From the WSJ:
From Bottom Up, Signs of Housing Recovery
After years of watching home prices slide, Claudia Ruggiero, a teacher in White Plains, was ready to strike.
She and her husband Michael Johnson, also a teacher, had a 14-month-old son at home and needed a shorter commute. They found a three-bedroom Dutch colonial in Armonk, a neighborhood they thought they could never afford, for a bit more than $500,000.
In a strong sign of recovery in the housing market, cost-conscious buyers such as Ms. Ruggiero have stormed back into the market for lower-priced properties across the New York area in recent months, leading analysts to speculate that the worst of the housing slump may be over.
Across Westchester, the number of buyers in contract to buy homes priced less than $500,000 at the end of 2011 rose by nearly 40% compared to a year earlier, according to a market report issued by the broker Houlihan Lawrence. Sales weakened at higher price points.
Analysts have noted a similar pattern in New Jersey. Sales have picked up due to buyers of properties priced less than $400,000, according to data compiled by the Otteau Valuation Group. The number of such contracts signed during the fourth quarter rose by 11.3% compared to the same period a year earlier.
Analysts said housing-market recoveries often begin at the bottom.
“It is nice when you get the high end of the market doing well,” said Chris Meyers, chief operating officer of Houlihan Lawrence, the largest residential brokerage in Westchester, “but in our experience the strong markets get healthy from the bottom up.”
Jeffrey G. Otteau, an appraiser and housing analyst in New Jersey, said that state’s market had “bottomed out.” He said the surge in lower-end sales strengthened month by month since September. It was, he said, like a “snowball, rolling down hill and gaining momentum” that was likely to continue in 2012.
He attributed the change to an improved economy, with the creation of entry-level jobs triggering home buying by first time homebuyers backed by support from federal housing programs. A bump down in mortgage rates was also a factor, brokers said.
From the NY Times:
Christie Proposes a 10% Income Tax Cut in New Jersey
Gov. Chris Christie vowed on Tuesday to press ahead with what he called “the New Jersey comeback,” proposing a 10 percent, across-the-board cut in income taxes and a host of changes to the state’s schools and criminal justice system.
In his State of the State speech midway through his term, Mr. Christie praised legislators for helping to “stop the bleeding” in state spending by working with him over the past two years to cut 375 programs, pass a cap on property taxes and roll back pension and health care benefits for public employees.
…
But Democrats, who control the Legislature, dismissed Mr. Christie’s remarks as merely “a good speech” and called the income tax proposal a “sound bite” that would disproportionately benefit the rich while taking money away from schools.
While stopping short of declaring the proposed cut dead on arrival, the Democrats said it would reduce state revenue by $1 billion, resulting in a reduction in the amount of money Trenton sent to cities and towns, forcing them either to raise property taxes or to cut school budgets.
“This sounds great; everyone loves to hear tax cuts, but it’s taking money out of one pocket and putting it in another,” the Senate president, Stephen M. Sweeney, said.
From the Times of Trenton:
Editorial: N.J. property tax control efforts off to good start
After about a year with a 2 percent property tax increase cap in place, New Jersey taxpayers are reaping the benefits.
A Star-Ledger analysis finds that while taxes did go up last year for most, homeowners paid an average of just 2.4 percent more for property taxes in 2011. That’s the smallest increase in nearly two decades — and a strong indication that Gov. Chris Christie’s push to restrain local levies is getting results.
Those results, of course, did not come about without a lot of hard work and sacrifice in the towns where tax increases were minimal. Other municipalities, as prescribed, asked voters for permission to exceed the limit; still others, operating on a fiscal year rather than a calendar, have yet to weigh in on the changes.
With bipartisan support in the Legislature, the governor limited property tax increases for towns, schools and counties to 2 percent, starting last January. In order to comply with the new mandate, many towns were forced to lay off employees, cut services or shelve capital improvement projects.
From HousingWire:
Fitch: ‘Mild’ 2012 recovery for housing
Fitch Ratings said the foundation is in place for “mild” recovery for the U.S. housing sector, though the economy continues to temper a revival.
In a report released Tuesday, the ratings service said it expects existing home sales to grow 3% for 2012, with single-family housing starts and new home sales up 5% and 5.5%, respectively.
Fitch’s report follows another Friday by Fannie Mae. Economists at the government-sponsored enterprise predicted a 3.5% increase in total home sales for 2012.
The housing sector finds itself coming off a disappointing year, Fitch said, much the same as a year ago. It’s also not filling its traditional role, the report said, as a driving force for a post-recession economy.
But the economy itself, Fitch said, continues to drag on the market. Home prices could lag over at least the next few quarters with employment and financial markets unstable and declines in personal income. The Census Bureau reported a 2.3% decline in real median household income to $49,445 in 2010.
A “negative psychology” from potential homebuyers could also weigh down the market, Fitch said.
“Many people expect or fear that home prices are vulnerable to further declines and buying now might be a mistake,” the report said. “This psychology applies to all types of buyers, but especially applies to trade-up and second-home buyers.”
From Bloomberg:
N.J. residents happiest with finances since 2006
One-third of New Jersey residents say their finances have improved in the past year, the highest percentage since 2006, with the most improvement among adults age 18 to 29, a poll found.
The 32 percent of New Jerseyans who said they are better off than they were last year is up seven percentage points from January 2011, according to a survey by Fairleigh Dickinson University’s Silberman College of Business. Forty-one percent said they are worse off, the lowest percentage since 2008.
Unemployment remains a concern, with 63 percent of New Jersey residents saying they or someone close to them has lost a job in the past year, little changed from 65 percent in a January 2011 poll. The percentage of respondents who are somewhat or very concerned about getting fired remains at 32 percent. Those saying business conditions will improve was steady at 54 percent, while those predicting it will improve declined by 5 points to 21 percent.
“People are not necessarily more optimistic,” Sorin Tuluca, a finance professor at the business school in Madison, New Jersey, said in a statement accompanying the poll. “But they are definitely less pessimistic.”
Good Morning New Jersey
No. 5 “people are not necessarily more optimistic” “but they are definetly less pessimistic” Pop the cork or don’t pop the cork?
I’m from Jersey, You from Jersey? http://i.imgur.com/Pwnf4.jpg (hope I don’t offend anyone)
Good morning Bloggers..Hate to steal Mikes line and say NJ
Somebody answer please. Where is all this new money coming from? 1 article talks about median income of $46K then you have these people (teachers) buying a $500K house, I’ve been working for 24 years,, have what you would call a reasonable middle class income and live within my means,, I still can’t see how these people can afford these homes,For young people how do they get 20%, pay the taxes and still have enough to raise a family. Your talking about 3k a month plus just for the mortgage. Then monthly expenses food, Gas, car/home Insurance plus repairs, Heat, electric, cable, cell phones, computers, entertainment, college and try to save something for retirement. Oh lets not forget health insurance if your company doesn’t provide a benefit
Wow Grim you are just full of all kinds of good news today.
The unicorns are stampeding this morning!
When Christie disassembles abbot through supreme court, youll know he is ready for pres.
If Christie can take apart Abbott or COAH, he should be made king for life.
Of course, were Abbott or COAH about to go, Christie would be found dead from a mysterious poisoned doughnut.
Gubmint bureaucracy is the real Mafia.
Funnel 8 That’s OK, Imitation is a form of flattery!
Hoboken = some of the priciest RE in NJ = Abbott district:) All that taxpayer money over all those years going God knows where.
Funnelcloud (8): I wonder the same thing I am 32, and making a good middle class income I can’t see how they swing it.
I know people in NJ who on 150k between the couple do not realize they cannot afford
NJ and living the way they do. Many are just to stupid to figure it out . After all, we’re in Bergen County and housing will come back .
RPatrick, I am around your age, bought in 2006 and I must say, the first year or so I was eating alot of pasta but as the years passed, income went up slightly which made paying the mortgage much easier. I was just able to re-finance for free now so now my monthly payments are around 1600 a month including taxes. Renting a 1 bedroom apartment in my area would cost around 1200 + a month so it definately is possible.
150K, lets see multiple cell phones, smart phones, netflix, cable, dinners out, leased cars, vacations, cloths, birthday parties. Honestly on 150K that stuff could eat up all your income the way the folks in BC live which leaves nothing left over for housing.
freedy says:
January 18, 2012 at 7:55 am
I know people in NJ who on 150k between the couple do not realize they cannot afford
NJ and living the way they do. Many are just to stupid to figure it out . After all, we’re in Bergen County and housing will come back .
I bought in 2006 too. I bought a cheaper house in a vast wilderness of retired hippies and rednecks. I refinanced, fixed up the house (and had two kids). I still eat a lot of pasta. I also switched from Samuel Adams to Pabst Blue Ribbon. Every little bit helps.
Brian, West Milford area? If so, I looked there as well but ended up choosing So. Bergen County because easier commute. Less land, but also less property taxes. I have grown to love the area.
Young couples can save insane amounts of money in a short time. I only made 50K a year when I got married and my wife made 50K a year. In 24 moths I saved 120K for a downpayment on that salary. She moved into my place and I banked 100% of her salary then I banked 20% of my salary and then she paid for wedding so all wedding gift money came back into our bank account. Sometimes it is not about salary about cash flow. If you have low expenses like a newlywed couple does you are set.
Dual Teachers make at least 200K a year minimun. A 500K house is not that much of a reach. My cousin the teacher makes around 90K a year teaching and she is in her early thirties. She tutors four nights a week for three hours a night at $60 an hour, another $1,000 a week and has a summer teaching job that pays another 20K. So she is making all in $150. Not bad for a 32 year old teacher.
Young people have it made. When you get to my age and all at once multiple colleges and retirement that once was 40 years away is creeping closer you realize you have to save a ton each month and housing expense once deemed a retirement piggybank is now as much of an investment as whole life, PSLs and timeshares.
funnelcloud says:
January 18, 2012 at 6:33 am
Good morning Bloggers..Hate to steal Mikes line and say NJ
Somebody answer please. Where is all this new money coming from? 1 article talks about median income of $46K then you have these people (teachers) buying a $500K house, I’ve been working for 24 years,, have what you would call a reasonable middle class income and live within my means,, I still can’t see how these people can afford these homes,For young people how do they get 20%, pay the taxes and still have enough to raise a family. Your talking about 3k a month plus just for the mortgage. Then monthly expenses food, Gas, car/home Insurance plus repairs, Heat, electric, cable, cell phones, computers, entertainment, college and try to save something for retirement. Oh lets not forget health insurance if your company doesn’t provide a benefit
BTW Chris Christie is insane for cutting taxes. He should raise them. Cumo is rapidly paying down debt, doing infrstructure project and spending on education and raising taxes. NYS top bonds are AAA, yes more highly rated than US Govt. Chris Christie will upset bond holders with his reckless plans resulting in much higher costs down the road. His plan is like lets save money by not maintaining our old car, yep for two years you save money then you have to buy a brand new car. He should keep taxes high and let bonds mature without rolling over and then call every callable bond and refinance them at the 46 year low rates. We are around 2 years away from higher rates, now is time to get ducks in a row like Cumo.
Starter home for $500k? No thanks.
Thanks partly to the shake out on this board of my situation a few weeks ago, we are sticking with renting. I am still dreading the thought of moving and still pricing out if it is worth leaving the current place in Manhattan for something cheaper within Manhattan or something larger in NJ. I have to factor in the moving costs, possibly a broker fee, and potentially a rent increase in the current place and figure it all out. I bought 3 calculators at Staples last week to have one on me at all times because it seems like all I do these days is crunch numbers.
If anyone saw a ’98 civic with a crumbled hood on Rt. 20 in Paterson yesterday waiting for the cops to write an accident report, that was me. My old civic has officially become a money pit. Since we are not having to pony up for a down payment on a home anymore, we visited Acura dealerships on Rt. 17 and in Montclair yesterday looking for an RDX.
jj – 22
I think it is posturing. Christie probably knows the state legislature will not let him lower taxes as much as he wants. It could also just be part of a negotiation. If he publicly asks for much more of a reduction in taxes than he actually expects to get, then he looks like the good guy to taxpayers and might actually get part of what he originally asked for.
Jeffrey G. Otteau, an appraiser and housing analyst in New Jersey, said that state’s market had “bottomed out.” He said the surge in lower-end sales strengthened month by month since September. It was, he said, like a “snowball, rolling down hill and gaining momentum” that was likely to continue in 2012.
He attributed the change to an improved economy, with the creation of entry-level jobs triggering home buying by first time homebuyers backed by support from federal housing programs. A bump down in mortgage rates was also a factor, brokers said.
What improved economy? What entry-level jobs? He mentions Federal Housing Programs; anything tied to “Federal” means that it’s either anemic, ill or close to death. And mortgage rates? Are you f*cking kidding me? Do you see property taxes mentioned anywhere? What about the fact that savings and health plans will be entirely your responsibility within the next few years?
It’s all about how frugal you are. Drive a 16-year old car that gets 40 mpg. Take advantage of the credit cards and travel for free. Take advantage of the casinos for free ski-trips and cruises. Clip coupons, buy entertainment books (we sometimes buy three of them), negotiate with your insurers (auto, home, life), lower your cable bills, seek out online discounts, use Upromise, etc. Join an investment club and learn about personal finance. Read Fatwallet forums. Only buy large ticket items when they are on sale. All of these things are so easy to do and do not require a lot of time. You can easily save $5K to $10K per year with frugality which can then be routed into a 529 or an IRA. It can be done. We are doing it. You can too.
My latest move was to purchase a Honda Snowblower and LR Chandelier from Home Depot. The blower was $700 and the chandelier, when I first saw it, was over $500. I bought gift cards at Shoprite using my 5% cash back on groceries credit card. Then I bought a 10% off coupon on Ebay for $5. I waited for the Upromise double cash back and free shipping (every winter holiday) and got 4% of the purchase price into my 529 for little Gator. Oh, the chandelier hit clearance after Christmas so it went down to $225. When it was all said and done, I paid $910, got $50 back from Amex and added $37 to our 529. The average shmo would have walked into the Home Depot and would have plopped down $1272 for what I paid $823 for. $450 savings and it took me all of about ten minutes of time to achieve it. Best of all, I didn’t even have to drive to Home Depot. The chandelier and snow blower got delivered to my front door in about four days. $450 savings really add up quickly.
If you really want insanity, you should see how we racked up savings for little Gators ice hockey fees. We are paying 40% less than everyone else. Unfortunately, it’s still not cheap enough. :P
Gary (25):
You know Otteau is just a paid shill, the guy has never been right for the past 5 years. Do you expcect him to be right now? His life depends on him being somewhat relevant in housing business. He gets paid not to understand.
gryffindor,
Looking at what rental prices are doing in our area as well as in Manhattan, you really have only two choices. Buy or stay put. To move to another rental is insane. Why are you moving up to an Acura? Just find another old Civic. The saving in insurance alone will pay for any significant repairs.
Anyone still putting money into IRAs is a d-m fool.
All Hype [27],
I know. And he knows it too, which aggravates me even more. The prices are still so ridiculously out of whack that it’s amazing that there are still people willing to be duped. I should’ve went into sales a long time ago. Every single day we’re getting hacked with cost increases on everything. And they’re not small, they’re huge chunks at a time. I seriously don’t know how anyone cannot see there’s a huge leg down in house prices just around the corner.
tbw,
What area do you reside?
Sorry about the civic Gryff, but why trade up to a much more expensive CRV in the RDX. Both will get you where you need to go just fine granted the RDX in more style. We bought an audi when we were saving for our house if we didn’t get the price down to VW levels we probably would have bought a Subaru instead. now that it is getting older wish we bought the Subby as they are much cheaper to fix
Gary – Carlstadt/East Rutherford area. I like it because it is safe, inexpensive, and the houses are old and have lots of character. Schools aren’t terrible either.
tbw,
Thank you. :)
#33 East Rutherford is blue ribbony (if you care), and one stop on the train to Hoboken.
#25 gary: I really think Otteau is clueless, does he even check what he writes before he publishes it. Entry level jobs and house buying?? So people are going out getting entry level jobs, and then the first thing they are doing is buying a house???? What a joke.
Why are you moving up to an Acura? Just find another old Civic.
DING! Lexus, Acura, and Inifinity are all manufactured and sold by companies that do business around the world (as Toyota, Honda and Nissan), but those brands are marketed solely to the American consumer. I wonder why?
BTW, this is nothing new. As a kid I remember driving in a Olds Toronado that rolled off the same assembly line as the Cadillac Sedan De Ville; the only two noticeable differences being the hood ornament and about $5,000 in sticker price.
Christie already slipping. He was on the radio today defending Romney calling his characterizations of Bain capital and so called Romney job creations facts. Fat man is going to lose me and others, we voted for him becuase he said he was going to clean up NJ, and instead he is on the microphone defending a kook like Romney. Get back to your job fatso and clean up NJ.
3B – not sure if ER is blue ribbon perhaps neighboring Rutherford is. Carlstadt/ER isn’t for everybody though, most home buyers looking in the Northern BC area would be turned off by the lot sizes and the mix of multi family houses and industry in the area. Plus, smaller older homes dont have a bathroom for every bedroom and the bathrooms you do get tend to be small. If you dont mind living small and in a mixed neighborhood I would say it is a great place to live.
WARN Notice – January 2012
COMPANY CITY EFFECTIVE
DATE WORKFORCE
AFFECTED
A & P Kearny 03/10/2012 129
A & P Bayonne 03/10/2012 89
IntraPac Swedesboro 03/09/2012 51
Phoenix Color Corporation Rockaway 03/04/2012 47
sanofi-aventis U.S. Inc. Bridgewater 03/12/2012 391
Sanofi-Aventis U.S. Inc. Bridgewater 03/12/2012 391
My buddy had his last day there last Friday. 20 years as a scientist, new big K-Hov house and just had his 4th kid. He is sweating bullets….
All Hype/Mike,
Yup, all a product of the improved economy that sh1thead Otteau mentions.
From HousingWire:
Mortgage applications jump 23.1%
Mortgage application filings jumped 23.1% this past week on low interest rates and a dramatic upswing in refinancing activity, an industry trade group said Wednesday.
The Mortgage Bankers Association, which measures mortgage loan application volume through its market composite index, said home loan volume soared 23.1% from the previous week as the refinance index grew 26.4% from the previous week, reaching its highest level in five months.
Home purchase activity also increased, with the seasonally-adjusted purchase index increasing 10.3% from a week earlier.
Refinance activity made up 82.2% of all mortgage activity, compared to 80.8% a week before.
Hype it was between them and where I currently am. something just didn’t sit right with me during the interview. Plus I know a senior director in CPM there and she recommended against it
#4 grim One-third of New Jersey residents say their finances have improved in the past year
That’s a bad thing, right? I guess I’m not a glass is 1/3 full type optimist.
Sounds like a lot of work. My buddy bought a snowblower new from Home Depot uses it once puts a secret mark on it and returns it as defective. Home depot puts a spray paint mark on in and resells it for like 75% off and my buddy then buys it back.
Chandleers go to canel street in NYC and get them wholesale and pay tax no cash.
Or even better go to snowbird sales and get them for free.
But fact of matter is you spend $823. I don’t have snowblower I have shovels I got for free and I don’t have a chandleer. You did not need either item. You can never save money by spending money.
Now the 16 year old Honda is a waste of money. The rich would never do that. My buddy used to buy classic cars and register then in his Dad’s business name and buy classic car insurance at $30 bucks a year. Tax code lets you depreciate a classic car used in business even though value is rising. Once car was fully depreciated he would sell it in newspaper for cash at more than he paid for it. Hence, he got paid to drive his car. Now that is savings.
My latest move was to purchase a Honda Snowblower and LR Chandelier from Home Depot. The blower was $700 and the chandelier, when I first saw it, was over $500. I bought gift cards at Shoprite using my 5% cash back on groceries credit card. Then I bought a 10% off coupon on Ebay for $5. I waited for the Upromise double cash back and free shipping (every winter holiday) and got 4% of the purchase price into my 529 for little Gator. Oh, the chandelier hit clearance after Christmas so it went down to $225. When it was all said and done, I paid $910, got $50 back from Amex and added $37 to our 529. The average shmo would have walked into the Home Depot and would have plopped down $1272 for what I paid $823 for. $450 savings and it took me all of about ten minutes of time to achieve it. Best of all, I didn’t even have to drive to Home Depot. The chandelier and snow blower got delivered to my front door in about four days. $450 savings really add up quickly.
Here’s one for ya… a co-worker bought a house in Cranford a year ago and really stretched financially. It was an old house, not updated but clean and liveable. He was happy to at least get out from that dreaded (sarcasm…) renting!! Anyway, the last good rain event revealed a damp spot on the ceiling in one of the bedrooms. No problem, get it repaired. Right? Only one small issue: stripping away a few tiles revealed major rot and damage to the plywood sheathing. The whole roof is being replaced at this very moment. He’s in the thousands for the cost to replace and is borrowing from family just to keep a roof over their heads. I guess the inspection didn’t include that slight oversight. But hey, at least he can say he’s prestigious, right? Right? I said, RIGHT?
Mortgage applications for refinancing is all smoke and mirrors. On a macro level you can not save money by refinancing. Impossible.
Lets say you have a 200k 8% mortgage and you refinance to 4% saving you $800 a month. The President would like you to believe that could stimulate economy. That is bs. Someone owns that mortgage and was receiving that as interest income. So grandma who invested 200K MBS for interest income to live off goes from getting $1,600 a month income to $800 a month income and cuts back on spending by $800. All it does is makes one set of people happy at the expense of another set of people
Pain:
The Sanofi CEO is not real big on R & D. He is a pure sales guy. To him the science and development people are just cannon fodder. My buddy has told me that some jobs went to Cambridge, MA but the majority of science people in Bridgewater have been laid off. The real issue is that going to Cambridge is no sure thing as the CEO stated there would be more layoffs at the end of the year.
Why do the Pharma companies continue to stay in NJ?
I’m surprised Timmy and Ben didn’t follow the Spaniard playbook. The solution to the housing problem? Have the banks build more houses……..
Spanish Banks Try to Build Their Way Out of Home Glut
MADRID—On a weedy dirt lot here, lender Bankia is pursuing its answer to a banking and property crisis that has left Spain with a glut of around one million vacant homes. Its approach: Build even more.
Bankia and a local developer plan to build a 212-unit housing complex featuring a gym and movie theater on the central Madrid site where a bus station once stood. Construction begins early this year, even though sales of existing properties are practically nonexistent and only 45 of the planned new units have been sold in advance.
“The market is at a standstill,” said César Cabal, a real-estate broker working with the developers.
The drive to keep building in a housing market drowning in empty properties shows the depth of Spain’s banking crisis. The country’s housing bust saddled banks with not just vacant homes, but also billions of euros worth of undeveloped land.
Yet rather than writing off the land as a loss and attempting to sell it, Bankia and its peers have begun selectively building on empty lots. In some cases there are buyers lined up but in other cases there aren’t.
A Bankia spokesman said the bank is building only in high-demand areas, like central Madrid, and that the new projects are a smart way to give a dud asset new value.
There were about 700,000 vacant newly built homes at the end of 2010, the most recent numbers available, according to Spanish government figures. Including repossessed properties, some economists and real-estate consultants estimate the total could be as high as one million, or even 1.5 million. There were 19,457 housing starts in the third quarter of last year, down 7% from the second quarter and down 5% from the year-earlier period. Ernesto Tarazona of consultant Knight Frank España SA estimates that Spanish banks and cajas will develop 5,000 to 6,000 new units in the next two years.
Lenders are hoping that the moribund Spanish property market will pick back up. But that is hardly a sure thing in a country with more than 22% unemployment and uncertain growth prospects.
Spanish banks, which played a big role in the country’s housing bust, are continuing to fund new real-estate projects despite a huge glut in unsold homes, Sara Schaefer Munoz reports on Markets Hub. (Photo: Edu Bayer for The Wall Street Journal)
Banks are trolling for foreign buyers, and last year—with Spanish officials in tow—they went on property roadshows in the U.K., the Netherlands, Germany and Sweden. They served wine and Spanish ham, and pitched Spain’s sunny climate and relaxed lifestyle.
Even meager home sales could benefit certain lenders in Spain. But there are concerns that building more homes will drive prices down further, compounding the problems of the housing market, and by extension, the banking sector.
Since its property bubble burst in early 2008, the Spanish financial sector has been dogged by fears that it has put off doing a deep clean of the estimated €176 billion ($224 billion) in troubled assets sitting on its books. Banks have set aside funds to cover about a third of that amount.
The Bank of Spain has forced a wave of bank consolidation and recapitalization, resulting in new entities like Bankia, created by the forced merger of seven regional savings banks. Over the past two years, Spain has injected a total of €22.3 billion into its banking sector, from the state or its deposit guarantee fund, and dodged the market cross-hairs as concerns about euro-zone debt shifted to Italy.
Spain’s new finance minister, Luis de Guindos, said earlier this month the sector will need an additional €50 billion to swallow losses on its bad property holdings. Eager to avoid a state-financed bailout, Mr. Guindos said the money would come from banks’ own profits over several years, after another round of mergers in the sector.
But some economists fear such moves still don’t go far enough. Unless the now-struggling banks start generating enough profits to absorb these losses, the sector could face a state-backed or international bailout, said José García Montalvo, an economics professor at the University of Pompeu Fabra in Barcelona.
Enlarge Image
CloseEdu Bayer for The Wall Street Journal
Many Spanish banks are building housing despite a home glut.
“Spain’s strategy has been ‘wait and see. We’ll inject money but little by little,'” said Mr. García Montalvo. “We are no longer in ‘wait and see.’ Now we are in ‘wait and pray.'”
The same drawn-out approach to bank woes has been seen elsewhere in Europe. French banks fought for several years to avoid shoring up their loss-absorbing buffers. But worries about their health have persisted, hitting their share prices hard and restricting their access to funds.
Even if the Spanish government wanted to intervene, it has become very expensive to do so. Spain has been paying a record premium on its debt and would have much more difficulty raising needed funds that it would have had even six months ago. The interest rate it must pay its borrowers has hovered between 5% and more than 6% in recent months, close to an unsustainable level of payments for the government in the long term.
Problems with property exposure have plagued Spain’s banks since its housing boom began to collapse in 2007. The year before, Spain built more housing units than Germany, the U.K. and Italy combined, according to data from the European Mortgage Federation.
Especially hard-hit were Spain’s regional savings banks, known as cajas de ahorro—or savings boxes. Local lenders often controlled by regional politicians or even the Catholic Church, they lent heavily to local construction firms and projects.
When the market crashed, the banking sector acquired €60 billion in properties, either through repossession or assets required in exchange for debt forgiveness. Savings banks were particularly saddled with these assets: They own €40 billion of the total, according to government and bank data.
In the past two years, the former government of Prime Minister José Luis Rodríguez Zapatero made strides in addressing the issues through broad reforms in Spain’s financial sector. The government shepherded the consolidation and strengthened the savings banks, shrinking the number of players as stronger ones merged with weaker ones.
Some investors remain skeptical. Graham Neilson, chief investment strategist at Cairn Capital Ltd., a London-based fixed-income asset manager, said many banks still are carrying real estate at unrealistic valuations on their books. “Some of these assets are close to worthless but have not been marked as anywhere near to that,” he said.
Problems have continued to emerge. The Bank of Spain took over troubled lender Caja de Ahorros del Mediterraneo in July, and in December the government decided to inject several billion euros from the Spanish bank insurance fund to help ease its sale for a single euro to Banco de Sabadell SA. In early December, it nationalized Banco de Valencia, infusing a lifeline of €1 billion.
Analysts and investors say that the practice of building on empty lots is one among several moves that have helped banks obscure the size of inevitable losses. They say that banks also have been refinancing loans to developers that in many cases have little hope of paying them back.
Spain’s banks have €338 billion in exposure to the real-estate sector, mostly through loans to developers, according to Bank of Spain data. This number has hardly budged in the past three years, despite a wave of developer bankruptcies following the property market decline.
Enlarge Image
CloseJoaquín Maudos, a professor of economics at the University of Valencia, said that statistic indicates banks are continuing to refinance loans, instead of writing them off. “They are putting makeup on these bad loans,” he said.
A division of Sergesprom 2000, a struggling midsize developer in Catalonia, is one example. It received about a €30 million loan from a local savings bank to build 200 homes during the property boom. But the market collapsed, and Francisco Gómez, the building firm’s chief executive, said he hasn’t been able to sell the homes, or even pay interest on the loan, for the past three years.
Instead of foreclosing, he said the bank—which he won’t name—has been lending him more money to cover the interest payments, adding an extra €3 million to the total debt. Mr. Gómez isn’t confident he can pay it off. He has said he has been “on my hands and knees to ask the banks to please give me work” completing unfinished homes the banks have repossessed.
A spokesman for CECA, Spain’s savings-bank association, said that some developers still have some ability to pay. “We’re in a down cycle right now,” he said. “These things take time.”
A Bank of Spain spokesman said it doesn’t permit banks to disguise bad loans in any way, and has strict rules that require disclosure and funds to be set aside cover such loans.
Things were looking up at the beginning of last year, with a 32% increase in foreign investment in Spanish property. But now euro-zone fears have taken a deeper hold on the continent, and buyers have pulled back. Home sales were 81,310 units in the third quarter, down 2.6% from the previous quarter, and down 34% from a year earlier, according to Spain’s national institute of statistics. The situation is growing still worse, as cash-strapped Spaniards have trouble paying their mortgages.
Home repossessions totaled 10,869 in the third quarter, up 14.2% from the period a year earlier, according to data from Spain’s courts.
Selling down banks’ housing inventory “is like bailing out a boat as more water is coming in,” said Robert Evans, a real-estate agent for several Spanish banks.
Yet banks are building in strategic spots, where they say there is more demand. Banco de Sabadell, a midsize lender based in Barcelona, is building or planning to build 50 new construction projects, and also funding the completion of 150 projects that developers wouldn’t have otherwise finished because of slack demand, said Salvador Grané, director of the bank’s real-estate division. Meanwhile smaller Banco Pastor is working on five new apartment buildings around Madrid and the northwest.
Mr. Cabal, the real-estate broker, is pitching properties for the Bankia project in central Madrid. The bus-station location sits near the intersection of two freeways, and homes will have features like floorboard heating systems and a device that can automatically draw the blinds, start the clothes washer or call the fire department. The bank is selling them for about €4,500 a square meter and sharing the proceeds with the developer.
“People are hiding their money under the floor boards, and they won’t take it out until things are better,” Mr. Cabal said. “With the euro fears, we’re all scared stiff” about whether the homes will sell.
In some instances, banks are waiting until they have lined up buyers before starting construction. Banco Pastor took possession of a parcel in one of Madrid’s upscale districts in 2008. It is now continuing to round up home buyers for Mindanao House, with 104 of its 130 apartments spoken for. It started construction early last year, when about 50 units were already spoken for.
In all, Banco Pastor is involved in building or completing 10 projects assessed at €160 million. The bank and clients are putting up an additional €35 million to build and finish the structures.
This year, Pablo Rodríguez-Losada, Banco Pastor’s director of real estate, says the bank plans to put into motion another €150 million worth of its land portfolio.
Mr. Rodríguez-Losada says market studies have shown there is a demand from well-off buyers for high-end new housing in and around big cities.
As the new homes go up, older developments languish. The Valcastillo development in Pioz, northeast of Madrid, comprises about 500 homes on the outskirts of town that were built by a developer at the height of the boom. Yards in the developments are overgrown with weeds, metal sockets have been torn out, and plaster is crumbling off brick walls.
About half of the Valcastillo homes are occupied. For two years, Manuel García of real-estate agent Básico Homes has been trying to sell 108 of the rest.
The bank that owns them, Grupo Caixa Catalunya, contracted Mr. García’s company to help sell the empty homes. The initial developer had been pitching them for €169,000, but Básico thought they would move if priced under €120,000. The plan at first was to sell the homes at around that price and then slowly raise it as demand grew, unloading all the property in two years, he says.
“It was optimistic,” says Mr. García. So far, he has only sold 27 homes.
Write to Ilan Brat at ilan.brat@wsj.com and Sara Schaefer Muñoz at Sara.Schaefer-Munoz@wsj.com
38.Juice Box says:
January 18, 2012 at 9:42 am
Christie already slipping. He was on the radio today defending Romney calling his characterizations of Bain capital and so called Romney job creations facts. Fat man is going to lose me and others, we voted for him becuase he said he was going to clean up NJ, and instead he is on the microphone defending a kook like Romney. Get back to your job fatso and clean up NJ
You’re right, Corslime would be much better, assuming he’s not in prison.
CEOs, CFOs, BOD, Comp Committee and Senior Mgt Team does not understand what the guys in the white coats do. The guys in white coats are terrible in doing powerpoints and making presentations
All Hype says:
January 18, 2012 at 10:06 am
Pain:
The Sanofi CEO is not real big on R & D. He is a pure sales guy. To him the science and development people are just cannon fodder. My buddy has told me that some jobs went to Cambridge, MA but the majority of science people in Bridgewater have been laid off. The real issue is that going to Cambridge is no sure thing as the CEO stated there would be more layoffs at the end of the year.
#39 tbw: It is either Rutherfored or East Ruth, one is definitely blue ribbony.
Gary 47 It’s still Cranford. Still can’t get the vision out of head going for my bike rides through Nomahegan Park and down prestigious Riverside Drive after Irene hit, those people had their whole lives out on the curb.
Gryffindor & Lib, new car, etc. – I reacted the same as Lib when I read Gryff’s post. “New car, live in NYC, that’s stupid.” But then I bit my tongue. If spend a lot of time driving, like Gryff does, I don’t have a problem with buying a new car (though I would buy a leftover in the fall, in fact I did). Buy a new car the same way Lib shops at HD, that’s the way I would and do do it. About a dozen years ago we bought ’99 model new car so cheap that we got every dollar back in insurance when my wife totaled it in ’02. We then bought a new ’02 that we still drive and maintain, still runs great and looks pretty good, considering it’s never been parked indoors in it’s life. Just bought an ’11 as we tend to buy a new car every 9 or 10 years whether we need one or not. New cars are so reliable these days that the good ones need almost nothing except regular maint for the for the first 7 or 8 years, so they really aren’t that bad of a value like I used to think they were.
http://online.wsj.com/article/SB10001424052970204555904577167323343069432.html?mod=WSJ_NY_MIDDLELEADNewsCollection
How’s this for taking money out the taxpayers pockets? It never ends
50 Freedy because those of us with experience who were trainined in the industry are in Mass, Cali, and here. you stay where the talent is.
Hype – sales guys never change could be worse could be Miles, you see what they are doing with our former employer.
JJ – My buddy used to buy classic cars and register then in his Dad’s business name and buy classic car insurance at $30 bucks a year. Tax code lets you depreciate a classic car used in business even though value is rising. Once car was fully depreciated he would sell it in newspaper for cash at more than he paid for it. Hence, he got paid to drive his car. Now that is savings.
Thanks for that one, JJ. I’ll be checking into it. I already have the cheap classic car insurance on our restored ’72 El Camino. I may just end up selling it to my business.
Pain (58):
Our friends still working at our former employer have no idea what is going on. There is absolutely no information coming out about the spinoff.
Pain – [44] – Hype it was between them and where I currently am. something just didn’t sit right with me during the interview.
You just reminded me of an interview for an IT job at Philip Morris in midtown Manhattan back in the early 90’s. I’ve never before or since been in a such a regular looking office that had such a creepy/weird/bad vibe.
On another topic, do the financial markets over the past month remind you of the times before QE1 & QE2 were announced? It seems to be going up for no other reason other than belief that another global round of QE is on the way.
Any thoughts from the gang?
[47] gary,
“But hey, at least he can say he’s prestigious, right? Right? I said, RIGHT?”
Here in the brig, Cranford is not considered prestigious. (snark!)
Hype that was the impression I got when I spoke with some of them over the holidays strange days.
As far as the market goes it is all banged up, rather than be a bond vigilante like JJ, I’m sitting on the sidelines trying to figure out what the f*ck is the new normal
Globally yes, but if you’re talking US only, not all MBS interest income holders are in US, but all mortgages are. So on a short term net, using this logic — that could be a Japanese (or Chinese) grandma somewhere.
“Lets say you have a 200k 8% mortgage and you refinance to 4% saving you $800 a month. The President would like you to believe that could stimulate economy. That is bs. Someone owns that mortgage and was receiving that as interest income. So grandma who invested 200K MBS for interest income to live off goes from getting $1,600 a month income to $800 a month income and cuts back on spending by $800. All it does is makes one set of people happy at the expense of another set of people/
Tell me more about the classic insurance. I think adding my Civic to the Xterra policy costs me about $200 per year. It’ll be a classic in four more years. :P
New cars are hard to justify from a sales tax, dealer prep, misc fees etc. alone.
For instance, I once bought a used Jeep, 4k original miles, paper mats still on floor. Always garaged. Got it for $4,600 off new price. Guy gifted it to me so no sales tax. Drove it three years and when it was stolen I got $200 bucks less than my purchase price. But if I bought it new I would be out $4,800.
The sales tax stuff alone makes no sense. Plus what is a used car. I was at the auction and I saw used cars with very low milatge. My friend bought a used car at auction with 15 miles. Guy bought his wife a stick sports car for her 50 birthday and she can’t drive a stick. Too late he registered it.
Love people who brag about driving 2002. After last car was totaled I was driving my even older car to train in 2008. Told guy at work I ain’t like you rich folk I drive a station car. Guy goes I ain rich I drive a 1996 car to station. I then told him I am driving a 1975 car to station. However, even for me driving a 33 year old car to station is a little cheapo. But the guy on Long Island with the 1967 Volvo with three million miles on it and never been garaged and original paint takes the cake.
Now getting three million miles off a car with original engine and tranny and paint and no garage that is impressive.
The Original NJ Expat says:
January 18, 2012 at 10:24 am
Gryffindor & Lib, new car, etc. – I reacted the same as Lib when I read Gryff’s post. “New car, live in NYC, that’s stupid.” But then I bit my tongue. If spend a lot of time driving, like Gryff does, I don’t have a problem with buying a new car (though I would buy a leftover in the fall, in fact I did). Buy a new car the same way Lib shops at HD, that’s the way I would and do do it. About a dozen years ago we bought ’99 model new car so cheap that we got every dollar back in insurance when my wife totaled it in ’02. We then bought a new ’02 that we still drive and maintain, still runs great and looks pretty good, considering it’s never been parked indoors in it’s life. Just bought an ’11 as we tend to buy a new car every 9 or 10 years whether we need one or not. New cars are so reliable these days that the good ones need almost nothing except regular maint for the for the first 7 or 8 years, so they really aren’t that bad of a value like I used to think they were.
But spanish gardners, illegals in Flushing, etc. who owns homes in states who refinance am I to assume all that money stays in US> or do they just ship more money home.
Duck Vader says:
January 18, 2012 at 11:07 am
Globally yes, but if you’re talking US only, not all MBS interest income holders are in US, but all mortgages are. So on a short term net, using this logic — that could be a Japanese (or Chinese) grandma somewhere.
“Lets say you have a 200k 8% mortgage and you refinance to 4% saving you $800 a month. The President would like you to believe that could stimulate economy. That is bs. Someone owns that mortgage and was receiving that as interest income. So grandma who invested 200K MBS for interest income to live off goes from getting $1,600 a month income to $800 a month income and cuts back on spending by $800. All it does is makes one set of people happy at the expense of another set of people/
If I was to take a completely unscientific guess about the markets, we are still trading in a range and sadly are most likely approaching the yearly top. Though I wouldn’t try to time/trade this market which is really a flat market that just happens to be near the top of the range at the moment. It probably helps our market that Asian markets pulled back hard last year and the Euro market is in the krapper.
JJ says: “All it does is makes one set of people happy at the expense of another set of people”
Captain Cheapo says: “Make sure you in the happy people set!”
I moved to NJ/NYC in July 2009 with 103K on the Honda Civic. 2.5 years later, I am at 144K miles. That’s about 16K miles a year. We would drive more but the car has become unreliable so we’ve actually been taking the bus to visit the DC in-laws. My parents have a 2010 CRV on lease so I’ve driven it a few times. I am leaning toward the 2012 RDX because I think the body shape is a little smaller and sleeker, reminds me of the shape of the CRVs from the late 90s. I don’t want to buy another Civic, I’ve been driving Civics for 15 years since high school. I feel like I am going to get crushed on the Turnpike by the trucks, it’s hard to see in front of me when stuck in a jam, and driving in NJ requires quick turns and merges which would be easier in a car more powerful than a Civic. Also a new car will hopefully require less maintenance and repairs than the Civic saving me lots of time. I’ve lost two work days in the last two weeks alone dealing with the accident yesterday and a blown out tire last week on Route 3 West. That was scary – I had just crossed the Meadowlands and was luckily able to pull over in a section that had barely a shoulder. Lots of Route 3 doesn’t have any shoulders.
I do all the point collecting, couponing, negotiating that Libtard does. Sometimes it works (parking garage, Time Warner), sometimes it doesn’t (apartment rent).
Yup. The numbers are key. How much of MBS payments ultimately flow abroad? How much of the savings go to people who remit money abroad? And what percentage of all mortgage holders are these remitters? I have only one number I know. Total remittances from US to rest of the world by immigrants are estimated at about 0.3% of GDP. How to feed that into some back of the envelope calculation will take more time than I have. But point was, there are leakages that make the 1:1 less than fully valid, and may create an argument for some net benefit due to refinance. Question is: how much?
“But spanish gardners, illegals in Flushing, etc. who owns homes in states who refinance am I to assume all that money stays in US> or do they just ship more money home.”
I always find it amazing that people say Hondas are good cars then say at 144k car is unreliable. Meanwhile everytime I get taken to airport in a lincoln town car or crown vic etc I always ask mileage on car. Usually it ranges for 120K to 500K. So a lincoln can be driven 24 hours a day by a cab company with 500K miles but a honda at 144K is not safe for a trip to DC. It is just funny. Before NYC got strict with mileage and age requirements on cabs I recall gettting picked up in old Checker Cabs when they were still in service with two million miles on them.
gryffindor says:
January 18, 2012 at 11:23 am
I moved to NJ/NYC in July 2009 with 103K on the Honda Civic. 2.5 years later, I am at 144K miles. That’s about 16K miles a year. We would drive more but the car has become unreliable
Bottom line, refinancing does zero to eliminate the liability. Lets say I bought a 50oK home and I got money interest free and it is now worth 200K. I want to move out of state and need to sell home I am still out 300K.
This is same as zero down and zero financing at GM. When rates were 8% on a car loan a customer may have bought a Malibu for 15K and put down 2k resulting in a 13K loan. Then zero down zero interest customers drove off in a 50K escalade. Well they just amped up leveraged and now owe 50K instead of 13k. Refinancing at lower rates should require person to have 20% equity or pony up 20% equity. Lowering the rate does not lower default risk as long as person has no equity in house.
Plus why do people need to refinance in first place? zero percent interest bascially in bank and in munis and treasuries, they should just start pre-paying their mortgage like I did in 2009 once all my one year cds started to matre to near zero rates from 5% rates.
Duck Vader says
JJ #67: “Now getting three million miles off a car with original engine and tranny and paint and no garage that is impressive.”
Not if you have a 1972 Dodge Dart. :-)
Gryff #71: I had 2 Civics, both 100% dealer-serviced — a 1990 and a 1992. Both blew head gaskets at 107K miles. Right now my 2001 Civic DX has just about 80K miles and is serviced by my local mechanic. Somehow I think I’m going to get more miles out of this one.
JJ New cars are hard to justify from a sales tax, dealer prep, misc fees etc. alone.
Not if you drive a hard bargain and think outside the box. Here’s a JJ type story. My wife and I had a 1989 Chevy Tracker convertible that I bought cheap off my sister in the mid-90’s. It was a great little Tonka Truck. Standard tranny, low and hi-range xfer case, get out and lock them yourself front hubs. Great for skiing, great for off-road, pretty cheap and easy to work on too. Started running real crappy while on a highway trip, sounded like a fouling plug, still drove at highway speed, didn’t seem like anything major. I pulled the plugs and they looked fine when I got home. Screwed in my compression tester, zero compression in number 3, one of the valves is hosed. Also, the car looked great on the outside and inside but I had gotten it soaked so many times by being drunk in so many Long Island bars while not realizing huge summer rainstorms dumping untold gallons in my Tracker parked outside with the tops off. I could always park it in the sun for a few days and it always dried out OK, but the carpets up front had gotten soaked so many times that there was no floor, all rusted out. If you looked in either front wheel well you could look back and see the carpet padding through giant portholes in the floor pan that were not factory options. But the body looked great, glossy red, almost brand new soft tops (they were just a little over $100 mail order). But I was down a cylinder, it was 10 years old and had no floors. So I took it to a Chevy dealer, somebody actually test drove the car there, and I negotiated $1800 for a trade. I saw a mechanic even stoop down in bright sunlight and look in the wheel wells. I thought for sure he would see the rust holes but he was just looking at the brakes and locking hubs. After driving it, he probably thought, like I did, that it just needed a tune-up, it really didn’t drive that bad for a whole cylinder being gone. So GM is offering $5000 off *any* Chevy and one of the cheapest is a ’99 Chevy Tracker convertible, for $18K (before the $5K off) after I negotiate it down a little bit and negotiate the trade up to $1800 from the $1200 they wanted to give me. They have one with all the options I want (alloy wheels, standard trans, 4WD, A/C). The only problem is it is a fugly iridescent Blue/Purple with a white soft top but I still have him write the whole deal up, but at the last minute I don’t sign and tell him I just don’t know about the color and I want to come back the next day and see it in daylight. Instead, I go home and fix the deal. I have a good trade for my worthless car, I don’t want to ever even risk driving it again except to the dealer to trade it in, but I need to fix the color of that ugly micro-wannabe-pimp truck. So I start using GM’s brand new web site where if you put in your zip code and the car you want, it will show you the inventory of vehicles at dealers local to that zip code. It will show you all the options down to the VIN number, but there’s no way to directly search dealer’s inventories unless you provide a zip code and it will show you cars at the 3 or 4 closest dealers. So I’m punching in zip codes for a couple hours until finally I find the left over ’99 Tracker in red with all the options of the other one, this one even has a CD player. It’s in New London, CT like 120 plus miles South. I’m certainly not going to drive my near-death trade-in down there, I have to make that car come up here. So I call up the dealer, get the sales manager on the phone and tell him my predicament. I ask him if he will do a dealer swap with my dealer so I can have the red car with black tops instead of the blue/purple with white tops. He says if my dealer says OK, he’ll do it. I call my salesman back and tell him the deal. He says sure if I come down and sign give him a deposit and that I can’t say no to the car when it gets there and it will have 120 miles it because somebody has to drive it up. I say no problem. So we get the $18000 car for an even $13000 ($5K off from the GM deal and my $1800 trade covers tax, title, dealer prep, etc.). We drive it for 2 years, my wife wrecks it in Spring of ’02 and the book value is actually more than the resale value(who wants to buy a used Tracker?), $13K, exactly what we paid. A couple years later we settle for another $10K from the company of the Ford F150 glass truck that pulled out and hit my wife, so I guess we got paid for driving that car too. Anybody who knows cheap, crappy cars might wonder why I didn’t say either car was a Geo Tracker. Because neither one was. 1989 & 1999, first and last year of the Tracker were badged as Chevys. Only 1990-1998 were Geos.
Can anyone recommend an exceptional mortgage broker for a re-fi? I recall one being posted here last week but can’t find the thread. Thanks!
Jill, the trouble with the Dart is its low book value. I had a 1971 Dodge Demon with 110K and a 1963 Dodge Dart with 169K. The 1971 Demon (looked like Duster), needed four new tires, brakes, tune-up, oil and antifreeze changed and my turn indicator and brake lights stopped working. Total costs for repair was like $600 bucks so I junked it even though everything else was perfect. My 1963 Dart had a book value of like $75 bucks. It needed like $400 worth of repairs so I junked it.
Meanwhile, in that era Caddie Convertibles, Corvettes, Camaros, 450sls might have needed repairs that ran to a few thousand dollars and people did them. Amazing that Dart owners regularly drove cars to 100k-200K when first big repair they just junked them. Today on an accura/bmw/lexus/mercedes we would drop 1K at the dealership just on maint, no repair.
Most insane car I ever had was I bought a 1976 CJ7 for $1,500 bucks memorial day weekend one summer on a whim, did not even realize top did not fit it. So no top, doors, no heat, no defroster, no radio, manual steering, manual breaks and you even had to go out and turn 4 wheel drive on manually. Had car for six months and sold it to someone else for $1,500. Although old GF was able to fix a top for car on her sewing machine I got free and I did some body work on my own. But those old cars pre computers, airbags, antilocks brakes etc. the mechanic would literally laugh at you if you asked him to fix it. Today even mechanics barely can fix a car. a 1982 deseal rabbit gets better milage than a high mileage new japanese car.
Jill says:
January 18, 2012 at 11:51 am
JJ #67: “Now getting three million miles off a car with original engine and tranny and paint and no garage that is impressive.”
Not if you have a 1972 Dodge Dart. :-)
Rpat/tbw,
It’s do-able if you are living paycheck to paycheck I suppose and supplementing with CC here and there. I’m in the same age and tax bracket, make a decent living, a multiple of the ridiculously low median actually. Still, I would not be able to sleep if I lived like some of the people I know do.
Some young couples who are bankrolled by their parents. It may not always be apparent but rest assured the shadow hand is hard at work. Weddings paid for, large home purchases (mattresses, furniture, baby items) paid for in full or in part, cars being gifted, etc. Having these purchases picked up frees up money to be blown elsewhere. Then you have those who are going at it with two median income jobs, homeowners, paying peak value assessed taxes. Those I know who fall into this category are living check to check and playing the balance transfer game. They do it, because this is what the middle class doctrine passed down to them calls for.
I sense the stress and tension, I can see it in their eyes. When they talk about it, they joke about being “f@ked” and “up to their eyeballs” or “it’s so hard” but “f@k it, it is what it is”. They wash it down with a drink and some laughter as if expecting everything to work itself out. I guess if we continue to reward stupid it will. You don’t have to make the right choice, you just have to make the popular one and you’ll be fine. In Chairman O we trust.
I refuse to accept that 400K and a 10K tax bill for a POS ’60 vintage pink bathroom is the new black.
#73 – I’ve been driving the car around with the “Check Engine” light on for a few months now. It needs a new catalytic converter, a different one than the converter I replaced in 2008. $700 but mechanic said it doesn’t need to be done ASAP so I’ve been waiting. Last month I got a $250 belt changed, last year I did over $1000 of repairs on other parts and new rear tires. Last week I got a new front tire with the Route 3 flat. Part of the issue with the car is that it was driven for the first 8 years in constant snow and ice in Buffalo & the midwest so the underside is all rust. It’s unreliable to drive to DC only because if something does happen to it, AAA will only tow 100 miles. Better to just take the bus than risk a time-wasting headache.
Nom 63 – How can you Brigadooners look down at your neighbors from Cranford? According to the prestigious folks at NJ Monthly, those Cranford kids are kicking Westfield’s butt at the HS. And we all know that NJ Monthly list is all that counts in the RE World. Better luck in 2012, Brigadoon. Sarcasm Off.
http://njmonthly.com/articles/towns_and_schools/highschoolrankings/top-high-schools-2010.html
Nice and a lawsuit settlement to boot. My jeep that got stolen was equally lucky, 4 wheel drive was not working right and I needed a new tire, good friday I make appointment to suck up $800 repair as I am off from work and dealer is open, well I get slammed drunk in mcfaddens holy thursday night get home at 4am and miss dealer appointment and that next week someone steals it. Loving it. My sable wagon getting tboned was also pretty good. Paid 11,300 for car in 2000 at auction and got $4,800 when wrecked in 1998. Meanwhile I had bondo on front bumper, bondo on left rear, got nailed by a 4×4 under car so bottom was nailed and car was not in best shape. But amazingingly only had 33k miles. as a ten year old car. Well insurance paid me great money based on low milage and magically the t-boning and dragging got rid of prior damage. Interior was mint, engine mint and low mileage. Even better insurance company tried to jack my rates and when I threatened to leave they said they would forgive accident. Then a week later I realize I had the policy five years and they give a discount for five years without an accident and since they wiped out accident I asked for discount and they gave it to me. Howver, the women in the brand new Lexus GX SUV that costs like 70K who was not looking when I cut in front of her was not as happy. Even though I took brunt of hit, dragging a station wagon sideways for 20 feet down road has to mess up car. She was even snotty when although my tire was blown out as well as passenger window, mirrow and part of windshield and glove box was cracked since I did not pay for towing insurance and was only two blocks from home I drove the car home and left her there. Cop goes you sure you want to drive that? I go you just told me from looks of this car is toast so why should it matter if I drive on rim. That lady was not happy. She should be happy, if someone was in my passenger seat she would have killed them. Now she knows to drive safer. I love it when a car gets totalled or stolen right when you want to get rid of it anyhow.
Best story is my sister who never ever lies sold her car that leaked one quart of oil a week. Guy opened hood checked oil and said wow it is clean like new. My sister goes it should be I change the oil every five weeks. Guy goes great and bought car.
The Original NJ Expat says:
January 18, 2012 at 11:59 am
JJ New cars are hard to justify from a sales tax, dealer prep, misc fees etc. alone.
Go to Advanced Auto Parts, they at most locations will do a free check engine light test. They don’t fix cars like Pep boys, they will tell you cuase, sometimes it is a cheap part. My wifes truck it was an evaporative gas issue. Meaning vapors were escaping due to plastic gas cap no longer fix. Ten buck gas cap good to go. Maybe he is wrong on cat convert. Or just find wire that goes to cat covert or fuse for that check engine light and turn off. Cars in NY dont need emmissions inspection over a certain age so on older cars we cut off the cat converts when they rust and bypas them.
gryffindor says:
January 18, 2012 at 12:16 pm
#73 – I’ve been driving the car around with the “Check Engine” light on for a few months now. It needs a new catalytic converter, a different one than the converter I replaced in 2008. $700 but mechanic said it doesn’t need to be done ASAP so I’ve been waiting. Last month I got a $250 belt changed, last year I did over $1000 of repairs on other parts and new rear tires. Last week I got a new front tire with the Route 3 flat. Part of the issue with the car is that it was driven for the first 8 years in constant snow and ice in Buffalo & the midwest so the underside is all rust. It’s unreliable to drive to DC only because if something does happen to it, AAA will only tow 100 miles. Better to just take the bus than risk a time-wasting headache
re cars:
I have 170K on my 03 9-5 Aero sedan. While I love the car (250hp/255lbs out of a 4cyl, 32+ on highway) at this juncture its pretty much a ticking time bomb. Recently things have started to go downhill at a rapid pace: no A/C, no gas gauge, heat is max only, ABS sensors going bad, bald tires, coolant disappearing, eating 1qt oil per 750 miles and the list goes on.
Yesterday I decided to take over a co-workers lease (moving to Manhattan) and to store my Saab for the 11 months left on the lease. I am paying her 40 cents on the dollar for her Infinity G37x. Even less considering she’s eating every single fee associated with the lease transfer and disposition, down pay, title, tax…etc. Car leasing is such a waste of money! Again, I can’t imagine, ever, paying what people do not to mention all the fees she paid at inception and ate at lease end. That’s a lot of cash to part with on what is essentially a fancy Asian appliance with some faux chrome trim. Lastly, I have 1,590 miles to drive per month. Wifey and I are planning on hitting some old favorites like Montreal, Lake Placid, Maine and DC over the next few months. These are trips which we did not feel comfortable doing in the Saab.
When it warms up, I’ll crack open a summer ale, maybe fix up critical things on the Aero and drive it through the first snow of 2013 while continuing to stack coin.
gryf- sorry to hear about all the $ that went into it recently.
cheapo – you are correct. hard to imagine paying retail for everything like the masses do, especially considering median incomes. F.F.L (fatwallet for..)
And the crazy thing is, I have some friends who are embarrassed by my coupon use. We’ll see who is laughing when I’m retired in twelve years and they haven’t saved a bloody nickel.
Hey, Stu and Gator. Make sure you wear non-slip shoes on your next cruise:
http://www.cbsnews.com/8301-202_162-57361085/report-captain-claims-he-tripped-into-lifeboat/
(CBS/AP) The cruise ship captain under fire for abandoning his vessel while thousands of passengers scrambled for rescue has reportedly come up with an explanation for his flight – he accidentally tripped and fell into a lifeboat.
snip
Wow. That’s awesome Shore. He would do well on Wall Street.
“This sounds great; everyone loves to hear tax cuts, but it’s taking money out of one pocket and putting it in another,” the Senate president, Stephen M. Sweeney, said.
Mr. Sweeney, please explain to me then why the money has to go to your pocket in the first place. I’ll let my town spend/waste it without you needing to see it thank you very much.
I drove over a year with a check engine light on. I had an auto repair place fool around with it so that it would pass the computer for the NJ inspection and it then came on three hours later.
The car overheated back in October and with my $135k on my 2001 Chevy Malibu which had tires with 40k miles on them and new brakes and have a valve tap the last 4 years aside from whatever caused it to overheat, I never even took it to a repair place but called a junkyard driver. The only regret was the new battery I bought back in February. I thought I lucked out that it happened then as compared to the month after when I getting ready to change brakes and get new tires. I’d have been out a grand and still had a lousy engine.
correction: It needed new brakes but never got them
WTF…you pay no taxes…yeah, you might be a bit bemused…..
grim says:
January 18, 2012 at 4:15 am
From the NY Times:
But Democrats, who control the Legislature, dismissed Mr. Christie’s remarks as merely “a good speech” and called the income tax proposal a “sound bite” that would disproportionately benefit the rich while taking money away from schools.
I bought a 2010 BMW 328i 6 months ago from Open Road they used it as a fleet car.Meaning,when you go for service they lend it to you. I saved $13,000 compared to buying it new.It had 15,600 miles.3 years left on the 50,000 mile bumper to bumper no fee service warranty and a 6 years 100,000 mile waranty on engine,trans etc.
People and their fancy cars. I simply don’t get it.
You know the answer: bank of mom & dad; inheritance (this is huge underappreciated one); accumulated equity for those who bought first home prior to 2002; people in NYC financial services make a fukload of money; expatriation of money from China, India, Russia where it is effectively confiscated due to taxation and corruption. These culture highly value real estate over other assets.
funnelcloud says:
January 18, 2012 at 6:33 am
Good morning Bloggers..Hate to steal Mikes line and say NJ
Somebody answer please. Where is all this new money coming from? 1 article talks about median income of $46K then you have these people (teachers) buying a $500K house, I’ve been working for 24 years,, have what you would call a reasonable middle class income and live within my means,, I still can’t see how these people can afford these homes,For young people how do they get 20%, pay the taxes and still have enough to raise a family. Your talking about 3k a month plus just for the mortgage. Then monthly expenses food, Gas, car/home Insurance plus repairs, Heat, electric, cable, cell phones, computers, entertainment, college and try to save something for retirement. Oh lets not forget health insurance if your company doesn’t provide a benefit
chicagofinance says:
Your comment is awaiting moderation.
January 18, 2012 at 1:30 pm
You know the answer: bank of mom & dad; inheritance (this is huge underappreciated one); accumulated equity for those who bought first home prior to 2002; people in NYC financial services make a fcukload of money; expatriation of money from China, India, Russia where it is effectively confiscated due to taxation and corruption. These culture highly value real estate over other assets.
funnelcloud says:
January 18, 2012 at 6:33 am
Good morning Bloggers..Hate to steal Mikes line and say NJ
Somebody answer please. Where is all this new money coming from? 1 article talks about median income of $46K then you have these people (teachers) buying a $500K house, I’ve been working for 24 years,, have what you would call a reasonable middle class income and live within my means,, I still can’t see how these people can afford these homes,For young people how do they get 20%, pay the taxes and still have enough to raise a family. Your talking about 3k a month plus just for the mortgage. Then monthly expenses food, Gas, car/home Insurance plus repairs, Heat, electric, cable, cell phones, computers, entertainment, college and try to save something for retirement. Oh lets not forget health insurance if your company doesn’t provide a benefit
chicagofinance says:
Your comment is awaiting moderation.
January 18, 2012 at 1:30 pm
You know the answer: bank of mom & dad; inheritance (this is huge underappreciated one); accumulated equity for those who bought first home prior to 2002; people in NYC financial services make a fukload of money; expatriation of money from China, India, Russia where it is effectively confi-cated due to taxation and corruption. These culture highly value real estate over other assets.
funnelcloud says:
January 18, 2012 at 6:33 am
Good morning Bloggers..Hate to steal Mikes line and say NJ
Somebody answer please. Where is all this new money coming from? 1 article talks about median income of $46K then you have these people (teachers) buying a $500K house, I’ve been working for 24 years,, have what you would call a reasonable middle class income and live within my means,, I still can’t see how these people can afford these homes,For young people how do they get 20%, pay the taxes and still have enough to raise a family. Your talking about 3k a month plus just for the mortgage. Then monthly expenses food, Gas, car/home Insurance plus repairs, Heat, electric, cable, cell phones, computers, entertainment, college and try to save something for retirement. Oh lets not forget health insurance if your company doesn’t provide a benefit
On principle alone I am officially voting Republican in November….
..
Obama Administration Said to Reject Keystone XL Oil Pipeline
By Kate Andersen Brower | Bloomberg – 1 hour 49 minutes ago.. .
The Obama administration will likely announce rejection of TransCanada Corp.’s Keystone XL pipeline later today or tomorrow, according to two people familiar with the matter.
The decision will probably come from the State Department, which has been charged with reviewing the project, and a joint statement will come from some of the larger unions and environmental groups in support of the decision, according to one of the people, who spoke on the condition of anonymity before the announcement is made.
It wasn’t immediately clear whether the administration would continue studying alternative routes for the pipeline from Canada to the U.S. Gulf Coast.
To contact the reporter on this story: Kate Andersen Brower in Washington at kandersen7@bloomberg.net
I got 170,000 miles on my Merc C240.They want $3,000 to replace evaporator for air con,Just kept it and use it less during the hot summer days
Grim [43];
Week-over-week (weak?) numbers with the holiday weeks as baseline?
NORM!
I got 170,000 miles on my 2002 Merc C240.At .50 cents a mile taking a bus that is equivalent to $85,000.If I paid $26,000 on the car,I am still better off ,than riding a bus.It does not equal to savings from your Civic but stiill a big saving
Libtard in Union says:
January 18, 2012 at 1:30 pm
People and their fancy cars. I simply don’t get it.
Shore 86 – How convenient. But how does it explain his refusal to get back on the boat when ordered to do so by the Italian Coast Guard?
Financials are up.Even GS up 3% after losing 50% of income.What is going on? MS up 5% due to report tomorrow
zieba: pink 1950s bathrooms are coming back in style. but yes lots of younger folk have help from parents. I admit I lived at home from 19 to 25 working full time and going to school driving beater cars. without the free room and board I never would have saved the 20% plus which helped me buy the house.
A 1995 Honda Civic saved me from two trucks on Route 78 by Exit 57 westbound…..
https://picasaweb.google.com/105371010838877695185/January182012#
Yo..you don’t need to defend yourself. I’ve simply never been a car freak. Like so many things in life, we all pick and choose how to obtain joy. I’m gonna wait until I’m secure and retired to go crazy.
NYC is significantly subsidized by the burbs. How else to you explain 20 dollar cocktails pounded by 28 yr old FIT grads living in NYC and working their 40k industry jobs while chasin’ their dreams? NYC is a adult amusement park divorced from financial realities.
Shore [86];
accidentally tripped and fell into a lifeboat
ROTFLMAO! That’s like all those deadbeats with $50k in income who accidentally tripped over the closing table and suddenly own a $400k house with a $500k mortgage that they nothing about the terms of.
NYC is significantly subsidized by the burbs. How else to you explain 20 dollar cocktails pounded by 28 yr old FIT grads living in NYC and working their 40k industry jobs while chasin’ their dreams? NYC is an ad@lt amusement park divorced from financial realities.
2 mods, not sure why
YO – “I am still better off ,than riding a bus”
Ever been to the Third World? There is no transit mode of reasonably fast point to point transport cheaper than the bus. Rail, car or otherwise.
Even in the USA you can take the bus from Washington DC to NYC for $13. That’s only 4.6 cents a mile and they include wifi and a laptop power outlet.
The Acela train is $145
The Regular train is $80
Driving a Honda that gets 40 MPG cost is $49.55 in Tolls & Gas
When the oil starts to run low enough and costs $350 a barrel or higher first the Government will reduce speeds down below 40 mph on all roads, and then it will be the BUS for everyone.
ChiFi (103): That poor Civic.
I rode the bus and train until I was 25. It’s cheap! Nuff said. Insurance alone costs $3-$5 per day. Then gas and tolls? Come on.
Though it still amazed me how expensive commuter rail is. That’s right, we have to pay the union benefits.
Chifi 95 for the first time in my life I feel the same way
As far as the idiot Sweeny goes soon or later everyone is going to get tired of that song and dance including your welfare constituents. Especially when their kids attend schools where the lord of the flies island seems like a viable alternative. Even the dumb wise up eventually. I wish he would just be honest and say we cant do it because our phony baloney jobs and the pensions of our overseers demand that we rob you blind. You can always leave though.
Likewise, the downfall of Christie (who had so much promise) is that he is slowly turning into your average Republican. It shouldn’t be long before he attacks gay marriage and starts talking about prayer in schools. The ten percent income tax cut is a joke. He just lost a lot of his mojo. His stumping for Mitt will be his downfall in NJ where his lack of appearing to be a Republican hack allowed his blue state constituents to go red temporarily. It’s not every term that the Dem governor prior was so bad that people forgot their party loyalties for a brief moment. Me thinks Christie just blew it.
“Last, and perhaps most importantly, establish tax credits to provide scholarships for low income students in the worst-performing schools in the state to enable them to attend a better school, either out of the district or a private school. Opportunity should not be offered to only those in an excellent school district or with parents who have the money to release their children from the prison that is a failing school. Let’s pass the opportunity scholarship act now.”
re: Captian tripped – so did Dimitri Christidis, the Greek second in command of the Concordia and Silvia Coronica, the third officer all into the same life boat.
Seems to me he pulled a George Costanza.
http://www.youtube.com/watch?v=ueh_1PeJhaQ
#12 Lib: Most of the college Freshman have returned to school this week, after the holiday break. The one common thread among all of them, High School did not prepare us for college. These are for the most part Honors/SUPA students, who took High School seriously, and are doing well so far after completing their first semester of college. However these comments are from students that graduated from blue ribbony schools.
My point in all of this is that maybe all parents should be able decide where and how there children will be educated, and not held hostage by the public school system; just saying.
#84 -Zieba-I have 170K on my 03 9-5 Aero sedan. While I love the car (250hp/255lbs out of a 4cyl, 32+ on highway) at this juncture its pretty much a ticking time bomb. Recently things have started to go downhill at a rapid pace: no A/C, no gas gauge, heat is max only, ABS sensors going bad, bald tires, coolant disappearing, eating 1qt oil per 750 miles and the list goes on.
Your fan problem is your blower motor resistor is rusted out. About $40 for your car, $20 for for a Ford product like the one I replaced last month on our ’02. The blower motor resistor attaches by two bolts, usually under the glove box, and the resistor portion sits inside the duct where the air gets blown from. At first it seemed like a stupid design, why does it need to be inside the air duct, it’s just a multi-coil resistor that allows your fan to operate at different speeds. The reason is because there’s also a thermal resistor that will blow and turn off the fan if the temp exceeds 250 degrees F. The idea is if you are in an accident and there’s a fire, but your fan is still running, the fan will shut off if it’s blowing super hot smoke into the car. So because of the placement for this safety feature, they rust out due to the humidity and condensation in there when you turn your car off in the summer. Didn’t know any of this until I replaced mine last month on our 2002, $20 for my part and 10 minutes to put it in and good as new now. BTW, the dealer will gladly change it for $200 or so , maybe more for a Saab, if you don’t want to do it yourself.
Corzine accidentally tripped and hit the “buy Greek bonds” button.
In NJ he accidentally tripped and hit the “tax and spend like crazy” button.
he accidentally tripped and fell into a lifeboat.
I thought he was going to borrow from Corzine and tell the court that he was “stunned” that he was no longer on the cruise ship and had absolutely no idea how it happened. He wasn’t responsible for the actual day-to-day transfer of human capital on a ship that size.
3B,
Absolutely. When you’ve soaked in it all your life, you take it for granted that government can and should educate children. But if you think about it from the perspective of principal/agent problems, customer service/responsiveness, quality assurance, or basically any rational angle, government control of education is just massively wrong-headed, and guarantees sub-optimal service and outcomes for most. What could be more bizarre than tying your kids’ school to what side of which street you live in? Perhaps in the future, you will only be allowed to go to the doctor allocated to your town, not the one best for your condition. Or restaurants that only serve local residents, or residents of one part of town. Eat all you want or not at all, but you’re charged based on the size of your house, like it or not. Can you imagine how poor that restaurant’s food and service will be compared to one that actually has to earn its customers patronage?
What’s worse, state control of education, besides its failure to educate, inflicts the ministry of propaganda upon those least capable of seeing through its lies.
Lib [112];
Not to go all Jamil on you here, but don’t confuse the social republicans with the fiscal republicans. Christie is not one of the former, even if he won as one of the latter. I know of one particluarly annoying Trotskyite who, when on eof his sheep would opposed being fleced to fund his grand schemes, accuses anyone to the right of him and Lenin of being Pastor Terry Jones writ large.
There still exists a ‘country club’ wing of the republican party, and I think Mitt ansd CC are both card carrying members. Who can honestly show me any evidence that former prosecutor CC is going to become the darling of the NRA in making NJ’s byzantine gun laws rational?
3B: We really should fix the public schools, but that would require politicians to stand up to the unions instead of buying their votes with promises for unsustainable benefits. Abbott certainly doesn’t help either. But having all the kids abandon public schools to attend private schools hardly seems like a fair or even a workable solution. In the process, you would probably destroy a lot of good private schools and somehow would ruin what’s left of the public schools. The problem is that teachers were never meant to be paid like business executives with insurance plans that even the average CEO is jealous of and pensions that would make the average 401K contributor blush. Yes it is important to pay our teachers well. And we do. It’s the absurd cost for their golden healthcare policies (spouse and children included) and disgusting retirement package that even if the state had made all of their payments towards could never pay out as promised. The state needs to fix the problem and the problem is the union benefits. Rather than fighting the bully, Christie is paying another bully for protection. It’s simply cowardly. And it provides a convenient back door discount for his campaign contributors to boot.
“With municipal yields at historic lows, bondholders and issuers are experiencing the greatest sellers’ market since the financial crisis.… We encourage this kind of portfolio cleansing. However, the exceptional strength in demand and scant supply of product also means tragically few income replacement/enhancement opportunities.”
A sellers market in Bonds!!
Moose,
For me it’s never a partisan issue. Christie stood up to the state assembly and made some tough changes which is putting Jersey on a better footing to compete nationally and has gotten some control over our property taxes. There’s no denying this. Then once he started getting popular, he has decided to hop on the partisan loser bandwagon with 10% tax cuts and vouchers. It’s all I’m saying. He’s killing his political career, as they always do.
I’ve already done the tinker-with-engine-light-to-pass-the-NJ-inspection trick in October, so I’m good for close to 2 years but I’m ready for something new. My fear is that I will be “that car” – you know, the one that is the “broken down vehicle in the Lincoln Tunnel.” Now with a crumpled hood, it’s time to retire the ’98 Civic complete with tape deck, busted FM radio (AM still works so I can hear traffic reports) and college stickers in the rear windshield.
Tard – “has gotten some control over our property taxes.” We all should know by now the 2% cap is bunk, and won’t survive long. NJ still has massive unfunded retirement liabilities to the tune of perhaps $10 Bullion a year to stay afloat. There is only $68 Billion in the pension fund now. The annual payout number is likely to be close to $7 billion a year from that fund and rising in a bad economy as the boomers begin to retire en-mass. Four years from now we can expect $15 billion per year payouts with none of it going to anyone affected by the latest pension changes passed by the Dems and Repubs and signed by Christie.
Christie now proposing to give away another billion a year with his proposed tax cuts is lunacy.
http://nj.gov/treasury/doinvest/
Problem is both parties, they both refuse to peel back the exorbitant pension benefits which will be a full 1/3 of the town budgets in the near future and that is one of the main reasons why I don’t want to call NJ my home and stop being a dirty renter.
Can Cuomo be gov of NJ and NY? Christie got to go. A fat man is funny for only so long, look at Rex Ryan
Juice Box says:
January 18, 2012 at 3:34 pm
Tard – “has gotten some control over our property taxes.” We all should know by now the 2% cap is bunk, and won’t survive long. NJ still has massive unfunded retirement liabilities to the tune of perhaps $10 Bullion a year to stay afloat. There is only $68 Billion in the pension fund now. The annual
The New York Giants’ dispute with hometown East Rutherford, New Jersey, over whether the National Football League team should pay property taxes on its training center led Moody’s Investors Service to downgrade the credit rating of the borough of about 8,900.
The ratings firm downgraded $16 million in general obligation debt from the borough one level to A2 from A1, saying the lawsuit between the town, the team and the state entity that owns the land beneath the stadium has worsened financial operations.
Coughlin said during a news conference that Manning left practice with a “stomach bug.” Manning passed for 4,933 yards, 29 touchdowns and 16 interceptions this season.
“Hopefully it’s a 24-hour deal and he’ll be better tomorrow,” Coughlin said.
Current RDX is 4 cyl turbo. 23 mpg highway at best and requires high octane – will run on 87 but at some point, will create problems with turbo ($3k replacement). Nice vehicle, would not touch w 10 ft pole. New RDX coming out w 6 cyl. 28 mpg highway w 87 octane & no issues. Get a used Forester. Family has 17 yr old subies and still going strong.
So one manning has a bad neck and the other has a stomach ache, I guess both of them swallow.
yo says:
January 18, 2012 at 3:45 pm
Coughlin said during a news conference that Manning left practice with a “stomach bug.” Manning passed for 4,933 yards, 29 touchdowns and 16 interceptions this season.
“Hopefully it’s a 24-hour deal and he’ll be better tomorrow,” Coughlin said.
Each other I bet.
#20 Lib: I agree the pensions etc are unbelievable generous, but it is more than that. Those that are informed are held hostage to the voters who vote yes for every budget, and voted yes for every spending referendum. We have no recourse because of the majority vote yes (even if by a small amount), than the rest of us have to go along with it.
If kids form the blue ribbony schools are complaining that HS did not prepare them for college, than what exactly is the benefit of so called good schools, or are the schools in the non blue ribbony towns even worse??? Who know perhaps they are better, and the blue ribbony towns are paying for bells and whistles (million dollar football field), but no substance.
Running lower octane than recommended generally won’t damage a turbocharger, but the resultant higher levels of detonation are sure to cause piston/ring and head damage.
Most modern cars have computers that monitor knock and will alter the fuel/timing mappings as appropriate to reduce knock. However, most modern computers assume the driver isn’t an idiot (actually they’ll assume higher levels of knock are temporary, due to a mis-fueling or a bad batch of gas) and will continually attempt to return fuel and timing back to the baselines. They’ll readjust, causing more detonation, and then back down as appropriate.
Problem is, they need to cause knock to know to retard/run rich again. If this happens in a situation where the engine is under boost, the resultant knock will be all the more damaging.
Pretty common issue in the modern turbo Subarus, especially when modified, detonation will cause significant damage to the piston ring lands, reducing compression, consuming prodigious amounts of oil, and in serious cases, blowing apart the piston entirely.
I suppose in those cases, a chunk of piston could make it’s way up into the turbocharger, causing that to grenade, sending shattered compressor blades back through the intake, mucking up the works entirely.
You’d be lucky to salvage anything in this case, wouldn’t be a $3k repair.
Grim that was prety much my explanation to my wife on why she couldn’t put 87 in the Audi ; )
Re NJ high schools and college freshman. It’s no accident. NJ high schools and Jr high schools use calculators for all math starting in the 7th grade or so. So they graduate not knowing how to do basic math on paper, but knowing how to use calculators for advanced math. We as parents are told that this is the future and not to complain or we are holding our kids back. Fast forward to Rutgers and other state university’s placement exams….no calculators allowed. the honor students fail these advanced placements tests and get thrown into “tard math” as it is routinely called at , for zero credits and about 600 dollars plus student fees a pop. Anyone paying attention?
The S&P 500 is up 4 percent for 2012. We are on tack for 48% gain!!
Exactly why do you need math to be on realty tv shows. Are there other jobs in Jersey I am unaware of.
Barbara says:
January 18, 2012 at 4:19 pm
Re NJ high schools and college freshman. It’s no accident. NJ high schools and Jr high schools use calculators for all math starting in the 7th grade or so. So they graduate not knowing how to do basic math on paper, but knowing how to use calculators for advanced math. We as parents are told that this is the future and not to complain or we are holding our kids back. Fast forward to Rutgers and other state university’s placement exams….no calculators allowed. the honor students fail these advanced placements tests and get thrown into “tard math” as it is routinely called at , for zero credits and about 600 dollars plus student fees a pop. Anyone paying attention
Chances are if you aren’t an aggressive driver, you’ll probably never have a problem.
However, if you want to push 150k+ miles, you might want to consider the long term.
gryff, from Acura’s web site:
Octane – RL, TL, TSX V-6, ZDX, MDX, RDX
Using gasoline with an octane lower than 91 octane may cause damage to the engine. Please consult the owner’s manual for details.
re: 132 – I was racing a home one summer evening in and out of traffic north on the turnpike when the engine threw a rod, the block cracked and the drive shaft popped out all at about 90 mph. The drive shaft wedged into the road and the car did what could best be described as a bunny hop until the center console gave way for the drive shaft to pay a visit. Somehow the car still had enough momentum to roll onto the shoulder. I left the car there since it was worth about $400 running and nothing after having to pay for a tow etc. I walked onto some roadway for the oil tanks fields of Carteret to a commercial area and into some dive gogo bar somewhere near exit 12-13 and called a buddy to come pick me up. I am not sure what was scarier the vibrations, smoke and noises from the engine as it blew or the smoke, noises and vibes from the women in that dive gogo bar.
No issue running 87 w normally aspirated engine that suggests 91 except for a bit of pinging and reduced HP. Turbo, as mentioned in above post has timing issues when running 87 where 91 is called for. You mentioned more power for NJ roads – just get the RDX and chip it – you should be able to push 300 HP. Of course, you void the warranty but you will have a hell of a lot of fun.
FYI most Town Cars get engine rebuilds at 200 – 250k
gryff – If you were shopping for a new SUV that size up here (Boston) I would point you to http://www.quirkmazda.com . I’ve bought 3 of my 4 last new cars there, you can’t cut a better deal anywhere else. BTW, I rarely get my cars serviced there, I just buy them there. If you search their inventory you’ll see that right now they have close to 30 2011 left over CX-7s in all trim levels in stock, most of them advertised at $5-$6K off list, and that’s where you start negotiating.
#34 Barb: not just math, but all the reading that is involved, but that is no surprise, since most high schools have eliminated their summer reading program; or made it optional.
hype (62)-
All the insiders are pumping the market in a slow bleedup…in order to dupe retail investors and bad fund managers back in. Then, they will shank it and the late, weak players will panic and dump the crap right into their waiting coffers.
I will definitely consider the 2013RDX given the V6 with better gas mileage. The gas mileage of the 2012 RDX does bother me. That would mean I have to pour more money to get the Civic hood uncrumpled to make it through until April so again, will have to weigh all options. I haven’t ruled out other small SUVs, RDX was just a starting point for research. Well, not completely true. I have ruled out the BMX X3 as it is out of our price range. I still need to look at the small SUVs in the non-luxury brands outside of Honda.
#139 – Juice – I had the privelage of a watching and engine blow at that speed at right around 90mph on the GSP North one Saturday morning. I was having a good natured race with a Red Camaro while driving my Honda CRX on the section through Clark or thereabouts. There was light traffic, but there are so many lanes we were each able to hold 90+ and pass the slower traffic. Suddenly a White BMW, probably a 318i or 320i back then, got into the act and we were all side by side probably approaching 100mph. I think the BMW must have missed a shift, maybe went up into 3rd instead of 5th? Anyway it was a really special thing to watch. The entire underside of the BMW put on a three act play. The first thing I saw was a huge flame front taking up all the space between front and rear wheels. The second act was pitch black oil, also filling up all the underbody space, and the final act was, of course, dense gray oil smoke as he coasted down behind us. The Camaro driver and I looked at each other and began laughing while we gave each other that elated “Did you see THAT?” look as we coasted down to somewhere near the speed limit, our fun having peaked.
I still have my X3, just about 100k miles, minor issue with the AC leaking but nothing else. Picked it up as a CPO with around 15k miles or so.. Great car, its got the M-sport package, drives like a coupe.
I’ll probably jinx it by saying it, but our 2002 Mazda Tribute has never needed any A/C work since new, not even a recharge. I don’t think I’ve ever owned a car where the A/C worked so well for so long.
Juice 124 – Bingo. The 2% is crap and excepts just about any real driver behind increased property taxes – health, pension and debt service. Christie is merely presiding over the Montclair-ification of the rest of the state. We’ll all keep paying more and more and getting less in return.
But Lib’s points do have some merit. NJ is a blue state. Jon Corzine was a train wreck of a Governor and Christie could still only pull in 48.7% of the vote. He takes any kind of a hard right social tilt and he’s likely toast in 2013.
http://elections.nytimes.com/2009/results/new-jersey.html
all this car talk:
I’ll be heading to West Virginia (albeit northern) next month to attend a high speed accident avoidance course. Skid control/recovery, off road recovery, hi-speed swerve to avoid dynamics, flogging crown vics into j-turns = good time all around.
http://www.mortgagenewsdaily.com/01182012_nahb_builders_confidence.asp
Builders confidence at 54 month high. all clear /hurry call your local realtor
146. Dumped the BMW. Just got tired of seeing myself coming and going. And didn’t like the prospects for the complex AWD system and my desire to take corners. Really fast. The two didn’t mix. Running an 09 Bullitt right now. It’ll flat out scoot.
Got a great deal on a clean GS300 w/120k on Ebay. Local mechanic gave it 2 thumbs up. We have a nice luxo car for less than $8k runs great
I’ve lost a lot of respect for Christie for endorsing that magic underpants freak. You’d think anyone willing to walk his fiscal and monetary talk could only back Ron Paul.
This also makes me scared that when push comes to shove, Christie is a hard-right true believer who’d love to legislate my wife’s body and my bedroom.
How them neo-nazis in your homeland doing? Looking to burn bodies in ovens you demented freak…….do us a favor and eat a gun…..
SX says:
January 18, 2012 at 6:52 pm
146. Dumped the BMW. Just got tired of seeing myself coming and going. And didn’t like the prospects for the complex AWD system and my desire to take corners. Really fast. The two didn’t mix. Running an 09 Bullitt right now. It’ll flat out scoot.
Meat – I don’t think he’s a true believe. I think he’s an opportunist. He’ll sell his soul to the candidate he thinks is his best chance for a national position. Heck, he only got his US Attorney position because he raised massive amounts of money for Shrub. Before that he was only a Morris County Freeholder. And like Christie Whitman before him, he sees the electoral writing on the wall. He has no long-erm future getting elected to state wide office in NJ. He’s backing the horse he thinks will take him to Washington.
153.There Went Meat says:
January 18, 2012 at 7:21 pm
I’ve lost a lot of respect for Christie for endorsing that magic underpants freak. You’d think anyone willing to walk his fiscal and monetary talk could only back Ron Paul.
This also makes me scared that when push comes to shove, Christie is a hard-right true believer who’d love to legislate my wife’s body and my bedroom.
Don’t worry, 12/21/2012, they are “ALL” toast anyway. None who live in Washington cast reflections in a mirror. Washington is the center of Sodom & Gommorah.
The problem I have with vouchers is once the govt. starts “giving” money to private/religious schools, it won’t be long until they start dictating to them how/what to teach, and who to accept or not. They won’t be able to kick out bad a$$es, or have the standards they want.
Then there will be no place for anyone, rich or poor, to go to get out of the system.
It will all go down the drain once they start meddling.
Allright! Rolling Stone says that Bruce has US arenas booked starting in March.
Will Bruce and the band play in Florida?
And if he wanted to effectuate real change in NJ, he’s stop dilly dallying and stumping for Mitt. He should be telling the voters in NJ that this property tax cap is a scam, but it’s the best that he could do with the current idiots in the legislature, and that if the voters in NJ want real change, they’ll vote in a legislature that will work with him. And then spend his time working on getting those people elected.
They always do. I have seen him down there.
http://consequenceofsound.net/2012/01/bruce-springsteens-new-album-wrecking-ball-out-in-march/
Information on and track list for the new album.
“Jeffrey G. Otteau, an appraiser and housing analyst in New Jersey, said that state’s market had ‘bottomed out.'”
Yeah, the NJ housing market has “bottomed out” — just like a scrawny prisoner in Sing Sing.
146. A lot of sexual tension in that post.
#118 A West
First, are you saying that for every child in America, education is not a right and should be funded based on the ability of parents to pay? If you can’t pay for your kids, they don’t get educated.
Overall I think Education needs to go the other way and go to the federal level. Do we need 50 different curriculum standards coming out of the states. Why not have one national curriculum that addresses the basics of the education system. If you still have an issue with Darwinism, then you always have the option to opt out.
165
you must be joking?
I think ChiFi’s meds have worn off. Still, she seems angry. Or worse.
CC has always been for School vouchers and charter schools. My big issue with that is that it takes cash out of the public school system, but doesn’t hold the non public schools to the same standards. The public schools have to take all students, regardless of emotional physical, mental challenges the child may have. The charter school can choose the students they want to teach and take funding out of public system to teach them.
Now if you want to pull your kid from the public system to send to a parochial, private or home school option, I don’t have a problem with that, but should the school district fund it?
CC had his big fight with the teachers. The net result was that 33K teachers took retirement and went from big contributors to the pension fund to consumers. Add to that the shortfall that CC made to the fund to balance the budget and overall he has continued to make a bad situation worse.
He lost the fight with the Judiciary over the Wallace nomination (although they let him save a bit of face). The property tax cap has more holes than a Swiss cheese and the unemployment rate is still nailed above 9%.
I think CC was surprised to win the GOP primary and I think his term can be summed up as “he talked a good game, but never delivered”
2012 was on tonight on FX channel. It’s $1B euros per seat on the survival arks.
#162 Shore
Outlaw Pete is a low bar that should be easily bettered.
Gator,
I believe you are correct. CC is smart enough to see that the only presidential candidate with a chance to win, who would be willing to name someone like him to a cabinet post, is Romney. Perhaps Romney will name him Interior Secretary so CC can do for the nation what NJ has done to our waterways.
“I’ll be heading to West Virginia (albeit northern) next month to attend a high speed accident avoidance course. Skid control/recovery, off road recovery, hi-speed swerve to avoid dynamics, flogging crown vics into j-turns = good time all around.”
Sounds like just another rainy or snowy day on the Parkway between TR and Asbury.
“Outlaw Pete is a low bar that should be easily bettered.”
Outlaw Pete should be hanged and burried, never to be seen again. WOAD sucked. Magic was an outstanding album, the best since Born in the USA.
#166′ Joyce
I wish I was joking. Why can’t there be a national curriculum for math. Does algebra change between CA and TN?
To take that discussion further. Why have 50 different driving licenses, Do the cars drive differently? The post office can issue one passport, why not one driving license.
168
fabius,
Yes, Christie sucks like 99.999% of the politicians. I thought one of his biggest sell-out moves with regards to “fiscal responsibilities” were the ridiculous business subsidies given to Atlantic City casinos (these are damn near identical to TARP, yet it happens at the State/local level all the time).
Back to public school… you said, “Now if you want to pull your kid from the public system to send to a parochial, private or home school option, I don’t have a problem with that, but should the school district fund it?”
Does this mean you get to keep the school portion of your property taxes? (of course not) The system is broken beyond repair. I’m not sold on vouchers, but if a private school(s) turned down applicants or expelled students (due to whatever reason, such as the ones you listed or others you didn’t)… they can just go to another school? The money would be tied to the student; if they leave the school, the school loses the funding. Honeslty, I’m not sold on this concept (I would have to re-research the history of these voucher systems in the US and other countries), but I think it is leaps and bounds better than the current system).
#175 Joyce
“Does this mean you get to keep the school portion of your property taxes?” Well if education went to the federal level, that discussion changes.
But if you apply and get rejected by Pingry, you can still apply to Kimberly and on down the chain until you get to the public school that is the only one that has to take your kid.
Funny thing is that a public school contribution to the likes of a Pingry would barely cover the travel costs of the Junior Varsity Ski team … :*)
#154 Chi
For someone who puts part of the professional persona out in this place, posts like that tarnish the brand.
Just Sayin!
174
Fabius,
I do not believe in the concept of driver’s licenses to begin with. But back to education… The reason for doing things at the municipal level, or county, or state, rather than federal is all about decentralization of power. It starts with one thing (well math is universal, so why not), but then it mushrooms to everything. You evidently have much more faith in the government (the individuals) than I do. When you give people the ability to legally steal (direct tax) and other “legal” uses of force, the situation is automatically filled with opportunities for abuse. You can exert more influence over local govt actions than national.
Plus, there is no authority for the federal govt. to have any involvement in education. If anyone wants that to change, an amendment is necessary. It seems (and I’m not saying you think this) that some friends I talk to think amending the federal constitution is an anachronistic concept. I cringe when I hear that. Violating the law (and the constitution is the law) for expediency undermines the very essence of the legal system. Let’s ignore it for this one thing now… and then all of a sudden the Patriot Act evicerates the fourth amendment and the NDAA destroys the rest of it, and the 5th and 6th as well.
#178 joyce
You are heading off into discussions on tax and constitutional law that go a lot deeper. but let me leave you with this.
“(well math is universal, so why not), but then it mushrooms to everything.”
Is there any part of the educational curriculum from the sciences through the arts that should differ between a kid in Tn and a kid in CA?
Just for Gary and the Gints are still going down.
http://www.nbcbayarea.com/news/local/Biden-Does-It-Again-With-49er-Gaffe-137626593.html
Wow. Gluteus is both a Wanker fan and a fan of central planning and Big Brother-type gubmint.
gluteus (179)-
No. All should be equally protected from some Federal gubmint program or lifetime desk jockey stepping in and fuking it all up.
“Is there any part of the educational curriculum from the sciences through the arts that should differ between a kid in Tn and a kid in CA?”
179
What about if a high school did not want to offer certain art classes, music, drama, sports after school … instead focus on math, history, science, reading & writing?
Would the federal govt mandate every school include all of what they thought was necessary?
I’m sure in our “Car Talk” session of NJREReport, precious few will read this (close to last) post, but I forgot to espouse one of the great benefits of a new car: You get to break it in, and you get to break it in your way. Race car engines aren’t driven slowly for X thousand miles and real car engines shouldn’t be either. If you want a car to run fast, you break it in fast. Since 1984 I’ve never owned a new car that didn’t reach redline multiple times in the first 100 miles. I’ve also never had an engine problem with any car I’ve purchased new. I’ve even owned sports cars with no mods whatsoever that pulled the highest stock numbers at “dyno days” for both hp and torque. Next time you’re on a business trip and have a low miles rental that drives like crap, think about why that is. Sure many previous renters beat the hell out of it, but the real damage comes from many different driving styles. I’ve been in rentals with not a scratch on them, 12K miles on the clock and they just drive like turds. OTOH, take about any new car off the lot, drive it like you stole it, and it will outperform any identical car by a long shot so long as you maintain it and keep driving it that way. Just my $0.02.
and regarding constitutional law
The constitution was written so that anyone who could read at the time could understand it. The word education, nor anything related to it, never appears in any article or amendment. It seems pretty cut and dry to me.
I have a second grader and the wife and I are trying to decide if we can go the private school route. The problem with ‘taxes’ is that most towns do not get to keep their large contributions to the pool. (Abbott rules) and therefore you are paying for your kid and a kid two towns over who is ‘at risk’. Right now the public schools are so afraid of alienating kids that if the kids are psychos or classifieds, or whatever, you will simply allow them to torpedo any class lucky enough to have them. Spines are not in huge supply with most school administrators. I simply wonder if it is any different after forking over $25k a year or if the nut your kid will contend with will just be another class of moron?
Hello Kristine, As being a Local Boulder Real Estate Agent I have read your blog post thoroughly and I want to say that it is really good. Keep it up and thanks for sharing such informative stuffs. You can get much more information regarding Real Estate at: http://www.propertyhookup.com/view_member_profile.php?mid=226811
An attention-grabbing discussion is worth comment. I believe that you must write extra on this subject, it won’t be a taboo subject but generally individuals are not sufficient to talk on such topics. To the next. Cheers