This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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From the WSJ:
Rule Change May Hurt ‘Jumbos’
By JESSICA HOLZER
Though mortgage rates are falling, a Jan. 1 decline in the maximum size of a mortgage that Fannie Mae and Freddie Mac may buy or guarantee in certain costly U.S. housing markets is likely to push interest rates higher on larger home loans.
Economic-stimulus legislation passed in 2008 lifted the loan limit in high-cost areas to nearly $729,750 from $417,000, but only through year’s end. On Thursday, the limit declined 14% to $625,500.
Among the geographic areas affected by the change are metropolitan New York, Los Angeles, San Francisco and Washington. In most parts of the U.S., the maximum will remain at $417,000 in 2009.
Interest rates on larger mortgages that will no longer qualify for purchase by Fannie or Freddie are expected to rise because so-called jumbo loans typically carry higher rates than those on “conforming” loans, which can be sold to Fannie or Freddie.
Lawmakers representing pricey home markets are likely to protest the new lower limit. The National Association of Realtors and Mortgage Bankers Association already have been lobbying Congress to make permanent the $729,750 limit for high-cost areas that was in force for most of 2008.
From the Courier News:
Golden Triangle plan must stay, or Toll Bros. can take a walk
The check’s no longer in the mail, it has arrived. And with that word on Tuesday that builder Toll Bros. Inc. had paid its latest installment to East Brunswick for the right to develop the much-maligned and often-altered Golden Triangle project, town fathers can breathe a little bit easier this new year.
Now the real work begins.
To recap, Toll Bros. grand scheme to build a mega transit village on one of New Jersey’s most valuable pieces of highway real estate appeared in danger of coming apart at the seams this fall when the developer’s pressing financial difficulties led it to request a change in its plans.
Originally, Toll Bros. had targeted the Route 18 land as the ideal site for a sweeping transit village, including housing, retail and commercial footage, plus a parking garage. Several years later, only the garage stands.
Last year, Toll Bros. asked that its plans be delayed, noting the moribund economy and sagging real estate markets no longer made its venture a profitable one, at least not until the financial climate improves. The township granted the developer’s request.
Then the deal took an even bigger turn for the worse, when Tolls Bros. indicated it wants to scale back the project, stripping housing from the equation.
I watched Desperate to Buy on HGTV yesterday. Saw 2 shows set in NJ. One couple offered 380k on a house listed at 439k, wound up getting it for 400k. The place needed $2,300 in safety repairs, the seller agreed to fix 2k of them. The buyers were going to walk over the remaining $300, even though they were living with the in-laws and hubby had a 2 hour commute from MIL’s house. They claimed they had already given up so much (I guess coming up 20k so they are paying 90% of list is “so much”.
The best part was they kept saying they couldn’t afford 2k in repairs and 400k was the max they could afford. If you can’t afford 2k in repairs me thinks perhaps you can’t afford the house.
Also the couple sold a house in San Diego and was complaining about the low price they got. Wifey mentioned they lost half their deposit Not sure if they took a loss, or just didn’t get the 2006 price they were dreaming of.
HUD has approved Cobb County, Georgia’s request for $6.8 million to purchase foreclosed homes. The county will pay at least 15% below appraised value for about 34 homes. The homes will then be renovated and sold to low and middle income qualified (whatever that means these days) first time homebuyers.
http://www.mdjonline.com/content/index/showcontentitem/area/1/section/21/item/125142.html
In addition to the reduced conforming loan limit going into effect, the self-imposed GSE foreclosure moratorium ends next Friday, January 9th.
grim (5)-
Then, the tsunami will begin again.
Good news for NJ Coast Line travelers.
From the APP:
Working on N.J.’s railroad
An important step was taken Wednesday toward replacing a 100-year-old railroad bridge in the Jersey Meadows, which will eliminate a bottleneck and provide capacity for more North Jersey Coast Line trains and those on other NJ Transit rail lines to and from New York.
It also paves the way, in conjunction with the proposed second Hudson River tunnel, to provide a one-seat ride in and out of Manhattan for riders of proposed lines, such as the Monmouth-Ocean-Middlesex line, and existing lines, where riders now have to change trains in Newark.
The Federal Railroad Administration approved the $1.3 billion project to replace the existing bridge over the Hackensack River, located southwest of the Secaucus Junction station, with a three-track fixed northbound bridge, a two-track moveable bridge built on a new southern alignment and tracks to eliminate crossover movements. One of the goals of the replacement project was to eliminate having a bridge which had to be opened for large boats and ships.
Saw lots and lots of retail RE in FL: brand-new, with 100% vacancy.
The best are the ones where the buildings are completely finished, and the parking lots are dirt.
Also saw a piece of land that must’ve had 2,000 Hyundais parked on it.
8 Clot
Were you in Miami? I was in Tampa. Seems like half the city is for sale.
When my friend was looking at rental listings in Miami many of them proudly proclaimed “Not a foreclosure”.
The more I scan the RE web sites, the more I become convinced it will not be a peaceful correction. It seems that far too many properties are being offered at peak sale price plus commission. I would guess that either the current owners paid peak or bought pre-1999 and HELOC’d to peak assessment and can/will only sell if they can break even. If they can afford to stay put, they can take it off the market. But if there is a job loss or other factor that forces them to sell, look out.
I have a couple of friends who bought in Tampa in 2006. While they can handle the payments they are upside down and can never afford to leave.
Clot,
My sil was in Ft Lauderdale. Many high end shops, now vacant.
From CNBC:
IndyMac’s Mortgage Obligations $1 Billion: Report
Fannie Mae, the largest U.S. home funding company, believes that failed mortgage lender IndyMac has obligations to repurchase around $1 billion of home mortgages that failed to meet Fannie’s standards, the Wall Street Journal said, citing people familiar with the situation.
Banks that sell loans to Fannie or its smaller rival, Freddie Mac, must make “representations and warranties” that those loans meet certain quality standards, the paper said.
If not, the lenders can be forced to buy the loans back, the paper reported on its website late on Thursday.
A spokesman for Fannie told the paper the company is working with the Federal Deposit Insurance Corp (FDIC) to resolve the issue. Fannie could not be immediately reached for comment by Reuters.
12 DL
Yeah thats the case. However, you’ll always have people so out of touch, they actually think they are better off now.
3…Wow. Those shows are insipid. I cannot bring myself to watch much TV anymore…too much noise.
In other Non New Jersey RE news…. UK housing prices down 16% in 2008. Homes are now at 2004 prices. Another 15% drop predicted for 2009.
http://news.bbc.co.uk/2/hi/business/7807724.stm
Does that mean wealthy Londoners won’t be buying up New Jersey capes? I am reminded of a circa-2006 conversation in which it was argued what wealthy Europeans were buying up non-condo/non-townhouse residential real estate in Northern NJ.
I never understood the ‘cape’…I live in and like ranches….less steep stairs. Just a thought.
“UK housing prices down”
i lost my shirt on a flat i had in london. talk about foolish…
SAS
lost (9)-
Miami.
BC (13)-
The clincher down there is how many shops are open, but have discreet little “Business for Sale” signs tucked into a corner of the front window.
Went into several places that I’d bet good money didn’t open today.
“i lost my shirt on a flat i had in london”
so much for striving for maximum liquidity.
learned my lesson, others will not.
SAS
Economy: On the agenda Friday is the Institute for Supply Management’s monthly report on manufacturing, to be released at 10 a.m. ET. Economists surveyed by Briefing.com expect further contraction in the sector, reflecting a recessionary environment, with the index dipping to 35.4 in December from 36.2 in November.
Mike Morgan’s first post of 2009. Cranky, as usual:
http://realestateandhousing2.blogspot.com/2009/01/headlines-thoughts-and-comments.html
The NJ Paid Family Leave Tax begins this week as well! Employers set to begin withholding an additional .09% of your paycheck to pay for the benefit. The new tax amount will rise to .12% next year.
Employers Must Begin Paid Leave Payroll Withholding Jan. 1, 2009
The Paid Family Leave program is funded by a new payroll tax on employees. Employers must begin payroll-tax withholding for Family Leave Insurance on January 1, 2009.
The tax rate is specified as: .09 percent (0.0009) for 2009 and .12 percent (0.0012) for 2010 and beyond. The tax is levied on the taxable wage base for the given year. For 2009, the taxable wage base will be $28,900 of income.
Please note that there is no direct contribution by employers to the paid family leave fund.
See official NJ paid leave withholding information published by the NJ Department of Labor & Workforce Development.
http://tinyurl.com/9vnon2
“Motorists’ habits spur call for tax increases”
http://tinyurl.com/8bv5qv
Jon needs to raise the gas tax, and quick.
Grim Unmod 29
Clotpoll says:
January 2, 2009 at 9:02 am
Mike Morgan’s first post of 2009. Cranky, as usual:
disposable diatribe du jour
Berkshire Has ‘Nowhere to Hide’ in Worst Drop in Three Decades
Jan. 2 (Bloomberg) — Billionaire Warren Buffett’s Berkshire Hathaway Inc. slumped 32 percent last year, the worst performance in more than three decades, as the U.S. recession forced down the value of the firm’s equity holdings and derivative bets.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a3bgwCfNYpAg&refer=home
It would be even lower if AMEX hadn’t been made a bank. Good move Warren. I’ll wait for that paragraph in your annual investment letter about using your government connections to benefit your book.
Cognative dissonance on CBBC web site. Main headline reads: “Stocks to post big gains, Economy to rebound: Pros.” Then, on the upper right hand side the headline reads: “Pros warn, stocks haven’t hit bottom.”
Take your pick.
CNBC. Sorry
One place in the US where housing prices are rising.
http://www.nytimes.com/2009/01/02/us/02nevada.html?partner=permalink&exprod=permalink
Euro-zone manufacturing contracts at record pace.
http://biz.yahoo.com/ap/090102/eu_economy.html
Hi – am new to this post. Am looking for accurate data on North Jersey Real estate sales – especially for Bergen and Hudson counties if possible.
Looking for Yr over Yr (& qtrly) sales volume (# of transactions) for SFR, Condo Multis by Town. Do you know where I can find this. Would also like to see listing volumes, median slaes price and any other data that is available.
Thanks
10 States With the Highest Weekly Maximum Benefit
1. Massachusetts
Unemployment rate: 5.9%
Weekly benefit maximum: $600-$900
Average weekly benefit: $383.77
Benefits recipient rate: 57%
2. Rhode Island
Unemployment rate: 9.3%
Weekly benefit maximum: $513-$641
Average weekly benefit: $357.41
Benefits recipient rate: 43%
3. Connecticut
Unemployment rate: 6.6%
Weekly benefit maximum: $501-$576
Average weekly benefit: $310.80
Benefits recipient rate: 45%
4. New Jersey
Unemployment rate: 6.1%
Weekly benefit maximum: $560
Average weekly benefit: $366.34
Benefits recipient rate: 57%
5. Pennsylvania
Unemployment rate: 6.1%
Weekly benefit maximum: $539-$547
Average weekly benefit: $325.06
Benefits recipient rate: 58%
6. Minnesota
Unemployment rate: 6.4%
Weekly benefit maximum: $351-$538
Average weekly benefit: $335.99
Benefits recipient rate: 39%
7. Hawaii
Unemployment rate: 4.9%
Weekly benefit maximum: $523
Average weekly benefit: $414.17
Benefits recipient rate: 42%
8. Washington
Unemployment rate: 6.4%
Weekly benefit maximum: $515
Average weekly benefit: $357.03
Benefits recipient rate: 34%
9. Illinois
Unemployment rate: 7.3%
Weekly benefit maximum: $369-$511
Average weekly benefit: $297.07
Benefits recipient rate: 38%
10. Maine
Unemployment rate: 6.3%
Weekly benefit maximum: $331-$496
Average weekly benefit: $266.42
Benefits recipient rate: 31%
http://finance.yahoo.com/career-work/article/106358/Jobless-Benefits,-State-by-State
#39 – Keep in mind that NJ raised the maximum unemployment benefit to $584 in 2009. I believe this would put us at #3.
Official face-off over N.J.’s ’09 governor race
“In a recent political roundtable that provided a not-so-sneak preview of the coming race, Democrats said that the economy would remain the top issue in the new year and that it played to Gov. Corzine’s biggest strength: his Wall Street experience and financial skills.”
http://www.philly.com/inquirer/local/nj/20090102_Official_face-off_over_N_J__s__09_governor_race.html
Gubbmint gets 5 million worthless GMAC shares.
http://news.yahoo.com/s/ap/20090102/ap_on_bi_ge/gmac_financing
your Gubbmint loves you.
and if you ever talk bad about your loving Gubbmint you unpatriotic and should be shipped off to gitmo.
wink…wink
SAS
How the heck can GMAC afford to pay the dividend on $5b in new preferred shares? At 8% a year, we’re talking about $400 million a year in dividend payments.
Making 0% loans to subprime SUV buyers doesn’t seem like it will be profitable enough to cover it.
From Nigel Gault at IHS Global Insight (no link):
Happy New Year? Maybe in 2010
As we enter 2009, the U.S. and global economies are in steep decline, in what is the most severe synchronized global downturn of recent times. Monetary and fiscal policies are loosening around the world to varying degrees—most aggressively in the United States—but they are battling against an extreme credit crunch, and will take time to become effective. One year from now, we will probably be able to look forward to 2010 with solid hope for a resumption of global growth. But first we have to get through 2009, which will likely see the first decline in world real GDP in the postwar era.
No Signs Yet of Stabilization. We are not looking for signs of recovery yet, merely for signs that the rate of decline is becoming less severe—but cannot find them. We expect U.S. real GDP to drop 5.6% in the fourth quarter and 5.4% in the first quarter of 2009. We expect final sales to decline less sharply in the first quarter than in the fourth, but firms will need to cut back inventories more aggressively. They are cutting production steeply, but still not fast enough to prevent the inventory-to-sales ratio from rising. We see negative growth through mid-2009, and only anemic positive growth in the second half, so that would put the recession’s length at somewhere between 18 and 24 months—the longest in the postwar era. In terms of depth, we anticipate a 3.4% peak-to-trough decline in real GDP, exceeded only by the short-but-sharp 1957–58 recession (down 3.7%). The calendar-year GDP outcome for 2009 is minus 2.5% growth, worse even than the 1.9% drop in 1982.
All Cylinders Firing…in Reverse. The holiday shopping season is proving as bad as retailers had feared. Real consumption dropped 3.8% in the third quarter; we expect declines in the 2.5–3.0% range in the fourth and first quarters. The decline in the labor market is accelerating; the United States lost 533,000 jobs in November and we expect a loss of 550,000–600,000 in December. We see the unemployment rate at 9.1% by the end of 2009. Housing starts and prices continue to retreat, with no end in sight, and nonresidential construction is poised for a steep drop in 2009. Export growth had been propping up the U.S. economy, but with the rest of the world in recession, we now expect exports to contract 7.0% in 2009.
Deflation Is Now the Threat. Oil prices continue to fall further; we assume they hit a trough of $30/barrel in the second quarter of 2009. That’s good for consumers, but plunging commodity prices bring new dangers—deflation, not inflation, is now the primary price risk. By the third quarter of 2009, we expect headline CPI inflation to be as low as minus 3.8% year-on-year, largely on plunging energy costs. Core inflation will prove more stubborn than the headline number, but will probably fall below the bottom of the Federal Reserve’s 1–2% comfort zone by the middle of 2009.
Fiscal Stimulus on the Way. The Obama administration-in-waiting is preparing a large fiscal-stimulus package. We know that it will be a mix of infrastructure spending, support for state and local governments, increased transfer payments (e.g., extended unemployment insurance), and a “middle-class” tax cut. The message from the Obama camp is that the package will be valued somewhere between $675 billion and $775 billion over two years. But how quickly can the funds actually be spent? Infrastructure spending is a key part of the package, and it cannot be turned on and off like a faucet. We assume that the funds will take much longer than two years to spend out, and that the actual total stimulus injected over the first two years will be $500 billion. Combined with the Fed’s vigorous easing, the package should help to stabilize the economy in the second half of 2009 and promote some recovery during 2010.
Fed Takes Rates to the Floor. The Federal Reserve has run out of conventional ammunition. We expect it to hold the federal funds rate in its new target range of 0–25 basis points throughout 2009. Near-zero rates are as yet having little positive impact, given banks’ reluctance to lend. In response, the Fed is now trying to stimulate lending by directly purchasing mortgage-backed securities itself, and it has a similar plan for the securitized consumer loan market.
by Nigel Gault
[41] DL
“Gov. Corzine’s biggest strength: his Wall Street experience and financial skills”
Funniest thing I read all week.
[65] SAS (yesterday)
When I see the movie Gran Torino, I will be thinking of you. I was going to be thinking of me, but I changed my mind.
Your story reminds me of a time in Philly, when I saw a couple of future 0bama voters, hiding behind a brick wall on my street in the middle of the day. I was in a suit and advised them in my best cop-sounding tone to move along. One of them started toward me and I pulled back my jacket. Confrontation over and I never saw them back there.
grim When you get a chance, could you providw me with sales history and addresses for:
njmls 2900030, and 2900038 (short sale) These lsitings came on the market yesterday, holidays over, and people already starting to list.
Thanks as always.
re: #41 “Gov. Corzine’s biggest strength: his Wall Street experience and financial skills”
Didn’t Corzine rasise taxes in NJ by 2 Billion already?
030 – 235 Wales Ave
Purchased: 1/3/2005
Purchase Price: $460,000
Currently listed for: $458,000 (but not a short sale, plenty of equity)
038 – 298 Kinderkamack
Purchased: 3/16/2001
Purchase Price: $357,000
HELOC’ed into foreclosure, $600,000 mortgage taken out on 1/20/2006.
Corzine was hoping to go to Washington before the manure hit the fan. O decided to let him stay in NJ and deal with the mess he made.
#49 grim:600,000 mortgage taken out on 1/20/2006.
Insane and on KKR too!!
Thanks for the info as always.
outstater, no. 4
Did you see the comments below the story about that HUD program to buy up foreclosed homes in Georgia?
Posted Comments
Pat says –
We will be visiting these homes to ensure no illegals are working on them. If they are, you’re desire for governor is toast, Sam.
Rick Zeier says –
Let’s see,$6.8 million to renovate 34 homes. That is $200,000 per home to be sold to low income families. If you are a low income family can you afford to pay for a $200,000 home? Isn’t this exactly the policy that got us into the housing mess we are currently in? If these houses have been forclosed or abandoned then a lending institution owns the property. Let them sell it on the open market at market price. We have already bailed out the financial institutions that wrote these bad loans. If you want “Neighborhood Stabilization” it probably wouldn’t cost $200,000 per lot to bulldoze the houses and return the area to a natural green state. The government insanity continues. Welfare under any other name is still welfare. I am tired of the government spending tax dollars on ridiculous projects.
Corzine was hoping to go to Washington before the manure hit the fan. O decided to let him stay in NJ and deal with the mess he made.
So his new strategy is to bet everything on a big bailout from Obama?
Budget? Who cares, Obama will shower us with riches.
Only 89 short days until the recession is over, as per bi.
I wonder if he means calendar days or business days
ISM came in worse than expected..
U.S. Dec. ISM index 32.4% vs. 36.3% expected
Ugly. Worse than even some of the most bearish forecasts. The lowest estimate provided by forecasters was 32% even.
From Reuters:
U.S. manufacturing sector tumbles in December-ISM
U.S. factory activity fell to a 28-year low in December, according to an industry report released on Friday that showed a more severe contraction in the sector than expected.
The Institute for Supply Management said its index of national factory activity fell to 32.4 — the lowest since 1980 — from 36.2 in November.
A reading below 50 indicates contraction in the sector.
Economists had expected a reading of 35.5, according to the median of their forecasts in a Reuters poll. Their 69 forecasts ranged from 32.0 to 40.0.
grim says:
January 2, 2009 at 10:00 am
How the heck can GMAC afford to pay the dividend on $5b in new preferred shares? At 8% a year, we’re talking about $400 million a year in dividend payments.
Making 0% loans to subprime SUV buyers doesn’t seem like it will be profitable enough to cover it
________________________________________________
Grim: There is no plan to make GMAC profitable. This is just to keep the flow of credit going. The gubbmint is going to just keep pouring billions into the banks as a hail mary pass.
The patient has 30 bullet holes and the gubbmint is just pumping more blood into him in hopes the patient can survive another 18-24 months.
The patient has 30 bullet holes and the gubbmint is just pumping more blood into him in hopes the patient can survive another 18-24 months.
$400m a year, in addition to needing to raise enough capital to buy back that $5 billion stake.
Worse than just having 30 wounds, the patient is still being shot at.
Grim (58):
Well put my friend!
The Paid Family Leave program is funded by a new payroll tax on employees. Employers must begin payroll-tax withholding for Family Leave Insurance on January 1, 2009.
The tax rate is specified as: .09 percent (0.0009) for 2009 and .12 percent (0.0012) for 2010 and beyond. The tax is levied on the taxable wage base for the given year. For 2009, the taxable wage base will be $28,900 of income.
Who else thinks that this programm is unsustainable: lets run some numbers:
33$/persdon/year.
which provides employees with up to six weeks of paid leave to care for a newborn, newly adopted child or a seriously ill family member during any 12-month period. Beginning July 1, employees will be eligible to receive up to two-thirds of their pay, up to a maximum of $546 per week in 2009, under the program.
One person taking 1 year leave – 3276$
So lets say it would take 100 people work for a year to provide 1 person with family leave… Once…
Plus costs of a programm and knowing goverment unefficiency I would say it would be something liek at least 100%overhead costs – so lets say 200 people for 1 person once a year.
Do you know how many people would choose to use it????
This programm is bound to run out of money instantly and never pay for itself……
clarification – 1 person taking 6 week leave at 546$ – 3200$
grim says:
January 2, 2009 at 10:22 am
The patient has 30 bullet holes and the gubbmint is just pumping more blood into him in hopes the patient can survive another 18-24 months.
$400m a year, in addition to needing to raise enough capital to buy back that $5 billion stake.
Worse than just having 30 wounds, the patient is still being shot at.
I said it long time agho – lets give EVERYBODY 1,000,000USD screw the dollar and see what emerges from it.. This way at least not only CEO will get rich…
Yes dollar will be shot, yes nobody will trust US credit anymore – but hey – national debt will be easy to pay off – everybody will; pay 350K back to the goverment in taxes – 350,000*300,000,000=105$ trillions….
Ohh wait we better get our national debt to that level first… What is it now anyways??
“When I see the movie Gran Torino, I will be thinking of you”
i don’t have a problem with someones buisness as long as its professional and doesn’t take place near a school during in session hours.
SAS
[63] SAS
you’re more tolerant than I am.
It also illustrates our backgrounds, training and educations. You would approach them as someone with special forces-indigenous peoples training. I would approach them like a cop would.
The major difference in those approaches is that the special forces soldier understands he is on their turf while the cop is intent on controlling the turf and keeping the oppo off of it.
“i don’t have a problem with someones buisness as long as its professional and doesn’t take place near a school during in session hours”
i wish i could say that about some of you RE agents out there…
ha ha ha..
:)
SAS
These monkeys are running ads on the radio…
http://www.fixhousingfirst.com
Their “plan”:
1) Stop the fall in home values and prevent foreclosures.
2) Restore consumer confidence.
3) Create jobs.
4) Lift our entire economy.
#66 – If we know how to do it, and it is so easy to do, why don’t we just always do it?
Why bother with recessions at all?
Why not a new era of permanent prosperity?
The Fed, the Treasury, and the Government all know how to manipulate the levers in such a way that guarantees sunny skies forever!
Anecdotal report:
My co-worker bought a new town-home in 2004 in Essex county. They had one kid, and the girl is pregnant again – needed a bigger home.
They went and bought bigger town home in the same development.
Placed theirs on the market at 30K below their neighbor – identical unit next door. They have plenty of equity as they bought it as pre-construction at about 250K.
They had 2 offers, one at full price, they are expecting to close in 3 days..
Not closed yet though.
on 450K townhome 30K is about 7% below competition..
So right now houses priced 7% below competition sells quickly.
P.S. Oer 12K taxes on the new townhome – 3 bedroom 2 bath, with no private land. + Pretty hefty HOA Fee’s.
I asked them if they think taxes are too much, and was brushed off with a look at me like I am an idiot: – you are silly, IT IS TAX DEDUCTIBLE!!!!
That was the end of conversation.
comrade nom deplume,
I found its just best to be polite & political and most will be receptive.
SAS
#52 Scribe – The “Sam” referred to in the first post is Sam Olens, Chairman of the Cobb County Board of Commissioners. I agree with the second post – it’s a dumb use of taxpayer dollars. Cobb was once one of the fastest growing counties in the country and the development didn’t slow down as quickly as it should have so now there are new subdivisions nearly devoid of occupants. I always thought it was odd that some of my daughter’s classmates lived in huge, mansion-like houses with all new furniture and two BMW’s in the driveway. How many 35 year olds make that kind of money in Georgia? Well, the answer was, they didn’t. It was all debt. The cracks in the facade are only now starting to appear, but only a little so far.
Chi (32)-
Why, exactly? This guy- along with Roubini- has called his shots for close to three years now. We’ve both gone along, grinning at his tendency toward written hyperbole and growing inclination to pump his own portfolio…but where, exactly, has he been wrong? I can’t find that.
As you say, he will eventually be wrong, and it will be spectacular. However, even his eventual spectacular flameout will pale in comparison to a Ruthian winning streak of correct calls. I have taken everything he postulates seriously and as a result had a portfolio gain in the worst Dow year since 1931 at least partly attributable to following his ideas (disclaimer: I don’t subscribe to his service).
In the end, an investor either wins or loses. It is a zero-sum game. Morgan may not possess the requisite degrees or professional demeanor you like, but you can’t argue with his results.
Please help.
HE (33)-
Buffett, Ross and all the other “gods” of investment have been rendered mere mortals by the current crisis. The only reason these guys aren’t completely wiped out is their collusion with both gubmint and corporate America to secure for themselves terms which are not available to the regular investor.
Self-dealing and collusion always pay in the new America.
I am finding is so frustrating that home prices in Middlesex County have hardly dropped at all and people are still asking insane prices. What’s all this talk about a bad economy? By looking at home prices in the Sayreville/Old Bridge area you would think everything is just swell. I’ve been waiting over a year to buy a house and it looks like I’m going to have to wait even longer.
SA:
Nine Ways to Profit in 2009
http://seekingalpha.com/article/112963-nine-ways-to-profit-in-2009
“Theme 5: Short REITs.
Action: Buy SRS.
Theme 6: Short China.
Action: Buy FXP.”
So I’ve covered 2 of the 9. Hope this guy knows what he is talking ’bout. ;)
DL (34)-
The only thing for certain about CNBC is that- outside Santelli- it is populated by good-looking, functional retards.
“I’ve been waiting over a year to buy a house and it looks like I’m going to have to wait even longer.”
That’s nothing. Many hear have been waiting 5 years or longer. Patience will pay!
From Bloomberg:
U.S. Factories Contracted at Fastest Pace Since 1980
Manufacturing in the U.S. shrank in December at the fastest pace in almost three decades as the recession deepened and spread overseas.
The Institute for Supply Management’s factory index fell to 32.4, less than forecast and the lowest level since 1980, from 36.2 the prior month, the Tempe, Arizona-based private group said today. Readings less than 50 signal contraction. The group’s price measure fell to the lowest level in almost six decades.
Clogged credit markets, the collapse in housing and mounting job losses have hurt demand for everything from furniture and appliances to automobiles, driving General Motors Corp. and Chrysler LLC to the brink of bankruptcy. The slump will extend into 2009 as downturns in Europe and Japan also depress exports.
“It’s a breathtaking plunge in manufacturing,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, whose estimate tied for lowest among economists surveyed. “The exports numbers are reflecting recessions abroad. The world is very much coupled.”
The group’s gauge, which covers about 12 percent of the economy, was projected to drop to 35.4, according to the median estimate of 57 economists surveyed by Bloomberg News. Forecasts ranged from 34 to 40 and the measure averaged 51.1 in 2007.
Jeff K-
prices have certainly dropped. You sound like Frank. no recession here.
Clotpoll says:
January 2, 2009 at 11:01 am
HE (33)- Buffett, Ross and all the other “gods” of investment have been rendered mere mortals by the current crisis. The only reason these guys aren’t completely wiped out is their collusion with both gubmint and corporate America to secure for themselves terms which are not available to the regular investor.
Self-dealing and collusion always pay in the new America.
clot: come on clotty….they made bad bets, but didn’t bet the house, so they are down…not out…
Hype (57)-
The patient is dead. They’re transfusing a dead person.
Strictly Weekend at Bernie’s here.
Clotty? How endearing.
Stu says:
January 2, 2009 at 11:08 am
“I’ve been waiting over a year to buy a house and it looks like I’m going to have to wait even longer.” That’s nothing. Many hear have been waiting 5 years or longer. Patience will pay!
Stu: my cousin from Boston called me yesterday and derisively tossed a “are you still renting?” in my face…….I was thinking what a turd this guy has been for the better part of 15 years, but I bit my tongue…..
Clotpoll says:
January 2, 2009 at 10:57 am
Chi (32)- Why, exactly?
I want to answer, but I can’t get the site to load….
chi (79)-
Do you get Sunday afternoon phone calls from Klink?
If you got a Sunday afternoon call from him, would you take it?
When a guy like Buffett cops to getting a call like that…and then less than a week later gets a class of GSpf all to himself…what’s a nice way to put that?
I can’t think of one. Please help me.
ChiFi (82):
“but I bit my tongue…..”
Often the best strategy these days.
if the index can hold until the end of the day, we should see a great year! sorry for your srs clot and stu.
Yea, prices have come down a little but Middlesex county is still WAAY to high. But the most frustrating part right now for me is the lack of new homes going on the market. It’s just the same homes that have been listed for many months now. I’m hoping maybe once the spring comes and people start trying to sell that might finally realize they can’t get $400k for a 40 yr old house that has never been updated.
chi-
Ok, I realize #84 isn’t exactly an answer to your question. True, Buffett and Ross have not gone “all in” and have considerable capital left in reserve.
However, their losses have been mitigated greatly by their being allowed special terms and privileges. Moreover, the special terms and privileges are not really being extended in return for either investor’s serious attempts to recapitalize/refinance the damaged companies targeted. They are being rewarded for lipsticking a smiling face of credibility onto the death rictus of rotting corpses.
bi (86)-
Good to see that we will be able to count on you to extrapolate one year of market movement from one day of light trading.
Thanks also for helping me sleep soundly at night. You’re cheaper than Ambien and a lot funnier.
Clotpoll says:
January 2,2009 at 10:57 am
Chi (32)- In the end, an investor either wins or loses. It is a zero-sum game. Morgan may not possess the requisite degrees or professional demeanor you like, but you can’t argue with his results.
clot: I don’t appreciate how you wrote this portion of your post. My beef with anyone is hubris and marriage to one viewpoint until they run it into the ground…..when you have a track record of being a genius, you end up like:
Howard Schultz;
Jerry Yang;
Michael Dell;
Robert Nardelli…..
Always be cautious of someone whose return profile is different than yours, and they don’t fully disclose how they benefit from your mutual relationship. Even in this case where he is merely hollering an opinion to the public ostensibly gratis….
still waiting for the load…..
if the index can hold until the end of the day, we should see a great year! sorry for your srs clot and stu.
There is essentially no correlation between new year first day trading returns and yearly performance. A single day trading results has absolutely no predictive power.
From 1950 to 2007, I think the correlation is something on the order of .05 or .08.
92#, maybe it is true. but this year is so pyschologically different
bi:
Instead of drinking the CNBC kool-aid, this is what you really should be paying attention to:
http://www.marketskeptics.com/2009/01/ten-major-threats-facing-dollar.html
Jeff-
agree that I would like the drop to be quicker, but the rise up wasnt as quick as we remember, it took several years as well.
My wife and I are very pleased with renting and waiting. The price we are willing to pay hasnt changed, but the amount of house, or selection of town has greatly improved. I find it very encouraging.
We looked at a place that was 100k-150k out of our range two years ago, didnt like it for a few reasons, but it wouldnt have even shown up on our radar back then.
I see no reason why things will change for the better or the downward trend will stop.
Clotpoll says:
January 2, 2009 at 11:21 am
chi- Moreover, the special terms and privileges are not really being extended in return for either investor’s serious attempts to recapitalize/refinance the damaged companies targeted. They are being rewarded for lipsticking a smiling face of credibility onto the death rictus of rotting corpses.
clot: I assume you are aware that someone from these threads could openly disclose that they will pay you $50,000 to vouch for various real estate opportunities in Central NJ. You could accept that money (fully disclosed here) and make good faith endorsements. People here would follow your recommendations due to your reputation, experience and prior conduct. Is there a difference? If $50,000 doesn’t do it, then what number? Full paid tuition at UNC for both your daughters?
bi:
“but this year is so pyschologically different”
Whawhawhawhaaaat?
The only difference I have noticed over the past 30 days or so is that the market is trading up as news is getting worse. Perhaps this has something to do with the lack of institutional trade volume which is typical of the end of the year. My guess is that there are tons of bi-like day traders who do not know the history of bear market rallies. Unfortunately, (IMO) they will come to learn about it the hard way. The continuing rally in the market on nothing more than hope is encouraging.
Bi, come talk to me on the week of January 12th. This will be an interesting one as the world finds out that these low PEs are not quite low enough. Retail numbers (earnings) will be reported then as well the official start of the 4th quarter’s earnings season. Hope and speculation tends to drive the market in the non-reporting periods. Earning ultimately put the speculators in their place as they drive stock prices. Between now and then, it’s all just noise.
OK…..
Friday, January 2, 2009
Headlines, Thoughts and Comments
Funds Suffer $320B Outflow – Financial Times
Flight from mutual funds as investors seek safety. Decline in fee revenue prompts job cuts.
Mike Morgan – There you have the headline and the two subheads from page one of the Financial Times for the first day of the New Year. Ouch. The FT always tells it like it is. Too bad the US media can’t do the same.???????????? WHAT DOES HE READ?
The outflow set a record in percentage of assets, which is far more important than the number of $320B as a record number. This brings me to the Bulls that keep pointing to all the money on the sidelines. The are correct, as there is now more money on the sidelines than ever before . . . both in number of dollars and percentage of assets. But . . . it will be a very long time before these folks find the confidence to invest in equities, after a year of Madoff and the worst year since the 1930’s. Oh, one more thing, with unemployment rising and wages falling, it would seem to me that there is less and less money sitting on the sidelines that will be coming back to equities anytime soon. THAT IS THE WHOLE THESIS? I DISAGREE ADAMANTLY.
After the Collapse, Guarded Hope for ’09 – The Wall Street Journal
1930 DOW down 33.8%
2008 DOW down 33.8%
Mike Morgan – Coincidence? Twighlight Zone stuff? Whatever it was or is or will be, the number I looked at next was 1931, where we were down another 52.71%. So if we simply want to look at history, 2009 is going to be very dark and gloomy. I believe it will be worse than the 1930’s because we have repeated the mistakes of the 1930’s . . . but this time we did it on steroids. SHALLOW SPECIOUS ARGUMENT
QUOTE: “Just look at what is happening in Greece” – French President Nicolas Sarkozy, in a stern warning to his party about how protests similar to Athens could break out in France if they fail to address unemployment. I HOPE THEY BURN FRANCE TO THE GROUND
What Obama Needs to Know – Newsweek
Compare that to Bush 1 and Bush 2 who surrounded themselves with self-serving, egotistical and greedy men and women. Obama is different . . . at least he was (to some extent). Unfortunately, his platform of CHANGE evaporated as he made appointments from the old guard. So far, there has been no indication that he is going to reach outside. For the sake of our country, let’s hope he does. OK…THIS SOUNDS LOGICAL, BUT HONESTLY, IN PRACTIVE SUCH COMMENTS ARE PATENTLY ASSENINE, CHILDISH, AND AT BEST NAIVE
A Rough Ox Ride to Asian Power – Financial Times
The sorry truth is that, if westerners are not spending, Asians have little cause to make things. TRUE, BUT NOT NECESSARILY VERY ANTICIPATORY OR OPEN-MINDED
Mike Morgan – The Asian Development Bank (ADB) has been slow to revise GDP numbers and overly optimistic that Asia was immune to the global financial problems. ADB’s latest prediction of 5.8% growth for Asia seems like pie-in-the-sky. There are rumblings that 2009 will be worse than the 1997-1998 financial crisis. And let’s not forget the 20th anniversary of Tiananmen Square followed that financial crisis in June of 1999. One final concern noted in this article is . . . “A confrontation over trade between the US and China cannot be ruled out, particularly if Beijing seeks to help exporters by allowing the renminbi to depreciate, instead of appreciate as Washington is demanding. (emphasis added) SO WHAT?
grim – Morgan response in mod
“grim – Morgan response in mod”
Morgan just paid Grim’s MBA tuition.
re: morgan. i recall he was so certain that china will have a major riot by the end of this month. we have 29 days to go to verify that.
Can anyone pull an old MLS 2517110?
Sold 01/22/2007: $335,000 according to Zillow and purchased again at the end of 08 for $259,000. A 30% decline in 18 months?
From Reuters:
Recession will persist for the time being: ECRI
A measure of future economic growth in the United States and its annualized growth rate rose in the latest week but were still near all-time lows, a sign that an end to the recession is still out of sight, a research group said on Friday.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose in the week ended December 26, to 108.0 from 106.8 in the previous week, which was revised from 106.6.
The index’s annualized growth rate ticked up to negative 28.7 percent from minus 29.2 percent.
“Despite a three-week uptick, WLI growth remains close to its all-time low seen in early December, which tells us that the recession will persist for the time being,” said Lakshman Achuthan, managing director at ECRI.
Wow!
From the AP:
Belarus ruble sinks 20 percent, shocking citizens
National Bank in Belarus devalues currency 20 percent to get IMF loan; citizens shocked
MINSK, Belarus (AP) — Belarus’ central bank sharply devalued the Belarusian ruble Friday, allowing the currency to plunge 20 percent to help stop the hemorrhaging of its reserves. The move came as an unwelcome shock to ordinary citizens.
The National Bank said the devaluation was aimed at raising the competitiveness of the Belarusian economy, which has been battered by the global financial crisis. It also was a condition of a $2.5 billion loan from the IMF announced Wednesday.
In the past six months the National Bank has spent about a quarter of its gold and hard-currency reserves keeping the Belarusian ruble stable against the dollar, euro and Russian ruble. The bank said its reserves stood at $3.8 billion on Dec. 1.
The Belarusian ruble is now trading at 2,650 to the dollar, 3,703 to the euro and 90.6 to the Russian ruble.
“I feel deceived by the government,” said Galina Bychkevich, a 53-year-old history teacher at a currency-exchange point Friday. Her monthly salary of 800,000 rubles, which the day before was worth $360, had dropped to $300.
“(President Alexander) Lukashenko loved to talk about the wild capitalism in the West and stability in Belarus, but now that fairy tale is over,” she said.
The devaluation will make imported goods more expensive and will likely drive up inflation. It comes after the government has already announced a 20 percent hike in electricity, heating and other municipal bills.
Linked from the All Hype article above:
http://www.marketskeptics.com/2008/12/graphs-and-visuals-of-current-economic.html
re: morgan again. his basic portfolio up 4% in nov. it would be intersting to see how he did in december.
#93 bi: Only 89 short days left until the end of the recession. As per bi.
Sold 01/22/2007: $335,000 according to Zillow and purchased again at the end of 08 for $259,000. A 30% decline in 18 months?
I’ve got a sale on 1/18/2007 for $335k, so that matches Zillow.
I don’t have an updated sale in the tax records, but my online service takes a few months. MLS# 2517110 expired at 145 days, with a list price of $309k, below the purchase price. Listing did identify it as a short sale.
Lemme check NJMLS.
#73 JeffI’ve been waiting over a year to buy a house and it looks like I’m going to have to wait even longer.
Spring will be a different scenario.
chi (96)-
I think the difference is, I wouldn’t do it.
“I assume you are aware that someone from these threads could openly disclose that they will pay you $50,000 to vouch for various real estate opportunities in Central NJ. You could accept that money (fully disclosed here) and make good faith endorsements. People here would follow your recommendations due to your reputation, experience and prior conduct. Is there a difference?”
#71 clot:professional demeanor you like
Oh yes professional demeanor has worked so well in this mess. Just sound good and look good, even if you are wrong who cares.
stu (97)-
PE’s are great, until the “E” hits 0.
Thought y’all would find this entertaining.
From the NYTimes Escapes section today:
“Catskill Home Prices: How Low Will They Go?
RANDY FLORKE, a real estate broker who specializes in weekend houses in the Catskills, ought to be distraught.
Some sellers have had to reduce prices by a third or more. (His own house in Livingston Manor, which he had hoped to sell last year for $299,000, is now listed at $199,000.) And still, he said, buyers are scarce.
But during a drive last week past some of the houses he would like to sell, as sunlight reflected off the perfectly white snowbanks, the situation seemed far from bleak. Mr. Florke said that, if anything, “part of me is thrilled about this market.”
When he started selling weekend houses in 1996, he said, prices in Sullivan County (the heart of what has traditionally been called the Catskills) were so low, he was able to help Manhattanites of modest means buy second homes.
“It was an exciting time,” he said, recalling days when young couples, with only $100,000 to spend, could find a farmhouse fixer-upper. “And I feel like we’re recapturing that moment,” he said. He recently listed a house for $85,000, a price, he said, he hasn’t seen in years.”
Next couple of paragraphs are about real estate offices closing down, houses going off the market after no buyers for a year etc. Then we get this:
“You don’t see a lot of distressed sellers up here,” said Dorothy McArdle, the owner of Apple Tree Realty, in Andes (a small town in Delaware County). People who bought second homes in the Catskills, she said, have tended to buy places they could afford, and to make large down payments. “You don’t see the high loan-to-value ratio” that is causing problems in other areas, she said.
Oh, really? No one has to sell? Is that why they’re dropping their prices by a third?
I rented a couple of these weekend homes for ski vacations. Never again. The owners are clearly out to get blood to pay the mortgage and utilities. Better off going to a hotel.
Lemme check NJMLS.
Yep, sold 11/26/2008 for $259,000, a roughly 30% decline.
bi (101)-
I think what goes on between your ears qualifies as a riot.
“i recall he was so certain that china will have a major riot by the end of this month. we have 29 days to go to verify that.”
grim (104)-
These guys are running the race to 0 on steroids.
“I’ve been waiting over a year to buy a house and it looks like I’m going to have to wait even longer.”
73,
Get comfortable. RE is the world’s slowest moving asset. If you want instant gratification, trade bellies.
This will be a minor matter for SPG once their tenants start defaulting on their leases and absconding under cover of darkness:
Hartford, CT — Attorney General Richard Blumenthal today announced that the owners of the Crystal Mall in Waterford will pay $308,736 — mostly for refunds to thousands of consumers — to settle allegations that they violated the state ban on gift card inactivity fees.
Blumenthal reached the agreement with Simon Property Group, LCC and SPGGC, LLC on behalf of Department of Consumer Protection (DCP) Commissioner Jerry Farrell, Jr. and state Treasurer Denise L. Nappier.
The settlement includes $258,736 in refunds to consumers subjected to inactivity fees on Simon gift cards from August 16, 2003 to January 31, 2005. The remaining $50,000 reimburses the state for investigative and litigation costs and will go into the General Fund.
The agreement settles a lawsuit that Blumenthal filed against Simon in 2004 on behalf of DCP and the treasurer.
Blumenthal said, “While this restitution is welcome and significant — almost $260,000 back to consumers whose cards improperly lost value because of dormancy fees — it also shows how sadly and starkly deficient the law is. At the time, Simon brazenly devalued gift cards by hundreds of thousands of dollars. Now, the company’s actions would be beyond the state law enforcement because it has shifted to cards issued through a national bank, deemed subject only to federal law.
“We must close the national bank legal loophole, so that unfair restrictions and fees are stopped, whoever issues the cards. I will seek state legislation requiring retailers who use national banks to callously circumvent state consumer protection laws to post prominent warnings that their gift cards are subject to inactivity fees and expiration dates.
“Simon customers effectively paid money for nothing, putting pure unearned profit into Simon’s pocket. Gift cards are supposed to be cash on call, and consumers should get every penny.
“I will continue fighting at the state and federal levels to assure consumers receive all the cash on their cards, stopping junk fees and arbitrary expiration dates that bleed value to zero,” Blumenthal added.
Nappier said she is pleased that Simon Property Group has agreed to return money that rightfully belongs to the gift card holder, but cautioned consumers to be aware of the potential hazards of giving and receiving gift cards and gift certificates.
Nappier said, “My administration has always maintained that Connecticut gift card holders are entitled to the full value of their gift cards. That’s why I fought for a law eliminating expiration dates and inactivity fees in the first place.”
Blumenthal estimated that thousands of consumers are eligible for refunds ranging from $2.50 to about $50. The total restitution is the amount that Simon collected in dormancy fees from Connecticut consumers during the time period covered by the agreement. Simon charged consumers a $2.50 per month “administrative” fee on cards not fully redeemed after six months.
The agreement requires Simon to post signs at Crystal Mall informing consumers subjected to inactivity fees on their gift cards between August 13, 2003 and January 31, 2005 that they are eligible to apply for restitution. The signs instruct consumers to contact Blumenthal’s office at (860) 808-5420 to obtain claim forms. The notices must stay up until February 2, 2009.
Consumers must submit claims by April 3, 2009 and will receive back 100 percent refunds of the fees charged them. Any undistributed funds will go into the state’s General Fund.
Simon is now issuing gift cards through two national banks, MetaBank and U.S. Bank, to circumvent Connecticut’s ban on dormancy fees. Because they are national banks, their cards are governed by federal law, which allows dormancy fees. Simon is charging $2.50 a month on cards 13 months and older.
Blumenthal has long fought to close the federal national bank loophole so Connecticut consumers are protected from inactivity fees, as well as expiration dates, regardless of who issues their gift cards.
Source: Office of Attorney General Richard Blumenthal
“(President Alexander) Lukashenko loved to talk about the wild capitalism in the West and stability in Belarus, but now that fairy tale is over,” she said.
Unfortunately, Mr Market does not believe in fairy tales.
“This will be a minor matter for SPG once their tenants start defaulting on their leases and absconding under cover of darkness:”
Clot,
Booyaaa.
74#, stu, both are exetremely dagerous play. chinese market has dropped over 2/3 from the peak and you are beating a dead dog. i was reiterating my call on SRS with target price $25.25 (bye bye to 50.5 and 101)
[75] clot
Some months back, Bogle said, on CNBC, that watching CNBC will make you poor and stupid.
Surprisingly, they have had him back.
Bi: I wish my mind was as innocent as yours.
Goolsbee Buddy….
WSJ
U.S. NEWS JANUARY 2, 2009 Mr. Rajan Was Unpopular (But Prescient) at Greenspan Party Article
By JUSTIN LAHART
To outline his fears about the U.S. economy, Raghuram Rajan picked a tough crowd.
It was August 2005, at an annual gathering of high-powered economists at Jackson Hole, Wyo. — and that year they were honoring Alan Greenspan. Mr. Greenspan, a giant of 20th-century economic policy, was about to retire as Federal Reserve chairman after presiding over a historic period of economic growth.
Mr. Rajan, a professor at the University of Chicago’s Booth Graduate School of Business, chose that moment to deliver a paper called “Has Financial Development Made the World Riskier?”
His answer: Yes.
Mr. Rajan quickly came under attack as an antimarket Luddite, wistful for old days of regulation. Today, however, few are dismissing his ideas. The financial crisis has savaged the reputation of Mr. Greenspan and others now seen as having turned a blind eye toward excessive risk-taking.
He says he had planned to write about how financial developments during Mr. Greenspan’s 18-year tenure made the world safer. But the more he looked, the less he believed that. In the end, with Mr. Greenspan watching from the audience, he argued that disaster might loom.
Incentives were horribly skewed in the financial sector, with workers reaping rich rewards for making money, but being only lightly penalized for losses, Mr. Rajan argued. That encouraged financial firms to invest in complex products with potentially big payoffs, which could on occasion fail spectacularly.
He pointed to “credit-default swaps,” which act as insurance against bond defaults. He said insurers and others were generating big returns selling these swaps with the appearance of taking on little risk, even though the pain could be immense if defaults actually occurred.
Mr. Rajan also argued that because banks were holding a portion of the credit securities they created on their books, if those securities ran into trouble, the banking system itself would be at risk. Banks would lose confidence in one another, he said: “The interbank market could freeze up, and one could well have a full-blown financial crisis.”
Two years later, that’s essentially what happened.
Many of the big names in Jackson Hole weren’t ready to hear the warning. Former Treasury Secretary Lawrence Summers, famous among economists for his blistering attacks, told the audience he found “the basic, slightly lead-eyed premise of [Mr. Rajan’s] paper to be misguided.”
The 45-year-old Mr. Rajan is an unlikely dissident. Born in Bhopal, India, he had a childhood marked by stints in Indonesia, Sri Lanka and Belgium, as his civil-servant father rose through the ranks. In high school, he came across the work of British economist John Maynard Keynes, who became his intellectual hero.
He was “helping the world out of recession,” Mr. Rajan says of Lord Keynes. “For a person growing up in a developing country, you sort of believe that there has to be a better way.”
Joining the University of Chicago’s business school in 1991, Mr. Rajan established himself as a rising star. He won the first Fischer Black Prize in 2003 for the person under 40 who has contributed most to the theory and practice of finance. Later that year he became the IMF’s chief economist, the youngest person and first non-Westerner in that position.
The Jackson Hole contretemps followed by a few months another set of attacks on Mr. Rajan for a study he co-wrote at the IMF that concluded foreign aid didn’t help developing countries grow. Mr. Rajan says the twin controversies didn’t deter him. At the IMF, he pushed the research department to focus on financial-sector issues, and continued to sound alarm bells about financial-market risks.
By summer 2007, as the crisis began unfolding in earnest, Fed bank presidents Janet Yellen and Gary Stern were citing Mr. Rajan’s critiques in their speeches.
With the economy heading toward the deepest recession since World War II, Mr. Rajan believes, the government needs to be more forceful in its efforts to right the still-teetering banking sector, deciding bank by bank which ones deserve capital injections and which need to die. Otherwise, banking problems will deepen, as they did in Japan in the 1990s, he says, and delay an economic recovery.
Mr. Rajan is now focused on coming up with ways to avoid a regulatory backlash akin to what happened during the Great Depression, when governments around the world threw up protectionist barriers and clamped down on financial markets.
Instead of heavy regulation, he says, the incentives of Wall Streeters need to change so that punishments for losing money are in line with rewards for earning it.
At the start of 2008, he suggested that bonuses that financial workers make during boom times should be kept in escrow accounts for a period of time. If the firm experienced big losses later, those accounts would be drained.
Facing withering criticism over the bonuses paid out in the boom, financial giant UBS and Wall Street firm Morgan Stanley have recently announced they’re adopting policies along the lines of what Mr. Rajan proposed.
Mr. Rajan also urges other safeguards. Along with Chicago colleagues Anil Kashyap and Harvard economist Jeremy Stein, he’s come up with a plan to create a form of financial-catastrophe insurance that firms would buy into.
When he presented the insurance idea at last year’s Jackson Hole confab, the reaction was different than back in 2005. Finnish central-bank governor Erkki Liikanen, recalling the weaknesses Mr. Rajan had spotted in the system back then, said: “I don’t dare criticize you. That is all.”
comrade nom deplume says:
January 2, 2009 at 12:15 pm
[75] clot
Some months back, Bogle said, on CNBC, that watching CNBC will make you poor and stupid.
Surprisingly, they have had him back.
nom: surprisingly (or not so much) he has accepted such invites…..
Stu (123)-
Just put your head into a bag of glue. That should do it.
“Bi: I wish my mind was as innocent as yours.”
Clotpoll says:
January 2, 2009 at 12:01 pm
chi (96)- I think the difference is, I wouldn’t do it.
clot: What price changes your mind?
All I want for Christmas is for somebody to whack Dennis Kneale.
sas, any ideas here?
chi (127)-
Everything’s for sale but my good name.
There’s never been a better time to buy. ;)
Yep, sold 11/26/2008 for $259,000, a roughly 30% decline.
Some NJ towns are being hit harder than others. Two years ago, when my wife and I were looking in North Arlington, only property under $375K was a tear down cape. Now there is at least 20 in the $299 – 350K range.
Big article in WSJ…A1 & A7…some of our favorites are there. A little to long and graphical to post here. I can mine some of it.
JANUARY 2, 2009 The Doomsayers Who Got It Right
More Bad News in Store for 2009? Last Year’s Cassandras Are Still Gloomy
from above article….Peter Schiff
Peter Schiff: Foreigners could ‘stop enabling us’ by buying U.S. debt, hurting the dollar.
Since at least 2004, as president and chief global strategist at EuroPacific Capital, a broker/dealer in Darien, Conn., Mr. Schiff has routinely peddled warnings that the housing market was a house of cards and that stock values were artificially inflated by Federal Reserve and White House policies that, he says, “were working against market forces.”
In a speech at the Western Regional Mortgage Brokers Conference in 2006, he essentially told the audience of mortgage bankers many would soon be unemployed due to a housing collapse. He noted as well that a recession could begin in December 2007 — correct, according to the National Bureau of Economic Research. In his 2007 book “Crash Proof,” he forecast the demise of Fannie Mae and Freddie Mac.
Still, he has been wrong on significant parts of his argument. Many detractors point out that two of his core beliefs — a longstanding prediction that the dollar would collapse and that foreign stocks would outperform U.S. shares — have been well off the mark in this crisis. A rush into the safety of the greenback sent the dollar soaring against other currencies and, as a side effect, helped undermine shares of stocks around the world.
Mr. Schiff acknowledges that he wasn’t expecting that to happen. But he says his worries aren’t misplaced: A dollar dive and foreign-stock outperformance are still in the cards.
Looking ahead, Mr. Schiff foresees “massive inflation,” and sharply higher interest rates, since the U.S. will have to entice foreign investors to buy the trillions of dollars in government-issued bonds that the U.S. needs to sell to pay for bailouts and stimulus plans.
The quandary, though, is that at some point global investors will stop buying U.S. debt. “They will stop enabling us,” he says, amid concerns about America’s ability to repay the debts. “They will stop buying our bonds, our currency, and the value of the dollar will drop precipitously.”
Taxes, too, will have to rise, particularly on upper-income families, he says, because an economy based largely on consumption, not production, has few ways to generate the money needed to repay its debt when consumption is waning.
He thinks there’s time for government officials to limit the damage he says they are inflicting. But “if they’re not careful,” he says, “their actions are going to wipe out the value of savings in this country.”
“Many of the big names in Jackson Hole weren’t ready to hear the warning. Former Treasury Secretary Lawrence Summers, famous among economists for his blistering attacks, told the audience he found “the basic, slightly lead-eyed premise of [Mr. Rajan’s] paper to be misguided.””
Good thing Mr. Summers isn’t in charge these days. Oh wait……
I’ll need to replace the asphalt driveway of the house we bought. It is quite large- 1,950 square feet total. I’d like to use paver, but is the investment worth it? Does an improvement like that increase your property value? The house is quite stately looking, being an 1820 colonial, and asphalt just doesn’t look very good with it.
Some positive economic news..
Strange how Catepillar and car manufacturers can be profitable in TX but not in UAW-controlled states. Maybe there is a lesson learned for the next administration, if they seriously want to create jobs.
“SEGUIN — Caterpillar Inc. will build a $170 million engine-manufacturing plant here that will employ more than 1,400 people, company and state officials announced Thursday.
The economic development coup for Texas is part of the consolidation of Caterpillar’s engine plants in Illinois — where a plant closing and layoffs were announced Thursday..”
if you own mike morgans portfolio, your crushed.
it was truly difficult life to be a hedgie..
Fairfield Greenwich Group charged 1.5% annual management fee plus 20% of profits, and all they did was just sent the incoming checks (up to $7.5B) directly to Madoff to be “invested”.
This must have be the management part of FGC’s operation. They were just “used paper salesmen” instead of hedge fund managers.
https://www.fggus.com/
137….Don’t worry….those morons will be wiped out sued, blued and tattooed.
Online version of some winemaking history…..
http://rmc.library.cornell.edu/ewga/exhibition/introduction/index.html
All disclaimers.
I have a few big questions left unanswered from 2008.
The first is the market holding around 8.5K and slightly rising towards 9K. I think the answer to this must be in the volumes. As the volumes have been light through the end of Nov and start of Dec, I suspect that most people may not have had to do a yearend sell off to take tax losses and rebalance a portfolio. I suspect most rebalanceing would have been done after the Oct plunge. This would kepp the volume light and resuce any sell pressure. I think the market does not really start until Monday and next week may be a better indicator of how the year will start. I think the only thing to look for will be insider trading. I think a lot of CEO’s and management, usually have a standing order to sell options or stock grants on the first of the year. It shoudl be a good indicator if the CEO is buying or selling or doing nothing in the next few days.
Next up is M&A. Coming out of 2007 M&A activity fell off a cliff. I said that company earnings would take a hit as without acquisitions, companies could not grow. I think these losses would have been hidden in the Credit issues and the market plunge. I suspect a few companies got away with mediocre quarters due to the market. How long can they hide. Some companies are like sharks, they need M&A to keep moving forward and without that momentum, they will start starving.
What is up next? I think we will see a rally through Jan, and the next leg down will start Feb. There will be a small inauguration bounce. Retail numbers for the holiday season will come out as bad and the market will not take that much notice. The bigger issues will be that a lot of companies will have burnt through the last of their cash or credit lines. Before, they could just refinance debt or be acquired, but with the credit markets still effectively closed off to them, they will just have to close the doors. The 80’s corporate raiders will be back to liquidate assets and strip companies. Maybe they will be steaming along with all the sideline cash or gvmt credit lines.
The strange thing is that I think the recession will be short and I think if I would call a bottom it would be Q3/09. Any company that can make it to that point should be able to ride out the rest of the storm. I think US manufacturing will see a bounce, as there will be a focus on domestic production over imports. I think NAFTA will be revisited and the automakers and the like will be told that anything they outsourced to Mexico and further must come back to create US jobs or lose tax breaks and gvmt cash.
The lack of letters of Credit for international shipping may be a lucky break for the US. Without the flood of imports, there should be a refocus on domestic production for domestic consumption, the exports will be backed by a gvmt credit program. The only things going out will be what the gvmt wants shipped.
It will be an interesting year.
LOL
just like how manhattan is “immune” and NJ, too, because of its proximity to NYC
to younger folks, 2008 is actually a good year since it brought value to the market. in fall 2007, i said on this board that i would sell everything except my home. now it is value everywhere except gold and tresury. all disclaimers apply
“to younger folks”
bi,
What about older folks? You bi-ased
143#, bob, yes i’m biased. the group hit most is the folks around 45 years old who have a lot of stake in stocks. but if they bought a home before investing heavily on stocks (another gold rule), they should be fine. what i don’t understand is most posters on this board are young but keep whining.
bi (144)-
Don’t change. Please.
Bi = Magic 8-ball
Only the magic eight ball is right on occasion.
stu (146)-
Blind squirrels & broken clocks.
Just had the talking heads on CNBC talking sh*t about Gold. “Do people stil buy physical gold?” “Where would I even put it?” “A inflation hedge? What is this the Middle Ages?”
Try finding some physical gold to buy right now dipsh*ts! Yeah an inflation hedge because last I checked no central bank has figured out how to create more gold out of thin air, morons!
Check out the market rally…
http://finance.yahoo.com/q/bc?s=^DJI&t=1y&l=on&z=m&q=l&c=
curious: with a close date of jan 21, should we have our app in yet for the mortgage?
the two companies we are gunning for both have ALL of our info, know our fico (one ran it) and say we’re not a problem.
thing is, one wants $500 for the loan app, and that place has a rate of .25 worse than the other place (where the loan app is $350). both are refundable … IF you get the loan with them.
i know, im being frugal about $500 … (but hey, that’s a small flatscreen TV for the kitchen or my office.) any thoughts? if we pull the trigger monday, think we’ll have time?
is 12 business days enough to go through the app process?
Have not watched CNBC since Commodore rallied on the popularity of the Vic-20. If TV is on and I want economic news, it is straight to Bloomberg. CNBC is the Maxim of investing where Bloomberg is more like the AP newswire.
Yikes,
Our app took 1 day.
RE: asphalt vs paver driveway
Jersey Jim, you didn’t say what town. In the right town, assuming the property is in a decent location, you should be able to get all or most of your money back upon sale.
If you ultimately go “paver” do some hard searching (even out of state) for real granite pavers, rather than concrete pawned off as pavers.
Yikes
What happens if you tell them its a junk fee and you’re just not going to pay it?
Stu 152 – That was in 2004, when you did not even need a pulse to get approved.
True Gator. But I did have the PDF!
Yikes, what date in the contract are you supposed to have applied for a mortgage by? and are you using a lawyer?
re#142 and #144 bi – “Value” that would be true but the problem is you cannot get any long term value out of the market until the market actually hits bottom, hence the trillions sitting on the sidelines otherwise we would already be off to the races. We are still do for additional debt deflation, the debt has not gone anywhere and still has to be either paid off, forgiven, or inflated away. We will have to pick a poison and soon the shell game being played with debt right now will come to an end.
As far as the age group hit most 45 yr olds you are incorrect, the age group hit most is those about to retire the boomers, many whom are now up shit’s creek no paddle and no life preserver other than some equity with is sinking fast.
I also don’t think anyone here is whining, we are caterwauling a very big difference. I would be careful if I were you with the Phil Gramm type of comments, someone might air mail you down a flight of stairs, after all one poster here has taken to clocking people over coffee so violence is bound to escalate in 2009 over simple things like words, not a threat or anything just a reminder that if you are going to express your cognitive dissonance in 2009 you may want to choose your words more carefully when addressing the soon to be unemployed, which will be about 1 out of every 10 people you know by the end of 2009.
Qwerty says:
January 2, 2009 at 1:54 pm
RE: asphalt vs paver driveway
Jersey Jim, you didn’t say what town. In the right town, assuming the property is in a decent location, you should be able to get all or most of your money back upon sale.
————————————
Qwerty,
The house is in Mt. Holly, in Burlington County in South Jersey. It is in the historic district and there are some nice old houses in the area. I’ll look at the granite options as I’ve only been looking at concrete so far. Thanks for the reply.
Grim,
I found the 1920’s you the other day. now you have something to aspire to when the jobs program starts up.
Lewis Hine Power house mechanic working on steam pump. (1920)
http://tinyurl.com/8uqdpa
158#, sean, thanks for reminding of right wording. i thought the unemployment would be down to less than 5% after o takes the office, change is coming and frustrated folks would be calm after jan 20th. if there is no change, why don’t keep w in office for 4 more years.
Step right up, any industry, big or small, we have bailouts for everyone!!!!
Time to bailout the newspapers….
Government aid could save U.S. newspapers, spark debate
http://www.reuters.com/article/reutersEdge/idUSTRE4BU53T20081231?sp=true
[134] jersey jim
If you want stately, go with gravel. I’d go with nitpack over pea stone though.
yikes (150)-
You should’ve had your app in already.
Yours sounds like an easier case, but you will, at minimum, get at least one finger up the arse before passing “go”.
corzine cutting 2.5 billion, say it will go to 5 billion next year.
NJ the garden state.
“corzine cutting 2.5 billion, say it will go to 5 billion next year.”
I’ll believe it when I see it. Have never witnessed a single cut in NJ at the state, county or local level. Probably more forced early retirement which ends up costing more due to incentives and their complete inability to keep those positions unfilled for more than ten seconds. NJ will simply wait for bankruptcy.
[162] Ket
The New York Times Bancorporation?
Victorian, Chifi:
Is The Performance Of Real Estate ETFs Skewed?
http://finance.yahoo.com/news/Is-The-Performance-Of-Real-etfguide-13952819.html
Can someone enlighten me as to what is the “skew”?
Spent a few hours this afternoon with a builder.
Said 2009 wasn’t looking too good. Said any builder who took on land over the past few years is dead.
When I picked up my lunch at the Best Buy mini-mall in Union at noon, there were two new vacant retailers that were there last week. The card store and the Athlete’s Foot are bye bye. There are now three empty storefronts in that mall now.
comrade nom deplume says:
January 2, 2009 at 2:26 pm
[134] jersey jim
If you want stately, go with gravel. I’d go with nitpack over pea stone though.
———————————–
I was looking at This Old House online and they do talk about a macadam driveway. That looked pretty interesting. I just wasn’t sure how it would hold up in the winter as far as digging up your gravel while shoveling snow. Anybody have a macadam driveway here?
http://www.thisoldhouse.com/toh/driveway-walkway
Can anyone provide any advice on writing a low-ball offer letter? I have found an example on the Long Island Bubble Blog:
http://longislandbubble.com/documents/offer.doc
I like this one because it is non-binding, however, I do want to be taken as seriously as possible. Is it a good idea to provide a pre-approval letter or any other documentation? What are your thoughts? Thanks in advance.
He is currently building, and will continue to build, said that there were good opportunities for new teardowns.
He recently finished a home at a cost of roughly $100/sq, 2,500 square feet total. $250k total construction costs? Not bad. Said costs have fallen dramatically.
Crazy, eh?
I wouldn’t be surprised to see another teardown boom.
Yikes says:
January 2, 2009 at 1:52 pm
curious: with a close date of jan 21, should we have our app in yet for the mortgage?
the two companies we are gunning for both have ALL of our info, know our fico (one ran it) and say we’re not a problem. thing is, one wants $500 for the loan app, and that place has a rate of .25 worse than the other place (where the loan app is $350). both are refundable … IF you get the loan with them.
i know, im being frugal about $500 … (but hey, that’s a small flatscreen TV for the kitchen or my office.) any thoughts? if we pull the trigger monday, think we’ll have time?
is 12 business days enough to go through the app process?
y-man: I would pay the good money for both and let the other know you have another good faith offer with non-refundable deposit. Clot or anyone else can correct me, but I would assume that you may be able to shave 0.125%. If so, you will easily make back your lost $350 or $500 with the leverage that your vendors have to come strong with best and final, or get a goose egg……I think it is worth the coin….you are already crushing here, don’t be a cheapskate where it really matters……
someone who knows what they are doing, please correct me……..
“Can someone enlighten me as to what is the “skew”?”
Just reread that article. Besides the extra words ‘toby’, that author was all over the place. You are correct, he should explain ‘what it is’ that is skewed.
Good god, why the heck would you write a letter?
1) Write up an offer.
2) Present offer.
You didn’t ask the seller to justify their asking price, did you? Why should you justify your bid? Of course, if they do ask, feel free to answer. Otherwise don’t bother trying to talk a seller into a lowball, impossible to do without pissing them off.
Clotpoll says:
January 2, 2009 at 1:38 pm
stu (146)- Blind squirrels & broken clocks.
clot: is that a new song by Coldplay?
From the Star Ledger:
Corzine plans to slash state budget by $2.1 billion
Gov. Jon Corzine said today he is calling for $2.1 billion in cuts from the current $32.9 billion state budget because the economic downturn has hammered state tax revenues.
…
The administration had previously said the hole in the current budget was $1.2 billion, but it is far bigger than that because of the dismal economy.
The governor said Tuesday he will push back introducing his next state budget by about a month so he can factor in help from President-elect Barack Obama’s federal stimulus package. Corzine and the governors of New York, Wisconsin, Massachusetts and Ohio today called on the president-elect to put together a $1 trillion federal stimulus package that would help states avoid huge cuts in funding for social services, education and transportation.
Meanwhile, Sen. Joseph Kyrillos (R-Monmouth) today called for a special session of the Legislature to put New Jersey’s budget back into balance.
Obama save us!
Walked by a small salon nearby that’s been there for several years.
Everything’s been ripped out. No “we’re moving sign” no nothing. Just gone.
grim (177)-
Thanks for providing a civil answer, so that I don’t provide the one that popped into my head.
Real estate. It’s not for everyone.
176#, stu, it is not skewed. it is screwed.
please pay attention to the table on page 20. with volatility of 40%, which is norm in these days, these 2x short etfs will lose “value” by almost 40% even underlying index goes to nowhere. apparently these instruments are tooled for day trading but not for long-term “investment”
http://media.proshares.com/documents/ProSharesSAI.pdf
chi (178)-
You’re close. Actually, Earl Scruggs & Lester Flatt.
Stu: remind me WTF toby means….
Bi,
I appreciate the advice. When I made over 200% from August 2007 through late last year, I suppose I should have been day trading it and paying taxes on my gains at a rate nearly double of long-term gains?
10 year yield makes another big leap today. Hearing that MBS prices also took a tumble.
Are the days of a 4-handle long gone?
Guys:
Where can I get the best mortgage rates for refinance my mortgage?
ChiFi:
I have no effin clue!
183#, …lose “value” by almost 40% in one year….
hope you have figured it out and start to think what the exit strategy is.
Unusual SRS behavior today in that REITs are selling off as market is rallying. VNO CEO keeps selling as well ;)
bi,
Should I drop a wad on the homebuilders?
It is some finance hipster crap……I’ve heard of it, but when you write it in that forum and context, you are trying to appeal to 20-year-olds……junior equity analysts use it…..someone help
192#, i really don’t know. but with SRS/SKF and etc, i feel only time you can make money is when you know the market will be panic in next few days.
Bi,
Trust me. It’s not easy to be down 50% and to hold or even add to your position, but as long as the fundamental reason for owning the position has not changed, then the share price means little. The moment there is any inkling of a recovery, I’ll take my bruises. Until then, don’t worry about me. I know what I’m doing and my position is only halfway filled. When and if the Dow gets to 10K on continued horrific news, I’ll be buying more at any price.
IndyMac sold!
193#, not sure if you are referring to the link i posted. that was from proshare, which created all these craps. but i won’t be so arrogant to discredit these numbers for two reasons: 1) i believe they made the table based on some “monte carlo” simulation 2) FXP and other simular etfs show the simular performance in last year.
stu (191)-
A Vornado sign in front of a property is your guarantee that it is completely vacant and overpriced.
From the Wall Street Journal Real-time Economics Blog:
Much weaker than expected report, with the composite index falling another four points to 32.4. Lower levels than this have only been seen in a handful of months during the 1980, 1973-75, and 1948-49 recessions, and the key orders and production gauges hit record lows. The manufacturing sector is clearly in the midst of one of its worst downturns ever. … The weakness in December was nearly as broadly based as it could be, with not a single sector reporting growth. – Morgan Stanley Fixed Income Economics
The price paid index plummeted to 18, the lowest since June 1949 and the third lowest ever. That fully two-thirds of the respondents reported pay lower prices for supplies in December than in November underscores the seriousness of the deflation threat now confronting the economy. The global scope of the recession now underway has undermined an important prop for the U.S. economy, in general, and the manufacturing sector in particular. – David H. Resler, Nomura Economic Research
Robust export demand had been the main support for U.S. manufacturing for many months. Now, with economic activity weakening sharply in many of the United States’ main export markets, exports have begun to drop, with the pace of decline set to accelerate significantly in the months ahead. – Joshua Shapiro, MFR Inc.
This echoes the readings on manufacturing activity from Europe, where a December survey of European purchasing managers fell to 33.9—underscoring the global nature of the economic contraction. – RDQ Economics
Overall, the ISM data … suggest we may see the deepest recession since the early 1980s, and if it lasts until the fall or winter of 2009 as we fear, it would be the longest recession since the 1930s. However, the downturn is not likely to be anywhere near as deep as what we saw during the Depression. The larger risk in our view is the Japan-like syndrome — a long recession followed by an extended period of weak growth. – Michael T. Darda, MKM Partners
TechTicker:
No Housing Recovery, No Bottom (Period, End of Story)
Posted Jan 02, 2009 02:36pm EST by Aaron Task in Investing, Recession
With the stock market rallying to kick off 2009, recent data remind us of a tried and true saying: It’s the economy stupid.
The bulls are buying now in the hope the economy bottoms mid-year, if not sooner. That may yet prove true but recent data suggest the recession is intensifying:
* Today’s ISM Manufacturing Index hit its lowest level since 1980 (and manufacturing surveys in Europe and China also nosedived).
* U.S. consumer confidence fell to a record low in December, as reported Wednesday.
* Also Wednesday, the Case-Shiller Index registered a record 18% drop in October vs. year-ago levels, bringing the decline from housing’s peak to 25%.
There are obviously many moving parts to the U.S. economy but it seems unfathomable a meaningful recovery can emerge as long as housing prices keep falling, more especially if they keep accelerating to the downside. The government is expected to keep pulling out all stops (and then some) to lower mortgage rates and prevent more foreclosures, but trying to stop home prices from falling is not the answer, as Henry Blodget writes.
Given rising unemployment and little apparent confidence at this juncture in President-elect O’s stimulus plans, any hopes for a “bottom” in either the economy or stocks in the foreseeable future is likely to prove terribly misguided, at best.
C’mon bi, what do I get long?
Toll? Centex? KB? DH Horton? HOV?
Clot:
He might suggest you go long PSYS!
stu (202)-
Wasn’t that one a Cramer favorite?
I don’t know. I just remember it from a few years back when it went bonkers.
From HousingWire:
Drop in Conforming Limits Means More Jumbo Mortgages
As the New Year rings in, some homeowners are likely to feel the pinch of higher mortgage rates and tightened credit — in particular, borrowers in certain areas of the U.S., with a mortgage between $625,500 and $729,750. That’s because temporary legislation that had boosted conforming mortgage limits to as high as $729,750 in certain designated high-cost housing areas expired at the stroke of midnight Thursday morning.
…
Now, those borrowers are back into the pool of jumbo borrowers, a market that has essentially dried up during the recent housing and mortgage mess. The loans that are available in the market for jumbos come at a substantially higher rate in the primary market, relative to conforming mortgages.
It’s unclear just how many higher-balance loans were purchased or guaranteed by the GSEs during 2008, something HousingWire will research for a future story. But it’s clear that the decline will push at least some borrowers into the still-largely-frozen jumbo mortgage market, increasing the rates they pay on a mortgage — assuming there is someone willing to fund the mortgage to begin with.
201#, my favorite is HOE. it used to trade in Paris Stock Exhcnage. now it is moved to Hanover. it is very predictable: move up Friday and move down Monday.
Rumors of another ponzi scheme coming to light? $1b?
From what I have witnessed, Hoes do better on Fridays then on Mondays. They have a very cyclical business model.
—Channeling John is in his absence.
grim (207)-
My SEC buddy last night told me another one’s brewing…this time, a lady working the NYC/Palm Beach circuit.
My pal also told me there are so many disgruntled employees dropping a dime on their firms, it’s hard to get real work done. Lots of people are pissed off over their bonuses (or lack thereof).
I wonder if any JPM or GS people have called the SEC and told them these companies are Ponzi schemes.
207#, $1b? it is not qualified to be a ponzi scheme.
Clot; ref 182. I know the year is only two days old but “Real estate. It’s not for everyone.” gets my vote for quote of the year.
stu (208)-
You do enough channeling John, your brain will get stuck in that pattern.
Just a warning…
“My pal also told me there are so many disgruntled employees dropping a dime on their firms, it’s hard to get real work done.”
Welcome to the company I work for. The repercussions of cutting everyone’s salary by 10 to 15% and forcing vacations has not had a positive impact on our productivity. No one is even around.
DL (212)-
Oh no. We got 363 days left here and guys like bi and John to provide us with gems for the ages.
What a Treasury bust today.
What a Treasury bust today.
Look at that yield curve, like something out a textbook. Well, the shape maybe, most certainly not those numbers hanging off that right side of the graph though.
Clot: We’ve seen this before. Market rallies about 10% (with no catalyst) over a couple of weeks only to see it all disappear in one or two down days.
very likely dow will end up at the north of 9K. Psychiatrically, it is very important to rally to 11K by the end of 2009.
“Rumors of another ponzi scheme coming to light? $1b?”
this a surprize to you blokes?
haven’t i taught you anything?
madoff was nothing..he is a name on a process that is instutinalized from the top down, and elements within the govt.
there is a black economy that is starting to unravel (how far, i do not know), many more “madoff” types will come out of the woodwork. as confidence & trust starts to disappear.
SAS
Lie.. brary? What is a library?
From the AP:
N.J. libraries face budget crunch, cuts in services
Pressure is mounting on many of New Jersey’s community libraries.
The worsening economic picture has meant less funding and cutbacks in hours and services at branches across the state.
At the same time, many libraries are reporting a surge in demand for their services in recent months, especially among job seekers and families looking to save by checking out books and videos instead of buying them.
Patricia Tumulty, executive director of the New Jersey Library Association, says 2009 could be “extraordinarily difficult” for libraries.
The Newark Public Library’s Board of Trustees called a special session today to discuss closing one branch or possibly cutting back hours, services or staff in the city’s system due to budget cuts.
“Lots of people are pissed off over their bonuses (or lack thereof)”
hence, let the economical warfare begin.
i sometimes wonder if i am speaking to myself on these boards.
:)
SAS
SAS:
“i sometimes wonder if i am speaking to myself on these boards.”
You are!
#219 – Did you really intend to use the word psychiatrically?
As in dealing with with mental, emotional, or behavioral disorders?
“i sometimes wonder if i am speaking to myself on these boards”
actually, i know that answer.
these boards are watched like a hawk, even by law enforement agencies.
i didn’t just fall off the turnip truck.
SAS
Pay-per-view of the year. Bi, Frank and REinvestor50.25 on Jeopardy with John playing emcee.
224#, taking consideration of all the traumas last year, i think it is better wording than “psychologically”.
Bi,
Why is FXP down 13% and SRS up 5%? When both are ultra short and DJIA is up 3%?
228#, it is a simple mean-revesion. srs was down almost 10% on dec. 31st. if the market keep rallying, it will catch up.
Re: ProShare UltraShort ETFs
Worth more of a look about how the ultrashorts may leave long term holders exposed. Here’s another link.
http://seekingalpha.com/article/112415-more-proshares-ultrashorts-tomfoolery
Haven’t had time to replicate these exactly to see if he’s right, and don’t get the the ‘option decay’ problem fully. I’ve been in and out of the SSO and haven’t had a problem but seems this issue affects LT holders of the ultrashorts.
Also seems to be a specific ProShare issue about how they hedge the positions to create the simulated return. Alot of bilateral stuff, unlike SPY, which actually holds the shares.
Anyone have any insight into the issue in this article? Was considering some SRS and TBT but want to know I’m OK if they turn into a longer term hold.
#207 – Rumors of another ponzi scheme coming to light?
Uh oh, it’s made Bloomberg and, more importantly, Dealbreaker.
Pretty soon this whole Ponzi thing is gonna be discredited as a business model…
Blatantly stolen from the orig poster on dealbreaker.
#226 Stu
You could call that show
“Stupid answers to simple questions”
#225 SAS
I think I met one of those nice lurkers at a GTG.
Trade protectionism as part of O’s stimulus plan, wow.
Bloomberg headline:
Obama Team Reviewing ‘Buy American’ Plank in Economic Stimulus
Don’t worry Newsweek says now is a great time to buy:
Mortgages: What You Need to Know in 2009
Mortgage rates are at historic lows and may be poised to go even lower next year. It’s a great time to buy a home — if you can
http://www.businessweek.com/lifestyle/content/dec2008/bw20081230_361031.htm
Hilarious reader comments ensue…
#234 – Let me guess, he’s proposing a Smawley-Hoot import tariff?
I like where this is going!
/cry
wow. it is worse than w’s “you are either with us or against us”
‘Sending a Message’
“I do worry about sending a message to the rest of the world that we’re going to put up big walls and barriers here because part of our long-term economic recovery is going to require exports,” Van Hollen said. He said he wants to ensure that U.S. companies benefit from growth in the rest of the world.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aFNpdoQbnYic&refer=home
ruggles says:
January 2, 2009 at 2:00 pm
Yikes, what date in the contract are you supposed to have applied for a mortgage by? and are you using a lawyer?
not using a lawyer, and there’s no “date” to apply by, but we’re told the process takes anywhere from 2-3 weeks to complete (appraisal, etc).
also, this is PA and not NJ, so that could play a part.
y-man: I would pay the good money for both and let the other know you have another good faith offer with non-refundable deposit. Clot or anyone else can correct me, but I would assume that you may be able to shave 0.125%. If so, you will easily make back your lost $350 or $500 with the leverage that your vendors have to come strong with best and final, or get a goose egg……I think it is worth the coin….you are already crushing here, don’t be a cheapskate where it really matters……
someone who knows what they are doing, please correct me……..
i think you’re right. we’ll just put in both apps Monday. thanks, man
Let the protectionism begin.
“Let the protectionism begin.”
My biggest fear is coming to fruition. Let’s see how much longer the Asians are willing to buy our debt once we tariff the Krap out of their imports.
identity of reinvestor101 revealed?
“He’s the Ultimate Couch Potato: Stan Friedman wins 2nd straight title”
http://tinyurl.com/9yfvpv
ha ha
just teasing reinvestor101, don’t bulldoze my house.
:)
SAS
yikes (238)-
Unless those lenders reduce their offers to writing in a Good Faith Estimate, the stuff they say on the phone is worthless.
“Let’s see how much longer the Asians are willing to buy our debt once we tariff the Krap out of their imports”
as long as our military is the strongest in the world (and thank your ass it is), they will do it, or get a bomb dropped on their head.
SAS
sas (243)-
Maybe we can have some protectionism and start a shooting war at the same time.
That would solve a lot of problems at once.
“start a shooting war at the same time”
we would never know it happened.
unless they wanted you to know.
but even so, that tactic can’t last forever.
SAS
Now, time for the real crisis. We lose this guy, we’re screwed for half a generation:
“Newcastle United goalkeeper Shay Given is set to become the centre of a transfer tug of war after his lawyer revealed his client is fed up with the turmoil at St James’ Park and wants out.
Shay Given: Time to move on?
Given, who has spent the past 11 years at the Premier League club, reached the “lowest point of his football career” during last weekend’s 5-1 drubbing at the hands of Liverpool and is now ready to move on.
The 32-year-old’s lawyer, Michael Kennedy, said: “Shay is very despondent following the very poor performance of the team against Liverpool last weekend.”
“It was the lowest point of his football career and a performance that he would not wish to be repeated.”
238–Yikes, okay. Just wanted to make sure about the application date because I sold RE in PA for 5 years and the standard contracts do specify a date by which the buyer has to apply–its somewhere in the mortgage contingency clause and I think the standard is 10 days unless specified. If you only have 12 days left, was just concerned that you might have passed the date.
And the thing about PA contracts is that since almost no one uses lawyers there–they make the contract 16 pages long and very enforceable–every stupid thing thats not adhered to is a potential way for the other side to get out (a seller would be stupid to cancel a deal these days, but I’d guess there are a lot of stupid sellers). You’re supposed to re-sign any and every change including things like adding 1k to your downpayment, as there’s no atty watching the process.
In NJ, the contracts are really just suggestions for the attorneys to modify, and the lawyer can usually get you out of trouble spots. While in PA the contract is the word of God. Fortunately, few people in PA can read a contract. Or if they can, they don’t bother. Just kidding although my opinions on PA come from living on the Delaware River for 7 years. good luck!
[234] Grim, et al.
Protectionism was something this board predicted from the moment 0bama became the heir apparent. You are all visionaries.
I personally hated the 70s, with all its labor strife, and the resulting stagnation and malaise. Hopefully 0bama doesn’t want to bring back disco too.
[247] Ruggles,
A couple of years ago, folks in Bucks and Philly would lament “Why is the administration talking about building a wall on the Rio Grande, when we should be building one on the Delaware?”
[212] DL,
We should substitute real estate for a drug in a DTC ad:
Not all persons should buy real estate.
Do not acquire real estate if you are pregnant, or may become pregnant. Do not buy real estate if you have liver problems. If you do buy real estate and experience shortness of funds, seek legal help immediately. Only your realtor can tell you if Real Estate is right for you.
comrade nom deplume (250)
good one.
SAS
just got 4 good faith estimates (at four different rates) from wells.
closing costs come in a shade under 10k, which i guess we can work on.
forgive me for asking a dumb question … but 7800 in “city property taxes?” does this mean that we’re paying 2009 house taxes in advance?
GPS Units in each car to support new milage tax.
http://news.yahoo.com/s/ap/20090102/ap_on_re_us/mileage_tax
[253] confused
I think that is hysterical. It also points out the mentality of tax policy. Because gas taxes were always a pretty good proxy for road use (kind of a user fee for roads), the hybrids and electrics threaten the ability to collect revenues. Solution: Change the tax modality to actual mileage. Of course, I don’t look for them to lose their gas taxes in reciprocity, so look for Ore. drivers to get doubly-screwed.
And the thing about PA contracts is that since almost no one uses lawyers there–they make the contract 16 pages long and very enforceable–every stupid thing thats not adhered to is a potential way for the other side to get out (a seller would be stupid to cancel a deal these days, but I’d guess there are a lot of stupid sellers). You’re supposed to re-sign any and every change including things like adding 1k to your downpayment, as there’s no atty watching the process.
In NJ, the contracts are really just suggestions for the attorneys to modify, and the lawyer can usually get you out of trouble spots. While in PA the contract is the word of God. Fortunately, few people in PA can read a contract. Or if they can, they don’t bother. Just kidding although my opinions on PA come from living on the Delaware River for 7 years. good luck!
lol, sort of
so do you think a lawyer would be a wise move? i hadn’t heard this 10-day thing, thanks for that.
#246 Clot
You were screwed when you sold Andy Cole. So be happy youre already half a generation closer to the bottom .. :*)
Shay should have made the jump years ago when United were looking for him. But he sat at the Toon punching the clock, colecting a check and happy to play his best games for Ireland.
People say that Arsenal are interested, but I think he is a bit too old for Wenger. At 32 he would look for a six year deal to see out his career. I don’t think Arsenal would offer more than three.
Clot,
Here is the more worrying news. Re101- get this madness to stop and stop now. My team needs buy quality european players. I need the GBP to get back to strength against the Euro.
Wenger – Credit crunch will hit January deals
http://www.arsenal.com/news/news-archive/wenger-credit-crunch-will-hit-january-deals
With the January transfer window well and truly open many clubs are expected to bolster their squads for the second half of the season. However, Wenger thinks that the current climate, and particularly the weakness of the pound sterling, will prevent many of the usual big spenders from splashing the cash.
confused 253
regarding GPS. FAIL.
A piece of aluminum foil placed over the antenna and painted the same color as your car and it looks like you never drive. you can remove the foil whenever you want to go on an “official” trip
Just 1 of many ways to kill this system.
clarification:
aluminum foil will prevent GPS from acquiring a signal and therefore tracking your movement.
The GPS system will work just as well as most DRM on media works.
Hi All!
My wife and I put in a bid for a home in Glen Rock more than a month ago. We were told there was a higher bid. Does anyone know what is going on with a home at 356 highwood in Glen Rock – MLS#: 2840436???
What did it go for – is it under contract, etc. I’m confused because the home is still on realtor.com and has a for sale sign in front of it.
Thanks,
Yikes, in my PA municipality we pay property taxes in April and school taxes in September. These are what make up the property tax for which your mortgage co will escrow. One is a bigger payment than the other. I believe the property tax is the larger payment. This may be why they want you to have that much now (7800). It will be due in early April. I personally don’t think you need a lawyer for the transaction. Your tile company will do all the leg work for you – making sure there are no liens or title problems etc. and making sure that everythings ready for closing. In my experience, an atty in NJ is necessary b/c it is common practice to modify the standard contract and change inspection timing and contingency timing etc. In PA, that’s not really the practice and you’ve alreay accepted the standard contract. Unless you anticipate a problem or difficulty with compliance by the sellers with one of the contractual provisions, a lawyer really isn’t necessary at this point.
many thanks, living in pa.
that’s how the realtor and mortgage company had explained things, but you never know when those two are in cahoots (conspiracy theorist here).
i tend to over-worry and over-freak out on big-ticket items (including this one), resulting in constant panic.
on the positive front, we measured the space above the fireplace, and it is about 35 inches; that means we can get a larger TV than the one we currently have.
i am thrilled. off to research and find another steal …
[248] Re. Protectionism: there are only 2 ways to begin restoring or at least slow down the decline of the manufacturing base here – one is protectionism (you don’t have to go Smoot-Hawley, you could go like the EU does by creating a set of standards to which the goods should conform which is difficult/very expensive to met for a non-local company), another is reducing the pay here to say double the Chinese level ($20 a day will do it). If we are unwilling to do either – yes the only thing left is to continue [attempting] to sell “innovative financial services” and naively expect the rest of the world to continue buying them.
“Trade protectionism as part of O’s stimulus plan, wow.”
Amazing, one never learns.
You can now kiss your *ss/dollar goodbye. There will be only one winner in this scenario.
yikes (252)-
Welcome to PA. They escrow months and months of property taxes (actually, the schools portion) in advance of closing.
Pa/NJ/Ny realtors feel free to comment.
Is there a commonly-accepted cut (devil you all) for elderly private sales?
Assume Gramma is moving in with Jr. and doesn’t want to upgrade the kitchen/bath, clean out the garage, two spare bedrooms, attic, etc.
What % of market value will Gramma get for her house from the “real-estate” company that pays cash, refurbishes and resells?
BTW, Happy New Year, everybody.
PGC (256)-
Can’t see Wenger taking him. Almunia is quality, and he’s durable.
I can see the Abu Dhabis taking Given, though. He’s an excellent keeper and would come at a fraction of the price Buffon would command (although the Dhabis are stupid enough to pay any amount for Buffon). The Dhabis ponied up good loot for Wayne Bridge, and I get the feeling he’s just the appetizer for what may turn out to be a transfer window feast. Plus, no other BPL teams really have any money. The idiotic part of all this is that Hart is a super keeper, and the Dhabis don’t really have a need at this position. F-ing dopes.
F-ing Liverpool may be broke and in court by April at the rate they’re going. Shit, they could win the EPL and go bankrupt in the same week. Honest to God, I could even see them having to sell Torres if things get really sticky.
I’m happy as long as Sir Alex doesn’t get Given. That would not be fair.
PGC (256)-
Spurs did it right before the season began: they got Modric and Pavluychenko for dirt cheap. Now watch these SOB’s pry Arshavin away from Zenit and win the FA Cup or the Carling again.
PGC (256)-
No Fabregas. No Rosicky. You guys are screwed.
Not to mention the fact that the Highbury condo project probably isn’t lighting the world on fire right now, either:
http://www.arsenal.com/history/arsenal-stadium-highbury/the-stadium-highbury-square
Yikes- I’m not really suggesting you need a lawyer. Just that because in PA they don’t really use lawyers, its up to REAs (who can’t give you legal advice) and you to make sure you’re living up to the contract.
I just got a little concerned because there are such specific items in the PA contracts that direct the buyer’s mortgage performance and if you only have 12 days left, that might be an issue–especially if the settlement gets delayed because of the loan. Most of the time, if the buyer fudges some of the mortgage obligations, its no problem–no one really cares, but if you are dealing with jerk sellers or a jerk sellers’ agent and they find out you made changes, you can get into trouble.
–for example, you don’t seem to be aware of the mort application deadline. Its on page 2, section 6 part B. There is also a place to write in the mortgage company you will be going with–if you wrote one in (you don’t have to), then legally, per the contract, you need to use them or get the seller to agree with your change. Any changes to the money, like you talk to the loan officer and decide to put more or less money down–another change in the contract that needs to be approved in writing. you’d think these are things that don’t concern the seller but because they’re in the contract, you’re obligated to abide by them.
#267 lot
To be honest, unless given goes to one of the Manchester’s, he won’t move. If he goes to City, you know it will be just for the cash.
I think if Liverpool win the league, they should be able to make this years debt payments without selling. If they have to start selling players, they will end up going the same ways as Leeds. That said, of the 14 teams for sale, they are probably the most attractive. There merchandising side is a huge cash cow.
#268
Spurs always do well in the transfer market, but can never pull it off as a team. They bought Berbatov for nothing, got a few good seasons out of him and then cashed out and sold him to Utd. Without him two years ago, they would have gone down.
Highbury will sell although it might be a slow sell in phases. they will probably phase it at some point. It is located in one of the best parts of London and is 30 secs from the tube. Worst comes to worst, they will rent most of it.
and you think this guy did it all by himself..
ha ha ha..
oh man
ha ha ha!
and the care bears are real too!!
what about the other 23?
“Madoff Accepted $10 Million Six Days Before Arrest”
“Madoff’s firm was the 23rd-largest market maker on Nasdaq in October, handling an average of about 50 million shares a day, according to exchange data. It took orders from online brokers for some of the largest U.S. companies, including General Electric Co. and Citigroup Inc”
http://tinyurl.com/8k4lk7
who investigates the SEC?
they better dig their own graves.
“SEC Said to Examine More Ponzi Schemes After Madoff (Update1)”
http://tinyurl.com/9hboxj
“The House Financial Services Committee at a Jan. 5 meeting will examine regulatory efforts to catch investment scams and scrutinize how Madoff’s alleged conduct avoided detection for years. SEC Chairman Christopher Cox said Dec. 16 that the agency failed to act on “credible, specific” allegations about Madoff dating back at least to 1999.
Markopolos Ill
Harry Markopolos, the former investment-firm employee who said regulators failed to act on his 1999 suspicions about Madoff, won’t appear at the meeting as announced by the committee because of an illness, according to the office of U.S. Representative Barney Frank, the Massachusetts Democrat who leads the panel”
PGC (272)-
I just wish the Yankees were stupid enough to get into the condo business. Can you see the Steinbrenners trying to do something like Highbury with the old Yankee Stadium? They’d make the place look like a damn stack-a-shack and lose about a billion in short order.
A man can dream, can’t he?
Man, you put a chill down my spine by mentioning Leeds. Talk about a rotting corpse of a club. Although Wimbledon was also quite a spectacular crash-and-burn…
sas (274)-
Hope somebody is posted at Markopolos’ door, so he doesn’t catch another “illness”.
A bullet in the head is so damn hard to shake…
Especially when it’s 12 bullets in the head, and your doctor is calling it a suicide.
and you think:
“hey, this story doesn’t effect my stocks”
“hey, sas..your a joke”
ha ha ha.
sure,
SAS
sas (279)-
Dude, you’re a laugh a minute.
I’d invite you over for a drink, but whoever’s following you won’t like being parked down the street from my house.
Chifi-Re: Cornell wine report…Hotelie?
Clotpoll,
alot, and i mean ALOT of blackmail going on. this story is far from over.
thats why i always kept my powder dry, i don’t even goto rated R movies…
SAS
“i don’t even goto rated R movies”
ok, that was a lie.
but, i’ve never seen a skin flick.
(prefer the real thing)
SAS
On the positive front, we measured the space above the fireplace, and it is about 35 inches; that means we can get a larger TV than the one we currently have.
I take it it is a non-working fireplace?
a TV above a fireplace?
each his own I guess..
but wouldn’t the idiot box take away the tranquil beauty of the fireplace.
SAS
“On the positive front, we measured the space above the fireplace, and it is about 35 inches; that means we can get a larger TV than the one we currently have.”
Why don’t you put your current television IN the fireplace and run a tape of the yule log any time it gets chilly?
speaking of blackmail:
this was a no brainer, i do hope you all picked it up. you had to be deaf, dumb, and blind not to notice.
So the Governor of Illinois decides to pull the plug on Bank of America:
“Illinois Governor Cuts off Bank of America After Chicago Factory-Worker Sit-In”
http://tinyurl.com/92ws54
And look what happens:
“Illinois Governor Arrested for Trying to Sell Obama’s Senate Seat”
http://tinyurl.com/74pqxz
And look what happens:
“Illinois governor arrested for trying to sell Omama’s senate seat”
http://tinyurl.com/74pqxz
NJCoast says:
January 2, 2009 at 9:25 pm
Chifi-Re: Cornell wine report…Hotelie?
Coast: no but know a bunch….did you know that the real estate major is in there, so there was a 4-5 years stretch where it became the hot major?
http://www.hotelschool.cornell.edu/academics/ugrad/concentrations/finance.html#SecurityAnalyst
this is a point that could be of concern. however, we can counter with the fact that when we made the offer, we had one day for them to counter/respond. they blew through that by two days. this pushed everything into the holidays, and we were out of town for 6 days. throw in xmas and NYE and the schedule of mortgage guys … and well, that’s where we are.
but definitely, monday morning at 9 am is app time for us.
again, many thanks to NJRE!
“Only 89 short days until the recession is over…
I wonder if he means calendar days or business days”
If one considers Pluto days, it might be accurate as a day on Pluto is, if I recall correctly, six Earth days long.
this is a point we didnt really consider. the room is longer than it is wide – and the fireplace is a perfect spot to view the TV from the kitchen.
there are built-in bookcases on each side of the fireplace, so can’t go with it there … on any other wall, you dont really have a good view from the kitchen.
shifting topics … anyone else check criminal websites and the megan’s law website prior to moving? weird feeling. no hardcore criminals in our new neighborhood, but it is strange to know the neighbor 6 houses down got a DUI three years ago … and you dont even know what the guy looks like.
“ked them if they think taxes are too much, and was brushed off with a look at me like I am an idiot: – you are silly, IT IS TAX DEDUCTIBLE!!!!”
I just LOVE that line. It echos what I hear from folks who insist one is stupid to ever pay-off a mortgage since one is able to deduct the interest. Nothing like paying a dollar to get $.5 back – yippee, such a deal.
Yikes, we toyed with the idea of putting the screen above the fireplace, but I’m glad now that we didn’t. It becomes the focus. We also have a large, long room with the fireplace centered in an end wall.
I’m watching the dying embers right now, and it wouldn’t be the same. Neither would the stockings.
My husband recycled an old chest of drawers the same width as the TV, removed the fronts of some of the drawers, turned one small drawer into a charging station, and rigged up a cord holder thing on the back. I pull one plug and can slide the entire thing behind a screen or anywhere downstairs if I need to.
Maybe rig one side of the built-ins into a TV thing?
“Blind squirrels & broken clocks.”
The Bush Administration’s nickname?
What did it go for – is it under contract, etc. I’m confused because the home is still on realtor.com and has a for sale sign in front of it.
Barry,
Still listed as in Attorney Review. Looks like it has been in AR for quite a long time, most likely because it is a short sale.
Shore guy is on a roll this weekend.
LOL
well i guess nj has a budget problem
nj has a budget problem.
Grim,
This week’s report from the hinterlands – Hunterdon County Comp Killers
GSMLS recorded 7 sales and 32 new listings this week in Hunterdon County. One sale and three new listings made this list.
Hunterdon County Comp Killer:
MLS#: 2586052
14 HORSESHOE DR
Raritan Twp
SLD: 07/24/06 $598,000
OLP: 04/21/08 $575,000
LLP: 07/16/08 $517,500
Withdrawn
DOM: 86
OLP: 07/16/08 $517,500
LLP: 09/30/08 $499,500
Expired
DOM: 76
OLP: 10/03/08 $499,500
SLD: 12/30/08 $470,000
DOM: 68
21.41% off 07/06 sale price
18.27% off 04/08 OLP
Hunterdon County FUTURE Comp Killers:
MLS#: 2622853
8 Fawn Run
Bloomsbury Boro
SLD: 07/20/06 $395,000
OLP: 01/02/09 $350,000
DOM: 1
11.40% off 07/06 sale price
MLS#: 2622466
2004 Farley Rd
Tewksbury Twp
SLD: 12/12/05 $910,000
OLP: 01/01/09 $779,900
DOM: 2
14.30% off 12/05 sale price
MLS#: 2622891
9 South Washington St
Frenchtown Boro
SLD: 08/15/07 $275,000
OLP: 12/30/08 $249,900
DOM: 4
9.30% off 08/07 sale price
From the Bristol Press:
Economy closes doors of Westfarms jeweler
Gold necklaces were still displayed in the window of Christian Bernard Jewelers Wednesday at Westfarms mall. However, the sign on the door read, “Will not open today.”
Holiday shoppers hoping to exchange, refund or buy other items were out of luck. Citing poor sales and limited access to credit, Christian Bernard Stores Corp. filed for Chapter 7 bankruptcy the day after Christmas. Court documents show that the New Jersey-based, 15-store jewelry chain started making a move toward bankruptcy earlier in the month when it retained a New York City law firm.
…
According to National Jeweler’s 2008 State of the Majors report, Christian Bernard is listed as number 38 on National Jeweler’s Top 50 list, which ranks the largest jewelry chains in North America by store count.
Don’t ask how I arrived at this link.
DMX’s Arizona Home Foreclosed & Up For Sale, Rapper’s Property Stolen
DMX’s Arizona home is reportedly under foreclosure and has been put up for sale by a local bank.
The realtor selling DMX’s home, Andrew Wheeler, revealed to AZFamily today (January 2) that the home was left unprotected and in shambles after it was raided for the second time by authorities in May 2008.
Wheeler divulged that the house’s doors and windows were blown during the raid and it made it easy for thieves to enter the house.
Wheeler claims various items were stolen including DMX’s quads.
“I think people showed up, walked into the house and took what they wanted,” Wheeler said.
The Arizona home appeared in DMX’s reality show which aired on BET in 2006. The Yonkers bred rapper paid $600,000 for the house in 2003 and the bank has put it up for sale for 429,000.
Say, whatever happened to Donald and his thesis about famous musicians being savvy real estate investors?
Oh bother, heard someone say that Fannie and Freddie are gouging poor homebuyers by making them pay a higher rate for a mortgage than a wealthy buyer (I think they meant bad credit, not poor, but it doesn’t really matter). Wealthy buyers should be charged a higher rate because they’ve got more money to spend, and less fortunate buyers should have their rates subsidized by the rich.
#303 grim
duckie can just claim DMX is a rapper, not a musician.
CORZINE’S BUDGET PLAN BY THE NUMBERS
Elements of the $2.1 billion deficit:
Revenue shortfall of $1.7 billion
Additional spending of $265 million, including a combined $112 million for recession-strained safety nets such as Medicaid, FamilyCare
Spending an additional $135 million on debt from the regular budget, rather than using a now-erased long-term obligation fund
Elements of the proposed solution:
$812 million in spending cuts, to be detailed Monday
Those cuts include $116 million in pension fund contributions, $75 million from education aid, $22 million by freezing union workers’ salaries, $19 million by delaying installation of paper trails on voting machines and $15 million in municipal aid
$500 million shifted from the long-term obligation fund, which the state set up to fund the repayment of debt
$275 million from the projected $600 million “rainy day” surplus fund
$208 million by lapsing funds unspent at the end of the 2008 fiscal year, rather than carry those funds forward
$300 million assumed from the federal stimulus package, probably additional Medicaid support
#307
Anyone remember this howler from the 80’s. Maybe he can do a sequel to cover the rent.
http://www.imdb.com/title/tt0091814/plotsummary
Jack Casey (Kevin Bacon)used to be a hot-shot stock market whiz kid. After a disastrous professional decision, his life in the fast lane is over. He loses his nerve and joins a speed delivery firm which relies on bicycles to avoid traffic jams of San Francisco, is attracted to a fellow bicycler, Terri, and befriends Hector, a budding entrepreneur. Can Jack regain his nerve and his self-respect, and rebuild his life on a more sound basis
The new movie could be called “Diversification”.
New Thread!
Yikes, not to beat a dead horse here, but I didn’t want you to be unnecessarily worried about your Bucks transaction. Ruggles makes some good points, but I seriously doubt you put the name of your mortgage lender into the contract given that you hadn’t applied for the mortgage yet. And, while there are time tables prescribed by the contract, you are certainly meeting those time tables (inspection is already done) including your mortgage contingency in good faith even if (and I highly doubt this) you are off by a day or so. Let’s face it, these sellers want out and you want in. There’s not likely to be a big blow up or confrontation requiring a lawyer. Just trying to save you an unnecessary lawyer fee.
As for PA’s taxes, just to be clear, nothing is escrowed BEFORE closing. And while it is true that you will be escrowing for the Sept school tax payment early, you are free to opt out of escrowing and pay the taxes yourself. Of course, most mortgage lenders insist on escrowing for taxes to avoid tax lien issues. Nevertheless, several of my neighbors do not escrow for taxes with their mortgage and pay the lump sum when it comes due.
Just wanted you to know.
Thanks Grim!
Yes, it is a short sale. I’m just surprised because they said they wanted a quick close. If a home is in AR – is there a way for another buyer to make a bid? Or is it pretty much a done deal?
Thanks
Jersey Jim …I did my entire driveway with that metal edging ,it’s very difficult to work with ,but it did come out great .I used small 1/4 inch blue stone which settles in about 3 mos and packed tightly . DON”T use pea stone ,unless you like the feel of walking in beach sand !Women with heels don’t like it ! for the skirt i used 8 rows of cobble stone
Really well written!