From Bloomberg:
Recession Theorists Confront Recession Reality: Caroline Baum
The calendar flipped from 2007 to 2008, and just like that, the talk turned from if to when, how long and how deep.
Recession, that is. Will it be short and severe, long and shallow, or some combination of the two (short and shallow, long and severe)? Will the slump have a V- or a U-shaped bottom? Will the end of the expansion turn out to be December, January or some future month, once the committee entrusted with determining such things assigns a date?
While all business cycles share certain characteristics, they have features unique unto themselves. For example, every postwar recession experienced an outright decline in real consumer spending in at least one quarter — except 2001’s, where the increase in consumer spending never fell below 1 percent.
Then there’s residential real estate, which, along with manufacturing, is the most interest-rate sensitive sector of the economy. Housing usually rolls over well before the economy; it leads us into the Promised Land of recovery as well.
Real residential investment barely missed a beat in the 2001 recession as low interest rates and lax lending standards conspired to provide a home of one’s own for anyone who set foot in a mortgage lender’s office. Small declines in the second and third quarters of 2000 and fourth quarter of 2001 show up as a blip on a graph compared with the more typical swan dive seen in previous cycles and at present.
…
Most recessions are consumer driven, which makes sense since the consumer accounts for more than 70 percent of total spending. The 2001 slump, on the other hand, was driven by a sharp cutback in investment in equipment and software following a technology bubble, with too much money allocated to too much fiber-optic cable for which there was no possible use.So what will the 2008 recession look like? Driven by home- loan defaults, falling home prices and cascading credit problems at financial institutions that have the potential to curtail lending to the rest of the economy, the recession may look something like the one in 1990-1991, which came on the heels of the savings and loan crisis.
It was commercial, not residential, real estate that was the villain back then, with banks and thrifts overextending themselves into areas they knew little about.
…
“Excess real estate lending, powered by rapidly rising rents and prices, rapidly occurred worldwide,” said William Seidman, former chairman of the Federal Deposit Insurance Corp. and Resolution Trust Corp., the agency created to clean up the mess, at a 1997 symposium on the history of the ’80s. “But more that anything else, real estate lending became the fashion, the new banking idea of the times.”
…
Sound familiar? The new banking idea of the current times — investing in structured financial vehicles collateralized with pools of subprime loans — is sending the biggest financial institutions overseas in search of additional capital. Yesterday, Citigroup Inc. and Merrill Lynch & Co. reported getting a combined $21 billion from investors, including the governments of Singapore and Kuwait.The good news is, the 1990-1991 recession was short (eight months) and shallow, featuring a peak-to-trough decline in real GDP of 1.3 percent.
The bad news is, it took a long time for real estate, both commercial and residential, to recover, damping job growth through 1992. Some regions of the country remained depressed for years. In New England, for example, home prices didn’t start rising until 1995, according to the Office of Federal Housing Enterprise Oversight’s Home Price Index for New England.
From the Wall Street Journal:
Lax Lending Standards Could End Up Fueling
Sudden Acceleration in Auto-Loan Delinquencies
By PETER EAVIS
January 16, 2008; Page C1
In the waning days of the housing-market bubble, lenders lowered their standards, and that made the downturn worse. There is growing evidence that standards also came down for auto loans, and rapidly rising default rates could be the next dilemma for the staggering financial sector.
The amount of auto loans that were past-due or written off as a loss moved sharply higher in the last part of 2007, according to analysts.
Two of the big reasons for the deterioration have been easy to spot. The economy has been slowing, leading to job losses and depressed wages. And the mortgage downturn has prompted banks to cut the availability of home-equity lines of credit, which borrowers have used to pay down car and credit-card loans.
It is becoming clear that several auto lenders let lending standards slip substantially in 2006-07. This increased the chance that loans were made to borrowers who couldn’t really afford them — even at the outset. There is also some evidence that credit-card companies made the same mistake.
“The problem of lax loan-underwriting standards was not just concentrated in the mortgage sector; it’s looking like it took place across the consumer-finance sector, from credit-card loans to auto loans to motorcycle loans,” says William Ryan, consumer-finance analyst at Portales Partners, a research firm.
The deterioration in credit quality appears to have accelerated in the last quarter of 2007. Certain classes of loans made in 2006-07 are reporting some of weakest early credit performances in recent memory.
For instance, 2.06% of prime auto loans made in 2006 were more than 30 days past due in November, according to a Standard & Poor’s Corp. survey. That past-due number for loans in their first year exceeds the historical high rate recorded in 2001 — and it is well up from the 1.75% for prime auto loans made in 2005, S&P says.
The past-due numbers for loans made in 2007 are even worse than the 2006 credits — a trend that exists for both prime and subprime loans, according to S&P.
From the Wall Street Journal:
S&P Raises Projections
Of Sour Subprime Loans
By SERENA NG
January 16, 2008; Page C3
There may be another wave of credit-rating downgrades of subprime-mortgage securities.
Standard & Poor’s Corp. yesterday sharply raised its projected losses for subprime mortgages made in 2006 to 19% from 14%, as loan delinquencies are rising. Those mortgages were important building blocks in billions of dollars worth of mortgage-backed securities issued that year.
Analysts said the rating company’s new loss expectations are much closer to the bearish scenario implied by the depressed values of the ABX index, a market index made up of derivatives tied to subprime bonds.
The change indicates S&P may cut ratings on many more subprime residential mortgage-backed securities, a move that would also affect collateralized debt obligations that hold them and banks and bond insurers that are exposed to these assets.
“I imagine there will be more downgrades arising from this,” said Kevin Cavin, a mortgage strategist at FTN Financial Capital Markets in Chicago, adding that many mortgage bonds with high double-A ratings could be hurt.
Investors track the loss expectations of rating companies closely to understand how the credit ratings of the securities they hold might change. In July, when S&P raised its subprime-loss expectations to between 11% and 14%, it marked a turning point for the mortgage-debt market as investors realized that a tsunami of downgrades could severely hurt the values of their investments. Many Wall Street analysts’ loss estimates for 2006 subprime loans are between 10% and 15%, making the rating service more bearish.
From the Staten Island Advance:
Staten Island home values drop, but taxes don’t
Staten Island home values are dropping more than in any other borough, but tax bills are continuing to climb, and an average single-family home in the borough will be charged $128 more in property taxes come July.
That’s the bottom line from the tentative property assessment rolls the city Department of Finance released yesterday for Fiscal Year 2009, which starts July 1.
Given the tanking real estate market crippling the country, it should come as no surprise that market values on the Island dropped nearly 3.3 percent this fiscal year, after six years of spikes that contributed to increased property tax bills.
…
She said the Island “is much more like a smaller housing community” than the other four boroughs, and therefore “tends to mimic the national trend a little bit more.”
The reason borough residents will pay more while their home values are dropping lies in a complex tax system which, under state law, caps increases on assessments at 6 percent regardless of the magnitude of market rate jumps. Assessments, which change each year and vary from one home to the next, are used to calculate property tax bills.
Overall, the Island is expected to see a 6.2-percent drop in market value for single-family homes, followed by a 5.3-percent dip for two-family homes and a 4.8-percent reduction in three-family homes.
That translates into a decline of $31,000 for single-family homes, but tax bills are expected to rise $128, compared to a $148 jump last year.
As the market trails, homeowners in the borough could pay smaller increases in the coming years and may even see their bills level off, but it takes time for assessments to catch up to market.
“I think Staten Islanders will reduce this to the most basic concept: That the value of my home has gone down but my bill has gone up, and that’s a simple formula they won’t be able to get their arms around,” City Councilman James Oddo (R-Mid-Island/Brooklyn) said.
From Bloomberg:
Housing Decline Hits Long Island, Queens as Home Sales Drop 25%
Long Island and Queens home sales dropped 25 percent in the fourth quarter and the inventory of properties surged as the housing decline hit residential areas east of Manhattan, Miller Samuel Real Estate Appraisers said.
Sales fell to 6,359 from a year earlier. The median price declined 3.2 percent to $425,000, New York-based Miller Samuel said in a report issued today. A total of 38,769 homes were on the market, 41 percent more than a year ago. The survey excludes the Hamptons.
“We’re seeing real price erosion across every major market,” on Long Island, said Jonathan Miller, director of research for Radar Logic Inc., a real estate data company that owns Miller Samuel. “Their behavior over the last couple of years has been the opposite of the city.”
From the AP:
SeaStreak cancels some ferries from N.J. and Manhattan
Commuters who ride some SeaStreak ferries need to find another way to work.
The company has canceled a handful of departures from Monmouth County and Manhattan.
No reason was given.
From MarketWatch:
JPMorgan Chase Q4 subprime markdowns $1.3 bln net of hedges
JPMorgan: Consumer home equity performed worse than expected
JPMorgan: remaining “extremely cautious” as entering 2008
How long will the recession be. Well its up to a few things
-price of houses skyrocketed
-property tax sky rocketed
-sales tax went up
-gas sky rocketed
-food prices are up
etc
So we need to look at not just housing we have to look at increase of everything as compared to all salaries.
So we need to look at what % everything has gone up and compare it to salary increase over the past few years.
So not only does there need to be an adjustment in the housing industry, there needs to be other things that need to be adjusted.
And a Hybrid is not the answer. Thats just a band aid to fix the gas prices. Plus I find it comical that many of these so called people preaching about being green live in McMansion sucking up energy left and right. Thats not to enviornmentally friendly now is it.
It seems that all they want to do is put band aids over the problem as opposed to saying look there needs to be an alternative or there needs to be a resolution to this issue.
It seems we go from one extreme to another.
Housing market goes from giving someone who has a pulse a mortage to making absurd requests to get a mortage.
Why not just figure out the underlying issue. Get rid of these half cracked mortage lenders. Stop building mc mansions there is no need for them. Make tougher laws for people who are flippers, or people who purchase a property and rent it out.
Don’t punish people who have good credit who may not have 20% down.
We need to fix problems and not just put bandaids on them. Until that happens history will continue to repeat itself through every new generation
From MarketWatch:
Week-to-week mortgage applications up 28.4%
The volume of applications filed for mortgages jumped a seasonally adjusted 28.4% last week compared to the prior week, as mortgage interest rates continued to drop in the face of a weakening economy, the Mortgage Bankers Association reported on Wednesday
It marked the second straight week of strong growth in filings. Seasonally adjusted applications grew 32.2% in the week ended Jan. 4 compared to the final week of 2007.
…
The rise in applications for the week ended Jan. 11 was driven by homeowners’ increased interest in refinancings: Applications to refinance existing home loans rose 43.4% on a week-to-week basis. The Jan. 4 week was shortened by the New Year’s holiday.
Meanwhile, purchase loan applications were up a seasonally adjusted 11.4% compared with the previous week, MBA’s weekly survey found.
So much for rich Londoners buying up our overpriced real estate. They’ve got their own problems now…
From Bloomberg:
U.K. Housing Market Was Worst Since 1992 in December
.K. real-estate professionals said December was the worst month for the housing market since the aftermath of Britain’s last recession in 1992.
The number of real-estate agents and surveyors saying prices fell exceeded those reporting gains by 49.1 percentage points, the Royal Institution of Chartered Surveyors said today in London. That compares with 40.6 points the previous month. In the capital, confidence in prices fell to the lowest since 2003.
Hi Grim, is the sale price of this MLS available? 5181003
much appreciated, and great article..I for one check in everyday.
NY Waterway is barely making money because of the cost of fuel/maintenance on the ferries. No suprise other ferry services will suffer as well.
Big window 11 Curious what do they charge for a ride from highlands & the hook.With the price of fuel for a person to drive they
should be able to raise prices.If tolls go up in NJ then even more.
From MarketWatch:
U.S. Dec. CPI up 0.3% vs. 0.2% expected
U.S. Dec. core CPI up 0.2% as expected
U.S. 2007 core CPI up 2.4%
U.S. 2007 CPI up 4.1%, most since 1990
From Bloomberg:
Wells Fargo Profit Declines as Overdue Loans Increase
Wells Fargo & Co., the biggest bank on the U.S. West Coast, said fourth-quarter profit fell 38 percent as more borrowers missed payments on home loans.
Net income declined to $1.36 billion, or 41 cents a share, from $2.18 billion, or 64 cents, a year earlier, the San Francisco-based company said today in a statement. Analysts were estimating Wells Fargo earned 40 cents, according to a survey by Bloomberg.
Wells Fargo suffered its first profit decline since 2001 after the bank made it easier for some borrowers to receive home equity loans. The result was higher defaults amid a housing slump that Chief Executive Officer John Stumpf said in November was the worst since the Great Depression.
“We expect the environment to remain challenging in 2008, particularly in the consumer sector,” Stumpf said in the statement.
We went to dinner last night with a distant relative, who happens to work for the state of NJ. He is retiring in may with a pension of $65,000,{@56} when we discussed the deep financial pit that NJ is in from high pensions, he said ,and I quote” it is not my problem or concern, I have put in 30 years and deserve every penny…let todays youth worry about it, they are very smart”
So as NJ throws money at its public workers, through the PBA and NJEA, under the guise of it is for the children, the reality is–they couldn’t care less about the kids as long as they get every penny from the taxpayer and screw the children aka tommorrow’s taxpayer.
I was appalled at his attitude,but it seems like it is expected from public employees, and I have quite a few in my own family.
The real shame is how today’s families fall for all the hype about— its for the kids… we are just burdening , and burying our own flesh and blood.
It is so sad
While it won’t do much, they should mandate that in order to keep receiving your pension, you must be a full time resident of NJ.
There are many ways around this, but the point is that if there isn’t going to be anything done to solve the root of the problem, maybe we can at least try to keep the cash in state.
From MarketWatch:
Ambac cuts payout, sees fourth-quarter loss
Bond insurer Ambac Inc said Wednesday it may post a fourth-quarter loss of up to $32.83 a share after having to write off as much as $3.5 billion of the value of it debt derivative portfolio.
The firm also said it’s slashing its dividend by two thirds and selling at least $1 billion in equity and equity-linked securities in a move to maintain its AAA debt rating.
State employees don’t put in or take out from Social Security though, right? I guess that’s the one bright part of it.
What would you propose as an alternative? Social Security and 401Ks are too late for these folks. I guess lower pensions would be a start.
For some reason, I don’t have as much of a problem with teachers retiring with a pension. State employees who pushed papers around, well, that’s a bit more annoying.
#18
State employees do get social security. My dad is a retired teacher and he gets his pension plus social security.
What would you propose as an alternative?
Collecting a pension beginning at SS retirement ages for a start.
JIM #15,
He is retiring in may with a pension of $65,000,{@56} when we discussed the deep financial pit that NJ is in from high pensions, he said ,and I quote” it is not my problem or concern, I have put in 30 years and deserve every penny…
Honestly, though – these guys were made a promise. They put in many years of service at below market rate pay in exchange for this promise. Reneging just isn’t right.
State employees do get SS, federal workers do not. So when these people , teachers included get to be 66 they will get SS.
The very first baby boomer to get SS was a baby boomer, and she just wanted the SS for pocket change and fun things to do!
This was addressed in AARP. PS. she was from NJ
re: (15) Jim, when your relative joined the system the crushing debt did not exist for the State of NJ. One of the reasons that local property taxes have been rising and infact doubled since the year 2000 is because of the pension contributions required by the state have been increasing exponetially. The state pension system has been underfunded for over 1/2 of your relatives career. Don’t blame the taxpayer, the money was contributed, blame the politicans over the last two decades for their shennanigans with the NJ pension fund. They just could not keep they greedy grubbing paws out if the NJ pension fund.
Most of the pension woes besides the bad faith negociations of the state and unions can be traced to the Whitman administration and the last few Govenors who either underfunded the pension system like Whitman or borrowed from it or worse played with the books in perhaps an illegal way.
Read this eye opener.
http://www.nytimes.com/2007/04/04/nyregion/04pension.html?_r=1&scp=2&sq=%22New+Jersey+Diverts+Billions%2C+Endangering+Pension+Fund&oref=slogin
Here is a press release from SeaStreak
http://www.seastreak.com/SeaStreak/Commuter+Service+Update/default.htm
I post this because the fast ferry is one of the driving factors in the rise of RE prices in the North Costal Monmouth area. Without it, the homes in Sea Bright and Monmouth Beach have a hellish commute to Manhattan. One may argue that Longbranch to Sea Girt are less affected because of proximity to trains. Nevertheless, the train ride from those areas into NY sucks to the extreme. It is far better to drive up Ocean Avenue to the boats and have that last half hour be a relaxing boat ride than to deal with train parking lots, the crowded North Jersey Coast Line, the train changes, yadda yadda. A selling point in the Mon. Beach Sea Bright, Highlands area has been the boat. Now, for someone to be faced with driving down to Long Branch, over to Red Bank to catch the train, or to fight their way up 36 (or an alternate route) to the Parkway. Yikes! Living on a barrier island with a maximum elevation of about 6′ above sea level and sitting between an often flooded river and the Ocean is likely going to seem less appealing to a number of potential buyers.
SeaStreak owner
re-starts the sale process for the ferry company
New York and London, 15January 2008 – Sea Containers, the parent company of SeaStreak, the profitable fast ferry passenger line that crosses daily from Atlantic Highlands and Highlands on the central New Jersey coast to Manhattan, is re-starting the marketing process to sell the four ships and the company together.
In October last year SeaStreak responded to press speculation about a sale of the ships alone to the National Infrastructure Development Company of the Government of Trinidad & Tobago by referring to it as premature and ‘wide of the mark’. These negotiations have not resulted in a sale.
SeaStreak, which ferries 4,000 commuters during each working day, is owned by Sea Containers Ltd, the Bermuda registered and New York quoted company that has been in Chapter 11 since October 2006. This has led to Sea Containers needing to dispose of its non-core businesses. SeaStreak, which profitably operates the service using four modern and fast catamarans, is one of the subsidiaries which have been put up for sale.
David Stafford, SeaStreak’s General Manager, said: “Everyone at Sea Containers and SeaStreak appreciates how important our Manhattan ferry service is to the local communities of Atlantic Highlands and Highlands. Sea Containers is keen to sell the route together with the ships and we already have firm indications of interest in buying SeaStreak. ”
ENDS
For further details:
Adrian Flook M: Communications + 44 (0)20 7153 1588
I found this in NY Times archives, dated 6/4/1992. I was in high school at the time, this is all new to me!
N.J. Transit Singled Out In Budget Cut
By JERRY GRAY,
Published: June 4, 1992
Under the pressure of a June 30 deadline to balance a budget that is $1 billion in the red, Republican legislative leaders zeroed in today on their first target for cuts — nearly $35 million and scores of management jobs at N.J. Transit.
…
… two weeks ago, Republican legislators rolled back the state sales tax by one percentage point, at a cost of $608 million in revenue.
…
The state’s 75,000 employees and their benefits have been cited as possible targets of the Republicans, who locked themselves into cutting the budget when they cut the state sales tax to 6 from 7 percent.
…
“If they don’t cooperate with us, we will dissolve New Jersey Transit,” Senator Haines said.
Pension gap divides public and private workers
Updated 2/21/2007 2:29 AM ET E-mail | Save | Print | Reprints & Permissions |
By Dennis Cauchon, USA TODAY
Johnnie Nichols, a civilian Defense Department employee, contributes to a federal pension that will let him retire at age 56, after 32 years of service.
His wife, Kimberly, a math teacher at a private business college, has no pension after two decades of teaching and running a horse farm. Their marriage reflects the new world of retirement: government employees who have secure benefits and private workers who increasingly are on their own.
“If we were both in her shoes, we’d be in a world of hurt,” says Nichols, 45, an information technology manager in Middletown, Ind. “We wouldn’t be able to retire until age 67.”
As the first wave of 79 million baby boomers heads to retirement, the nation is dividing into two classes of workers: those who have government benefits and those who don’t. The gap is accelerating in every way — pensions, medical benefits, retirement ages.
Retired government workers are twice as likely to get a pension as their counterparts in the private sector, and the typical benefit is far more generous. The nation’s 6 million retired civil servants — teachers, police, administrators, laborers — received a median benefit of $17,640 in 2005, according to the Congressional Research Service. Eleven million private-sector retirees covered by traditional pensions got $7,692.
(snip-jb)
While it won’t do much, they should mandate that in order to keep receiving your pension, you must be a full time resident of NJ.
They should at least be paying property tax bill to help fund the system that they and their unions created and benefited from. Hardly seems fair to reap the sweetheart benefits and then skip out on the bill.
What would you propose as an alternative? Social Security and 401Ks are too late for these folks. I guess lower pensions would be a start
It’s too late for current and those about to retire. You can’t change the rules on someone after the fact. What irks me though, is this idea that some 25 year old with a gubmint job is now somehow locked-in for life with retirement at 55 and ridiculous benefits.
Not that it will necessarilly stay there but the DJIA is now below 12500. I am now beginning to wonder if we will see 12,000 before the Easter Bunny comes.
Sean (23)
I think the pensions have become a little too generous, add another $18,000 on top of these numbers for SS, plus in some cases (teachers) full lifetime healthcare benefits.
This has reached unaffordable levels, and may be part of the reason so many people are leaving NJ.
Parity between public workers and private sector is needed, including pensions.
Nj is headed for bankruptcy.
Thanks Ann #18 “I don’t have as much of a problem with teachers retiring with a pension.”
It isn’t that way in every state #19 Willow..
When I moved back from Oregon, where I paid into the SS system I already had 32 years in (banking years plus teaching.) Due to a Calif. (and the same for a few other states as well) law -WEP -Windfall Elimination Provision, I can only get credit for 20 of my 32 years paid in. They say I only earned “substantial earnings” in 20 of the 32 years…(I’m not even counting the other 4 years as an employee of Border’s Books 20 hours a week for 4 years as a second job.
Then it should be 36.)
It works like this…You have to earn a specific amount in each year to have that year qualify as substantial. It varies every year…then you get credit for the year. If you are short earning – even a dollar for that year – they throw out the year’s credit. (I was off by $170. in 1977 so they do not count 1977 in my total.)
Once you have 20 years of credit you see 40% of your benefit. For every year thereafter, you receive 5% more so 21 years – 45% 22 years 50%, 23 years 55%, and so on. If you earn double or triple the substantial earnings for the year – no matter – still only one year’s credit. (That happened to me during my teaching years in Oregon.)
Over the course of my personal 32 years of paying in, I earned $120,400. or so OVER the substantial earning totals for those same 32 years BUT not in the designated years..so..I will see 40% of my benefit. I have worked in every year since was 16 but went to college, had small children etc. Worked part time for many of those years. But the money was taken out of my check..I paid it in as did my employer.
So, as a result, figure $340.00 SS
$1,040. or so Oregon retirement and $2,350.00 from Cal. if I continue to work until I am 63. (It is very stressful – no matter what you hear – it will be hard for me these last 4 years.) That means I will get $3730 monthly or $44,760. a year before taxes. If they change the tax laws regarding homes here in Ca. I could be at risk of losing my home.
Our retirees pay for insurance -we have a 10% cap- I have put a very small amount (had to start over in 1997)into 403B funds but I’m pretty sure that is about to be wiped out or at least not available to me for years to come (I’m not 591/2 until July.)
I will probably have to look at supplemental income as a retiree. But I love what I do and we all live the best we can with the choices we make. I am willing to do the same. But I do feel the WEP ruling is unfair.
Short story:
I have voted Rep. every since I was a drive-up teller for UCB in the early 70’s. Mom drives up to cash her welfare check with grandma – with her check. I look in the back seat – 3 kids who have just figured out that this was how you made a living.
So I am not looking for a handout. But I did earn the small pension I will receive.
One thing to look at with respect to NJ government pensions is the issue of the number of days one must work each month in order to qualify for pension credit. I know lawyers, for example, who are in private practice and do work for school districts. They have been able to claim pension credit for this work, and after doing so for a few days work each month over 25 years, they have credit for working for 25 years. Then, three years before they want to retire, they get a govt job and the salary for those last three years counts as the salary for pension calculation purposes. It is a sweet deal for them. As for the taxpayers……
http://www.youtube.com/watch?v=AkuV9gwEqcQ
Jim Roger interview…good stuff.
1:00 – Housing Market Index
The National Association of Home Builders produces a housing market index based on a survey in which respondents from this organization are asked to rate the general economy and housing market conditions. The housing market index is a weighted average of separate diffusion indexes: present sales of new homes, sale of new homes expected in the next six months, and traffic of prospective buyers in new homes. (National Association of Home Builders/Wells Fargo)
This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as the housing market index, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.
Whether the housing market index reflects new home sales or home resales, once a home is sold, it generates revenues for the realtor and the builder. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic “ripple effect” can be substantial especially when you think a hundred thousand new households around the country are doing this every month.
Since the economic backdrop is the most pervasive influence on financial markets, home sales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
Life may be getting a bit harder in train towns too:
http://www.app.com/apps/pbcs.dll/article?AID=/20080116/NEWS03/801160312
WASHINGTON — Commuters stranded from Virginia to Massachusetts. Train service shut down at major terminals in New York, Chicago and Boston. A flood of extra cars on congested highways around Washington and San Francisco.
Come Jan. 30, that nightmare could become a reality unless a long-standing labor dispute between Amtrak and nine unions is resolved.
There has never been a strike in Amtrak’s 36-year history, and it’s still likely that one will be averted, either through a last-minute deal or intervention by Congress.
But if workers do walk out, the 71,000 people who take Amtrak every day won’t be the only ones who’ll suffer. Hundreds of thousands of people who ride commuter trains will join them, since many such services depend on Amtrak employees or infrastructure, particularly in the Northeast.
The dispute involves about 10,000 employees whose last contract ended Dec. 31, 1999. After years of unsuccessful mediation, a presidential emergency board issued a report on the dispute Dec. 30, triggering a 30-day countdown until a strike becomes legal.
Siding with the unions, the board recommended that wage increases be made retroactive. Amtrak, which relies on federal subsidies, is worried about whether it can afford the back pay.
Under the Railway Labor Act, most disputes that get to this point end with a contract based on the emergency board’s report. In cases when that doesn’t happen, Congress usually imposes the board’s recommendations.
Still, transportation officials across the country are bracing for the worst.
The biggest impact of a strike would be felt around New York City, where two major services, New Jersey Transit and the Long Island Rail Road, would be disrupted.
Just over half of NJ Transit’s 740 weekday trains travel for all or part of their routes on lines owned by Amtrak; if Amtrak employees aren’t at work, trains cannot run on those tracks. Some 218,000 daily trips are taken on the affected lines.
[snip]
It took me so darn long to type up that post that I’ll have to sign off ..I read the day’s post in the AM so I’m always a day behind. I hope that gives you another perspective. Talk later,
Cindy
NAHB pushing hard to increase the Freddie/Fannie conforming loan limit. Those guys want the comforming limit moved from $417,000 to somewhere around $1,000,000.
A conforming limit of $1m means alot of crowding out. Who do we help? 5 buyers in the midwest looking to borrow $200k to buy a home, or 1 borrower in NJ or California, looking to borrow $1m to finance his McMansion?
What ever happened to the GSEs being about “affordable housing”?
Leave the $1m mortgages to the bankers and lenders, the government need not step in.
re pensions
I am sure that there have been some very good mitigation plans proposed for the pension funding issue. However, unless the general population of the state starts to hold it elected leaders accountable and get off of the “i got mine” band wagon, then any solution will ultimately fail. Even if the immediate problem is solved the status quo will just allow the same issue to redevelop. This is also tied into the fact that very few people (especially politicians) consider the long term. Until people consider long term that means longer then the next election then financial bondogals will continue as well.
To paraphrase Shakespeare, “First kill the pensions for elected officials.”
Maybe leave one for the President, but until elected official’s old-age security is not tied to retaining their elected positions they will not be sufficiently motivated to be fiscally responsible.
heres a worthless thought…
from seans (#22) link you can see how much the state has actually paid into the pension fund over the years. Why not say that what ever amount is in the pension fund is what you get, end of story! So you would recalculate everyones benefits based on the difference between what is supposed to be in the fund, and what is actually there. Then perhaps we should allow the various [politicians that were responsible for this mess to be legally/civilly liable!
OT
Cindy,
The other day you asked if natural gas brought in through new terminals would help US energy issues. The following link discussed the somewhat complex supply demand issues with natural gas, as europe asia and russia juggle the difference between supply and demand.
http://www.theoildrum.com/node/3502#more supply and demand
From Reuters:
Merrill Lynch braces for record-setting pain
A $20 billion fourth-quarter write-down at Merrill Lynch & Co Inc’s would not wreck the company, but it might force new Chief Executive John Thain to sell a major asset and cut deeply into the company’s capital intensive fixed-income division.
Thain has announced capital infusion deals of nearly $13 billion in the past month. And analysts say that’s enough for Merrill to weather a $15 billion write-down of subprime mortgage related assets in the fourth quarter. The day of reckoning is on Thursday when the company releases year-end results.
But if Thain acts more aggressively than Citigroup Inc and Morgan Stanley in cutting the value of Merrill’s subprime mortgage and collateralized debt obligation positions, the company’s write-down could creep toward $20 billion, according to some of the gloomiest scenarios laid out by analysts.
Wall Street analysts’ scenarios range from $10 billion to $25 billion in write-downs for Merrill, which wrote-off $8.4 billion in the third quarter when the company lost $2.3 billion.
Lehman Brothers analysts said on Tuesday they would not be surprised to see a $15 billion write-down.
J.P. Morgan’s Dimon sees home prices falling 5%-10% in ’08
10:11 a.m. 01/16/2008 By Greg Morcroft
This is more than a bit off topic but for the parents amongst us it is a big issue, especially with the proliferation of mp3 players. So, Grim, with your permission:
http://www.ingemicorp.com/
This company makes earbuds that have been designed to keep the volume at a safe level to prevent noise induced hearing loss.
That way, the future RE buyers will be able to clearly be able to hear the price of the property they are attempting to buy.
from ‘your town news’ in c-n.com
Real estate seminar at Raritan Valley CC
Raritan Valley Community College’s Corporate & Continuing Education division will present a program Saturday on How to Purchase and Flip Foreclosed Properties.
The three-hour program starts at 9:30 a.m. and will be held at the college.
The class offers strategies for people interested in renovating and flipping a property,
holding it for long-term equity appreciation, or building a real estate portfolio with monthly positive cash flow.
Topics include budgeting for the unexpected; financing foreclosures with little-to-no down payment; negotiating with property owners during the preforeclosure state; and positioning oneself as a cash buyer at bidding. The top 10 foreclosure resources are also featured.
The cost per participant is $69. To register or for more information, call (908) 218-8871 or go to http://www.raritanval. edu/cce.
http://www.c-n.com/apps/pbcs.dll/article?AID=/20080116/NEWS01/801160336/1006
$69?
This site offers more bang for your buck.
#45 A value at twice the price, in fact.
In regards to SS and Pensions – We can thank Peter Turner for this mess. His dirty old statute is in a park near Clark Street.
Peter Turner is famous for commenting over 100 years ago how can it be that a great nation such as ours can allow homeless people to sleep on the street on a cold winter night warmed only by huddling near a heating grate.
There was no SS, Govt Pensions, Welfare, medicaid, Financial Aid, disability, unemployemnet or even charaties to help the poor. That great man founded Catholic Charities and made a difference for the poor.
That sense of grass roots helping out got our great nation thourgh the depression and back on our feet after WWII.
Somehow the corupt elected govt officials took that great deed and turned it into their free medical and pensions for life and turned their back on the poor.
So lets toast Peter Turner today for his good work, and every teacher, cop or fireman with a huge pension should travel to Brooklyn to visit his statute for that trip is the equivlent of the Holy Muslim pilgramige that must be made at least once in every lifetime.
I salute you Mr. Peter Turner without you there would be no five digit real estate tax bills and cops could not retire at 41!!!!!
Would there be as much resentment of government benefits if employees of corporations hadn’t seen their own benefits cut to the bone over the last 10 years?
Where was the outcry when corporations were eliminating defined benefit pensions in favor of higher-risk 401(k) plans and then eliminating their contributions to such plans?
I didn’t hear an outcry, all I heard was people echoing the Reaganomics cry “Rich people create jobs!”
Angelo Mozilio is being terminated with $110 million. Maybe the problem isn’t that state workers get too much; it’s that ordinary workers in corporations get too little.
Just checked out the latest daily listings – one house was listed at $739,000 with over 120 DOM… now reduced to $729,000. LOL!! Hurry, someone get my checkbook!
re: pensions & budget — Well Corzine had his traveling roadshow last night in Hackensack and tonight they are at the County College Of Morris.
His plan to fix NJ budget woes might work, it just will be a bitch if you take the GSP or the Turnpike.
Here is the townhall schedule, don’t forget to RSVP or the State troopers might not let you in.
http://www.state.nj.us/townhallmeetings/listing/
JIM (15)-
I hope you stuck your cousin with the check.
Grim, what’d you think of Rutgers class you went to the other day?
Nobody should be allowed to purchase a flip as an investment (in a public sale) unless they can manually calculate ROI (using a piece of paper and a pencil)to within fifty bucks a month.
No free lunch.
Flipping and real property investment absorbs and impacts public goods in the form of municipal tax revenues, sheriff compensation requirements, neighborhood property values, potential for crime in blighted zones, etc.
Therefore, I would propose a required course, similar to a driver’s license.
I’m seeing big price reductions on several houses I’ve been following in southern Morris and upper Somerset counties today. A house I’ve been follwing in Mendham reduced by 17% over previous asking and one in Basking Ridge reduced by 11%. I’ve seen several prior reductions between 5% and 8% in these areas also. Just FYI for those looking in these areas.
69… bang…
when’s the
reachturn around?gary 49
Got to love the 0.0001% price reductions.
and one more “investor” issue.
Each additional home purchase gets audited. There better be rental income reported.
Maybe renters need to report amounts of rent paid on their tax returns and to whom. Just like taxpayers must report daycare provider EIN or no credit.
I’m sick of hearing about landlords who are only cash positive because they only take cash. What a scam.
I did not know that state employees also get SS, only federal. Interesting. I guess they pay in too, which is good to keep it afloat now anyway.
As far as this quote:
“He is retiring in may with a pension of $65,000,{@56} when we discussed the deep financial pit that NJ is in from high pensions, he said ,and I quote” it is not my problem or concern, I have put in 30 years and deserve every penny…”
What else do you expect him to say? Of course he is going to say something like that, we all would too.
I agree with you all though, there is a huge problem when state benefits are better than the benefits the rest of us get in the private sector. Politically, you can’t expect anyone who works in the private sector, that has little to no pensions anymore, to be sticking up for these pensions.
From Sandy Weil,
So what’s your theory for how this subprime mess became so severe in the first place?
If you look over the last 10 or 15 years, housing prices went up every year. But people’s incomes didn’t go up nearly as much as the prices of homes. So more people had to stretch to buy homes, which eventually created a problem. The only way out of some of these mortgages was prices continuing to increase.
http://www.businessweek.com/investor/content/jan2008/pi20080115_189480_page_2.htm
Anybody believe IB’s?
FOR IMMEDIATE RELEASE
Citigroup Inc. (NYSE: C)
November 04, 2007
“Citi announced that, while significant uncertainty continues to prevail in financial markets, it expects, taking into account maintaining its current dividend level, that its capital ratios will return within the range of targeted levels by the end of the second quarter of 2008. Accordingly, Citi has no plans to reduce its current dividend level.”
2 months later …
FOR IMMEDIATE RELEASE
Citigroup Inc. (NYSE: C)
January 15, 2008
“Citi Announces Key Actions to Enhance Capital Base
Raises $12.5 Billion Via Private Placement of Convertible Preferred Securities
Announces Public Offering of Approximately $2 Billion In Convertible Preferred Securities And An Additional
Offering of Straight Preferred Securities
All in Response to Public Demand
Lowers Quarterly Dividend to $.32 Per Share.”
Gary/Ann,
$10k is a start.
Not a day goes by that there aren’t at least 20 North Jersey listings that cut the price by a few hundred dollars. These almost always include properties near the $1m mark.
These kids of cuts do make sense if they are “positioning” changes. For example, Reducing the price of a home from $705k to $695k. These cuts usually address two factors, psychology and search criteria. Psychology, the house is a six-hundred-thousand-dollar house now, versus seven. And search, the likelyhood of falling into a search range where there is more demand is more likely.
GSMLS #2472728 is in my neighborhood, lots of families coming in to check it out last few days, after work hours. I don’t know how many are coming during work hours since I’m at work.
The families I’ve seen come in to see it are mostly young couples with very young kids.
Last year, another similar unit was on sale in my neighborhood and activity was much slower than this.
Just another worthless anecdote.
Ann,
Isn’t it wonderful? By the way, I love your descriptions of the home sellers and the dumps they’re trying to peddle. Especially when you talk about sellers who won’t budge even when they’re dead! LOL!! That is classic.
A lot of people have no idea of the horrors of house hunting until they go through it. I can’t think of any other situation where someone is willing to sign away hundreds of thousands of dollars and get abused like a three-legged bulldog.
grim [61],
I understand, but if a potential buyer is falling for that measly tactic, they shouldn’t be buying a house. And yes, at least it’s a cut but they have a loooong way to go before they attract buyers who have at least an ounce of savvy.
Does anyone have the address for 2450516 on the gsmls? It’s been there for a while — it’s not in the neighborhood I’m really interested in, but I see it whenever I do a search and might be willing to broaden my target area. Thanks! Usually I’m pretty good at finding this out on my own, but this one has stumped me …
Gary, they might as well do a “buy 79, get one free” sale.
SG (59)-
So, do you think at any point Sandy Weill might have imparted that little piece of commonsense wisdom to Chuck Prince?
Guess not. Prince danced himself right off a cliff.
BC (60)-
I bet that .32 dividend would be even lower without Alaweed as an investor.
Gary,
You don’t think these sellers “get it”?
These are lp/lp changes, not olp/current lp changes. These are price reductions were in one shot.
These are all from 1/13-1/14 (I had the xls handy).
Pompton Lakes Boro
601 Lincoln Ave
LP: $800,000
LP: $599,900
Reduced: $200,100
Parsippany-Troy Hills Twp.
411 South Beverwyck Rd.
LP: $895,000
LP: $750,000
Reduced: $145,000
Plainfield City
889 sterling st
LP: $379,900
LP: $245,000
Reduced: $134,900
Readington Twp.
25 SPRINGTOWN RD
LP: $919,900
LP: $800,000
Reduced: $119,900
Plainfield City
65-67 WESTERVELT AVE
LP: $379,900
LP: $265,000
Reduced: $114,900
Madison Boro
403 Woodland Road
LP: $699,000
LP: $624,900
Reduced: $74,100
Kearny Town
6 WILKINSON TER
LP: $364,900
LP: $300,000
Reduced: $64,900
Pequannock Twp.
8 South Sunset Lane
LP: $659,900
LP: $599,900
Reduced: $60,000
Plainfield City
1437 Coolidge Street
LP: $350,000
LP: $290,000
Reduced: $60,000
Bloomfield Twp.
35 ELMBROOK PL
LP: $479,900
LP: $429,900
Reduced: $50,000
Franklin Twp.
6 Locust Grove Road
LP: $649,000
LP: $599,000
Reduced: $50,000
Rockaway Twp.
3 VINTAGE CT
LP: $700,000
LP: $650,000
LP: $50,000
Watchung Boro
1160 Johnston Drive
LP: $749,000
LP: $699,000
Reduced: $50,000
Union Twp.
562 Jesse Place
LP: $339,000
LP: $289,000
Reduced: $50,000
Mountain Lakes Boro
177 Lake Drive
LP: $799,000
LP: $749,999
Reduced: $49,001
Randolph Twp.
110 MORRIS TURNPIKE
LP: $948,500
LP: $899,900
Reduced: $48,600
Chester Boro
73 GROVE ST
LP: $635,000
LP: $590,000
Reduced: $45,000
Morris Twp.
37 Canfield Road
LP: $839,900
LP: $799,000
LP: $40,900
Mahwah Twp.
5201 RIO VISTA DRIVE
LP: $515,000
LP: $474,900
Reduced: $40,100
Fort Lee Boro
1500 Palisade Avenue 3C
LP: $379,000
LP: $339,000
Reduced: $40,000
South Orange Village Twp.
77 Hixon Pl.
LP: $579,000
LP: $539,000
Reduced: $40,000
Lambertville City
37 Jefferson St.
LP: $589,000
LP: $549,000
LP: $40,000
Wayne Twp.
12 TAMARACK RD
LP: $539,900
LP: $499,900
LP: $40,000
Watchung Boro
78 Brookdale Road
LP: $575,000
LP: $535,000
Reduced: $40,000
Hardyston Twp.
32 HAVENHILL RD
LP: $499,900
LP: $459,900
Reduced: $40,000
Queens (65)-
3 Claremont Dr, Millburn.
Cindy,
Republicans and Democrats both believe in welfare, the differenc is only who they give it to.
KL
grim #69,
Is that just a sample or is that everything from yesteray? I’m asking because Plainfield is on that list quite a bit.
sync,
1/13-1/14, not yesterday. I typed and hit submit before I realized I didn’t pull the data from yesterday yet. I was looking at 1/13 thru 1/14 (GSMLS)
grim [69],
Yeah, that’s more like it. Remember, I only see what the realtors want me to see. I have no idea what’s on their site are what they’re sending me. Maybe they’ll think buyers will eventually capitulate? I have no idea. Anyway, it’s a step in the right direction.
gary (69)-
My contacts in Morris Co. tell me things are much worse up there than in Hunterdon/Somerset. I have seen some huge price cuts in heretofore “top drawer” towns (Mendham, Chester, etc). This has got to be due to the seizure in the jumbo markets.
Right now, unless you have 720+ FICOs and a downpayment, you are jumbo toast. Any deficiencies in your profile either gets you rejected…or an interest rate over 9%.
In the current environment, expect to see this problem bleed into the Brigadoons soon.
grim: do you see any action closing action
on MLS: 2445420 2439294
Check out the cars parked at your local high school/elementary school faculity lots
Mercedes
Lexus
BMW
New Camrys and Altimas
And this is in average towns like Fair Lawn…
I should have become a teacher.
Here is yesterday until today (11:28am). I’ll cut it off at $40k to keep the list short..
2460633 Boonton Twp.
14 WILTSHIRE DRIVE
$2,699,900
$2,499,900
$200,000
2473315 Newark City
226 5TH ST
$292,000
$169,000
$123,000
2421605 Mountain Lakes Boro
324 Morris Avenue
$1,599,900
$1,499,000
$100,900
2431239 North Caldwell Boro
26 Oak Place
$1,875,000
$1,775,000
$100,000
2460545 Madison Boro
105 Ridgedale Avenue
$1,250,000
$1,150,000
$100,000
2440744 Watchung Boro
58 ROBIN GLEN RD
$1,099,000
$999,999
$99,001
2378898 Paterson City
233-235 E 24TH ST
$289,000
$225,000
$64,000
2435838 Franklin Boro
132 BUCKWHEAT RD
$199,000
$142,000
$57,000
2460869 Livingston Twp.
44 EAST DRIVE
$1,425,000
$1,375,000
$50,000
2430273 West Caldwell Twp.
14 PIN OAK RD
$799,000
$749,000
$50,000
2452577 Raritan Twp.
3 GIDEON CT
$999,000
$949,000
$50,000
2450220 Readington Twp.
34 Chamberlain
$1,050,000
$1,000,000
$50,000
2447474 East Hanover Twp.
10 BIRCHWOOD CT
$949,000
$899,000
$50,000
2443381 Rockaway Twp.
4 DEER RUN
$949,000
$899,000
$50,000
2433758 Wayne Twp.
1151 Alps Road
$999,000
$949,000
$50,000
2473892 Bridgewater Twp.
753 BYRD AVE
$749,000
$699,000
$50,000
2471198 Maplewood Twp.
561 PROSPECT ST
$599,999
$550,000
$49,999
2428896 Bloomfield Twp.
47 Carteret St
$340,000
$295,000
$45,000
2376817 Newark City
106 JAMES ST
$339,000
$299,000
$40,000
2454531 Kearny Town
40 BRIGHTON AVE
$299,000
$259,000
$40,000
2408628 Vernon Twp.
16 SEELEY STORM DRIVE
$619,900
$579,900
$40,000
2472669 Cranford Twp.
107 Pine Street
$409,000
$369,000
$40,000
Of course, because I’m sorting by dollars and not percent, we get a list that is skewed towards the upper end.
Here are a few for Gary.
Roselle Boro
1020 harrison street
$294,900
$294,400
$500
Montville Twp.
7 LOUIS DR
$619,900
$619,500
$400
Roselle Boro
1020 harrison street
$294,500
$294,400
$100
Franklin Boro
20 Sterling Street
$349,990
$349,900
$90
Clotpoll [75],
I’m locked, loaded and ready!
mark,
Both still UC, no action.
Clotpoll Says:
January 16th, 2008 at 11:13 am
BC (60)- I bet that .32 dividend would be even lower without Alaweed as an investor.
Yep.
grim: on those two , its been awhile.
Financing problems?
or apprasials
Hey Grim – I looked at most Listings you had with huge reducions: thouse which have huge reductions were grossly overpriced
And I mean GROSSLY.
It might be a new tactics – list you house at 100k+++ above comps, wait for amonth, and tan reduca price by 50-60K in hope to attarct attention….
Rinse and repeat.
P.S. I will list my car for ONE million and reduce price by 500K… Wonder if someone would buy it??? I will post it on craigs list – my car is one of a kind – nobody else have a car with dents, scratches and stains like mine!!!!!
From the WSJ:
Lenders Rethink
Home-Equity Loans
As Delinquencies Rise, Some Companies Are Walking Away
Instead of Foreclosing, While Others Get Stingy With Borrowers
By RUTH SIMON
January 16, 2008; Page D1
Rising delinquencies and falling home prices are putting home-equity lenders and borrowers in a tightening bind.
As home values continue to sink, mortgage companies are increasingly walking away from delinquent home-equity loans rather than pushing borrowers into foreclosure. At the same time, some lenders, in an effort to protect against future losses, are looking at scaling back home-equity lines of credit held by certain borrowers who are still making payments.
…
Home-equity lending exploded during the housing boom as homeowners took advantage of rising home values and tapped their equity to fund spending. Others flocked to so-called piggyback loans, which allowed them to finance as much as 100% of a home’s value by combining a mortgage with a home-equity loan.
With home values falling, lenders began last year to cut back on originations of new home-equity loans. Lenders extended an estimated $456 billion of new home-equity loans and lines of credit in 2007, down from a peak of $504 billion in 2006, according to SMR Research in Hackettstown, N.J.
The dollar value of home-equity loans outstanding stood at $1.1 trillion in the third quarter of 2007, according to the Federal Reserve.
Most borrowers continue to make their home-equity payments. But delinquencies are climbing. Some 4.65% of fixed-rate home-equity loans were delinquent in the fourth quarter of 2007, up from 3.11% a year earlier, according to Equifax and Moody’s Economy.com. Delinquencies on home-equity lines of credit nearly doubled, to 2.01% from 1.07%, during this period. “The loss rates are climbing at all lenders,” says Frederick Cannon, an analyst at Keefe, Bruyette & Woods.
Moody’s Economy.com estimates that losses on home-equity loans outstanding as of June 30, 2007, could ultimately total $58 billion — on top of $278 billion in losses on mortgages.
Ohh yea I need to check my blind typing ….
Al,
Asking prices have no basis in reality right now.
None.
Mark to myth.
or rather,
Mark to wish.
BTW For thouse in Cental Jersey:
Metuchen Comps Killer:
MLS ID# 722622
3 Bed, 1 Bath
Listed Price: $210,000
Al #87, in Metuchen? Wow.
In NYC, where I come from originally, my recollection of Public Sector Giveaways, started with Mayor John Lindsay;
Lindsay left office in 1973, having declined to seek a third term as mayor, which was then permitted. His critics have argued that mistakes he made played a large part in causing the city’s fiscal problems in the 1970s; Lindsay had allowed one in seven New Yorkers to work for the city, with almost as high a proportion receiving welfare; he was perceived as too sympathetic to organized labor, and he had borrowed for operating expenses. The bargains Lindsay made with the unions later contributed to the fiscal crisis of Beame’s administration. To secure their political support, Lindsay offered unions large raises — the transit workers managed an 18 percent salary increase, an extra week of vacation, and fully paid pensions; District Council 37 got a raise and retirement after twenty years; the teachers received increases of 22 to 37 percent.[citation needed]
In his critical biography The Ungovernable City, Vincent J. Cannato argued that Lindsay was the wrong man for the job of mayor, as he was more concerned with solving the enormous social problems of NYC’s poor instead of delivering basic services.
While it’s fair to honor reasonable promises, we did not elect officials to misrepresent the Public. No one is their right minds would ever Compute Pensions on (Last Years Salary plus Overtime) to generate a Pension for life, greater then active Salary. Those who agreed to this are Criminals, betraying Public Trust, and Stealing from the People, they misrepresented.
On busy street but still… 50×100 Lots were going to 300K couple of years ago.
Clotpoll Says:
January 16th, 2008 at 11:28 am
gary (69)- In the current environment, expect to see this problem bleed into the Brigadoons soon.
clot: how ’bout Tewksbury :)
Is revenge a dish best served cold?
For those interested there is a pretty big article over at the NYT on Bernanke.
http://tiny.cc/Times
How you bring Starbucks to its knees…..
P&G is expected to announce that it will spin off its Folgers coffee business. An outright sale had also been under consideration. Full story to follow shortly.
State employees in the PERS fund contribute 5% of their salary to their pension every year. No choice in that, it automatically comes out. Also, make a small contriubtion to their lifetime medical.
After 30 years of service, wonder what that would be in a 401K?
Confused #89,
No one is their right minds would ever Compute Pensions on (Last Years Salary plus Overtime) to generate a Pension for life, greater then active Salary. Those who agreed to this are Criminals, betraying Public Trust, and Stealing from the People, they misrepresented.
True!
Now that’s more like it — $210,000 in Metuchen! I looked at so many junkers in that town this past summer that were asking double that amount (and more!). No basements, one bathroom, no garage, busy streets, wallpaper nightmares (as Ann would say!)… My husband got so fed up he won’t even let me mention the name of the town now, even though, overall, I think it is a good place to live …
re metuchen, the condos on the opposite side of Rt 27 from the train station, i am told, are also dropping in price. That’s a very nice location (IMO) for a single nyc commuter.
96 leaving queens
No wallpaper nightmares! Ha!
Does anyone else think that there are a lot of towns in NJ that are considered “nice” and yet have a super crappy housing stock?
77
There is still time to become a teacher! Go for it!
Re small price drops
I can see a 10K price drop if it puts your house into a different search category.
But to go from, let’s say, 819 to 809? Why bother!
“But to go from, let’s say, 819 to 809? Why bother!”
Because they are d*cks for a tic.
Yes, I did find the housing stock disappointing in Metuchen — if you wanted something affordable or practical. There were some very pretty houses, but I was not willing to trade charm for a garage or a basement you could stand up in. It was a real shock to me coming from NYC. I don’t have a garage or a basement now — that’s why I’m moving to NJ!
That said, I did very much find Metuchen to be friendly and down-to-earth. I’m a little nervous about moving to a town where parents buy their kids multiple pairs of Uggs (sp?) and Tiffany necklaces (true story from my sister-in-law who lives in, yes, Brigadoon.)
Ann,
It gets the listing on the daily hotsheet. For those of us who look at the hotsheet every day, it means the listing gets added visibility.
Could also be used to spur a sense of urgency in a potential buyer.
I know a few people who live in that area (Metuchen) who have converted their garages into offices. Now they park on the street.
The Biggest problem with Metuchen – Is traffic……………..
# 103
How long will it be before some enterprising RE agent starts dropping prices $1 or $10 per day to keep the home on the topf of everyone’s mind?
Just want to clarify — my sister-in-law didn’t buy that stuff for her kids. She knows people who do. She moved there about 10-12 years ago.
AL #105, Yup. That’s true for the entire area though, including Edison and Woodbridge, and as time passes, Pway too.
Start dancing, NAHB rises to 19 from 18.
Yes it is true for the whole area, but Metuchen in my experience was the worst… – there is just no Back-way roads in Metuchen. But for NYC commuters it might be not so important.
I am not NYC commuter though.
WASHINGTON (MarketWatch) – U.S. home builders’ mood brightened slightly in January, but they remain deeply pessimistic about a turnaround in the housing market any time soon. The home builders’ housing market index rose to 19 in January from a downwardly revised 18 in December, which marked a record low for the 23-year-old survey, the National Association of Home Builders reported Wednesday. It was the first increase in the index since February. At 19, the index shows that only about one in five builders believe the market is healthy. A year ago, the index was at 35. Economists expected the index to fall to 18 in January
#74 gary: Buyers can capitualte all they want, but of they cannot get financing,than it does not matter.
RE: syncmaster Says:
January 16th, 2008 at 12:55 pm
I know a few people who live in that area (Metuchen) who have converted their garages into offices. Now they park on the street.
If you took a mortgage on a house claiming it as a single family non commerical property and use a portion of the house for commerical purposes you are committing a felony. In addition, if you are not paying a commercial real estate tax on the portion of your property that is a business you are a tax cheat, another felony. In addition, violation of zoning laws are civil penalties.
My neighbor runs his whole CPA practice out of his home in a residential neighborhood with a residential tax rate and a mortgage rate on a confirming loan that is for a residental house, has clients visit their and advertises his home address as a business in phone book and his little internet site.
To me that is a big set of balls, if someone rats him out he could get convicted of mortgage fraud and tax evasion both felonies which will cause him to lose his CPA license.
I see this all the time. All it takes is one neighbor to have a bad day and can’t get into his driveway cause customer cars are blocking it and they go into the AICPA website, IRS website or zoning board website and rat them out.
The CPA is our only nice neighbor as he smart enough to know we can all drop a dime on him.
Rat out any bad neighbor with an illegal business or illegal tenant. Remember, you are paying their share of property taxes each month and subsidizing their business while your house is devalued and your quaility of life goes down.
From MarketWatch:
Regionally, the NAHB index was unchanged in the Northeast at 20, rose two points to 17 in the Midwest, rose three points in the South to 23 and fell five points to a record-low 13 in the West.
ChiFi (91)-
Serve that one ice cold, with a shot of rotgut vodka on the side.
The Califon hillbillies are toast.
John #113,
The people I’m talking about aren’t running businesses, they turned their garages into home offices (I should have called it that to begin with).
Wow, super comp killer in Closter.
175 Piermont Road, Closter NJ
Purchased: 10/6/2004
Purchase Price: $1,065,000
MLS# 2637201 (Multiple relistings)
OLP: $1,349,000
Reduced: $849,000
Sold: 1/15/2008
Sale Price: $760,000
28% under 2004 price!!
There’s a house close to me that is Under Contract. I’m really curious to know the price. Can someone look up if I give the address? Current owner bought in 05 for $615,000.
From the Wall St. Journal
Why Baby Boomers May Bust the Housing Market
Think the current housing downturn and the subprime mortgage mess is the worst of the housing market’s problems? Not so, according to a report published this month in the Journal of the American Planning Association.
About to wreak havoc on the housing market are the 78 million American baby boomers who will “retire, relocate, and eventually withdraw from the housing market,” according to report authors Dowell Myers, a professor of urban planning and demography in the School of Policy, Planning and Development at the University of Southern California, and SungHo Ryu, an associate planner with the Southern California Association of Governments…
…“In some states like New Jersey, it could be 20 years before prices recover,” he says, explaining that the generational trend is one that could stretch for decades…
anyone have MLS access? trying to find info on 5181003
thanks in advance.
39 ket
That’s simply turning a DB plan into a DC plan.
There’s a fundamental problem with the gov’t unilaterally breaching contracts; no one will want to contract with the gov’t, which is not a good result. It’s somewhat similar to simply deciding to default on the national debt or stop honoring T-bills. We need to change pensions going forward.
#84 grim: As home values continue to sink, mortgage companies are increasingly walking away from delinquent home-equity loans rather than pushing borrowers into foreclosure.
So the home equity borrower borrower does not have to pay, ever?
#83 Al Hey Grim – I looked at most Listings you had with huge reducions: thouse which have huge reductions were grossly overpriced.
I would argue most of all the listings are grossly over priced.
VMC #119,
… the 78 million American baby boomers who will “retire, relocate, and eventually withdraw from the housing market,”
Retire and relocate – I get it.
Withdraw? Is that a euphemism for dying?
Re Pensions
I don’t think that having state employees collecting a pension that is 65000 is going to bankrupt the state. The larger problem and the first that needs to be corrected is the politicos who are collecting multiple pensions from the state for holding different offices. Some of these rats go around jumping from post to post (or holding multiple positions at once) collecting pensions and extra salary.
BB,
Can someone look up if I give the address?
Sure, but we won’t have the sale price until it closes.
“Wow, super comp killer in Closter.”
[117],
Closter, where is Investor David?
House Hunter,
I don’t have access to the MLS system that listing is on, maybe someone else here can help.
BC,
Last I heard he was making snow angels in his pile of ducats.
Eileen Says:
January 16th, 2008 at 12:21 pm
State employees in the PERS fund contribute 5% of their salary to their pension every year. No choice in that, it automatically comes out. Also, make a small contriubtion to their lifetime medical.
After 30 years of service, wonder what that would be in a 401K?
Zero when the Depression hits.
JB [129],
LOL. If you communicate with him, tell him I said hello.
#98
Does anyone else think that there are a lot of towns in NJ that are considered “nice” and yet have a super crappy housing stock?
YES YES YES
Its impossible to avoid oil, well, or septic. A house with none of those 3 would be a dream house! You have wall A/C and/or radiators? Sold! Actually, we’ll take oil as long as there’s gas in the street. … Oh, & no knob & tube wiring because the bank won’t insure us.
Mind you, we’ve found the above many times, but it’s 550k+++
Some of these features: (please note, found on pricer places too but usually the lower the price, 400k & under, has it all)
a) lovely views of 78/287/24/202/206/NJTransit.
b) add a 2nd bath to either upstairs or downstairs because the condition is so bad you gotta replace the only one there anyways. (fix the kitchen too, you’ll get it back when you sell! … or be the best house in the neighborhood of people that can’t afford to fix theirs)
c) infested neighborhood of mice/rats/termites/crackheads
d) my favourite! pay top dollar for brand new retail and g’head! flip that flop:
Rip out the poisonous granite, badly installed pergo, the chair rail/the counter top/air-duct that’s installed, not 1/16″, but several inches or feet short. (Best was the bath trashcan covering the hole!)
Bonus: Asking 20k for 300.00 worth of new! white appliances.
I honestly don’t know how condos/townhouses lost value in the last run-up because many are in better condition than SFHs.
Me buy a condo?
Oh, I just can’t… see, I’m really xenophobic (which is why I won’t swim in the opposite direction & buy one of those big beautiful houses in Plainfield) plus, I want a liberty garden and you just can’t garden in a condo/townhome.
njpatient Says:
January 16th, 2008 at 1:15 pm
39 ket
That’s simply turning a DB plan into a DC plan.
There’s a fundamental problem with the gov’t unilaterally breaching contracts; no one will want to contract with the gov’t, which is not a good result. It’s somewhat similar to simply deciding to default on the national debt or stop honoring T-bills. We need to change pensions going forward.
Except in cases where the Elected Officials Largess was Criminal, in which case you Jail Them, and Correct the Pension.
130
LOL
it’s funny because it’s true.
thanks Grim!
3b 123
I wondered the same thing. It sounds like they just forgive the entire debt…. anyone know if that is the case? wouldnt you get hit with an IRS bill then?
ithink_ithink #132: What do condos have to do with xenophobia *confused*
From Bloomberg:
Deutsche Bank Cuts 250 to 300 Global Markets Jobs, Person Says
Deutsche Bank AG, Germany’s biggest bank, is eliminating 250 to 300 jobs in its global markets division, according to a person with knowledge of the reduction.
The staff cuts, which began this week, are across the unit run by Anshu Jain and Michael Cohrs, which spans equity sales and trading, debt capital markets and derivatives, according to the person, who declined to be identified because the reduction is still underway. Positions in London, New York, continental Europe and Asia will be affected, the person said, citing market conditions for the decision.
for you finance/invest gurus:
a co worker asked my opinion on PTR. Not my field or area of expertise. So I demurred. I agreed to bounce it off folks here as I can’t answer him.
sl
grim Says:
January 16th, 2008 at 1:23 pm
BB,
Can someone look up if I give the address?
Sure, but we won’t have the sale price until it closes.
The address is: 114 Blvd Pequannock 07440
NOS was just filed on 1/11/08. Thanks so much.
When we were younger my mother,who was a muncipal empolyee was forced on strike in Philadelphia. She was out of work for about three weeks and her raise didn’t cover her lost wages. My dad explained that it was part of the game. Previous workers did it for them. They were doing it for future workers.
A slick politician could do the same thing to start to work on NJ’s pension problem. Force the union’s hand and take the money saved and use it to offset future liabilities. At least it would be a start.
Down in SJ we hear of people moving to DE to escape property taxes. Our neighbor, a retired cop, moved two years ago.
103 grim re small price drops
That makes sense. Gets some added visibility.
When we had active searches going, those kinds of drops always made me laugh. Although, I would usually click through the pictures again.
BB,
Anticipated closing date is 1/31, check back near that date.
The list price of $599k was below the last purchase price of $615k.
Inflation Rate Is Worst in 17 Years
http://biz.yahoo.com/ap/080116/economy.html
So if this is the case, and we see stagflation, will my mortgage debt be half the value in 5-7 years, rather than the average 20?
Finance guys?
And when can I start buying me some 15-20% back government securities!
To TJ 144
I am right now struggling with the same IDEA.
The only problem – Global Workforce Market puts a very hard cap on Salary’s increases. Private industry will not raise salaries.
So you will have a lot higher food/heating/electricity bills, with essentually the same salary as today.
And houses will not appreciate – they might stay flat or even drop a bit.
TJ, re: stagflation
There is now way right now conductor Bernake of this crazy train will have it any other way.
I read someplace, I disremember where, but we are not having a recession or decession or reflation or repression or some kind of infarction.
The current “worry” has now reached epic proportions which may turn out to be global stagflation – a phenomenon never before encountered, and still yet unnamed.
I was thinking we should call it “nullflation” or “dammflation” or perhaps “divorceflation”, but I am sure some economic professor from some highbrow English University will come up with something catchier.
Yes unfun, no bonus, no vacation, and no nookie, global stagflation. After all in these times of no consequences or responsibility who needs to have a localized depression.
Ask the boss for a raise now because you will not be getting one later since the bosses will be to busy giving themselves raises trying to stay ahead of nearly double digit inflation.
1. Is there anyone here that would work for 30K less per year so they could have a better (more secure?!?) retirement benifits or relative career stability? Health insurance costs private sector workers about $3000 more per year so deduct that and call it 27K.
2. Not all public employees sit around pushing paper…and the ones that do are compansated fairly for the most part for doing their job. The thing is, lots of public sector employees have been in a job…sometimes THE SAME JOB…for a long long time, so you will see the occasional secretary that makes a similar wage as the admin assistant to a director at Goldman Sachs. However, that is the exception. Most public sector employees make a below market wage (considering qualifications and responsability) and remain in the public sector partly because of the expected advantage in retirement.
3. Can anyone tell me why the public pension was underfunded although deductions continued to come out of the public employees paychecks? Doesn’t that seem like theft?
TJ
I am not an economist… but i did stay at a holiday in express last night….
Stagflation is a combination of stagnation and inflation. this inflation does not necessarily mean hyper-inflation. The only way you will see you mortgage reduced to half in 5-7 years is in a hyperinflation environment and no one wants to be there. in that scenario your mortgage is the last of your concerns because if you thin 3$/gal milk is bad the try 8-10$/gal milk. On top of that companies are not increasing wages to match inflation. most wages have stayed flat while the dollar inflates.
#137 – i don’t want to get the mail & say hello. i don’t want to take out the garbage & wave hi. not a fan of the fence but a thick hedge in the backyard is nice. & any noise i hear inside the home is generally one i recognize, not next door.
# 148
3. Can anyone tell me why the public pension was underfunded although deductions continued to come out of the public employees paychecks? Doesn’t that seem like theft?
yes it does seem like theft, but the politicians passed legislature that said it was legal before they stopped paying, so it goes from theft to legal with just a couple of signatures
Well this could be part of the general finance/housing problem
Many Americans remain ignorant about much of science, the board said. Many are unable to answer correctly when asked whether Earth moves around the Sun (it does).
(nytimes.com)
http://tinyurl.com/36ua9p
sl (139)-
The easy money’s been made in Petrochina. Juicy dividend, though.
ithink_ithink #150,
I agree about the noise in the house (the rest I don’t really mind)… none of what you said is xenophobic :p
re: (148) theft.
Read this eye opener.
N.J. Pension Fund Endangered by Diverted Billions
http://www.nytimes.com/2007/04/04/nyregion/04pension.html?_r=1&scp=2&sq=%22New+Jersey+Di
RE 146. won’t a global workforce lead to higher salaries?
“RE 146. won’t a global workforce lead to higher salaries?”
Increasing worldwide competition, leading to higher salaries?
Our standard of living has peaked, the blow off top has occured. It’s Cap’n Crunch time.
RE Can anyone tell me why the public pension was underfunded although deductions continued to come out of the public employees paychecks? Doesn’t that seem like theft?
To pay your insanely high salaries and retirement costs. BTW free medical in retirement in worth around 250k in present value and a juicy pension is worth 250K in present value upon retirement. So a govt employee gets a half million dollars at retirement while a private sector employee gets to pay COBRA and hope he turns old enough for medicare before it expires. I would gladly take a 30K paycut to be a civil service worker.
#154
lol, you’d think it’s not by definition.
So if this is the case, and we see stagflation, will my mortgage debt be half the value in 5-7 years, rather than the average 20?
Finance guys?
No – in fact when Lincoln was president we had our last long period of deflation. People kept their money in their matresses cause literally banks paid a negative rate of return on money. You had a better rate of return in your mattress.
Beige book is out:
http://www.federalreserve.gov/fomc/beigebook/2008/20080116/default.htm
Re global work force salary
No salary will decrease. The US and western Europe had/have the highest standard of living. SO as we become globalized supply and demand comes into play. Consider the example of a PhD Chemist. In India 35K/yr is a good salary for them but a US PhD chemist wants 80K/yr. The business will move to india where they only have to pay 35K for the same services that cost 80K in the US. 1st world countries cannot compete with the reduced labor cost in developing countries. Globalization tends to level the playing field for everyone, so if you are the wealthiest country in the world, you have nowhere to go but down.
158
John
Excluding law enforcement and teachers, if most public employees salaries were reduced by $30,000 they would be receiving some sort of public assitance.
And remember no merit raises and no bonuses in the public sector either.
From MarketWatch:
Home equity emerges as trouble spot for banks
Just as banks are struggling to get out from under the subprime mortgage mess, they’re facing a new burden: growing delinquencies for home equity loans.
of the U.S.’s largest banks that reported earnings this week, Citigroup, Wells Fargo and J.P. Morgan , said that mounting pressure on home equity loans were a major — and growing — problem in the fourth quarter.
J.P Morgan took a 34% cut in profit over the fourth quarter, a change it attributed at least in part to its lagging home equity products. The bank said it expects home equity chargeoffs to rise to 1.5% of total loans this quarter.
…
Likewise, Wells Fargo announced it would reserve $1.4 billion for losses in its home equity lending unit, more than half of the $2.6 billion it set aside for all loan losses. The company more than tripled the amount it would earmark for losses in the fourth quarter.
…
Citigroup, too, pointed to faltering consumer loans as a major factor in the bank’s decision to reserve $5.1 billion to increasing loan losses and delinquencies.
“We had losses in our U.S. consumer business, up over $4 billion, and these numbers completely overwhelmed record performance in many, many of our other large businesses,” Chief Executive Vikram Pandit told analysts Tuesday.
#162 kettle; And my question is at what point do we reach in this country, where the incomes are not enough for peaople to pay for the ggods and services.
If incomes continue to stagnate and fall here, and the fall increases rapidly, will most Americans be able to afford to pay for these goods and services at some point in the future?
Or will the decrease in demand be made up by an increase in demand from other areas of the world, as their wages increase?
Do we assume at soem point that the global economy will no longer rely on the American consumer to consume?
Do we assume at soem point that the global economy will no longer rely on the American consumer to consume?
YES
#146 Al: or even drop a bit.
A bit? They are dropping alot already in lots of places, with lots more drops to go.
3b,
So doesnt this line of reasoning lead us to the conlcuion that it makes more sense for the geenral population of the US to NOT globalize? Put regulations in place that require businesses that conduct themselves in the US to maintain a given % of their operations here (or something along those lines). Why should we globalize if there are limited positive benefits for the average person. The only people globalization makes sense for are CEO’s and the GOV
In my anti globalization scenario, proces would be higher, but you would be able to maintain wages at a comparable level so that the higher prices are acceptable and in line with incomes. Globalization also comes with the spectar of global financial collapse instead of a single nations finance system collapsing.
Can someone explain to me again why globalization is good????
“In taking over deeply troubled lender Countrywide Financial, the nation’s biggest bank is wagering $4 billion that the US housing market is near a turnaround. But on Wall Street, that seems like a roll of the dice.”
“The ability to get that kind of size and scale became more appealing as we saw the business model change to a model we could accept,” Lewis said. “We considered the lawsuits, the negative publicity that Countrywide had. We weighed the short-term pain versus what we think will be a very good deal for our shareholders.”
“Bank of America deployed 60 analysts from its headquarters in Charlotte, N.C., to Countrywide’s headquarters in Calabasas, Calif. After four weeks analyzing Countrywide’s legal and financial predicament, and modeling [Edit: HMMMNN? Another blackbox, marked to what?] how its loan portfolio was likely to perform, Bank of America offered an all-stock deal valued at $4 billion for Countrywide — a fraction of the company’s $24 billion market value a year ago.”
“The deal could be renegotiated if Countrywide experiences a material change that adversely affects its business, but Lewis said he does not anticipate that will happen. The deal is expected to close in the third quarter. Countrywide declined to discuss the deal.”
http://articles.moneycentral.msn.com/Investing/Extra/BankOfAmericasRiskyBet.aspx?
“Can someone explain to me again why globalization is good????”
kettle,
Let the market decide where to go to purchase goods and services. Are you supporting protectionism?
BC (170)-
Hope that blackbox had a “mark-to-doomsday” scenario as one of the permutations.
Re: 158…then apply for one…
http://www.state.nj.us/personnel/jobs/index.htm
just don’t be shocked when as an administrative analyst or senior management assistant you have to manage a unit of 20-30 people, struggle to attract new employees with the needed skills, make 50 or 60K a year and report to a political appointee with little to no accountability that makes 3 times your salary. I’m sure you’d love that! You’d probably prefer a “Manager” job at Prudential for 40-50K more with less direct reports! Or, if you’re an entry level clerk (with an associates degree), start in the mid 20’s instead of taking the mail room job at Pru for 10K more. (notice my reference to specific jobs and salaries)
BTW – medical isn’t free for NJ public sector retirees…and 250K over the life of the average retiree isn’t much. If you are talking about 250K per year…then you are dreaming. Not one NJ public retiree (including the governor) will make that (except perhaps some high level double and triple dippers). Besides…Where do these funny numbers keep popping up from? I’ve heard estimates from 10K to now 250K as estimates for these benefits…sheeessh.
FACTBOX-U.S. financial companies cutting jobs
Wed Jan 16, 2008 3:18pm EST
U.S. banks and financial service companies are cutting tens of thousands of jobs to reduce costs as the economy weakens and credit conditions tighten, especially for mortgage lending.
CITIGROUP INC (C.N: Quote, Profile, Research)
The largest U.S. bank announced 4,200 more job cuts on Jan. 15 in a plan to shore up the balance sheet after a record $9.83 billion fourth-quarter loss. It had said in April it would cut 17,000 jobs and move 9,500 jobs to lower-cost locations.
BANK OF AMERICA CORP (BAC.N: Quote, Profile, Research)
The No. 2 U.S. bank said on Jan. 15 it would eliminate 650 corporate and investment banking jobs and sell its prime brokerage unit. The cuts affect 12 percent of capital markets and investment banking workers and are in addition to 500 cuts late last year as part of an overall reduction of 3,000 jobs.
COUNTRYWIDE FINANCIAL CORP (CFC.N: Quote, Profile, Research)
The largest U.S. mortgage lender has cut 11,000 jobs since mid-2006 to cope with weak housing demand, rising foreclosures and tighter credit markets, ending 2007 with 50,600 employees.
NOVASTAR FINANCIAL INC (NFI.N: Quote, Profile, Research)
NovaStar, which last year halted subprime mortgage lending and is struggling to survive, said on Jan. 11 it would shed 85 percent of its remaining workers, or 170 jobs. It will have 30 staff after the cuts, down from 2,048 at the end of 2006.
INDYMAC BANCORP INC (IMB.N: Quote, Profile, Research)
IndyMac, one of the largest independent U.S. mortgage lenders, said on Jan. 15 it would cut 2,403 positions, or 24 percent of its work force, on top of 1,000 already eliminated.
LEHMAN BROTHERS HOLDINGS INC (LEH.N: Quote, Profile, Research)
The fourth-largest U.S. investment bank said in September it would cut 850 jobs, or about 3 percent of its work force, as it restructures mortgage lending efforts globally. Between June and September it announced the loss of 2,450 jobs overall.
MORGAN STANLEY (MS.N: Quote, Profile, Research)
The second-largest U.S. investment bank said in October it was cutting about 300 jobs in its institutional securities division. Earlier it had announced cuts of 600 jobs.
UBS (UBSN.VX: Quote, Profile, Research)
The Swiss investment bank said in October it would fire 1,500 fixed-income staffers after $3.4 billion in write-downs.
CREDIT SUISSE GROUP (CSGN.VX: Quote, Profile, Research)
The Swiss bank fired 170 people from its investment banking unit at the end of September, including many in fixed income.
NATIONAL CITY CORP (NCC.N: Quote, Profile, Research)
National City, one of the top 10 U.S. banks, said on Jan. 2 it would cut 900 jobs, bringing total job losses to 3,400 since mid-2007.
ACCREDITED HOME LENDERS HOLDING CO (LEND.O: Quote, Profile, Research)
The San Diego subprime lender said in September it would cut 1,600 jobs, closing nearly all retail lending branches and support centers and five of its 10 wholesale divisions.
BEAR STEARNS CO INC (BSC.N: Quote, Profile, Research)
The Wall Street bank said in November it would cut 650 jobs, or 4 percent of its global work force. The firm has cut about 9 percent of its work force from peak employment levels.
CAPITAL ONE FINANCIAL CORP (COF.N: Quote, Profile, Research)
The largest independent credit card issuer said in August it would cut 1,900 jobs and close its GreenPoint Mortgage Inc wholesale loan unit. In June, it had announced 2,000 job cuts, or 6 percent of the total, to help save $700 million annually by 2009.
FIRST MAGNUS FINANCIAL CORP
The privately held mortgage lender filed for bankruptcy protection in August and said it had laid off most of its nearly 6,000 workers, leaving it with about 60 employees.
H&R BLOCK INC (HRB.N: Quote, Profile, Research)
The largest tax preparer said in September it would fire 575 workers at its subprime lending unit, on top of 615 job losses announced in May.
HSBC HOLDINGS PLC (HSBA.L: Quote, Profile, Research)
The world’s fourth-largest bank said in September it would close its U.S. subprime mortgage unit, cutting 750 jobs. London-based HSBC employs 60,000 people in the United States.
SUNTRUST BANKS INC (STI.N: Quote, Profile, Research)
The seventh-largest U.S. bank said in August it planned to shed 2,400 jobs, or 7 percent of the Atlanta-based bank’s work force, as part of a plan to save $530 million a year by 2009.
WELLS FARGO & CO (WFC.N: Quote, Profile, Research)
The fifth-largest U.S. bank said in July it would close its subprime wholesale lending business, eliminating 170 jobs.
FIRST AMERICAN CORP (FAF.N: Quote, Profile, Research)
The largest U.S. seller of insurance to protect homeowners against property claims said in September it would cut 1,300 jobs, on top of 600 cuts announced in the second quarter.
LANDAMERICA FINANCIAL GROUP INC (LFG.N: Quote, Profile, Research)
The third-largest U.S. title insurer said in August it planned to cut 1,100 jobs. (Reporting by Ed Leefeldt, Jonathan Stempel and Dan Wilchins; Editing by Braden Reddall)
Clot [172],
From the article;
After 4 weeks of analyzing and modeling. YIKES.
150 i think
It depends on your neighbors. You can have a townhouse or condo community, where everyone works and you don’t meet anyone for years.
Or a single family home neighborhood, where everyone has kids and they are home all the time, playing in the street, making noise AND are nosy and all in your business.
Can someone explain to me again why globalization is good????
Globalization is good for creating Ultra-Rich CLASS of people, eliminating middle class as right now American middle-class way of living is unsustainable on world-wide scale.
So as result of globalization rich will get richer, will raise the barriers to become rich, and push majority of world’s population into survival mode (it is already in survival mode in most of world’s population now it will come to USA.)
If we don’t have free and open markets who services our debt?
162 – I understand where you are coming from. however, my point is that –
1. US does not have highest salaries (especially now the dollar is weak)
2. in your senario wages will increase in developing countries
3. wage increases will outstrip loss jobs in developed economies
4. therefore net increase in wages
5. increased specialization in location and type of jobs (new/differnt types of jobs in developed economies)
6. increased specialization leads to increased wages in developed economies
I know that is a very simplified model…but I think it works that way for the most part.
Unlike the 01-02 slowdown which hit hard for Silican Valley, etc.. the Q1 08 slowdown will put more hurt in the tri-state area with obvious concentration of financial services. How far will this trickle down into other industries…
hi,
I’m a techie with no financial experience. Will a certification like the one below help my case?
http://www.icma-group.org/educational/ifid.html
thank you.
The Star Ledger had a study last year (2007) on NY/NJ Port Authority retirees, which definately had Pensions in excess of $100K & Full Medical, because O.T. is included in the Final Year Calculation. At the time they defended this, with how tough the job is, in these dangerous time. I doubt if the PA job, is that much tougher then a soldier in IRAQ, who get’s Peanuts in Retirement for both Pension & Medical.
Kettle,
“if you think 3$/gal milk is bad the try 8-10$/gal milk”
Good think I am lactose intolerant and I hate soy, which is going through the roof. Almond milk is where it is at.
also, stagflation is defined as “Stagflation, a portmanteau of the words stagnation and inflation, is a term in general use within modern macroeconomics used to describe a period of out-of-control price inflation combined with slow-to-no output growth, rising unemployment, and eventually recession.” by Wikipedia.
So stagflation does imply hyperinflation, but that is if you trust everything you read on the internet:)
John,
No – in fact when Lincoln was president we had our last long period of deflation. People kept their money in their matresses cause literally banks paid a negative rate of return on money. You had a better rate of return in your mattress.
What? Does that answer my question or am I just missing something?
171 BC bob,
Yes i may be suggesting a form of protectionism. Its not like we really run a free market economy in the US. We may say we do, but our economy has a fair amount of central control, just look at the FED and the GOV doing their best to stop a recession! Why not run a free market within the US but have controlled input/output from external markets?
#179 Par
Yes i am familiar with those bullet points, but look at them again. The ultimate consequence is that the 1st world countries must decrease their standard of living!! Call me what ever you like but i will pass on decreasing my standard of living so that an indian villager can raise his. I am all for conservation of resources and increased efficiency, but what incentive do i have to decrease my standard of living so that others may raise theirs?? Please note that i am exploring ideas here and am not sure what my real point of view is on the topic.
generally i think i agree will al # 177
Globalization is good for creating Ultra-Rich CLASS of people, eliminating middle class as right now American middle-class way of living is unsustainable on world-wide scale.
I remember seeing somewhere that goods at the lower end are providing an increasingly higher levels of utility while more expensive gopods are not. one example used was cars…another was a fridge. anyone remeber where that info was posted?
I bring that up becasue ultimately…one impact of merging levels of compensation globaly will be merging values of utility.
Sean,
no nookie
Wouldn’t global depression bring an overwhelmingly large increase in prostitution. But then again you need money for prostitution. I wonder what a can of corn can get you in ten years. All I can think of now is inserting the word “Can Corn” into a very famous Full Metal Jacket sentence being shouted by a Vietnamese prostitute.
I wonder, if the State Files for Bankruptcy, will the courts absolve it of it’s Pension Debt? That actually may save NJ.
January 16th, 2008 at 3:17 pm
“Can someone explain to me again why globalization is good????”
Because it is going to happen with or without the U.S. participating. If we don’t, then we will be Japan in a matter of 10-15 years.
TJ # 183 and 184
regarding Johns answer…. i see what he was getting at and in some aspect he did, but in a very indirect manner.
I would argue that “out-of-control” inflation is not necessarily hyperinflation. Look up the wiemar republic for an example of hyper inflation. People were burning treasury bills for warmth because inflation was so bad that the notes were worthless. The US went through stagflation in the late 70’s and while you could argue that inflation was out of control (13.5%), that is no where near hyper inflation; look at zimbabwea with 1000%+ inflation rates, thats hyper inflation!!!
confused 188
It is my understanding that a state cannot legally declare bankruptcy. sorry no reference
ChiFi
I dont have leg to stand on, but i would argue that globalization is not the only option. It may the preferred option of the ruling class and corporations of the world, but it is not the only way.
#181 Njrebear
The certification the link points to is from a British organization, and I never heard of it. The gold standard for investment analysis is the CFA certification. I have this certification and I work with a lot of other CFAs, but some of the people in my department have this “CFA-lite” CIMA – Certified Investment Management Analyst – certification from IMCA. There is another well-respected certification called CFP – Certified Financial Planner. I know there are other certifications out there too.
185 – yes. there would be a perception of a decreased standard of living. however, merging levels of utility should cause people to buy the toyota instead of the lexus or go to the mall once instead of twice a month. will my “standard of living” really fall that much? after a while we might even revert to historical norms for the middle class and not the easy credit fueled standards that we have becomed accustomed to. Isn’t it weird to see the number of BMW’s etc in so called middle class neighborhoods???
“We may say we do, but our economy has a fair amount of central control, just look at the FED and the GOV doing their best to stop a recession!”
Kettle,
Can’t make that comparison. The fed and our govt control monetary and fiscal policy. Control may not be the right choice of words. How about they f*ck up our monetary and fiscal policy.
Another topic is free markets for goods and services. If we adopted a platform of some form of protectionism, the stock market would tank, prices paid would be the next bubble and our interest rates would be north of double digits. I don’t think many would be thrilled paying 50K for a Ford Taurus.
BC 194
this is an interesting topic but unfortunately i have limited ability to debate it as my advanced economic knowledge is way to shallow and i would just be talk out of my rear end. and i am curious as to what is so bad about japan that we would not want to be them ? i am not suggesting we should, but i am not terribly familiar with their markets
I guess what gets me about the globalism debate is that it is always framed as being the only option. I am not saying there is a better option but there is always another option
What’s with the rightmost green lawnchair?
Is that like being put in the “dock”?
http://homepics.realtor.com/image9/http/gardenstate/listings/large/049/v01/2476602_5.jpg
whole house:
http://www.realtor.com/realestate/clinton+twp-nj-08833-1094240280/
Any advice on evaluating house rental prices while we wait out the market?
this is my last post on this…(for today) None of this seems outlandish to me….this is all public information
http://www.state.nj.us/treasury/pensions/fact11.htm
http://www.state.nj.us/treasury/pensions/fact04.htm
formula for public retirement benefits –
Years of Service/55 X Final Average Salary
= Annual Retirement Allowance
For those hired before July 1, 2007 – if you retire before age 55, your allowance is permanently reduced 1/4 of 1 percent for each month under that age (3 percent per year).
For those hired after July 1, 2007 who retire after 25 years of service credit between the ages 55 and 60 have an allowance reduction of 1 percent per year (1/2 of 1 percent per month) for each year under the age of 60. For those under the age of 55 a 3 percent reduction for each year under the age of 55 will be made.
More facts on public benifits –
ENROLLMENT
Generally, your employer will continue to cover you in the active employee group for one month beyond your termination of employment. Eligible members whose employer does not participate in SHBP will be enrolled as of their retirement date.
Continuation of your health benefits into retirement is not automatic. When the Division of Pensions and Benefits receives your Application for Retirement Allowance, notification is sent to the Health Benefits Bureau. If you file your application at least three months before your retirement date, you will be sent a letter offering you enrollment in the retired group of the SHBP about two months before your retirement date. If applicable, the offering information will include a rate chart showing the cost for each type of coverage. You must complete and return the SHBP Retired Status Application to be enrolled. If you are waiving coverage because of other coverage, an application must be submitted at the time of retirement in order to be eligible for enrollment when you lose coverage. If you do not submit an application within 60 days of your date, you will not be permitted to enroll at a later date. If you are not eligible for employer-paid coverage, the premium will be deducted from your retirement check each month, or you will be billed on a monthly basis if the amount of your retirement check is not enough to cover your premium.
Note: Dual HMO enrollment is prohibited. State statute specifically prohibits two members who are married to each other or who are civil union or same-sex domestic partners and who are both enrolled in the SHBP from enrolling under any two of the SHBP’s HMO plans. One member may belong to a SHBP HMO as a retiree or as a dependent but not as both.
If you had dental care coverage through your employer you may be eligible to continue coverage through the Retiree Dental Expense Plan. If you had vision coverage through your employer, federal COBRA law requires your employer to offer you continued coverage under those plans for up to 18 months after retirement at your expense. To apply, you must contact your employer for a COBRA Application upon terminating employment. (Note that retirees do not need to enroll in COBRA for drug coverage, as prescription drug coverage is included with all retiree SHBP health plans.)
MEDICARE COVERAGE IS REQUIRED
Retired group members and their dependents eligible for Medicare must enroll in Parts A and B of Medicare. Attach a photocopy of your and/or your dependent’s Medicare ID card, or a letter of confirmation from Social Security stating the effective dates of enrollment, to the application for SHBP coverage. If you and/or your dependent is age 65 or have a Social Security Disability at retirement and have not enrolled in both Parts A and B of Medicare, you should contact Social Security to apply for Parts A and B Medicare coverage 90 days prior to your retirement date.
Medicare Part D: The SHBP prescription drug benefits are equal to or better than the standard Medicare Part D plan, most Medicare eligible retirees enrolled in the SHBP and/or their Medicare eligible dependents need not enroll in Medicare Part D. Retirees who enroll in Medicare Part D will lose their SHBP prescription drug benefits. If you or any of your eligible dependents enroll in a Medicare Part D plan, your SHBP medical plan benefits will continue, but your SHBP-provided retiree prescription drug benefits will be terminated for you and all of your dependents. Some SHBP members who qualify for limited-income subsidy programs may find it beneficial to enroll in Medicare Part D.
HOW MEDICARE AFFECTS THE COST OF SHBP GROUP COVERAGE
If you are paying the full cost of your coverage, the cost generally decreases when you and/or your dependent enrolls in Medicare Parts A and B since most SHBP health plans charge lower premiums for Medicare eligible members.
About globalization – sometimes people assume that there is some limited amount of wealth and limited potential to create any more wealth so that for one country to get rich, another country must be poor. This is not at all the case. It would be good for us if more Indians make it into the middle class so that they can buy pharmaceuticals, computers, software, industrial equipment and other advanced, technical items made (or partially made/designed) in the US. Our standard of living DOES NOT depend on poverty elsewhere. We would all be better off if there were NO poverty anywhere. Less war, less crime, no teeming slums, less terrorism etc.
Imagine for a moment that someone inherits a farm. Let’s say that the farm has good topsoil, a good well, good breeding stock, good seed, and excellent farm equipment in good repair. Prior to passing into the control of the present owner the farm did a good business selling vegetables, meat, and dairy products to the local market, and it made a small profit.
But let us suppose for a moment that the present owner of the farm doesn’t understand farming, or isn’t even really interested in learning. The present owner has no objection to standing around looking good, so he stays at the farm, standing in front of it, looking good to passers by.
Of course, the bills still come in, so our farmer puts them on his credit card. When that bill comes due he uses another credit card, Then another. Pretty soon the interest payments alone are higher than his bills and the banks get nervous and call him. No problem. Our farmer sells the tractor, takes the money around to the various credit cards, the food store, the utilities, and pays off all his bills. Then he stands around in front of the farm looking good to passers-by, the lord of his domain.
Well, the bills still come in. Again the credit cards get loaded up. So, this time our farmer sells the harvester. Then later on, the cattle, then the chickens, then the seeds, then he leases the well to his neighbor and finally sells the top soil from his farm to another farm down the road whose soil is getting tired. The cash is taken around to the various creditors, the food store, the utilities, etc.
Now at this point, our farmer thinks everything is okay. The bills are paid, he has a little cash in his pocket, and everything is fine.
Of course, you know better. The farm simply does not exist any more; it’s just an empty lot with a few buildings, and soon they will be gone as well. The path from the farmer’s present condition to seizure of the property for unpaid taxes is a foregone conclusion, even if the farmer doesn’t look far enough ahead to see it.
Poor, dumb, stupid farmer.
That farmer is our government, and our business leaders.
So when do the repo guys show up to take the state of NJ?
Good Article on how we got to where we are;
http://www.whatreallyhappened.com/ARTICLE2/doodoo.html
Roach on protectionism and inflation. Long read.
http://www.morganstanley.com/views/gef/archive/2007/20070507-Mon.html
BC (175)-
If I spent four weeks at Countrywide’s home office, I’d feed myself a bullet.
Clot [204],
I wonder how many times the Blackbox blew up before Paulson stepped in and told the quants to make it work?
Bob, I was just wondering if they ended up using a quarter or spinning a paperclip to determine if the offer was on or off.
Pat (205)-
Rock/Paper/Scissors showdown.
Confused [201],
Very troubling, especially chart pertaining to our debt bubble. UGH.
BC (204)-
Which Paulson? The genius or the fool?
We have to come up with some way of telling those two guys apart.
http://www.worldrps.com , Baby! It’s where Madam Poot goes when she’s divided.
OK, today is a good day. Newcastle rehires Kevin Keegan.
Go Toon!
Pat (209)-
I can’t find the “Quant” tab at that RPS site…
You have to go to the Advanced link.
If you want to see politics at their worst just look at Nick Asselta, State Senator from Vineland. He was voted out of his Senate job. On January 8th he voted for Corzine’s new school plan. He was one of only 5 Republicans to vote for the plan. The plan is terrible for the district that he represents.
His reward. Corzine appointed him to the NJ State Utility Commission at 125k per year on the same day.
Vote with your feet, people.
(208)BC Bob Says:
January 16th, 2008 at 4:48 pm
Confused [201],
Very troubling, especially chart pertaining to our debt bubble. UGH.
I agree, unfortunately it seems to be accurate. Now if we could only get Pandora to Close the Box again.
Pat [205],
Paulson tells Lewis; heads I win, tails you lose.
Clot [208],
Hank Paulson tells the quants to make the simulations work. The last thing the Treasury wants is the 6:00 PM news showing panicked depositors storming Countryslide. Only the 5:00 AM X-Mas shoppers are allowed to break down the front door.
Once the quants gives Hank what he requires, John starts screaming sell orders.
BC (216)-
“The last thing the Treasury wants is the 6:00 PM news showing panicked depositors storming Countryslide.”
Is there still such a thing as the 6:00 news? I thought the networks were running game shows then.
“The pipeline of new mergers and acquisitions – the wellspring that sustains investment bankers’ jobs and fattens their paychecks – is all but dry and isn’t being replenished.”
“A pullback in new deal business doesn’t bode well for investment bank hiring or compensation, and observers aren’t expecting a pickup soon. While optimists point to strategic acquisitions by corporations and heightened interest from overseas buyers spurred by a cheaper U.S. dollar, it’s far from clear those sources are sufficient to make up for the disappearance of large leveraged buyouts. Demand for underwriting new stock and bond issues is widely predicted to decline this year, as well.”
http://news.efinancialcareers.com/NEWS_ITEM/newsItemId-12428
211#, two most famous quants are james simons and d.e. shaw. they don’t talk on squawk box but quietly making money by solving stochastic differential equations.
#199,
Joe Smith started the day early having set his alarm clock (MADE IN JAPAN) for 6 a.m. While his coffeepot (MADE IN CHINA) was perking, he shaved with his electric razor (MADE IN HONG KONG). He put on a dress shirt (MADE IN SRI LANKA), designer jeans (MADE IN SINGAPORE) and tennis shoes (MADE IN KOREA).
After cooking his breakfast in his new electric skillet (MADE IN INDIA) he sat down with his calculator (MADE IN MEXICO) to see how much he could spend today. After setting his watch (MADE IN TAIWAN) to the radio (MADE IN INDIA) he got in his car (MADE IN GERMANY) and continued his search for a good paying AMERICAN JOB.
At the end of yet another discouraging and fruitless day, Joe decided to relax for a while. He put on his sandals (MADE IN BRAZIL) poured himself a glass of wine (MADE IN FRANCE) and turned on his TV (MADE IN INDONESIA), and then wondered why he can’t find a good paying job in…..AMERICA…..
This is why you need to turn your dollars into GLD, learn Chinese, German and japanese, and get yourself as many passports as possible. Thank you for a great $200 yrs. by the way can we sell the rights to the constitution. It seved us good and we don’t need it anymore.
In 1982, before it was broken up, AT&T MA Bell changed it’s Defined Benefit Pension Plan from a calculation based upon average of last five years to one based upon the average of a window frozen in time. In 1997, ATT Inc changed their Defined Benefit Pension Plan to a Cash Balance Plan through a formula which basically froze their liability for 7 to 11 years, i.e. that long to increase your pension. A rough calculation of Pension Benefit would be 1% for each year worked, e.g. 30 years, 30%.
In 2000 ATT Inc chaged the Medical Plan so that it covered 80%, same as Medicare, once you were Medicare eligible. In 2005 SBC/ATT Changed their Medical Benefits to a High Deductible Consumer Driven Health Plan (Passed by Bush with Medicare Part D), which offers minimal coverage once you are Medicare Eligible, such that most people drop it and buy Medigap Privately.
These changes were necessary, given uncontrolled Medical Costs, to keep the Company viable.
Unfortunately, the same is true of NJ, although no positive cost changes have been made. Actually the reverse, Pension enhancements voted by the Legislature in 2000, completely ignored Billions in Market Losses.
Government’s need to adhere to a Rational Set of Financial Standards, by LAW.
Good point Confused 221. That’s why tenure has to be gotten rid of too, as much as my Democratic self hates to admit it. No competition is not good, not good for the students, teachers or taxpayers.
Tenure is not a concern to most teachers…
In fact the current system really seeks to lock in good teachers….unlike a system of business competition a teacher cannot go out and interview very easily…yearly contracts are renewed…and there is no such thing as two weeks notice. Believe me when I say that the good people would love to see more mobility in the system.
I was wondering if someone would be so kind as to give me the address of mls listing 2474647. I would really appreciate it thanks.
A friend of mine is marrying a Teacher, who is retiring this year, and will be entitled to his spousal medical for life, which she is very much looking forward to. Question to any teachers out there, if the retiring teacher marries a 16 year old, do we the tax payer pay her medical for the next 84 years? Or is there an age cutoff for marriage after you retire?
Our standard of living DOES NOT depend on poverty elsewhere. We would all be better off if there were NO poverty anywhere. Less war, less crime, no teeming slums, less terrorism etc.
??? does anybody believe it??
Seriously…
#229 – Al
You should believe it – no poverty would be better for everyone, including everyone in the USA. If everyone in the world could buy our software, computers, pharmaceuticals etc. (goods that it takes some intellect and capital to produce), we would be better off.
Most of what we produce is off-limits to the majority of the people in the world – they are too poor. If they could afford it, maybe we would lose out on really cheap maid service, lawn care, and some cheap imported goods etc., but that is chicken$hit compared to what we would gain. We are still at the top of the heap in science, technology, research, finance, pretty much any super high-value-added good. And most of the rest of the world can’t afford our stuff, and it’s our loss.
228…geezus confused….you ‘really’ are.
#229 – Everyone seems to think we buy everything from China, but do you realize they aren’t even advanced enough in manufacturing to export cars? It’s true, look at this (says they MAY start exporting cars in 2007). From Business Week in 2005 – as far as I know, they still export nearly NO CARS, they can’t make them to export standards.
Here Come Chinese Cars
China aims to be a big auto exporter, with help from big names manufacturing in the country. Detroit isn’t looking in its rearview mirror — yet
Audacious, gutsy, and maybe a little nutty — how else to describe the push by New York auto entrepreneur Malcolm Bricklin and China’s Chery Automobile Co. President Yin Tongyao to import and sell 250,000 mainland-made sport utilities, sedans, and sports coupes in the U.S. starting in 2007? …
After all, Chery produced only 80,000 cars in all of 2004, has near-zero brand recognition outside China, and has been sued by General Motors’ (GM ) South Korean unit for allegedly ripping off the design for its best-selling QQ minicars in China — a charge Chery denies
VMC 200
You are missing the point. the middle class lifestyle is very resource intensive. There is most likely not enough raw materials i.e copper, water, phosphorus, oil, arable land etc to support all 6.7 BILLION people on the planet to live a middle class lifestyle. So there is in fact a limited amount of wealth available. even the most optimistic oil projects from the oil companies themselves show oil peaking and rapidly declining by 2050 at the latest. There are oil supply problems now and only a small percentage of china and india have entered the middle class. You cannot continue growth forever when you raw materials are limited
RE: banks walking away instead of foreclosing on home equity loans.
not sure if it was answered, but the paper version of the wsj briefly mentions that the borrower is still on the hook. it seems the loan is written off the banks books, and the bank takes the loss, but the lender keeps the lien in place in the hopes that it will receive some money when the property is sold.
rita,
23 Earl Street
Deutsche Bank laid off 300 people in NY today.
You do realize that the teacher’s pension is not just a promise it is a return on an investment teachers have no choice but to make. In addition to social security and everything else approximately $170 is deducted from each of my 20 paychecks for the pension. I can not opt out of this deduction and I have no say on how it is invested. I think there is this misconception that the pension is just given to us. We fund it in a similar manner to social security.
Thanks grim for the address I love your blog
#232 Give them time, they will get there;look at how far they have come. They are not going to stop now.
Gov’t job — I can tell you from experience, if you are a Veteran and especialy a disable Vet apply for any and all NJ Civil Service you are interested in. EXCELLENT chance to get it !!
237…Rita….you got two on this board….the intelligent you can learn from and the others who are typical bottom feeders….times get tough? Blame the teachers.
226 Essex
Exactly. The good teachers get rewarded with tenure, but so do the crummy lame teachers. Not exactly fair and doesn’t make the profession very appealing to the many of our brightest.
There’s no supply and demand in teaching after tenure. If a certain type of teacher is harder to hire, they should get paid more, not get locked into some pay scale. A teacher who performs at a higher level should get paid more.
Seriously, when I think about some of the bozos who taught in my high school, I get sick.
We had this guy, he was a gym teacher, and then he was so belligerent and demented that they just made him the Driver’s Ed teacher and let him ride it out til they could get rid of him. He used to stand at the Stop sign at the end of the road and if the high school kids only did a rolling stop he would jump out in front of your car and make a citizen’s arrest. Apparently, this behavior wasn’t quite enough to get him fired, with his union protecting him of course.
Then we had this other creepy health teacher who used to teach us how to use, uh, protection, but couldn’t even say the name of the parts and used to substitute fruit names in.
And these people got paid the same amount as the fabulous, wonderful teachers, teaching real subjects like science and history, who challenged us to think for ourselves and were role models and everything else.
I only stick up for the good teachers and all the people who don’t become teachers because of the system. Believe me, it’s been hard for me to get to this place, it goes against every liberal bone in my body.
Yes..it is a serious issue….and so completely complex that you could write a book about it….take one part….your experience….two parts…..patience…and three parts a willingness to work all day with children……forget the stylin lunches downtown and the adult conversation regarding pending deals….etc…..your life is over from that standpoint. *Shrugs* wonders why they can’t keep fresh new teachers for five years, 50% of them bail before that mark.
Ann (242)-
“Believe me, it’s been hard for me to get to this place, it goes against every liberal bone in my body.”
Good for you, Ann. Liberalism is a self-loathing, parasitic illness.
In the functional world, people who do nothing and contribute nothing are routinely cashiered and dismissed. In education, people like this are coddled, promoted and celebrated.
The Real Issue Today does not involve one specific group. The Ponzi Scheme is nearing it’s end, and we are all victims. The Federal & State Entitlement Programs, which are not sustainable, are obvious targets. We here the FEDS say Social Security, Medicare & Medicaid are not Sustainable. We here the States say State Pensions & Benefits are underfunded and not Sustainable. Latest figures show Public Pensions have a greater liability then Social Security. We see the Private Sector losing Pensions & Benefits. We see Real Manufacturing Jobs outsourced to be replaced by Service Sector jobs of questionable value. We see Government/Corporate sponsored Fraud create continuous Ponzi Bubble Schemes to keep the Charade Alive. It doesn’t matter what promises were made to any of us, when Ponzi ends, and the rubber meets the road.
Something I read today that asks the questions we ponder here.
From a Floyd Norris post called A Bear’s Questions comes an excellent quote from David A. Rosenberg, a Merrill Lynch economist:
Finally, the question must be asked: if the first 7 percent downleg in home prices could manage to trigger …
1. Almost $100 billion in write-downs in the banking sector;
2. A 65 percent year-over-year surge in foreclosures;
3. The highest residential real estate loan delinquency rate in 20 years; and,
4. A 20 percent plunge in S&P financials …
… then what, pray tell, will the next 20-30 percent have in store?
thanks clot!
(will repost in most recent thread)
I’m no stock advisor – but I see folks in my field eyeing some scary investments – I guess I’m too contrarian.
Thanks again though,
sl
thanks VMC!
“Good for you, Ann. Liberalism is a self-loathing, parasitic illness.”
————————————–
Crawl back under your rock.
Sweeping generalizations and mindless political rhetoric — are a cancer.
Essex,
Yes, I know it’s a very complex issue, of course. I have the utmost respect for good teachers.
But I also think that tenure is a bad idea because it makes it practically impossible to fire the crummy ones, or even worse, the nut jobs.
BTW, I’m still a liberal and a Democrat, but I’ve opened my mind to the possibility that school reforms like eliminating tenure and school choice may not be such bad ideas.