, any income data available for the house YOY stats by county you generously post? Not sure how one would get it, but just asking….

  83. grim says:

    85 – From the 2011 Profile of Buyers/Sellers, this is about the best we’ve got:

    New Jersey Buyer Income
    Less than $25,000 2%
    $25,000 to $34,999 6%
    $35,000 to $44,999 4%
    $45,000 to $54,999 3%
    $55,000 to $64,999 5%
    $65,000 to $74,999 5%
    $75,000 to $84,999 9%
    $85,000 to $99,999 10%
    $100,000 to $124,999 16%
    $125,000 to $149,999 9%
    $150,000 to $174,999 7%
    $175,000 to $199,999 5%
    $200,000 or more 19%
    Median income (2010) $110,000

    Because this is based on statewide numbers, I’d expect Northern NJ to skew towards higher incomes than represented in this distribution. For example, Bergen County household income is 20% higher than statewide average, very crudely, we could shift the distribution to the right by 20% to get an idea of where things might lie (for example, think of the $200k or more category as $240k or more, and so on).

  84. Ernest Money says:

    dope (80)-

    Bordeaux, Burgundy and big Italian reds.

  85. JJ's B.Se says:

    401K for 2013. Who is frontloading? I am doing my who match in January as I think fiscal cliff resolved we get a rebound. Last year I did whole match by July which worked out well. Going to suck though, nice to have no 401k or ss from paycheck and then come Jan Boom Boom plus 3.9% medicare and plus SS tax increase plus payroll tax going up.

    Folks checks are getting ugly next month. Car dealers and Contractors are lucky, best Nov and Dec of their lives right before tax rates rise!!!

  86. JJ's B.Se says:

    Cliff Update: Threshold of Tax Increase Said to Be $450K for Family; ‘Sequester’ a Sticking Point

  87. grim says:

    Ezra Klein tweeting that AMT will be patched permanently as part of the new deal emerging?? https://twitter.com/ezraklein

    That was unexpected..

  88. grim says:

    1. Details on the deal: 39.6% tax rate for individual income over 400k/family income over $450k. AMT patched permanently.

    2. Dividends and cap gains taxes at 20% of the $400k/$450k levels. PEP at $250k. Pease at $300k.

    3. UI and business cuts extended through 2013. Stimulus cuts for 5 years. Medicare cuts stopped with offsets. Payroll cut expires.

    4. Sequester unclear. Prez wants to offset with taxes and spending cuts. R’s only want to offset with spending cuts.

    5. Estate tax set at $10m exemption but 40% rate.

    6. Deal raises about $600b — and maybe a bit more — in taxes over 10 years. As always details can change, but that’s where it is now.

  89. Essex says:

    $400k is a key element. *whew*

  90. Anon E. Moose says:

    Reaction, in no particular order:

    — At the spinal cortex level (which is all most people can muster, particularly those who advocate “SOAK THE RICH!”): Meh, I don’t make that much, no skin off my nose.

    Out of curiosity, I found a Kipplinger’s tool to see where you income stacks up, and put in $450k. Result

    Your $450,000 adjusted gross income (AGI) puts you in the top 1% of earners.
    The top-earning 1% of taxpayers reported 18.87% of all AGI and paid 37.38% of total income taxes.
    Together, you and the other 1.4 million taxpayers with incomes of $343,926 or more paid a total of $354.8 billion in federal income taxes.
    Read more: http://www.kiplinger.com/tools/income_rank/index.php#ixzz2Geoi8IGD

    Really? They’re going to soak the “1%”? I can’t believe fiscal policy is being made to satisfy come-again hippies and their bong/bongo circles.

    We Are Doomed.

  91. Painhrtz - Not like you can dust for vomit says:

    Money the best predictions are the ones you don’t have to stretch on thought you would get a kick out of the bagholder comment.

    Moose is over 450k under the annual take of the jackals in Washington that.number seems a little obtuse. We are all screwed.

  92. Ernest Money says:

    We are doomed anyway…mainly because the whole country now caters to the micro-constituencies of the superrich and destitute poor. The middle will be squeezed until it no longer exists.

    Then, the shooting will start.

  93. Anon E. Moose says:

    Chifi [67];

    All the fun elements: Echoes of Patty Hearst, Occupy trustafarians, and a realtor’s daughter.

    Greenwich Village couple busted with cache of weapons, bombmaking explosives: sources

    The privileged daughter of a prominent city doctor, and her boyfriend — a Harvard grad and Occupy Wall Street activist — have been busted for allegedly having a cache of weapons and a bombmaking explosive in their Greenwich Village apartment.

    Morgan’s mother, Susyn Schops Gliedman, is a realtor with Prudential Douglas Elliman.

  94. Ernest Money says:

    Shoot the Realtors.

  95. JJ's B.Se says:

    450K to me is a lot of income for a single person to earn on the W2. AKA my friend at Merril makes 450K a year income.

    450K for a dual income middle of career NJ couple when adding in total household income, cap gains, rental, bond interest etc. is not that hard to reach. It aint rich at all.

    No one brags about household income at all. Obama makes it seem like he is taxing a rich man who makes 450K a year. Instead it is household income, yep if you count my daughters holy communion bond interest and my stubhub sales along with other things 450K aint much at all.

    My friends who make that live in apartments and drive used cars and return bottles. Basically rich enough to donate clothes to goodwill.

    I actually find this rich/poor thing disturbing. For instance. I needed a pair of work gloves when I was doing Demo, I went to FEMA site and got a pair with my FEMA number back in early Nov all dirty in a borrowed ten year old wagon. So FEMA is closing up shop next week. I gave the pair to my wife and I need a pair as I got to demo garage and they work great. So I swing by FEMA site over weekend in my cadillac in clean clothes guard sees me coming in and was all uppidity with me. WTF do I have to borrow the old wagon again.

  96. Juice Box says:

    Taxes are still going up the 2% Social Security payroll tax cut will still expire.

  97. JJ's B.Se says:

    2% + 3.9% baby. Plus 5% in cap gains. Plus state tax is rising. BEND OVER BABY

    Juice Box says:
    December 31, 2012 at 2:59 pm

    Taxes are still going up the 2% Social Security payroll tax cut will still expire.

  98. JJ's B.Se says:

    If every home buyer and seller got 3% back on every sale it would cover the burial costs of all the realtors in no time. However, buick and cadilac sales will fall.

    Ernest Money says:
    December 31, 2012 at 2:50 pm

    Shoot the Realtors.

  99. Hughesrep says:

    99

    I’m sure they will wait until Thursday to pass anything, and then make it retroactive.

    They need to make sure they can then call it a tax cut in the political ads next election cycle. People are too stupid to remember how and why it actually happened.

    Prediction? Abe Vigoda lives.

    http://www.abevigoda.com/

  100. Richard says:

    My prediction, continued layoffs in Wall St, Pharma and now also Tech 2.0 means NNJ house prices wont do so well in 2013. Hard to get excited about low mortgage rates when property taxes are often higher. Other parts of the country could do OK.

  101. relo says:

    65:

    Bra vo. Is this the british cheerleader?

  102. relo says:

    Predictions:

    Obama will continue to walk on water (Nobel II?).
    Repubs will continue to be unable to get out of their own way.
    Media will exaggerate both.
    Reported UE will remain a farce.
    Nom will heart PA.
    JJ will heart LI.

  103. JJ's B.Se says:

    BREAKING

    S&P 500 index climbs more than 13% for the year

    I rather have layoffs than split up the bonus pool.

  104. Ragnar says:

    I predict my family will be above the limit to avoid tax hikes on “the rich” in 2013.
    I predict people will earn zero to negative real after tax returns on the majority of fixed income investment products in 2013.
    I predict that the biggest news of 2013 will be things that “experts” didn’t predict, but somebody will have said something kinda about that topic and will claim that he predicted it.
    I predict that most people will keep on believing in silly things there is no evidence to support, based mostly on tradition and peer pressure.

  105. yome says:

    The first $450K is not getting tax at the higher rate above 450 is. Are we really soaking the rich at this level?

  106. yome says:

    You are most probably making $500k or more to get to an AGI of $450k after deductions.

  107. Grim says:

    House not voting today, New Years parties more important, everyone gone. Deadlines don’t apply to the overlords, jokes on us.

  108. Comrade Nom Deplume in the packed powder says:

    Heat pump fails for second time this month. First time the fan motor broke its mount and this time the outside control board failed.

    Am I worried? Nope. Just called the landlord.

  109. Comrade Nom Deplume back in PA says:

    [109] yome,

    Perhaps more. Depends on the taxpayer. Now the planning emails are being written to target the affected cohort and sell them on planning services to eviscerate the tax hikes.

    Big winners: large corps with deferred comp plans, fund companies, tax accountants and attorneys, and charities.

    Big losers: look in the mirror.

  110. grim says:

    Heat pump in the northeast? Huh? Are we talking geothermal or air-source? I can understand why it’s breaking if it’s air source, aren’t those things not designed to work under 30 degrees?

  111. Comrade Nom Deplume back in PA says:

    I predict health insurance premiums go up even more than they have already.

    Congress guts parts of Obamacare that would save money.

    Progressives start to note that Obamacare not delivering and push for single payer.

    Housing increases 6% YOY, then growth rate decreases to 2%.

    Mortgage interest and state/local tax deductions remain. Health benefits remain excluded from taxable income.

    All of these are bold ass guesses.

  112. Libtard at home says:

    ” jokes on us.”

    Sure is. Apparently, one needs a golden parachute to avoid the fiscal cliff.

  113. Comrade Nom Deplume back in PA says:

    [113] grim

    Pretty common around here actually. I don’t care for these (not geothermal) and they still have parts. Parts fail sometimes. But not my problem.

  114. Comrade Nom Deplume back in PA says:

    I also predict that exit tax goes to 20% This will be in the final legislation. If not, you are rewarding people who flee.

    In fact, I predict 2012 4th qtr expat report has over 600 names as many will have expected a hike to 25 or 30%.

  115. scribe says:

    Gary, Grim

    Thanks for the responses.

  116. Comrade Nom Deplume back in PA says:

    Off to deal with cranky girls. Oy.

    Here’s to hoping that Ernest is only right about wine and the Toon. Happy New Year Everyone.

  117. BklynHawk says:

    Happy New Year!
    I’ll take a crack at a few predictions before I head out to a party…

    Existing Home Price – S&P Case Shiller HPI +3.0%
    National New Home Sales – NAHB – slightly over 400k
    Gold – around $1700 (unless inflation climbs dramatically)
    Equities – United States +4%

    Hope everyone has a prosperous and healthy 2013.

  118. Fabius Maximus says:

    No recession this year. We are up to the 5th anniversary of the crash US firms are on a strong footing, most of the high cost 5yr notes will be out of the system. Apple will move back into hardware. RIM will bounce back on Version 10. Amazon will have issues with their cloud platform.
    Stocks start the year slow but big end of year rally and we finish around DOW 15K.

    Niners over the Bronos in the Superbowl and Alex Smith gets shipped to the Jets.

  119. McDullard says:

    Ragnar,

    If you are going from 250k to 500k in a year, celebrate it and not worry about 3% extra taxes on the amount over 500k.

    S

  120. Dan in debt says:

    2013 predictions.
    Why not.

    Hugo Chavez dead now but not announced until february.

    Queen Elizabeth dies

    Gold ends year at 1500 and goes as low as 1200.

    Recovery declared in economy by October but housing prices flat even though rents up.

    Assad still in Syria.

    New political ledger in Israel steals spotlight from netanyahu and is not surprisingly polarizing?

    One of the Fox News night people with show named for them gets fired or leaves

    Yankees in last place for all of April and may and barely miss .500 by end of season.

    Jets go 4-12. No qb solution found and Ryan fired at end of season.

  121. McDullard says:

    Talking about 2013 incomes going up way up… a friend of mine joined a small startup — and by the time they got started, they got acquired by the company where he was working before. It was a couple of weeks ago, should be easy to figure out. A big payday for him in 2013 — well into the “rich” category, and probably a promotion too courtesy of the acquisition. I feel happy for him, and I think taxes were the last thing on his mind.

  122. BearsFan says:

    Happy New Year!

    Housing – NJ – down 5-10%, last dribble of the credit story is squeezed out by April
    Gold/Silver – 2500/45 oz with record short position by Cartel
    S&P – +3%
    Green Bay/Denver Super Bowl. Green Bay wins 41-27.
    Cost Push Inflation continues (10%)+ and the paradigm cont’s to shift towards real assets.
    Fed printing 120Bil monthly by year end. 1-2% of sheep wake up.
    Some ridiculous legislation will be passed tonight.

  123. Ernest Money says:

    The rotting decline of everything will accelerate.

    Note to self: stop going to New Years parties where a bunch of rictus-faced drunks try to convince themselves it’s getting better.

  124. Ernest Money says:

    It will all work until it doesn’t.

  125. Essex says:

    It is what it is.

  126. Juice Box says:

    So the Spending Bill Passed the Sentate? Yay, we are saved by more spending.

    Funny how the Greeks want to print Drachmas to solve their deficit spending woes but when we do it nobody in the MSM blinks an eye.

    Here is to hoping 2013 does not end in a currency crisis.

  127. Pierre says:

    -98 : JJ the ultimate welfare queen

  128. Ernest Money says:

    Not that anyone cares- or is paying attention- but the Senate bill averting the fiscal cliff isn’t exactly a lock to pass the House today.

    The Senate bill is also another move that packs more radioactive waste and shrapnel into the economic dirty bomb that will eventually implode the entire necronomy.

  129. Ernest Money says:

    The Mortgage Forgiveness Debt Relief Act has also apparently expired.

  130. grim says:

    131 – Vote today? What are you some kind of fascist? It’s a holiday, and our overlords need their rest.

  131. Juice Box says:

    Get them while they are still salty.

    http://www.weather.com/news/hurricane-sandy-cars-20121231

    Hurricane Sandy-ravaged vehicles line the runways at Calverton Executive Airpark on Long Island. The cars will be salvaged or auctioned.

  132. Juice Box says:

    Vote on what exactly? What they passed in the Senate amounts to less than 6% of the annual deficit if you take the 600 Billion and divide it by 10. I would rather we go off the cliff, than continue with sticking our heads in the sand.

  133. chicagofinance says:

    The New Year has started off with a bang.

    Seven people have been shot since the city welcomed in 2013 – starting at around 2 a.m., when two people were hit with bullets in separate incidents, police said.

    In the first shooting, on White Plains Road and Seward Avenue in the Bronx, a 32-year-old man was hit in the stomach and taken to Jacobi Hospital, cops said. He is in stable condition.

    In the second report of gunplay, a 19-year-old boy was shot in the back on Irving Avenue in Bushwick, Brooklyn, cops added. He was rushed to Wyckoff Hospital in stable condition.

    APHeavily armed New York City police officers stand guard during Times Square’s New Year’s celebration.Then, at around 4:30 a.m., a man was shot in both legs at the Queensbridge Houses in Astoria, Queens, cops said. He was taken by private car to New York Hospital Queens and has non life-threatening injuries.

    About a half hour later, at around 5 a.m., a woman took a bullet to the arm on Webster Avenue in the Bronx, cops said. She was transported to Lincoln Hospital for treatment.

    Just before 6 a.m., a man who had been shot in the stomach was dropped off at Kings County Hospital, cops added. He was in critical condition and expected to undergo emergency surgery. Investigators have yet to talk to the victim to ascertain details of the violence that left him wounded, cops said.

    On Staten Island, a 42-year-old man was blasted in the stomach on Osgood Avenue at about 6 a.m., cops added. He was taken to Richmond University Medical Center and is expected to live.

    Lastly, an hour later, at around 7 a.m., a man was shot on East 138th Street and Brook Avenue in the Bronx, cops said. He was brought to Lincoln Hospital and is listed in stable condition.

    There was also a report of police firing a single shot at a suspect near the Brownsville Houses in Brooklyn just before 2 a.m., cops said. No one was injured and further details were not immediately available.

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  135. Ragnar says:

    Dullard,
    I cannot remember the last time my family income was below 250k. Maybe 2005. But as jj says, 250k is just a living wage around here. We are definitely comfortable, and for that I thank hard work from me and my wife. Not “society”. My SIL and neice were in town, and after the 15 y o began talking about how rich people don’t desrve their money, she got smcked down by my wife and her mom, talking about their youth with only money to eat rice and pickles, traveling to school in trains, a bit of money sewn into their underwear. Years of working nights while earning degrees. Saving almost all their incomes for years to build up down payments for homes. Then after all those years, someone shows up and says “you’re rich, you owe me half”.

  136. relo says:

    124:

    It’s not what you make, it’s what you keep. If he’s not thinking about taxes now, I’d wager he will be in short order. And if not, it’s his money to waste (until he writes the check – then it’s the elected’s).

  137. chicagofinance says:

    U.S. NEWS
    Pressure to Rein In Tuition Squeezes Colleges

    By MICHAEL CORKERY

    Private colleges are facing pressure to slow tuition hikes and boost aid, as families question the cost.

    College officials say the long-held faith among many Americans that college is worth whatever it costs is starting to waver under the weight of lackluster job prospects, stagnant wages and a pileup of student debt.

    The shift is already threatening to put stress on some schools’ finances. Average tuition this past year rose by the smallest percentage in at least 40 years among the 960 private schools that belong to the National Association of Independent Colleges and Universities, which collectively enroll 90% of the students in private colleges. It climbed 3.9% to $29,305.

    Twenty-four of the group’s colleges froze tuition during the 2012-13 academic year, more than double the previous year’s total. Eight colleges shrank tuition costs, up from six in the 2011-12 academic year and none in the previous academic year. Colleges freezing tuition this year include Mount Holyoke College in South Hadley, Mass., while Seton Hall University in South Orange, N.J., cut tuition for high-achieving applicants.

    “They are treating us like they are buying a pair of shoes,” says Donald Farish, president of Roger Williams University, a 3,785-student college in Bristol, R.I. More students are attracted to the college “that gets me the best value,” he says.

    Roger Williams said in October that it will freeze tuition for the 2013-14 academic year at the current $29,976 and vowed not to increase tuition for its next freshman class for four years. Mr. Farish says that the school froze tuition because “costs are increasing faster than people’s incomes and we need to keep it affordable.”

    Parents, he says, have become hardball negotiators, playing one school’s scholarship offer off others’ and coming back as many as three times to Rogers Williams asking for more aid.

    “There has been a fairly dramatic change in the number of people who are angling” for more money, he says. “If we have become used-car lots, God help us all. But that seems like that is what is happening.”

    At private colleges, the average discount rate—institutional grant dollars as a share of gross tuition and fee revenue—is expected to hit an all-time high of 42.8% in the 2011-12 academic year, up from 42% a year earlier, according to the National Association of College and University Business Officers.

    Allie Tommasone, a 17-year-old high-school senior who lives in Rotterdam N.Y., has gotten acceptances and scholarships from several colleges. Her parents, Jerry and Kim Tommasone, are hoping to seek additional scholarship money from the colleges Allie likes best. “I want her to get a great education at, or a little above, the price of a state school,” says Mr. Tommasone, who works in the finance department of a nearby hospital.

    The family has created a detailed college spreadsheet. “You have to know what you are paying for,” Mr. Tommasone says.

    Across a group of 110 four-year private colleges and universities, net tuition per student, which subtracts scholarships and other discounts from gross tuition, is projected to climb a median 2.6% in the year ending in June 2013, down from an estimated median 3.8% a year earlier, according to a survey by Moody’s Investors Service set to be released early next year.

    Discounting doesn’t necessarily indicate financial pressure. Schools with big endowments and robust fundraising efforts have a cushion that gives them more freedom to offer big aid packages to lure the best students. Some of the country’s most prestigious schools comfortably award lots of financial assistance, relying in part on hefty endowments.

    But under particular pressure are high-priced colleges that lack strong name recognition or a well-regarded educational niche, says John C. Nelson, a Moody’s managing director. Some colleges may be forced to cut staff and programs, which could make them less attractive to students. If the pressures continue, “many smaller, unrated colleges will eventually close because they can’t grow net revenue,” Mr. Nelson says.

    So far this year, Moody’s has downgraded the credit ratings of 19 schools, while upgrading only two schools. The credit-rating firm says the fiscal pressures will continue to increase for both small and large schools.

    The 505 private and public colleges and universities rated by Moody’s had a total debt of $205 billion in the fiscal year ended June 30, 2011, the most recent data available. Total debt is up from $192 billion in the fiscal year ended June 30, 2010.

    In December, Moody’s downgraded some of Franklin Pierce University’s bonds deeper into “junk” territory, citing the college’s “weakening operating performance.” Moody’s says the “unrestricted monthly liquidity” for the school, a 1,400-student private college in Rindge, N.H., is “extremely thin.”

    Richard Marshall, the school’s chief financial officer, says the school has ample liquidity, though said that the net tuition revenue has declined slightly. The school held tuition steady at about $28,250 this year “to be sensitive to affordability concerns,” says Mr. Marshall. Officials increased merit scholarships to help attract top students.

    Franklin Pierce boosted enrollment by about 110 students in the past year. But it has worked to bolster retention recently as only about two thirds of freshmen have been returning for their sophomore year. Mr. Marshall says many students cite the cost as a reason for leaving.

    In August 2011, officials at the University of Charleston in Charleston, W.Va., were alarmed when 42 students—or about 12% of the incoming class—withdrew a month before school started, forfeiting their deposits.

    “We called every one of those students and asked what happened,” says Ed Welch, the college’s president. “Most of them were having second thoughts about borrowing that much money.” Many decided to go to community college instead, he says.

    Mr. Welch enacted a tuition cut of 22% to $19,500 for this year’s incoming class and reduced some financial aid. Partly because of the tuition cut, this fall’s freshman class swelled to 390 from 333 last year, he says.

    At Allegheny College in Meadville, Pa., Treasurer Dave McInally says the school needs to help pay for scholarships by growing its approximately $150 million endowment.

    Last year, tuition at the 2,200-student liberal-arts college grew by about 4% to $37,260—but revenue was essentially flat, partly because Allegheny offered more financial aid to attract high-quality students. Just 3% of the students at Allegheny pay the school’s full cost of $47,150, says Mr. McInally.

    “We might be seeing the limitation of the high tuition and high discount model,” says Mr. McInally.

    Diane Ennis, of Lancaster, Pa., wants her 17-year-old son Benjamin to graduate from college with little or no debt, partly because she watched an acquaintance’s daughter take out tens of thousands of dollars in student loans, and then find work only as a receptionist.

    “We are not going to do that,” says Ms. Ennis, a sales manager for a business-to-business company. So far, Benjamin has an $8,000-a-year scholarship offer from Temple University, a partly state-funded school in Philadelphia where tuition is $13,000. She says that might be one factor that could sway them away from private college, which they’d always thought would offer the best education.

    —Ruth Simon contributed to this article.

    A version of this article appeared December 31, 2012, on page A2 in the U.S. edition of The Wall Street Journal, with the headline: Pressure to Rein In Tuition Squeezes Colleges.

  138. Ernest Money says:

    juice (134)-

    Got no time to buy salty cars. Too busy buying salted gold.

  139. Ernest Money says:

    Obviously an attempt to collect a debt.

    “Then, at around 4:30 a.m., a man was shot in both legs at the Queensbridge Houses in Astoria, Queens, cops said.”

  140. chicagofinance says:

    The End Is Nigh (Willy Wonka Edition):

    Police in Norfolk, UK are investigating after a man said he was attacked by four people dressed as “Oompa Loompas.”

    According to the Norfolk Police Department, the alleged incident happened last Thursday.

    The victim, a 28-year-old male, had just come out of a kebab house when he was

    According to police, two of the males were dressed as ‘Oompa Loompas’ from Charlie and the Chocolate Factory with painted orange faces and dyed green hair.

    One of the males in the group then pushed the victim to the floor. He sustained a cut below his right eye, two black eyes, a small cut to the nose and a cut lip.

    No other information was provided.

  141. Ernest Money says:

    House sends (spending cut) revisions to fiscal cliff bill back to Senate.

    Open @ limit down tomorrow AM? Methinks yes.

    The bloodletting will now commence.

  142. Ernest Money says:

    Sad Gooners display against Southampton.

  143. Comrade Nom Deplume back in PA says:

    [145] ernest,

    I hate the Gooners as much as the next geordie, and mainly cuz of their affiliations with the Yankees and fabius, but they did kick the snot our of us, and we didn’t fare much better vs southampton.

  144. yome says:

    House will vote on the bill tonight

  145. yome says:

    House passed the fiscal cliff bill

  146. Dan in debt says:

    Congress kicks can down road. No one gives a damn that deficits still a trillion plus per year. Obama now patting all clowns on their backs.

  147. Dan in debt says:

    Just reading clot’s comments on house sending bill back to senate. Silly Clot……sounding like an optimist actually thinking congress would do the right thing.

  148. Libtard after an ice hockey game. says:

    Phew…that cliff sure was scary.

  149. McDullard says:

    Stu, don’t worry more cliffs to come in the next few months.

    Most of us here will see a direct increase of 2 to 4k because the temporary freebie FICA tax cut has expired. On the other hand, we are still living in a tax cut land compared to Clinton era tax rates. Nobody seems to raise the issue of carried interest loophole.

    At this rate, the debt keeps going up and up unless a new bubble comes up.

  150. McDullard says:

    Ragnar, sorry, I confused your id with that of 250k…

    A disclaimer re taxes… My point is about the relative impact of the new bills (which is a a few percentage points — still lower than Clinton era rates for even the rich [working or idle]). If the whole thing is about morality of taxes, then anything non-zero can be objected.

    About the 50% fed plus state rates, people have paid much higher than those rates till Clinton time. And I presume some of them also worked hard in their childhood and walked bare feet on snow covered roads, uphill both ways, but the tax rates aren’t based on those factors, right. If that is the case, the [estate] taxes should be way higher for those that went to primary school in a limo.

  151. Ragnar says:

    Dullard,
    The reason my relatives were starving was that the government was in charge of feeding them. Just the way lefties want the government to be in charge of everything. Nearly halfway there now, and debt limits aren’t going to stop them.

  152. Fabius Maximus says:

    When I came to this country I was very suprised. Taxes were lower taxes but basics such as Bread were much more expensive.

  153. Ernest Money says:

    Silly me, thinking the House would actually stop the madness.

    We’ll be back here in about 60 days, after Geethner has robbed some gubmint pension money. Next time, Clowngress will be handling a live grenade.

  154. grim says:

    The cliff was an entirely manufactured scenario, done so to create a crisis that could be leveraged for political gain. Unfortunately for the politicians, it didn’t play out according to plan. Sequester was put in place 16 months ago, are you telling me there simply wasn’t time to resolve it in the 16 months that followed?

  155. All Hype - Mr. Oil, Mr. Gas, Mr. Coal says:

    Grim (157):

    You are so right about the manufactured crisis. This cliff was pure political theater. Obama played the republicans like a fiddle.

    There will be no crisis about the debt ceiling. Obama will not negotiate, blame the republicans on TV and the socialists will cry that the conservatives will prevent them from getting their free gubbmint cheeze. Of course by March the fiscal year will be half over so why bother making any hard choices. Kick the can down the road…

    It is clear the Obama will use the banks and the federal reserve to monetize the entire debt for his 2nd term.

  156. grim says:

    Still, this morning, I’m sure there is a large swath of the population that believes Obama and Congress saved America. Hip Hip!

  157. Essex says:

    154. I would think that ‘if’ your relatives were ‘starving’, It would have been because they did not have any food.

  158. Essex says:

    159. Or others that figure running a deficit after a Depression is par for the course.

  159. grim says:

    At least the repugs can take some solace in the fact that by waiting until Tuesday, they technically cut taxes.

  160. Ernest Money says:

    All over but for the crying.

    Argentina, dead ahead.

  161. Ernest Money says:

    Moody’s, from September. Move along, nothing to see here:

    “13 months ago, in the aftermath of the debt ceiling fiasco, which we now know was a last minute compromise achieved almost entirely thanks to the market plunging to 2011 lows, S&P had the guts to downgrade the US. Moody’s did not. Now, it is Moody’s turn to fire up the threat cannon with a release in which it says that should the inevitable come to pass, i.e. should congressional negotiations not “lead to specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term” then “Moody’s would expect to lower the rating, probably to Aa1” or a one notch cut. Moody’s also warns that should a repeat of last year’s debt ceiling fiasco occur, it will also most likely cut the US. Of course, that the US/GDP has risen by about 8% since the last August fiasco has now been apparently forgotten by both S&P and Moodys. Sadly, continued deterioration in the US credit profile is inevitable, as every single aspect of modern day lives that is “better than its was 4 years ago” has been borrowed from the future. More importantly, with the S&P at multi year highs courtesy of Bernanke using monetary policy to replace the need for fiscal policy, Congress will see no need to act, and Moody’s warning will be completely ignored. This will continue until it no longer can.”

    http://www.zerohedge.com/news/moodys-warns-1-notch-downgrade-if-bitterly-divided-congress-does-not-begin-cooperate

  162. grim says:

    Mortgage debt forgiveness act extended 1 more year

  163. zieba says:

    came across this…

    It is my understanding that Pershing Square Capital took a massive short position in Herbalife some time ago. Bill Ackerman, one of the principals went on a whistleblowing campaign recently calling out Herbalife a pyramid scheme. Pershing square compiled factsaboutherbalife dot com, complete with a PDF presentation laying out their case….

    Obviously, Pershing Square’s profits on this position have since gone exponential.

    Is something like this legal?!?? Lather rinse repeat? STEP 1: Take position, STEP 2: slander/defame (unsubstantiated at the time), STEP 3: profit.

    How is this not stock manipulation? Not sure who he’s trying to sway here, retails? Given how it’s easy to see Herbalife for what it really is, what kind of paid advisers would push client money into a company that could be exposed at any time and open fifty down.

  164. grim says:

    166 – If Herbalife is a ponzi scheme, is what they did manipulative or corrective?

    Isn’t this kind of self-policing for profit something that should be expected in an on open/free/efficient market?

    I suppose it boils down into whether or not their allegations were true or false.

  165. zieba says:

    In principle, I’m not against Ackerman. Infact, I think it’s a BSD thing to do. It just seems like such obvious manipulation of public perception of a security which he has a direct interest in. I’m just surprised that this is permitted.

  166. grim says:

    Dow up 260, clearly America was saved.

  167. Comrade Nom Deplume back in PA says:

    [163] ernest,

    Maybe Argentina, with a stop in France first.

  168. Essex says:

    169. America might not be saved, but my portfolio is on fire. Especially one stock seeing new highs this year which I sell every January.

  169. Brian says:

    The sun came up again today. And I’m still not in Argentina. Huh.

  170. grim says:

    I’d trade NJ for a beach in Argentina this morning.

  171. grim says:

    Chi/Brian – Thanks for the 529 info, we ended up going with T. Rowe.

  172. Juice Box says:

    re: Ackerman and Facts about Herbalife?

    You folks make me laugh sometimes.

    It does not matter whether their ” allegations were true or false”.

    Did anyone read the long disclaimer you have to agree to before getting access to the website where they admit that they are doing this to drive down the price of the stock so they can make money?

  173. zieba says:

    I agree, in that slander/libel does not have to be proven because the plaintiff has already suffered damages regardless of outcome.

    No, I did not read the disclaimer.

  174. Juice Box says:

    Zieba – pick any stock, you won’t find too many analysts recommending sell, ever wonder why that is?

  175. Essex says:

    My kid’s got a flagship account from the wall street mogul. Kinda neat.

  176. zieba says:

    horse head on doorstep, newspapered fish? country club stigma? thinner envelope?

  177. Juice Box says:

    re: #179 – Pink Slip?

  178. zieba says:

    right.

  179. Ragnar says:

    Essex,
    They were starving thanks to Chairman Mao and his government’s takeover of capital.

  180. McDullard says:

    Ragnar,

    If you are an immigrant, you would have taken advantage of the developments in this country that were due to high taxes paid by the then rich and hard work by the then poor. Now that you’ve have it made, you want out of the system? Well, it is a free country (unlike some other countries)…

  181. joyce says:

    McDullard,
    Why dont you use effective tax rates from the past and not the ‘for-show’ marginal tax rates? Also, why the obsession with ‘Clinton-Era’ tax rates? I’ll give you the quip response… Clinton Era tax rates & Clinton Era spending… deal.

  182. Juice Box says:

    JJ – close but no pony for you, looks like the Hurricane Sandy bill won’t pass this session
    and they will have to start all over again next session.

  183. Carlito says:

    Hey, stop it makin fun about Argentina, that’s my home!

  184. McDullard says:

    Joyce, Clinton era was wonderful with respect to economy. It was also an example of how investments from earlier generations (arpanet) paid off, so that freshly minted “html frontpage programmers” with 1 month training making 100k+ could complain about how it is unfair that they have to pay taxes!

    Without the wars, W’s tax cuts, medicare Part B… the main contributor to deficits is rising health care costs, right [and the effects of recession]? Instead of a fixed “let’s not spend more than X”, I think an approach would be to wind down wars, undo W’s cuts, put a lid on rising health care costs, and spend money [wisely] towards improving the economy. Better than going down the austerity path.

  185. Ernest Money says:

    Hah. The only goal of the US gubmint is to give the average Amerikan a proper reaming.

  186. Ragnar says:

    Dullard,
    The economic progress of this country was due to mutual trade for mutual benefit. Nobody owes anybody anything for that. My greatest gratitude goes to the US founders that said we have the inalienable rights of life liberty and the pursuit of happiness, and didn’t ask that future generations be charged for something that was already theirs to begin with. The understood that government is the servant, not the master of a free people. The only charge for maintaining this republic was intellectual, an understanding of the value of liberty and individual rights. Our society defaulted on the intellectual debt owed the founders long ago.

    Now constitutional scholars suggest we rip up the constitution, Declaration of Independence, and just let “society” govern free-style and decide who it wants to eat without reference to principles.

    Ernest Money is on the ball on this subject.

  187. Brian says:

    No, The United States Will Not Go Into A Debt Crisis, Not Now, Not Ever

    http://www.forbes.com/sites/pascalemmanuelgobry/2012/10/19/no-the-united-states-will-not-go-into-a-debt-crisis-not-now-not-ever/

    The article compares the situation in Argentina in 2001 to the US present day. It’s probably just a conspiratorial piece of government propoganda so don’t even bother reading it Chip.

  188. yome says:

    #191 how much debt =bonds already destroyed from the 4T bonds bought from treasury?.print and destroy debt. Cant the fed do this?

  189. Juice Box says:

    re# 191- Brian – When you spend more than you take in you get poorer, not richer. I hope that fact does not escape you.

  190. Brian says:

    193 – It doesn’t, you are right. However, I cannot print my own money.

  191. Peace, Love, Dope says:

    It is Ackman, not Ackerman just for the record. Also, he “claims” that any profits from the trade are going to charity. His reason for his 4 hour seminar on Herbalife is because “he thinks people should know the truth.”

    Take that for what it’s worth…likely, not much.

  192. Brian says:

    I’m not saying it’s a healthy way to run a government, I’m just saying we’re not on the same path Argentina was.

  193. joyce says:

    So prices for all things will continue to rise, with wages lagging, as they have done since forever… glad to know that can and will continue forever as well

  194. Peace, Love, Dope says:

    “deficits don’t matter”

    – Dark Lord Cheney

  195. Brian says:

    197 – no, it’s not fine, it’s just not Argentina. Also, you may find this useful, in the event we do descend into Argentinian chaos circa 2001, a handgun may prove more useful than a semi-automatic assault rifle. They are easier to conceal. Assault rifles are easy to spot and since government will also be struggling to survive, they will kill you on sight and confiscate your bulky assault rifle.

    http://www.amazon.com/Modern-Survival-Manual-Surviving-Economic/dp/9870563457

  196. Brian says:

    Hey grim, would you be able to unmoderate post 199 please? Thanks.

  197. relo says:

    195:

    Looks like most of the info. is in public domain. Do your research and take the other side of the trade. He’s only up 4x since inception. No match for JJ and Stu.

  198. joyce says:

    198

    I forgot politicians never say anything false.

  199. Statler Waldorf says:

    “I pledge that under my plan, no one making less than $250,000 a year will see any type of tax increase. Not income tax, not capital gains taxes, not any kind of tax.”

    – The One

  200. Juice Box says:

    re # 201 – It’s called “Paranoia Chic”, young rich unemployed heroin addicted hipsters strive for that edginess that comes from being seen holding a shotgun with some clips in your back pocket while your pregnant GF snorts heroin at a dinner party. Their guests/friends turned them in to the cops because they were jealous.

  201. Comrade Nom Deplume, enjoying the view from the Fiscal Cliff says:

    [204] waldorf

    Well, he broke that one years ago.

  202. Comrade Nom Deplume, enjoying the view from the Fiscal Cliff says:

    Across the river OT alert:

    Philly Inky calling B.S. on “Amish Mafia”

    http://www.philly.com/philly/news/local/20130102_Amish_with_guns__fancy_cars__Really_.html

    This is more egregious than “Doomsday Preppers” where I discovered (and pointed out) that many of the “preppers” are actually hawking their own services and trying to build a market. Which would explain why they are violating the first rule of prepping.

    Reality TV isn’t.

  203. Brian says:

    http://www.businessinsider.com/chris-christie-sandy-relief-bill-2013-1

    Chris Christie Went Ballistic On John Boehner In A Press Conference That Was Like Something Out Of A Movie

  204. Essex says:

    205. Another reason not to live in an apartment. My neighbors are on drugs and keep high explosives around. Neat.

  205. Brian says:

    “They are so consumed with their internal politics, they’ve forgotten they have a job to do,” … “Everything is the subject of one-upmanship. It is why the American people hate Congress.”

    -Chris Christie

  206. Essex says:

    If we don’t institute term limits then we deserve what we get from Congress.

  207. yome says:

    Is SS Payroll tax really considered a tax when you get your investment with dividend at retirement or disability?

  208. joyce says:

    yome,

    How many times (on this blog alone) does this have to be mentioned? It doesn’t matter what one thinks or wants SS to be… it doesn’t matter what one calls the ‘program’ itself. Even on the social security website, they mention the Supreme Court cases which state it’s a tax and the benefit can be changed at the whims of Congress whenever they want.

    Does the fact that the Court has ruled Obamacare as lawful make it so?… then SS is a tax and nothing more. Deal with it.

  209. Comrade Nom Deplume, enjoying the view from the Fiscal Cliff says:

    [215] Joyce,

    The history of the court cases for SS and for Obamacare make clear that the government defended the legitimacy of each program under the taxing authority. In the case of SS, it was the primary basis. For Obamacare, it was an alternative argument, but that was just a fig leaf so the Dems could claim it wasn’t a tax.

  210. Comrade Nom Deplume, enjoying the view from the Fiscal Cliff says:

    [209] brian,

    Christie is doing what he has to as a governor. But that rant will come back to haunt him if he ever runs for 1600. So at best, he is a veep candidate–he’ll never get the GOP nod for the top spot. Not anytime soon anyway.

  211. Comrade Nom Deplume, enjoying the view from the Fiscal Cliff says:

    Breaking, Boehner supposedly told Reid to go Fcuk himself or something to that effect.

    About time. I’m waiting for a fistfight in the well of the House.

  212. joyce says:

    216
    I agree. However, I didn’t bring up Obamacare with regard to the fact that it was upheld as a tax. I brought it up because it’s clearly unconstitutional; yet the tyrants in the black costumes said it isn’t… so BOHICA.

  213. Peace, Love, Dope says:

    217 – good thinking! you should be a strategist for the GOP. Why bring in new blood? The current crop is doing so well.

  214. Juice Box says:

    I also liked how Rep Peter King said don’t give money to Republicans.

    Any change Bohener does not get the nod when the 113th United States Congress convenes for the vote tomorrow?

  215. Punch My Ticket says:

    They are so consumed with their internal politics, they’ve forgotten they have a job to do

    So, according to the Governor of the Great State of New Jersey, Congress’s “job” is to write more NSF checks?

    This is what passes for statesmanship these days. It’s also why I cannot entirely discount Clot’s daily moaning.

    As it’s a prediction thread, I predict JJ will be more than a little ticked when he discovers just how high his marginal tax rate is in 2013. For something a little more off the wall, I will also predict that Warren Buffett flees high tax Nebraska in order to mitigate the capital gains damage inflicted federally on New Years Day.

  216. Juice Box says:

    re#222- JJ is going to more ticked that they did not pass the Sandy bill. He already got 32k for not having flood insurance and apparently the new bill included grants of perhaps $200k to rebuild.

  217. Punch My Ticket says:

    Yes, by all means, let’s just print up another 2000 Ben Franklins for every schmuck who wants to build a house in an area known to flood. Because we can do that without limit and without long term consequence.

    In fact, I think I’ll write a note to my dear friend Christopher Christing Christie suggesting he set up a printing press in the root cellar at Drumthwacket. Because if it’s good enough to do in DC, there is no reason it can’t be done in Princeton.

  218. Juice Box says:

    Punch – some other Ponies in the Sandy Legislation.

    “Waiver of Adjusted Gross Income limitation for theft/loss deduction, so individuals can deduct the cost of uninsured losses.”

    “Allow taxpayers whose principal place of residence is in the Hurricane Sandy Disaster Area and who suffered a loss from Hurricane Sandy, to take distributions from retirement savings accounts with no tax penalty, provided such amount is repaid within three years.”

  219. Peace, Love, Dope says:

    224

    repubs don’t run up deficits silly goose! except when they do.

  220. Then, write all the scrambled words on a paper and give a copy to each guest (or divide everyone into
    pairs). Put in a $15 Blockbuster card, movie sized candy and a bag or
    two of unpopped microwave popcorn. So, oft in theologic wars The disputants, I
    ween, Rail on in utter ignorance Of what each other mean; And prate
    about an Elephant Not one of them has seen.

  221. joyce says:

    The U.S. Senate voted 89-8 to approve legislation to avoid the fiscal cliff despite having only 3 minutes to read the 154-page bill.

    http://cnsnews.com/news/article/senators-got-154-page-fiscal-cliff-bill-3-minutes-voting-it

  222. chicagofinance says:

    The End Is Nigh (Redneck Cowboys’ Fan Edition):
    http://www.youtube.com/watch?v=6EamsxzKKB0

  223. Ragnar says:

    Repubs always pursue deficit spending when they are in power. They only argue against deficits when they are in power. The only political group really against deficits are libertarians and tea party repubs.

  224. Ernest Money says:

    brain (191)-

    You are not just stupid. You are super-stupid.

  225. Ernest Money says:

    sx (213)-

    Clowngressmen are only elected to 2-year terms. Where do you want to demarc the term limits?

  226. Ernest Money says:

    We are well and truly fuct. All that comes between now and the day of reckoning are the bittersweet tears of the rejected and thwarted.

  227. Brian says:

    Ha ha you’re getting soft chip. That’s the best you’ve got?

  228. Comrade Nom Deplume back in PA says:

    [220] dope,

    One thing I like about your posts (okay, the only thing) is that while they are inane and devoid of any utility (unless snark has utility), at least they are short. I can dismiss them quickly and move on.

    Hey, at least I read them.

    Well, usually anyway.

  229. Comrade Nom Deplume back in PA says:

    [230] Joyce,

    The irony is just too, well, ironic.

  230. The Original NJ ExPat says:

    2013 prediction (If I’m not too late) – Obesity and cars per capita peak in the US. And property taxes rise.

  231. Ernest Money says:

    Has Reid challenged Boehner to a pistol duel yet?

  232. Comrade Nom Deplume back in PA says:

    [228] joyce,

    It wasn’t a complex bill, and at that point, they pretty much knew what was in it. I didn’t take much more time reading it. I would not compare this to passage of Obamacare.

    What is of more interest to me are provisions in the sunsetted Bush legislation that weren’t renewed. Those will be the rude shocks for many.

  233. Comrade Nom Deplume back in PA says:

    [239] Ernest,

    I want to see Joe Wilson (if he is still in the house) duel Alan Grayson when that carpetbagging fcuk shows his face.

  234. Peace, Love, Dope says:

    Where does “super-stupid” fit along the stupid, stupider, stupidest chain? Perhaps joyce knows.

    240 – 3 minutes? didn’t they have 16 months TO CONSTRUCT THEIR OWN BILL???

Comments are closed.