“Is this the end of the story? I don’t think so”

Posted on January 14, 2008 by grim

From Bloomberg:

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127 Responses to “Is this the end of the story? I don’t think so”

grim says:

January 14, 2008 at 5:43 pm

From Reuters:

CIBC sets $2.5 billion in subprime writedowns

Canadian Imperial Bank of Commerce, Canada’s fifth-largest bank, said on Monday it will take close to $2.5 billion in before-tax writedowns related to the U.S. subprime mortgage crisis.
grim says:

January 14, 2008 at 5:46 pm

From Reuters:

Drop in home wealth could hit spending hard

Sliding home values are eroding the equity U.S. households can tap for cash at the same time banks have grown reluctant to lend, threatening the consumer spending the economy needs to dodge recession.

In the third quarter of last year, homeowners refinancing mortgages withdrew $20 billion less in real estate wealth than in the prior quarter, and since housing prices have continued to tumble, the outlook for cash-outs has continued to dim.

Lenders have also grown more cautious doling out cash through home equity lines of credit since those loans were failing at their highest rate in ten years during the third quarter.

If the housing market remains soft this year, as most economists expect, consumers will have less home equity to convert into cash, which could lead to an economically damaging pullback in spending.
grim says:

January 14, 2008 at 5:47 pm

From MortgageNewsDaily:

NAR Launches New Public Info Campaign To Counter Slump

The National Association of Realtors® (NAR) announced on Monday that it is launching a new campaign, reaching out to consumers “with the facts about homeownership and the value of real estate as a long-term investment.”

NAR’s Public Awareness Campaign is centered around a new website, http://www.HousingMarketFacts.com which provides information on homeownership as an investment, including a calculator that purports to show have a down payment will grow over the years, and links to portions of the official Realtor.org site that will guide viewers in accessing housing and community research or to identify an appropriate real estate agent.

The campaign will also use broadcast and print media to make its point to consumers. Local associations can receive posters, newspaper/magazine ads, and billboards following the campaign’s two basic themes: “Building Wealth,” and “Home Values.” Between now and November the Association will broadcast ads on these same themes more than 10,000 time on national TV and radio. Local associations can coordinate the national media buys with their own local advertising.

The media plan for the PR campaign indicates that network television ads will be sparse – a total of 265 in the 11 months of the effort – but cable television on channels such as the Food Network, HGTV, the History Channel, DIY, and TBS will broadcast 2,340 ads and Hispanic outlets will get 558.
chicagofinance says:

January 14, 2008 at 6:40 pm

Citigroup Plans to Cut Costs
By DAVID ENRICH and ROBIN SIDEL
January 14, 2008 6:01 p.m.

Citigroup Inc. is expected to announce a sizable dividend cut, cash infusion of at least $10 billion and write-down of as much as $20 billion in mortgage-related investments as part of its fourth-quarter earnings report, people familiar with the plans said.

Vikram Pandit, Citigroup’s new chief executive, also is expected to unveil Tuesday a cost-cutting plan that will likely include substantial job cuts. The moves are part of his push to shore up the company’s finances, including by replenishing its depleted capital.

At a board meeting Monday, Citigroup directors were poised to sign off on Mr. Pandit’s recommendation to cut the bank’s quarterly dividend payment, according to a person familiar with the matter. The size of the cut wasn’t clear, but analysts and some investors have been bracing for it to get sliced roughly in half from the current 54 cents a share. A 50% reduction would save Citigroup more than $5 billion a year.
BC Bob says:

January 14, 2008 at 6:42 pm

“links to portions of the official Realtor.org site that will guide viewers in accessing housing and community research or to identify an appropriate real estate agent.”

[3],

How about links to this site?
grim says:

January 14, 2008 at 6:47 pm

Seems like just yesterday everyone was talking about how great the economy was doing, “Goldilocks” they said.

Now, Goldilocks wants a raise or she’s walkin’ off the job.

Frank Says Democrats Plan $100 Billion Stimulus Plan

U.S. Representative Barney Frank said Democratic lawmakers will announce a $100 billion economic stimulus package offering tax relief and aiming to spur consumer spending in the wake of the subprime mortgage crisis.

“What it has to do, obviously, is get money into the economy quickly,” Frank, the Massachusetts Democrat who leads the House Financial Services Committee, said today in an interview from Boston with Bloomberg Television.

The package will feature tax cuts for those “who are somewhat stressed,” include middle-class and working-class Americans, Frank said in the interview. It will also offer relief to local and state governments and call for increasing the length and amount of unemployment pay, he said.
syncmaster says:

January 14, 2008 at 7:09 pm

Kushner Sells Condo Project

1/14/2008

Charles Kushner’s Florham Park-based real estate firm Kushner Cos. last week continued its withdrawal from the New Jersey market by selling a condominium project in Asbury Park, according to Gordon Gemma, a spokesman for Kushner Cos. Washington-based developer Madison Marquette paid $37 million to buy the property, called Wesley Grove, on which Kushner had partially completed 70 of the planned 140 units, Gemma added.

That deal comes after Kushner sold its 85 percent interest in a Newark office building to The Berger Organization for $25 million, which NJBIZ.com first reported last week.
Confused In NJ says:

January 14, 2008 at 8:03 pm

U.S. Representative Barney Frank said Democratic lawmakers will announce a $100 billion economic stimulus package offering tax relief and aiming to spur consumer spending in the wake of the subprime mortgage crisis.

How many of today’s children will be indentured to pay this bill?
njpatient says:

January 14, 2008 at 8:20 pm

““What it has to do, obviously, is get money into the economy quickly,” Frank, the Massachusetts Democrat who leads the House Financial Services Committee, said today in an interview from Boston with Bloomberg Television.”

A little hair of the dog that bit you?

Because, you know, the problem has been not enough money in the economy. Just ask Greenspan.
grim says:

January 14, 2008 at 8:20 pm

sync,

Two developers pulling out of Asbury isn’t a positive sign. However, the Kushner pull-out was likely due to a very different set of circumstances than the Metro Homes shutdown. Let’s hope Madison Marquette lives up to their promises..

ASBURY PARK, N.J., Jan. 14 /PRNewswire-USNewswire/ — The much-anticipated revitalization of the Asbury Park Waterfront is about to take a giant leap forward according to Gary Mottola, president of Madison Marquette Investments and the managing partner of Experience Asbury, the joint venture between Madison Marquette and Asbury Partners that is responsible for the City’s Boardwalk redevelopment efforts.
…
The Initiative includes: 1) an extensive renovation of all of the Boardwalk facilities from the Convention Hall to the Casino Building; 2) major improvements to the off-Boardwalk portion of the Waterfront Redevelopment Area; 3) the creation of a Boardwalk-Downtown coalition to improve the coordination of marketing and public events and to realize upon the synergies of a coordinated merchandising effort; 4) a commitment for a substantial increase in private support for Asbury Park’s schools and the City’s community at large; and 5) increased private support for the City’s continuing efforts to improve public safety.
JBJB says:

January 14, 2008 at 8:28 pm

Asbury Park is just a microcosm of NJ. A place that was and coulda been — but got ransacked by a bunch of dimwit, sleazy politicians, most of which happen to be democrats. The sheep just fall in line.
HEHEHE says:

January 14, 2008 at 8:30 pm

Ben Stein’s latest clueless babble (or should I say finally getting a clue babble)

http://www.nytimes.com/2008/01/13/business/13every.html?_r=3&ref=business&oref=slogin&oref=slogin&oref=slogin
Clotpoll says:

January 14, 2008 at 8:44 pm

HE (12)-

From that NY Times article:

“Ben Stein is a lawyer, writer, actor and economist.”

And he sucks at all of them.

Stocks trading at historically-high PEs??? After last year’s market boomlet, a casual obesrver might think so…but, the opposite is true. In fact, PEs are at historic lows. Imagine what would be happening on Wall St right now if valuations were at dot-bomb-era levels!

Even more amusing is that Stein essentially makes a Barney Frank-like plea for relief, even though he bills himself a conservative. I guess liberals and conservatives alike have learned how to pander and whine for handouts. Phooey to all of ’em.

Bueller? Bueller?
kettle1 says:

January 14, 2008 at 8:44 pm

This may have already been posted

NEW YORK (Fortune) — Faced with foreclosure on her Russellville, Indiana home, Christina Snyder allegedly concocted the kind of plan that now has insurance executives on edge.

According to the county prosecutor, the 31-year-old Snyder allegedly offered to pay a neighbor $5,000 to help her burn down her house and make it look like a botched rape attempt – all in order to claim $80,000 in insurance money. Snyder wanted the neighbor to bind her hands in duct tape, write “whore” on her shirt, and then help her escape once the blaze was set, the prosecutor says. The neighbor demurred, instead reporting Snyder to police.

With the national foreclosure rate zooming and the real estate market in a two-year funk, the insurance industry fears more homeowners will see arson as a way out of their financial woes. A recent report by the industry-funded Coalition Against Insurance Fraud notes that with “untold thousands of homeowners struggling with ballooning subprime mortgage payments, fraud fighters are watching closely for a spike in arsons by desperate homeowners who can no longer afford their home payments.”

History indicates such a spike is coming. “When the economy is down, we see an increase in fraud,” says Dennis Schulkins, a claim consultant in State Farm’s Special Investigative Unit.

It may already be happening. Allstate (ALL, Fortune 500) spokesman Mike Siemienas says his company has seen an increase nationally in arsons among homes in foreclosure. In California, the state¹s insurance division reports that the number of questionable residential fires in 2007 increased 76 percent over 2006.

National arson statistics for 2007 aren’t yet available, but Federal Bureau of Investigation crime data shows there was a significant uptick – 4 percent – in suburban arson in 2006, when the real estate downturn began to take hold. The arson increase in 2006 marked a change from the prior three years when suburban arson fell 3 percent, 5 percent and 6 percent, respectively. Says Dennis Jay, the Coalition Against Insurance Fraud’s executive director, “It’s a growing problem.” To top of page
kettle1 says:

January 14, 2008 at 8:48 pm

#6,8,9 regarding stimulus package.

Ok there may be a few economist on this board but the majority are not. Yet we can all recognize that more money is not the solution, less spending is as well as a recession. It would be incredibly refreshing to actually hear a politican make statements that show they understand economics at some basic level, and that they understand we actually need a recession even if it hurts ( yes i know ron paul has made such statements, RP for pres)
Ed Sanders says:

January 14, 2008 at 8:50 pm

Apologies if this is old, but I just picked it up from Ben Jones (the Godfather of all housing bloggers I think it’s fair to say).

From The Press of Atlantic City:

“As the housing market continues to keep its head just above water nationwide, the oceanfront-home market on Long Beach Island is a whole other animal, according to several local real estate agents.”

“‘The oceanfront market is a recession-proof market,’ said Joy Luedtke, owner of Joy Luedtke Real Estate.”

http://www.pressofatlanticcity.com/top_three/story/7527711p-7429229c.html

Why do I get the feeling all is not well on LBI?

FTR, The publicly available MLS I hit showed 75 SFHs priced over $2M, another 70 between $1.5M and $2M, and 86 more over $1M on LBI.

I get the feeling supply is far outstripping demand at the moment.
BC Bob says:

January 14, 2008 at 8:55 pm

Short term handouts? Long term incentives should be established to induce savings and productivity. Concentrate on drawing down our current account defecit. Main Street does not need more Koo-Koo juice. Stop the asinine quick fixes.
Ed Sanders says:

January 14, 2008 at 8:55 pm

As far as Asbury Park is concerned, it saddens me to say that the city has once again missed its chance.

Long Branch got its act together (and a huge cash infusion from the state)in time to really turn things around, but AP just missed the wave. Some good things happened, just not enough.

Unfortunately, it looks like the city will have to wait for the next RE upturn sometime after 2012.
sas says:

January 14, 2008 at 9:00 pm

This is interesting:
Looks like Mitt Romney is going to be pushing propaganda via clear channel.

“FCC OKs Clear Channel buyout”

http://hosted.ap.org/dynamic/stories/C/CLEAR_CHANNEL_BUYOUT?SITE=ORAST&SECTION=HOME&TEMPLATE=DEFAULT

http://en.wikipedia.org/wiki/Bain_Capital

SAS
sas says:

January 14, 2008 at 9:01 pm

moderate?

what did I do? Is this Red China or something?

he he….

SAS
t c m says:

January 14, 2008 at 9:01 pm

#3 re: NAR campaign

i thought that they weren’t allowed to position real estate as an investment – meaning you need a license to sell investments.
kettle1 says:

January 14, 2008 at 9:05 pm

It has been said before, many times actually, but it appears that alexander tyler was right…

“The average age of the world’s great civilizations has been two hundred years. These nations have progressed through the following sequence:
from bondage to spiritual faith,
from spiritual faith to great courage,
from courage to liberty,
from liberty to abundance,
from abundance to selfishness,
from selfishness to complacency
from complacency to apathy,
from apathy to dependency,
from dependency back to bondage.”

it is really starting to look like we may be entering the “dependency” stage. So i would suggest the boomer represent the transition from abundance to selfishness, but we may have transiitoned trhough complaceny and apathy in only 2 decaes, i.e the 80’ s and 90’s. It is starting to look like the current generation in highschool age could be the first real dependency generation.
sas says:

January 14, 2008 at 9:09 pm

I recall calling $100 crude come Labor Day, I was damn near spot on…

next up $125 BEFORE summer.

that is going to bite and bite hard.

I wonder how much prices have to climb to start thinning out NJ turnpike & 78??

we will see.

what say you???
SAS
grim says:

January 14, 2008 at 9:11 pm

At what point will the media stop referring to this as a “subprime” problem? It’s obvious that the mortgage crisis has transcended well beyond subprime.

From the WSJ:

S&P Cuts Ratings On Classes Tied To Alt-A Loans
By KATHY SHWIFF
January 14, 2008 7:07 p.m.

Standard & Poor’s lowered its ratings to junk status on 56 classes from 32 U.S. net interest margin securities transactions backed by Alt-A mortgage loans in 2005 and 2006.

The ratings agency had placed the ratings on CreditWatch with negative implications Nov. 9. Along with the ratings cuts, S&P removed the classes from CreditWatch.

S&P also affirmed its ratings on six classes and removed them from CreditWatch negative. The agency withdrew its rating on one other class that has paid off.

The 56 downgraded classes had an original total principal balance of about $845.33 million, which represents 33% of the roughly $2.60 billion in U.S. net interest margin securities residential mortgage-backed securities backed by Alt-A mortgage loans that S&P rated from the beginning of 2005 through the end of 2006.
…
Alt-A mortgages typically have resulted in higher interest rates because the lack of proof makes such borrowers increased credit risks. As the credit crunch hit full steam in August, investors’ resistance to buying any mortgages deemed risky soared because of a sharp rise in past-due home loans.

Meanwhile, Moody’s Investors Service continued downgrading the ratings and placing others on review for possible downgrade of tranches backed by Alt-A mortgage loans.

On Monday, Moody’s acted on tranches from deals by five more financial institutions. Last week, Moody’s acted on tranches from deals — issued in 2007 — by 11 institutions. The company didn’t provide dollar values for the deals and tranches affected.
Clotpoll says:

January 14, 2008 at 9:14 pm

grim (24)-

“At what point will the media stop referring to this as a “subprime” problem?”

At about the time when Alt-A is scorched earth and prime is on deathwatch.

The really annoying thing will be going into the general election campaign with a Dem & Repub screeching “subprime” every 12 seconds.
sas says:

January 14, 2008 at 9:15 pm

“At what point will the media stop referring to this as a “subprime” problem?”

Thats a good question.
sas says:

January 14, 2008 at 9:17 pm

“campaign with a Dem & Repub screeching “subprime” every 12 seconds”

I thought the buzzword was “change”

tell you what, the dems & repubs serve the same masters, 2 heads of one snake.

SAS
grim says:

January 14, 2008 at 9:20 pm

i thought that they weren’t allowed to position real estate as an investment – meaning you need a license to sell investments.

The NAR would argue that any statements regarding real estate as an investment are nothing more than puffery.

http://definitions.uslegal.com/p/puffery/

Puffery refers to an exaggeration or statement that no reasonable person would take as factual. It often occurs in the context of advertsing and promotional testimonials. Puffery may be used as a defense to a warranty or fraud claim, to assert that the plaintiff shouldn’t have relied on the statement in issue.

You can better understand real estate agents once you realize everything they say is “puffery”.
Clotpoll says:

January 14, 2008 at 9:20 pm

sas (27)-

So true.

Gotta go polish my grenade launcher.
Clotpoll says:

January 14, 2008 at 9:21 pm

#29 might not have been exactly what I intended to say. :)
sas says:

January 14, 2008 at 9:24 pm

“Gotta go polish my grenade launcher”

he he… yee…

Better off voting these rascals out.

SAS
njcoast says:

January 14, 2008 at 9:28 pm

I work at Convention Hall in Asbury Park from time to time and it is such a cool building.The acoustics at the Paramount Theatre are wonderful. There is nothing like hearing BC Bob’s much quoted artist there.

I have noticed in the last few years there are more people on the beach and lots more runners, walkers, bikers on the boardwalk.

There are currently 7 Wesley Grove condos under contract. Best wishes to Madison Marquette to hopefully pull off what nobody else has yet been able to do.
Clotpoll says:

January 14, 2008 at 9:28 pm

grim (28)-

“You can better understand real estate agents once you realize everything they say is “puffery”.

Been saying it here from Day 1. We’re people who SELL THINGS. People who sell things talk up their product. The amount of offense taken at people like us who practice old-fashioned salesmanship still puzzles me. The housingpanic crowd is most puzzling: one the one hand, they all profess to be jaded, urbane sophisticates; on the other, they can’t claim often enough that Realtors wielded Manson-like skills of mind control in convincing millions of Americans to buy homes they couldn’t afford.
chicagofinance says:

January 14, 2008 at 9:30 pm

Bystander Says:
January 14th, 2008 at 7:53 pm
Jill #167, Are you talking about the old HR consulting firm Kwasha-Lipton that became Coopers that beame Price Waterhouse that became Mellon that is now ACS (at the moment)? Yep, I worked there back in 2002 – 2003. I could not get out there fast enough.

by: it was always a sweatshop, but back in 1985-1995 it really had a buzz and paid well. I only could fully critique the place after all of my competitive strategy classes at Chicago (CFA huh?) and also working in a proper IT shop.

The leaders had no formal training in business or finance, so they basically sold their staff into servitude in the name of winning business.

I remember working until 7:30AM on the night before/on Thanksgiving (as in a 23 hour day), and then getting reamed out by my mom and brother’s in-laws for showing up to T-giving dinner late. They thought I was hung over….NOT

The flipside was being 26 years old and having a staff of 8 (quality) college grads reporting to me.
grim says:

January 14, 2008 at 9:32 pm

From the AP:

BOJ head: US subprime mortgage crisis had bigger-than-expected impact on Japan economy

Japan’s central bank chief said Tuesday that the U.S. housing loan crisis is having a greater-than-expected impact to slow the Japanese economy, ruling out a possibility of raising key interest rates any time soon.
Orion says:

January 14, 2008 at 9:32 pm

Asbury Park Redevelopment Press Release.
From APP:

http://www.conventionhall.net/initiative/index.html
sas says:

January 14, 2008 at 9:34 pm

speaking of Red China.

I was in Beijing & Jining China for the month of Dec.

Let me share with you my observations:

-crowded and polluted, worse than just 2 years ago.

-no more bikes, they all are starting to drive, MAJOR oil consumption, 2 years ago..bikes.. not anymore.

-Out of control inflation, natives are getting restless with this…puting pressure of govt. Watch the peg!!!

-However, subways & trains are damn cheap, amazing cheap. The govt is trying to encourage people to use mass transit by keeping public transportation prices very low.

Unlike here, we raise prices and say “its for the env”

Environment my ass,
SAS
chicagofinance says:

January 14, 2008 at 9:36 pm

BTW – Citi reporting right out of the chute tomorrow…..let the fireworks begin….
Essex says:

January 14, 2008 at 9:38 pm

This is a fascinating and especially scary time in the ‘by the grace of God go we’ economy…..this next year will belong to those who can hold onto their jobs. Any ‘relief’ from taxes…sure who doesn’t want that…will go to pay bills or into the college fund….not to ‘stimulate’ anything meaningful — but then….we consume enough imho.
Shore Guy says:

January 14, 2008 at 9:39 pm

# 4 Pandit is smart to write down everything he can right now, slash and burn, etc. At least he can say it was the mess he was left and it had to be done. If he waits, it will be HIS mess.

# 6 ““What it has to do, obviously, is get money into the economy quickly,””

I can fee the hands reaching into my pockest already. Hillary’s $60 billion here, $50 billion there. Barny’s $100 billion.

The only thing they are stimulating for me is my tax bill.

# 16 “Why do I get the feeling all is not well on LBI?”

Or for that matter on ocean avenue in Spring Lake, Belmar, Bradley. Heck, even some apartment to condo conversions in Avaon.

# 18 “Long Branch got its act together”

Kinda, they built things but they are ugly rabbit warrens that shield the town from its ocean views and block the ocean breezes. Long Branch is an ugly mess.
sas says:

January 14, 2008 at 9:42 pm

“Citi”

let me tell you about Citi.
They haven’t even begun to announce their losses… thats because at this point they still “have no idea of the loses” words from a high member, told to me last Wed.

So, whatever they say tomorrow, they are feeding you crow, its alot worse than what they say.

SAS
Shore Guy says:

January 14, 2008 at 9:44 pm

# 32 “njcoast Says:
January 14th, 2008 at 9:28 pm
I work at Convention Hall in Asbury Park from time to time and it is such a cool building.The acoustics at the Paramount Theatre are wonderful. There is nothing like hearing BC Bob’s much quoted artist there.”

Ian Hunter sure lit up the place, back in the day.
grim says:

January 14, 2008 at 9:47 pm

Ani DiFranco at the Paramount on the 19th?

I’m tempted to haul myself down to Asbury.
Clotpoll says:

January 14, 2008 at 9:51 pm

ChiFi (38)-

Crash helmets, kids…
dinra says:

January 14, 2008 at 9:53 pm

anyone,

current status of 2450479 ?
grim says:

January 14, 2008 at 9:55 pm

dinra,

MLS# 2393266
Listed: 04/04/07
OLP: $422,900
Reduced: $394,500
DOM: 183
Expired

MLS# 2450479
Listed: 10/05/07
OLP: $389,900
Reduced: $379,900
DOM: 94

Sold: 01/11/08
Sale Price: $363,000
dinra says:

January 14, 2008 at 10:01 pm

and this one.
2448935
dinra says:

January 14, 2008 at 10:02 pm

Grim, u r 2 quick. thx.
Clotpoll says:

January 14, 2008 at 10:02 pm

grim (43)-

Ani DiFranco knows a good RE deal when she sees one.

That old church she bought in Buffalo is a gold mine.
Clotpoll says:

January 14, 2008 at 10:06 pm

Shore (42)-

“Ian Hunter sure lit up the place, back in the day.”

I went to a Mott the Hoople show in the ’70s where the audience in the front rows lit their seats…literally.

Oh, well. At least I can claim to have seen Black Oak Arkansas live.
RentinginNJ says:

January 14, 2008 at 10:06 pm

“At what point will the media stop referring to this as a “subprime” problem?”

I agree with Clotpoll.

Calling it a “subprime” problem is easy, understandable to most news consumers & the most palatable way to present very bad news.

At a time when most people consumer their news in sound bites & bullet points, explaining the current situation as a “subprime problem” is easy & understandable; lenders (the bad guys) made risky loans to people with bad credit (irresponsible) who were either speculators (other bad guys) or legitimate homebuyers (victims), tricked into taking these loans. Interest rates started going up & these people now can’t afford to repay. That’s the MSM story in a nutshell.

This story is also the most palatable way to present the bad news. The majority of people in this country are paying their mortgages, are not Wall Street bond traders & are not flipping houses. This allows the masses to point the finger at the aforementioned groups & play the role of the victim. “My retirement nest egg is dropping in value because of the subprime problem”. “If it weren’t for this subprime problem, we would all be on the path to permanent prosperity via our homes”.

People simply don’t want to hear that they bought-into a mass delusion and that their “savvy investment” is fundamentally overvalued and isn’t worth what they think its worth.
dinra says:

January 14, 2008 at 10:19 pm

The prices have to come down further. I notice 2005 prices in Mt. Olive.

Montville, where I rent does not seem to be giving in that easily. Denville seems to have given in by 5-10%

So even a 10 -15% of inflated 2006 prices does not cut it for me.

What do you guys think?
SM says:

January 14, 2008 at 10:20 pm

Checkout MLS#2439791. 2 bedroom townhouse in Cambridge heights, Nutley.

OLP 429. LP 399 and you know how long it’s on the market 332 DAYS !!!!!!!!!. Damn what the hell the owner is thinking. Morons.
dinra says:

January 14, 2008 at 10:25 pm

…forgot to mention. I am not looking for the over the 1/2 a million dollar homes. atleast not yet…may be some day, when I break my self imposed taboo of not working for financial companies and rake in the moolah.
Cindy says:

January 14, 2008 at 10:25 pm

At 59, my folks may have been part of that first generation to “buy on time.” Mom said she was so proud of her new washer and dryer from Sears. Yet, my exes Dad (about 10 years older than my folks) only paid cash for such items. There are just so many irresponsible borrowers out there. Once their “line of credit” known as home equity ean dry they just started accepting all of those credit card offers that came in the mail and ran those up. Then someone loses a job and bingo.
RentinginNJ says:

January 14, 2008 at 10:28 pm

I notice 2005 prices in Mt. Olive…What do you guys think?

I see asking prices all over the board. Identical houses 2 blocks from each other might differ in price by $50k.

I think you will see the places with 2005 asking prices are mostly sitting. Those that do sell go for well below list price.
Clotpoll says:

January 14, 2008 at 10:29 pm

dinra (52)-

I still think you’ll never buy a house.
Confused In NJ says:

January 14, 2008 at 10:30 pm

One lasting legacy of the Jonestown tragedy is the saying, “Don’t drink the Kool-Aid.” This has come to mean, “Don’t trust any group you find to be a little on the kooky side.” or “Whatever they tell you, don’t believe it too strongly”.

This is especially true of anything coming from the FED or US Government, “Don’t drink the Kool-Aid”.
gryffindor says:

January 14, 2008 at 10:31 pm

49 clotpoll – What’s so special about the church she bought? Compared to NJ, everything can be considered a good RE deal in Buffalo.
dinra says:

January 14, 2008 at 10:31 pm

(57 Clotpoll)
…and why would that be?
Clotpoll says:

January 14, 2008 at 10:32 pm

Confused (58)-

Where does Kool-Aid go to get its reputation back?

Man, when I was 10, my body had to have been 15% Kool-Aid by liquid volume. Cherry flavor.
Clotpoll says:

January 14, 2008 at 10:34 pm

dinra (60)-

Your questions and posts here remind me of prospects I’ve had over the years who don’t buy.
Confused In NJ says:

January 14, 2008 at 10:34 pm

Recent articles allude to people tapping their 401K’s to make Mortgage Payments. Couple this with Boomers tapping 401K’s for Retirement, and Age 70 forced distributions, and one wonders what Kool-Aid the Government will come up with to replace Fuel the Equities Market.
Essex says:

January 14, 2008 at 10:34 pm

52….I think Montville has to be one of the most boring communities on the planet….I spent a few years there….1.5 hours to NYC….(when will that direct line be in place?)

Montville’s one strip mall and a 7-11 are real amenities….the countryside around the area is ‘nice’ tho….good motorcycling and driving area….but B-O-R-I-N-G.

Denville is OK, but halfway under water in places….watch out for those flood plains.
Essex says:

January 14, 2008 at 10:36 pm

61….VITAMIN Water….the ‘new’ and pricier Kool Aide.
Clotpoll says:

January 14, 2008 at 10:36 pm

gryf (59)-

That church is a recording studio/concert hall/bar/office.

Talk about return on square footage!
John says:

January 14, 2008 at 10:37 pm

“Mortamer, we have to get a hold of Wilson and tell him to SELL”.
Confused In NJ says:

January 14, 2008 at 10:37 pm

Clotpoll (61) You are right, the Dictionary should have stipulated Grape Kool-Aid, but it didn’t? I guess because Cyanide can be added to any flavor.
John says:

January 14, 2008 at 10:39 pm

Montville is KPMG’s NE Think tank location. Many a training session held with drinks at the Holiday inn
Clotpoll says:

January 14, 2008 at 10:39 pm

Confused (63)-

Buy gold miners on margin?

All disclaimers. I am currently long gold miners, on margin. Do what I do, and I’ll see you in hell.
HEHEHE says:

January 14, 2008 at 10:42 pm

Clot,

I was surprised Stein had his head out of his ass long enough to notice the economy has tanked. I was more impressed he wrote an entire article without shilling variable annuities.
Everything's 'boken says:

January 14, 2008 at 10:42 pm

22

The ‘tytler’ quote is notorious. There is evidence that it was never written by him and it may well be a case of intentional false attribution to lend authenticity to some author’s own view.
dinra says:

January 14, 2008 at 10:42 pm

(62 Clotpoll) : Hope the best for me. may be 2008 end when it hits 2002 prices adjusted for inflation. asking for too much :-)

(64 Essex) : 40 minutes to Port Authority by bus, although no NYC commute for me. you are right, a little bit on the low key side, but that works for some non party guys like me.
Essex says:

January 14, 2008 at 10:43 pm

68….KPMG come up with any new tax shelters over those sessions?
Essex says:

January 14, 2008 at 10:44 pm

73….No way dinra……40 minutes…maybe at 5AM. In traffic you are easily at an hour plus.
Clotpoll says:

January 14, 2008 at 10:47 pm

dinra (73)-

Sorry for the abuse. The trend is down; just don’t miss a great home by shaving the numbers too fine. The bottom will have passed before you or I have noticed it.

Montville & Denville are damn nice places. Funy how many investor clients of mine live in both towns & “invite me over” when they want to buy or sell properties in my bailiwick.

I don’t accept those invitations without polishing my Cole-Haans and detailing the jalopy.
Clotpoll says:

January 14, 2008 at 10:50 pm

HE (71)-

Perhaps the variable annuity consortium has ceased payments to Mr. Stein.

He is the human embodiment of a braying donkey. If he continues to publish his idiocy, I’ll track him down…armed with a pair of needle-nosed pliers.
gryffindor says:

January 14, 2008 at 10:55 pm

clotpoll (66) – I just looked it up, thanks. Good for Ani Difranco trying to help revitalize Buffalo, but unfortunately it is going to take a lot more of these projects to turn her hometown around.
dinra says:

January 14, 2008 at 10:58 pm

I think the worst affected are the ones who paid for those expensive (jacked up prices) upgrades when buying a new house from the builder.
njpatient says:

January 14, 2008 at 10:59 pm

41
yes
njpatient says:

January 14, 2008 at 11:01 pm

“At what point will the media stop referring to this as a “subprime” problem? It’s obvious that the mortgage crisis has transcended well beyond subprime.”

They’ll finally start calling it the “mortgage crisis” approximately one month after it’s obvious that the economic crisis has transcended well beyond mortgages.
Confused In NJ says:

January 14, 2008 at 11:04 pm

Clotpoll (70)

I’m Ultra Conservative. In the 80’s Market Woe I was getting 16% on Government Obligations. My Main Strategy today is Tax Minimization and FDIC Insured Interest Maximization. I stopped buying Gold when it passed $800. I no longer dabble in Equities. Once a Critical Mass was acheived, Stable Principal Preservation becomes my key requisite. I still adhere to the Three Legged Stool of Pension, SS, & Savings; coupled with Tax acumen. Although the First Leg has dissapeared in most of the Private Sector, and has grown exponentially in the Public Sector.
njpatient says:

January 14, 2008 at 11:04 pm

“Clotpoll (61) You are right, the Dictionary should have stipulated Grape Kool-Aid”

do NOT denigrate the Grape Kool-Aid. It can be added to straight grain alcohol to produce one of the greatest drinks ever: Purple Jesus.
RentinginNJ says:

January 14, 2008 at 11:04 pm

and one wonders what Kool-Aid the Government will come up with to replace Fuel the Equities Market.

Alternative energy & low carbon technologies!

We will see massive govt. spending on alternative energy infrastructure via direct subsidies & tax breaks with the promise of creation of “green collar” jobs to replace lost manufacturing jobs.

The stars really seem to be aligning for this play:
– heading for a recession with growing calls for stimulus.
– lost manufacturing jobs (with a growing populist\protectionist sentiment)
– growing consensus/concern over climate change
– $100 oil with calls for the gubmint to “do something”
– growing calls for energy independence with less appetite for using military intervention to protect oil interests around the world.

In fact, Hillary has already said that alternative energy would play a big role in her stimulus package if elected.

(disclaimer, I’m long PBW & GEX)
dinra says:

January 14, 2008 at 11:06 pm

2448935 grim? or any one else
Cindy says:

January 14, 2008 at 11:06 pm

(81)In California, it is no longer a “mortgage crisis” it is a borrowing crisis…cars, clothes, vacations. What people wanted they just bought. Didn’t borrowing for everything start in earnest post WW2?
njpatient says:

January 14, 2008 at 11:09 pm

86
agreed – that was what I was trying to get at. Critical mass looms.
Cindy says:

January 14, 2008 at 11:13 pm

87 – Sorry – Got it..I’m one of those “grasshoppers.”

Critical mass big time in Calif. The folks I’m talking about don’t make the kind of money you folks in NJ make.
Shore Guy says:

January 14, 2008 at 11:14 pm

# 51 ““At what point will the media stop referring to this as a “subprime” problem?”

I agree with Clotpoll.

Calling it a “subprime” problem is easy, understandable to most news consumers & the most palatable way to present very bad news. ”

I have had the opportunity to appear on many U.S. network and international TV and Radio programs and to interact closely with numerous print editors and reporters from some of the finest programs and publications. One thing that has struck me is the inability of most producers, reporters, and others to deal with NUANCE. It does not seem to be important to them. The “essence” is more important to many of them than the underlying truth. It is a shame and it bites us in the backside when we see various media outlets fail to do proper vetting of candidates for office, or ask penetrating questions of our political and economic leadership. Boxers or briefs; give me a fricken break.
dinra says:

January 14, 2008 at 11:14 pm

Clotpoll : I bid on a raised ranch in Denville for 460,000 in April 2006. I was outbid with a Cash offer of 460,000 that was withdrawn on the day of closing. We were asked to come back and being naive and not to look cheap ( by lowering the price) offerred to honor the initially offerred price. They took this offer to the cash buyer and arm twisted him back into the deal. We gave up. I was not going to play a game that was so much tilted against us. So, we will wait.
Confused In NJ says:

January 14, 2008 at 11:16 pm

Cindy (86)

If you were the Children of Depression ERA Parents, you tended to be Financially Conservative, because of of what they taught you and a less affluent environment. Their Children, less so, as they grew up in a more affluent environment. What is both interesting and disturbing is that Parents born between 1940 & 1950 will probably be more affluent then their Children, even though the Children have greater Formal Education. My first house was $50K with a $35K Mortgage. My Childrens first house’s averaged $300K. My Grandchildren’s first houses may be off the Charts, or Not?
Confused In NJ says:

January 14, 2008 at 11:17 pm

Interesting that History Channel at 11:16 PM tonight is airing the Jim Jones Kool-Aid Story.
syncmaster says:

January 14, 2008 at 11:18 pm

Cindy #88,

The folks I’m talking about don’t make the kind of money you folks in NJ make.

The readership of this blog really isn’t representative of this state.

Good thing, too. If it was, it wouldn’t be nearly as informative.
kettle1 says:

January 14, 2008 at 11:19 pm

#72 broken,

it may be a false quote, i have not researched its history…. regardless, i think that it is somewhat accurate if you look at the history of previous republics/democracies. I think that it is also interesting how over the last 100-150 years you can see a clear progression of the government intruding into peoples lives and expanding control in a similar manner as with previous historic republics/democracies
syncmaster says:

January 14, 2008 at 11:19 pm

#93 – instead of readership, I should have said the ‘posters’.
Essex says:

January 14, 2008 at 11:21 pm

89…….Shore Guy=Ted David
Shore Guy says:

January 14, 2008 at 11:22 pm

# 76

I love the Cole-Haansthat are made in Italy. Softest shoe leather around. When live in those puppies. The Allen Edmunds are nice too, actually.
Shore Guy says:

January 14, 2008 at 11:25 pm

# 83

After emptying a bottle of grain alcohol into a punch, have you ever “burnt the spirits” out of the bottle?
Shore Guy says:

January 14, 2008 at 11:26 pm

# 96 “Ted David”

Huh? Went right over my tired head.
Cindy says:

January 14, 2008 at 11:27 pm

Confused (91) Yeah, the exes Dad was a child of the depression. Everything was cash.

My first house was a 1 bd. 875 sq. ft. cracker box for $9,500 purchased in 1974. Sold in 1976 for $11,500. to buy in Oregon at $18,500. That place eventually sold for $95,000. My daughter bought at $178,000 in a small town in Wash state 31/2 years ago so they should be okay. They did convert out of an ARM @ 5.875 just about 3 weeks ago.

I swear, the most important lesson (having learned it the hard way myself) I’m passing on to my kids is to not carry CC debt. Then the money you earn belongs to you..you’re not paying for a dinner you had 3 months ago with today’s paycheck.
Essex says:

January 14, 2008 at 11:30 pm

99…………http://www.cnbc.com/id/15838180/
Shore Guy says:

January 14, 2008 at 11:35 pm

# 100 “I swear, the most important lesson (having learned it the hard way myself) I’m passing on to my kids is to not carry CC debt.”
Cindy,

I am with you on that. I had a chilling conversation with a friend recently. Over the past decade he kept cashing out from the home ATM. The last time he went intertest only. At every step I advised against it, but he kept telling me how my ideas were “so yesterday,” and that debt was good. Well after losing his job, yadda, yadda, the chickens have come home to roost. He needed to buy something and I advised against putting it on CC, and he said something to the effect that there was already so much on it, a bit more didn’t make a difference. I should have held my tongu but said something about how it was not wise to carry over CC debt month to month and he said “Oh, yea, like you don’t have $15-20,000 on your cards. When I told him I do not, and even in a month when I charge that much I pay it off, he got all pissed off.

When did financial responsibility become a bad thing?
Shore Guy says:

January 14, 2008 at 11:38 pm

# 101

Essex,

At least it was not Ted Baxter, lol.
Shore Guy says:

January 14, 2008 at 11:39 pm

And, although I have been on CNBC, I am not Ted.
Cindy says:

January 14, 2008 at 11:42 pm

syncmaster (93) I should have said the posters make – huh.

confused (82) The three-legged -stool is what I’m going for, too. (much smaller I am sure.) – Great expression!

They really messed me up on the SS end. In Calif. I have WEP -Windfall Elimination Provision- (curtails my ability to draw on full 32 years paid in.)
Cindy says:

January 14, 2008 at 11:46 pm

Shore (101)
“When did financial responsibility become a bad thing?”

After WW2 I guess. Like it was “beyond the depression” or something. “Look I qualify for credit.”
Shore Guy says:

January 14, 2008 at 11:46 pm

The Federal Reserve said last week that credit card debt rose at an 11.3 percent annual rate in November. From 2003 to 2005, that debt had been rising at a rate between 2 percent and
4 percent.

http://www.cnbc.com/id/22652455

It looks like we are reaching the end of the rope for those who are not in good financial shape. Houses have been tapped, 401(k)s are being liquidated, CC debt is rising, there will be fewer and fewer solvent “potential buyers” this spring and summer. I suspect it will be ugly as we enter the slower autumn season. Time to buy some papertowels, there will be “blood” on the floor.
Cindy says:

January 14, 2008 at 11:49 pm

I do get the feeling now and then that there is a bit of resentment regarding school teachers there but here we really don’t make too much. After 25 years of teaching I make $65,000. What about NJ?
Clotpoll says:

January 14, 2008 at 11:50 pm

Confused (82)-

Are you William Buckley?
Clotpoll says:

January 14, 2008 at 11:52 pm

Shit. I think I got moderated for invoking the name of William B#ckley.
Cindy says:

January 14, 2008 at 11:54 pm

Clotpoll (109)

“Are you William Buckley?”

Have I told you guys today “You crack me up.”
Essex says:

January 15, 2008 at 12:02 am

108…..Here is an interesting blog about the teaching profession…the study is one part, but the comments from long-time and also newer teachers is telling:

http://tinyurl.com/2ubzze

What I find fascinating is how in tough times everyone complains about how ‘much money’ teachers make….but in boom times, they can’t find nearly enough people to fill the classrooms….as nearly every job imaginable pays more….with less stress.
Clotpoll says:

January 15, 2008 at 12:02 am

patient (83)-

Grape Kool-Aid can only be used as the blender for the genteel party mix known as “Boondoggle au Romilar”. Recipe as follows:

– 1 garbage can
– 1 assload of powdered Kool-Aid
– 1 gallon of Everclear
– 10 gallons of Mogen David 20-20 (aka “Mad Dog”)
– Festive slices of assorted cut fruits
– Questionable water, poured from a garden hose
– Finish with 10 cc rations of codeine cough syrup (aka Romilar CF) as garnish. Pour the Romilar over the finished beverage in the form of a pousse-caffe.

Procedure: stir all above ingredients toegther with a stick. Serve, sit back, and enjoy.
d2b says:

January 15, 2008 at 12:05 am

I’m not sure about the Federal Reserve CC number. I’m wondering if that is a debt number or just an increase in granted credit.

Last year I bought a watch in Macy’s. Instead of buying it with a card in my wallet, I opened a charge and saved 10%. Plus we, as a society, are continuing to move away from cash. I charge everything and rarely purchase anything over $20 with cash. Of course, I never carry a balance.
Clotpoll says:

January 15, 2008 at 12:08 am

dinra (90)-

Good for you. If I’d had that experience, I’d be a little gunshy too. Nobody should be used as the stalking horse in a bidding war.

Sorry for the treatment. Not all offers to purchase turn into such a clusterf*ck. A better deal will come along for you.
Essex says:

January 15, 2008 at 12:09 am

I’ve never been on TV…..but……..as someone who lived through 2 bubbles ….Tech and now housing……I am shocked out how ‘hands off’ the government was as they encouraged us to spend, spend, spend, took away whatever safety net the ‘old’ bankruptcy laws had….and allowed the banks to practice their own brand of usury…

What I find so fascinating is the heavy toll the banks and their employees are now taking for the actions that they practiced….but it is now not a subprime issue…now it is flooding the mainstream and I maintain that we are witnessing a catastrophic shift in the American economy that will play out over not just a series of months…..but years.
Cindy says:

January 15, 2008 at 12:10 am

Thank you Essex (112) Although many do not understand it – it is very stressful.

“Questionable water, poured from a garden hose..” How do you think this stuff up?

Well, signing off – This school teacher needs to be at school before 7:00..

Thanks for all the info..Have fun!
Cindy
Clotpoll says:

January 15, 2008 at 12:17 am

Cindy (117)-

“Questionable water, poured from a garden hose..” How do you think this stuff up?

Don’t have to. I lived it. Twice.

The first time I drank this punch, I took part in an indoor mock naval battle.
Essex says:

January 15, 2008 at 12:22 am

118….”The first time I drank this punch, I took part in an indoor mock naval battle.”
——————————————–

Not that there is anything wrong with that.
Essex says:

January 15, 2008 at 12:28 am

A great read:

http://www.wsws.org/articles/1999/nov1999/bank-n01.shtml
me says:

January 15, 2008 at 5:52 am

clot: is that recipe for real??? (remember, I am the dope that thought sheeple@verizon.net was a real email address…. I’ve matured a bit since then (thank god.)

remember that talk we had about my family?
It’s gotten very ugly.

sl
Pat says:

January 15, 2008 at 6:45 am

Finish with 10 cc rations of codeine cough syrup … flavor?

Growing up poor, we kids faked coughs so we could break into the giant supply of phenergren with codeine (cherry) my mother kept in the back of the medicine cabinet in the pantry.

I’m now bewildered. Why did none of us think of mixes? I need to ask my sister. When I was five and she was nine, she’d crack open the bottle and give me whatever I wanted if I kept my mouth shut.

She’s also the one who now has the baby shower invitee list up to 60 something people and white linen. No spinach pie for me.

Damn, she’s been manipulating me a long time.

Well, she’s an RN, so I guess the dispensing did SOME good.
Pat says:

January 15, 2008 at 6:58 am

http://www.nytimes.com/2008/01/15/us/15mortgage.html?_r=1&ref=business&oref=slogin

Baltimore Finds Subprime Crisis Snags Women

—
The summer before last, when JB had his discussion forums up by topic, I brought up this issue (of 2005 buyers including a disproportionately large number of single females) to try to get some ideas on how this would play out.

Of course, in my uncouth and tactless manner, the attention became focused on whether or not I’d offended women, rather than the effects and possible outcomes.
Pat says:

January 15, 2008 at 7:02 am

One of the outcomes I predict is more pressure on boomers ages 50-70 to house younger families.

Would 3 BD rentals and homes with in-law suites fair better because of this?
Confused In NJ says:

January 15, 2008 at 8:01 am

109 Clotpoll.

I am far to the right of William Buckley, did vote for James Buckley in NY, though.
Willow says:

January 15, 2008 at 8:03 am

cindy,

I know some of the teachers in my school district make over $100,000. That’s with over 30 years experience and a masters degree.
Cindy says:

January 15, 2008 at 8:38 am

Willow (126) Thanks, I was wondering – Top pay for teachers here is about $75,000. 30 plus masters.

NJ teacher retirement packages must be better than what we have here as well. They have done away with premium ins. deals for new hires. Retirees have to pay monthly for ins. plus copays for all of us. A friend of mine lost her life-time benefits by not retiring last year (different dist.)Benefits are being trimmed here at a rapid pace.

I have a meeting of our faculty senate tomorrow to find out how the $4B cut is going to impact us (education) in the short run then there is the estimated $14B budget deficit projection for next year yet to deal with. Supposedly there is a plan in the works for the fed gov to help out the states.

My district is overly fiscally responsible – we have gone w/o raises for years in a row. When they have the money – they give some to us. (We didn’t get a raise this year – but did last year – zip for the two years prior.) With the ins. costs going up and the COL – I’m in the hole. But..I have a job and I love what I do.

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“Is this the end of the story? I don’t think so”

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