From Bloomberg View:
Connecticut and New Jersey: Rich States, Poor Economies
It’s been a tough week for Connecticut, which just learned that it is losing its most prominent corporate citizen to Massachusetts. But that’s nothing new. It has also been a tough decade for the Constitution State. A tough quarter-century, even.
…
But here’s the thing. Connecticut is the richest state in the U.S., as measured by per capita income. That figure is of course skewed on the high side by a few hedge-fund managers in Greenwich, but even if you go by median household income, Connecticut ranks fourth, behind only Maryland, Alaska and New Jersey.This contrast between great wealth and financial distress has inevitably led people to offer explanations. Cato Institute senior fellow Jim Powell, writing at Forbes.com, blamed it mostly on big government and high taxes. New York magazine economics columnist Annie Lowrey proposed that income inequality might be the problem.
As for me, I’ve been writing a lot lately about the diverging economic prospects of big cities and suburbs, so the possible explanation that immediately struck me is that Connecticut is all suburbs. (Which isn’t strictly true. But the state’s largest city, Bridgeport, has only 147,612 people, so it’s not far off.) That got me thinking about the suburb-filled state on the other side of New York City, New Jersey, which isn’t as fiscally bad off as Connecticut but is also a very affluent place that has had its share of economic woes lately.
…
Connecticut’s taxes went from moderate to high, while Massachusetts’ went from high to moderate (it scores even better on the Tax Foundation’s Business Tax Climate Index). So that Cato guy may be onto something. But New York has been No. 1 in tax burden almost every year, yet it’s growing faster than Connecticut and New Jersey. Clearly, taxes don’t explain everything.Same goes for inequality: Connecticut is the most unequal state as measured by the Economic Policy Institute’s top-to-bottom ratio, which divides the average income of the top 1 percent of taxpayers by the average income of the other 99 percent, but New York is almost tied with it, and Massachusetts comes in fourth place. One product of this inequality is high real estate prices relative to median household incomes, which could be holding back job growth. Bloomberg estimates that New Jersey has the least affordable real estate in the country, while Connecticut is tied for fifth-least-affordable with Vermont. But Massachusetts is tied for second (with California).
Then there’s my cities-versus-suburbs thesis. New York, Massachusetts and Pennsylvania are home to the central cities of giant metropolitan areas — the New York, Boston and Philadelphia combined statistical areas are the nation’s first, sixth and eighth largest. Connecticut and New Jersey don’t have anything like that. The Hartford CSA comes the closest, ranking 36th nationally with a population of 1.5 million. But its central city has only 124,705 people; it’s basically all suburbs.
That doesn’t prove anything, of course. But I have the feeling that in an age of cities, Connecticut and New Jersey have lost some of their attractive force. Key industries — finance and insurance in Connecticut, pharmaceuticals in New Jersey — have suffered big job losses, and there isn’t much in the wings to replace them. Neither state is a major magnet for new college graduates, or for venture capital investment. Connecticut ranked 11th among the states in incoming VC investment in 2014, and that was an unusually good year; New Jersey ranked 17th. Massachusetts and New York, meanwhile, were Nos. 2 and 3 behind California.
Connecticut and New Jersey were early manufacturing powerhouses that weathered the decline of industrial employment in part by riding the great 20th century wave of suburbanization. That wave may be receding, at least in the Northeast. Which probably means more tough times ahead for both.
FRIST!
Damn you!
Hold onto your arse. Market futures are already down nearly 2% before the open.
Nearly…well over.
Walmart closing 269 stores. Blood in the streets, who has their shopping list ready?
I sold large positions in T, VZ, and LLY back in October. Had a great two year run with LLY, but I hoped to get back into T and VZ by January 5th, but I had to skip the dividend because it just never got cheap enough. Maybe today.
Bloomberg estimates that New Jersey has the least affordable real estate in the country…
There are a lot of people that got f.ucked beyond belief during the theft years. The aftermath is just starting to shake out. I got a deal that I could live with but I will tell you, if I waited another year, I could have done a lot better.
Only 150 in the US, and 100 of those are “Walmart Express” stores – whatever the hell that is.
Libturd,
When do we start piling into the market? DOW 15,000?
[8] Last year WMT closed a handful of stores from April-November. Conspiracy theorists were thinking Jade Helm, others thought it had to do with stores that were making noises to unionize. Employees got just hours notice that the stores were closing. It did seem weird.
Looks like Walmart express was a play at Walgreens, CVS, etc.
[9] When T gets below $32
Libturd,
When do we start piling into the market? DOW 15,000?
#7 Fast Eddie, I wouldn’t count on any substantive depreciation in your area of Bergen County in the foreseeable future. The worst I can imagine is a period of stagnation. Gold Coast Hudson County on the other hand looks ripe for some fallout in the rental and sale market within the next year or two. Rapid growth in the vacancy rate and no end in site on new construction. Bad recipe.
Sheriff sale volume continues to increase. Attendance at sales is higher than ever before. Hard to believe any good deals can be found with the current level of competition at the sales. I have not made a new purchase since October.
Those walmart closings will result in the loss of 16,000 jobs.
[14] 30 yr
Are you saying the properties are selling near market rates?
17. Wife thinks everything is great and wants 2 new bathrooms…..
[6] expat
I also had a nice ride with VZ before selling last year. Also thought about getting back in. What were you looking for as an entry point?
[10] expat
” Last year WMT closed a handful of stores from April-November. Conspiracy theorists were thinking Jade Helm”
I thought you were cracking wise until I googled Wal-Mart and Jade Helm. Seriously, where do you find this stuff?
30 year,
Thanks as always. I guess I pulled the trigger at about the right time.
Hmmmm so this guy notices an uptick Capital One card holders paying for Netflix subscriptions so he buys the stock. Makes sense….
U.S. jury finds ex-Capital One analyst liable in insider trading case
Huang did not deny using Capital One’s non-public information, which the company’s policies forbid. The case hinged on whether the sales data was “material,” or gave Huang a significant edge compared to the scope of other information available to the investing public.
The sales information met that definition because, in part, Huang used it to make “calculations that allowed him to project and predict” broader company sales patterns, said SEC lawyer David Axelrod in closing arguments on Wednesday.
The Huangs, who are not related, began with a $147,000 investment and together made more than $2.8 million from the trades, a three-year return of 1,819 percent, the SEC said.
http://www.reuters.com/article/us-sec-capitalone-insidertrading-idUSKCN0UR2KR20160114
7. The waiting. Yeah man no pressure here. Watching. Waiting. Interesting times dead ahead…
FKA 2010 – So many unknown variables in this type of purchase. What is the right price for a 60 -70+ year old house that may have an oil tank buried in the ground? What is the right price for a house you cannot see the inside of? There is almost always some discount. Question is what discount is enough on most of these homes and do the people bidding understand the risk they are taking?
Any questions?
https://www.yahoo.com/music/powerball-reimbursement-fund-page-created-235504618.html
13 pricing on the mold coast is stratospheric. I’m not sure how it goes down from here. I agree the good areas will remain good areas and there is a floor because in good areas no one needs to sell. What I do see is the dramatic rise in prices in Jersey City is unsustainable, most of the non-prime areas are pretty bad, full of housing that is worthy of condemnation, 500-700k for a renovated multifamily next to a house that is falling down 3/4 of a mile from JSQ is in for a world of hurt.
I can’t tell you where the bottom is. All I can say is that oil won’t stay below $30 for long as demand will eventually increase enough to absorb the oversupply. China only has about another 50% to go before their markets are priced correctly. Personally, I’m always buying when we are down here. And if we lose another 10% I’ll be buying more. And we get back to DOW 18,000, I’ll be selling the crap I bought around here.
Gut opinion? We are near the bottom and the macroeconomics don’t really support this correction, which is why I am bullish here. Cheap oil, which is painful to the market in the short-term, will end up as a tailwind to the profits of the rest of the market besides the energies. It always blows my mind how something unexpected tends to save the market over and over again. Be it world wars, real estate, Mozilla, etc. The conspiracists here will claim these are all engineered by the international banks, but I don’t believe it at all. The moral of the story always remains the same. If the market is going to crash, it really doesn’t matter if you are in it or not. You’ll still be living in a lot of pain. Might as well be in it when it comes back. I can’t stand Willie B. But, he’s right when he says you need to get in when the majority (asses) are getting out. And get out when the majority is getting back in. You need not nail the bottoms or tops. Just coming within range of them will leave you in a much better position than any hedge fund manager ever will.
Next investment club meeting is Tuesday night in Morris if anyone is interested. Should be an interesting one as the portfolio is pretty beat up. I like these times as it provides a valuable lesson. Don’t panic and add to your positions that are beat down more than fundamentals. It’s much easier to determine which stocks are undervalued when they are beat down more than the sectors they are in, then when the market is booming.
“Thanks as always. I guess I pulled the trigger at about the right time.”
The right time was in late 2011.
I suggest not owning equities in any amount you cannot afford to lose 50% on over a 3 year period.
We’re roughly 7 years into a “recovery” that’s been supported by years of unprecedentedly low interest rates and government intervention in financial systems. This recovery could continue or peter out entirely, giving everyone another peek at the abyss. Neither outcome would particularly surprise me.
Smoke ’em if you got ’em, folks.
Going down hard.
rags (28)-
My money is on the abyss.
“This recovery could continue or peter out entirely, giving everyone another peek at the abyss.”
27, Nope, your still with us.
BAAH, the sound of the sheep. Don’t feel too bad today.
haha, mold coast. I thought that was Florida until I looked back at #13 . That was funny.
“My money is on the abyss.”
A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
Winston Churchill
26. Lib, would love to go but work every Tue night…
Let me know if you ever have it on a Wed.
Will do.
“Paranoia will get you through times of no enemies better than enemies will get you through times of no paranoia.” -Pete Granger
https://www.youtube.com/watch?v=De0Pvrw6uo8
Gold, .223, food, water, materials for fashioning IEDs.
Investments, all.
marilyn (33)-
Google on “Peter Mocco”, and you’ll know everything you need about the Mold Coast.
You’ll also feel like taking twelve showers.
“haha, mold coast. I thought that was Florida until I looked back at #13 . That was funny.”
[28] Rags
Sound advice there. If you have some dry powder, put a little to work.
Chipotle closing all of their stores on Feb 8th to re-train everyone on Food Safety. Who knew food poisoning was bad for business?
Hey. Ebola is organic.
Monsanto tainted all of Chipotle’s raw product. That’ll teach them.
It’s not like anybody died or anything…
DOW down 500 points at – 3%
#23 [30YR]
I can’t understand WHY someone would want to bury an oil tank in the ground but my former primary residence had one. Used the state grant to get it out for free before I put it on the market. Funny thing about it (the grant) it covered up to $5000 so, EVERY removal cost that much! What a scam!
*I referred potential clients to the co. that removed mine….It was a good Christmas that year.
#34 [LT]
After hearing about the attack on Pearl Harbor WC is often said to have opened a bottle of Champagne and uttered “We have won the war”. I heard from a U.K. friend that he told the Queen “Tonight I’ll sleep the slumber of the saved”.
[45] yome
The first time I saw the Dow drop 500 points in a day, we called it the Crash of 1987.
I was at Fidelity and joked nervously with my boss about having a job on Tuesday. He voiced the same concern.
[18] Nom – I would be inclined to jump back in at anything und $43.50, so we’re not too far away, but there is strong support right around $44, where it is trading now. I would normally just hold VZ and T as they can go sideways all year long for all I care with a 5% dividend. I heard Tom McClellan being interviewed on a podcast in early August saying that the McClellan oscillator indicated that we would enter a bear market later in the month and it would run through April. I didn’t pay much attention and held (actually bought) in August. Got rid of blue chips I wouldn’t normally sell in October because the more I studied the oscillator, the more I believed in it.
I also had a nice ride with VZ before selling last year. Also thought about getting back in. What were you looking for as an entry point?
[49] expat
I was thinking $44 and its there. You may see your entry point.
[49] expat
It hit 43.90 and triggered a small buy. I have others set lower as it was trending down slowly.
Any opins on the house of the mouse at this level? DIS showing what looks to be a technical inflection point but I am not sure how (or if) to read that..
[52] DIS is at long term support and could be at a double bottom. It would have to rise above 100 and stay there to confirm. Remember, there’s no such thing as a $99 stock.
Heard this one on CNBC this morning:
A chart technician and a value investor were having a discussion in the kitchen. The tech trader dropped a knife and it went right into the foot of the fundamental investor. The fundamental guy asked the tech trader why he didn’t stop the knife from falling. He replied you never reach for a falling knife. The chart guy asked fundamental analysis guy why he didn’t move his foot. He replied, “I didn’t think it would fall that far.”
Went to two different functions about the economy this week…..interesting….
this one…
http://chicagobooth.edu/eo/cities/new-york/new-york
Cute.
and this one…
http://events.r20.constantcontact.com/register/event?oeidk=a07ebxehe0l42fe7949&llr=pq8gf4cab
The MODC one the guy was crowing how positive the results of the survey were……I asked when was the last time you had such a blowout positive survey……answer? January 2007.
Slow, grinding, rotting, wasting away deflationary credit collapse.
50-100 years of torpor.
Get ready. We’re only eight years into it.
French Canadian Man About Town (clot Edition):
BURLINGTON, VT – Maybe we should build a wall from Canada, too. Border Patrol agents busted a 21-year-old Canadian early Wednesday, dragging a sled loaded with 182 pounds of Xan^x pills in 300 vacuum-sealed bags. The haul has a $1.6 million street value, the Burlington Free Press reports. Despite the man’s winter-white camouflage clothing, authorities found Cedrik Bourgault-Morin after he tripped an electronic sensor in woods not far from the Quebec border. He faces a $250,000 fine and five years in federal prison and has to sacrifice all those anti-anxiety pills he could really use about now.
Are you trying to turn me on?
59 Splat Mofo says:
January 15, 2016 at 2:54 pm
Slow, grinding, rotting, wasting away deflationary credit collapse.
50-100 years of torpor.
Get ready. We’re only eight years into it.
This cop is a human lie detector
http://www.sfgate.com/crime/article/Video-Cyclist-claims-brutality-in-SFPD-stop-6759879.php
^My favorite part is when the cop is finished beating the guy (his buddies getting their turn), he goes over to the guy with the camera phone to make sure he’s recorded commenting on how proper his actions were.
What the investing public is really quaking in their boots about right now is whether batter in an aerosol can is about to “disrupt” the fwck out of Bisquick.
Whoop, whoop…this is the sound of the Police.
Whoop, whoop…this is the sound of the beasts.
[62] Meh. I could say some things that would spark more conversation, but I’ll skip that part. The thing I hate the most is that the taxpayers have to pay the eventual settlement. The good news is it’s San Francisco. Eventually sanctuary cities will bankrupt themselves and reconsider their actions, which is exactly how it should work in the free market.
DIS and VZ
I like to lever in to situations in declining markets by selling puts. DIS closed at 94 (rounded); 91 puts 29 days out could be had at $2.50.
Short them, if you get hit you’ve saved 6% on the downside and can still write covered calls against them to further average down. If you don’t get filled you made nearly 3% in a month, not bad.
Same idea VZ, run it at 43, slightly less favorable.
66
If it weren’t for bailouts
67. That is when I am not rolling the dice…
Forget who it was here that cautioned me a few months back on an options trade and time value decay over a weekend; I got lucky and hit pretty well. Here we go again…..
Threw on a vertical call spread on BAC at close today. Yes, a bank reporting earnings in the face of bad reports by peers in a down market over a three day weekend with expiration next Fri. Hahahahahahaha.
Bought the 15s, sold the 16s. Net cost 17 cents.
Had to….over 115,000 contracts – 115,000 contracts mofo – of those options traded today with strikes between 14 and 16. That’s equal to the entire open interest, not even taking into the open interest ballooned yesterday especially at the 15.50s.
Me thinks someone much smarter than I knows something……
We’ll see. Popping a Three Philosophers after a long day. Tuesday I’ll brilliant or an idiot. Go BAC Go!!
Tuesday I’ll *be*
Darn beer.
Gillian < Detective Fish
Gilligan < Detective Fish
Damn autocorrect. Bad enough it doesn’t know sitcoms, the delay is maddening
That would be me…….the Chicago half, not the Cornell half……
leftwing says:
January 15, 2016 at 9:08 pm
67. That is when I am not rolling the dice…
Forget who it was here that cautioned me a few months back on an options trade and time value decay over a weekend; I got lucky and hit pretty well. Here we go again…..
I just realized I punked myself. I saw a post from a friend and posted the vigoda meme. But something nagged me about it because I thought Denver died a while ago. I went back and saw my friend had posted a 10 year old story.
Haha Chi, yeah, that was more a right brain move.
I don’t even know how I ended up here, but I thought this post was good. I don’t know who you are but certainly you are going to a famous blogger if you aren’t already ;) Cheers!