This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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Weekend Video Interlude
Ka-Ching by Shania Twain from the Up! album. I can’t help of think of Pink Floyd’s Money during the intro.
From Bloomberg:
Brokers Probed by Finra on Mortgage Security Sales, Person Says
U.S. regulators, concerned brokerages may have sold clients money-losing securities tied to subprime mortgages, are seeking information about how the investments were marketed, a person familiar with the situation said.
The Financial Industry Regulatory Authority, which polices about 5,100 brokerages, sent letters Dec. 14 to more than a dozen firms that sell collateralized mortgage obligations, a type of security linked to home-loan payments, said the person, who declined to be identified because the inquiry isn’t public. One letter obtained by Bloomberg seeks sales spreadsheets, marketing materials, and procedures and methods for matching products to clients’ investment needs.
Mounting losses from securities tied to home loans are prompting regulators to examine how Wall Street firms valued and promoted the products. Finra Chief Executive Officer Mary Schapiro said in September the agency was scrutinizing sales of mortgage-backed products to retirees, and had sent a round of letters seeking information on the transactions.
From the WSJ:
Wall Street’s Watchdog
Probes Brokerage CMOs
By KARA SCANNELL
January 4, 2008
Securities regulators, broadening their review of Wall Street’s role in the mortgage industry, have asked several brokerage firms for information about the marketing and sale of mortgage-related products, specifically those sold to individual investors.
The Financial Industry Regulatory Authority, Wall Street’s self-regulatory body, last month sent letters to firms asking for documents, including marketing materials, a list of supervisory policies and procedures, and descriptions of how collateralized mortgage obligations were valued, according to a copy of the letter reviewed by The Wall Street Journal.
The letters were sent to more than a dozen brokerage firms believed to be involved in the CMO market, one person familiar with the matter said. It is unclear which brokerage firms received the letter.
The letters, dated Dec. 14, were sent from Finra’s enforcement division in what has been described as a “sweep” investigation, which is a broad look at industrywide practices that doesn’t necessarily result in an enforcement action. The letter asks for PowerPoint presentations, sales scripts and detailed customer-account information from June 30, 2006, through July 31, 2007. Firms have until Tuesday to respond.
From the Baltimore Sun:
What will we do if big two go bust?
They don’t know it, but taxpayers stand to lose billions as the housing bubble bursts. And in a bipartisan effort to “do something” to save the housing market, President Bush and the Democratic Congress appear set to put taxpayers on the hook for billions more.
Until now, losses in the housing world have been confined to homeowners, mortgage lenders, banks and investors in toxic mortgage securities. But by virtue of the implicit federal guarantee backing mortgage giants Fannie Mae and Freddie Mac, U.S. taxpayers may be one of the largest mortgage lenders in the world – set to lose billions, like all the others.
Between them, Fannie Mae and Freddie Mac back more than $4 trillion in mortgages. If they fail, it could force an unprecedented taxpayer-funded bailout. And they are much closer to failure than most people realize.
From the Chicago Tribune:
Effects of lax lending standards settling in
There are increasing signs that the subprime home mortgage pain is spreading to other forms of consumer credit, economic observers say.
On Thursday, the American Bankers Association released data showing that for many types of consumer loans, delinquency has reached the highest rate since mid-2001, when the nation was in the embrace of recession. Delinquency is defined as payments that are 30 days or more overdue.
“There has been an increase in certain categories of delinquencies,” said Carol Kaplan, senior manager of public relations for the American Bankers Association. “We are seeing stress in housing-related loans and we anticipate that trend continuing.”
The delinquency rate of consumer auto, personal, home-equity, home-improvement and recreational vehicle loans has risen to 2.44 percent, the association said. That is the highest since the 2.51 percent reached six years ago. Hardest hit were residence-related loans, the association said.
…
Keith Gumbinger, vice president of financial information publisher HSH Associates, said that for years consumers could raise money by refinancing their homes and use the cash to pay down other debts. That has come to a halt, he said.
From the Star Ledger:
PATH fare to increase 25 cents, officials say
The Port Authority of New York and New Jersey is expected Friday to vote to increase PATH rail fares by a quarter instead of the originally proposed 50 cent increase, officials familiar with the plan said today.
PATH customers would pay $1.75 per trip, up from the current $1.50, while motorists using the Port Authority’s Hudson River and Staten Island crossings will pay $8, under hikes likely to be approved Friday by the agency’s board of commissioners.
From the Star Ledger:
Illegal pool gets its day in court
It may be winter, but summer will be the focus in a courtroom in Somerset County today, where at torneys will argue the fate of a pricey backyard swimming pool that may not be around when the weather heats up.
Lawyers for Bernards Township and the pool’s owners, Susan and Jeffrey Pesot, will appear in state Superior Court in Somerville to argue who is responsible for the illegally built swimming pool.
A motion filed by the township seeking to throw out a civil suit, filed by the Pesots last year, argues the couple misrepresented their permitted lot coverage after adding the pool. As a result, a permit was issued that allowed the start of construction in 2006. Now the township wants Judge Yolanda Ciccone to order the pool filled in.
The Pesots said they knew of no problems with the coverage, and the pool, along with a patio and fencing, was 90 percent completed, at a cost of $230,000, by the time the bad permit was detected.
The couple were furious, and finished the pool anyway for safety reasons. “I was not going to leave a concrete ditch in my backyard, under any circumstances,” said Jef frey Pesot, who sued after being denied variances for the pool in June.
Just as irate was their neighbor, former Bernards Mayor Mary Pav lini.
As it turned out, the pool’s construction in the backyard of the Pesot property, also fronted Pavli ni’s million-dollar home, which is for sale. Pavlini’s home fronts the Pesot backyard because it is on a flag-shaped lot, directly next door to the Pesots’.
From the AP via NorthJersey.com:
Mortgage rates fall to lowest level in a month
Rates on 30-year mortgages fell last week to the lowest level in a month as investors found new reasons to worry about a possible recession. Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 6.07 percent this week.
That was down from 6.17 percent last week and was the lowest level for 30-year mortgages since the week of Dec. 6, when they fell to a two-year low of 5.96 percent.
Rates on 15-year mortgages, a popular choice for refinancing, dropped to 5.68 percent this week, down from 5.79 percent last week. Rates on five-year adjustable-rate mortgages declined to 5.78 percent, compared with 5.90 percent last week. Rates on one-year ARMs fell to 5.47 percent, down from 5.53 percent last week.
From the NY Post:
SILVER’S RECKLESS BAILOUT
It sure must be nice to live in Assembly Speaker Shelly Silver’s consequence-free world – where Joe and Eileen Taxpayer can always be hit up to cover the losses of their less prudent neighbors.
Yesterday, Silver and his Assembly pals proposed socking taxpayers with a $180 million tab to bail out strapped subprime mortgage borrowers.
Now, if Albany were flush with cash, such a move would be merely wrong-headed and unfair. But with lawmakers already planning to spend $4.3 billion more than they collect in revenues next fiscal year, it’s beyond reckless.
In microcosm, it’s precisely this kind of thinking (it’s OK to spend more than you earn) that has led to so many borrowers facing foreclosure in the first place. Question is, who’ll bail out New York when it can’t pay its bills?
Oh, yeah: Joe and Eileen Taxpayer.
I wonder if Dodd’s regulatory fervor will be tempered now that he’s out of the race?
From the NY Times:
State Street Corp. Is Sued Over Pension Fund Losses
The State Street Corporation, which manages $2 trillion for pension funds and other institutions, ousted a senior executive on Thursday and said it would set aside $618 million to cover legal claims stemming from investments tied to mortgage securities.
State Street made the announcement after five clients sued it, claiming they had lost tens of millions of dollars in State Street funds that they were told would be largely invested in risk-free debt like Treasuries. One fund lost 28 percent of its value during the credit troubles in the summer after placing big bets on mortgage-related securities, according to the lawsuits.
The move by State Street highlights the legal challenges that lie ahead for financial firms that were involved in the origination, packaging and sale of complex mortgage securities.
This piece ran in the NYT yesterday, but was ‘registration required’.
Levitt’s failure leaves owners on the outside
Ettore and Larisa Costanzo are showing off their new house, which they love madly.
“Notice how we upgraded so there’s tile on all the floors,” said Ettore Costanzo, a retiree from Brooklyn. He pointed to the Kashmir granite in the kitchen. “It’s nice, no?”
Now if only they could get the keys and go inside, instead of peering in the windows like a couple of Peeping Toms.
The house, on which the couple made a down payment of $88,820, is empty. Their belongings are in storage. They live, unhappily, in a hotel.
…
Sixty-one years ago, Levitt began mass-producing homes on a patch of Long Island potato fields. It quickly built tens of thousands of houses in Long Island, New Jersey and Pennsylvania, creating the modern suburb in the process.
In recent years, the builder has been concentrating on projects for the children of the Levittown generation, the 78 million aging baby boomers. Its sales strategy leaned heavily on both the company’s long operating history and its long-ago achievements.
…
Everyone had plans for the clubhouse. Darr wanted to swim and work out. Andy and Pat Hudak were looking forward to dancing the jitterbug, as they used to.
“We didn’t buy a house; we bought a lifestyle,” said Hudak, 68, who ran a messenger service in New Jersey. They signed a contract in March 2006, paying $58,508 for a deposit and upgrades.
Selling a lifestyle was something Levitt perfected long ago. Thanks to the builder, Time magazine noted approvingly in a 1950 cover story, buying a house was suddenly easier than buying a car. The original cost was $6,990, about $70,000 in today’s dollars; government-backed mortgages and low down payments smoothed the way.
“NJ needs 115,000 affordable homes”
How about we move these people to Detroit? homes go for a $1, we can buy the entire city with our incentives.
[1],
Need a job? FINRA is hiring. Great growth opportinity.
Anyone else skeptical?
“A jump in ATM fraud led Citibank to slash the maximum amount of cash available to customers from their accounts – a security move greeted warily Wednesday by its patrons.”
“The new cap on cash kicked out by the company’s ATMs began in mid-December after what Citibank called “isolated fraudulent activity” around the city.”
“The bank, with 134 branches around town, would not say how many customers were affected or how much money was involved.”
http://www.nydailynews.com/money/2008/01/03/2008-01-03_citibank_limits_atm_cash_in_city-2.html
I have been reading your blog/comments since 12/12 when I accidently hit upon your site after reading Greenspan’s book. I was seeking an update on his comments re housing (I couldn’t believe he never referenced his zeal in 2004 for “alternative lending” practices.)
I live in the Central Valley of California -Fresno/Clovis area – where I have seen foreclosures steadily increase over the last several months -(45 in the Fresno Bee last week -60 this week.)Our housing problem is two-fold,over-built (builders materialized out of nowhere) and existing home sales/foreclosures. All appear to be continuing to fall in price.
I personally started over (post-divorce) by returning to the area from Oregon in 97 -$40 thou in debt, lost my house, two in college, no support. I am one of those dreaded school teachers. I took a second job at Border’s books nights and weekends, lived in an apartment for 4plus years, and taught summer school plus Borders summers to save the 5% down for a modest home.
Bought 1100 sq. ft. in 2001 for $105(At its peak in 2006 – supposedly worth $285 – now down to $200.) Doesn’t matter. I’m just trying to pay extra (4.75 – 15yr. w/ Wells)to get it paid off by the time I retire.
Good credit – I ate crackers and peanut butter for months on end to keep the girls in college and my bills paid on time. (Yes, they both graduated -yes, I had to pay for the weddings myself – yes, I have two wonderful grandchildren.)
I find your blog facinating! and funny..
I’m just a reader..Much too uninformed to comment. I can tell you this..2 things..
First – My school district (non-union BTW)is beginning to feel the ramifications of the housing problem. We are now a “declining enrollment” district – first time ever.
Second – Without the prop. 98 – 3% cap on R/E taxes rule- I would have never been able to buy a home. (I’m one of those $65 thou folks you refer to.)
Oh yeah, we DO supervise our students before school… two teacher-assigned duties 7:45 to 8:00 – 8:00 to 8:15 when school begins.(busses start their drop offs by 7:45.)
Well, I’ll keep quiet..a very interested reader. You are all so informative – about everything! I love your site..keep up the excellent work in 2008.
Foreigners buying in manhattan.
TOKYO (AP) — Japanese stocks plunged Friday to their lowest finish since July 2006 after jittery trade on Wall Street amid concerns about the U.S. economy and rising oil prices.
Japan’s benchmark Nikkei index lost 616.37 points, or 4.03 percent, to finish Friday’s half-day session at 14,691.41 points on the Tokyo Stock Exchange — it’s lowest since it closed at 14,500.26 points on July 19, 2006
my personal take on all this foreign buying in Manhatttan is that its going to end and its going to end bad! with the dollar declining, it may just keep that market up for a bit longer but as soon as the dollar starts to stabilize (which it is already poised to do) combined with the some $300B in money that just vanished from the subprime / credit mess, those foreign RE investors are going to go somewhere else! china maybe? india? Stay in Europe?
bottom line is that they are buying here as investors and we all know what is happening to the average american who ‘invested’ in an overspeculated RE market! it just takes a little longer for the foreigners with RE investments here to catch up – thats all…
TIME WILL TELL…..
Here is a good use for all those empty houses.
http://news.yahoo.com/s/ap/20080104/ap_on_bi_ge/war_wounded_finances;_ylt=Aiez_ey2tEmnrbQ8_2tyGns_r7sF
OUCH. NFP up 18K.
From MarketWatch:
U.S. jobless rate jumps to 5% as payrolls grow 18,000
The unemployment rate shot up to 5% in December as job growth stalled, a sign that the U.S. economic slump has spread to the labor market. U.S. seasonally adjusted nonfarm payrolls rose by 18,000 in December, the weakest job growth since August 2003, according to a survey of thousands of businesses. Job growth was revised up by a total of 10,000 in November and October. Economists were expecting payrolls to increase about 58,000 in December. Private-sector payrolls fell by 13,000, the biggest decline in more than four years. A separate survey of households showed employment plunging by 436,000, marking the biggest decline in five years. The number of unemployed adults rose by 474,000, pushing the unemployment rate up to 5.0% from 4.7%.
Keep in mind that these labor numbers do not include the Merrill Lynch or Citi cuts which have a ripple effect.
Let the puking begin
CAIBC [17],
I agree. It’s dejavu time. Similar to when the Japanese were buying Manhattan in the late 80’s? They eventually puked it out, monster losses.
My black box crashed when I fed it these new numbers.
private sector payrolls were actually worse –
U.S. Dec. private-sector payrolls fall 13,000
#22 BC
Excerpt from a 1992 article……dejavu all over again
WASHINGTON: Every week, it seemed, newspapers reported the sale of some other American landmark – Rockefeller Center, the Pebble Beach golf course, Arco Plaza in Los Angeles. Even cattle ranches were being sold to investors from Japan, who seemed to have endless supplies of money and optimism about the U.S. market.
In 1990, Japanese investors spent close to $13 billion on U.S. real estate. For many Americans, the purchases brought home dramatically Japan’s emergence as a potent force in another area of their country’s economy. Japanese diplomats began to worry about “investment friction.”
Suddenly, the boom has cooled.
Recession at home and imploding values in the United States have caused these new investors to rein in their enthusiasm. A few have done what Japanese businesses supposedly never do, they have put their U.S. properties on the market, sometimes at a loss.
New Japanese real estate investment in 1991 plummeted 61 percent, according to a study by the accounting firm Kenneth Leventhal & Co., which tracks the industry. The year’s $5-billion figure represents the smallest infusion into the U.S. market since 1985.
grim, your black box may be a good tell of what is about to happen to the stock market this morning!
BC #14:
I saw that yesterday on Dealbreaker. The cynics among us might view that as an attempt by C to hoard cash, no????
Time to move up the sell stops.
caibc,
Rate cut rally seems more likely to me. I’m sure someone is going to come forward this morning and say “50bps is in the bag”.
hehe [27],
I agree. The cynic in me says Citi is bankrupt and being propped up by our Treasury. Didn’t they recently restrict wire transfers? ATM fraud? My a##.
Futures Contracts
Fed funds futures contracts on the Chicago Board of Trade showed a 70 percent chance that policy makers will lower the target rate for overnight lending between banks a quarter- percentage point to 4 percent at their meeting Jan. 30. The odds of a half-point reduction were 30 percent.
Odds of a cut in the funds rate to 3.75 percent increased this week from zero as earlier reports showed weakness in private employment indicators and manufacturing.
BC,
Anytime I see ATM I immediately think “fees”. I admit, when I use another banks ATM and there is a fee, I tend to make large withdrawls to minimize the percentage impact of that fee. If I am going to pay a $2 fee to use an ATM, I’m going to take out the maximum amount.
C could just be getting tired of people like me draining their ATMs.
I cringe at the thought of people paying $3 ATM fees to take out a twenty.
If Citi is really that broke then Jaimie Dimon is pitching a pup tent in his pants at the thought of buying Smith Barney at a fire sale price.
BC Bob Says:
January 4th, 2008 at 8:52 am
hehe [27],
I agree. The cynic in me says Citi is bankrupt and being propped up by our Treasury. Didn’t they recently restrict wire transfers? ATM fraud? My a##.
grim (9)-
I wonder whether he’ll be on a beach somewhere by noon tomorrow.
Cindy [15],
I admire your hard work and determination; kudos to you! Your story is inspiring!
BC (14)-
Expect to see a Northern Rock-type scene at Citi branches sometime between now and March.
Will be interesting to see riot police- a la Giuliani- come in and break up the crowds.
Cindy (15)-
You made my day & it’s not even 9 AM yet. Good luck to you!
Would love to be a fly on the wall for the
PPT meeting.Jobs #s falling in line with the expected reccession.Now ths fed can cut away to no avale.Talking heads just brought up stagflation CNBC.First time I have heard them bring it up.Just a little behind the curve.That was some ugly #.Fed 50 point in the bag.
grim,
i have a funny feeling that even the “50bps is in the bag” comment (which you predicted and i agree will happen sooner than later) wont be enough to stop the bears today! its going to tank hard! lets hope not……
i think this economy is starting to come back to reality now! its sad that its at the expense of those of us that keep this economy going – the middle class!
celebrity equivalent of the housing market….
http://www.nypost.com/seven/01042008/news/nationalnews/cops__intoxicated_spears_hands_over_kids_609314.htm
# 17 “bottom line is that they are buying here as investors and we all know what is happening to the average american who ‘invested’ in an overspeculated RE market!”
It will also be interesting to see how foreigners react to NY taxes, especially if the state tries to reach into their pockets for income tax. It is one thing to buy a place in a city you just adore or one in which you spend lots of time and want to avoid hotels. It is another thing to endure high tax rates on a speculative venture – especially if prices begin to level off. The opportunity cost of parking $ in an investment that is not appreciating in value (and which is subject to large property taxes, energy bills, perhaps building maint fees) is high and may not be attractive to more than a few hundred (or thousand) high-wealth individuals.
I thought the middle class got us in to this mess getting on over their head on 2000 bubble stocks, then 2001 zero percent financing Esclades, then 2002 to 2005 RE Bubble and oh yea trade in the 2001 Escalade for a 2005 because of “Employee Pricing” then off to 2006/2007 for Commodities day trading and then on to 2008 where we are now bailing them out so they can stock up on $999 plazmas at Walmart and oh wait GM looks like they will have some red tag sales event so they might as well trade in the 2005 Escalade for a 2008. The middle class is one big pain, my favorite today is that the SUNY schools are thinking of doing a middle class special to give everyone under 150K a year income a big break on tuition as they can’t afford to pay for their kids schools, What the heck, SUNY is like $4500 a year and they had 18 years to save and I got to pay for that too! Send them all to cleveland and detroit in those dollar HUD homes. In my neighborhood at Christmas time the ones with thousands of dollars of blow up things and lights on their lawn are usually the brokest, it is time we stop giving these addicts cheap financing as they can’t help themselves, cut up their Credit Cards, cancel their HELOCS and tell them that once upon a time people went to deposit money in a bank not just got their to borrow money.
From Bloomberg:
Dollar Falls to One-Month Low Versus Euro on Payroll Report
The dollar fell to a one-month low against the euro and dropped versus the yen after a government report showed U.S. employers added fewer jobs in December than economists forecast.
Demand for the U.S. currency decreased as investors bet the Federal Reserve will cut borrowing costs by a half-percentage point at its meeting this month. The dollar dropped against 14 of the 16 most actively traded currencies last year on speculation the worst housing slump since 1991 and credit-market losses would lead to a recession.
“This restarts all the fears and concerns about a dollar decline,” said Robert Sinche, head of global currency strategy at Bank of America Corp. in New York. “The market will start discounting a significant probability that the Fed will cut by 50 basis points this month.”
#40 “LOS ANGELES — Britney Spears was reportedly under suicide watch overnight after a three-hour drunken standoff with K-Fed over their children resulted in the failed pop star being taken away in an ambulance. ”
I bear no animus towards Ms Spears, and would have a hard time picking her out of a police line-up or identifying one of her songs, still, it would be good to be free of the background chatter of her disfunctional life. Every couple of years a new “pop tart” emerges, contributes nothing to music, film, society then blows up, burns out, or fades away only to be replaced by a new flavor of the month. I did not care for them when I was 14, and I sure as heck do not now. Still, it is amazing how many people seem to be able to recount minute details of the lives and loves (or at least lusts) of such peoples’ lives but cannot recount anything meaningful about the economy, our political system and the like. Maybe if Spears sang a song about saving a downpayment, not spending more than one earns, and not keeping up with the Joneses it would make an impression on those who mindlessly go through life, and home purchases.
caibc
“as soon as the dollar starts to stabilize (which it is already poised to do)”
Dollar stabilizing????
What factors led you to believe this? You are aware that Fed will continue to lower rates as we get deeper in this recession, are you?
What fundamentals you see for being long on the dollar?
#42
not sure why it didn’t post but i was doing a
(slow 1980’s movie clap) in response to John.
Maybe if Spears sang a song about saving a downpayment, not spending more than one earns, and not keeping up with the Joneses it would make an impression on those who mindlessly go through life, and home purchases.
Highly recommended.
http://youtube.com/watch?v=I42c6RP04xU
Shania Twain
Ka-Ching
We live in a greedy little world
That teaches every little boy and girl
To earn as much as they can possibly
Then turn around and
Spend it foolishly
We’ve created us a credit card mess
We spend the money we don’t possess
Our religion is to go and blow it all
So it’s shoppin’ every Sunday at the mall
All we ever want is more
A lot more than we had before
So take me to the nearest store
Can you hear it ring
It makes you wanna sing
It’s such a beautiful thing–Ka-ching!
Lots of diamond rings
The happiness it brings
You’ll live like a king
With lots of money and things
When you’re broke go and get a loan
Take out another mortgage on your home
Consolidate so you can afford
To go and spend some more when you get bored
All we ever want is more
A lot more than we had before
So take me to the nearest store
Can you hear it ring
It makes you wanna sing
It’s such a beautiful thing–Ka-ching!
Lots of diamond rings
The happiness it brings
You’ll live like a king
With lots of money and things
Let’s swing
Dig deeper in your pocket
Oh, yeah, ha
Come on I know you’ve got it
Dig deeper in your wallet
Oh
All we ever want is more
A lot more than we had before
So take me to the nearest store
Can you hear it ring
It makes you wanna sing
It’s such a beautiful thing–Ka-ching!
Lots of diamond rings
The happiness it brings
You’ll live like a king
With lots of money and things
Can you hear it ring
It makes you wanna sing
You’ll live like a king
With lots of money and things
Ka-ching!
$45 ““as soon as the dollar starts to stabilize (which it is already poised to do)”
Dollar stabilizing????”
This reminds me of the night my father died. For a number of hours his blood pressure just started to drop. It was not a significant drop at first, just something that got noticed. As it steadily dropped, the physicians kept doing this and that to stabilize it. Eventually, the drop reached the point that organs failed. In the final analysis, while the medical folks were obsessing over what they could se, the hidden effects caused his demise well before theythought that the blood pressure decline should be a problem.
Lets assume for the moment that the Euro at 1.47, 1.48, 1.49 dollars is not in and of itself a big deal; is there some aspect of the economy that we (the Fed, Treasury, Wall Street) are not focusing uponthat is ready to bite us in the proverbial bottom?
Re Manhattan:
Also think this is a blip.
Rush of foreigners buying now are looking at year old news about the falling US RE market, seeing the low dollar and thinking they got a deal. Their own RE markets are starting to tank an they haven’t yet felt the knock-on effect pain yet.
They will. Sterling is already weaker. Those Manhattan investments will start to look a whole lot less rational in the cold hard light of the morning. UK residents obsessed with Florida are already feeling the pain, you’d think they would learn.
Be grateful that the credit issues are global, and not local. Otherwise this area would be turning into Miami/Orlando or the coast of Spain – just a giant retirement community for people from other places looking for somewhere cheap to retire.
# 45 that is, not “$.”
Cindy – thanks for sharing and welcome.
Hope you get your house paid off in timely fashion.
Oh – and most teachers here do have outside duty – at my school they certainly do, they line the paths of the school in the mornings and afternoons.
Thanks for the welcome…
Ooops! (I warned you I was uninformed -and living in Oregon during this time…)
Correction: 30 years ago it was prop. 13 that limited property taxes…Prop 98 – 10 years ago guaranteed schools 40% of the budget. Dan Walters in today’s Bee adds “Spending on prisons exploded from less than 3% of a $20 billion general fund budget to nearly 10% of a $100-plus billion budget, thanks in part to a powerful prison guard’s union.” Whatever – We spend more than we make here in California!
Sorry about that..
Cindy
Out in LI the volunteer parents are on valet duty and hall monitor duty while the teachers finish up their starbucks in their heated mercedes seats while the parents are freezing in the cold.
Mornin’ everybody. Can somebody please give me some information on MLS #2470816 in Morris Plains? Thanks!
grim Says:
January 4th, 2008 at 9:40 am
Shania Twain
grim: I’m no Mutt Lange fan. He wrecked the sound of Def Leppard (although responsible for its original), the Cars, and obviously Shania Twain….ironic that the song itself is a sellout given its subject matter….
# 56
This is the first musiv video I have watched since, umm, I thing Reagan was still president, well, maybe GHW Bush. Looking at the images, it made me think of 1927.
Shiller comments:
http://commonsenseforecaster.blogspot.com/2008/01/robert-shiller-is-very-bearish-on.html
#42 #44 #48….
Right on dudes!
Ka-ching
I was in banking for 12 years before I renewed my credential (post children) and we would have NEVER handed out loans like these…
I worked as a note teller in the 70’s for UCB and I had to walk around to the lending officers and have them okay contract collection interest changes (tied to prime) – we watched many a business go under paying 18% on their operating loans…
We WATCHED THEM GO under – we didn’t try to save them!
Different times..
Cindy
Word on the streets is Wall Street is going to have massive layoffs. HAHAHAHA
Oh and John you keep talking smack about the middle class. Well buddy most of this country is made up of middle class folk like myself.
You say people who make average incomes should not be able to buy 4 bedroom homes.
First not all of us live about our means. 2nd not all 4 bedrooms are mc mansions
And most important 70% of NJ makes 100k and under. So you keep telling yourself that home prices will not fall. I blame all NYC commuter for the over priced market in this state. Why??? Very simple becuase now most everywhere in NJ is an easy commute to NYC therefore people were able to up the prices for the commuters. So John I blame you and people just like you for screwing up NJ.
So I will be the one laughing in the end when prices continue to plummit, and people cry becuase there house is worth a whole heck of alot less than it was in 2005.
By the way you need to do a little more research before you go running your mouth
Most of Jersey does not want to live in Berger King county or care about a train town. And there are plenty of nice towns that are safe and have good schools thats houses are 350k and below.
Hey we can’t all be schmucks like you and over pay to live in some chincy BK county town like Milburn or Hobo-oken.
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RF 21.67, -1.61, -6.9%) stock fell 6%. The bank said Thursday that it plans to increase its loan loss provision to about $360 million in the fourth quarter, an increase of about $270 million from the third quarter, due to weakening credit quality mostly in its residential building loan portfolio. Regions also expects to record about $131 million of additional pre-tax charges in the fourth quarter, excluding merger-related expense.
Remember….past performance is no indicator……
WSJ Fund Track
And the Mutual-Fund Oscars Go to …
Morningstar Singles Out Fidelity’s Danoff on Stocks, Pimco’s Gross on Bonds
By MURRAY COLEMAN
January 4, 2008; Page C13
Two well-known mutual-fund managers who steered clear of the subprime-loan downturn in 2007 and delivered impressive returns to stock and bond investors received honors yesterday from investment researcher Morningstar Inc.
Will Danoff, of Fidelity Contrafund, one of the country’s biggest mutual funds, and the smaller Fidelity Advisor New Insights Fund, was named Morningstar Domestic Stock Fund Manager of the Year.
Meanwhile, Morningstar’s Fixed-Income Manager of the Year went to Pacific Investment Management Co.’s Bill Gross. His team running Pimco Total Return and Harbor Bond Fund has won the award three times. Pimco is a unit of Allianz SE.
Separately, Hakan Castegren, lead manager at Harbor International Fund, was selected International Stock Manager of the Year, an award he won also in 1996. The foreign large-cap value fund returned 21.8% in 2007, topping 96% of its class, Morningstar said.
Mr. Danoff led the $80.8 billion Contrafund to a 19.8% gain in 2007, topping its large-cap growth category average by more than six percentage points, according to Morningstar.
Technology stocks worked especially well in 2007 for the fund, which is closed to new investors. Mr. Danoff pointed to top performers including Research In Motion Ltd, Google Inc. and Apple Inc.
“Avoiding financials was a big win, as well,” Mr. Danoff said. “When I saw many of the issues financials were wading through, I stepped back.”
If markets decline in 2008, he adds, Contrafund’s team will likely use it as an opportunity for long-term-minded shareholders to buy into companies with strong fundamentals and top management.
Mr. Danoff says another key performer in 2007 was the fund’s investment in energy and materials sectors. “Those turned out to be very good this year, and that really helped the fund’s returns,” he added. “And with decent demand coming out of emerging markets, prices continue to be strong.”
Morningstar gives awards to managers each January based on strong investment performance in the previous calendar year, superior long-term results, and a proven commitment to investors in their funds.
“All of this year’s winners made real money for investors this year as well as over longer periods,” said Christine Benz, director of mutual-fund analysis at Morningstar. “These are all very consistent performers.”
She noted that Mr. Danoff’s Contrafund dropped 10% in 2002 versus the broader market’s 22.1% loss. During the past 10 years, the fund’s average annualized return of 10.7% tops 96% of its large-cap growth rivals, Ms. Benz added.
“It was a $30 billion in assets-under-management fund,” Ms. Benz said. “Danoff’s record has built quite a following over the years.”
Morningstar emphasized that its international award in 2007 went to the team Castegren leads, which includes analysts at asset manager from Boston-based Northern Cross International Investment Management.
“The team has shown a lot of patience in looking for bargain stocks,” Ms. Benz said. “He’s very long-term focused and has been on the fund for 20 years. This is another large fund, with $27.2 billion in assets and very stable management.”
Meanwhile, Mr. Gross is one of the most-respected bond-fund managers in the business, she added. “He’s our only three-time winner,” Ms. Benz said. “He’s a manager who isn’t afraid to take bold stances when he and his team thinks it will profit investors over the long term.”
For example, in 2006, long before anyone else was worried about a downturn in housing, Mr. Gross moved to shield his portfolios from a downturn, Ms. Benz said. “At first, that led the fund to look out of step with its intermediate bond-fund peers,” she added.
Still, Pimco Total Return was able to put up results close to the category’s average. “But that was relatively weak for such a strong long-term performer,” Ms. Benz said. “It’s not typically an average, run-of-the-mill type of bond fund.”
[edit]
David Malpass of Bear Stears says:
http://www.iht.com/articles/2008/01/04/business/wbdance.php
Homer 360,
…ow most everywhere in NJ is an easy commute to NYC therefore people were able to up the prices for the commuters. So John I blame you and people just like you for screwing up NJ.
Or you could blame NJ Transit, the private bus companies, the turnpike, the parkway and the interstates, all for providing a service the commuters are willing to use. And the ferries, too. Let’s get rid of all that, let’s really stick it to the commuters. That’ll fix Jersey.
John #42 – Amen!
The American middle class has unrealistic expectations for its lifestyle. Two new cars, vacations in Cabo, media rooms, etc. for everyone. It can’t go on forever, and it won’t.
re: 40 One of my predicitons was she would be dead by 2010, I may have to adjust my predictions.
Some day you will find me
Caught beneath the landslide
In a champagne supernova in the sky…..
wow, that shania song is just.. just.. awful.
musicians should just totally avoid trying to teach morals in their songs, especially ones that involve spending money foolishly.
i wonder when we’ll see her on ‘Cribs’.
From WSJ:
http://blogs.wsj.com/deals/2008/01/03/citi-and-jp-morgan-predict-a-buffet-of-defaults/
bewm,
17 Sunset Road
OLP/LP: $379,900
DOM: 1
No prior MLS history, but the listing does mention that it’s an estate sale.
This is a repost from yesterday.
Hi, can anyone get me the street address of GSMLS # 2460687 ? This is in Pway.
Thanks.
Hey Homer I could give a crap if houses fall to zero! I can’t afford a four bedroom home and I don’t think anyone with less than three kids should be living in one.
Most Middle Class people no longer have free medical in retirements and will spend around 250K in medical in retirement, most have 2-3 kids and college even if you are doing a 50/50 will run around 200k, middleclass do not have a pension so they should be putting 15.5K in the 401K each year. Everyone should have at least 3 months salary in the bank for emergency and no one who is middle class should be buying cars and big ticket items on credit, they should save and buy cash as who knows when you could lose your job.
So where in your fantasyland can a 65K person with three kids be able to remain fiscally responsible and afford a FOUR bedroom house in NJ?
BTW YOU ARE LIVING BEYOND YOUR MEANS if you are taking a car loan, puting dinner on the card, getting a HELOC to do a renovation, skipping funding your retirement or saving for your kids education. What about things like weddings, I heard it is now popular for kids to pay a 1/3 the groom parents to pay a 1/3 and the bride parents to pay a 1/3. I am sure your kids new in-laws will love you when you tell them you blew all your money on a underwater four bedroom andthey will have to cover it.
My problem is not with the hard working and saving middle class. My problem is the spending middle class expect me and the rest of the hard working and saving middle class to cover for them.
When I made 100K I save 50% of my take home salary each month, how much do you save? A lot of 70K people near me have lawn service, maid service, daycare, take out food, cable, high speed internet, new leased foreign cars When they retire they won’t have a pot to piss in and will stick the kids with the bills. The housing free ride is over, The ATM machine is broken, live in as small and cheap a house as possible and start saving for the future.
Market down 202 at 11:00. Going back to a thread from a couple of days ago, I guess we may see 12,000- 12,250 sometime this year.
Can anyone recomend any good ways of converting dollars to Euros and GB Pounds and then placing them in European banks and non-dollar-denominated investment vehicles? I am not looking to move much right now, maybe $20-25,000.00. Just a bit to hedge against a meltdown.
#40 LMAO and PIMP
Welcome Cindy! Your story reminds me of my in-laws telling me about when they were living on peanut butter and jelly (and every other cheap meal) to make their mortgage and bills.
I was pretty naive when hubby and I just started house hunting. I told my colleagues that I was looking for more work hrs so that we would pass the paystub/taxform inspection when looking for a mortgage.
They laughed at me, “Nobody checks that anymore.” I felt pretty stupid. Didn’t realize just how messed up the system was.
sl
An overview of recent events from Weiss Research:
http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1332
From MarketWatch:
Services-sector growth slows slightly in Dec., ISM says
Growth in the nonmanufacturing side of the U.S. economy grew at a slightly slower pace in December, the Institute for Supply Management reported Friday. The ISM nonmanufacturing index fell to 53.9% in December from 54.1% in November. The reading was close to the 53.8% expected by economists. Readings over 50% indicate most firms are expanding. Five of 18 industries were growing in December: retail, information, professional services, construction and health care. Eight industries were contracting.
http://www.ise.com/WebForm/options_product_fxOptions.aspx?categoryId=98&header0=true&menu2=true&link1=true
ISE FX Options can be cheap and easy currency hedge.
re: 27 & 33
Check out Citi’s limits on transfers – 10k monthy.
Limits on IIT Transfers
Type of Limit Standard Transfers Next Day Transfers
Incoming
Daily $100,000 $1,000
Monthly* $100,000 $2,500
Outgoing
Daily $2,000 $1,000
Monthly* $10,000 $2,500
https://web.da-us.citibank.com/tandcFiles/printable_cashedge.htm
The foreign investors I know are middle income baby boomers that happen to have an extra $500k around to buy a modest Manhattan condo or coop. A few years ago the exchange was $1.46 to 1 GPB, now it’s $1.97, and just a few weeks ago it was over $2.
People use the condos for part of the year, and rent them out as self-catering flats to travelers, cutting their overhead expenses. When they do come here EVERYTHING is on sale. You would be hard pressed to find something that is cheaper in the UK then in the USA.
Sorry, but to the rest of the world America is currently on sale. And they only really loose if: real-estate in Manhattan really plummits while the dollar stays low.
Employment breakdown:
http://www.rgemonitor.com/
(note losses in manufacturing!)
grim, thanks again as always!
Bewm,
That’s a great block! I think the house is a little smaller then some of the other split levels on the block (when you compare price), and there is an eye-sore next door (constant work in progress), but great block and really nice area. I was trying to convince one of my friends to buy that house.
Good luck
#71 John: I have to agree with you on much of what you say.
When I owned, and even now that I rent, I am one of the few people on my block that mowed/mow their own lawn, absolutely mazing.
I know quite afew people with modest incomes, and everyday jobs, who have once a week house cleaners.
I am not that self important, where I need someone to come in and clean my house for me.
You are right, in that services that were once reserved for the truly wealthy have now been embraced by everyday people.
[72] Shore Guy
I’m interested in this too.
Serious check out ISE FX Options to do the hedge. It is an equity option you can do on line cheap at your own bd cheap and on your own.
spam spam bacon spam Says:
January 4th, 2008 at 11:23 am
[72] Shore Guy
I’m interested in this too.
Sync,
14 Chelsea Drive
#83
I am not an alarmist, not by any stretch of the imagination. Still, just like when I was 14 and had no particular expectation of needing a condom on any given day I still kept a couple in the wallet. Besides, having few thousand GBP in the bank in London and Euros in Paris would make it easier to chash a check when over there.
I agree with John, also. When we get together at a social event with the parents from school, the conversation always turns to the latest goody purchase or next vacation destination. I pointed this out to my wife a long time ago and she said, “yeah, you’re right.” I too, mow my own lawn. When did we all become so privileged? The answer is, we didn’t. The plebs are just following along because it’s the “normal” thing to do.
Can anyone recomend any good ways of converting dollars to Euros and GB Pounds and then placing them in European banks and non-dollar-denominated investment vehicles? I am not looking to move much right now, maybe $20-25,000.00. Just a bit to hedge against a meltdown.
I would stay away from british pounds if I were you. GLD or swiss francs is a good alternative to the Euro.
#87 gary: Yes,and do not forget that winter vacation to the DR;its a must,in ones quest to keep up with the Jones’s
To 72- Shore guy & 83 Spam Spam Bacon:
Look up http://www.offshore.hsbc.com & follow to online savings. You can transfer from a US branch or use http://www.XE.com to send it. They will all check your paperwork.
And remember you got to check??? and fill out that little box in the 1040 saying you have more than 10 thousand in offshore… Yeahh right…
3B,
DR is a must for the gardener or the nanny, my wife wouldn’t get caught dead in the Domenican Republic.
She wants for me to approve her to spend a mandatory 20K a year to have our own personal doctor. There is this supposedly good doctor who will only see 10-15 families a year and charges 20 per family. She tells me that all her friends have him and Elisa lost 15 pounds with his guidance and everyone is super healthy.
He does house visits, performs a physical examination and says” you seem very stressed”.
DUH!!
grim #85,
Awesome, thanks! :)
3B,
DR is a must for the gardener or the nanny, my wife wouldn’t get caught dead in the Domenican Republic.
She wants for me to approve her to spend a mandatory 20K a year to have our own personal doctor. There is this supposedly good doctor who will only see 10-15 families a year and charges 20K per family. She tells me that all her friends have him and Elisa lost 15 pounds with his guidance and everyone is super healthy.
He does house visits, performs a physical examination and says” you seem very stressed”. All this a for a mere $1700 per month.
You can tell everyone that you pimp a doctor.
I can’t wait for this recession already. Job loss numbers are starting to head in the right direction.
#82 I am also one of 3 or 4 out of 30 houses on my block that doesn’t use a lawn service (lots are about a 1/4 acre). But I am the only one that uses a push mower, no gas, no electric. I received a lot of good natured teasing, but no trips to the gas station.
What ever happened to kids in Jr. High being the ‘lawn service’ anyway?
I mowed a couple of neighborhood lawns for spending cash when I was a kid. No big deal, few minutes time, paid under the table.
I guess that makes me no better than an illegal?
I pay for Lawn Service at my Mother in Law’s house 3 hours away in PA!
#90 Thanks.
http://www.offshore.hsbc.com/1/2/international/savings-accounts?WT.ac=HBIB_1501_OS
http://www.offshore.hsbc.com/1/2/international/current-accounts/money-in
For anyone else interested.
From the WSJ:
S&P Puts $6.4 Billion in CDOs
On Watch for Cuts in Ratings
By KATHY SHWIFF
January 4, 2008 11:31 a.m.
Standard & Poor’s Ratings Services has placed on watch for possible downgrade its ratings on 149 tranches worth a total of $6.42 billion from 43 U.S. cash flow and hybrid collateralized debt obligation of asset-backed securities transactions.
The move follows last month’s downgrade of 793 classes of U.S. residential mortgage-backed securities backed by U.S. closed-end second-lien mortgage collateral issued in 2004, 2005 and 2006.
All of the CDO tranches with ratings placed on CreditWatch with negative implications are from CDOs of asset-backed securities collateralized by structured finance securities, including U.S. RMBS backed by closed-end second-lien collateral.
CDOs, which use sliced-and-diced assets such as subprime-mortgage bonds to create customized products offering various levels of risk, have been at the heart of steep write-downs at big banks and brokerage firms.
Grim [95],
Are you kidding me? Teenagers mowing the lawn for money? How are they supposed to text message and mow the lawn at the same time? And besides, what would everyone think if they saw a grass stain on their Diesel jeans. Like…. hello??
Problem with mowing your own lawn, is it avoids the Corzine Tax. Corzine as of 7/06 charges Sales Tax (Homeowner) & Income Tax (Vendor) on your Lawn Service. He’ll be at his wit’s end if you dry up this Cash Cow. He may have to institute a USE Tax, in lieu of Sales Tax, on the Homeowner cutting their own lawn.
gary,
I never wore my Z. Cavaricci jeans (or Black Reeboks) to mow a lawn.
The Fed is now going to make $60 Billion to banks in its january auction. Humm, the $20 Billion in December was supposed to quiet things. NOW we are looking at trippling the emergency infusion. At what point do we start sparking inflation? And, when inflation kicks in, during a sinking economy, which do we attack — rising prices by jacking up rates or growth by cutting them. The last time things felt like this we were in Leisure Suits and laughing at the escapades of Billy Carter.
Where the heck is Paul Volker when you need him?
Are we going to see black-market lawn services springing up? MAybe using reel mowers during the middle of the night?
http://blogs.wsj.com/juggle/2008/01/02/when-a-wife-outearns-her-husband/
this is a good article for chicago finance
Hey grim,
How about those Edwin jeans?? :-)
sl
The dollar stable????
In my worthless opinion the dollar is anything but stable. We may have slowed the decent for a bit but the bigger economic picture of both US and Global economics all lean towards the dollar continuing to fall.
Shore Guy,
I agree with make money. The GBP is poised to take a substanatial drop. Swiss francs are probably one of the safe currencies to park a rainy day fund in and i personally hold a reasonable amount of silver/gold. IF you go the precious metal rioute for a rainy day fund then you might want to consider purchasing the physical material and putting it in a safe deposit box/ safe. I think it was merryl lynch who got sued recently for selling silver that they didnt actually have in their vaults. If its truely a rainy day fund then you should make sure you would actually have access to it in short order.
SL,
Emailed you.
Most men if they could get their mother-in-laws to mover three hours away would also pay for their lawn service.
Doyle Says:
January 4th, 2008 at 12:01 pm
I pay for Lawn Service at my Mother in Law’s house 3 hours away in PA
Re Corzine as of 7/06 charges Sales Tax (Homeowner) & Income Tax (Vendor) on your Lawn Service.
How does he collect it off illegals? Is it paid in pesos?
But I did see you in a members only jacket with some capizzos!
grim Says:
January 4th, 2008 at 12:14 pm
gary,
I never wore my Z. Cavaricci jeans (or Black Reeboks) to mow a lawn.
Lisoosh # 50
I agree, Many parts of europe are set for housing crashes themselves are most people are not aware of it. The UK is next in line and their markets are already showing stress fractures, heck they have already had bank runs. Spian may be the next in line after the UK, they have a growing amount of unrest as their middle class is being squeezed just like the middle class in NJ as their housing prices sky rocket. On top of this, there is apperntly some questions of the long term stability of the euros value ( still researching the claims i have read on this)
the dollar is way oversold. Look at the bond market– they are saying we are in deflation and they are not fools.
Headline inflation way up in the Euro. Don’t drink the weak dollar cool-aid.
grim,
Do you think the youngsters even know how to mow a lawn?
#72 I’m sorry if this sounds condecending, but investing in forex is something that even very smart pros routinely get wrong. Also, for what it’s worth, a lot of smart money expects the $ to appreciate against other major currencies this year – it’s stretched really far into cheapness right now (smart money being asset allocation groups at UBS and Mellon, plus a few hedge funds I’m familiar with). An alternative to investing your funds in a foreigh country is to buy a US CD. Also, if your spending is dollar based, a dollar decline won’t make much difference to you.
From the WSJ:
Home Prices Must Fall Far
To Be In Sync With Rents
By GREG IP
January 3, 2008; Page A2
U.S. house prices “likely would have to fall considerably” to return to a normal relationship with rents, says a study by one former and two current Federal Reserve economists.
The study, which doesn’t necessarily reflect the views of Fed policy makers, suggests prices would have to fall 15% over five years, assuming rents rose 4% a year. House prices would have to fall further if the adjustment took place more quickly.
http://online.wsj.com/article/SB119931831334463571.html?mod=hps_us_mostpop_viewed
This is how the banks should start collecting their cash.
Where’s my money?
#114 In general, I don’t know that I disagree with you. That said, our fundamentals are dreadful. Inasmuch as $25,000 is not a big deal to us, putting some of this overseas in a different currency will provide some psychic peace. I do not expect the dollar to drop by 50% anytime soon, nevertheless, in case of a meltdown, some foreign cash could allow for taking advantage of “deep-discounts” over here. I am not sure how I feel about the Euro, as the EU is not all that strong and has not had to weather a strong economic downturn and any political unrest. The GBP goes up and down but at least it has the whole commonwealth structure, which makes it attractive. I believe it was Buffet who mentioned Swiss Francs the other day; he is someone who has never before purchased quantities of foreign currency but has started to do so.
I am not sure if I will do it, but I am going to look long and hard into switching some USD to some other denominations.
Offhand, does anyone know where the DJIA was on the day GWB took office, 1-20-2001.
make money Says:
January 4th, 2008 at 11:50 am
She tells me that all her friends have him and Elisa lost 15 pounds with his guidance and everyone is super healthy.
make: if you want to drop the coin, use this nutritionist…..
http://totallifecenter.com/
Actually, the NJ CARB Portable Gasoline Can Requirement, makes storing gas such a pain, many people contract the service out. Hard to get gas into a mower with the new CARB Cans without back splash. Never spilled a drop until NJ required the new cans in 2005. Summer heat makes the cans build up significant pressure and their’s no relief valve. Go to use it under pressure and it’s like rocket fuel.
jb
check ur email
sl
umod grim
Wow, this is a great thread and I love the video message too. So true.
I’ve been a SAHM now for quite a while, so I hang with the mom-suburb crowd and I seriously need to excuse myself at times to get away from the conversation, and this includes when the dads are there too.
I swear, sometimes, all anyone talks about is PURCHASES. I have actually excused myself during daytime get-togethers and left because I simply can’t listen anymore. I then come home and swig some Advil and coffee to kill the headache.
What house renovation they are doing next, buying furniture, putting in pools, buying cars, where to buy kids clothes, how much do you pay your cleaning lady, buying new furniture for the kids, where are you having the birthday parties, where the next vacation is, blah blah blah.
Some of them can afford it all and good for them. But some can’t.
And more importantly, endless talking about your past, present and future purchases makes for the most boring conversation on the planet.
I guess it’s true, we really aren’t people anymore, but consumers.
Shore Guy # 116,
1/20/01 was a Saturday.
Close on 1/19 was 10,587.59
Close on 1/22 was 10,578.24
Those new cans are absolutely horrible. I have never spilled so much gas before I started using them.
I am sure someone got rich off that BS.
124 thanks. Even with a pretty steep decline, it looks like the DJIA will have higher nominal close on the day he leaves office next Jan. In the words of “Scum of the Earth,” an English band from WKRP, “Pitty.”
As an engineer, i have to ask what they were smoking when they decided the CARB gas cans were safer!!!
A design may be perfect but if you do dont design for the real world user it will never work. unfortunatly i see this all to often :(
SInce this is open discussion…..
I have come to the personal conclusion that the next 20 years may well be the equivilent to at least WWII and possibly the industrial revolution in terms of social change chnges. Globaliuzation is pretty much in full force, consumerism is burning bright and about to crash and asia is poised to become the next world power as the US declines. Just look at a quick overview of the various topics we discuss here that have huge consequences, everything from mass immigration to energy prices spiking to a receding middle class and asia’s increasin influence in global markets. SHould be an interesting ride…..
127
Often what sounds like a good design idea on paper turns out to be an unmittigated disaster in practice; anyone here remember the Shuttle’s “O” rings?
Fed Boosts Amount of Auction Offers
Wall Street Journal – 42 minutes ago
By JEFF BATER WASHINGTON — The Federal Reserve plans to hold two auctions of 28-day credit through its Term Auction Facility in January, offering $60 billion.
http://online.wsj.com/article/SB119946671895768071.html?mod=googlenews_wsj
# 130
I guess the $20Bn in December worked so well………..
Shore
Intersting that you bring up the shuttle,
A family member of mine was actually incharge of atlantis before he retired recently. The engineers at nasa warned that there was a risk of O ring failure if there was any ice, but the administration said that it was an acceptable risk as that flight was a high PR flight and had to launch on schedule.
The challenger was a case of everything working exactly as expected. The decison makers were warned and they went ahead anyway.
On a side note, internal Nasa investigations found that atleast 2 of the crew survived the intial explosion and tried to use the escape hatch system. This means that they were most likely killed by the impact of the orbiter hitting the water. The rest of the crew was killed by the initial shockwave of the explosion
Nothing to see here folks, just move along. Everything is fine…
http://www.reuters.com/article/bondsNews/idUSN0323047220080104
NEW YORK, Jan 3 (Reuters) – U.S. banks’ direct borrowings from the Federal Reserve for the week ended Wednesday surged to the largest amount since the week shortly after the Sept 11, 2001 attacks, data from the U.S. central bank showed on Thursday.
Primary credit borrowings at the Fed’s discount window averaged $5.770 billion per day for the week ended Jan. 2. That was the largest one-week daily average since the week of Sept. 12, 2001, when it hit $11.742 billion.
Overall discount window borrowing averaged $5.787 billion a day in the week ended Wednesday, also the largest since the week of Sept. 12, 2001, when it averaged $11.47 billion.
Data also showed that New York-area banks were awarded $17.467 billion in the second $20 billion auction under the Fed’s term facility, compared with $16.49 billion in the first auction.
[snip]
From the Star Ledger:
Port Authority raises bridge and tunnel toll to $8
Motorists using the Hudson River and Staten Island crossings will pay $8 in tolls during peak hours beginning in early March, under a package of increases approved today by the Port Authority of New York and New Jersey.
After scant public opposition during the past two months, the Port Authority’s board unanimously authorized the bridge and tunnel toll increases from the current $6 peak-hour cash levies. Drivers using E-ZPass will fare even worse: They will lose their $1 peak-hour discounts and have to pay the same full $8 rate as cash customers.
Off-peak E-ZPass discounts, however, will remain $2.
PATH rail fares also will jump a quarter to $1.75 per ride under a revised plan; The agency had originally proposed increasing the base fare to $2.
Way to go Texas.. Hats tip to the folks at Calculated Risk for the link..
Lying to get a home loan is now a felony
They call them liar loans.
With some mortgages, borrowers were free to make up info about their income, assets, liabilities and other data.
Lenders were so eager to make these mortgages that they’d look the other way when borrowers fudged the numbers on an application.
Try that today in Texas and you can go to jail.
A state law that took effect in September makes borrowers swear in an application that all their financial and personal information is correct.
Of course, you were always supposed to tell the truth in lending documents. But many folks didn’t.
“Now there are severe penalties for fraud or misleading statements,” said Dallas attorney Richard Barrett Cuetara of Cowles & Thompson. “You can now be prosecuted for a felony.
“You can go to prison for two to 99 years, plus there is a $10,000 fine.”
Anybody here ever donate a car to charity in Hudson County and have a service they would reccommend?
I wanted to add something about the middle income families living like there rich.
First so were all st8, I am middle income, and I live within my means, yes I have 2 car loans but I drive a rodeo and a now 5 year old Expedition(not by choice only truck big enough for twins, a double stroller 2 dogs and a wife.) I may not be rich with money but I think I have a damn good life. My only companint is not being able to afford a house. I do not want some mc manison, nor do I want granite counter tops or a 50k bathroom. But becuase of greed this market has gone to hell. If prices were in my price range, and I could afford a normal size(real person noraml sized home) than I think my life would be perfect.
The problem is people have no control when it comes to spending. Everyone has to have the latest and greatest. And hey lets just charge it. And this country is only going to get worse. Why? Well this passed christmas my wife and I purchased a few old classic board games for our boys, right now there to little for them but I just wanted to make sure I could get classic games like
Candy Land, Monoply, Life etc
And when I was looking at the games many of the “New Version” of these games allow them to charge things. Come on thats absurd. I also saw a commercial for some toy for girls that they get a credit card with unlimited money to spend.
I guess we need to teach kids at a young age to charge. Its a sad world we have become where people teach there kids to just charge it.
132
Ket,
The day the explosion occurred, I was worried that it was something that my plant did wrong. We supplied O-ring material to the manufacturer of the O-rings, except ours was silicone-based rubber — something we supplied to missile makers as well. As it turned out, they were not using silicone like the USAF used and instead used a florine rubber, which, unlike silicone rubber, gets hard and fragile in freezing weather. We were biting our nails for days.
RE Middle Class.
I hate to agree with John but on this…..I do.
I actually think that part of the trouble is that being middle class has been fetishised. EVERYONE is middle class all of a sudden. Working class became a shameful thing. So you have to be middle class, with all the trappings, or you are a welfare bum, with nothing in between.
It’s a big reason why I want to dial back a little in a more rural area.
Ann – I agree, the SAHM circle can really suck. I think it is boredom. The B’day parties, the one-upmanship, everyone nit-picking about child rearing. It’s a symptom of a totally child-centric suburban lifestyle. We’ve fetishised our kids too – everything has to be perfect.
#137,
Homer, I hear ya.
Even more tragic is that most people don’t know how their true APR they pay on credit card balances. What rate is stated in big fat bold is just disclosure in ‘wolf in sheep clothing’ style. If the card follows a two cycle average balance billing, they’re paying atleast 2x the stated APR, depending on the balance carried.
A credit card is like a whirlpool if used inappropriately.
SHore guy,
Intersting story, but i still would not have been your fault. The techincal experts warned nasa, both the o-ring makers and the SRB (solid rocket boosters) manufacturers warned that the cold temperatures were not safe to launch in.
An interesting side fact… The SRB’s burn aluminum powder. The aluminum oxide actually seal the hole hole left by the O-ring and would have probably allowed the shuttle to make it to orbit, but the shuttle hit extreme wind shear which caused the aluminum oxide seal to fail.
The shuttle is a classic example of bureaucracy. The final product that is the shuttle had so many compromises added to its design in order to satisfy the various political/financial interests that the final design is close to the least effective design you can come up wiht. In engineering you can either do 1 thing very well or many things poorly. The shuttle ended up the doing may things and is hence the waste of money that it has become. if you want interesting reading on proposed spacecraft look at nuclear rockets!!! now that is some promising technology.
Good for you Homer!!! Now if I can get you into a nice ten year old Taurus wagon for 2K and ditch the two trucks we could free up even more cash flow. If you read consumer reports you will notice that cars like the camry, accord or taurus are considered family sedans, with only two kids an Expedition is overkill, heck I got three kids and a dog and would feel as funny as Jed Clampet would feel if he was in back of a limo. Also what is up with the two dogs? I only recently got a dog as I could never afford one before, vet bills, feeding, having to have a larger vehicle to take them with me or pay for dogsitting. Plus when I was renting you had to pay extra rent to find a landlord to take you with a dog.
I like most of your cutbacks. If everyone thought like you their would have been no big run up in houses. For now I would look at some REO’s, two families, or homes for sale that have renters (for some reason they always sell for less as no one wants to wait till tenants get out). In six months to a year some cheap deal will pop up and you can snatch it.
Now all you need to do is to concentrate on earning more. I know we all talk about investments and housing as get rich quick schemes but bottom line investing in your career and having a proper savings plan is the real long term solution. How boring. I rather just hit is big on tradeoptions.com but hey that’s life.
Lisoosh
I agree with both you and john, and having become a father recently and seen the world of SAHM that my wife has entered, i agree with your sentiment there as well. However not all SAHM groups are so bad, my wife has found a small group of people who are very down to earth.
Regarding the middle class sickness; we have to remember that this “fetish” has had the full support of both government and business as it has allowed both to grow beyond what they would have otherwise. The first thing that people need to remeber is that possestions do bnot fring happiness. WHile that flashy new 5000″ plasma may be shiney and keep you distracted watching GG for a while it will not make you any happier. people realizing that happiness lies in friends, family and personal achievemt is the first step to correcting the current “fetish”
Cindy, you sound like you have your stuff together! Great for you. I wouldn’t be in a such a hurry to pay off a 4.75% mortgage. That’s cheap money considering the tax writeoff gets your effective rate down to around 3.5%.
‘Since 1949 the unemployment rate has never risen by this magnitude without the economy being in recession.’
— John Ryding, Bear Stearns
If you read my post at #143 you probably guessed that i am either illiterite or english as a second language :( sorry, for the poor grammar
A .50 bps cut is in the bag. If Ben wants to stabilize things he’s going to have to go to a surprise .75 cut now before it’s too late.
RE: 5000″ plasma may be shiney and keep you distracted watching GG for a while it will not make you any happier
Hey watching GG does make me happy!!! I may have gotten two out of three of my TV’s from dead people and the third came from a going out of business sale at the wiz but damm it!!! I will not have anyone mocking the GG, you can be haute cature on a 13 inch BW as long as the GG is proudly being shown!
Given the PPT’s meeting last night I wouldn’t be surprised to see a cut before the next Fed meeting. They obviously were worried about this jobs report.
I have a question what do people in hear consider middle class and why?
I consider 50-70k salary to be middle class
71-89k to be upper middle class
Above 90k rich
Why do I consider this correct?
70% of NJ makes under 100k.
So that 30% that makes over 100 are automatically considered rich
Half of 100 is 50 so half = middle hence middle income.
I understand what people are saying, people trying to live like there rich when there not.
I think as the housing market declines and we go into a recession people will hopefully learn to live with in there means, and once in a while getting something nice like a LCD tv etc. But only time will tell
HEHEHE, my husband donated a car last year, but not in Hudson County.
Any of the charities that accept a car should be able to tell you:
-if the car will be repaired and given to someone, or
-at what auction the car will be sold (his went to Bordentown auto auction), and
-whether or not they will mail you a receipt after the auction.
If you want to know who we used, I’ll ask my husband. They got maybe 3k for his car at auction and sent him a receipt.
In the 70s the SAHMs had key parties, all homes had bars and their was no car seats and kiddie crap to deal with. Just hit the disco toss the kids in the back of the wagon and when the night was done you headed home with your husband or any other husband you felt like having that night. 2008 is such a drag for a SAHM.
BTW who watches Dirty Sexy Money? My other favorite trashy show about NY?
Re: Britney,
Yes I know not housing related however it has been metioned in this thread. My take is: 2 babys in 2 years. Post partum pychosis. Not to be confused with Post Partun Depression. With all the family around and ability to recieve top of the line health care, she needs this checked. Post Partum pycosis is not that common but it can reak havoc on the whole family.
KL
Donating a car to charity makes no sense. All you get is the wholesale dirt cheap price they sell if for at auction. Then you only get at most 40% of that back at tax time. So the car you could have sold yourself for lets say 5K out of your driveway gets wholesaled for at most 3k and then you get $1,200 hundred off your taxes. Plus you open yourself up to legal issues. My brother in law did the donation and it was sold at auction to someone who never registered it properly and ran up a few thousand in tickets and cause it was still his VIN number he had months and months of grief. I sold my last car myself and I got a few thousand extra and the guy registered it before he took it so I did not have to worry about the ticket stuff.
The other final issue is sometimes they say they will send you the receipt so you don’t know what the donation is, I was at a car auction that was poorly attended and they were selling off old donor clunkers at $100 bucks each so those people get a whooping $40 bucks back at tax time. meanwhile some of those cars looked like 1 – 3k cars. Also some charities give you a trip or a meal to donate and guess what you need to put that as taxable income. So if you get a $200 hundred gift card and they sell your car for two hundred it wipes each other out.
The final thing to realize when you sell a car is that proceeds are tax free anyhow. Remember you paid 20K most likely for the car you are selling for 5K so it is a loss. Donating something like stock to avoid the additional income when you sell is one thing but donating money you could of had tax free is stupid.
What kind of car are we talking about here?
A pos 1992 Toyota Corolla
Fed Auction boost:
http://biz.yahoo.com/ap/080104/fed_credit_crisis.html
The final thing to realize when you sell a car is that proceeds are tax free anyhow. Remember you paid 20K most likely for the car you are selling for 5K so it is a loss.
Thanks. I didn’t know that.
NYS considers anything less than 150K middle class from today’s article about the the new tax break proposed for SUNY schools.
Even more interesting the STAR program in NY gave a rebate check late last year calling it middle class school tax relief. According to Gov Spitzer is proudly states AGI of 250K and under is middle class.
Wiki has numbers that are more in line with yours on the definition of middle class.
That is like a 2K book value.
HEHEHE Says:
January 4th, 2008 at 2:19 pm
A pos 1992 Toyota Corolla
Over 500K income and 5 million in assets is rich. Acording to Goldman.
500K income and 5 million in assets means you’re old. According to me. Even if you’re frugal and you get above-market returns on your savings, it takes a bunch of years to reach 5 Mil.
Definition of middle class:
Depending on the geografic area/cost of living:
I would say in NJ lower middle class is family making 70-120K (they get screwed as they get no goverment hand-outs, hammered in taxes and still quite low income)
Middle class 120-200K.
And there is no upper middle class…. – Upper middle class is for people who are making ton’s of money but having trouble cutting their spending down.
Another question – I have noticed that quite a few listings expired New year. When can we expect old listings to start coming back?
#134
Maybe they will use the cash to improve the number of toll booths on a lot of these crossings. There is just too much traffic all the time. Even on off hours when I go back and forth to visit my parents in NJ, it is crazy. I know some people will not agree with me, but I actually favor the increase in tolls. Maybe it will keep people off the roads.
For many people in middle class & below (using SUNY cut-off figure), the devil is in the driveway. Homer, that’s not directed at you in any way! Once people have a car paid off quickly, it’s amazing how quickly one can build up savings to allow them to buy their next car for cash much quicker than they ever imagined.
The problem is that people want to be seen in a newish vehicle. So they get into a lease or if buying, they stretch their loan term to 5-6 years, remain upside down for a long time, and use the residual as their next down payment. However, knocking off the loan in 2-3 years gives people a shot at accumulating some decent dough for the next car over the next 3-4 years when they have no payments.
By all means, please drive a nice car and enjoy it. But when your monthly nut on that soon-to-be jalopy is exceeding 7-8% of your monthly income, it’s not worth it.
Yeah 2K blue book value and I just got a $130 ticket for not having it inspected for two years (I need to get speedometer fixed before i can even have it inspected) and I only use it a few times a month. I am not worried about the tax writeoff. Just getting to be a waste of money in Hoboken.
Homer,
regarindg middle class….
You have to take location into account. 150K in backwoods arkansas is rich, but 150K in mendham NJ is middle class.
In northern Nj i wouls say that 100-200K in upper middle class. To me a wealthy person is bringing in over 500K per year. Me and my wife make between 100K and 200K and while we recognize that we are better off then many people we are certainly not wealthy! We do not hop over to monico for the weekend or have homes in aspen.
many people we know who make have similar incomes as us live like they are wealthy, but looks can be decieveing when the cars and homes and trips are all put on credit you are certainly not wealthy even if it looks like it. How do you consider someone making 150K wealthy when there are a non-trivial number of people brining in more then 1,000,000 + per year?
Pat – I don’t know about post-partum psychosis, but sounds plausible. Plus, the girl just has NO stability in her background, she grew up as Mommy and Daddy’s meal ticket, no boundaries, no regular life since she was what, 5? Too much money, gold digging friends and ex and followed around endlessly by a pack of braying hyenas that she can’t live with, can’t live without.
I feel really sorry for her actually.
I have a 2000 golf, 74K miles on it. I got into a small fender bender and the repair estimates on it are in the 7K range. Insurance won’t fix it because the repair costs are close to the residual value of the car. Insurance is cutting a check to me for the the residual value of the car ($6500)
My question is what do it do with the car. Should I just sell it to the mechanic and see what I get or donate to charity?
To Post 168 – take the Insurance Company check, Find a cheapest possible quite from repair shop – do nto care about quality – just to fix it and make it look good – If it was not major accident I am sure you can get it fixed for 1-2K., Sell it for 4K.
We really need to organize another get-together.
grim, when was the last get together? where?
Federal Employees To Receive Pay Raise
By Stephen Barr
Washington Post Staff Writer
Friday, January 4, 2008; 2:02 PM
President Bush today signed an executive order that provides nearly 1.8 million federal employees with an average 3.5 percent pay raise and also increases salaries by smaller percentages for the armed forces, members of Congress, federal judges, diplomats and others.
In 2008, the base pay provided most civil service employees, covered by the General Schedule, will range from $17,046 to $124,010 annually, according to the order. The base pay will be supplemented by geographic-based raises, or locality pay, that can boost the take-home pay of employees.
More than 1.4 million active-duty military personnel will receive raises that average 3 percent, but the raise will be increased by an additional 0.5 percent after the White House and Congress reach an agreement on the fiscal 2008 defense authorization bill. Military pay varies widely, based on rank and years of service.
The pay of Foreign Service officers also varies by rank. This year, base pay will range from $26,264 to $124,010.
The pay raises are negotiated by the White House and the Congress each year as part of the government’s budget, and they help shore up the Washington region’s economy. In 2006, for example, the federal employee payroll alone was about $76 million per work day.
Under the order, the vice president will receive a $5,400 salary increase, to $221,100. The speaker of the House will receive a $5,300 increase, to $217,400, and the majority leader of the Senate will get a boost of $4,600, to $188,100.
In 2008, members of the House, senators and U.S. District Court judges will be paid $169,300. The chief justice of the United States will be paid $217,400, and Supreme Court justices will receive $208,100.
Members of the Cabinet, usually heads of large departments, will be paid $191,300 this year. Deputy secretaries of departments and heads of major agencies will receive $172,200.
Members of the Senior Executive Service, the government’s career senior officials, will be paid from $114,468 to $172,200, according to the order.
The president’s salary is set by Congress, at $400,000, and is not changing.
re: 153 rhymingrealtor whatever she has that woman helped induced her own psychosis.
She has been mixing paxil, xanax and alcohol and who knows what else for a while now.
Britney is just like Elvis who thought that pills were the answer to everything.
I am revising my death estimate, perhaps as soon as August 2008.
Actually, the hardest part is getting to $1 million. If you max out your 401k contributions each month (around $1,300 by a combination of your contribution and employer match) and get an average 10% return per year, it takes 20 years to hit $1 million. The next $1 million takes 6.3 years to reach. The next $1 million takes 3.8 years. If you start at 30, you can have 3 million in the bank at 60 (in nominal terms) and retire. It’s possible….. just put aside money consistently.
The theory behind the Emission Proof CARB Gas Can is that it will not release fumes into the atmosphere. This is entirely true, if you fill the can, and never use it. Any use of a pressurized CARB Can will result in gas splash and emmisions into the atmospere. Unlike a steel nozzle & rubber boot, filling up a steel car gas tank neck, it is not possible to push a plastic CARB Can nozzle tight, on a Plastic Mower Gas Tank, without damaging the tank or hoses. Mower and Snow Thrower Gas Tanks have not been beefed up to take pressure abuse from CARB cans. They will leak if abused. And any opening of a CARB Can will release emmisions under pressure into the air. California & the North East have embraced this insanity, as they are always on the leading edge of stupidity.
Toyota speedometers are only like $50 bucks on ebay, just pop the horn cover and uscrew the steering wheel and you can pop it right in in ten minutes.
They have them in Junkyards too and most yards are computerized and share inventory so there is no running around, usually for a $20 dollar tip they throw it in.
http://stores.ebay.com/LPD-Auto-Parts_Toyota_W0QQcolZ4QQdirZ1QQfsubZ10QQftidZ2QQtZkm
Car Donation #136, #154, #165
I donated a car a few year ago. It was in good working condition with a blue book value of ~$3.5k, but after 3 months of trying to sell it my best offer was $1k. After a few alternate side parking tickets I just wanted the car gone. I donated it to http://www.800charitycars.org
Since the car was in good working order they gave the car to a needy family, so I was able to deduct the full blue book value off my taxes (worked out to be just over my best offer). They inspect the car after they take it from you to determine that it’s in good condition for one of their families. It’s important that you do not misrepresent the cars condition, because if there is a discrepancy, and they don’t give it to a family you can only claim the auction sale price off your taxes. That said with our car we had no problems, and it worked out better for us financially to donate it. Oh and this was in Hudson County. They take the cars to Pep Boys for inspections, ours was done at Newport in Jersey City.
Thx. I am going over the insurance etc tonight and will decide what to do.
#95 grim The problem in many cases might not necessarily be the kids, but rather the parents.
What will the neighbors. friends say if they see your kid mowing lawns, or shoveling snow, or working part time in CVS or the super market.
They will think Oh my God, the Smiths must have money problems, because their kid is working, we cannot have our neighbors/friends thinking that.
I have a friend of mine whose kid is graduating this May from college , 23 years old (5 year plan), and has never worked a day in his life, ever.
Grim,
Any preliminary NNJ December sales numbers?
#173
Dream,
I’ve got to say I love reading your posts on anything financial. You and ChiFi/Clot seem to disagree on the whole index thing, but you are pretty buttoned up on all things saving. I save a ton, but I’m not all that buttoned up (getting better though). That’s why I enjoy when you break things down.
3b
you are right, its mostly the parents who allow this type of behavior and lifestyle for these kids. No concept of making a buck by most kids – not all. Some of these parents are trying to be friends with their kids which is a mistake. You have to deliver some tough messages in my opinion. The kids will love you more in the end and respect you more.
schlivo,
Not done compiling the data yet. Will be posted on Sunday night.
dreamtheaterr Says:
January 4th, 2008 at 3:01 pm
Actually, the hardest part is getting to $1 million. If you max out your 401k contributions each month (around $1,300 by a combination of your contribution and employer match) and get an average 10% return per year, it takes 20 years to hit $1 million. The next $1 million takes 6.3 years to reach. The next $1 million takes 3.8 years. If you start at 30, you can have 3 million in the bank at 60 (in nominal terms) and retire. It’s possible….. just put aside money consistently.
MOST IMPORTANTLY: do not pay for financial advice, it is worthless, you can do it yourself…
I had my daughter work at Friendly’s and my son work at ACME in New Providence, during High School. They kept their earnings as discretionary income. The purpose was to teach them what they didn’t want to do for the rest of their lives. My daughter graduated from College of St Elizabeths (2BA’s), and my son from Seton Hall University (BS) & St Peters College (MS). I paid the full cost of college. Ability to pay, doesn’t remove parental responsibility to teach them life lessons. It worked. Years later they were very glad dad & mom paid, as they married spouses with College Debt. I don’t think it registered untill then, the fact that they consumed their mothers full salary for 9 years, plus two home equity loans.
Wachovia forecloses on Meadowlands project
by Maura McDermott/The Star-Ledger
EnCap, the long-troubled effort to build golf links and thousands of homes on four Meadowlands landfills, has hit another snag.
Wachovia, which leads a consortium of banks backing the project, has foreclosed, demanding that the 785-acre property be sold to pay off $149 million in loans and unpaid interest, according to court documents.
The foreclosure complaint was delivered to EnCap’s trailer in the Meadowlands Thursday, according to Michael Cohen, executive vice president at the Trump Organization, which took over day-to-day operations at the site late last year. Cohen said he received the complaint late Thursday and it is still unclear what effect, if any, the foreclosure action will have on its ongoing cleanup at the site.
http://www.nj.com/news/index.ssf/2008/01/encap_bid_to_develop_the_meado.html
How do you consider someone making 150K wealthy
Easy, I am reffering to the entire state. I understand many people have a household income of 6 figures. I am not reffering to just parts of the state. Yes by all means if I lived in Bergen county I would be considered Dirt poor. I am taking the whole state into account.
Yes I am sure Many of the 30% of the state making 100k plus lives in Bergen and Milburn and Mendhem.
Again 70% of the Entire state of NJ makes under 100k household income.
It seems that people on here are considering NJ just certain parts of the state. Yes maybe in the areas people are talking about are that way, I am reffering to the whole states of NJ.
Most people in NJ do not have 6 figure household incomes. There is more to NJ than Bergen county, Mendham and Millburn. Yes I am sure my salary would make me dirt poor in those areas. But I am reffering to other areas.
So yes maybe in those areas 100k is middle class, but you cannot exclude other counties
Mercer county, Brulington county, Glocter county, Sussex coutny etc. where people do not make 6 figures salaries
Chi: The conventional wisdom on this board (some might call it groupthink) is that you can do anything yourself, as long as you put in the effort and/or get training, enough to do it right. If JB can do fancy contracting work and be a real estate agent on top of this blog and his job; and if John can turn a fat profit by selling a car himself rather than giving it to some lame charity; then I can certainly manage my own investments and/or sell my own home if I have to (and keep the “value add” a third party would provide and charge me for).
Dream: I’m going to go out on a limb here and say the average investor comes nowhere near getting 10% return on their investments. Most people market time poorly, invest in expensive funds, etc. That’s the beauty of indexing – you reject worrying about these things – knowing that you will outperform whatever percent of actively managed things (of course, you won’t outperform anything Chi recommends). The whole thing is very zen. Still, taking 20 years to reach 1 Mil. Oof that sucks. To a 25 year old, 20 years is a long time. And I wonder what 1 mil will get you in 20 years. Perhaps one of those huts near the beach in Far Rockaway?
Confused #185-
I struggle with this issue. I worked hard and paid for my whole school tuition. I graduated with no loans, but I started to get money money in my pocket frequently and never went to grad school. My lawyer friends are all becoming partners. I make a very good living, but I have maxed out my earning potential.
There’s something to be said about being a poor college student and finishing your education.
D.R. Horton, Inc 10.74 -11.62%
Hovnanian Enterprises, Inc 5.73 -11.16%
2007 was just the begining
re: kids mowing lawns or shoveling snow.
I spent the better part of last weekend trying to find an enterprising Gen Y or even Gen Z kid or teen in the vicinity of my mothers Bergen County home to shovel the snow for her. I asked neighbors, checked the local supermarket bulletin boards, and even looked online. There were none to be found.
When I grew up in Bergen County back in the 1980s, I funded my first auto purchase a 1970’s chevy nova with several seasons of lawn mowing, raking leaves and shoveling snow. Heck I even had some money left over to buy a nice radio and speakers.
How will these Gen Y and Gen Z kids ever survive in the real world after college?
According to NJ.COM’s “by the numbers” site, in my census tract in Pway (below average part of a very middle class NJ town), average household income is 93k. If that’s average, a large (albeit below 50) percentage make 100K+. The area I’m referring to is not a commuting area, the closest trains are on RARV line which is not a popular commuting option. NEC stations are about 10 miles away and parking is scarce.
On the kids working thing,I have teenagers
most of the kids want to work but jobs are hard to find,also you have to be 16 to get papers stupid law we do not have 12 yr olds in coal mines anymore.I was on my 4th job by 16(loading trucks).My 15 yr old can’t work but wants to.My 18 yr old senior in HS
works 33 hours a week a local shoprite pays his car ins & is saving (he is really cheap).So all isn’t lost on younger gen.I gather most here kids are younger than mine
so just tell them if you want it go work for it, they will be better off.I will admit
I am somewhat generous with them but I still have been able to get them to understand it does not grow on trees.
I mowed lawns in Lee jeans & high white cons(Chuck Taylors)I understand they are cool again.Showing my age.
#191 Sean:How will these Gen Y and Gen Z kids ever survive in the real world after college?
Many of them will not, in fact many of them are crasing and burning during college.
I cannot tell you how many people I knwo whose kids have failed out of collgee after 1 or 2 years @25 to 40K a year, and are now sitting home.
And these are the kids of parents who are supposed to know and do better.
Be careful with those calls John..
CastleKing Says:
September 18th, 2007 at 5:07 pm
K. Hovnanian up 28% today. Bernanke is the best. All you have to do to make $$$ is read the posts made by the negative “geniuses” on this site and do the opposite.
HOV down 60% since that day…
chicagofinance Says:
January 4th, 2008 at 3:28 pm
MOST IMPORTANTLY: do not pay for financial advice, it is worthless, you can do it yourself…
Mr. Aqaba, that’s the most worthless post I’ve read in a while. I would have expected better from you. If you want to continue taking cheap potshots, be my guest.
#193 mike: I do not know about your area, but in my area of Bergen county, there are lots opf help wanted signs in all the CVS stores, supermarkets, pizza places and of course the malls.
#187 Homer:Yes by all means if I lived in Bergen county I would be considered Dirt poor.
Believe it or not, but 70% of all house holds in Bergen county have incomes of under 100k
Didn’t mean to spark an attack on Dream. I said he was buttoned up and I liked the way he broke things down. To clarify: I will not sell my own home, have paid for investment advice, and won’t attempt to remodel my own bathroom. I would like to retain my digits.
It was just a leisurely Friday afternoon compliment. Settle down boys.
Net Worth Issues for the Hovnanians.
Stock was $54 is April 2006
Kevork (father and founder) Net worth went from over $400,000,000 to $50,000 or a paper loss of $350,000,000
Ara (son and poster boy for this market) went from $100,000,000 to around $10,000,000 or approximately $90,000,000 loss.
Old man must want to puke
139 lisoosh
Re SAHM-hood and materialism, I agree, it’s boredom. But OMG, is there anything MORE BORING than talking and thinking about your purchases all day and night. I actually don’t think it’s restricted to just the SAHM crowd though, everyone is so materialistic now. You’re also dead on about the competition and one-up-manship.
Re Britney
The Britney thing is so sad. These things only end one of two ways. You either hit bottom and make an effort to recover, or you die.
On the job thing, I think it’s sad that kids don’t work PT jobs anymore, or at least some kids. Some of my best memories from HS were those crappy jobs and I definitely learned how hard it is to earn a buck. And what’s up with all these kids wearing 300 dollar boots and 150 dollar jeans. Totally outrageous.
I don’t get the whole Bergen rich image. It’s only the northern portion really, and even there, just select towns and even within those towns, just certain neighborhoods.
I think anyone who loves to sell can sell a house or a car but they need to LOVE to sell and I LOVE it. When I was in consulting the first lousy 20K thing I sold was like getting a high and when I sold my first million dollar deal it was like crack cocaine. Why anyone in their right mind would trade a car in and lose out on 2 or 3K and the fun of haggling is beyond me. My sister is the best salesperson ever, favorite line ever was she sold a car that leaked a quart of oil a week on a car that held five quarts. They guy said wow your oil looks great and she said it should be I change it every five weeks. Now that is funny. Guy buying a $500 dollar car with a $300 dollar radio should know better. She sold my old plymouth once when I was at work with snow tire on it in July and said with a straight face that was a selling point as I drive so infrequently there is no need to switch tires in the summer. She no longer will sell a used car as the last one she sold had a slight stalling problem (like once every six months) and she sold it to an Indian Family who broke down on the whitestone with around the usual 90 of them jammed in the car and all of the family baraged into her house and wanted to honor kill her and held her down and took back the $500 hundred bucks. Those guys are nuts. You buy a $500 dollar car load eveyone in it for bumper to bumper traffic in July without any inspection and are shocked when it has a problem.
Come one she would have missed all that fun by trading in her clunkers for $50 bucks.
What a drag it is getting old
“Kids are different today,”
I hear ev’ry mother say
Back to real estate:
Prices are not dropping.
Credit is still holding up the b.s.
Condo’s at 400k?!
Underground oil tanks at $400k?!
Sometimes with septic too!
I’ve run the numbers & realize I should’ve purchased/leveraged a 4 bedroom/3 bath home with my HS diploma era income in the mid 90’s. F!
#144 – thunderbolt “I wouldn’t be in such a hurry to pay off a 4.75% mortgage.”
I know, I know -my CPA friend says the same thing. But once you’ve lost a home and been in the hole $40K it is all you can think about.
Re: middle class
I consider my self working class @ $68,000 after 25 years of teaching. I do get an early retirement check from Or. -1,000 mo.- that goes straight into 403B savings/Roth AND extra for taxes…Also, I have established accounts for the grandkids.
I feel as though I do not want for a thing…I get a sick feeling in my stomach when I carry a balance on my one CC.
What is GG?
AND..BTW….
Does everyone always tell their entire life story on this site or is it just me…?
Cindy
The birth/death model indicates that 66k jobs were added in Dec.. I have been calling the BLS all day. Not one person can tell me where these jobs, created by their models, are located.
“49,000 construction jobs were lost in December.
31,000 manufacturing jobs were lost in December.
A whopping total of 75,000 goods producing jobs were lost. In general, those are the higher paying jobs.”
“The BLS birth/death model has now added 1,305,000 jobs to the economy since February. That model remains somewhere in outer space.”
http://globaleconomicanalysis.blogspot.com/2008/01/unemployment-soars-as-private-sector.html
BC Bob,
Giants baby!!!
If Schweppe Burgdorff says it, it MUST be true.
Dear XXXXX,
I am anticipating a very viable market now that we are into the New Year. The mortgage crisis seems to have subsided in many areas, and “fresh” home listings have already started to appear. I would be happy to talk to you about your 2008 housing plans. Just give me a call or send me an email.
John,
I appreciate the enthusiasm but this Corolla is a POS. I’d have to get it super detailed from the remnant smoke smell from my mother who owned it before she passed away 8 years ago and to get the hidden pounds of dog hair from my ex-wife’s dogs removed. Then there’s also fixing the speedometer and still hope it passes inspection. Plus it was in a major accident back in 2001. I’d just as soon throw it to the curb. If you want it it’s yours as is for $500.
Accept the challenge John, you could double or triple your money. It’s not often you see returns like that!
I would do it in a minute if I was back in college. Don’t have time now. But you know what is funny 20 years ago a million kids would jump on that deal, but today they are too lazy.
3b197 Vernon Sussex Cty Not as much opportunity up here for the kids as BC.We are just northwest of nowhere!Looking for some huge drops due to my remote loc.& price of gas to get to anyplace 30 miles 1 way.That is like Wayne or Parsippany.
Can anyone pull an address/history on NJMLS #2749438?
Thanks in advance.
After seeing all the Christmas gifts given this year to all the 3 to 5 years old in the family, I actually found myself being pretty disgusted and feeling quite sad on Christmas day. Does a 5 year old really need PSP(roughly $200) and a $300 train set??? These kids made out like bandits. I actually had one kid ask me if I had anything else for him after he opened my gifts. Guess he wasn’t too happy. Sickening.
BC Bob,
According to ISM (prepared by bi?), construction is one of the 5 industries that expanded in Dec.
http://www.marketwatch.com/news/story/services-sector-growth-slows-slightly-dec/story.aspx?guid=%7BBFCBD7E5%2D8D14%2D4D82%2D9DDC%2D0FFE10936284%7D&dist=hplatest
#208 The mortgage crisis seems to have subsided in many areas
Gee, I must have missed that news.
On overspending, kids and competition.
I will say that as my neighbourhood fills up with Indians, their tendancy towards *ahem* thriftiness, at least in certain areas is actually rather handy.
Now that my eldest is in public school, a lot less expensive birthday parties, no more competition to give teachers more expensive gifts, less of my kid asking for $200 a month “(insert here)” lessons because everyone else is doing it. :-)
BB,
It’s sickening. My kiddo is almost 2 and he got so much crap we don’t know what to do with it all (from relatives). The wifie is taking a bunch of clothes / toys up to Washington Heights with my Mom this weekend. My Mom grew up there and donates clothes etc, frequently.
#204 Prices are not dropping.
Credit is still holding up the b.s.
Wrong on both counts.
njrebear The market must have missed that report very ugly today,maybe they need a conference call with BI & RE 101.Just thinking about that cracks me up.
BB – Gifts.
Someone almost fell over when she asked my daughter what she got for Hannukah and she answered “What do you mean? Hannukah is for candles, not presents?”
Don’t think I’ll get away with that for much longer.
They get a few fun, cool things a year that I don’t think they will get bored with in a day that will allow them to brag, but I try to avoid the insanity.
Dolye / lisoosh,
I’m glad to know that there are other people out there that seem to be trying to raise their children right. I’m 32 and don’t have any children yet. If I do, hopefully I will be able to pass on to them the lessons/wisdom my parents have taught me. Receiving my “Fake” Cabbage Patch Kid when I was 7, has not scarred me for life. My parents couldn’t afford the real one at the time.
dreamtheaterr Says:
January 4th, 2008 at 3:52 pm
Mr. Aqaba, that’s the most worthless post I’ve read in a while. I would have expected better from you. If you want to continue taking cheap potshots, be my guest.
Taking the moral high ground when there is none. Fabulous……and being lectured by the paragon of virtue no less…..hypocrit
This is for John
You said you were looking for a bigger place you just look in the wrong part of NJ
LVL represent:
(Still out of my price range but one day they will be affordable enough for me)
http://www.realtor.com/search/listingdetail.aspx?ctid=94367&ml=3&typ=3&sid=e89b7c9d7d7b47d2b06a092fbf1a89ea&sdir=0&sby=5&pg=12&lid=1080677979&lsn=113&srcnt=236#Detail
Went out to a dinner last night with a couple of wine-salesman and a retailer. Said retailer claimed all economic unrest is due to media hype becuase of upcoming elections, and once Hillary gets sworn in, economy would experience sudden upturn.
What a load…since it was a friendly dinner we all decided to skip politics altogether
You guys.
We have a new person worrying that she maybe should not have told her story, and all you two want to do is peck, peck, peck at each other’s old scabs about indexing? Come on.
Didn’t I have to heave you both up by the ankles once before and crack your heads together about this?
;)
205, Cindy Lou Who
Everybody tells his or her story on here. It’s all there. Some more slowly than others.
Does everyone always tell their entire life story on this site or is it just me…?
I’ve spilled my guts… in larger forums.
https://njrereport.com/index.php/2006/11/02/my-turn-the-renter-who-blogs-on-real-estate/
https://njrereport.com/index.php/2006/04/23/rebuttal-published/
Since this is the weekend thread, I am taking the liberty of stating what I have held back earlier this week:
I have never said that financial advice isn’t worth it to anybody. The value derived from any service depends on the person receiving it. I don’t aspire to be a jack of all trades and do everything myself. But a good place to start is knowing ones strengths and limitations. Would I attempt to sell or buy a house on my own? No. Would I attempt to do basic maintenance on my car on my own? Yes. Would I attempt to rebuild a car engine? Hell no.
So just because I manage my own portfolio does not in any way mean I think a financial planner does not add value to others. Of course, they add value – to the people wishing to receive the service. A person who thinks the Dow Jones is Indiana Jones twin brother needs a financial planner, and will benefit immensely.
In my case, I see not enough reason why I should give a 1% fee to a financial planner year in and year out. Assume he or she does a brilliant job and grosses 10% a year average return, he keeps his 1% retainer fee. So he is partaking 10% of my return each year, and I am left with 9% before inflation and taxes. Add that up over the years and that’s serious money not being left to compound and grow. For a person retiring and withdrawing 4% of their portfolio every year, a 1% fee is 25% of the gross withdrawal amount. On a $1 million portfolio, 4% withdrawn is $40,000, of which $10,000 goes in investment fees. That leaves $30,000 a year for cat food and sundry expenses. And try running the numbers if you hit a bear market just as you retire and the 1% retainer fee deducted….. it’s jolting.
I hold CPA/CFA/CFP, etc in very high esteem. I have plenty of friends in the profession too. Just because I do not wish to use their service does not mean I am against the profession in any way. But it is conveniently put forth that I am this holier-than-thou dude against the profession (aka Jack Bogle) style just because I am a proponent of passive investing.
Here’s a little snippet from a column I read yesterday at Seeking Alpha:
“Morningstar dedicates a large amount of resources to identifying the great money managers. It rates about 5,000 mutual funds, giving just 500 its coveted five-star rating. But why settle for the top 500? Why not invest in just the very best in each asset class? In November 2001, Morningstar created its Aggressive Wealth Maker and Wealth Maker portfolios. In May 2002, it added the Wealth Keeper Portfolio. Each portfolio contains less than ten funds. It’s Morningstar’s effort to identify the best of the best. This provides us a living laboratory to test the ability to identify future outperformers. How has Morningstar done? All three of the portfolios trail their benchmark portfolios that consist of simple broad market index funds. The Aggressive Wealth Maker trails its benchmark by 1.41 percent per annum, the Wealth Maker by 1.28 percent per annum and the Wealth Keeper by 1.76 percent per annum. And we should note that the hurdle is actually too low as Morningstar includes small and value oriented funds in their portfolios while their benchmark contains only total market index funds. Since small and value stocks have outperformed broader market indices, Morningstar’s portfolios had a tail wind at their backs aiding their performance. Unfortunately, it was not enough.”
Sorry Pat, couldn’t resist after being flamed earlier. I try and post perspectives on the blog that might help people, and instead I get ‘worthless’ replies to needle someone for no reason. Maybe I should change my handle to ‘WhartonRulz, ChicagoSux’ to be taken more seriously.
From Reuters:
Mass. Probes Merrill Role in City’s Subprime Loss
Massachusetts said on Friday it launched an investigation to determine Merrill Lynch and Co’s role in investments linked to subprime mortgages made by the city of Springfield that have fallen in value.
The state’s move comes after Springfield recently blamed Merrill for guiding it toward investments in securities backed by home loans.
Pat Says:
January 4th, 2008 at 5:33 pm
Didn’t I have to heave you both up by the ankles once before and crack your heads together about this?
Pat: I just hate it when I see people fail to transcend a stereotype, and fail to show intellectual curiosity when they are damn sure capable of it.
kl (153)-
Your diagnosis of Britney: post partum psychosis.
My diagnosis: Louisiana white trash.
#209 ….yes yes yess “must be” hehhehhhee
Tewksbury Comp Killer
3 Halsey Farm, Tewksbury NJ
Purchased: 8/25/2004
Purchase Price; $1,672,500
MLS# 2388301
Original List: $2,095,000
List Price: $1,699,950
Sold: 1/4/2008
Sale Price: $1,611,600
“A person who thinks the Dow Jones is Indiana Jones twin brother needs a financial planner,”
dream,
I thought, when I was 12, that Johh Deere was a running back from USC. I knew then that farming was not my calling. However, I may go back to school for Agricultural Economics. I can’t tell you what causes Soybean Pod and Stem Blight. However, I know I like beans in the teens.
You also don’t need to be an expert in currencies to understand that the Taj Mahal does not accept US dollars.
my definition of middle class:
– someone who needs to work for a living to maintain a basic lifestyle
my definition of rich:
– someone who can live luxuriously off of their savings/inheritance
anything in between is “upper middle class”
another word for “upper middle class” is “affluent”
dreamtheaterr Says:
January 4th, 2008 at 5:47 pm
In my case, I see not enough reason why I should give a 1% fee to a financial planner year in and year out. Assume he or she does a brilliant job and grosses 10% a year average return, he keeps his 1% retainer fee. So he is partaking 10% of my return each year, and I am left with 9% before inflation and taxes. Add that up over the years and that’s serious money not being left to compound and grow. For a person retiring and withdrawing 4% of their portfolio every year, a 1% fee is 25% of the gross withdrawal amount. On a $1 million portfolio, 4% withdrawn is $40,000, of which $10,000 goes in investment fees. That leaves $30,000 a year for cat food and sundry expenses. And try running the numbers if you hit a bear market just as you retire and the 1% retainer fee deducted….. it’s jolting.
If there was any imprimatur of your lack of objectivity, you have removed any shred of doubt. This example is bastardizing several rules of thumb, and it is done in a passive-aggressive style. Seriously, are you that narrow minded? Think about some of the quantitative and QUALITATIVE reasons that you stated argument may not be as cut and dried as you assume.
Bear in mind this other issue that seems to come up relatively often – is your partner on equal footing with you? Should you not be able to continue with your independent management, do you have a suitable person to assume your role?
AP
Administration Considering Tax Cuts
Friday January 4, 5:49 pm ET
By Martin Crutsinger, AP Economics Writer
Administration Considering a Possible Economic Stimulus Package to Ward Off Recession
WASHINGTON (AP) — The Bush administration, faced with a deteriorating economy and a big jump in unemployment, said Friday it was considering an economic stimulus package that might include tax cuts to ward off a recession.
Now if we could only get enough people to mail back their $300 stimulus check from Bush et.al., with a note; “Pay off the Debt Stupid!”, maybe we could get somewhere.
Current dead pool in my office:
-Angelo Mozilo
-Britney Spears
-Mike Wallace
One of the best I’ve ever seen.
(229)-Grim,
So, you’re the evil culprit, the architect of NJ’s RE demise?! LMAO
Administration Considering a Possible Economic Stimulus Package to Ward Off Recession
http://biz.yahoo.com/ap/080104/bush_economy.html
I AM COMPELLED TO POINT SOMETHING OUT HERE….
“Here’s a little snippet from a column I read yesterday at Seeking Alpha:
“Morningstar dedicates a large amount of resources to identifying the great money managers. It rates about 5,000 mutual funds, giving just 500 its coveted five-star rating. But why settle for the top 500? Why not invest in just the very best in each asset class? In November 2001, Morningstar created its Aggressive Wealth Maker and Wealth Maker portfolios. In May 2002, it added the Wealth Keeper Portfolio. Each portfolio contains less than ten funds. It’s Morningstar’s effort to identify the best of the best. This provides us a living laboratory to test the ability to identify future outperformers.
ONE OF THE BASIC REASONS NOT TO INDEX IS DUE TO THE FACT THAT AFTER PERIODS OF STRONG OUTPERFORMANCE, THERE CAN BE SIGNIFICANT OVERALLOCATIONS TO CERTAIN ASSET CLASSES. Using a starting point of November 2001 and May 2002, is tremendously convenient, as the bulk of the dot-com carnage had already savaged the index, but it is “conveniently” wiped clean fromt he sample.
“Sorry Pat, couldn’t resist after being flamed earlier. I try and post perspectives on the blog that might help people, and instead I get ‘worthless’ replies to needle someone for no reason. Maybe I should change my handle to ‘WhartonRulz, ChicagoSux’ to be taken more seriously.”
Maybe it would be more appropriate to call yourself “drink my own kool-aid” “confirmation biased coder”.
Note: to be consistent…I was railing against the S&P 500 Index over the summer, stating that financials (as well as energy) were overallocated in the portfolio. Well the Seeking alpha article would ahve begun at the equivalent of maybe March 2008 or so in this cycle, after the remainder of the financial cratering has been wrung out…seriously….what would that prove?
Wow Grim -Thanks for the links..#229
In your heart you are a writer you know…really. You are an excellent communicator with a noble cause.
I have learned so much just tapping into this resource – accidently! I actually get that “need to know more” deal you have going on. I’m considered to be a bit OC over my way as well. But you folks know facts – you are helping each other so much.
From a California perspective – again – I would not have been able to buy were I not in a position to pay the RE taxes on a retired teacher’s salary five years from now. Not a house payment AND taxes – I’m just shooting for the taxes…I cringe when I tell you this…
The taxes on my home are $1,400. a year.
From what I hear you all say…You have to do something about your R/E taxes if you plan to keep folks there. First, the high prices drive them away – then the old folks can’t pay their tax bills. You were spot on, Grim about the R/E bubble but will they adjust the tax bills accordingly? Are there any plans in the works in New Jersey to do any sort of Prop 13 magic?
Cindy
Grim,
Is your wish list up to date?
Yes it is.
Grim – could you give me a history for 33 maple road, upper saddle river, nj? thanks!
248-Thanks.
Versions of David Lereah’s books:
http://bigpicture.typepad.com/comments/real_estate_/index.html
Never did make a prediction on 12/31.
My first one is that CF and Dream will continue to debate the prudence of managed fund investment. We will see this in March, and again in August.
Cut and paste, you guys. Stop rewriting every time.
My second prediction is that REO sales will double by July. Not inventory, but sales.
Now, where’s the tracking on that?
Third prediction is that median price in Bergen county will drop by 3% by 12/31/2008.
Even the rich folk know when to lie low and stop counting the money in public when times get tough.
Final prediction: Mets win the series.
PAT only 3% in BC by year end?
Hehehe:
Just donate it.
The amount of money you COULD make is minimal, and not knowing you and what/how much you make, my can offer you my general rule which is this:
If the cost of paying someone else to do a task (in your example the task is “sell a car”)…if the cost to me is LESS than I make in the time it takes to do “it”, then just have it taken off your hands at the cost.
So, in other words, if you THINK you can make, let’s say $500 MORE by doing these things: detail yourself, purchase and install speedo, put up for sale, meet with buyers and complete the sale transaction…and these tasks take, let’s say…20 hours total, and you can make 50.00/hr doing your job, you’d obviously only be getting $25.00/hour to do these tasks. Therefore, it’s WORTH NOT going after the extra $500. You’d make $50 /hr doing your job and $25 /hr selling the car.
Easy math.
*Caveat: I’m self employed so I can work harder (or not) and so I had to come up with this formula…I use this formula to decide when to “farm out” tasks…
Got some annoying news on our house purchase today. We’re in the home inspection phase and as I’ve talked about before on here, there are some repairs to be made, I estimate about 1,500 bucks or so worth.
The sellers are basically going to ignore our request for the repairs or credits, basically saying No, because they want us to back out. They have another buyer who made an offer after our attorney review was over, for close to their asking price. Our offer was 7% below asking, close to a 2004 comp.
So now we are left with the decision of walking or sucking up the 1,500 of repairs.
This house is on one of the nicest lots in the development. There are so many others for sale in there, but this is the one everyone wants.
Finally, some positive RE news, from Asbury Park Press:
ASBURY PARK — Madison Marquette, the developer reviving the city’s boardwalk buildings, reached a deal Dec. 31 to buy out Kushner Cos.’ unsold Wesley Grove condominium units and two other beachfront blocks awaiting development, Gary Mottola, Madison Marquette’s president of investments, said today.
The acquisition, which must be approved by the city, had been expected in recent
weeks. Mottola said that finalizing the agreement with Kushner New Year’s Eve was ”to some extent, tax driven” for Kushner.
Kushner’s Westminster Communities halted work on its Wesley Lake project last year after the parent company decided to pull out of several projects in New Jersey.
“We think we can accelerate the whole process there,” Mottola said. “Since Kushner Cos. did a business strategy of exiting New Jersey, they didn’t have the same level of excitement about Asbury Park as we have and which we can bring to this project.”
“We’re going to completely finish all the units, improve the overall look,” Mottola
said. “The whole area will be cleaned up and beautified.”
Madison Marquette’s investment last spring in the city gave a boost to the boardwalk as new restaurants opened and the city’s historic icons, Paramount Theatre, Convention Hall and the Casino, underwent renovation and restoration.
News of the Kushner deal came a few weeks after Hoboken developer Metro Homes shut down its oceanfront Esperanza condominium site, citing a “national mortgage crisis” that had caused a setback for the company.
Mottola said today his company is not looking at the Metro Homes site at this
point, and that he believed Metro Homes is working to find a solution. Mottola said he plans to hold a press conference within 10 days to discuss his company’s overall plans.
A third beachfront builder, Paramount Homes, has said in recent weeks it is
continuing to build its North Beach condominium units on the block north of the Berkeley Hotel and will then continue to development of a second block.
On the Kushner lakeside land, Madison Marquette will take over the block of 91 units of which 22 have been sold, Mottola said. The company plans to complete and sell out the remaining units and then develop residences and retail on an adjacent lakeside block and the triangle block across the street at Cookman and Asbury avenues.
The city was informed of the end-of-the-year negotiations between Madison Marquette and Kushner but has not yet given the approval required whenever a new developer comes in or takes over an existing development site.
“The city has not approved the deal and the next move is Kushner’s to make a request to the city and the city will respond accordingly,” City Manager Terence Reidy said.
The city lost significant tax revenues when Westminster Communities halted work on the project last year, but Mottola said his company’s concern is not to make up that loss in the deal with Kushner but to push forward to finish the units to move forward on the waterfront.
Sam Gershwin, president of Westminster Communities, could not be reached for comment.
Madison Marquette is in a joint venture with the city’s master developer, Asbury
Partners, to develop all of the retail and entertainment space along Ocean Avenue which includes the historic boardwalk buildings and pavilions.
“We’ve made no secret of our desire to have a larger role,” Mottola said. “We
believe strongly in Asbury Park.”
Mottola previously has said his company planned to invest $150 million to $200
million in the city, and said today that investor equity for the project is sound.
He said Madison Marquette raised $500 million in private equity funds and the
investment in Asbury Park comes both from that fund and from the company’s internal equity funds.
When Metro Homes shut down its site in December, some city officials said they would not go forward with any developer in the future unless a performance bond is posted, which has not been the case on the existing development sites.
When asked about posting such a bond on the Wesley Lake project, Mottola answered: “I think when you look at our financial capability, it speaks for itself.”
Ann 255 Tough call 1500 is a drop in the bucket on the price I would venture BC right.I know you saw the market today reccession on the way.(job report)From your last line you seem to be trying convince youself or are really torn.My head says run
my heart says buy (you know my position from are prior discourse).Whatever you & hubby decide I wish you the best.
When I was growing up we each got to ask for 1 toy for Christmas. I plan to keep it that way when I have kids. I work mostly with kids and teens and I usually don’t ask what they got for Christmas because some of them don’t get a Christmas since mom and dad blew the welfare checks pretty fast. Also because last year I got owned by a 12 year old who told me “We don’t celebrate Christmas, we are Jehovah’s Witnesses.” (Her mom always brings a Bible with her, I thought that would be a sure sign they celebrated Christmas. Oops.)
But clearly when my job brings me back to NJ in a few years, I get to look forward to bratty non-compliant children and their blame-hungry parents galore.
I read in the NY Times a few months ago that Caldwell, Scotch Plains-Fanwood, and Bridgewater-Raritan have all banned cupcakes from school birthdays. Also that parents are now having gift-free parties, instead choosing to compete in how much their kid raises at the party to donate to charity. The poor kids these days, none of this sounds fun for an 8 year old. Any parents on here seen this in their NJ towns and care to elaborate?
S&P layoffs next week.
“Sometime in mid-December, Standard & Poor’s President Deven Sharma sent an e-mail to employees verifying that his appointment was permanent and warning of possible layoffs in the structured finance group, according to several market sources familiar with the company. A small number of executives had already left the company by early December, but drastic layoffs affecting the top third of the structured finance hierarchy are expected this week, according to these sources. A spokesman for Standard & Poor’s declined to comment.”
Pat Says:
January 4th, 2008 at 7:59 pm
My first one is that CF and Dream will continue to debate the prudence of managed fund investment. We will see this in March, and again in August. Cut and paste, you guys. Stop rewriting every time.
Pat: the frustrating thing is that we are not arguing the same point….
Without using pejoratives….he is rationalizing a fault, and using his stated preference as a justification….it is intellectual dishonesty…
I’m not saying he doing it consciously or else deliberately, but he surely might be…
Aaron, 125
Those new cans are absolutely horrible. I have never spilled so much gas before I started using them.
Go to Wal-Mart. You can still buy a can with the old fashioned spout without the “safety” valve. They are in the outdoors section. You may accidentally spill a few drops here & there, and you will vent fuel vapors to the atmosphere if the can is left full, but you are less likely to set yourself and your garage on fire fuelling up.
258 gryffindor We have fund drives in are schools by having the kids sell chocolate,baking goods,wraping paper.Now these are all seperate sales they just keep comeing & they are for the school not a charity.Now all the kids in area come home with this at the same time so you can’t go door to door.You can only rope the fam. in so many times.But here is the rub you get prizes based on sales & my 10 year old girl can’t sell enough to get what she would like
the kids get crazy over the prize page.I hate to see them keep breaking her heart but refuse to purchase a load of crap just to make her happy.This is not right & I have a good mind to let them know at school.
I live in a rural area so ite hard to sell alot my wife & I don’t work in large offices
so no good there.Thank goodness my fam. is very good about it or we wouldn’t sell much at all.
…commmenting to yesterday’s Manhattan article…NYC is going to crack and it it is starting to show signs similar to last downturn.
Fringe areas in the boroughs are not selling as well, poor locations are slow to sell, poor layouts, etc.. It always the top quality, top locations that keeps moving OK up to the end, while the middle (lesser locations) drops – putting pressure on the bottom (worst locations – both geographic and within a building) , etc etc etc. How long before we have the inevitable condo / coop meltdown? 6 months? 1 year? If we go into any type of recession – I’d say by fall 2008.
And I agree with earlier postings – the foreigners are investors (speculators), investing in the last place with potential.. isn’t the investor phase the last phase before a bubble bursts?
ricky,
Sold for $2,150,000.
Was originally listed as MLS# 2515882 on 5/23/2005 for $3,200,000. The most recent listing, the one you posted, had an OLP of $2,675,000.
$1,050,000 (33%) off OLP?
For #239,
Chifi, for heavens sake, I am not trying to pick a bone with you. My paragraph started with the phrase ‘In my case’….. so it applies only to me. I do agree with what you mention after that regarding the reasons people might need a financial advisor.
For #244,
Those are the dates Morningstar started their portfolios. There was no hand picking of starting dates on the part of the author to data mine to prove any point.
For #260,
Intellectual dishonesty? So that’s what all this boils down to, eh?
Peace to you…I’m signing out.
bubblewatcher Says:
January 4th, 2008 at 10:15 pm
…commmenting to yesterday’s Manhattan article…NYC is going to crack and it it is starting to show signs similar to last downturn.
I agree. Here in Hoboken I am seeing it more and more. There are some condos near me that have been available for sale for 6 months I think. I haven’t looked inside, but they seem to have clearly assumed that anything would sell, as these condos were squeezed into a tight spot between 2 buildings. No clue what they are trying to sell them for though. As far as I can tell, none of them have sold.
Just noticed that they are also trying to sell some “unfinished lofts” near me for $250k or something. My guess is that the money ran out.
Another small “Luxury” building near me is still unfinished, and has big signs on it indicating units are still for sale. This building was originally supposed to be finished in Aug/Sept I think, but is nowhere close to being done.
Check this out:
Suddenly there’s 7 listings in 1 day for Maxwell:
http://newjersey.craigslist.org/search/rfs?query=maxwell&minAsk=min&maxAsk=max
Panic much?
Ann (255)-
Are you nuts? $1,500 even deserves a second thought in a transaction like this? You’re thinking of walking on this over chump change?
You’ve gotta have way more than $1,500 tied up in this deal already.
# 221 “lisoosh Says:
January 4th, 2008 at 4:52 pm
BB – Gifts.
Someone almost fell over when she asked my daughter what she got for Hannukah and she answered “What do you mean? Hannukah is for candles, not presents?”
Don’t think I’ll get away with that for much longer.”
Whether Christmas, Hannukah, or anything eles for that matter ,one of the best things to do is to have kids focus on buying presents for the needy, sick children in hospitals, and the like. It is a lot more satisfying than more, more, more.
new 29 out of 30 in Zagats. anyone ever eaten here?
Cuisine: New American
Chef: Nicholas Harary
Price Range: up to $75
160 State Route 35
Red Bank, NJ
(732) 345-9977
restaurantnicholas.com
Hobokenite
Developments that started too late in the cycle that didnt get enough presales are losing steam. Some that didnt hit critical mass may go back to rental or commercial (sounds like 1990 all over again) or even abandon the project.
I personally know of developers in Brooklyn that are cutting planned amenities due to lack of sales. They are getting closer to just trying to get out without taking a bath.
It’s getting closer and closer to Manhattan – what will it take to jump the river? It’s coming folks. To what degree I cannot speculate.
And it’s not a good sign when million$ condos are advertising on craigs list – are they that short on cash? (they are) – and do they think a buyer on craigs list is not as smart?
#264 grim – yup that’s what I thought, was on the market for quite some time (2.5+ years?)
even prestigious bergen county stuff seems to be going for a bit less than asking as well. thanks vm!
257 Mike, yep, it’s our last chance to bail. You got it.
268 Clot
It’s total chump change in terms of the total deal.
I guess they are ticked at us, they could have made a lot more money if they had rejected our semi-lowball.
Interestingly, upon closer examination, 5 of the 6 maxwell places (1 of the original 7 is a rental) are for delivery in 2009.
Today’s market drop was caused by dec. job report? no. it was caused by nervousness about Iowa results. the market doesn’t like the winners from either parties.
Technically, homebuilder index etf (XHB) is testing nov. low at $17. if we see strong rebound next few days, the bottom is here. otherwise, we may have long way to go.
10 year yield came down to 3.87% again. I see the activities start heating up.
“grim Says:
January 4th, 2008 at 2:46 pm
We really need to organize another get-together.”
YES
bi Says:
January 4th, 2008 at 11:50 pm
Today’s market drop was caused by dec. job report? no. it was caused by nervousness about Iowa results. the market doesn’t like the winners from either parties.
Is that why the futures dropped right after the job report was announced?
Dream on.
“I read in the NY Times a few months ago that Caldwell, Scotch Plains-Fanwood, and Bridgewater-Raritan have all banned cupcakes from school birthdays. Also that parents are now having gift-free parties, instead choosing to compete in how much their kid raises at the party to donate to charity. The poor kids these days, none of this sounds fun for an 8 year old. Any parents on here seen this in their NJ towns and care to elaborate?”
apparently the same is true in Brigadoon.
the cupcake part, that is.
bi – I see you’re still a jack@$$
but hey – oil is falling!
Technically, homebuilder index etf (XHB) is testing nov. low at $17. if we see strong rebound next few days, the bottom is here. otherwise, we may have long way to go.
Are you saying a strong XHB rebound indicates housing bottom? Please tell me you don’t get paid to make up stuff like this…
NJMLS Bergen County Sale and Under Contract Data for December
Year-Sold-Under Contract
1995 685 445
1996 662 477
1997 817 529
1998 912 676
1999 831 536
2000 843 480
2001 735 600
2002 827 586
2003 949 667
2004 994 684
2005 898 683
2006 776 629
2007 475 393
(Like September, October and November, this past December is the worst in the last 13 years.)
RE – cupcakes, charity collections, school garbage sales and getting kids to buy presents for the needy:
1. My kids school allows cupcakes, but without frosting. My daughters teachers don’t give a rats @ss, allow the kids to have fun and I am fine with that. Must be noted, I am not in a “top town” school district so maybe us plebes get to have a better time.
2. Charity collections for kids birthdays is miserable. Nearby school district had elementary kids out collecting for UNICEF on Halloween. Confused the kids, confused the adults, pain in the behind.
I think it is pretentious; more about the statement that even on Halloween and birthdays they are making their kids think of others than it is about actually helping anyone.
3.Mike – I throw all of those ridiculous fundraisers in the garbage. I’d rather just pay for the stupid school trips or be asked for a cash donation.
The school benefits from my time, as I volunteer there, help out in classrooms and the library – even better I get an inside view of the school and my kids class.
4. Shore – I actually don’t go in for the buying toys for needy kids thing either for a very simple reason – it keeps the emphasis on STUFF and on non-essentials. I’ve tried to put the emphasis on essentials (food etc.) and volunteerism (visiting sick kids and the elderly). I think it is really good for kids to see with their own eyes that they are actually very lucky for having what they have. And also how much they can do to help someone just by their presence.
Caveat – Sure I’m completely screwing up my kids anyway and am giving them a thousand reasons for hating me when they are older.
Don’t sweat it, lisoosh. They’ll hate you when they are older for no reason at all.
I tried to rally some core support at the local Catholic school for eliminating fundraisers and simply increasing the tuition to cover whatever they made, average gross, over the last three years.
None of them could get it. They’re the ones that toss the fundraisers, though. Like Mike, we buy from each one, but can’t really solicit sales from anyone outside of the school.
The fundraisers are a way to keep tuition down, but have people with extra money subsidize other families.
Re: Anne….I’m not sure what the issue is here? You say you lowballed and won….now are you looking for the seller to make $1500 in repairs? Or are they in a position to dump you in favor of the higher offer? *confused*
pat258 MY kids go to public school.
Big News about ML ..just could nor ressit funny about Hair drying experiance!!!:)
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