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Frist!
second?
F the banks.
F congress.
F Obama.
Thanks.
Sorry for the slow posting folks, I’m out in the woods in the middle of VT.
From HousingWire:
Freddie Mac 30-Year Rates Hit 25-Week High
For the second consecutive week, mortgage rates rose, driven by an increase in bond yields, according to Freddie Mac’s Primary Mortgage Market Survey.
Thirty-year fixed-rate mortgages increased to an average 5.29% with an average 0.7 point in the week ending June 4, marking the highest rate recorded since the week ending December 11, 2008.
The 15-year fixed-rate mortgage averaged 4.79%, up from last week’s 4.53% average, but well below the 5.65% average a year ago at this time.
One-year Treasury-indexed ARMs climbed from 4.69% last week to 4.85% this week, while Five-year ARMs also jumped, from 4.82% to 4.85%.
“Rates are substantially higher than they were a couple weeks ago, when many would-be borrowers were floating instead of locking,” said Bankrate.com’s Holden Lewis. “They were gambling that mortgage rates would decline further or stay the same. They Lost.”
Bankrate.com conducts its own rates survey each week. This week, Bankrate found benchmark 30-year fixed-rate mortgage rose 20 basis points to 5.65%, while the 15-year fixed-rate mortgage rose 20 basis points to 5.06%.
sean From last nights post.No the house did not sell. However it can still be yours for a now reduced pirce of 549K
From Bloomberg:
U.S. Unemployment Rate Probably Topped 9%, Highest Since 1983
Unemployment in the U.S. probably exceeded 9 percent in May for the first time in more than 25 years, underscoring the threat job losses pose for an economic recovery, a government report may show today.
The jobless rate jumped to 9.2 percent, the highest level since 1983, according to the median estimate of 75 economists in a Bloomberg News survey. Employers probably cut 520,000 workers from payrolls, the smallest decrease in seven months.
A deceleration in firings, coupled with stabilization in housing and manufacturing, signal the recession is easing. Still, Americans are spending less and saving more as home values fall and companies from American Express Co. to General Motors Corp. pare jobs, meaning any expansion may be muted.
“The worst is over for the job market and for the economy,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. “It’ll still be a tough environment. Firms are going to be cutting through the end of 2009, and it’ll take time for all those jobs to come back.”
The Labor Department report is due at 8:30 a.m. in Washington. Economists’ estimates for unemployment ranged from 9 percent to 9.4 percent. The rate was at 8.9 percent in April.
Forecasts for payrolls ranged from declines of 450,000 to 600,000. Job losses peaked at 741,000 in January, the most since 1949.
“The worst is over for the job market and for the economy,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. “It’ll still be a tough environment. Firms are going to be cutting through the end of 2009, and it’ll take time for all those jobs to come back.”
Is that a wish or a fact?
From the NY Daily News:
Recession, U.S. Postal Service downsizing may force closure of twenty post office branches in NYC
The economy might do what neither snow nor rain nor dark of night could – close 20 post office branches in Manhattan and the Bronx.
The shutdowns could come before Labor Day because of the recession and the downsizing of the cash-strapped U.S. Postal Service, local union officials said.
“This is unprecedented,” said Chuck Zlatkin, the legislative and political director for the New York Metro Area Postal Union. “This is pretty drastic, and it’s happening very quickly.”
The union has not received formal notification of the closings, but Zlatkin said it was part of an overall cost-cutting effort by the Postal Service. Union officials heard postal officials in New York had 90 days to select the doomed branches.
It was unclear how many jobs might disappear, Zlatkin said. The union represents some 7,000 clerks, drivers and maintenance employees in Manhattan, the Bronx and northern New Jersey.
The Postal Service has trimmed 25,000 jobs nationally this year but still faces a $6.5 billion loss this year.
Postal officials said there are no plans to shutter outlets “at this time,” but they left the door open for closings down the road.
“The economy has decreased mail volume this year substantially,” said Postal Service spokeswoman Darlene Reid.
“We’re looking at every possible way we can to cut costs while continuing to meet customers’ retail needs, improve productivity and increase efficiency,” she said.
8 – Hope
Stephen Roach = Green Shoots talk is world trying to talk itself into a recovery that won’t be there
http://www.bloomberg.com/avp/avp.htm?N=av&T=Roach%20Says%20%60Devastating'%20U.S.%20Job%20Losses%20to%20Sap%20Recovery&clipSRC=mms://media2.bloomberg.com/cache/v7OtBmPm2ThU.asf
Essex [3],
“Government is good at one thing: It knows how to break your legs, then hand you a crutch and say, ‘See, if it weren’t for us you wouldn’t be able to walk.”
Harry Browne
Credit card default tsunnami
“If you want to get a window on why credit card defaults are soaring, look at credit card underwriting. There is virtually no income verification in the card industry–all loans are stated income loans (a/k/a liar loans), and we know how well that worked for mortgages (and there’s more temptation to lie about a card as a default won’t cost you the house). ”
http://www.creditslips.org/creditslips/2009/06/credit-card-defaultspiggybacked-underwriting.html#more
“Benefits, such as Social Security, food stamps, unemployment insurance and health care, accounted for 16.2% of personal income in the first quarter of 2009, the Bureau of Economic Analysis reports. That’s the highest percentage since the government began compiling records in 1929.
In all, government spending on benefits will top $2 trillion in 2009 — an average of $17,000 provided to each U.S. household, federal data show. Benefits rose at a 19% annual rate in the first quarter compared to the last three months of 2008.”
http://globaleconomicanalysis.blogspot.com/2009/06/benefit-spending-hits-2trillion-highest.html
From Rosenberg yesterday –
Everyone is back in the same trade
* Buy stocks (massive multiple expansion – S&P 500 priced for $75 operating EPS)
* Buy commodities (still long-term bullish but a pullback is definitely overdue)
* Buy non-Treasury bonds (same story as commodities – long-term bullish on corporates, but supply is now coming in droves and being gobbled up – this is NOT the contrarian trade of six-months ago)
* Buy gold (again, in a secular bull phase, but the dollar is not going to zero and being bearish on the greenback has become far too fashionable – especially in the wake of Bill Gross’s latest missive; the Euro is saddled with problems at least as deep as the USD, if not deeper)
* And of course, sell Treasuries (that was a good trade coming off the 2% lows on the 10-year note, but what we just saw crammed into six months, which took 48 months to accomplish in the last bear market in govie bonds, was yields soaring 175bps from the low). Sentiment on government bonds is exceedingly bearish and inflation views have become too extreme for my liking. I believe there is a lack of appreciation from what history tells us about the aftershocks that occur after a cycle that was dominated by a credit collapse and asset deflation, as opposed to a garden-variety inventory-led recession. In five words: economic fragility, lingering deflation pressure.
In the meantime, with the cheerleaders on CNBC, our balance sheet is strong and stable. The housing market is stabilizing and the future is bright. Let’s “protect our house” while I squeeze the comp comm.
I would imagine that a ton of c#ckroaches are scurrying about today, and have been for awhile.
Remember, RE never losses value.
“We have no way, with any reasonable certainty, to assess the real risk of holding these loans on our balance sheet. The only history we can look to is that of World Savings however their portfolio was fundamentally different than ours in that their focus was equity and our focus is fico. In my judgment, as a long time lender, I would always trade off fico for equity. The bottom line is that we are flying blind on how these loans will perform in a stressed environment of higher unemployment, reduced values and slowing home sales.”
http://www.reuters.com/article/businessNews/idUSTRE5537AH20090604
JB,
You can kill # 15. I found the c#ckroach that put me in mod.
Yes you can keep spending beyond your means.
Keep hope alive.
The nation’s shopkeepers need you.
Gag.
“A deceleration in firings”
This might be a good sign if some of the existing jobless were getting absorbed into the ranks of the employed. As it is, the flood continues, it is just that the floodwaters are rising at a slower rate. Yippee!
Clot [13],
Fantastic, 1 out of every 6 dollars if fed/state dollars or vouchers. Maybe this is the reason Chinese students were laughing at the jackass? Yes, we are well on our way towards restructuring.
“A deceleration in firings”
This might be a good sign if some of the existing jobless were getting absorbed into the ranks of the employed. As it is, the flood continues, it is just that the floodwaters are rising at a slower rate. Yippee!
I think I will have a green-shoot salad with my economic data, please. Oh, and some B.O. Coolaide (how the heck IS that spelled, anyway?).
“This might be a good sign if some of the existing jobless were getting absorbed into the ranks of the employed.”
Shore,
W-Mart is hiring 22k more.
HeHeHe (8):
[“The worst is over for the job market and for the economy,” said John Silvia]
Is this the same Mr. Silvia?
John Silvia, chief economist at Wachovia in Charlotte, North Carolina, said his concerns for 2010 include tighter regulation of financial markets and players, higher taxes, and what happens when the Federal Reserve decides to reverse course and tighten monetary policy.
“You could easily snap this nascent recovery,” he said. “The challenge is the exit strategy. How are you actually going to get out of this without keeping the stimulus in place for a long time? I think the risk is that you do get a little bit more inflation than you anticipated.”
Vic [14],
That’s the reason, if you have large gains, why you hedge.
British dude from Newcastle (the town, not the brewer) was on Bloomberg Radio this morning.
He said that the market appears to be extrapolating rain forests from green shoots. He said unemployment will definitely hit 11%.
Good stuff!
Shore – did you see my post last night re tix?
345K, recession is over.
From MarketWatch:
U.S. May unemployment rate jumps to 9.4%
6 million jobs lost since recession began
U.S. May unemployment rises to 14.5 million
U.S. May job loss much less than 500,000 expected
U.S. May nonfarm payrolls fall by 345,000
Frank,
What recession?
Print | A A A Payrolls fall 345,000; jobless rate rises to 9.4%PROVIDED BY MarketWatch – 08:31 AM 06/05/2009
WASHINGTON (MarketWatch) – The U.S. unemployment rate jumped to a 26-year high of 9.4% in May as 345,000 payroll jobs were lost, the Labor Department reported Friday.
The decline in payrolls was the smallest since September, and much lower than the 500,000 expected by economists surveyed by MarketWatch. Payrolls had lost an average of 643,000 in the previous six months.
Payrolls in March and April were revised higher by 82,000.
Details of the report were mixed. While the payroll figures from a survey of business sites was much better than expected, a separate survey of households showed unemployment increased more than expected. Unemployment rose by 787,000 in the month to 14.5 million, pushing the jobless rate from 8.9% to 9.4%, the highest since August 1983.
Steep job losses continued in the goods-producing industries, with 225,000 payrolls lost. Manufacturing industries lost 156,000, with just 12% of manufacturing industries adding workers. Construction industries lost 59,000 jobs, the fewest since September.
Among 271 industries across the economy, 32.7% were hiring in May.
The pace of job loss moderated in services, which lost 120,000 jobs, the fewest since August. Temporary help jobs fell by 6,500, the fewest since the recession began in December 2007.
Health-care firms added 36,000 jobs in May. Retail lost 17,500. Financial services lost 30,000.
Government agencies lost 7,000 jobs, including 15,000 in the federal government.
Total hours worked in the economy fell by 0.7%. The average workweek fell to a record-low 33.1 hours.
An alternative gauge of unemployment – which includes discouraged workers and those whose hours have been cut back to part-time – rose to a record 16.4% from 15.8%. The records go back to 1994. The number of workers forced to work part-time rose by 164,000 to 9.1 million.
Average hourly earnings rose by 2 cents, or 0.1%, to $18.54.
In a separate survey of households, the government found that employment fell by 437,000. Unemployment rose by 787,000 to 14.5 million, while 350,000 people joined the workforce.
The number of people who’ve been out of work longer than six months rose by 268,000 to 3.9 million, representing 2.5% of the workforce, the highest since 1983.
The employment-population ratio fell to 59.7%, the lowest since October 1984
Frank:
The UE rate jumped by 0.5%. Recession nowhere near over.
Sweet 40% of people don’t work. Guess we in the 60% are the suckers
The employment-population ratio fell to 59.7%, the lowest since October 1984
U.S. lost 345,000 jobs in May, fewest losses since September; unemployment rate rises to 25-year high of 9.4%.
Grim unmod 11 good Steve Roach interview from Bloomberg
I cannot wait for the revision to the UE numbers over the next few months.
I cannot wait for the revision to the UE numbers over the next few months.
“An alternative gauge of unemployment – which includes discouraged workers and those whose hours have been cut back to part-time – rose to a record 16.4% from 15.8%. The records go back to 1994. The number of workers forced to work part-time rose by 164,000 to 9.1 million.”
“Average hourly earnings rose by 2 cents, or 0.1%, to $18.54.”
From [30],
What recession?
With Omama running this country, we are going to be called the United States of France, 9.4% unp is the low end of my estimates, 10% will be our norm from now on. Get used it.
Tony Vegas development struggles in downturn
‘I thought it was a no-lose situation. It ruined me,’ says one resident
LAS VEGAS – It was a symbol of Las Vegas largesse during the good times. Now it’s an emblem of recession blues.
With a manmade lake in the desert, an Italian-style village beyond the suburban sprawl and neighborhoods fit for diva Celine Dion, the Lake Las Vegas resort development flouted good sense and modesty in the tradition of all great Las Vegas dreams.
But it has fast turned sour for some.
Last year, the developer, Transcontinental Corp., lost the property in foreclosure after defaulting on $540 million in loans. The new owners of Lake Las Vegas filed for Chapter 11 bankruptcy last summer. One if its anchor hotels, a Ritz-Carlton owned by Village Hospitality LLC, also filed bankruptcy to stave off foreclosure and has been sold. One of three premier golf courses has been abandoned.
New home construction has slowed to a crawl, though the community is far from built out. Foreclosures have spread like a virus, and home values are falling.
Even the sparking, blue lake — the jewel of the luxury haven — nearly sprung a leak, forcing engineers to rush to make repairs before it drained.
Not surprisingly, residents are jumping ship. In May, nearly 10 percent of the homes on the market at Lake Las Vegas were either bank-owned or short sales, meaning they were priced so low a sale would not satisfy the owners’ debt to the bank, according Applied Analysis, a real estate research firm.
Nearly 80 percent of the homes listed were vacant.
“I thought it was a no-lose situation. It ruined me,” said Ed Santacruz, a former mortgage broker and fortune seeker who let his Lake Las Vegas hotel-condominium go into foreclosure. He had planned to rent out the property to tourists, but couldn’t get enough takers to cover the mortgage.
“That’s where I messed up, I believed enough in the product and in Las Vegas,” Santacruz said.
Lake Las Vegas’ woes largely are due to now familiar problems. The community was designed as both a resort and residential destination — leaving it heavily dependent on second-home buyers and tourism. Both faltered when the economy sputtered.
“There was a point and time when the higher end of the market had been less impacted. But as the recession has run longer and deeper than initially expected…” said Brian Gordon, a principal at Applied Analysis.
The community that strove for seclusion wasn’t as isolated as some thought.
The palm trees and putting greens of Lake Las Vegas emerge out of the near empty desert off a dusty suburban highway 17 miles from the Las Vegas Strip. The homes are clustered around a 2-mile-long lake that defies the scorching heat and environmentalists, alike.
A replica of Florence’s Ponte Vecchio, a popular venue for weddings, crosses the water on the south end, near a tasteful, small casino.
Two of the community’s three golf courses were designed by Jack Nicklaus. Promotional materials boast a seven-minute commute to the Las Vegas casinos on the horizon — by helicopter.
The idea of exclusive desert resort living originally was the brainchild of J. Carlton Adair, an actor and businessman. Adair acquired the land in 1966 in a swap with the federal government that also included the rights for 10,000-acre feet of water. Creating what he planned to call Lake Adair would require damming water destined for Lake Mead, the Colorado River reservoir that provides water to southern Nevada.
But Adair went bankrupt before his dream was realized and a subsequent group of investors also failed to raise the necessary money.
Transcontinental took up the mantle in 1990, a year before the dam was completed. The city of Henderson, a bedroom community next to Las Vegas, was attracted by the promise of a new solid tax base. It agreed to sell the community the water it would need to replenish the evaporation under the scorching sun. The community pays a water bill of about $2 million a year.
The decision was blasted by environmentalists, who now see a bit of karma in Lake Las Vegas’ recent troubles.
“This was the height of the gilded age of excess in the 1990s and 2000s. It was a community built on the idea that there were no limits to natural resources or to the number of millionaires willing to invest in a project,” said Launce Rake, a spokesman for the Progressive Leadership Alliance of Nevada, a liberal government watchdog group.
“I don’t know if Lake Las Vegas is sustainable in the long term. Does it turn into a ghost town?”
This dire notion is dismissed as hyperbole by many residents and the current owner of much of the land and amenities, Atalon Group.
“Like many large-scale second home and resort communities throughout the country, Lake Las Vegas has had to adjust to the decreased demand for property and pricing of investments,” Frederick Chin, president of Atalon-subsidiary LLV Holdco LLC, said in a statement.
“Atalon’s goal for Lake Las Vegas is to reset and reposition the community to flourish as market conditions improve, thereby achieving what is in the best interests of homeowners and stakeholders alike.”
After the development filed for bankruptcy in July 2008, corporate officials won approval to pay for urgent repairs to prevent the premature deterioration of two pipes underneath the lake. They argued the damaged pipes threatened to drain the lake like water from a bathtub.
There are plenty of residents with ample resources working to hold Atalon to its commitment. A savvy and heavily invested group, some are banding together to protect their homes and their amenities. One group is trying to arrange to buy the private SouthShore Golf Club now tied up in the bankruptcy.
Others are ready to move to less remote pastures.
To her own disbelief, resident and real estate agent Lynne Hoffman has had her Lake Las Vegas home on the market for three years with an eye toward moving to a community closer to more ordinary comforts — supermarkets, clothing stores, a bank.
She’s dropped the price to $488,000 — $40,000 less than she paid in 2001. She gets offers from potential buyers, she says, but they lowball her lowball price.
“It’s insane! I’m like, what do you want people? You want this house for a penny? I have to pay the bank,” she said.
There are plenty of properties that have fallen much further from the height of southern Nevada’s real estate bubble, one of the most inflated in the nation.
Real estate listings show a 4,000-square-foot mansion that sold in 2005 for $2.7 million was marked down to $1.2 million in May. A 1,700-square-foot condominium that sold for $1.2 million in 2004 is now listed for $389,000.
Celine Dion and her husband Rene Angelil bought a home on the lake’s south shore for $1.2 million in 2002, as the Canadian songstress began what became a five-year run at Caesars Palace on the Las Vegas Strip. Since then, Dion has moved on to other gigs and the home has only sunk in value to about $795,000, according to estimates on Zillow.com.
“Deals” like these are drawing a new breed of potential home buyers to the lake. One agent and resident, who asked not to be named to protect her business, described her new clients this way: “It was the Lexus or the Mercedes, we’re down to now pickup trucks.”
However, it’s not likely that this tony retreat will soon become a favorite for young families or middle-class homeowners. Although home values have dropped to affordable levels, homeowners association fees that go to pay for upkeep of common areas have not. Some residents pay three such fees, adding more than $500 to a monthly housing bill.
Santacruz, who now lives in Chicago, laughed a pained chuckle when told the current listing price for the condominium he let go to foreclosure. He paid $359,000 for the 630-square-foot unit in 2004. It’s listed for $76,900.
He thought for a minute and said, “At that price, someone could make some money.”
http://www.msnbc.msn.com/id/31112551/
Can’t wait to hear how they glaze this turd.
“Among the unemployed, the number of job losers and persons who completed
temporary jobs rose by 732,000 in May to 9.5 million. This group has in-
creased by 5.8 million since the start of the recession. (See table A-8.)”
“The number of long-term unemployed (those jobless for 27 weeks or more)
increased by 268,000 over the month to 3.9 million and has tripled since
the start of the recession. (See table A-9.)”
http://www.bls.gov/news.release/empsit.nr0.htm
SRS @ 15 today. Booooooyyyyyyyyyyaaaaaaaaaa
Green Shoots
http://bloomberg.econoday.com/showimage.asp?imageid=17674
quicker we get to 10% the better. BTW I have three friends who are career women with young kids at home and sky high day care expenses. All three were let go between October 2008 and April 2009. All three claim they looked for a few weeks there are no good jobs out there, they killed day care are home with their kids and are going to milk 52 weeks of unemployment along with serverance and start looking again when firms get new budgets in 2010. None of these people are unemployed, they are full time moms working their butts of 16 hours a day 7 days a week. Same thing happened in 1992, in fact my Mom got laid off in 1992 at age of 65 and collect a years unemployment. Bet that is happening too. How many sole heads of households with young children are out of work 27 weeks or more?
this market just won’t give up any ground ,the rebound still has legs ,if your not a bull you are left behind ,the housing market will be next ,Just don’t know when
Also I have two single friends who are women one in her 30’s other in her late 40’s. The late 40’s girl bought a two family house back in 1992 dirt cheap in Brooklyn and lives in one half for free, even makes very good income off other halp, she is 49 and is looking to take a few months off and then do civil service stuff as she is sick of rat race. The 30’s girl is a prima donna, but she has a smoking hot body and killer looks. She was offered several off the books bartending and hostess jobs for the summer but turned them down cause she is too good for that. SHe is looking for her do nothing IB job back, where looking good and sounding good entitled you to 300K. Ain’t happening. I have around 20 friends unemployed, and other then two of them the other 18 were slackards who rode a long term bull market and now are coming to grips that they have to do a real job for lower pay.
I like that word, “slackard”.
So retro.
19.Shore Guy says:
June 5, 2009 at 8:15 am
“A deceleration in firings”
shore: sounds like double talk spoken at Treblinka
More Green Shoots:
FDIC gives up on Silverton Bank
FDIC throws in the towel after trying to sell Atlanta-based bank, will allow Silverton to fade away.
Agree, if the bull don’t die people flush with cash will put it to work in distressed RE driving up prices. People hiding in money markets are rolling dice big time we will re-touch the March low, if not they are screwed, they missed the huge muni, corporate, commoditiy and stock market rebound of last three months. Investments can keep going up up up while RE goes down down down for too long. At this rate we will be buying million dollar homes for cash by Christmas time.
Dentss says:
June 5, 2009 at 9:03 am
this market just won’t give up any ground ,the rebound still has legs ,if your not a bull you are left behind ,the housing market will be next ,Just don’t know when
Howard Simons:
I wrote last year that Paulson and Bernanke were engaged in the sort of thing that would have put most short-sellers in jail: They were talking down the U.S. economic situation and raising the specter of deflation to drive Treasury yields lower.
That game ended with the December 2008 announcement of 0-0.25% interest rates and the hint of quantitative easing. Once they went to quantitative easing in March, long-term Treasury yields have risen 130 basis points.
So here’s the multi-trillion dollar question: Will the Federal Reserve stop monetizing the Treasury’s debt? If they do, they will be acting in the interests of the economy and the taxpayer. If they keep pretending we are in a deflation risk, you will know they are acting in the interests of financing fiscal irresponsibility.
Public choice theory, which notes how governments act in their interests versus those of their citizens, is getting a fascintating real-life workout here.
Frank (41)-
Yep, 9.4% (soon to be 10%+) UE is gonna sky those malls. Keep buying GGP, SPG, IYR and all the crap you so dearly love.
Better hurry. You need to leave now to get to the mall in time to start counting heads.
John (49)-
That’s how you know it’s an illusion. No basis in fact, no basis in fundamentals.
“At this rate we will be buying million dollar homes for cash by Christmas time.”
John
Is the FASB close to closing some off balance sheet loopholes for the banks? As you are aware, trillions of debt is hidden. If these loopholes are modified, the banks tangible common equity would take a huge hit. Now, I’m sure the FASB will not have to power to change this. Any thoughts?
“the housing market will be next ,Just don’t know when”
[44],
Borrowed from Chi, Kumbaya.
Thirty-year fixed-rate mortgages increased to an average 5.29% with an average 0.7 point in the week ending June 4, marking the highest rate recorded since the week ending December 11, 2008.
“Better hurry. You need to leave now to get to the mall in time to start counting heads.”
I do miss Frank’s weekend mall report. Did his employer stop serving Taco’s?
Frank,
How about that high water mark? It’s a kindergarten question for a hedgie.
re John – “do nothing IB job making 300k.”
Right now John I personally know a bunch of do nothings who’s severance is about to run out and are waiting for something to happen, sitting home now being Mr. Mom pushing the stroller to the park on the nice days, wondering if they can ever refi their place cause the ARM is resetting. Some have tried to break into the Hedge Fund and Private equity buisiness but no luck there those places are contracting as well.
I see a future for them and it is either blue collar or some lowly matttress salesman type of white collar job.
Most likely they are out of Investment banking forever for you see securitzation beast is dead, it’s corpse is already rotted and unless we go facist and confiscate everyones money there will be nothing for these do nothings to do.
“Keith Baker noticed sour smells emanating from the walls of his newly built home in Fort Myers, Fla., soon after he took up residence there in March 2008. Then the copper pipes from the water heater turned black, “as though someone threw soot on them.” Soon, Baker and his wife started experiencing sinus problems, dizzy spells and muscle aches. They are among thousands of homeowners in Florida and elsewhere who are blaming such problems on low-quality, imported drywall.”
http://realestate.msn.com/article.aspx?cp-documentid=20239533>1=35000
I don’t go to the mall, too crowded. Go URE.
#51,
Just because you are loosing your shirt on SRS, why do you pick on me?
Frank,
Clot isn’t picking on you. He is warning you.
Would you like some green shoots with that?
http://1.bp.blogspot.com/_H2DePAZe2gA/SihyFvMwpUI/AAAAAAAAJMA/O6EAq6-0zt4/s1600-h/greenben.JPG
I am seeing signs of a bottom in the sub 300k housing range.
“I don’t go to the mall, too crowded.”
I get it, that’s the other Frank. Dolt.
zieba [61],
Want to clean up my coffee?
Zieba,
That’s hilarious!
Dent 44
…..if your not a bull you are left behind ,the housing market will be next ,Just don’t know when
ROFLMAO
in about 15-20 years…..
What do mortgages rates have to do with housing? Only an idiot buys a home cause rates are cheap. You buy an investment cause it is a good investment. Maybe this is why PPIP will work, free financing they will buy anything.
Credit to Jesse L. from CafeAmericain
some interesting charts up recently.
http://jessescrossroadscafe.blogspot.com/
tax news for the day:
“(BNA) Studies Show Estate Tax Costs Economy
As Much Revenue as It Raises, Group Says
Repealing the estate tax could create 1.5 million new jobs in the small business sector, and its elimination may actually cost the economy less than it raises in tax revenues, according to two studies released June 4 by the American Family Business Foundation.
“Simply killing the estate tax would expand investment by 3 percent, increase small business capital by $1.6 trillion, increase the probability of hiring by 8.6 percent, increase payrolls by 2.6 percent, and slash the current jobless rates by 0.9 percent,” said Douglas Holtz-Eakin, one of the authors and a former director of the Congressional Budget Office.
Holtz-Eakin said that the increase in jobs from eliminating the estate tax is nearly half the total number of jobs that the Obama administration said it hoped to save or create under the $787 billion American Recovery and Reinvestment Act (Pub. L. No. 111-5).
A second study, from Institute for Research on the Economics of Taxation President Stephen Entin, said that although the estate tax currently generates about 1 percent of total federal revenues, it has a negative impact on job creation and investment, which hurts revenues by even more.
“Not many taxes are so damaging on revenues that they lose as much, or more, than they bring in, but this is one of them,” Entin said.
Entin said a cut in the top rate for the estate tax to 35 percent and raising the exclusion to $5 million for individuals—from a 45 percent rate and an exclusion of $3.5 million in 2009—would add nearly $27 billion in annual growth to the economy and would boost labor income by nearly $18 billion per year.
Senate Finance Committee Chairman Max Baucus (D-Mont.) has previously proposed the 35 percent estate tax rate and a $5 million exclusion, but he acknowledged that the deeper cut could be difficult to pass in the Senate. Baucus has also advocated keeping the estate tax rate at its 2009 level as the minimum amount that Congress can do, and President Obama’s budget calls for making the 2009 estate tax levels permanent.
Lawmakers are expected to take up an estate tax bill later in the year in order to keep current law from dropping estate tax rates to zero in 2010, then allowing them to rebound to a 55 percent tax rate in 2011.
American Family Business Foundation President Dick Patten said the studies from Holtz-Eakin and Entin were done independently, but “they clearly should be viewed together because they send a coherent and compelling message to policymakers.”
“One the one hand we have 1.5 million jobs at zero cost; on the other hand we have three to four million jobs at a cost of $787 billion. You do the math,” Patten said.”
I loved that last quote. Very much in keeping with BC’s quote at [12].
FWIW, although the studies were released by an anti-estate tax group, they were done by folks that are pretty well respected in this area.
If BC and Clot are so bright why didn’t they see DOW 8,800 coming?
John 67
What do mortgages rates have to do with housing? Only an idiot buys a home cause rates are cheap
Historical trends show that home prices track interest rates. rates go up prices go down and vice versus. The average home buyer buys based simply on what the maximum monthly payment they cam handle is. They do not look at the big picture. if they did, you would see the home buying trends that we have seen for the last 25 years.
John,
Actually BC did. and this was when we were in S&P 600’s.
BC Bob the turd has been polished.
“Today we have not just ‘green shoots’ but an authentic sighting of the Jolly Green Giant himself,” said Robert Brusca of FAO Economics in an email.
So is the BLS outright lying or did ADP miscount by about 200k?
http://www.marketwatch.com/story/us-stock-futures-higher-ahead-of-payroll-data
John [70],
First of all I’m not bright. If you had been paying attention, I was looking for a major retracement. I actually got long many different sectors. Now, just long one sector. By the way, if this sector fails, you are screwed.
“If BC and Clot are so bright why didn’t they see DOW 8,800 coming?”
J,
Are you talking from 14K?
“By the way, if this sector fails, you are screwed.”
I certainly think it will!
Stu [76],
That’s fine, I’m locked in.
What sector are you talking about?
BC Bob says:
June 5, 2009 at 9:51 am
John [70],
First of all I’m not bright. If you had been paying attention, I was looking for a major retracement. I actually got long many different sectors. Now, just long one sector. By the way, if this sector fails, you are screwed.
Actually, I have no problem re-testing lows. I am not touching the money for another 20 years. I was not in a panic so much in October or March.
And in other news, SRS is now positive on the day :P
Go SRS!! I have taken another vow, bonds are too rich and stocks are too rich and CDs and money market rates are too low. Will spend next few months banging out mortgage and when that is done I am back in baby. No fun buying 100k of bonds for 90K when three months ago I could buy 100K of bonds for 40K.
“What sector are you talking about?”
John,
Go to the videotape. While you are at it, sharpen your pencil.
Dow turned negative with a suprise “good” news about unemployment.
Dow is as unpredictable just like my wifey..
For those that are interested in Green Brook houses… The ask on this place is falling fast…
http://www.realtor.com/realestateandhomes-detail/Green-Brook_NJ_08812_1108679809
A month and a half ago, the ask was 450 (Clot’s guess was 425 to 440 since it seemed well priced — it was just a guess, so all disclaimers apply). They went to 430, and now the ask is 400.
It was the one we were thinking of if the current one wasn’t affordable (seems so now, the backyard filling estimate is 40k!, so we’ll let our little one learn some wall jumping tricks and navigating treacherous pits with thorns and poison ivy — assuming the property closes!)
Anyone experienced with chainsaws? I would like to get some basic education on clearing small crap growing in the backyard. And, I’ll stock up on chain saws and build a SasPound! :)
S
“Anyone experienced with chainsaws?”
Sastry,
Check with Frank, he has a ton of Mexican’s lined up for his quant position. I’m sure not all of them will make the grade.
Next Test: Value of $125,000-a-Year Teachers – So what kind of teachers could a school get if it paid them $125,000 a year?
http://www.nytimes.com/2009/06/05/education/05charter.html?ref=nyregion
This article is about a new charter school opening in Washington Heights for 480 underperforming students selected by lotto. The premise is that teachers will get paid 125K a year, principal 90K. No assistant principal, dean etc. The teachers will get bonuses up to 25K for successful testing of kids and can be fired at will. They’re not able to participate in the NYC Teachers Union I think.
I wonder- if this is successful, if other schools will follow suit? Charter schools are outperforming public schools in NYC already.
It’s a model that might be worth watching. Maybe the idea that those who can’t, teach will go out the window.
Good teachers should make between 125K and 250K.
I think NJEA wants to get some of this protection for its teachers:
“(CNN) — Former teacher Charlene Schmitz is behind bars in a federal detention center in Tallahassee, Florida, serving 10 years for using texts and instant messages to seduce a 14-year-old student. She has been fired from her job as a reading teacher at the high school in Leroy, Alabama.
But she is still collecting a paycheck.
Schmitz is appealing her federal conviction — and her firing. State charges filed in connection with the case are pending. Under the law in Alabama, she is still entitled to her $51,000-a-year salary while she appeals her firing. . . .
The Alabama Teacher Tenure Law, meant to protect tenured teachers from unfair firings, gives them a chance to appeal their firings with the board. A change made to the law in 2004 requires the board to continue paying Schmitz until her employment appeal is heard and decided by an arbitrator. . . .
“Ms. Schmitz is entitled to receive pay until all this is determined,” Caddell said. . . “
any cash heavy buyers wanting to take advantage of 50% off prices?
http://www.themuranocondominium.com
it’s going to take serious cash to win these bids since no bank is going to lend on a 70% unoccupied condo building.
Sliera #86…
… for 480 underperforming students selected by lotto. The premise is that teachers will get paid 125K a year, principal 90K. No assistant principal, dean etc. The teachers will get bonuses up to 25K for successful testing of kids and can be fired at will.
It sounds more like a reality show rather than a serious effort at education. At least the summary seems so — given the emphasis on salary and bonus, and no other details.
They should get hold of some of the Indian/Chinese “Computer Coaching Centers” from late ’90s — I taught a few classes in one place. They can very easily get the kids pass the test — educating the kids is altogether a different matter.
S
[84] sastry
I have used chain saws on several occasions (and no, not to chop up a revenue agent. Sorry Sas).
Needless to say, invest in safety equipment. Goggle and ear protection are a must. Unless you are only clearing brush, a hard hat is recommended and you can get them with face shields.
If your chainsaw doesn’t have an anti-kickback block on the end, don’t cut with the tip. Use only the middle of the rail and you won’t get kickback. Not much of an issue with today’s chain brakes.
Position legs and always be aware of where you are moving and cutting, and think about where debris will fall with each cut. This is how most injuries happen, not from kickback.
Don’t cut into the lower side of any large branch or trunk, except to start a short notch. Cut only on the side where the cut will expand, not contract, when the trunk or branch starts to flex. Otherwise, the rail will get stuck and you won’t get it loose.
As for brands, no help here. Remember that chain saws require lube and constant sharpening. Buy depending on your needs. If you are only clearing brush, you don’t need a monster. If you want to reach branches, consider a pole-attachable model, which will likely be small and electric. Consider getting a second chain if you will be using it a lot.
B/D adjustment added 220K job. This turd is shiny!
job(s)
You can’t make this sheet up.
“Fed Intends to Hire Lobbyist in Campaign to Buttress Its Image”
“Linda Robertson currently handles government, community and public affairs at Johns Hopkins University in Baltimore, and headed the Washington lobbying office of Enron Corp., the energy trading company that collapsed in 2002 after an accounting scandal. She was also an adviser to all three of the Clinton administration’s Treasury secretaries.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZjQKyLci1AM
Nom, any book recommendations? Any web videos? This will be the first time I will be surfing the web for those types of videos!
S
Sastry (95) –
This site is pretty cool –
http://www.thisoldhouse.com/toh/
Sastry- the article had some compelling descriptions of the teachers. It seems very results orientated but the founder of the school seems interested in actually teaching kids. The fact that it’s taking the lesser performing students is also good.
Charter schools are outperforming public schools but there’s grumbling that Charter schools are taking the better students to begin with, and also are kids of parents that care enough to go through the process of selecting a school for them.
Vic #96: thanks for the link. My wife used to love the show — though we cut down a lot of TV in the last couple of years.
Silera #97: I am with you on this. I hope they succeed at a more fundamental level. It is very tempting take the “cramming approach” for the exams [that approach usually works very well for testing]. In my opinion, the bonuses should be contingent up on kids doing well from the perspective of at least medium-term metrics.
Again, I do not know much about the specifics, and may be they are doing much more than my wishes. I should shut up now :)
S
Silera, in an urban setting the idea that the students can be separated is the only answer. Parents and children with a drive to obtain education can be in one place and the miscreants who wreak havoc can be someplace else. Any other model fails, jersey city public schools are beautiful buildings with more equipment than any rich town school I have seen but the schools aren’t good and the kids wreck the facilities. I hate to say it but some kids are a lost cause, and a few kids like this greatly reduce the other children’s chances of success.
This is what critics of parochial schools always say. They outperform because they have involved parents, they skim the cream, they don’t have to handle disruptive or under performing kids etc…..
There are 30 3 bdr homes for sale in Brigadoon listed below 500k.
Green shoots.
Renter, it is true, private schools have the advantage that only those who really want to be there(Or there parents) are there. Newark or Jersey city spends 23k per student, a good private school runs 20-25K, a really good catholic school probably run 10-15k, your typical run of the mill parochial school is probably 8k and the truth is the student at any of these schools outperforms the public school student in Newark, for way less money.
I got to be honest with you, we missed the boat people. The 10% drop in housing is pointless now that the interest rates are almost up a full pt.
Any one who says people shouldnt by a house because of a low interest rate needs to wear a helmet. What do you do, go out and buy something and say to the lender please give me a high rate, what are you slow.
10 year – 3.85%
There goes the re-finance boom.
OK says:
I got to be honest with you, we missed the boat people. The 10% drop in housing is pointless now that the interest rates are almost up a full pt.
Interest rate changes over time but the $amount you paid for your place and corresponding mortgage amount will be locked in at purchase time. I wouldn’t be too concerned with rates because they eventually go down to where it makes sense to refi. If you save 10% on a purchase price, that’s money that’s locked in forever.
“What do you do, go out and buy something and say to the lender please give me a high rate, what are you slow.”
Lets see –
“Higher Principal/Lower Interest” versus “Lower Principal/ Higher Interest”
Tough decision. Am happy to be slow.
OK, prices will have to fall accordingly. The market is based on what people can afford. That of course is payment based(typically not always), rates go up, prices go down. End of story.
84/Sastry – Chainsaws. Personal experience with a Ryobi electric. Good on smaller stuff and small jobs. It’s part of a big set of tools that my father-in-law owns.
I concur with Clot on eye protection. You probably don’t need ear plugs with an electric. Also, father-in-law keeps it well oiled and takes it to a shop to get sharpened.
Silera
heaven forbid that a child might have an advantage because their parents are involved!!! quickly we must find a way to handicap them!
Oh and on an OT point. Why can Sotomayor publicly state that woman judges can make better decision them men judges? If a man were to say that men make better decisions he would instantly be crucified!!?!?!?!?
I’m not an educator, but I benefited from great teachers and wonderful facilities. That said, my mother never even signed one report card for me. I was a good student. My oldest son is as bright or brighter than I was, and no matter what we do to motivate, interest, cajole, participate, inspire, you name it- he refuses to work at school.
I’ve personally wondered if I had the money to do so, would I spend it to send him to military school in to force him to care. I think in many ways- the money thrown at uninterested kids for traditional schooling is well intentioned but maybe workforce focused training starting from 9th grade might be better received and more appropriate.
Kettle- I think the grumbling is more about dismissing the better test scores from the charter schools in comparison to public schools. Honestly, if a parent is uninterested in getting their kid in a charter school, if the kid has it in them, they can do most of the legwork themselves.
I did it when I was 10 yrs old, unfortunately I don’t think my sons have it in them to do the same as I have overcompensated and made them lazy.
Silera 110
thats similar to the european model.
Your son may be bored enough with standard schoool work that he doesnt care. or he may have a talent for trades type work and be happier in that situation.
Americans need to get over the Trades work stigma
Not OK
That is a rediculous statement. Buying a house becuase of low rates is stupid. The interest rate can always be refinanced, and as it goes up, you get a larger tax write-off.
Once you overpay for a house, you are basically screwed for a decade if not more. Your DP will be lost to depreciation, your mobility is limited, and unless you are going to bring a check to closing or sell short you are stuck with the dump.
I would much rather have a cheaper purchase price comapred to a low rate.
The interest rate benefit is simple sales blather from realtors.
Silera,
the US public education system is geared for making drones. Anyone who can think for themselves will put through the wringer in such a system.
“the US public education system is geared” to provide jobs and benefits to its union members first, education is merely a side show.
what does doing good in school have to do with success, basically nothing. School to me growing up was never of any importance. No-one ever even check in JH or HS even if I did my HW, half the time I left the books at school, Mom was at my school 3 times, HS, College and MBA graduation. School is for fools, memorizing a bunch of useless junk. George Bush was president and he was a c-student drunk. Mr. and Mrs. O are just some afirmative action push him through guy. Clinton was just a skirt chaser. The guys who carry the prsidents briefcass are the good students, People good at school become 100K teachers, players like Bill Gates make billions.
116 john
unfortunately i agree with some aspects of that.
I love how people with stupid kids go oh he is super smart he is just so far ahead he is bored, face those kids are stupid. This is right up with 48 year old women with 55 year old husbands with rotten eggs having newborns and blaming autism on the vacine.
125k for working 9 months out of a year? Thats more than most Pediatricians make.
I say privatize the education system. I dont want those lazy teachers on the public dole. Make them work for a change instead of babysitting.
Middle aged people top notch employees with masters around 200K a year in private. So that is about right. I really want to teach, but I can’t afford to. It is like 60K to start and tops out at 100K.
james says:
June 5, 2009 at 11:59 am
125k for working 9 months out of a year? Thats more than most Pediatricians make.
“I got to be honest with you, we missed the boat people.”
You should be thrilled, the boat is sinking.
Looks like ill go get my teaching certificate. Degrees are a dime a dozen, trust me I have 3. Cant wait to put some dumb ass teacher out of work.
John,
You have a very twisted view of people. How many bodies do you have in your basement?
“The Federal Deposit Insurance Corp. is pushing to shake up Citigroup Inc.’s top management, threatening the future of Chief Executive Vikram Pandit, The Wall Street Journal reported, citing people familiar with the matter.”
“Officials at the FDIC have been concerned about the lack of senior executives with experience in commercial banking, and Pandit comes from an investment-banking background, the newspaper said Friday.”
http://www.marketwatch.com/story/fdic-pushes-for-purge-of-citi-management-wsj
John,
God Bless TLGP.
Too bad it took the FDIC this long to shake things up. They should have been on this blog. We, with the exception of you, called this over a year ago.
Go Sheila baby.
…wow, just woke up… (sniff)… what’s up? Damn.. better wash those dishes soon, I guess…. (burp)… let me go see if my weekly check arrived… need to get more grape soda and barbecue chips… (yawn)… anybody want to go to Grafton Ave. and cop a bag? Hit me up… let me know….
“You should be thrilled, the boat is sinking.”
LOL! Post of the day!
There is a school in New Orleans that lost all its records in Katrina, they work on honor system, just fill out form for replacement PHd. My friend did it for fun.
james says:
June 5, 2009 at 12:20 pm
Looks like ill go get my teaching certificate. Degrees are a dime a dozen, trust me I have 3. Cant wait to put some dumb ass teacher out of work.
[95] sastry,
Sorry, no. Best advice is common sense, except on how to cut certain things, then any web or video clip is more than sufficient.
Sastry re chainsaws..
1.) Depending on it’s size (and your age), might be wise to use a back support if you’ll be cutting logs for a while. The heavy dutys can weigh ALOT.
2.) Follow Nom’s advice. Eye & ear protection, gloves, and long sleeve/long pant should be standard. I wear steel toe boots.
3.) If cutting near the ground (i.e. stump), clear away dirt rocks from base. Then say a prayer that there are no rocks ‘in’ the stump. If you hit metal or rock in your cut, you may not notice anything but a sudden pause in progress, which will be permanent b/c it takes about 0.5 sec to dull the chain at high rpms.
4.) Most important: you’re a smart guy — use common sense!
John, I don’t disagree with you. Booksmarts don’t always translate to financial or even personal success. I have no misconceptions about my son being insufficiently challenged by the school. He’s sufficiently challenged by the requirement to show up and bring a book bag apparently since he can’t comply with it.
He doesn’t care about doing the basic things that you need to do in life like wake up and go to school and then meander through the hallways and show up at class. If he was motivated enough to do that, I’d stop nagging him and worrying.
I don’t think he’s bored. I think he’s lazy and selfish. While I’m sure he’s not technically retarded or a genius, he’s also not smart enough to figure out how to skate -except on a skateboard- which is worrisome.
Many successful people were slackers in school and caused their parents grief. Those people tend to excel because their motivations aren’t to please others but to please themselves. While that can work out great it could also lead to a miserable existence.
James,
If you think teachers are overpaid, check out Asbury Park Press Data Universe You might be surprised. I have not seen 125k teachers in any of the districts I’ve checked. And if you do see a teacher over 100k, they will have 20-30 years experience. Outrage over teacher pay is way overblown. My high school physics teacher makes about as much as I do and he’s about 20 years older than me.
If John becomes a teacher, I’d recommend he stays away from High School. He’d be fired for harassment faster than you can say lawsuit.
The NJ Real Estate, Charter School, and Chain Saw Report
We really do need a GTG.
122 “Looks like ill go get my teaching certificate. Degrees are a dime a dozen, trust me I have 3. Cant wait to put some dumb ass teacher out of work”
They’re sacking non tenured teachers left and right. And the tenured ones could shoot the kids and keep their jobs. Who’s gonna hire you? Newark? Irvington? that’ll be fun.
On grim’s recommendation, I might as well introduce myself. I’ve been lurking and posting once in a while for a few months now. Hi all.
-goonsquad
Sastry,
When you get good at it, you can wield the chainsaw like a sword — swinging and slicing and jabbing and even throwing it. It’s quite spectacular. Don’t attempt this until you’re REALLY good though.
Silera #130
You dignify John with a reply? It’s obvious the guy has been off his meds lately!
Silera (130):
I am your son!
I was lucky enough to smarten up and turn it around in college (Dean’s list every semester after a 2.1 as a frosh). And trust me, my parents pushing never helped one iota. It was when they forced me to pay my own way that made all the difference. Do not micro-manage your children!!!
130:138 – Ditto
Joey says:
Outrage over teacher pay is way overblown.
Teachers are not the problem. 99% of them earn every penny they make. It’s the unecessary administration that is. Each school has over a half dozen people that make over $100k and do very little. The towns could merge and eliminate 50% of the Sr, mgmt. Teachers can’t go beacuse you can only fit so many kids in a classroom.
I think that $125k teacher plan sounds great. Key is no unionization. Top teachers work their @sses off, but are no better compensated and have no more job security than the laziest, worst teacher with tenure.
make it easier to fire bad teachers and raise the upside for teachers who do a good job and don’t base it simply on standardized test scores (good to use this in part, but this also encourages teaching just to the test and it is sort of random because you could get a bad class in any given year). Use parental evaluations in addition to test scores (they are the customers).
there was a good article in the NYTimes magazine a couple of weeks ago about how many smart kids are just not interested in academics and that is OK. Even people who are mentally capable of doing well in school might be better suited to building non-academic skills, which also reward intelligence and hard work. such kids might benefit from getting an after-school job/internship with a tradesman where they can learn a real skill
#103 Ok: You need to go back an rethink that statement. I will take 30 yr mtg money at 7%.
OK….
500K home, 20% down w/average carry cost and 4.5% interest rate = 2443 monthly payment and 880K paid over term.
400K home, 20% down w/average carry cost and 6.5% ineterest rate = 2208 monthly payment and 795K paid over term.
Some will argue interest deductibile is better with bigger loan. I prefer to look at the opportunity cost of an extra $20,000 saved in down-payment.
Revelations (from yesterday’s thread)
I have no personal experience with Malibu except for the occasional rental.
My go-to source for consumer information for anything, automobiles included, is Consumer Reports (consumerreports.org, subscription required). Consumer Reports is non-profit, no advertising, and they buy all tested products anonymously. They collect reliability data from their subscribers based on personal experience.
The highest rated cars in the class with Malibu are the Camry and the Accord. Malibu ’08 and ’09 don’t look too bad from a reliability perspective, but the older ones show a lot of trouble spots. Hard to say whether this means that they don’t age well or if the newer ones have improved quality. There is no way to tell for a year or two. If parts start falling off in 2011, it means that they don’t age well.
Any new COMP Killers???
x-underwriter,
I do not disagree with you, But that is a lot more difficult to do than to blame teachers. Also, The unions will fight it, the administrators will fight it, and you’re going to need over 50% of the voters to approve it. Not as easy as some make it sound. Hopefully the Great Recession can make it happen though.
Then we’ll be alright until the next round of boroughitis hits sometime at the end of the next decade.
Silent- I don’t think he was trying to insult me but then maybe I’m an optimist.
I never thought I’d read a negative article about Elizabeth Warren. Apparently, her love affair with the media is wearing thin on some.
This article discussing the bankruptcy research she’s done and how it’s biased.
http://business.theatlantic.com/2009/06/elizabeth_warren_and_the_terrible_horrible_no_good_very_bad_
This one is slamming her for her criticism of TALF and accuses her and the commission of either being woefully uninformed or purposefully miscontrueing the facts:
http://online.wsj.com/article/SB124407903047283723.html
This economy is causing havoc in ways I would not have predicted. Actually I guess this should have been expected. A friend lives in a condo and has recently received a letter from the management company stating that the association financials are in dire straits because there are several condo owners who are not paying their condo dues. Anyone else hearing stories like this? I would expect this is happening in other condos and I have to check the financials of my own.
Anyway, I think the highest condo dues are around $300 / month and there is an individual who owes close to $10k. They have taken this individual to court and placed liens on the property several times unsuccessfully. The have filed bankruptcy several times. To me our legal system in this case is absolutely crazy, how can that happen? To top it off, there is a special assessment fee (close to the amount of the monthly dues) related to work to remediate a leaky fuel tank that hasn’t been completed which I’m sure no one is paying.
My question to the board: What recourse does the condo association have when a home owner does not pay their monthly association dues?
http://www.cnbc.com/id/31106964/
Jim Rogers is saying now that he is out of shorts and we could see stocks go to 20,000.
Ouch. This is really making me dump my SRS position a take a stupid loss.
BC,
Any thoughts?
Stu [144],
Come on, it’s friday afternoon. Stop talking sense.
Gator,
No I did not. Also, per your request, I asked Jb for your e-mail but have not heard back. Feel free to get mine from him. Also, if you have NJC’s, she has mine as well, and she has my permission to give it to you.
Re teacher salaries..
$125K and up? I’d say that’s really high, but I guess that depends on the level they teach. 3rd grade? I would think no. 12th? I still think $125K is too high, but if they are PHDs or equiv, perhaps. Do we have a teacher shortage in NJ? Honestly, that’s probably the best way to determine whether they are paid fairly.
2010 Buyer,
If one fails to pay the association dues one can lose the property.
make [149],
He’s talking hyper-inflation. If he’s right, gold will then be 6-10K.
No feeling for SRS. I took a .79 loss.
Sorry! Sent to gator.
Weighing In On The Mozilo Charges
http://dealbreaker.com/2009/06/weighing-in-on-the-mozilo-char.php
Looks like mo-mo might be the first of many. I told you Thain, Fuld etc shouldn’t have been popping off how well capitalized they were when they clearly were not.
Grim/Rich
I think this should be 457 Carlton that I think went into Forclosure a few months back and then closed last week. This will knock about $200K off the value of the neighbors.
456 CARLTON RD
Wyckoff
$560,000
10y yield taking off. Big upward pressure on mortgage rates.
Green shoots = Higher rates
How does this help housing? Catch-22.
Joey says:
Hopefully the Great Recession can make it happen though.
Don’t take a nap for too long, you might miss the end of this recession. I’m actually with John on that.
#157 – Holy crap, that place sold for $920k in 2006.
$920k down to $560k? And in Wyckoff too.
Wow.
he [156],
All the c*ckroaches are scrambling.
If Jim Rodgers feels that way he must now like housing ,being a hard asset ,it’s a hedge against a losing currency .I’m not so sure I agree with his thinking .
“$920k down to $560k? And in Wyckoff too.”
Approx 40% off peak.
“everything that dies, someday comes back”
154#, bob, how accurate my black box is! 79 cents v.s. my estimate 96 cents.
#160 grim
That’s why I think it is 457. Can you check MLS and the hot sheets?
Where is Tom these days. His Bergen Foreclosure blog has not been updated in a while.
In mod, it seems.
http://www.google.com/hostednews/ap/article/ALeqM5ipVUX_BySIOm7FCTgbyATYx9NrywD98KJDBO0
here is the link. Nak-ed, in a closet, with a rope around one’s neck; sure sounds like an accident to me too.
“If Jim Rodgers feels that way he must now like housing ,being a hard asset”
It’s a hard to sell asset that will continue to slide down the slope of hope.
I’m sure he’s more interested in those assets/commodities that are not encumbered with ludicrous taxes and high carrying cots. What currency desk trades RE futures?
“everything that dies, someday comes back”
Often, but, sometimes it just turns to dust.
Back to the grindstone. Catch all ya’ll later.
“how accurate my black box is! 79 cents v.s. my estimate 96 cents.”
bi,
Kudos to you. Yeah, I was arrogant. That’s why I took the .79 loss.
The lis pendens was on 456. And it was 456 that just sold for $560k.
456 sold for $772k in 2004 and $920k in 2006.
457 shows no lis pendens, and is still active on the MLS.
157, 160, 163,
OMG, this is a f*cking knife through the heart. Now, that’s what I’m talking about! That’s not a comp killer, it’s mere devastation! That street in Wyckoff is considered prime in a prime town. If this doesn’t set the pace for everything around it including neighboring towns, I don’t know what does.
Silent- I don’t think he was trying to insult me but then maybe I’m an optimist.
I never thought I’d read a negative article about Elizabeth Warren. Apparently, her love affair with the media is wearing thin on some.
This article discussing the bankruptcy research she’s done and how it’s biased.
http://business.theatlantic.com/2009/06/elizabeth_warren_and_the_terrible_horrible_no_good_very_bad_
Shore: That snuff cr@p is weird. Where the heck do these fetishes come from? John?
This one is slamming her for her criticism of TALF and accuses her and the commission of either being woefully uninformed or purposefully miscontrueing the facts:
http://online.wsj.com/article/SB124407903047283723.html
#148 was put in moderation and I don’t know how to fix it or delete it.
Did I say snuff films? I meant erotic autoasphyxiation.
Stu- thanks for success story. We’re trying to let him do his thing without letting him run over us. My job as a mom is to prepare him to leave. Once he’s on his own, it’ll kill me to see him stumble a bit but it will be the only way he starts getting it.
#172 grim
Wow indeed. What is 457 listing for? Is there an MLS link we can look at.
#159 X underwriter:Don’t take a nap for too long, you might miss the end of this recession. I’m actually with John on that.
We can go to selrrp for the next 6 months, wakse up, and not have missed a thing, except more decline in houisng prices and unemployment north of 10%
Stu,
Pay cuts!
5% associates
8% directors
10% p/vp
12% above
2010- The NY Times did an article on the condo situation:
“The pain in the condo market, mostly in urban areas, may not only be deeper than in the rest of the housing market during this downturn but more prolonged. Bargain hunters say they are reluctant to buy into a building even when the upfront cost seems low because they might have to pay unexpected fees as distressed neighbors default on their mortgages or just stop paying the association fees that cover everything from taxes to pool maintenance to air-conditioning repair.”
http://www.nytimes.com/2008/05/15/business/15condo.html?scp=5&sq=condo%20fees%20not%20paid&st=cse
Stu says:
June 5, 2009 at 1:37 pm
Shore: That snuff cr@p is weird. Where the heck do these fetishes come from? John?
After they are bored with pet animals? People do stupid things. Smart people do stupider things, and even smarter ones do the dumbest things [e.g. Spitzer] :)
S
“e.g. Spitzer”
Add Bill Clinton to that list.
Kettle… Re Sotomayor. Her comment within context is not very horrific. She was tooting her own horn, but nothing demeaning.
Trivial when compared to the cr@p that many others routinely say.
S
Shore – You’ve got mail…
how does one get comfortable living in a town called wykoff?
Stu… In Bill C’s case, there was no cash exchange. That’s where the line seems to be drawn. His last month as the Pres was probably more damaging — the mainstream media were stoking the fires too, focusing on trivia like furniture they got as gifts, and so on. Of course, the pardons stuff was a disaster [on that issue, W did a much better job that Bill C — never thought I’d say such a thing in my life!].
S
Skep-tic:
Better than this street, “Remorse Ledge” in Greenbrook — next to “Brandywine Rise”! The Brandywine one was the short sale property I mentioned earlier.
S
Silera – It’s been my experience that a kid either has motivation or he doesn’t and there is nothing you can do about it one way or the other. I know how frustrating it is to watch but they do eventually shape up – but sometimes not until they are on their own and wondering when or if they’ll have the money for a meal. It’s not your fault. Relax.
3b says:
We can go to selrrp for the next 6 months, wakse up, and not have missed a thing, except more decline in houisng prices and unemployment north of 10%
Probably 6 months of flatline…not getting worse, not getting much better
Silera… to add to others’ comments… Life is a marathon, don’t stress too much on the schooling part if other aspects are good. If the kid seems happy and you notice healthy habits, it may not be too bad. On the other hand, if he is in the room all alone playing video games or chatting online all the time, and his acads are bad, then you should start worrying…
S
Sastry,
Forget the cash exchange, he irreversibly damaged his party and this country (IMO) cause he couldn’t keep it in his pants. A little self control and his legacy would have been historical. Instead, people will remember cigars and interns.
Bernanke was successful in cutting Rates to Zero, in order to drive money back into Stock Market. Unfortunately, it’s rise is akin to Ponzi rather then Fundamentals.
#191 xunderwriter: I would say 10%+ unemployment is getting worse.
The end is nigh…..
http://www.app.com/article/20090605/NEWS/90605025/Shrewsbury+bowling+alley+on+fire&referrer=FRONTPAGECAROUSEL
#189 skeptic: Is Ho Ho Kus any better, or Mahwah?
Clever Comic:
http://peterjcooper.files.wordpress.com/2009/06/dollar-crisis.gif
john, whatever you do, don’t go out like david carradine.
none of your relatives want to hear from the boys in blue that you had a rope around your schlong
RE: “Only an idiot buys a home cause rates are cheap. You buy an investment cause it is a good investment.”
Indeed. But the NAR crowd has fully convinced virtually everyone that “A house is not an investment, it’s a place to live.”
Whenever a large sum of money is tied up, it’s invested.
“Only an idiot buys a home cause rates are cheap. You buy an investment cause it is a good investment.”
Right now we have the toxic mix of rapid asset depreciation combined with out or control RE tax increases. Interest rates should be the least of your worries.
157: I have a friend that grew up on this street. Nice neighborhood. As many here have predicted, this is how capitulation to lower prices will happen combined with rising mtg rates. Not to say it will ever be as bad here for myriad reasons, but that was the prescription in FL three years ago. Even there you still see some stuff move, but don’t believe that prices have bottomed there or anywhere else.
ChiFi:
I went to a bowling birthday party there a few years ago. I think it was for the daughter of my heralded Redbank friends, who for the first time last night admitted they might be slightly underwater. Of course their slightly is akin to the black box on Flight 447 floating in the Atlantic.
I hate to use the term Jewish Lightning since it’s so offensive, but it appears that their have been an awful lot of this type of storm lately, mainly in establishments that were highly dependent on discretionary income. Especially those that were barely making it prior to the downturn.
Arrgh. Must take the time to proofread. their should be there!
3b says:
I would say 10%+ unemployment is getting worse.
We’re already there. Will it get worse than that? Who knows. I’m ready for my Macallan right around now.
@69:
“Simply killing the estate tax would expand investment by 3 percent, increase small business capital by $1.6 trillion, increase the probability of hiring by 8.6 percent, increase payrolls by 2.6 percent, and slash the current jobless rates by 0.9 percent,” said Douglas Holtz-Eakin, one of the authors and a former director of the Congressional Budget Office.”
Wishful thinking at best. We have more wealth disparity than most civilized countries (more millionaires and billionaires) and 10% unemployment. You do the math.
More voodoo economics from the right wing.
Wan’t Holtz-Eakin the moron who proclaimed that McCain was responsible for the BlackBerry?
All: a friend of mine from Hunter College High School has authored a book that will be released later this month. She sent out a communication. She is currently an adjunct professor at NYU.
The post will immediately go into moderation due to multiple links.
grim unmod please
The end is nigh…..
Dunkin’ Donuts is giving out free doughnuts today.
Friends and colleagues: I’m delighted to let you know that Our Lot: How Real Estate Came to Own Us, my book about the making of the housing bubble, will be available beginning on June 23 from Bloomsbury. Our Lot is the untold story of how the homes we live in came to devour the economy. It journeys back through four decades of history and across the nation to find the elusive answers, using personal stories of homeowners and those who helped them reach for the American dream to tell the larger political and business story of what went so calamitously wrong. In a starred review, Publisher’s Weekly calls “Our Lot” a “gripping account of collective irresponsibility.”
I’ll be doing a reading in New York City on June 25th, at BookCourt, 163 Court Street in downtown Brooklyn, which will double as a launch party – if you’re in or near NYC then, please join us, and invite your friends! The event starts at 7. I’ll be doing another NYC event on July 7 from noon-2, a talk with historian Beryl Satter at Demos, 220 Fifth Ave, 5th flr.
For those of you in D.C. and vicinity, I’ll be reading at Politics and Prose on July 8 at 7. I’m not going to be doing a formal book tour, but I’ll be doing talks in other cities into the fall and for as long as anyone’s interested. If you or your organization, book club, class or other group want to have me come speak, let’s talk.
I’ll be keeping mass emailing to a minimum, so if you want to receive updates about future events and media appearances, visit http://alyssakatz.com/news-and-reviews. If you’re on Facebook, I invite you to join the Our Lot group if you haven’t already,
http://www.facebook.com/groups.php?ref=sb#/group.php?gid=81253232395
And please, buy the book. While you’re at it, tell your friends and associates to, too:
Amazon: http://www.amazon.com/Our-Lot-Real-Estate-Came/dp/1596914793/
Barnes & Noble: http://search.barnesandnoble.com/Our-Lot/Alyssa-Katz/e/9781596914797
Powell’s: http://www.powells.com/biblio/62-9781596914797-0
Thank you all for your support in making Our Lot possible, and I look forward to seeing many of you very soon.
Alyssa
http://www.alyssakatz.com
Sure looks like we’re in the return to normal phase.
http://1.bp.blogspot.com/_H2DePAZe2gA/SigvGo90HeI/AAAAAAAAJLQ/SvFrJB0jXAg/s1600-h/bubblesandmanias.GIF
#153 & #182 thanks for the feedback
I think but not sure, she said the individual is paying their mortgage but not their assoc fees. It would suck if the condo followed the route of the article.
skep:
Funny thing is that all those people that have real jobs are always asking me what 10% off this is and 25% off of that. School should be about the 3Rs. Most are used everyday in every profession.
Shore, et al:
Sometimes when something dies it just rots.
All:
I have no problem with what teachers make. My problem is with tenure. I can’t understand why a union would want to protect members that bring their whole profession down.
Here is a sample form Alyssa’s book from the B&N link….
Chapter One Almost like a Conspiracy
Chicago, 1972
SHE POURED ANOTHER GLASS from the vodka bottle. It was approaching three A.M., Indiana time, here on the campus of Notre Dame, a couple of hours drive east from the city where Gale Cincotta had lived her whole life. By day Cincotta was nominally a housewife, a mother of six boys and young men living in Austin, a West Side Chicago neighborhood. But by now she was working full-time and beyond, trying to rescue Austin and surrounding communities from a real estate plague that showed no signs of receding. It was, she would say, “almost like a conspiracy of people deciding that this area was going to go.”
Huddling in the dorm room with an ex-Methodist minister, who was downing Jack Daniel’s himself, Cincotta dragged on a series of Salems, the smoke wafting over her platinum bouffant sprayed out into stiff cascades.
She always brought two bottles to organizing meetings, which often went on long past midnight. One was for herself, and the other to help inspire the other activists-student interns, career community organizers, and neighborhood residents like herself-to keep going. Cincotta used the vodka not to dull the hurt, but to fuel her will to prevail over those responsible for the destruction.
In West Side Chicago, it was hard to find a block that didn’t have a vacant home, its furnace, copper piping, everything of value ripped out. Lots of streets had four or five. Neighborhoods were turning ever more wretched, saturated with empty houses and trashed lawns.
Investigators from the Chicago office of the U.S. Department of Housing and Urban Development wrote up briefings for their division chief about some of the five thousand foreclosed homes now abandoned in Chicago, as he, unlike his superiors in Washington, vowed to crack down on the mortgage companies responsible for making the loans that led to their destruction. Tens of thousands of dilapidated structures like them littered cities across the country, their purchase made possible by a government program that was supposed to make homeownership a possibility for anyone in America.
In Humboldt Park: “Very bad-should be demolished, a hazard to neighbors. Water not shut off or drained-thruout building water damage. All radiators, bathroom and kitchen fixtures missing. Garage full of debris. House boarded with cardboard-like material.”
Near Lake Michigan: “Should be demolished right away. This house could burn up at any time. House looks like it could fall in-it has been completely stripped of everything. There is no plumbing, all gone. There are no electric fixtures, all gone.”
East Garfield Park, near the Kezdie El stop: “Structure in very bad condition-plaster, glass and junk all over. Entrance unlocked. Chimney collapsing. Garage destroyed by fire. Interior littered with glass and plaster.”
“House is littered with junk, furniture, cabinets, freezer, washing machine, mattress dead cat, bugs.”
“Dead cat in the middle of living room. House vandalized repeatedly, furniture chopped up.”
And on and on through the government’s files, for block upon mile.
In 1972, in Chicago and in every other city in the nation, almost anyone could get a home mortgage, including borrowers who didn’t earn enough to pay them off, on just about any house, for any reason. In many instances real estate brokers simply fabricated information on the application to make it look like a buyer who didn’t qualify, did. (“Husband? I haven’t seen my husband in six years!” one borrower told an auditor who asked whether she and her spouse were both still working.) Real estate speculators descended to buy flimsy houses cheaply and, with the consent of appraisers, resell them at absurdly high prices to first-time buyers. The money for the loans came from a new and lucrative market in mortgage-backed securities-pools of thousands of mortgages packaged together by financial traders and sold as bond-like investments. The more loans borrowers took out, the bigger that bond-sales business would grow. And in the end all that was left were empty and unwanted homes, whatever value they had now spent.
All those travesties seem utterly familiar today. These were, after all, hallmarks of the great real estate bubble and bust that has in the 2000s left homeowners choking on debt and the global financial system in shambles. Yet the feverish episode of frenzied real estate lending that ensnared the nation’s cities almost four decades ago was remarkable, then as now, because it upended virtually everything that had until then been sacred about how Americans bought and financed their houses. And just like the recent adventure in lending beyond any rational limits, the mortgage disaster of the early 1970s was born from a lofty ideological conviction that enabled the basest of crimes and most foolish of gambles under its cover, insulated from almost any scrutiny until the damage was already done.
Owning homes would serve as a force to better the world-to build stronger families, more pleasant communities, financial security, a sharing of wealth through the generations. That idea has been embedded in the national psyche, not through any innate aspiration in the human spirit but by dint of methodical, deliberate salesmanship and an array of incentives seemingly too powerful to refuse. In the 1920s, an ambitious secretary of commerce named Herbert Hoover sponsored a national campaign for “Better Homes in America,” introducing the effort by declaring, “It is mainly through the hope of enjoying the ownership of a home that the latent energy of any citizenry is called forth.” Owning a home, Hoover insisted, “may change the very physical, mental and moral fibre of one’s children.” His agency sold hundreds of thousands of copies of a book called How to Own Your Home. It was distributed through furniture, lighting, and hardware stores, some of which folded their own advertising around the government tract. “Adults who have not already begun to save toward buying a home should start at once,” the booklet advised readers. “Lack of experience should deter no one.”
In the depths of the Great Depression, the administration of President Franklin Delano Roosevelt pressed for a vast new government home mortgage program not because they had any notions that homeownership would build better men or better places to live, but because they were desperate to jump-start a dead economy-and the construction and sale of housing would put people to work. A surge of housing development supported through the government’s sponsorship “would affect everyone, from the manufacturer of lace curtains to the manufacturers of lumber, bricks, furniture, cement, and electrical appliances. The mere shipment of these supplies would affect the railroads, which in turn would need the produce of steel mills for rails,” anticipated Marriner Eccles, an assistant treasury secretary whom FDR would soon appoint as head of the Federal Reserve.
One third of the unemployed had worked in construction, during a mad 1920s real estate boom fueled by-how did a nation forget this?-a vast marketplace in mortgage-backed securities. In the early 1920s, real estate prices hurled upward by an astounding 50 to 75 percent a year. By 1933, a thousand homeowners were going into foreclosure every day.
By Eccles’s account, FDR was distressed by how much his administration was spending on the Works Progress Administration and other public jobs projects. The trick was to find a way to juice up the production of housing, putting those men to work, but without spending government money.
When Roosevelt gave his orders to create a self-perpetuating national housing machine, no one had any idea what it would look like. Would it make loans? Help homeowners pay for them? For answers his administration turned to the auto industry, which had just done something miraculous: during the 1920s, it had taken a nation that had abhorred debt and convinced consumers to borrow their way to a better life.
Until then, while many people held mortgages, most did so with the taint of shame. Generations raised on Victorian values upheld “thrift” as the greatest virtue second only to chastity, and the attitude extended to home mortgages-they were a last resort, when all other options were gone. Most homes didn’t even have them, and a majority of Americans rented. Holding a mortgage was considered more or less the same thing as being a tenant, with little difference between owing rent to a landlord and a payment to a bank.
All that changed when automobiles rolled into the world. Henry Ford was famous for his policy of paying workers enough to buy one of his Model Ts. General Motors had a different idea. In 1919, GM started its own loan company, the General Motors Acceptance Corporation, to fuel the sales of its cars. Two years later, that financial arm saved GM and installment loans rescued the American economy from a depression before the Great Depression. When business ground to a halt in 1921, millions of workers found themselves out of a job, and manufacturers ended up with piles of products few customers could afford to buy. GM and other automobile companies began to aggressively market their installment plans, and crashed right through the borrowing taboo. People wanted cars so badly they’d do almost anything to get one.
By the end of that year, businesses and retailers found they could sell almost anything on installment plans, from sewing machines and pianos to newfangled radios and refrigerators. The 1920s were bought with a pyramid of debt. When the Great Depression finally hit, American consumers were $7 billion in the hole. That didn’t count another $30 billion in mortgage debt.
Two of the men who turned thrifty Americans into a nation of debtors ended up in charge of the Federal Housing Administration, the New Deal agency that would build a way out of the Great Depression. This time, the hope was, they could use their genius in installment sales to get Americans spending again.
The FHA built on the success of the Home Owners’ Loan Corporation, an emergency government agency that beginning in 1933 undertook an effort unprecedented in American history. It refinanced more than a million mortgages, and kept their holders in homes they would otherwise have lost to foreclosure.
To understand just how remarkable Roosevelt’s project was, consider the prospects for someone who’d tried to buy a home in the 1920s. To assure lenders they weren’t going to disappear without paying their bills, borrowers had to make a down payment of something close to half the entire cost of the house, and many who didn’t have that much cash on hand instead took out a second mortgage to finance the down payment. The interest rate on that second mortgage could be 20 percent, or more. After all that, the mortgages usually lasted only three or five years; most borrowers expected not to pay them off in that time but simply to refinance-take out new mortgages-when the clock ran out, paying hefty fees for the privilege. In many cases the loans were for interest only, the principal sitting there month after month like a never-melting glacier.
Hence the need for the Home Owners’ Loan Corporation. When the Great Depression hit, banks wouldn’t or more often couldn’t refinance the second mortgages, since borrowers had taken out far more money than the houses were now actually worth. The problem for unemployed borrowers wasn’t just that some couldn’t afford their monthly payments. It was that when the mortgage’s term was up the remainder of the bill came due at once. Even though the house had fallen in value, the borrower would still have to pay the full amount owed. (In today’s parlance, they were “upside down.”) Most just refused.
The Home Owners’ Loan Corporation refinanced more than a million home mortgages (average size: $3,028), and its success whetted enthusiasm for a continued government role in financing real estate. Once the new Federal Housing Administration was up and running, Roosevelt appointed as its head Stewart McDonald, formerly head of the Moon Motor Car Company of St. Louis. The executive who’d run GM’s lending division, Albert L. Deane, helped the president’s economic adviser devise the winning formula for the FHA: insure mortgages, to assure lenders they would be repaid in the event a homeowner defaulted on the loan, and make borrowers pay the premiums via a 1 percent fee on every mortgage.
These new government-backed loans were everything the 1920s mortgages weren’t. They would run for thirty years, not three or five, and at the end of that period the borrower would owe nothing. Banks everywhere could make the loans, even if they didn’t have a pile of cash to hand out, thanks to a new government fund, the Federal National Mortgage Association, which would soon come to be known as Fannie Mae. (At first the Roosevelt administration called for private financiers to create that funding pool, but none stepped up for the job.) Fannie Mae repurchased mortgages from banks, which gave the banks a reliable pipeline of funds to lend that they’d never had before. If anything happened to the borrower-if they missed payments, or up and disappeared-the government-managed FHA insurance fund would bail out the bank.
This new safety net literally built the American Dream. Over the next three decades, FHA and a no-money-down program for returning veterans insured loans for millions of new homeowners, about half of all the mortgages in the whole country. Most of these first-time buyers lived in single-family homes, in spanking new suburbs such as Levittown, New York, and Westchester, California-little houses, mass-produced and settled by the millions after the war and through the early 1960s. Thanks to the government support the homes were inexpensive, one to two years’ salary (and this was back when most families had just one income).
But for all that time the FHA had refused to insure loans in older, poorer, and, most especially, blacker parts of cities. The agency’s appraisers’ manual, which determined who would and who wouldn’t qualify for a government-insured loan, ruled out all kinds of homes as too risky-including those in neighborhoods that were “aging,” “changing,” or “racially inharmonious.” Row houses, places where lots of people lived in close quarters, and integrated areas were all verboten.
Whether or not they used the federal insurance, banks followed their own strict playbook, the American Institute of Real Estate Appraisers’ manual, which advised lenders to seek eight signs of “neighborhood conformity”: homes were safe bets for bankers if they were similar in style, configuration, age, size, quality, and price to the ones next door to them, and where residents shared similar ethnic backgrounds and household incomes.
These standards ruled out most loans in most American cities. For someone in Chicago or Baltimore or Toledo, 1966 might as well have been 1936. In large swaths of those and many other cities, a homebuyer just wasn’t going to get a mortgage. “We are not social or welfare agencies,” the Chicago-based lobbyist for the nation’s savings and loans would explain. “We will not make loans at our own risk … in neighborhoods threatened with blight.” The older and more industrial the neighborhood, the less of a chance there was of getting a home loan. In the mid-1960s, fewer than 3 percent of all the FHA-insured loans in the country were being made in central cities.
Like so much else in the late 1960s, all that had been sacred about home lending would quickly turn upside down. In June 1966, Chicago’s West Side erupted into three days of window-smashing, rock-throwing, fire-bombing, and shooting after a police officer arrested a man who opened a fire hydrant on a broiling-hot day. One reason, the National Advisory Commission on Civil Disorders chaired by Illinois governor Otto Kerner would eventually conclude, was that homes in the neighborhoods where riots took place were already in dismal shape. Nearly a third of black Chicagoans lived in decrepit residences. Rents were too high, and people too poor. “The supply of housing suitable for low-income families should be expanded on a massive basis,” the Kerner Commission continued. Government assistance in paying rent, the investigators concluded, would help more than anything. Martin Luther King Jr. had sounded the same note that summer, as his Chicago Freedom Movement staged demonstrations protesting the terrible conditions black Chicagoans were living in.
(Continues…)
grim unmod
Wells Fargo 30 year rates are now 5.625/5.846 with 1 point. Goodbye refi boom, hello lower prices. Can’t wait for those option arms to reset.
This is a pretty awesome compilation on navigating through insurance coverage.
http://online.wsj.com/article/SB124407903047283723.html
On the left hand side it has a compilation of links to various sites and resources on how to select a plan, and figure out the claims process.
VOX:
A Tale of Two Depressions
http://www.voxeu.org/index.php?q=node/3421
“This is an update of the authors’ 6 April 2009 column comparing today’s global crisis to the Great Depression. World industrial production, trade, and stock markets are diving faster now than during 1929-30. Fortunately, the policy response to date is much better. The update shows that trade and stock markets have shown some improvement without reversing the overall conclusion — today’s crisis is at least as bad as the Great Depression.”
Chi Fi- Free donuts at all locations?
I’m starving and have an unlimited metro card I’ve been wanting to burn through.
Krispy Kreme and Duncan are doing free donuts today…
In honor of National Doughnut Day, Krispy Kreme offers a doughnut of your choice for free. That’s the best doughnut deal we’ve seen in 2009. (See below for a relative comparison.) Limit one doughnut per person. Click here to find a Krispy Kreme near you.
Of note, Dunkin Donuts offers all customers a doughnut of your choice for free with the purchase of any beverage.
question…what is typical “vig” in the interest rate that a mortgage broker sees (wholesale rate) versus where they sell it (retail rate)…if ther even is such a thing.
Stu… I should thank you very much for your May 26th post. As you said, I took the chill pill and locked at 5% (wife and I agreed to avoid a minor gamble with rates). Turned out fine so far (assuming locking happens).
S
assuming closing happens…
Jersey City Condos Offered ‘Regardless Of Price’
“assuming closing happens…”
It will as long as you didn’t lie to your mortgage broker :P
Penske Auto to Buy Saturn as GM Shrinks in Bankruptcy
“National Doughnut Day” –
Get the sheep high on sugar so that they start seeing the green shoots more clearly.
You need to buy a drink to get the free Dunkin Donut, not the case at Krispy Kreme:
http://midtownlunch.com/2009/06/04/krispy-kreme-jumps-into-the-free-doughnut-game/
SG, those Jersey City Condos, we’ll see if this trick works for them(getting the ebay effect). Given the project and what is going on over there, they need to sell 1 bedrooms for less than 150k and 2 bedrooms for less than 250k and even then it is a big risk. The project is less than a 20% complete and while nice you are surrounded by rat infested old buildings, the area is suspect and that project was to the shining light to revitalize it. If the developer goes belly up, which an auction somewhat signals, anyone who owns there is in big trouble. Not only that there are already foreclosures in the project I think they only started moving people in 2 years ago.
SEC Complaint Excerpts: Mozilo on ‘Toxic’ Loans, Borrowers’ Income Lies
More green shoots:
Consumer borrowing plunges by $15.7B in April
Consumer borrowing plunges by $15.7 billion in April, second largest amount on record
Previous $-11.1 B
Consensus $-7 B
Consensus Range $-11.0 B to $-4.7 B
Actual M/M change $-15.7 B
Highlights
Consumer credit continued to contract very severely in April, down $15.7 billion and roughly split evenly between revolving credit, down $8.6 billion, and nonrevolving credit, down $7.1 billion. Heavily underscoring the trouble is a steep downward revision to the prior month, now down $16.6 billion vs. an initial $11.1 billion decline. Banks are tightening available credit at the same time that consumers, many of whom are losing their jobs, are preparing for the worst. Personal income data earlier this week showed a big jump in the savings rate, now at 5.7 percent. The business cycle appears to be at or near an inflection point, that is at the deepest part of the recession with recovery perhaps beginning. But consumer retrenchment raises the risk that the bottom of the recession will be lengthened or perhaps deepened. This is a sleeper report that may not move the markets but is certain to get the attention of policy makers who are desperately trying to stimulate economic activity.
http://bloomberg.econoday.com/showimage.asp?imageid=17678
Stu,
Rally on!!!
Payroll Data In Perspective
Posted by Tyler Durden at 3:26 PM
Compliments of a much happier and much less Merrill “Is that the most bullish piece you can come up with” Lynch-supervised David Rosenberg.
We have to put the data into perspective. Before the Lehman collapse, when equities were in a moderate bear market and bonds in a moderate bull market, the worst nonfarm payroll result we saw was -175,000. We don’t seem to recall too many pundits rejoicing over employment declines at that time, which were basically half of what was just posted in May. Moreover, the worst nonfarm payroll number in the 2001 recession — right after 9-11 — was -325,000; and before that, at the depths of the 1990-91 recession, the worst report showed a -306,000 print. So basically, what we saw today was a number consistent with a deep recession — just not quite as deep as the near-6% at an annual rate contraction we saw in the first quarter. It is difficult to rejoice over an employment data that is consistent with real GDP still declining anywhere from a 2% to 4% at an annual rate. Now here we are, close to nine months after the Lehman collapse, and we are still printing employment numbers that are double what they were before pre-Lehman. That is the bigger picture.
Moreover, the internals of today’s report, in a word, were awful. Not only are businesses still cutting jobs but they are also reducing the hours that their employees are working; the private workweek hit a new record low of 33.1 hours (from 33.2 hours in April). So, total labour input was much weaker than the headline payroll suggests and this is vividly illustrated in the aggregate-hours worked index, which fell 0.7% MoM and something ‘green shoot’ advocates will not like discuss since this was actually worse than the 0.3% MoM drop in April; this takes the three-month trend to a -8.6% annual rate. Think about that for a moment because what goes into GDP is total hours worked and productivity — so the latter better continue to hang in there or else we are going to be seeing some nasty output data going forward that may well take Mr. Market by surprise. Put another way, if companies had held hours worked constant in May instead of cutting them, to achieve the total labour input they achieved last month would have required — get this — a 927,000 payroll cut. ‘Green shoot’ indeed.
http://zerohedge.blogspot.com/2009/06/payroll-data-in-perspective.html
We’re only talking a monthly drop of 7 billion. Chump change!
I meant 15 billion.
[208] meter
“Wishful thinking at best. We have more wealth disparity than most civilized countries (more millionaires and billionaires) and 10% unemployment. You do the math.
More voodoo economics from the right wing.”
I’ll take voodoo economics over snarkalysis any day. “Your view sucks” isn’t much of a rebuttal. Tells me you didn’t exactly get your money’s worth from that fuzzy-major b.a.
But since economics is an experiment that only works in real time, and we are trying your way for now, let’s see how that works out. (Disclaimer–its working out fine for me, but that is because of what I do. My profession LOVES irrational and distortive tax regimes).
[209] stu
No, he said that McCain invented the internet.
At least what he said sounded an awful lot like what Al Gore said, and they were both senators that worked on commerce policy, so I figured the blackberry was a symbol for internet.
“The latest data on insider selling shows little relief in the relentless unloading of company stock by corporate insiders. In the last two weeks insiders sold over $335MM in stock vs listed insider purchases of just over $12MM. As has been the trend over the course of the last few weeks the list of insider selling has been long and the amounts have been staggering. The buy side, on the other hand, is represented by low rated, low priced stocks whose insiders rarely purchase over $500K.
One might think that with all of these “green shoots” the insiders at major U.S. corporations would begin buying up their own shares voraciously. Especially after a nice little run like we’ve seen lately. After all, with stocks still 35% off their highs and a full blown economic recovery (supposedly) on the horizon it would make nothing but sense than to buy your own shares, right?”
http://pragcap.com/despite-green-shoots-insider-selling-picks-up
Can’t refinance? Try your congressman
[223] renting
You are thinking of the yield spread premium. There was an effort some time back to force disclosure of YSPs but I don’t think anything came of it.
In the end, since it doen’t really affect you, you try to cut your best deal, and you deal with both the banks (retail) and the brokers, who have the wholesale lines, and sometimes there are arb opportunities (meaning you can get a better rate thru a broker using Wells than thru Wells itself).
Nom #240..
At least what he said sounded an awful lot like what Al Gore said, and they were both senators that worked on commerce policy, so I figured the blackberry was a symbol for internet.
Al Gore got crucified (and still does) by the media for saying that. Part of it is his (and Kerry’s) holier-than-thou attitude, but still the media has been unfairly critical of him — not counting Faux cr@p on his wealth [much of the wealth could have been from Google stock anyway — small fish there have tens of mils, an “advisor” would have received a lot of stock options].
S
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZjQKyLci1AM
Fed to hire a lobbyist to fix image. You just can’t make this stuff up.
HR 1207 is catching fever I guess.
http://www.forbes.com/2009/06/05/sonders-schwab-housing-intelligent-investing-bubble.html
This is maybe a New York-focused question. Do you think conversely in New York it could get much worse housing-wise since so many jobs will be lost [due to losses in the finance industry]?
I think New York is kind of one of the last ones to suffer, so, you know, I don’t do a tremendous amount of research at the city or state level in real estate. But intuitively given what’s happened in the financial-services business you could see it, yeah. And it kind of hung in there for a while–relative to, say, California, [which] suffered harder and earlier. I think New York is probably not at its bottom.
My point about honing in on that suggests that, look, the idea if we just get mortgage rates down to 4% or something lower than that, that answers all of our problems. But it’s the double-digit price depreciation, deflation, that is the problem in that equation. You could take mortgage rates down to 1%; if the asset you’re borrowing to buy still has its price declining at a double-digit pace, I don’t care how low the mortgage rate is, there is limited incentive to do that.
It certainly is a good thing to have mortgage rates come down to have housing affordability at about a record high, but I really don’t think you see a real unleashing of pent-up demand until price declines stop. I don’t think we have to go back to an environment where prices are going up, but we have to see more traction in the rate of change in terms of price declines.
The $3.5 Trillion Commercial Real Estate Collapse
Yahoo finance/Business Week oddly enough has this featured:
CEOs Without College Degrees
http://finance.yahoo.com/career-work/article/107139/CEOs-Without-College-Degrees?mod=career-leadership
Jim Cramer: Buy A House Now, Calls Housing Bottom
http://www.huffingtonpost.com/2009/06/03/jim-cramer-buy-a-house-no_n_210768.html
Ol’ Cramer thinks we’re going back to ‘normal’? The bull trap.
got a nice tax write off for half of my SRS play.
Frank, Bi and other haters,
Now you can have a party. Idiots.
Bank Profits From Accounting Rules Masking Looming Loan Losses
June 5 (Bloomberg) — Big banks in the U.S. say they’re on the mend. The five largest were profitable in the first quarter, rebounding from record losses for the industry in the fourth quarter. Share prices have jumped, with the KBW Bank Index doubling since March 6.
Treasury Secretary Timothy Geithner, after “stress testing” 19 banks on their ability to withstand a worsening economy, declared in early May that Americans can be confident in the banks’ stability and resilience. Wells Fargo & Co. and Morgan Stanley were among banks raising $43 billion in new capital since then through share sales.
“With our capital and assets, stressed as they have been, we can go back to focusing all our attention on managing our business and restoring value,” Citigroup Inc. Chief Executive Officer Vikram Pandit said after Geithner’s examinations were completed.
The revival may be short-lived. Analysts who have examined the quarterly profits and government tests say that accounting rule changes and rosy assumptions are making the institutions look healthier than they are.
http://www.bloomberg.com/apps/news?pid=20601109&sid=alC3LxSjomZ8
#218,
“Can’t wait for those option arms to reset.”
Options arms are resetting to 4% rates. These people can’t and don’t need to refi. You have no idea what you’re talking about.
[244] sastry
That is the “gotcha” culture that Clinton so famously derided.
Anyone who listened to everything Gore said would know that “we” meant the government, which did create the internet. Anyone who listened to Holtz-Eakin knew that he was talking about McCain’s work on committee that fostered development of technology. But we are in what I call “total war” mentality, so we take the other side’s words, parse them, and spin them to seek advantage. Or we simply hurl snarky comments at one another.
I try not to do that, but only because I am arguably a professional at it, so presumably I know that you don’t gain any advantage over a knowledgeable adversary by doing so.
Also, that sort of imprecision is not allowed in my line of work, which is why I resist the urge (and it’s hard sometimes) to get into it with snarky idiots. I don’t want to pick up bad habits.
Still, that isn’t politics, nor is it new. When Adlai Stevenson ran for president he was known for his thoughtful, cerebral style. He gave a speech and one fan told him “Great speech. You’ll get every thinking man’s vote.”
Stevenson replied “That’s not enough. I need a majority.”
REIT Players Crossing Fingers The Worst Is Over
By A.D. PRUITT
OF DOW JONES NEWSWIRES
NEW YORK — What a difference six months makes.
The pervading sense of doom that permeated the National Association of Real Estate Investment Trusts conference in November was missing during REIT Week this week in New York, with chief executives, Wall Street analysts and economists waxing poetic about the potential for acquisitions and massive deleveraging while noting that challenges remain ahead.
“The financial Armageddon scenario is over,” Michael Fascitelli, Vornado Realty Trust’s (VNO) chief executive, said on the sidelines of the three-day conference that concluded Friday morning at the Waldorf Astoria. “The risk for survival is out of the market.”
Mitchell Hersh, president and chief executive of Mack-Cali Realty Corp. (CLI), a New Jersey-based office REIT, said during an interview “there has been renewed confidence that access to capital exists.”
Until March, REITs had been hammered amid concerns about the financial services industry as well as commercial real estate malaise as a continuing credit crunch made it difficult to refinance upcoming debt maturities. The industry’s saving grace has been massive amounts of equity issuance allowing REITs more flexibility to reduce debt.
Since the beginning of the year, REITs executed 45 common stock offerings through May, raising some $14.2 billion in capital, according to NAREIT. By comparison, there were 76 offerings in all of 2008 totaling $14.5 billion. The optimistic tone has fueled REIT prices higher by 54% since March 6 — where many experts say a bottom was hit — through May, according to the FTSE NAREIT All REITs Index.
Amid concerns about overvaluation, the financial services market, the recession and credit risk, equity REITs fell 15.7% in 2007 and 37.7% in 2008.
REITs, which own about $600 billion of commercial real-estate assets, were established in the 1960s to give individuals an easy way to invest in income-producing real estate. Such companies typically focus on distinct areas of property, such as offices, retail or apartments.
Drawing parallels from the real-estate crisis in the early 1990s, REITs are expected to use equity issuances to finance acquisitions and bring leverage down to 25% by the second-quarter of 2010, according to a new analysis presented by NAREIT during the conference.
The organization said such re-equitization and lower debt ratios could pave the way for $582 billion to be on tap for acquisitions by the end of 2012. And acquisitions, initial public offerings and increased market capitalization could push the REIT composition of the broader commercial real estate market to roughly 30% by the end of 2012 from roughly 5% currently, based on market capitalization, says NAREIT.
But, the economy is still the 800-pound guerrilla in the room. NAREIT’s assumptions don’t take into account economic factors and market participants say that job growth and the health of the economy will ultimately determine the trajectory for REITs.
“I wouldn’t be in a rush if I were a CEO,” said Mike Kirby, director of research at Green Street Advisors, during a panel discussion Wednesday. He noted that REITs still need to continue to fix their balance sheets. “Distress isn’t here yet.”
He said he thinks the pace of acquisitions will be less than what the market anticipates: “No one wants somebody else’s balance sheet” in this environment.
Mack-Cali’s Hersh said that when the company moves to spend capital, they need to have adequate replacement costs.
“We are going to be very, very careful,” he said.
—By A.D. Pruitt, Dow Jones Newswires, 201-938-2269, angela.pruitt@dowjones.com
#252 frankOptions arms are resetting to 4% rates.
grasshopper it appears you arre the one who has no idea what you are talking about.
Now Japan?
“Asian currencies should be unified into a common currency in the course of the region’s forming a single economic zone,” Nakagawa told AFP.
He did not give a timeframe, saying it would largely depend on economic and political developments in China.
Nakagawa said people must “take into account the possibility that the dollar might not function as the key currency any more in the medium and long term” as the world seeks a new order in the post-Cold War era.
http://www.asiaone.com/News/Latest%2BNews/Asia/Story/A1Story20090531-145078.html
Green Shoots?????
The genesis of the recession ? risky adjustable-rate loans made to borrowers with bad credit ? remains a significant factor in foreclosures. Today, almost half of all subprime ARMs are past due or in foreclosure. In Florida, New Jersey and New York the number is above 55 per cent.
The impact has now filtered out, consuming homeowners who until recently had a good track record of paying their bills on time. Nearly 6 percent of these prime borrowers with fixed-rate mortgages were past due or in foreclosure, nearly doubling in the last year.
But experts expect the pain to spread throughout the country as job losses mount. MBA?s chief economist Jay Brinkmann estimates the unemployment rate will top out in mid-2010 and foreclosures to abate about six months afterward. The number of newly laid off people requesting jobless benefits fell last week, the government said Thursday, but the number of people receiving unemployment benefits reached 6.78 million in mid-May, the highest on record.
The continuing rise in unemployment, which economists say could reach double digits, means more trouble for the ailing financial system and the economy. Lower incomes and lost jobs are the No. 1 reason people lose their homes through foreclosure. Higher unemployment also means people have less money to spend on basic necessities, let alone luxuries.
#249 Calls Housing Bottom.
No housing bottom here. Perhaps in Cal, fal or AZ.
Hi,
Question for the board. I’m currently a homeowner and am possibly looking to sell and move up to larger house. We are looking to stay in the same area.
Does it make sense it make sense to sell now and get less for my current house but then hopefully get at least the same percentage but greater dollar amount reduction on the our next house?
It would appear to me its better to move up in a down market than a market where prices are increasing.
Forgot to add link,
http://www.straitstimes.com/Breaking%2BNews/Money/Story/STIStory_383222.html
“Options arms are resetting to 4% rates.”
“I’m Johnny Knoxville, and welcome to “Jackass”!
Home Prices: This slide is but a taste of things to come
Although steep declines in home values are enticing new homebuyers, the overall affordability indices are troublesome. Existing “A” paper laon portfolios suggest trouble ahead. Further declines are not only coming, they should be welcome.
The Subprime crisis is winding down. We still have a tremendously large amount of “A” paper loans that will be adjusting and a really, really dangerous inventory of Pay-Option ARM’s which have started to re-cast as I type. The details and mechanics of these loans make them nearly impossible to “modify” and will necessarily create a tremendous amount of foreclosures in areas ranging from the lower economic strata to the highest. The subprime loans were the tip of the iceberg.
So, yes, we are seeing a dramatic increase in some areas that were hit the hardest. Yes, there is more optimism on the streets regarding housing opportunity. We are even seeing some lending happening! We still need, however, for prices to adjust to reasonable levels. I am not an economist, nor do I know what levels of homeownership and affordability that are necessary for a healthy economy (I have heard figures in the 70% area), but I do know that given current income levels, home prices need to still come down to a point where an average American family can buy a home.
http://www.glgroup.com/News/Home-Prices–This-slide-is-but-a-taste-of-things-to-come-40028.html
#262 in mod
http://www.glgroup.com/News/Home-Prices–This-slide-is-but-a-taste-of-things-to-come-40028.html
A letter sent out earlier this month by Bridgewater, N.J.-based Financial Solutions Today LLC is a good example of the difficulty assessing a company.
The letter is designed to resemble a W-2 or other form from the Internal Revenue Service, with boxes across the top and a similar typeface.
It suggests the recipient “may be eligible for a special modification program according to guidelines created in conjunction with the Government Stimulus Program HR 1106: Helping Families Save Their Home Act.”
The bill that bore that number in the House of Representatives actually used the plural “Homes” in its title, a subtle misspelling that consumer advocates say is the type of thing that should be a red flag for recipients.
http://www.commercialappeal.com/news/2009/may/28/housing-crisis-breeds-scams/
Clot – Is that you sending letters?
“After the typical in January in which the Birth/Death Model revisions bore some semblance of reality, the Birth/Death numbers are back in outer space.”
“At this point in the cycle birth death numbers should have been massively contracting for months. The BLS is going to keep adding jobs through the entire recession.”
“This is a complete joke.”
http://globaleconomicanalysis.blogspot.com/
This house listed below sold in March of 2006 for 740K! it sold again 6 months later (Oct of 06) for 968K!!!!!
It is now offered for sale at an asking price of 623K! Boy that has to hurt.
http://www.njmls.com/cf/details.cfm?mls_number=2925359&id=999999
frank (252)-
Roll an underwater option ARM into a fresh, new 4% option ARM?
Please tell us where the option ARMs are and just exactly how one refinances negative equity.
Oh…and be sure how to explain how someone who long ago reached the neg-am limit on his option ARM- and as a result has watched his current mortgage forced into a normal amortization schedule- can manage to talk a lender into letting him start the whole insane neg-am game again on that new mortgage.
Moron.
SG (263)-
Not me, pal.
The only “special modification program” I offer underwater clients is to give me your listing, get the hell out of my way and get ready to haul your sorry ass out of your house.
“Clot – Is that you sending letters?”
Indiana pension funds lose Chrysler BK appeal in 2nd Circuit.
They are now knocking on the doors at SCOTUS. They should know those guys hate working weekends.
Let’s now see how well SCOTUS’ puppetmasters control them. I’d say they refuse to even hear this.
http://zerohedge.blogspot.com/2009/06/indiana-pension-funds-lose-appeal.html
I would love to see SCOTUS put a Lochner-style smackdown on the O economic agenda
245#, hate what? i hate losing money.
>make money says:
June 5, 2009 at 4:27 pm
got a nice tax write off for half of my SRS play.
Frank, Bi and other haters,
Now you can have a party. Idiots.
skep (269)-
I’d love to see Mr. “Tight Interpretation” Scalia posit an argument as to how it’s okey-dokey to invalidate contracts and turn the rightful claims of creditors upside-down in order to pacify unions and their gubmint lickspittles.
If I sink two straws into a fifth of Knob Creek at 5 PM every Friday and suck like a Hoover, is that some sort of sign?
Clot 272 Yes, it is a sign I should be hanging out with you on Fridays. By the way is Gary with you?
Clot Are you running or hanging in with SRS?
mike (273)-
Sounds great. Just make sure to bring your own damn bottle.
I can’t hang with Gary. The whiskey combines with his meds, and he starts doing really weird things.
He should also toss that Bavaro jersey in the wash every now and then. Sheesh…
“…it is a sign I should be hanging out with you on Fridays”
mike (274)-
Hanging. One caveat: my current position is funded by profits taken last year, and it has taken a major beat-down. Were my basis higher, I’d ditch it and come back when CRS starts the death spiral. It could take another year or so (although I believe it will happen faster than that).
Let the weekend begin. Failure Friday!!!
http://abclocal.go.com/wls/story?section=news/local&id=6850784
Clot tell me about it, major beat-down is what I’m taking. Want to play gotta be prepared to lose. Still haven’t decided whether or not to take the hit.
mike (278)-
Take a look at the top 10 components of SRS. Would you go long any of them for more than 15 minutes? Can you construct a long-term survival scenario for any of them (other than, say, PCL)?
Do you think CRS somehow avoids nuclear meltdown?
These are the things I ask myself at moments of weakness. And yes, I understand time/volatility erosion in leveraged ETFs.
Clot 277 not to worry all is well green shoots & the market doing fine!Forget about those pesky unemployment numbers.
The real ones that is.
The 16%+ U6?
Yeah, right.
Clot 278 Have to have big ones to ride this one out. But if it goes to zero all is lost.
I keep getting this feeling Gov going to step in & save them with loans.
TCLP Troubled Commercial Loan Program. Pronounced tic-lip. We need more alphabet soup bailouts don’t you know.
England’s winningest team ever, taken down by a couple of American subprime cowboys. This is Anfield. Urrp…
Wait ’til the Glazers start spitting the bit in Manchester.
ESPN (6/5/09)-
“Liverpool’s parent company owned by Tom Hicks and George Gillett suffered a £42.6m loss last year – mainly due to interest payments on the debts the Americans took on to buy the club.
In the annual accounts released tonight, Liverpool’s accountants have also warned that remaining uncertainty over refinancing the £350m debt before the July 24 deadline ”may cast significant doubt on the group’s and parent company’s ability to continue as a going concern”.
Although Hicks and Gillett say they are confident of securing a refinancing deal, the figures reveal that the financial success of the football club is being swallowed up by the cost of servicing the parent company’s loans.
The accounts for the year ending July 2008 showed Liverpool made a £10.2m profit but the parent company Kop Football (Holdings) Ltd made a substantial loss of £42.6m, mainly due to interest payments totalling £36.5m.
The clubs accountants KPMG LLP also expressed a warning in their notes in the filed accounts.
The accountants said: ”The group has credit facilities amounting to £350m which expire on 24 July 2009. The directors have initiated negotiations to secure the replacement finance required by the group and these negotiations are ongoing.
”These conditions.. indicate the existence of a material uncertainty which may cast significant doubt on the group’s and parent company’s ability to continue as a going concern.”
The club’s turnover was a record £159.1m compared to £133.9m the year before, with a profit of £10.2m.
That was reflected by a similar turnover for Kop Football (Holdings) of £164m – most coming from the football club – but the overall loss of £42.6m.
Hicks and Gillett have been scouring the globe to find investors keen on putting money into the club but so far without success.
It is not Hicks’ only problem – he has said he is prepared to sell a majority shareholding in his Texas Rangers baseball team after the Hicks Sports Group in April defaulted on £325m (525m US dollars) in loans relating to that team and his Dallas Stars ice hockey side.
Sean Hamil, a lecturer at the University of London’s Birkbeck Sport Business Centre, told Bloomberg: ”Any company, never mind a sports company, which is not able to cover interest from operating activities has three options: refinance, get new equity investors, or sell it to somebody else who’s prepared to absorb the debt and start from scratch.'”
Rain delay channel surfing. C-Span has a comedy show apparently, called Today in Washington. Some skit about unemployment. Hilarious.
Methinks Messrs. Gerrard and Torres may be plying their trade elsewhere next season.
#287
I wonder where it leaves the new stadium?
PGC (288)-
Hoo hah! That’s a good one. Tell us another!
Here is an interesting perspective on the Chrysler situation from Baseline Scenario
http://baselinescenario.com/2009/06/05/the-little-pension-funds-that-could/#comments
“The pension funds in question bought the Chrysler debt in question last July for 43 cents on the dollar. (They stand to get 29 cents on the dollar in the restructuring.) I guess the difference between that and speculation is that “speculation” is something that bad people do; when pension funds by distressed debt, it’s called “investment.” I have no problem with pension funds buying modest amounts of risky investments, but they are taking the same risks that hedge funds are taking, and if they lose money on bad investments, that’s the fault of the pension fund managers.
Now, the popular defense of the Indiana pension funds is that they have a fiduciary duty to their beneficiaries to maximize the value of their assets. (Hedge funds should have the same duty to their limited partners, unless I’m missing something, but let’s set that aside.) There is a deal on the table worth 29 cents on the dollar. Apparently they think Chrysler can do better by finding a a higher bidder (not likely at this point), or they can get more in liquidation. But that is far from a certainty, and the value of Chrysler is deteriorating as time passes; and if they manage to drag this out past June 15, Fiat can back out of the deal. So it’s not at all clear that their actions have a positive expected value for their beneficiaries.
Their cheerleaders, like the Journal, think that the little pension funds are standing up to the big evil government and defending the rule of law – namely, the order of priority of creditors in bankruptcy. (The issue is the relative treatment of the UAW and the bondholders.) But that’s not the job of a fiduciary; a fiduciary isn’t supposed to stand on legal principles and win Pyrrhic victories that harm the people it is supposed to serve.”
“The pension funds in question bought the Chrysler debt in question last July for 43 cents on the dollar”
– Does John run the Indiana Teachers Pension fund?
Regarding the Wyckoff foreclosure… I have been keeping an eye on the inventory there and just checked out 456 Carlton. I don’t remeber seeing it on NJMLS. However, I just looked up 457 Carlton and I do know that one. It has been rotting at the same asking price ($779k) forever with no pics, price reductions, etc. I noticed a while back that I know the listing agent. I saw him at a party last weekend and asked him what was up with the house and why was it rotting there. He said that it was a bank foreclosure and he didn’t seem to be actively marketing or looking to sell it. Wyckoff isn’t anywhere near his home turf. Grim, I believe you said 456 was a foreclosure as well. So, are there really two foreclosures across the street from eachother on this nice street in Wyckoff?
If so, this is getting interesting…
My old office was in Wyckoff, if you move there be prepared for mortal combat on who has the best lawn in the neighborhood.
210…..you probably know my cousin.
#293
Sean: LOL. My wife says if that’s the case then I’ll fit right in. Of course, I’ll probably be the only one mowing his own lawn…
#266,
Clotpoll, the idiot RE from NJ,
I look at neg-am loans all day long, they reset by default to 4%, you don’t need to do anything. Most of them are MTA or Libor + 2-3% margin. If you hit your recast limit you just call up your lender and they convert it to a fixed or IO at 3-5%.
Get out there, sell a home for once instead of buying SRS all day long.
Went to look at a new office space today, midtown Madison Ave.
Brand new building, $40/sq foot, first year free on a 5 year lease.
Owner is willing to do anything to get us to sign, including hiring a hot secretary.
Too bad SRS does not move on this news.
nice smackdown frank. FYI no need to share your office space nobody cares unless you are in the nine building.
If you think 9.4% unemployment is high, just read this. 12% will be our new norm after this bill passes.
Kennedy Bill Would Make Employers Provide Care
http://www.nytimes.com/aponline/2009/06/05/us/politics/AP-US-Health-Overhaul-Kennedy.html
what’s a “nine building”??
Frank – pulling my leg cumon? I saw Jerry Seinfeld coming out one day after a visit to his hedgie.
http://farm3.static.flickr.com/2364/2051044165_a9b5d3c958.jpg?v=0
Now that the recession is coming to an end, it’s time to buy that Westfield home you been looking for, before it doubles in price, just like in 2005.
#301,
This is 57&5th, some big players are in this building, but 80% of it is empty but the owner refuses to lower his $120sq/ft asking rent.
Mikeinwaiting:
I’m locked into the SRS as well. I share much of Clotpoll’s sentiments around the position and am also playing only with last year’s gains. I’m sincerely considering doubling down, but not yet. Hang in there.
Frank you should tell your bosses to stop being cheap. You will learn more in the camping out all day in a stall of the john listening to the farts champions than you will in some low rent dump on madison.
frank (296)-
Thanks for the unnecessary primer on how pay-options reset. If you look at that stuff “all day long”- as you allege- you know two things:
1. Those loans, as a class, are more toxic than gamma ray-bathed spent uranium.
2. When you hit your neg am limit (which most holders of this crap did 18-24 months ago), your lender CALLS YOU with your “new” amortization schedule. It does not amortize over 30 years, and the new rate is NOT some function of LIBOR or MTA plus a nominal margin. Hitting a neg am limit is a screaming red flag that the borrower is about to become a deadbeat, and the borrower is treated as such.
Please post again and explain to me how one refinances negative equity. I seem to have missed that answer the last 8-9 times I asked you.
sean (305)-
Frank is incapable of learning. He is, alas, a functional retard.
He does, however, look at pay-option ARMs all day long.
Sometimes, I watch soccer all day long. But, being 49 years old, it doesn’t help me play any better.
Clot- If he spent a month cleaning the john in a few places around town he could learn something.
Quote of the week;
“It will be helpful if Mr. Geithner can show us some arithmetic”
Mr. Yu Yongding
#302 frank: Frank, dude its gettomg old give it up already.
Check my post from earlier, nice house for you to buy offered at 623k (bank owned), sold in Oct of 06 for 968K.
You can snap it up now I am sure for 600k, hold it and it will be worth 1.2 million next year.
Stop wasting your time here get out and buy real estate now.
New Record! More Green Shoots!
http://research.stlouisfed.org/fred2/graph/fredgraph.png?&chart_type=line&graph_id=0&category_id=&recession_bars=On&width=630&height=378&bgcolor=%23B3CDE7&graph_bgcolor=%23FFFFFF&txtcolor=%23000000&preserve_ratio=true&&s_1=1&s%5B1%5D%5Bid%5D=UEMPMEAN&s%5B1%5D%5Btransformation%5D=lin&s%5B1%5D%5Bscale%5D=Left&s%5B1%5D%5Brange%5D=Max&s%5B1%5D%5Bcosd%5D=1948-01-01&s%5B1%5D%5Bcoed%5D=2009-05-01&s%5B1%5D%5Bline_color%5D=%230000FF&&s%5B1%5D%5Bmark_type%5D=NONE&s%5B1%5D%5Bline_style%5D=Solid&s%5B1%5D%5Bvintage_date%5D=2009-06-05&s%5B1%5D%5Brevision_date%5D=2009-06-05&s%5B1%5D%5Bnd%5D=&undefined&undefined
272.Clotpoll says:
June 5, 2009 at 6:16 pm
If I sink two straws into a fifth of Knob Creek at 5 PM every Friday and suck like a Hoover, is that some sort of sign?
clot: the end is nigh of course…..
Q: What does Knob Creek do to a paranoid schizophrenic on lithium? Does it count if he signs a POA?
#306,
The lender, thanks to the Omama plan, modifies the mortgage into a low fixed rate or an IO. The lender get a $1K for doing it.
Why do you think my returns are only 30% per year? because everyone under the sun is getting a 3% IO mortgage courtesy of Omama and Co.
No one cares about negative equity these days. How long are in RE??
Chi – some “I stayed at a Holiday in Express last night” advise for you. Today I was standing outside in the rain at St. Vinnie’s on 12th st. I overhead a conversation between two doctors one a rookie and another about 10 years older. The rookie doctor spoke loudly to the other doctor very frustrated with dealing with patients who do not want to help themselves.
The second older doctor said simply that you need to simply lower your guard and listen to them, first and foremost acknowledge them, since most of the time it is acknowledgment they seek that they exist, that they matter and their fears are not totally unfounded whether you agree or not.
Perhaps our resident doc here can offer other helpful advise.
Cheers,
Sean
BC (309)-
I’d think Yu Yongding would be a character in one of John’s stories…if every wire service on the planet hadn’t run that quote.
I get the willies thinking that the way China treated Timmay is very similar to the way Germany treated Chamberlain before WWII.
chi (312)-
Dunno. Snap some photos with your cell phone & send ’em to me.
“What does Knob Creek do to a paranoid schizophrenic on lithium?”
frank (313)-
Give me one copy of a HUD-1 from a legitimate closing where this has occurred, and I will pronounce you king of RE right on this blog.
The neg am on most pay options shuts down when it’s tacked on about 12% to the original principal balance. Since many pay options are low-to-no DP/IO jobs, the LTV at that point is well in excess of Making Home Affordable guidelines, and the refi is rejected.
Unlike you- who stares slack-jawed at underwater pay option ARMs all day long- I work with actual mortgages and borrowers all day long.
You have no game. I’m done answering your trolling drivel.
sean (314)-
Were I an ER doc, I’d counsel most patients to go home and kill themselves.
Fortunately, I did not decide upon a career in the medical arts.
I like “House”, though.
#317,
There’s no refi, it’s a mod, it happens all day long, I see people with $10M homes getting their payment cut by 50% and rate reduced to 3%. If you ask me it’s a crime, but thanks to Omama and Co. it’s the new way.
re: #315 Clot – Japan and the oil producing nations are as much of a bag holder as China.
My opinion is reparation if it every happens will come from them way before China.
spelling when drinking don’t matter right?
frank (321)-
Bullshit. Post the HUD-1, or STFU.
sean (323)-
All that counts is that you’re drinking.
I like to drink.
Were Frank in front of me, I’d like to shoot him.
Then, I’d have a drink.
New in NJ @146,
Thanks for answering! I missed your post whilst I was typing.
I test drove the ’09 Malibu and it was nice. With ‘special pricing’ (doesn’t everyone get this nowadays?) I was looking at an LS base model for ~$18.5K (the Malibu base comes with more features than other brands). Then the salesman calls yesterday to tell me that Chevy changed their incentive yesterday from $2500 rebate to $1000 cash back. ??? Deal’s off. Wifey has now picked out the color for our next Honda.
Ahhh, so close GM. You’re learning now how to make cars, but you still need to learn how to sell them.
Clot – anytime you are near the city, let me know, I can always use another drinking buddy.
That comes with a warning, I do enjoy my drink in both the good times and bad.
CH914 @259,
The strategy makes sense to me. If you’re trading up and borrowing, the rates are decent and only heading up, IN MY OPINION. As a seller AND buyer, I think you’re removing most interest rate related price risk, and you get the benefit of lower rates. I also would think, in this RE market, that larger/higher priced homes would be more discounted than cheaper/smaller ones that would potentially have a larger pool of qualified buyers. The trick of course will be timing a successful sale of yours and contract on the new in an era of weak activity.
My 2 pence. Hopefully someone who actually knows what they’re talking about will chime in. :)
#331
Revvy,
Why not wait a bit? 30% off of $900k is much more than 30% off of $400k no?
If things do wind up there in the long run they’ll be better off, I think?
I appreciate the little things in life.
The fact that I know I can come here, and Frank will be proven wrong on almost everything he says, warms my heart.
He wakes up, peruses the Journal, or the Post or whatever he grabs from the neighbors front door, gets excited, comes on here and people who know what they are talking about crush him. Day in and day out this happens, its like watching the sun come up, you know it will happen.
Thank you Frank.
Another love affair at the NJ Report
“Clotpoll says:
June 5, 2009 at 10:47 pm
I like to drink.”
“Sean says:
June 5, 2009 at 10:52 pm
Clot – anytime you are near the city, let me know, I can always use another F buddy.”
http://money.cnn.com/2009/06/04/real_estate/home_affordability_soaring/index.htm?postversion=2009060412
Anyone else think IHS Global Insight concocted a load of cr@p in their analysis?
Some snippets:
“Prices have fallen so far that the average U.S. home is now undervalued by 12.2%”
“Las Vegas prices have dropped more than 46% since 2005, and the city is now undervalued by 40.9%.”
“In the biggest metro area, New York City, the price is just about right, with a median at $469,400, an under-valuation of just 3.3%”
Do median incomes in these areas support their estimates of ‘correct values’?
and what is 40/sf in midtown? a new building? class b, class c????
Stan,
It’s in the basement, in the back, under the rub & tug joint.
Doyle @332:
Great point. I was thinking proactively, that they could negotiate that bigger discount on the larger house now before higher rates (assuming they’d borrow more). But they might find the bigger discount is yet to come.
I’m firmly in the ‘wait’ camp, but I don’t have a house to sell..
Revvy,
Admittedly, I’m in a similar situation so its wishful thinking on my part. However, I have noticed that the swankier towns are stacked with inventory at the higher levels and they are holding out as long as they can. Its headed south, but it seems to be taking a bit.
We’ll see, but even if you’re to lose on your current sale, I think you stand to gain on the buy up.
This is great info for us all. Glad you posted this. I am subscribing to this blog.
Damn!
Ya know, I was just thinking about changing my handle to ‘Car Lumbar Cushion’ and now it’s taken. First the RE bubble, and now this!
It’s just like Terminator.. the bots are growing in strength and intelligence.
LSAT?
Frank, you mean to say that people that buy houses now (I may join the group soon) can somehow get 3% rates via loan mods? I am open to taking I/O loans if that is what it takes (and save money in CDs or whatever). Clearly something doesn’t compute. The only “evidence” you are giving is “Thanks to Omama”…
S
THE END IS NIGH
I’m out of single malt scotch.
[269] skeptic
Ya had to bring up Lochner, didn’t you?
“The Geography of Recession”
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/06/04/the-geography-of-recession.aspx
SAS
“The Geography of Recession”
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/06/04/the-geography-of-recession.aspx
SAS
“Obama Administration Calls for
Slashes to Medicare and Medicaid
To Balance the Budget!”
http://www.larouchepub.com/pr/2009/090602admin_cut_care$.html
SAS
SAS? is that you? welcome back
hyperinflation can be offset by the deflation by reduction in value of labor and lowering consumer demand & resulting from falling incomes in the general population.
So, when you see one of the bumper stickers saying “support our troops”… it should also say, or “support our troops, or there goes my 401k”.
SAS
“SAS? is that you? welcome back”
thanks. i had a rondevu in Japan and then on over out to the Maharashtra, where i bumped into the Pakistani ISI.
We got ISI crawling all over the Maharashtra, clearly up to no good. what that means? i don’t know, but it can’t be good.
SAS
348. The Nazi Healthcare reference is right on target.
348. The Nazi Healthcare reference is right on target.
348. Luckily the new Health-care doesn’t apply to the Public Sector, only Private Sector Serfs.
Look at the research in this article @ Zero Hedge. Could there be two Nick Andrews in the world?
I think not. This is vodka’s work.
http://zerohedge.blogspot.com/2009/06/futile-task-of-projecting-unemployment.html
Nice stuff, vodka. I think I’ll go saw on my wrists with a butter knife now.
“Silera says:
June 5, 2009 at 3:04 pm
Chi Fi- Free donuts at all locations?”
he bad news is that all the rich b@stard$, those earning more than, ummm, how about say $200,000 (and no doubt driving in Rolls Royces, and flying in private jets — cough, gag, yea, right) will need to declare all such giveaways so that the IRS can calculate imputed income on the benefit.
Watch out BC, that taste if strawberry at the farm stand may cost you in April.
All power to the Obomu-its.
Hey, I hear the NY Gov is “making the hard choices.” Gag me with a Kennedy. Yea, right.
This reads like something out of the CIA fact book. I’m glad to see that China is projected to have problems holding their country together after laughing at us the other day. We may want to see what we can do to help Taiwan. What?? Stop meddling?? Let me tell you something, we have every right to “meddle” when people aren’t free and that applies anywhere in the world. No one should have to chafe under commie rule anywhere and our job is to see to it that’s not the case, particularly when someone laughs at us or pushes for another damn reserve currency.
sas says:
June 6, 2009 at 1:09 am
“The Geography of Recession”
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/06/04/the-geography-of-recession.aspx
SAS
Clot,
The second half of this year is going to be worse than the first. These mainstream economists are a bunch of bs artists trying to keep their fat paychecks by spewing hope where there is none. You have an economy that was pumped 70% by the consumer. The consumer’s balance sheet is a mess and now they a)have lost their job or b) are afraid they are going to lose their job. There’s no green shoots in those facts. People don’t spend money they don’t have when they are afraid of losing the sole source of income that they do have.
TPTB have done a good job pumping the stock market the past 3 months but look at what is going into the pump. The number of secondary debt and equity offerings in the last three months are through the fricking roof. These companies know what’s ahead and are trying to get their balance sheets in place for survival. The execs are selling shares left and right and sure aren’t BUYING.
When this thing turns it’s going to be frigging messy.
re: 329 Revelations
Test drive Sonata first. You should be able to get a base model for ~15K, which is better equipped than Malibu. I got top in the line for less then 21K 3 years ago. I drove restyled 09 and can tell they fixed most of small things that are bugging me in mine .
Kette1 on Zero Hedge? The end must really be coming.
I am going out today and buying some stuff on credit to forestall the crash.
You know, reading about the details of David Carradine’s unfortunate demise brings an entirely new image to mind when blog posters use the term “grasshopper”.
“Day in and day out this happens, its like watching the sun come up, you know it will happen.”
“Thank you Frank.”
Stan [333],
Ditto. Clot slam dunked him last night.
Kettle,
Great work @ Zero Hedge. Congrats!
Frank:
Seventy percent of refinancing activity could be knocked out as rates close in on 5.5 percent, according to Mark Hanson, a managing director at the independent research firm Field Check Group of Menlo Park, Calif.
That’s because homeowners wouldn’t get much of a benefit if a refinancing only reduces monthly payments a tiny bit while they are stuck paying closing costs that typically run about 2 percent of the loan amount.
When I die, I pray that they won’t find me with a rope wrapped around my man junk.
Watched the live ceremony from Colleville-sur-mer, and when they played Taps, my 6YO (who had been to Normandy and Omaha 2 years ago) saw the sailors saluting, and asked me why. I told her about honoring the dead, and she saluted too. Then she turned to me and asked “Dad, do they know I’m saluting?”
I told her, yes, they did.
[365] stu
I always thought that was self-evident. When we refi’ed, we went from 6% to 4.625% so it was quite evidently worth it. Saving about $340 per month. I estimate that I will cover the closing costs in 7.5 months.
I feel pretty fortunate–rates went down, then up, so I thought I missed the window. Then the rates tanked. Wasn’t gonna miss that window.
A guy I know refinanced during the past couple of weeks. He bought a large house in San Antonio last September. He went with a different company to refinance and his closing costs were over $13,000. Whenever this guy makes a decision involving money I move in the opposite direction. He said he’ll recoup his closing costs in four years.
stu, 366
re: rope/man junk
don’t AEA and they won’t
better than finding you dead after f.ucking a Vidalia…
sl
sl: True!
[370]
Auuuggghhh.
After this blog, I don’t think I will let the wife buy onions for recipes anymore.
Was surfing last night and passed ad for some show on Spike about 1000 ways to die, or something like that, and one of the featured deaths had to do with sex and veggies. Did not watch show so no details.
#324,
Clotpoll,
Stick to buying SRS, you are so good at it, leave the RE and mortgage stuff to me.
#343,
Check this out:
http://www.treas.gov/press/releases/reports/modification_program_guidelines.pdf
From the above link:
“The Interest Rate Floor for modified loans is 2%.”
Guess what FDIC is giving away?
Thanks, Gator. I will look for it later this weeekend or Monday.
A pottymouth with a dirty mind.
still_looking says:
June 6, 2009 at 11:17 am
stu, 366
re: rope/man junk
don’t AEA and they won’t
better than finding you dead after f.ucking a Vidalia…
sl
#324,
“The HUD-1 is to be used as a statement of actual charges and adjustments to be given to the parties in connection with the settlement.” With modification there’s no settlement.
This tells me you know nothing about RE nor mortgages at all. Stick to your stock picks.
“Countrywide Loan Modifications – Easier Than Ever”
http://www.articlesbase.com/mortgage-articles/countrywide-loan-modifications-easier-than-ever-957073.html
Anyone going to the REDC auction tomorrow??
http://www.auction.com/auction-details.php?auctionID=H-086#;
I love this blog, it’s always full of useful info. Keep up the great work!
Anyone know how real estate sales conditions are in Bradley Beach / Avon? Have always dreamed of a place there, but wonder if valuations have gotten realistic yet.
Clot, BC
Hot Damn!!!!!
i had no idea ZeroHedge had picked up my work!!!!
I better start watching what i say, apparently i have gotten some peoples attention.
Anyone else going to see NIN and Jane’s at the PNC?
“I better start watching what i say, apparently i have gotten some peoples attention.”
welcome to my world bloke.
if you think these boards aren’t monitored by more than Grim and his little E. German button. best think again.
SAS
“Michelle Obama at a Homeless Shelter – Priceless – HILARIOUS”
http://www.freerepublic.com/focus/bloggers/2260589/posts
SAs
kettle,
for example, I did a write up about how something smells rotton btw Colgan Air 3407 and Air France 447.
ex. switching them into `alternate law’ banking maneuvers on an `Airborne Internet’ developed for the USAA.
next thing you, I’m the one taken a ride with the JPATS.
yikes!
SAS
and then there was that time I made post about
Cisco’s Airborne Internet trades to USAA tontine-insurance sales staff a C4ISR remote facility capable of taking planes off regular en route airways.
but hey, what do i know.
lets talk real estate.
:)
SAS
“AGRI-FOOD THOUGHTS”
http://www.financialsense.com/editorials/schmidt/2009/0601.html
SAS
“NJ Man beaten and arrested for having an unzipped jacket”
http://tinyurl.com/kwwpd2
384: Was thinking about it, but going to pass. Have fun, let me know your review.
Kettle , SAS , now no disappearing in the middle of the night. I realize you have no choice.
Kettle,
When you get the knock on the door you’re just a janitor right?
Found a house that we want to make an offer on but i just found out that its a modular…
Does modular automatically mean that it was built poorly?
Its ten years old and having problems settling, the sheetrock and floors are cracking and shifting by fractions of an inch all over the house. I would pay a structural engineer to assess if we make an offer but would also appreciate any advice from the board. thanks
btw
i hope nobody out there listeins to Suzie Orman.
if ye are, ye getting taken for a ride.
she is a shill.
SAS
commercial RE.
look out below.
this sinking ship is far from over.
SAS
WSJ
ROI
JUNE 5, 2009, 9:54 P.M. ET.
Gold: Headed For A Bubble? Though it has captured investors’ imaginations, no one can say what gold is really worth.
By BRETT ARENDS
Investment bubbles usually begin as legitimate bull markets, and I wouldn’t be surprised if gold were next.
First, there’s a serious investment case. Central banks are flooding the world economy with liquidity. That’s a peril to all paper currencies. Anything scarce and valuable, such as precious metals, ought to benefit. Gold is also coming off a very low floor from 10 years ago.
And it’s captured investors’ imaginations. Boston is the home of many of the biggest mutual fund companies in America — including Fidelity, Putnam, MFS and Wellington — but one of the busiest places around the financial district right now is J.J. Teaparty, a well-known shop dealing in bullion and rare coins. All day, a steady stream of customers stop in to buy gold and silver bars and coins. A number of local mutual fund managers — “stocks for the long run” notwithstanding — have been seen sneaking off during their lunch hours to do the same.
Gold may be a great bet at these levels. But people should be aware of the risks of buying bullion — either through an exchange-traded fund, or directly.
To say this metal is volatile is an understatement. Since the start of 2008, the price of gold has swung between $1000 and around $700 (it’s currently at $965). This is a safe haven? When the stock market does this, it’s on the front page.
And while U.S. and other Western investors are jumping aboard the golden caravan, many in Asia — who rode it all the way from $260 an ounce — are quietly disembarking. The World Gold Council, an industry body, reports that Asian investors were actually net sellers during the first quarter, while westerners bought heavily and sent prices soaring.
Ordinary U.S. investors, on average, aren’t timing this market too well. Money flows into, and out of, exchange-traded bullions funds like GLD, and are tracked monthly by Financial Research Corp., an analytics company. Comparing them to gold prices over the past year is disheartening.
Gold spiked well above $900 an ounce in July 2008 and again this February and March. Those, of course, were the months when bullion funds reported by far their biggest net inflows. Yet when gold slumped, as it did last October and November and again in April, so did fund sales.
Rarely does anyone discuss the biggest problem with gold — no one actually knows what this metal is really worth. After all, it generates no income. All the gains come from capital appreciation. And that, of course, is a gamble.
Don’t believe me? Try this: What will an ounce of gold sell for in 2038? Are you confident it will sell for more than $3,500? Yes? No? Maybe?
I don’t know either, and I’m skeptical of anyone who insists they do know. Anyone buying gold today is basically betting on it.
Today you can buy zero-coupon Treasurys guaranteed to turn $965 into $3,500 by then. That’s an annual return of about 4.6%. If you’re buying gold, which has no guarantees, you are gambling that it will do a lot better.
(Of course you may hope to sell long before then. But if you want to make a profit, you will still have to find someone else willing to bet gold will be higher than $3,500 by 2038)
While the public has become excited about bullion, shares in mining companies have been left behind. Sales of mutual funds that buy gold-mining shares have been anemic. Both the big and small companies look reasonably cheap compared to their product. A basket of them ought to give many of the benefits of bullion with fewer risks.
Many mutual fund companies offer funds that invest in mining stocks. Among them, U.S. Global Investors World Precious Minerals (UNWPX) is rare for focusing on small stocks. Many funds, including for example Tocqueville Gold (TGLDX), Fidelity Select Gold (FSAGX), and Vanguard Precious Metals and Mining Fund (VGPMX) are flexible and can hold stocks and some bullion too if they choose.
Veto 394 seen some good seen some bad . It is all about the foundation & if it was set right on it. That is the key . Been there done that. All in all unless it is a total f up job you will be able to tell . how old the test of time is the true one.
Chifi the voice of reason. Thank you for being grounded.
Does anyone have an opinion on Essex & Sussex Condominiums in Spring Lake, NJ, they are listed for $119K? Thanks
http://www.realtor.com/realestateandhomes-detail/700-Ocean-Ave-Unit-301_Spring-Lake_NJ_07762_1106109026
Mikey: WTF is U6? Sounds like a two-bit U2 cover band…..
OK joisey people…..I have a client that want to spend a week with his wife and 4 kids at the beach/shore somewhere. He probably wants to book for the week of June 22. He has nothing at this point. Where would you go if cost was no object, but these are normal people, so not some over-the-top chic-chic thing? He probably would want to be a short distance to AC ideally? I guess a good 3BR would work, walking distance to a beach and with stuff for the kids……..advice?
#402,
Rent a house in LBI.
http://www.mancinirealty.com/summer_rental.htm
Chifi El Coronado Wild Wood Crest.
Manhattan RE is on fire again.
“Sales, off 30 percent in April from a year earlier, were off less than 10 percent in May compared with the same month in 2008.”
http://www.nytimes.com/2009/06/07/realestate/07cov.html?ref=realestate
Chifi u6 is the real deal , I am not over the top but to ignore kettle’s numbers is a mistake . I trust him a lot more that the gov on many levels. Honesty & competency just to start.
#402 chifi
ocean city NJ. Great boardwalk, lots of things to do on the boardwalk, dry town, good restaurants in the area.
Margate and Ventnor would put him next door to AC. Could easily go to the beaches on margate or Ventnor and hop a Jitney to the AC boardwalk when the urge struck.
I would go with LBI, unless the boardwalk is a draw to them. Best to go Sunday to avoid the transition traffic on Saturday.
“Gold: Headed For A Bubble? Though it has captured investors’ imaginations, no one can say what gold is really worth”
ye first problem, gold isn’t an investment. Its a hedge.
there was a time i was thinking gold will buy the DOW at a 1:1.
I don’t think that will happen anymore. Military will prop up the dollar too much for that to happen, via global taxation.
how the taxation works?
Foreigners Buy our T bills. if they don’t buy them, their current holdings will drop in value (keep in mind velocity, better to fall a slow controlled pace than drop like a sack of spuds) and because they are forced to via trade agreements or a bomb will drop on their heads.
God Bless the USA!
(and screw everyone else)
cause thats essentially what we are doing, and you wonder why some of those people with the turbins on their heads get a little pissed off? when you lost it all and have nothing to lose, you lose it all.
SAS’s disclaimer: don’t believe a word I say, just close your eyes and watch Roseanne rerun episodes & The Phil Silvers Show.
SAS
SAS….thought about you when we watched “taken”…..with Liam Neeson. Good show there.
“there was a time i was thinking gold will buy the DOW at a 1:1”
but don’t get me wrong, i’m still a gold bug that likes to burn the midnight earl !!
SAS
How Long Can Commercial Real Estate Remain Irrational?
http://www.minyanville.com/articles/dow-SRS-tol-hov-bzh-spf/index/a/22949/from/yahoo
“Meanwhile, cash flows are shrinking, interest rates are rising, rental rates are falling (hard), and values are tanking. There’s no way on earth the Boston Properties of the world can justify their market-equity value, but dollars to donuts that those who can get a piece of the secondary (full disclosure: I have a bid in for an allotment) will likely be able to flip it for a profit. That’s just what’s happening, and it makes no sense arguing about it.”
kettle,
when you have done of your comparison studies of depression era to the current economic climate… how are you taken the effects of the internet into consideration?
the internet has suppressed consumer prices & pricing power, how you factor that into the diffy q?
SAS
Frank-
Just be aware Essex & Sussex units have no kitchens. They are basically hotel rooms.
“Anyway, demand is so high for soybeans that old crop ending stocks will be at a record low. The world may be moving into an era of soybean shortages.”
Soybean meal in backwardation. BOOYAAA.
“‘Jumbo pensions’ spark state funding debate”
http://www.newsday.com/news/local/ny-enpens0712830048jun05,0,2797241.story
SAS
#382 Phil in Montclair
Avon and Bradley Beach are like apples and oranges. Avon is much more upscale than Bradley. That said prices are still too high in both towns.
“Rarely does anyone discuss the biggest problem with gold — no one actually knows what this metal is really worth. After all, it generates no income. All the gains come from capital appreciation. And that, of course, is a gamble.”
Chi’s post.
Hey Brett Arends you a-hole. Maybe Chi too? We all know what’s it’s worth. Take a few minutes and pick up a chart. In 2001 Dow/Gold was 44-1, today it’s approx 9-1. That’s what it’s fcking worth. Nothing scientific about that.
In addition to this, it’s up over 350% since the start of the bull run, 2001. That may help you calculate it’s real worth. The only investment that has settled higher yoy, every year, since 2001.
Gamble? You are fcking kidding. Watch the technicals, catch the move and then lock in. Bergabe/Timmy are laying down the red carpet. Gamble? The only gamble is to hold a mountain of paper that is printed 24/7. Oh, I forgot, another gamble, insolvent IB’s.
Sorry, Chi. This crap belongs in South Kearny. Prove me wrong. Brett Arends, or Chi [he posted], akin to Mike Mussina throwing a 88 mile/hr fastball, down the heart of the plate, to Manny.
what
Grim, homework assignment completed. See report on the link below.
The ofheo data was a great find.
It allowed us to directly compare the 80s bubble to the 2000’s bubble from bottom to top and then to bottom again, Although we obviously still have not found bottom yet, this is something we could not do with CS, since it only went back to 1987.
Converting the two NJ bubbles to inflation adjusted returns and then comparing the two side by side is an eye opening experience.
Hope you enjoy it!
http://tinyurl.com/lzxf6x
-Veto That and Kettle1
bc [418]
Last time Dow equaled gold price was in 1981 or 1980 when both were around 800. Even with the recent gold advance, it lost inflation adjusted 70% or so since then. Inflation-adjusted Dow about tripled.
[420] veto/kettle
Nice, presentation quality piece. Logical conclusion is that we absolutely need a serious bout of inflation – which will be helpful for many other reasons as well – to avoid having something like 50% of mortgages underwater.
Frank,
I checked your loan mod document. The major catch is that the servicer has to agree to the loan mod, and the rate drops till it reaches the 31% income limit.
Many reasonable loans will not fall into that category…
S
Veto That and Kettle1, you guys rock. Thanks for putting the pdf together!
Agreed. Great research completed and nice graphs to boot.
Where da stickmen at?
Kettle1 & vetothat-
awesome! Thank-you.
Great work Veto & Kettle. Thank you.
kettle and veto,
great research!
Thanks kettle and veto.
26 more weeks to bottom?
I get an “Error opening file” message when I try Kettle & Veto’s tinyurl.
I’d love to see the data…..anybody eles getting that Error Message ??
cobbler, i agree, desperately need inflation.
stu, good point, its not credible research until you have stick men skiing down the double diamond down side.
Note on the bubbles: 1980s prices crashed to prices 30% higher than original values. If we assume the same correction, we still have 20% further crash from todays prices, not counting inflation.
I had whole wheat waffles for breakfast.
Whole wheat waffles are slightly less bad for you than regular waffles so…
Green Shoots!
fiddy, link is working for me.
i can email you, whats your address?
frank (374)-
Bullshit again. A house with an LTV of over 105% is ineligible. Most pay option borrowers who’ve maxed out their neg am have an LTV far in excess of this.
You also mentioned seeing mods done on 10mm houses. How many of these borrowers have mortgages that are 729K (the program’s max loan limit) or less?
At least Tard is funny and tongue-in-cheek with his trolling. You, however, are just a giant, inflammed hemorrhoid.
http://seekingalpha.com/article/141757-the-futile-task-of-projecting-unemployment?source=article_lb_author#comments_header
Kettle – TD has referenced your work in an article over at Seeking Alpha. Just though I’d let you know in case you are keeping track of such things.
frank (378)-
Mods still have to be documented (even by portfolio lenders). Please post one of those statements here.
You’re reaching now. I’d say that you were embarrassing yourself, but you’re not capable of feeling embarrassment.
frank (374, 378)-
Don’t even try to tell us Hudson City (big player in multi-million $$$ portfolio mortgage lending) is doing mods for trophy properties.
Thornburg was another big player in the multi-million $$$ homes category.
Too bad they’re in need of a teensy mod themselves.
They’re bankrupt.
Re homework.
You should note that the debt load is significantly higher now then it was during the 80’s bubble.
That suggests that this bubble will settle lower then the previous one. One other point; note that the (HPI/Household income) chart shows that the ratio bottomed at approximately the value it stared at before the 80’s bubble began.
Assuming that the current bubble follows the same trend, then we have about another 60% to drop in (home price/income) Terms
http://tinyurl.com/kt9al3
SA:
Poisoning the Green Shoots
http://seekingalpha.com/article/141771-poisoning-the-green-shoots?source=article_sb_picks
“Watching what is happening this week economically leaves me weak. Are we in a bottoming or a pause before another leg down? The interest rates are in an uptrend. Rising interest rates cool an economy. Whatever green shoots we have seen to date have died. The good news is that the economy is not getting much worse.”
King: Sense of community lost in nation’s housing crisis
http://www.cnn.com/2009/POLITICS/06/04/sotu.foreclosures/index.html
STORY HIGHLIGHTS
Foreclosures change neighborhoods in Las Vegas
Vacant houses in area have one family adding heavy security to home
Another family can afford first home as price drops from $400,000 to $179,000
439 is a dead link,
correct link
http://tinyurl.com/o268qq
#437,
“Don’t even try to tell us Hudson City..”
HC is not, but Greenpoint is doing it big time. So is Thornburg, $5M+ mods. Speaking of HC they are buying mortgages from Citi for par+. Nuts.
#434,
Greenpoint is modifying 80% of their mortgages, I don’t have the addresses to find any docs for you. I just know I am getting screwed on my bond payments big time and my returns are dropping because of it.
Another thing big players are doing is buying a mortgage for 20 cents and cutting the principal by 50% in hope of getting the borrower to continue paying. Those people are making a killing doing it. Booooooyaooooooo
frank (443)-
So now, please tie this all in a nice, neat bundle and tell us all why any of this is some sort of positive sign.
Because I fail to see it. Lenders doing mods on dying trophy houses are doing it to either wring a few more payments- of any kind- out of an insolvent borrower- or are trying to keep the loan minimally-performing, in the case of Thornburg.
Trophy homes have taken a kill shot to value all over the US, and there’s currently a 40-month absorption rate in the 750K+ category.
Do you even remember why you started posting stuff that is evidence of the death of this market segment?
Then again, if you work for Orin Kramer and the NJ MOney Incinerator, all this stuff is green shoots.
frank (445)-
That is the first true thing you’ve posted in two days.
Too bad the sharpies who buy these loans at .20 often can’t find the borrowers, in order to offer them the 50% break on the principal.
Hey Frank,
Here’s a green shoot: you can’t foreclose on a guy who’s declared bankruptcy.
http://globaleconomicanalysis.blogspot.com/2009/06/bankruptcy-filings-reach-6000-day.html
China’s fake recovery redux, or who’s laughing now?
http://ftalphaville.ft.com/blog/2009/06/03/56572/chinas-fake-recovery-redux-or-whos-laughing-now
How’s that for a thought? Chinese not stockpiling commodities for a percieved future economic expansion but for public works projects because they know this “green shoots” talk is bs!
417 Bradey and Avon,
Bradley is the old-money button-down guy and bradley is the guy who recently came into money through a comp or med mal claim. They may live on the same street but they are very different cats.
417 Bradey and Avon,
Bradley is the old-money button-down guy and bradley is the guy who recently came into money through a comp or med mal claim. They may live on the same street but they are very different cats.
cobbler, [421],
That is correct. During the gold bear market, 1981-2001, I was not a participant. As far as I’m concerned, it’s not on my radar. Hey, I was also a RE bull during this time frame. I have only been long since 2003. During this time frame, there’s no comparison. dow/gold.
cobbler,
I don’t agree regarding inflation. Gold/gold stocks were one of the best performers in the 30’s. Gold will thrive in either a deflation or inflation environment. It will not prove to be a stellar performer in a disinflation period.
kettle/veto,
Great work. Thanks.
#429 26 weeks. what am i talking about. 26 quarters,one and a half years to bottom.
Those bags are starting to spoil.
Can’t do my math;6 years and 6 months.WOW!!Dropping 1% a month,78% down to go.
#446,
“some sort of positive sign”
A person with a 2% mortgage is not going to default any time soon, nor will they try to sell it. It’s a win-win for everyone, except me. Think a little.
#448,
Bankruptcy is the best thing out there, it wipes out most debt except my mortgage. This one is a winer for me.
bc [453]
Gold and gold stocks had been among the best performers in the 1930s because USD and all other currencies had been run based on gold standard. Everything had been deflating and gold was staying on (it even went up when FDR dropped the value of USD in gold) – but since most of the physical gold had been “confiscated” – actually, force-exchanged to the paper currency – before that event, how it worked as a store of value back then is not really relevant. Actually, holding on to cash would work in the 1930s as well as holding gold (again, exempt the 1-time devaluation episode).
Delusional people building housing for delusional people: http://www.nytimes.com/2009/06/07/realestate/07njzo.html?ref=realestate
grim,
please unmod 459 – I wonder which word had been the filter trigger…
Anyone seen the French Open. Federer, along with Tiger Woods, make a game worth watching even when a match/tournament is horribly one-sided. Of course, Nadal is also very strong and can rewrite history.
S
This is quite good, thanks. It’s gonna be very useful for many.
Frank 400
re Essex/Sussex.
Looked at a foreclosure apt 2+ yrs ago – they wanted around 400K+ at the time.
NO kitchen. (no cooking allowed)
Nice view of the ocean but that’s it
OIW, a f’ing ripoff. Same place for 119K?
Maybe worth it. YMMV.
sl
NJCoast,
just saw your post.
I’m too bleary eyed after a 30 person shellfish fest/kid party and making way too many pina colada slushies.
sl
yome 455/6 If you are right it will be the end of the USA as we know it. Catastrophic lose to all homeowners, even ones with no mortgage. Do we really want this? Will it happen no matter what the gov tries, wish I knew.
Next on the horizon principle forgiveness. Force prices down even more & forget about getting a loan. No way out except inflation I guess.
Mike,All i know is my house is a place i go to rest.I can take a lost as long as my mortgage is still less than rent and i keep up with same income, i’m ok with it. If not I can always walk away.
Bought in Edison $126,000 in ’96 mortgage at less than $700 a month property tax at less than $6,000 a year with 2 kids in the public school system.
yome you are in a sweet spot. I doubt most are in such good shape as evident in the foreclosure rate.
You want GREEN shoots ….I’ll give ya’ green shoots http://www.youtube.com/watch?v=KWu-efNN8PM
LBI
I should say that njrereport.com has lots of interesting information. Looks like the author did a good job. I will be coming back to njrereport.com for new information. Thank you.
Good point! Thanks!
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