This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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From the Star Ledger:
Novartis plans 2,500 job cuts
Keeping up with the Joneses in the pharmaceutical industry once meant launching a blockbuster drug. Now, it’s slashing jobs to keep costs in line.
Novartis kept pace with its rivals yesterday, announcing roughly 2,500 job cuts and a plan to eliminate bureaucracy and streamline business processes. Those job reductions are in addition to 1,260 announced in October, most of which fell in the United States.
…
Separately, Johnson & Johnson confirmed it will close a facility in Parsippany and lay off 296 workers there, beginning in January. The affected employees work for the McNeil Consumer Healthcare subsidiary of the New Brunswick company. Earlier this year, J&J said it planned to cut as many as 4,820 jobs, but the Parsippany layoffs are part of the ongoing integration of Pfizer’s former consumer products unit.
Most major drugmakers that are either based in New Jersey or have large operations here have announced substantial work force reductions in the past year. Bristol-Myers Squibb last week said it would eliminate 4,300 jobs, and Pfizer has plans to cut 10,000.
From Bloomberg:
Citigroup Rescues SIVs With $58 Billion Debt Bailout
Citigroup Inc. will take over seven troubled investment funds and assume $58 billion of debt to avoid forced asset sales that would further erode confidence in capital markets. Moody’s Investors Service lowered the bank’s credit ratings.
The biggest U.S. bank by assets will rescue the so-called structured investment vehicles, or SIVs, taking responsibility for their $49 billion of assets, the New York-based company said in a statement late yesterday.
…
Moody’s lowered Citigroup’s credit rating to Aa3, the fourth-highest level, from Aa2 late yesterday. The bank will probably “take sizable writedowns” for securities backed by home mortgages and collateralized debt obligations, Moody’s Senior Vice President Sean Jones said in a statement.
From the Star Telegram:
Money pits
The loose lending practices that accompanied the oil boom of the late 1970s and early ’80s were chronicled, with wonderful detail and humor, in the book Funny Money by Mark Singer. When I read it some 15 years ago, I found its revelations both appalling and hilarious. The book revolved around the wheeler-dealer moves of some Oklahoma good ol’ boys and the ensuing collapse of the Penn Square Bank, which made national headlines.
America needs a new version of Funny Money, focused this time on the ultra-lax and irresponsible lending practices that accompanied the housing boom of recent years. With the inevitable housing bust laying waste to home buyers, builders, mortgage lenders, purchasers of mortgage-backed securities and stock market investors, it’s a safe guess that the financial repercussions will total at least in the hundreds of billions of dollars.
During the oil boom, many people were convinced that petroleum prices had only three ways to go: up, up and up. Never mind that prices already had zoomed from $3 to $35 a barrel from 1972 to 1981, when the drilling boom hit its peak. But when prices cascaded below $10 in 1986, the bloom was off the rose. In Texas, the oil industry underwent a stunning collapse, dragging down banking and real estate with it.
Similar runaway optimism pervaded the housing boom.
So what if the average new-home price in California topped $400,000? If monthly payments got too steep, you could always sell your home for a profit and buy another one, confident that it too would swell in value.
So what if you bought a house with one of those subprime loans with low teaser rates later resetting to higher rates that could escalate your monthly payment 35 percent? You could just refinance as your home’s value soared.
http://www.chicagotribune.com/business/yourmoney/chi-fri_barnhart_1214dec14,0,3650765.column
“Liquidity is fine,” said Richard Berg, chief executive of Performance Trust Capital Partners, a fixed-income management and advisory firm in Chicago. “I hear the guys at Goldman [Sachs] and Merrill [Lynch] and Citigroup screaming about how bad it is, and then I hear the guys in the real banks say, ‘This is pretty good.'”
KL, because everybody forgets, like Clot said. Money wipes the memory. Going up with greed, there’s absolutely no memory or fear of taking loans. When your Dad was originally buying, he took larger and larger risks with his loans, as long as he didn’t get burned.
Madam poot,
Actually he didn’t his mortgage on the 2nd purchase was for a total of $7000 his salary at that time being about 40,000 he paid it in full in one year. The point is his mortgage’s both times were well within/or under his yearly salary. Thats not possible today. While everyone is screaming for lower interest rates, we need to be screaming for lower prices. It does’nt matter the interest rate if your home costs no more than 2x your yearly salary or in his case even less. The interest rates in the seventies and early eighties were skyhigh, however the prices of the homes were in the 2x salary range.
KL
No one could have anticipated the breach of the levees!
KL If people today could buy at 2x income
there would be dancing in the streets.
NJP 6 Levees did I miss something or are you on N.O.
njpatient Says:
December 14th, 2007 at 7:29 am
No one could have anticipated the breach of the levees!
NJ,
You are actually onto somethinghere. NOLA is a below-sea-level city with a shape like a saucer. It is surrounded by water, between the river, the lake, etc on 3 3/4 sides. The Levees were built to sustain a Cat3 storm and every expert knew that at some point a strong storm would take out a levee or two. But, because people did not want to come face to face with that uncomfortable reality they ignored it.
This is much the same with RE. People knew prices had gotten out of hand but did not WANT to believe it.
Clotpoll Says:
December 13th, 2007 at 8:32 pm
3b (243)-
“I don’t think we’re in uncharted territory; the only thing different about this bust cycle is that the numbers are bigger.”
Clot,
We are in unchartered waters. If not, I better check my boat, it’s rocking violently. As our good buddy Bob Toll stated, like a deer in headlights, never before has the RE market imploded in the face of a strong economy.
During what time frame has this industry been dictated/supported by fictious financial engineering. They created products whereby anybody, alive or dead, qualified. Forget about the subprime, this is the media’s, Paulson’s scapegoat. If you were a prime borrower, they s#cked you into bigger loans with nothing down; 80/20’s, I/O’s, neg amort. Why buy a 600K house on a fixed mortgage when you qualify for a 1M house on a teaser? RE will only go up, reach higher. You are applying for 500K, here take 700K, you want to furnish the place, buy a new car or take that dream vacation, No?. Why not it’s only 2%, you’ll make the difference up next year with 20% appreciation. RE always goes up, the quants say so. As you are well aware, ask Wells Fargo how their prime borrowers are performing.
I owned during the early 1990’s, the reckless spending, borrowing, levering, buying up was not part of the landscape back then. That run was created by deregulation, the strong economy of the mid 80’s and was brought to its knees by the recession. Now that was a recession, not the 6 month period in 2001 before AG, with the cooperation of the BOJ, decided the world required steriods. Never before has a RE bust led to a recession, that’s #ss backwards, well buckle up. If we charted how many times we have heard first time ever, never before, first time since the GD, etc.., it would probably rival Larry Crudeslow goldilocks.
Yes, this is unprecendented. It was a house of cards, built on a foundation of debt/debt and more debt. It was the greatest Ponzi scheme ever created, fueled by the largest credit bubble in the history of our markets. Now’s there $300-400B of this crap that is worthless, lever it and it’s close to 3T of credit that goes puff. Boom, bubble and now bust. When Paulson’s, FDIC and banks freeze fails you will see the updated version of the RTC. The Resolution Bust Corp will be formed. In comparison, the RTC will prove to be a walk in the park.
Not since the GD have we experienced RE declines on a national, now international level. Now we begin our descent back to 2001 prices. This market will retrace the entire delusional gains that preceded it. History tells us that. Our lifetime, yes unchartered. History? 1920, early 30’s.
From MarketWatch:
Consumer inflation accelerates in Nov.
Consumer prices rose 0.8% in November, led by higher prices for gasoline, the Labor Department reported Friday. This is the fastest pace of consumer inflation in more than two years.
But energy wasn’t the entire story. Prices of apparel, drugs, and airline fares also spiked.
As a result, core inflation, which excludes food and energy prices, rose 0.3%, the biggest gain since January.
The figures raise concern that inflationary pressures are increasing, and could limit the room for the Federal Reserve to cut interest rates to counter the expected economic slowing over the next few quarters.
The numbers were worse than expected.
Economists were forecasting the CPI to rise 0.7% and the core rate to rise 0.2%, according to a survey conducted by MarketWatch.
The core CPI has now risen 2.3% in the past year, up from 2.2% a month ago. This is the fastest annual rate since April.
The CPI is up 4.3% in the past year, the fastest inflation since June 2006.
BC Bob,
Now we begin our descent back to 2001 prices. This market will retrace the entire delusional gains that preceded it.
When do you figure, by 2009, 2010?
Fed has lost control of inflation.
B. Bernanke = G. William Miller
Gary [11],
Hard to say. I have been stating 5-7 years, peak/trough. I would not be surprised if its sooner. There are much larger problems festering as compared to RE retracing its gains. I’m starting to think that I’m turning Japanese, I really think so.
JB [12],
The fed is pulling a Bob Toll, deer in headlights.
7 mike
I was responding to grims post on the front page quoting all the fools who didn’t anticipate the RE bust being so bad, and attributing their lack of foresight to those around them. When they say “no one anticipated…”, what they really mean is “I didn’t anticipate…”
test
BC/Clot,
You’ll enjoy this one.
Downey Financial Corp. Announces Thirteen Month Selected Financial Data
Take a peek at non-performing assets.
I’ll just post here..
Downey Financial Corp.
Non-performing assets as a % of total assets
Feb 07 – 0.88%
Mar 07 – 0.94%
Apr 07 – 1.04%
May 07 – 1.30%
Jun 07 – 1.53%
Jul 07 – 1.77%
Aug 07 – 1.96%
Sep 07 – 2.25%
Oct 07 – 2.74%
Nov 07 – 3.65%
BC
“It was the greatest Ponzi scheme ever created, fueled by the largest credit bubble in the history of our markets.”
That should be put on T-shirts, lapel buttons, bumper stickers and coffee mugs, and tattooed on the foreheads of Greenspan, Lereah, Yun, Cramer, Kudlow, Stein, Mozillo, Toll and every jacka$$ who ever fluffed this monkey.
Citigroup said late Thursday that it will bring $49 billion of assets from several structured investment vehicles onto its balance sheet in a move that could hurt the firm’s capital base and potentially sound the death knell for an industrywide move for a rescue fund for SIVs. Shortly after Citi’s announcement, the firm’s long-term debt rating was downgraded a notch by Moody’s. Moody’s said it believes Citi’s capital ratio will remain low as it makes write-downs against its mortgage holdings. Citigroup’s shares slipped 0.4% in recent premarket activity, to $30.88.
I love it and now lets see how they deal with their 3,000 LEs, the SEC review of their modeling and valuation process next month and the fact that their external auditor actually assigned OpRisk/Basel/AMA/VAR types including PhDs to beat up their models for the year end audit. The new CEO will have a shakey Pen when he signs his 302 cert in two months, cause if he Fs up he and Bernie Ebbers and Dennis K can spend the rest of the decade swapping stories in the big house.
njp,
http://www.cafepress.com/nnjbubble.68233219
This one is more fun..
http://www.cafepress.com/nnjbubble.68290024
“The figures raise concern that inflationary pressures are increasing, and could limit the room for the Federal Reserve to cut interest rates”
Fire up the presses, boys, we’re printing dollars!!!
#9 BC Bob: You just covered that oh so well. I remember the last real estate boom and bust. Yes I was part of it,and it was a party.
And yes there were talking heads (not sure we called them that back then), “who said buy now or be closed out forever, a whole generation will be denied homeownership etc.”
But there was not the complete abandonement of common sense that we saw this time around. Heck I know friends and family members who purchased houses over the last few years,at prices I never would have even considered,even in my days of being employed at Goldman.
We are talking about every day people, and none of them making the big Wall Street bucks.
Plus the incredible use of home equity loans, these thing were rare back in the late 80’s early 90’s, now everyone I know has at least one.
I know people of modest means who spent over 100k on just a kitche remode, then a 30k SUV, and on, and on, and on.
This time around is different, we truly are in unchartered waters, in our lifetimes.
Good news for fellow vultures: The BLS has just announced that real wages dropped .4% from Oct-Nov. Combine that with increased inflation, less equity for the over-extended, tighter lending standards and for well-capitalized vultures the future is bright.
BTW I am a CITI mini bull, but I am waiting till around Feb when most of the shit has hit the fan and the smell of death is in the air and I may buy a bit of the preferred stock which should be yielding 9% plus by then. But even then I am only in for around 10K, I don’t trust the new CEO yet.
# 11/13 BC Bob/gary: We will see large declines through next year, I think it will be much quicker than the 5 to 7 years from peak to trough.
“When they say “no one anticipated…”, what they really mean is “It is not in the Interests of the Power Brokers to anticipate””. The Power Brokers make money, every time, off of every Ponzi, House of Cards, Scheme. The Common person knew in 2000 that the R.E. Market was starting to experience “Irrational Exhuberance”, just like Wall Street in 1998.
Weather you are talking R.E., Wall Street, Commodities like Oil, the Power Brokers have created enormous Frauds on Main Street to keep the Schemes Going, with the Government acting as their Enabler.
POP
I love it
BC BOB [#9] wrote:
“You are applying for 500K, here take 700K, you want to furnish the place, buy a new car or take that dream vacation, No?. Why not it’s only 2%, you’ll make the difference up next year with 20% appreciation.”
——————————————–
When my wife and I applied for our jumbo $380K loan, We had no debt, a 20% down payment, and another $150K in the bank. Our credit scores were both >750. Although we only took $380 since we wanted to put down the minimum 20% to avoid PMI or a piggy back scheme, we were offered $700K. Keep in mind, our only assets were a 5 year old Nissan Altima and a 9 year old Honda Civic. Our combine gross income was less than 150K. What is the loan to value ratio on this scenario. Keep in mind too, it was a 2-family home we were purchasing and the upstairs unit takes in $1500/month rent.
I agree, the willingness of the banks to give out huge amounts of money, with only the home as collateral for it was bad business. Especially considering how homes had recently appreciated.
Now they must pay the piper!!!
I just started looking at properties online in Summit — just at first glance it appears that the tax rates are high but the assessments are low. Why is that? And does that spell trouble? I live in Queens and am not that familiar with NJ and have been looking for a house in town-by-town manner (train towns, which, I gather, are more expensive overall), so my perspective may be warped.
POP go the weasels?
Confused – you write like A. A. Milne.
http://online.wsj.com/article/SB119760031991928727.html?mod=mktw
Fully two-thirds of women and half of the men said they were “very” or “extremely” willing to marry for money. The answers varied by age: Women in their 30s were the most likely to say they would marry for money (74%) while men in their 20s were the least likely (41%).
Women aren’t the only ones with the gold-digging impulse. In the Prince & Associates study, 61% of men in their 40s said they would marry for money. Ms. Smock says that as men get older, they become more comfortable with women being the bread-winners.
The matrimonial price tag varies by gender and age. Asked how much a potential spouse would need to have to be money-marriage material, women in their 20s said $2.5 million. The going rate fell to $1.1 million for women in their 30s, and rose again to $2.2 million for women in their 40s. Men have cheaper requirements. In the Prince survey, their asking price overall was $1.2 million, with men in their 20s asking $1 million and men in their 40s asking $1.4 million.. “The men aren’t going to say they want $10 million, because they wouldn’t be comfortable with a woman who’s worth so much more than they are,” he says.
Of course, when the mercenary marriage proves disappointing, there’s always divorce. Among the women in their twenties who said they would marry for money, 71% said they expected to get divorced — the highest of any demographic. Only 27% of men in their 40s expected to divorce.
Says Mr. Prince: “For these women, it’s just another step on their journey to the good life. They want to be paid what they think they’re worth and then move on.”
Oh my. A .8 increase in prices, a .4 decline in wages, and God-knows-what decline in equity and the wealth effect, Merry Christmas Ben Bernake. Sounds like he will have visions of stagflation dancing in his head this Christmas Eve.
33 “They want to be paid what they think they’re worth and then move on.”
It sounds like an ad, or recruitment poster, for an escort agency.
http://www.homevestors.com/ugliest_house/
ten ugliest houses that were actually sold in 2007.
John,
I’m a big fan of ugly, but only when ugly is easily remediated (e.g. a “sleeper”).
You’ve got your sleepers and you’ve got turds. Sleepers can be polished up very nicely. Turds? Well, everyone knows you can’t polish a turd.
http://www.app.com/apps/pbcs.dll/article?AID=/20071214/NEWS/71214008
Not to condone vandalism, BUT, oy!
TOMS RIVER — When Jennifer Wuttke looked out her window Tuesday morning, she asked her mother Bernice, “Where?”
[edit]
“Jennifer loves Christmas,” said Bernice, who has lived at her Savannah Circle residence since 1967.
Jennifer’s love for the holiday is obvious, with dozens of snow globes, toy trains and numerous stockings surrounding the large lighted tree in the corner of the family room.
Bernice said her daughter became confused when she realized a 7-foot blow-up Christmas Tigger, two 6-foot blow-up snowmen and six 1-foot lighted trees along the driveway were stolen.
“I told her Santa is still coming,” Bernice said.
Living on a limited income, however, Bernice said she cannot afford to buy new lawn ornaments. She hopes whoever stole them will place them back on her lawn.
“They left the stakes. … I will even put them back up,” she said.
[snip]
“everyone knows you can’t polish a turd.”
I think Dan Rather said something like that once.
Inflation is increasing …. When will it manifest itself in rasing salaies??
Or will it as salaries now in global market are al competitive – americans are conpeting with 3rd world counties – where people are working full day for a loaf of bread…
BRUSSELS, Belgium – Inflation in the 13 nations that use the euro surged to 3.1 percent in November versus a year earlier, its highest level in more than six years, the European Union’s statistics agency Eurostat said Friday.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a_Lp1ZmqMUf8&refer=home
How in the world can the Fed cut again anytime soon? Inflation is showing signs of igniting on both sides of the pond.
#36 John –
Here in NJ those would be $600k “fixer-uppers”
“How in the world can the Fed cut again anytime soon? Inflation is showing signs of igniting on both sides of the pond.”
Shore Guy [41],
Inflation has been our # 1 export the last couple of years.
Hey – fed need that inflation – US must do something to entitelment programs which are growing out of control, and with national debt.
If goverment will manage to get rid of majority of middle-class – I mean not by income by by lifestyle – well thats a hidden bonus, since when people are struggling to make the ends meet they are less likelly to be interested in anything else but how to get more food on the table and pay tomorrow rent.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aFGRVkX98Hzw&refer=home
where were this articles in 2005?
Shore Guy [34],
Consumers are buried in debt, wages are flat to falling and home equity is
disappearing. Global growth is slowing and inflation is growing, factory prices at 34 year lows. Not to worry, the fed is monitoring inflation. Akin to running a circus from a bird cage.
#45
John,
Don’t you know, withthe pent-up demand and such, this is the PERFECT time to buy, lol.
“where were this articles in 2005?”
John,
Right here on this site.
#46
BC,
I almost feel bad at my positive feeling about this. It is a shame that many people will be hurt by the declines and the likely recession but it is the market’s way of restoring things to where they should be. I suspect that many, if not most, of the people who get hurt will be the ones who, through their own actions, allowd themselves to get overextended. Now, with that one bump, they cry “it was not my fault.” The heck it wasn’t.
Shore Guy Says:
December 14th, 2007 at 9:21 am
33 “They want to be paid what they think they’re worth and then move on.”
“It sounds like an ad, or recruitment poster, for an escort agency.”
Escorts have more integrity.
Post 46,
34 year highs. I have a brain cramp, lower is on my mind today.
The markets are no higher now than when the FED began opening the discount window and lowering the lending rate. Many so-called experts will state that it takes 6 months for these cuts to affect the economy. IMO, we are on the brink of a major recession. Mark my words, the Spring of 2008 will be a scary time for both housing and the stock markets.
The math is too damn simple, all you have to do is open your mind to see it. Our banks are going to be owning a whole lot of homes in which they made almost no money from due to the low teaser rates they were offering on exotic mortgages. To exacerbate the situation, there are no buyers due to the difficulty of obtaining loans, the increase in inflation and their diminishing wage.
So homes, which were formerly being paid out on 30 year fixed mortgages with disgustingly profitable amortization schedules have gone from being a steady bank moneymaker into a drastic drag on bank earnings. As home prices drop another twenty percent from where they are now plus add the carry cost (maintenance and property taxes), the banks are going to be completely screwed. Worst of all, there is nothing the FED or the government can do to change it. The federal deficit and debt are already out of control and the recession is going to significantly reduce their tax revenue. Our wonderful standing in the global economy has been destroyed by our current administrations choice to ignore the rest of the world’s pleas so we can no longer look to our neighbors for help.
Most here will choose to ignore the reality we are facing and will lose a lot of wealth for it (if you have any in the first place).
Others here will say it’s just doom and gloom. In my opinion, then next 3-5 years are going to make the 70’s look like a party.
Good luck to all of you.
“Inflation has been our # 1 export the last couple of years.”
Bc,
You’re the man. I LOVE you man!!!
I just increased rents in a regressive ignorant kind of way. Everyone who doesn’t have a lease has been increased by $100 per month.
I had a bunch of wining and complains but so far everyone is staying put. I haven’t lost a tennant due to a home purchase in well over a year. I used to loose 1 or 2 per month in 2005.
Low RE sales=rent increases!
right or wrong.
ps. I love my Euro and Swiss Francs denominated assets. Thanks BC.
MM
Shore Guy[49],
I agree. I do feel bad for some. They have no clue regarding the storm that is coming. That said, I have talked to anybody who would listen over the last few years.They looked at me like I had 3 heads. Now they ask, why I didn’t convince them to sell/not buy. You can only shake your head.
That’s why didn’t I.
“ps. I love my Euro and Swiss Francs denominated assets. Thanks BC.”
MM,
Just an observation. A year end dollar rally?
Anyone correctly evaluating the current US Financial Crisis writes like A. A. Milne, because our Financial System has become like Pooh.
Seeking Alpha:
Pent Up Housing Demand in Pictures
http://tinyurl.com/2ejsom
In the meantime, if anyone starts yapping about “pent up housing demand” please show them the above charts.
Can somone pull up the full property details for this listing
MLS # 2744396
It appears it is a foreclusure ? but I am not sure.
Thanks
Just an observation. A year end dollar rally?
BC,
More like a headfake! Like the Jets when they beat Pittsburgh.
Do you see any fundamentals suggesting this? I don’t.
We will continue to cut rates and the feds are finally beggining to hint and admit there “risk” of inflation.
Why would anyone want to own dollars?
I originally thought prices were going to come down about 20%, then I revised that to say we’re going all the way back to 2000 prices plus 4-5% a year inflation (basically the historical norm of appreciation).
I’m currently looking at houses that are priced in the 2000 plus 4% inflation and I still feel it’s not the end. It’s really hard to pinpoint the exact value of a house even if you know what it was bought for in 2000 (who knows if they over or under paid relative to the market at that time).
Part of me says there’s still more pain to come and maybe 1996 plus 4% inflation is the way to go. Another part of me says the government will never let that happen. I’m not trying to be greedy, I just don’t want to see my down payment disappear in 6 months.
I’d appreciate your thoughts on this.
# 19 ..everybody was FLUFFING up that monkey!!!
And now we see what goes up must come down.:)
“FLUFFING up that monkey!!!”
lol, not since I got married, lol
Can anyone tell me what the ramifications are in purchasing a home with a small encroachment? The neighbors patio sits 8-10 inches on the property we are in contract on. Our Attorney says is no big deal, family friend who is a pit-bull Attorney says B*S*, get it removed prior to closing. We do not have a current survey to show exactly what the deal is.
http://www.app.com/apps/pbcs.dll/article?AID=/20071214/OPINION/712140349/1030/OPINION
comments on the Esperanza issue in AP.
64 NJ buyer
From what I understand about stuff like this, it’s fine not to do anything about it if you are ok with it. But, if you try to resell one day, it might be a problem if your new buyers find out about it and then get spooked. So it’s your call what to do about it. But I’m sure people on here will have more advice!
Shouldn’t you have a survey done for your title and title insurance that tells you exactly if it is on your property or not?
64 NJ buyer
There might also be legal ramifications if someone gets hurt on that 10 inches of patio that is technically on your property?
Bergenbuyer,
Stay put for the rest of 2008, you’ll be glad you did. After the experience of seeing 2008 you’ll be convinced not to buy in 2009.
RE in NJ, peak to trout will be a depriciation of around 50%, as a smart, and resourcefull consumer(member of this site) you’ll probably land 60% off 2005 prices in 2010-11.
My advice to a family member last night was. He had put away 100K and hasn’t saved a penny in th elast six months. I told him that’s it was fine and in the last six months his type of house in Staten Island went down around 35K-40K. That was like saving above amounts and prices remaing flat. Go ahead and take a vacation, get a 24 months lease on a sexy car, buy your wife some diamonds, it’s all a waste of money but still a better financial move then buying a house today and watching it go down 40K-50K per year for the next 2-3 years.
NJ Buyer,
I am not a lawyer, my advice is worthless.
Pit bull is right, the encroachment may have been unintentional, but if you let it go you may be leaving yourself open to adverse possession.
The problem is that by making the neighbor get rid of it, and I think they should, you are likely making an enemy before you ever move in.
64
If your att’y is right then it should be no problem to remove it before closing. I suspect it is not “no big deal”, tho.
NJ Buyer.
Get it removed, or, failing that, have a shylock draft an easement agreement that provides you due compensation, assuming that it’s land you can spare. Inquire with the local authorities about their policies concerning municipal jurisdiction over such agreements.
Maybe Shore Guy can find you a six-minute lawyer who’ll do the job… ;)
OT- Dwek claiming “slavery” (f*ing nuts!)
http://www.app.com/apps/pbcs.dll/article?AID=/20071214/NEWS/712140331&referrer=FRONTPAGECAROUSEL
Can anyone tell me what the ramifications are in purchasing a home with a small encroachment?
If you don’t care, it’s probably not a big deal. As a formality, I might consider sending a letter to the neighbor giving them permission to use your property but asserting your right to revoke that permission at any time.
This would help avoid any possible risk of the neighbor claiming adverse position in the future.
Thanks to all for the advice. Yes we will need a survey before closing, but we we are trying to understand if we should just walk away from the problem before spending any more money on a deal that is not going forward.
On another note, if we do not move forward with this home, we need a new Realtor and Attorney. Totally fed up with both. Our target area is Wyckoff and HoHoKus.
Two questions for the experts:
1. I just today rolled out of two former companies 401Ks and into rollover 401ks with Scottrade. My background is IT/systems and not exactly a financial wizard. With the market turmoil, is it better to sit for awhile and not invest right now? I was thinking of an index fund but that seems to be a bad move. Any NTF/no load suggestions? So many choices..
2. Anyone know the cheapest way to set-up a corp to corp in NJ?
On a side note, even with the pull-back equity loans for the past year it is still impossible to get contractors to call back or submit a reasonable bid. I have a very small POS (1,200 sq ft internal) and want to do the siding over. It can’t be more than several squares. I had a bid for vinyl at almost $20K not including windows. When are these guys coming back down to reality? These guys are not hurting enough for work yet obviously.
#53 BC My head hurts from shaking it so much.
Yesterday Clotpoll said:
“One of the beauties (or pitfalls) of residential RE is that there are no margin calls.”
I’m afraid I have to disagree. In some circumstances, you can’t avoid taking a hit. For example, job transfer, job loss, major health expense for which insurance has decided to deny coverage, etc. If you don’t have the money to make your payments, you either must sell (for a loss) or rent (for a loss). Now, losing 30-50K may hurt but not break you. But what if it’s 200K? The fact is that owning a sharply depreciating asset (at these levels) isn’t just a pesky annoyance- it’s a major risk. You are betting that you won’t face financial crisis any time soon. I know a few of well-off people with substantial savings who lost everything because of some disaster or another.
I agree that a house provides tremendous non-financial benefits. The question is whether those benefits outweigh the risks at this time. And those risks could potentially be extreme.
#75 bystander: Wait until 2008, they will be all over you for work,and the price you are being quoted will not be anywhere near 20k.
A lot of thes builder renovator guys, nice guys ( I know a few), but they have no idea what is going on. Any point of reference they might get is from a Realtor.
Bystander,
My brother is getting new siding and new windows, too.
His contractor is booked solid because the guy does good, reliable work. He also did two bathrooms for my brother, in 2001 and 2003.
Good contractors are always in demand.
I think the real question is where is the fair value? If it is only 15% below current asking prices, then I guess if you plan to stick around for 5 yrs and the market stays flat you will be fine. But what if fair value is 30-40% below current asking. Can you potentially afford to be underwater for 10 to 15 yrs? I agree with others that there is a huge amount of uncertainty now. Maybe you can never perfectly time the market, but you also don’t have to buy in the middle of a massive transition period
#77 Artemis, The risks far outweigh the non-financial aspects of owning at this time.
Memories and good times can be created anywhere, you do not have to own your own house to do that. You can simply rent a house and receive many of the same benefits.
We are not talking about 20k or 30k, but as you say potentially much, much more.
Even if it all works out in the end, once you over pay, by 50K or 100K or more, you will have always over paid, plus all the additional interest that has to be paid on that amount you over paid by.
The risks of buying or having recently purchased in the last few yeas, far outweigh the non-financial advantages of owning IMHO.
54#, bob, even a re bull like me knows a major storm is coming
>I agree. I do feel bad for some. They have no clue regarding the storm that is coming.
http://www.weather.com/newscenter/stormwatch/?from=wxcenter_news
#80 skeptic: Precisely.
Alright, so we put an offer in and it got accepted. We love the house. I know I’m not supposed to say love, but we do. You know, as much as you can love a house in good ole Bergen County.
We got it for about a 2005 comp, which is, well, high. About 10% off list, not that that means much.
The house had an offer that fell through this summer for list price.
It doesn’t need any work, move-in condition.
One upside is that this purchase is part of a corporate relo, so our closing costs on our sell were covered including the realtor fee. The closing costs on this will be covered, including two points towards the mortgage. We have to buy by the fall 08 to get the benefits of that.
As I’ve mentioned we have a kid starting K in the fall, so ideally, we want to be settled somewhere by then.
But I am feeling major buyer’s remorse today. Big time.
All the talk about the sellers going through heck is all fine and dandy, but it really sucks being a buyer right now too.
njbuyer,
I’m looking in the same areas and then some. I have a realtor that I am happy with and I had no complaints from the lawyer I used to buy and sell although I’ve only used him twice. I’d be happy to give you both names (as long as we’re not both looking in the same price range).
Grim- can you send njbuyer my email?
Ann,
I’m getting real close on a house in Bergen as well. I think the price is good, but if we settle on a price, I’m going to be feeling that buyers remorse as well. Similar school/kids situtation as you. Sometimes a home needs to be looked at as a roof, not an investment.
Bystander
http://www.napfa.org/consumer/index.asp
Not recommending that particular organization above any other association, but there is a checklist there for evaluating advisors if you start interviewing advisors, and there is a link to iard and finra at the bottom of the checklist page so you can search for any actions against ADVISOR LST NAME.
#75 Bystander,
Am not an expert, but here’s my opinion on #1 to get you started. I think you need to take a step back and see whether your IRA will primarily be ivested in individual stocks or mutual funds. Scottrade is $7 a trade, which offers value to a customer who trades individual stocks. However, if you primarily invest in mutual funds, you need to see how many NTF funds are available through the brokerage. Also, consider whether they charge a brokerage fee if you pay a fee per transaction if you dollar-cost average or reinvest dividends on a monthly basis.
If the market turmoil is making you wary, the first thing would be to assess your risk tolerance. And I don’t mean risk tolerance as in you’re down 10% and you’re fine. Test your tolerance with absolute numbers.. a 10% drop on a $50K portfolio is way different that a $500K portfolio.
As far as fund shops are concerned, you could head over to Morningstar and run their Fund Screener. If you are a premium member (sign up for a 14 day trial if you aren’t), you can run a Premium Screener to screen by “Brokerage Availability” =Scottrade NTF and to return only NTF funds, and add additional filters like lower expenses, risk-adjusted returns, open to investors, minimum investments, etc. to get a feel of fund shops that match your criteria.
Hope this helps.
#68 makemoney, I hear ya, if this was purely investment I would stay out. But I’m trying to establish myself in a neighborhood, town, etc. long term. I’m doing a 2 year rental right now, I don’t want another 2 years of rental. I will buy in the next 6-9 months unless I can get a guarantee I would do significantly better waiting a year or two.
Another ?, I’m looking to put down about 50-70% down payment, any reason why I shouldn’t?
from this blog, i know there are a lot of pent-up demands for housing in desirable nj towns. people hold off putting an offer because of a lot of negative media coverage. from now on, more main stream media will start to cover where hillary was when he was… the real estate market should rebound quickly.
But I’d maybe tell you take this opportunity to evaluate all of your available resources, including investment options offered in both your and your spouse’s 401(k) plans, the tax ramifications of a Roth and resulting mixes, and the other sides to personal financial planning…like insurance.
BTW, I am not an expert and get my financial advice from Madame Poot, therefore all information received from me should be dissected thoroughly before flushing.
Oops 91/Pat was for bystander.
GSMLS is currently at 33,570. While off the high for the year, isn’t this really high for mid December? I thought inventory typically fell off a cliff in November. Will we see another inventory tsunami on top of current supply post Super bowl?
Right, because the people who comment on this blog are a representative sample of the population.
Are you sure you come from a quantitative background?
Bergen Buyer #61
Part of me says there’s still more pain to come and maybe 1996 plus 4% inflation is the way to go. Another part of me says the government will never let that happen. I’m not trying to be greedy, I just don’t want to see my down payment disappear in 6 months.
In the current situation the government has little power to influence the direction of events. The real estate bubble is a perfect example. The government didn’t want the DOT COM bubble to be followed by a bubble so they pumped up real estate. The government can delay the inevitable, but it cannot do much to actually prevent it. They may have evaded a bubble after the dot com bust but the it has come time to pay the piper. it appears that the people in power in the government have little idea of how economics actually work.
93#, from my random observations on central jersey, the inventory came down to a unblievable level compared to last year and 2005. For example, the inventory in east brunswick is abount 430. it was about 500 in 2006 and 550 in 2005 at the end of the year. I am puzzled why this could happen since we are in the midst of the worst housing recession.
Ann,
You said:
But I am feeling major buyer’s remorse today. Big time.
But that will pass. Soon, you’ll be happy and excited about moving into your new house.
Congrats.
97#, i never think that way. as i said here 5 months ago, people bought it in this winter catched a lift-time opportunity.
lift-time opportunity for those pant-ups?
Pat,
It’s those pants-down owners I’m worried about.
99#, pat, right now it is too early to tell. two years from now you will see it.
I’m thinking of going into the foundation garment business.
kettle,
The dot com bust is relevant, but as much as I don’t want it, it seems like the govt will bail out people, banks, etc when it comes to a home.
Almost like “buying” a house you can’t afford is your only other option besides living in a ditch.
The govt doesn’t want that to happen, so they’ll borrow from my great great great grand kids so some idiot can lease a bmw, live in a stucco face house with vinyl siding, watch their plasma in their designer jeans while their kids play on a $500 video game system and their wife squeezes themselves into one of those velour work out suits that have never seen the inside of a gym, only the inside of a mall.
bi, just funning with ya.
I also think there are a few…a VERY few great opportunities this winter, but not in NJ. Not yet. There was too much money to blow through first here.
You need to take a drive on a couple of weekends away from this area.
Go down and visit some friends in NE philly or something. Drive around. Go in the Walmart on the boulevard.
On another weekend, hit Baltimore.
bi #96,
In Middlesex county, East Brunswick is one of the more desirable places to own. Maybe that’s why? What do you see if you a similar analysis on other Middlesex county communities like, say, Sayreville or Woodbridge or Pway?
Bergenbuyer,
Your primary residence is NEVER an investment. It’s a place you live that will keep up with inflation. Thats’ all.
What I meant was that you’ll be overpaying.
It’s like buying $500 suit at Macy*s on Thursday cause you want to wear it on Saturday for a wedding. However, you know that Macy*s is having a sale next week and you’ll be able to get the same suit for $250 or get an Armani for $500.
If you don’t want to wear the same old suit(rent apt. and save), go ahead a rent a tuxedo for $150(rent a huge house in a good area) and you’ll be better off next week.
Save yourself $100.
I hope you hear me.
105#, when we do any analysis on nj housing, we have to seperate desirable area from undesirable area. if you seperate east essex from west essex, north bergen from south bergen country, you will see real rich area is not clot’s backyard: hdoon and semerset
I’m with Ann….
You should get a survey and I’d get the encroachment removed.
We rent a small portion of our land to our neighbor who was encroaching for years before we bought.
We had our property surveyed, discovered the encroachment and since no permanent structures we built, we decided to rent it to him for a $1.00/year. It’s about 40′ deep x 20′ wide. Our agreement is renewable annually and does not survive the sale of either property (his or mine).
FWIW, my property goes pretty much right past his back door to a 3-way prop corner and had I tried to use this property for my own enjoyment, I would have been staring at him make b-fast in his undies every weekend… He put up a hammock, some flowers and mows it.
Housing Crash Deepens in 2008 as U.S. Realtors See Record Drop
By Daniel Taub
Dec. 14 (Bloomberg) — For U.S. homeowners, builders, bankers and realtors, the crash of 2007 will only get worse in 2008.
Everyone from mortgage-finance company Fannie Mae to Lehman Brothers Holdings Inc. expects declines next year. Existing home sales will drop 12 percent and existing home prices will fall 4.5 percent, Washington-based Fannie Mae says. Lehman analysts estimate almost 1 million mortgage loans will default in 2008, up from about 300,000 this year.
“We’re only halfway through the housing shock,” said Ethan Harris, chief U.S. economist at New York-based Lehman, the fourth-biggest U.S. securities firm by market value. “It’s just a matter of time before the weakness spreads to the rest of the economy.”
The housing market collapse has been anything but the “soft landing” that Federal Reserve Bank of San Francisco President Janet Yellen and David Lereah, former chief economist at the National Association of Realtors in Chicago, predicted for real estate at the start of 2007.
Median home prices declined in the U.S. this year, the first annual drop since the Great Depression, according to forecasts from the National Association of Realtors.
“I’m not going to sit here and tell you it’s going to turn real strong next year,” said Jim Gillespie, chief executive officer of Coldwell Banker Real Estate LLC, the largest U.S. residential brokerage, according to Franchise Times. “It’s not going to turn real strong next year.”
`Let the House Go’
Analysts at New York-based CreditSights Inc. predict housing won’t rebound until “2009, at best.” Moody’s Economy.com Inc., the economic forecasting unit of Moody’s Corp. in New York, says home sales will hit bottom next year, declining 40 percent from their peak. And U.S. Treasury Secretary Henry Paulson’s plan to slow foreclosures won’t help those who already are facing the loss of their homes, like C.W. and Sandy Hicks of Las Vegas.
The Hickses refinanced the mortgage on their four-bedroom, 1,300-square foot home two years ago. Their $237,000 adjustable- rate loan resets every month, and now their monthly payment has jumped 50 percent to $2,700. The couple can’t afford it.
“It looks like we’re going to have to let the house go,” said C.W. Hicks, 65, a long-haul truck driver who has kept working past retirement age to help pay medical bills for his wife Sandy, 59, who has heart problems. “I guess we’ll try to rent a house or something.”
The Hickses aren’t the only ones grappling with the consequences of this year’s housing market. The number of Americans behind on their mortgage payments rose to a 20-year high in the third quarter, the Washington-based Mortgage Bankers Association said earlier this month.
Lender, Homebuilder Woes
“The whole thing has deteriorated faster and further than we or anyone else had anticipated,” said Ron Muhlenkamp, president of Wexford, Pennsylvania-based Muhlenkamp & Co., which has about $2.5 billion under management and holds shares of mortgage lender Countrywide Financial Corp. and homebuilder Ryland Group Inc.
The five biggest U.S. homebuilders by revenue, led by Miami-based Lennar Corp., recorded writedowns and charges totaling about $7.5 billion this year for land that plunged in value.
Mortgage companies, including Irvine, California-based New Century Financial Corp., the second-largest subprime lender in 2006, have filed for bankruptcy protection after borrowers unable to repay their loans defaulted.
H&R Block Inc. of Kansas City, Missouri, shut Option One this month after plans to sell the subprime home-lending unit fell apart, and U.S. regulators ordered Santa Monica, California-based Fremont General Corp. to stop selling subprime mortgages, loans given to people with poor or limited credit histories or high debt levels.
O’Neal, Prince Fall
Bank and brokerage writedowns and losses related to subprime loans totaled more than $80 billion. Citigroup Inc., the biggest U.S. bank by assets, last month said it would write down the value of subprime mortgages and collateralized debt obligations — securities backed by bonds and loans — by $8 billion to $11 billion. At Merrill Lynch & Co., writedowns on mortgage-related investments and corporate loans have cost the world’s biggest brokerage $8.4 billion. Both companies are based in New York.
The losses led to the ouster of Merrill Chief Executive Officer Stan O’Neal and the resignation of Citigroup CEO Charles O. “Chuck” Prince III. O’Neal’s exit came after he said as late as July that “not even a sharp downturn in one market today necessarily portends financial disaster in another, and we’re seeing this play out today in the subprime market.”
Fallout from the subprime crisis in the U.S. has crimped economic expansions in the U.K., Canada and Germany.
Investment in U.K. commercial real estate may slump 60 percent in the fourth quarter as buyers shun large acquisitions of shops and offices, Chicago-based Jones Lang Lasalle Inc., the world’s second-largest property brokerage, said Dec. 10.
Fund Markdowns
Spending on British commercial real estate, Europe’s largest investment market, may decline in the final three months of the year to 5 billion pounds ($10.2 billion) from 18.6 billion pounds a year earlier, Jones Lang said in a statement. Investment for all of 2007 may fall 24 percent to about 48 billion pounds.
Falling prices are already hurting U.K. property funds. New Star Asset Management Group Ltd., the fund company founded by John Duffield, said earlier this week that value of its U.K. commercial property mutual fund was cut by 8.2 percent after the value of its buildings dropped 18 percent since July.
Market lending rates rose worldwide in the past month as writedowns linked to subprime defaults heightened concerns about the strength of financial institutions.
Anxiety Continues
“Until the public is convinced that the subprime credit exposure has been identified, quantified and dealt with, there will continue to be anxiety,” said Todd Canter, international director at LaSalle Investment Management in Baltimore, where he helps manage about $11 billion in real estate stocks. “There will continue to be volatility in the marketplace.”
U.S. office sales fell 70 percent in October from a year ago, industrial sales declined 24 percent, and retail and apartment sales dropped 50, according to New York-based research firm Real Capital Analytics Inc. The declines are the biggest since the company began keeping records in 2001.
The 128-member Bloomberg REIT Index rose 62 percent in the two years ended Feb. 8, the day before New York-based Blackstone Group LP bought Equity Office Properties Trust for $39 billion, including debt, in the real estate industry’s biggest leveraged buyout. The index has dropped 26 percent since then.
“You’re not seeing the Equity Office transactions anymore,” said Dan Fasulo, Real Capital’s managing director for research. “It’s extremely difficult right now to finance the large portfolio transaction and privatizations we’ve seen over the last couple of years. I can’t even think of one major privatization that has been announced since the credit crunch.”
Financing Difficulties
Mission West Properties Inc., owner of almost 8 million square feet of Silicon Valley commercial buildings, disclosed talks in July with a private equity firm about being acquired. The Cupertino, California-based company said a month later the sale might fail after a bank withdrew funding. Mission West then said in October that there remained three potential bidders. A transaction hasn’t yet been announced.
Highwoods Properties Inc., the owner of almost 34 million square feet of commercial space, said last month that it no longer expects to sell properties in Winston-Salem, North Carolina, totaling 1.6 million square feet. The company cited “volatility of the capital markets” as the reason the sale didn’t go through.
“I know we weren’t predicting things would get this bad,” said Frank Liantonio, executive vice president for global capital markets at New York-based Cushman & Wakefield Inc., the largest closely held real estate services provider. “There were some signs there, but I don’t think anyone anticipated the level of dislocation that was actually created.”
To contact the reporter on this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net
Last Updated: December 14, 2007 00:16 EST
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bi #107,
And?
Bi-quaint,
Have you tracked sales volume too in East Brunswick and other towns? Ask yourself why has inventory dropped? You might be surprised….
“lift-time opportunity for those pant-ups?”
I agree, my shorts have been hemmed repeatedly, current status, pant up.
“you will see real rich area is not clot’s backyard: hdoon and semerset”
I agree, it’s in mdum and bidmister.
Yea, Far Hills is a craphole…
http://cnj.craigslist.org/rfs/508423211.html
I thought this was hilarious, this lady is smoking something she has some nerver, she purchase this property 10/02/95 for $159000
2 bed 1 bath for 400k….
She must have missed the report on the housing collapse. We should email her
LOL
“Yea, Far Hills is a craphole…”
As is Pepuck and Gadtsne.
“bi Says:
December 14th, 2007 at 12:13 pm
97#, i never think that way. as i said here 5 months ago, people bought it in this winter catched a lift-time opportunity.”
That was just about the same time you said oil to $40.
#71
“Jamey Says:
December 14th, 2007 at 11:14 am
NJ Buyer.
You laugh at the six-minute thing but, for an experienced lawyer who understands the issue of encrochments, it should not take more than that for him or her to tell you whether or not there are any legal landmines to leaving it there. Now, to draft a document to remove those issues it will no doubt be longer than that. THat said, it is not likely a multi-hour job and, even at $600/hr, well worth the expense.
One seldom regrets consulting with one’s lawyer prior to acting, and frequently regrets acting without such a consultation.
” it seems like the govt will bail out people, banks, etc when it comes to a home. ”
How is that going to work?
Someone buys a home for $1 million which is now worth $700K, and the gov’t gives them $300K to feel better?
How do you stop prices from falling, bergenbuyer?
I keep hearing about a “bailout” that will magically keep home prices artificially high forever. Please explain how that will work.
“You laugh at the six-minute thing ”
Simply put, it’s true.
http://www.nytimes.com/2007/12/14/opinion/14krugman.html?_r=1&hp&oref=slogin
speaking of bailouts that don’t work, here’s Krugman:
“On Wednesday, the Federal Reserve announced plans to lend $40 billion to banks. By my count, it’s the fourth high-profile attempt to rescue the financial system since things started falling apart about five months ago. Maybe this one will do the trick, but I wouldn’t count on it.
In past financial crises — the stock market crash of 1987, the aftermath of Russia’s default in 1998 — the Fed has been able to wave its magic wand and make market turmoil disappear. But this time the magic isn’t working.
Why not? Because the problem with the markets isn’t just a lack of liquidity — there’s also a fundamental problem of solvency.
Let me explain the difference with a hypothetical example.
Suppose that there’s a nasty rumor about the First Bank of Pottersville: people say that the bank made a huge loan to the president’s brother-in-law, who squandered the money on a failed business venture.
Even if the rumor is false, it can break the bank. If everyone, believing that the bank is about to go bust, demands their money out at the same time, the bank would have to raise cash by selling off assets at fire-sale prices — and it may indeed go bust even though it didn’t really make that bum loan.
And because loss of confidence can be a self-fulfilling prophecy, even depositors who don’t believe the rumor would join in the bank run, trying to get their money out while they can.
But the Fed can come to the rescue. If the rumor is false, the bank has enough assets to cover its debts; all it lacks is liquidity — the ability to raise cash on short notice. And the Fed can solve that problem by giving the bank a temporary loan, tiding it over until things calm down.
Matters are very different, however, if the rumor is true: the bank really did make a big bad loan. Then the problem isn’t how to restore confidence; it’s how to deal with the fact that the bank is really, truly insolvent, that is, busted.
[snip]
In August, the Fed tried again to do what it did in 1998, and at first it seemed to work. But then the crisis of confidence came back, worse than ever. And the reason is that this time the financial system — both banks and, probably even more important, nonbank financial institutions — made a lot of loans that are likely to go very, very bad.
It’s easy to get lost in the details of subprime mortgages, resets, collateralized debt obligations, and so on. But there are two important facts that may give you a sense of just how big the problem is.
First, we had an enormous housing bubble in the middle of this decade. To restore a historically normal ratio of housing prices to rents or incomes, average home prices would have to fall about 30 percent from their current levels.
Second, there was a tremendous amount of borrowing into the bubble, as new home buyers purchased houses with little or no money down, and as people who already owned houses refinanced their mortgages as a way of converting rising home prices into cash.
As home prices come back down to earth, many of these borrowers will find themselves with negative equity — owing more than their houses are worth. Negative equity, in turn, often leads to foreclosures and big losses for lenders.
And the numbers are huge. The financial blog Calculated Risk, using data from First American CoreLogic, estimates that if home prices fall 20 percent there will be 13.7 million homeowners with negative equity. If prices fall 30 percent, that number would rise to more than 20 million.
That translates into a lot of losses, and explains why liquidity has dried up. What’s going on in the markets isn’t an irrational panic. It’s a wholly rational panic, because there’s a lot of bad debt out there, and you don’t know how much of that bad debt is held by the guy who wants to borrow your money.”
BCBob, add Wipperney to the list.
#115 Homer:
The realtor listed that the home is FIOS equipped!
That’s pretty funny.
My home is equipped for DSL/Dial-up/Wireless and two cans connected via a string.
makemoney,
Trust me I hear ya. But the whole issue is where is the bottom? The house I’m looking at is 15% lower than comparables that have sold in the past month. Those were down 15% from peak. If I wait maybe the whole market will be down that extra 15%, maybe not. Maybe it will happen in 6 months, maybe 6 years. Sure, then I’ll have a bigger selection, but again maybe not. If I’m at 30% off peak now adn the most it’s going to go is 40%, but it’s going to take 5 years to get there, I might want to buy now. Again, the family thing is a big issue, I could live in a van if I was single.
I appreciate your comments as I’m not 100% sold on buying either so I’m looking for a devils advocate view.
Anyone else want to provide some input?
njpatient,
I don’t know how it’s going to work and I don’t want it to happen. I’m just giving my thoughts, trust me I couldn’t be happier if on Dec 31st they kicked everyone out of their house and home prices dropped 50%, it would be awesome for me, bad for others. Unfortunately, it seems like the govt is going to step in and do something. Even if it’s a waste of resources, something seems to happen.
Should my tax dollars go to support newark and camden, no, but it still does every day.
I know this is off topic, but I have a question about what is allowed in a listing for a house. I copied what’s below from an active listing and it basically says that the home only supports a 3 bedroom septic, yet it lists 4 in the remarks. It also lists 4 where a buyer would input their search requirements, so this “3 bedroom” would show up in a 4 or more bedroom search. My question is how can this be allowed? How do listing agents get away with this misrepresentation ?
RMS: 10 BDRM: 4 FB: 3 HB: 0 TBTH: 3 SQFT:
GENERAL INFORMATION
GARAGE: 1 / Attached Garage LSTZ: 60×121
DRIVE: 2 Car Width, Additional Parking, Blacktop ACRES: .16
P-USE: Home-Office OTP: Fee Simple BSMT: Yes / Finished, Walkout
LTDES: Lake Front
ROOF: Asphalt Shingle POOL: No /
EXTER: Stucco, Vinyl Siding FP: 2 / Living Room, Rec Room, Wood Burning
EXTFT: Deck, Patio
DIR: East Shore Trail to # 262
REM: Custom Lakefront. 4 Bdrm with 3 bed septic. Spacious Kitchen, LR with Cathedral Ceilings / Marble Fireplace. Multiple Sliders to Deck w panoramic views of Lake. Pristine Condition.
and two cans connected via a string
Nice LOL
I have thos 2, except I hooked a 3 can in for 3 way calling ;)
BB:
Keep it simple. At the minimum, home prices are going to drop another 10% within a year’s time. How much is raising a family in a home you own vs. renting worth to you.
If it’s a 400K home, then you’ll pay $40,000 this year for that privilege. Is it worth it to you?
These are the questions you must ask yourself.
Personally, I wish I did not own right now, although I’m still aways from being upside down on my mortgage. I’m quite rationale though. I plan to buy a second home and rent out my first as soon as we approach the bottom. Will I be able to hit the exact bottom? Nope. Am I fairly certain housing will be lower a year from now than it is today? Yep.
I’m gonna wait a year.
njpatient,
also even if it doesn’t keep prices artificially at the highest levels, what if it just prevents the full drop. What if the full drop is 50% off, but the govt does something that keeps it to 35% off. It’s still something.
118#, shore, you seem have good experience with lawyers. can you share with us in general how to find a good lawyer?
sorry if this has been posted – funny chart
http://www.voiceofsandiego.org/articles/2007/12/12/toscano/854smiar121207.txt
2007 bonus data from Dealmaker:
Bankers learn who’s been naughty and nice.
by Erica Copulsky
‘Tis the reason why bankers work round the clock all year: bonus season. After spending the last several weeks in closed-door management huddles calculating pay, a few of Wall Street’s biggest firms—including Goldman Sachs and Lehman Brothers– are starting to dole out bonus figures to their troops. Meanwhile, others that plan to tell staffers next week how big their pay packages are still scrambling to lock down their numbers. However, based on the preliminary numbers obtained exclusively by Dealmaker, a few things have become clear: For the mere mortals, life will be status quo; bonuses will be in line with last year’s. For the superstars, paychecks will be slightly heavier, as Wall Street picks the pockets of the poor performers to take care of its top of class.
And then there’s Goldman, which this year is in a category all by itself. To the rest of Wall Street’s dismay, Goldman’s numbers are off the charts, which is why we literally left them off Dealmaker’s chart.
Here’s a peek at what to expect:
Exclusive
Preliminary 2007 Projections*
Level
Low
Median
High
Group head
$2.5M
$3M-$4M
$6.5M+
Managing director
Managing director
less than $1 M
$1.75M-$2.5M
$4M
Director/SVP
$550K
$900K-$1.1M
$1.2M-$1.4M
VP 3 (class of ’01)
$450K-$500K
$775K-$825K
$950K-$1M
VP 2 (class of ’02)
$400K-$450K
$650K-$700K
$800K-$850K
VP 1 (class of ’03)
$325K-$400K
$575K-$625K
$675K-$700K
Assoc. (class of ’04)
$300K
$500K
$575K
Assoc. (class of ’05)
$250K
$400K
$450K
Assoc. (class of ’06)
$210K
$335K
$375K
My brother, who claims to be the most lucrative personal injury lawyers in Southern Jersey always says…”If you see the lawyer advertising in print, then they are not a good lawyer. If you see them on TV, then run away as fast as possible.”
Then again, he is also fond of making such statements as, “Global warming is good for global farming.”
Ultimately, a personal reference is the way to go. Perhaps someone here could recommend one?
“bi Says:
December 14th, 2007 at 1:21 pm
118#, shore, you seem have good experience with lawyers. can you share with us in general how to find a good lawyer?”
A good lawyer for what?
Grim,
My post #128 is awaiting moderation-Can you’look’into it ? Thanx, Bob
BB – “what if the gov’t does something” is not a concern to me. In my opinion, there is nothing that the gov’t can do to prevent prices from falling back to historical norms. They can, in the meantime, tax me and give my money to someone who “deserves” it because they bought a house at a stupid time, but that will happen whether or not I buy now. So until someone can tell me how, as a policy matter and as a matter of logic, it is possible to keep home prices artificially inflated on an indefinite basis, I’ll retain my conclusion that it’s not possible.
Bergen Buyer
The US government is essentially insolvent. I dont care what plans they come up with, the government is insolvent because the population as a whole is mostly insolvent. The GOV may come up with various plans that provide the corporate bigwigs with a cushy landing, but they do not have the ability to stop the large scale economic drop. One of the funde,ental reasons is that in the current economic systemwe use MONEY IS DEBT. When a bank loans you a dollar, it is because someone else owes them a dollar, not because they have one dollar in gold or other assets sitting in a vault. To destroy the debt that currently exists in the market due to the run up in housing would be deflationary and deflation is one of the scariest scenarios to many economists and the FED because most of the tools normally used to direct an economy become powerless in a deflationary period. The only other option would to be to try and print our way out of trouble by running the FED’s printing press on overdirve. This is already being done to a point but it is risky and could spark runaway inflation which would be a very nasty situation to deal with, hope you have some gold bullion at that point.
To end my rant, the GOV is backed into a corner, there is very little that they can really do right now
“Ultimately, a personal reference is the way to go. Perhaps someone here could recommend one?”
For what?
It’s like asking someone to recommend a doctor.
What kind of lawyer do you need, bi? Personal bankruptcy?
Patience everyone. The drop in home prices will come.
If you can’t afford to wait. So be it.
138 kettle
That first sentence is key.
“Patience everyone.”
You talkin’ to me??
clot has multiple closings this morning, presumably.
Hey commanderbob, if grim won’t unmoderate your post you could just give us the Free Republic link to read the original.
Ann – Congratulations!! Take lots of pictures the first day, especially your first dinner in the new house. Ours was on a card table and the kids sat on boxes.
thanks, pre
law bonuses pretty good this year as well
(reading generally http://www.abovethelaw.com/)
Begren,
if nothing else consider the following.
Almost no one can predict the exact bottom, but why buy at the start of the drop when its clear that the drop is going to be precipitous. The most favorable number suggest that things could bottom out by the end of 08. So wait a year and save yourself a lot of money and a lot of buyers remorse. As much as the Kettle family would like to buy. we have decided not to even look at the market until 2010. yes we could miss the bottom, but thats not the point, the point is to miss the peak and just be in the general vicinity of the bottom.
#126-it doesn’t count as a “bedroom” (for septic/co purposes) if it has no closet. It sounds like that 4th “bedroom” is the same room as the “office”.
I once looked at a house that called a basement room a “bedroom”. Someone is playing marketing games.
MM,
You said:
RE in NJ, peak to trout ….
trough
how’d I miss this?
“NYSE moves to delist ACA Capital Holdings”
http://www.reuters.com/article/governmentFilingsNews/idUSN1325383920071213
Ann
Congrats on making your offer. I too am having major buyer’s remorse and this encroachment issue is only making things worse. We should start an AA type group, “Hello My Name is…. and I just went into contract on a house in downtrend market”….”I couldnt stop myself from making lowball offers, checking the NJMLS for price reductions”
Question:
Does anyone know someone who actually fits the criteria of the Paulson bailout plan, where they’re elbow-deep in trying to get the promised rate freeze?
“I once looked at a house that called a basement room a “bedroom”. Someone is playing marketing games.”
So did I – when I asked where the fourth bedroom it was the agent said “it’s in the basement” and I promptly left.
My point with the bonuses post is not to say that people are going to sprint to the nearest open house and offer asking the moment they find out their #.
I simply wanted to post evidence that allows readers to observe that wages for New York finance sector workers remain very high and don’t seem to be crashing yet. Where else do people get paid like this?
This helps explain why Hudson County home prices seem to be outperforming the rest of the state. Hudson County is more exposed to the NY finance sector than any other part of New Jersey.
When I write Hudson County, I’m mostly thinking of the waterfront areas that attract people who work in the New York finance sector.
These areas are Hoboken, Weehawken, and waterfront Jersey City.
“To end my rant, the GOV is backed into a corner, there is very little that they can really do right now”
kettle,
Bingo.
1) Holding patten, let banks work off problem loans, cut slowly and allow banks time to build back their capital base. Lending is curtailed, banks hoard capital. Dead man walking, zombieism. I am turning Japanese.
2) Allow the RE/credits market to correct/unwind and let the chips fall where thay may. Severe recession, maybe depression. Doubtful in the People’s Republic of USA.
3) Hyper inflate, weimar. The worst scenario possible. This will eventually result in a Volcker clone at the helm. Rates will eventually rise to compensate for our dollar being trashed, attract foreign lending. The bond market will blow the 10 yr out of the water. It may be a good idea to move to Chicago. Tend to the fields, harvest your grain, and head off to the pits, sell 10 year futures all day long. Unfortunately, this road will eventually lead you back to scenario #2. Only, now, deeper and longer in duration.
The ultimate goal? Cut and hope for elevated, not out of control, inflation. This will realign the yield curve, back to a positive slope. This is the medicine the doctor has ordered for the banks. Be careful what you wish for. Inflation may be uglier than the fed anticipates.
Comp Killer in Westfield
625 Maple St – Sold – $695,000
(listed in last Sunday’s NYT “Sales around the region)
From Domania
625 Maple St Aug 05 $719,000
$24,000 plus $34,750 (estimating 5% commission) means a loss of $58,750, not figuring in inflation, etc.
The ultimate goal? Cut and hope for elevated, not out of control, inflation. This will realign the yield curve, back to a positive slope. This is the medicine the doctor has ordered for the banks. Be careful what you wish for. Inflation may be uglier than the fed anticipates.
Amen to that…
It does not matter what the value will be – the key here is not out of control, inflation
Now Economic wizards here: once country have started inflanatory spiral are there any historical examples were it was controlled???
I think it is always runs unchecked for a while and after that …… Volcker comes back…
With the brewing Depression coming, best bet in buying a house now would be a solid brick house, with steel roof, doors & shutters, and a good root cellar to hold your emergency supplies. The third little pig was the smart one.
I would like to buy one … but they do not make brick houses no more….
Please be advised that this board is representative of the upcoming class war that’s about to rear its head. People don’t like to hear about folks making money or being well off. They want to hear about people being destroyed financially.
One only need to witness what occurred on this board recently when a poster mentioned how high his income was relative to his housing cost. There was a few people who got extremely angry at the mere mention of that. I’ve been attacked just because I own and invest in real estate.
I suggest you refrain from talking about raising rents and making money.
make money Says:
December 14th, 2007 at 10:05 am
“Inflation has been our # 1 export the last couple of years.”
Bc,
You’re the man. I LOVE you man!!!
I just increased rents in a regressive ignorant kind of way. Everyone who doesn’t have a lease has been increased by $100 per month.
I had a bunch of wining and complains but so far everyone is staying put. I haven’t lost a tennant due to a home purchase in well over a year. I used to loose 1 or 2 per month in 2005.
Low RE sales=rent increases!
right or wrong.
ps. I love my Euro and Swiss Francs denominated assets. Thanks BC.
MM
It is just veneer anyway…we can still bust our car through the wall to get in!
Fannie: Home prices to sink 4-5% in ’08
Fannie Mae chief executive tells shareholders he sees no recovery in housing before 2009 – blames unaffordable prices for current housing woes.
Doesn’t sound like much but when we have million dollar homes all over the place in BC, that is a a one year 50K loss plus you lost our on 50K interest income and you paid 12K in taxes.
Nice $112K beating in one year on a can’t lose investment
NJ Buyer Says:
December 14th, 2007 at 1:52 pm
Congrat to the two sellers who are selling you their houses, you are saving them from losing another 50K to 100k.
Ann
Congrats on making your offer. I too am having major buyer’s remorse and this encroachment issue is only making things worse. We should start an AA type group, “Hello My Name is…. and I just went into contract on a house in downtrend market”….”I couldnt stop myself from making lowball offers, checking the NJMLS for price reductions”
RE101: Why concern yourself with a class war when you clearly have none?
FNMA sez: See ya in ’09!
http://news.yahoo.com/s/ap/20071214/ap_on_bi_ge/fannie_mae_shareholders
RE is waiting to spike on the day Hillary takes office, just like Iran freed the hostages on Saint Ronnie’s first day in the WH…
grim (17)-
Thanks. I think I see a trend there…
3b (26)-
I see the coming drop in prices & think it will be fast & furious, too.
Our Govt may be insolvent, but when has that ever stopped them from interfering? You ask me how they would do anything, I don’t know. I’ll ask you, when have they ever NOT done anything.
I’m trying to be devils advocate here.
scribe, outofstater, thanks.
bergenbuyer #86
Yes, the school thing is a real constraint. I would prefer not to switch districts once we start K in Sept. So the alternative is to pick a town, rent there, and then buy there later. But then you have a constraint later of wanting to buy only in that town, rather than having a few to pick from.
NJ Buyer #150
I can imagine that having that encroachment thing hanging over your head would really put even a bigger damper on the fun that is buying in this market : ) Now that I think about your situation again, I would make sure that gets cleared up before you buy and make the sellers do it. Why should you deal with that? The sellers are going to have to do it at some point anyway, because I’m sure any buyers in this market are going to be thrilled about that. It’s in the seller’s best interest to clear it up now, rather than wait until the end of the whole process when it will rear it’s ugly head again.
Yes, an AA type group would be a great idea by the way.
I do believe that this whole market instability is totally real, but I really have to say, not to sound like NAR, that the psychological part is real too. I believe that the price is ok, but the nausea churning in my stomach is making me want to bail. I guess the psychological mania caused the runup and now it’s going to factor into the fall.
Sigh.
Shore (118) Now I know why you’re rich: you get paid by the word.
(Just funnin’ ya.) When one needs one–which is oftener than most would cotton to — a lawyer is worth his or her weight in, well, something that’s slightly more valuable than chicken parts, but less so than gold or cocaine….
But, really, I think I was clear enough without you having to translate English into English…
;)
#30
“I just started looking at properties online in Summit — just at first glance it appears that the tax rates are high but the assessments are low. Why is that? And does that spell trouble? I live in Queens and am not that familiar with NJ and have been looking for a house in town-by-town manner (train towns, which, I gather, are more expensive overall), so my perspective may be warped.”
In NJ, many towns do not reassess every year. The assessments you see are from the year of the town’s last reval. Instead of reassessing every year, the tax rate is adjusted. If a town has not had a reval in a long time, you could really be hit by tax increases once it does happen. That is definitely something to look into when purchasing.
For instance, West Caldwell hasn’t had a reval since the late 80s (1987 I believe). Therefore, houses that sell for $475,000 could be assessed at $185,000 but the tax rate is 3.63%. They are up to have a reval in the next few years.
144 FRANKLIN AVE, Midland Park
Purchased: 9/2005
Purchase Price: $630,000
MLS# 2734110 REO
Listed: 10/14/2005
OLP: $519,000
LP: $464,900
DOM: 120
Active
Sometimes ignorance is bliss. Under Volcker,while busy working, I had a 16% return on 401K Government Obligations, 7% return on GIC’s, and 11% on IRA CD’s. The equities downturn didn’t adversely effect Conservative Investors. In the last Depression, stable employer’s like old regulated Ma Bell, cut salaries rather then implement lay offs. Back then (not ME generation), people thought it was good for many to have some, rather then a few all, and many none.
Mortgage industry needs to cut jobs by a third in 2008 — analyst
December 14, 2007: 01:30 PM EST
SAN FRANCISCO, Dec. 14, 2007 (Thomson Financial delivered by Newstex) — The mortgage industry will continue to feel the impact of the deflationary housing market and rising credit costs and needs to shed a third of its roughly 400,000 jobs in the next year if it is to generate a profit, an analyst said Friday.
Friedman, Billings, Ramsey & Co. Research Analyst Paul J. Miller lowered his 2008 mortgage origination forecast to around $1.8 trillion from $2.2 trillion, citing the ongoing tightening of credit guidelines in the industry.
‘Bottom line, too many loan brokers are chasing too few loans!’ he said in a research note. ‘Until the mortgage industry eliminates back-office personnel and loan officers, which could take several quarters, we believe the mortgage industry will not generate an economic profit.’
Ooops, error on listed date
144 FRANKLIN AVE, Midland Park
Purchased: 9/2005
Purchase Price: $630,000
MLS# 2734110 REO
Listed: 08/17/2007
OLP: $519,000
LP: $464,900
Ann
Do you mind me asking what town you bought in? We have narrowed our selection to Wyckoff, HHK and Demarest. Schools are good and the taxes are not as bad as some of the other towns.
Here is another intersesting point for this blog- My husband and I have been living with my folks for a year. I just found out that there are 3 other families in my sons day care class (total kids in class is 12) doing the same thing. Living with folks while waiting out the market….
bergen – I don’t think anyone can tell you what to do. If you are looking for a long term home, you really really like the house and you can live with the price yu should do what is right for you.
I can get your position. I have started seeing houses that are coming into my range that I actually like and can afford and it is very tempting to move on them. Then again, with the suspision that plenty more are coming on to the market in the near future, having a strong downward pressure on prices and giving me a bigger and better selection, I am making myself hold off for a bit. Not forever, but if 6 months can make the difference between settling and being really happy, I’ll go with happy.
# 168 bergen,
No problem, nothing like a good debate….
to answer your question; the reason that our countries current financial condition is an issue is that because for the last 50+ years the US had enough respect and clout to pretty much demand credit or financial concession at will. Over the last 5-10 years the world has come to recognize that as a country we are shopaholics who have run up our credit cards far beyond our immediate means to pay the bill. This means that since we dont actually have the money to bail ourselves out we would have to borrow it (or sell national assets, who ants to buy yellow stone? china?). But, we cant borrow it, we already borrow so much money and our financial instability has been spread through international markets to such a degree that it would be close to financial suicide to global markets to write the US a blank check.
You are correct in that we have historically spent money without regard to consequences and gotten away with it. Unfortunately, or perhaps fortunately that is quickly coming to an end as the dollar is rapidly losing its status as a global currency
Summit is a well located, nice town. It used to be a Short Hills alternative, with stately homes and lower taxes. It is still reasonable to live in for working class housing, as the Mansions pay a lot of the tax. But, some of the big employers have left, shifting the burden onto residential properties. One big one that moved last year was Summit Medical Group, which relocated to the old Dun & Bradstreet property in Berkely Heights. A big hit a few years back was Cieba Gigy moving after the Sandoz merger. Train wise both the Morristown & Gladstone lines join at Summit. It also has Overlook Hospital as a plus, and a pleasent downtown. Personally, I would chose Chatham or Madison (Morris County) over Summit (Union County). There was a time in the mid 90’s when Summit, New Providence & Berkeley Heights investigated trying to secede from Union & join Morris. They are cash cows milked by Union.
When people talk about the balance sheet of the USA, they usually focus on the liabilities.
Let’s not forget the assets – a population that grows by 3 million people per year and the tremendous earning and wealth creation powers of the American people.
Yes, the school thing is a real constraint. I would prefer not to switch districts once we start K in Sept. So the alternative is to pick a town, rent there, and then buy there later. But then you have a constraint later of wanting to buy only in that town, rather than having a few to pick from
Ann,
Your kid is aproaching Kindergarden age…you’ve got to be kidding me with this school change. he’s gonna have to go to 1st grade to a new school in NNJ, wow big culture shock.
bi (96)-
I do business in East Brunswick. Your unsubstantiated declarations about the viability of that market are lies.
Pre
WE do indeed have assets, but we have given up our manufacturing base which was a big asset. We are not a lost cause financially, but we are in a bad position and need to stop spending like drunken sailors and actually balance our trade deficit instead of just talking about it.
U.S. Role as Biggest World Bank Donor at Risk in Negotiations
By Christopher Swann
Dec. 14 (Bloomberg) — The Bush administration may have to pledge more money to the World Bank to avoid the U.S. losing the title of biggest donor to the largest poverty-fighting agency.
The U.K., whose aid budget has been swollen by the pound’s rally, is increasing spending on development to a record. Russia may lift its contribution, while China could commit cash for the first time, according to World Bank negotiators.
World Bank President Robert Zoellick dispatched aides to meet officials from the world’s richest nations in Berlin this week to decide funding for the International Development Association, the bank unit that finances projects in 80 countries. The dollar’s drop is eroding the value of the U.S. contribution, while gains in foreign-exchange reserves among some developing nations give them an opportunity to enhance their influence.
“The fall in the dollar and the rise in sterling will make it even harder for the U.S. to keep its lead in international currency terms,” said Dennis de Tray, a former World Bank director and now vice-president of the Center for Global Development in Washington.
The World Bank has scheduled a press conference for 12:30 p.m. today in Berlin.
In 2005, the U.S. contributed 12.95 percent of the $18 billion in total donations to IDA, down from 20 percent in 2002 and higher than the U.K.’s 12.4 percent. Negotiators may forge a compromise to avoid relegating America to second place just six months after the 54-year-old Zoellick took office, said Alex Wilks, director of Eurodad, a Brussels-based organization representing non-government organizations.
U.K. `Influence’
“Neither Britain nor the World Bank management will want to embarrass the U.S.,” Wilks said. “Whatever the diplomatic fudge, the fact is that the U.K. is gaining influence relative to the U.S.”
World Bank donations are made in Special Drawing Rights — an international basket comprising dollars, yen, sterling and euros. The U.S. currency’s 10 percent decline since 2005 means the Bush administration has to increase spending to keep its contribution unchanged in SDR terms. The pound and the euro, by contrast, have strengthened.
Britain is well placed to take the leading role at the World Bank, analysts said. In October, Chancellor of the Exchequer Alistair Darling said the country’s overseas aid budget will climb 17 percent.
Spending by the U.K.’s Department for International Development alone will go up by 11 percent to 7.9 billion pounds in three years. Total British spending on aid will reach 9.1 billion pounds by the end of 2011.
Displacing the U.S.
“Britain has the money to take the lead” de Tray said. “The question is whether they will want to take the risk of displacing the U.S., which might lead U.S. policy makers to step aside and disengage from the World Bank.”
Japan, the third-largest donor to the World Bank in 2005, faces a bigger challenge than the U.S. The yen has fallen by 13 percent against the SDR since 2005. The biggest advancers are Canada, whose currency is up 16 percent and Australia, whose dollar has advanced 11 percent.
In 2005, 60 percent of IDA contributions came from the Group of Seven major industrial nations, according to the World Bank. This time, developing countries are likely to assume a greater role. The World Bank expects at least five new donors to make contributions, including Lithuania, Latvia, Estonia, Egypt and Cyprus.
World Bank negotiators are also asking oil-exporting nations to provide more money, reflecting crude oil’s surge. In 2005, Saudi Arabia represented 0.22 percent of the total, lower than its 2.85 percent shareholding in the World Bank.
“Zoellick has been trying to make a pitch where the money is,” said Bruce Jenkins, policy director at the Bank Information Center, an organization in Washington that monitors the World Bank. “It would be very strange if the Saudis were not very much in his sights.”
bi (107)-
You are a pluperfect idiot.
Is your lunch break up yet? If it is, get back to work, and remember to ask every customer if they want to supersize.
My favorite Christmas present is a wonderful fiction book published in February 2005:
Are You Missing the Real Estate Boom?: The Boom Will Not Bust and Why Property Values Will Continue To Climb Through the End of the Decade—And How To Profit From Them.
The famed economist and author David Lereah penned the mighty tale which is clearly by far the number one book of 2005 in terms of having the longest title.
WE migrated from a Manufacturing Economy to a Service Economy. Now that relavent Services are Outsourced to other Countries like India, we migrated to a Financial Economy. Now that the World is balking at our Voodoo Finance, we need a new migration plan. Oh Corzine has one, sell of all the National Infrastructure. Will the last Billionaire please shut off the lights.
The death of US manufacturing is a myth promulgated by the mainstream media. 2006 was a record year for output and profits in the US manufacturing sector.
#188 Pre,
You’re kidding, right? When you get back home this evening, please take an inventory of all your belongings and let us know what % is labeled ‘Made in USA’.
184 …good it time europians step up to the plate!!!
180 pre
“Let’s not forget the assets – a population that grows by 3 million people per year and the tremendous earning and wealth creation powers of the American people.”
since that second part is truly just hot air, I have to ask: population growth is all we’ve got?
We’re going to screw ourselves out of this mess?
Or be rescued by the illegals?
I’m so relieved….
186 John
is that on the shelf next to “Dow 36,000”?
Oh, boy…take a bad situation and make it worse:
Dec 14, 2:51 PM (ET)
By JESSE J. HOLLAND
WASHINGTON (AP) – The thousands of Americans facing foreclosure because of the ballooning interest rates on their subprime mortgages would get help from the federal government under legislation overwhelmingly approved by senators Friday.
The legislation, approved 93-1, is the Senate’s first attempt to address the looming subprime mortgage crisis through stand-alone legislation. Sen. Jon Kyl, R-Ariz., was the lone senator to vote no.
The bill would allow the Federal Housing Administration to back refinanced loans for tens of thousands of borrowers who are delinquent on payments because their mortgages are resetting to sharply higher rates from low initial “teaser” levels.
The Senate bill raises the maximum mortgage the FHA can insure in high-cost areas from $362,790 to $417,000 – the same level as loans backed by Fannie Mae (FNM) and Freddie Mac. (FRE)
reinvestor #160
I got beat up by this crowd last winter when I erroneously predicted a RE comeback or flattening in the Spring 2007. They were all right and i was proven wrong. In august, everyone realized including the Fed.
BC, ChiFI, Grim, skep, kettle, even clot sometimes, really have a sound grip on the big picture and I have learned alot from them. Heck they even made me money.
If you pay attention you might learn something too. Grim runs a very informative Blog.
Rememebr Dec 16th is the Ron Paul Boston Tea Party day for donations.
Just think of how much this will save you when he eliminated the income tax.
Donate $100.
Dreamtheaterr,
I thought about the stuff I bought recently. Most of it (key exception: clothes) was made here or consists of several American-made components.
Furniture
Ipod
Books
Appliances
Bicycle
Medicine
Home improvement stuff – shades, wood products, paint
And if I bought a car, most of that would be made in the USA.
Trusting in Ben and Hillary to clean up this mess is like trusting and believing in Isiah’s plan to fix the Knicks.
I got stock holding the bag (season tickets)
126 – Roni
lol the 3 ‘bed’ septic does not mean 3 bedrdoom septic. It refers to the way the septic system is built. – bed type septic system.
pretorius jobs in manufacturing have declined, just like Confused in NJ said.
The Bureau of Labor Statistics projections of U.S. job growth by industry and occupation.
Here is a chart for you.
http://www.bls.gov/iag/manufacturing.htm
Missing in the BLS lineup are the high-tech and knowledge jobs that economists have been falsely promising us are our rewards for losing our manufacturing jobs.
Are you ready for this? The BLS says that the bulk of U.S. job growth over the next decade will be in low-paid nontradable services that do not require a college education.
Here is America’s job future for the next few years:
waiters and waitresses
janitors and cleaners
food preparation
nursing aides, orderlies and attendants
cashiers
customer service representatives
retail salespersons
registered nurses
general and operational managers
postsecondary teachers
Here is a chart for you.
http://www.bls.gov/iag/leisurehosp.htm
Fries with that?
http://www.bls.gov/iag/eduhealth.htm\
or can I clean your bedpan for you?
All the while the dollar collapses, a country cannot close its trade deficit if its economy is being moved offshore.
Americans won’t be able to afford those “cheap foreign imports” for which we are giving up our good jobs.
If the BLS future projections are correct the United States won’t long remain a high-tech, high-wage economy.
un-moderate #198 please
“Let’s not forget the assets – a population that grows by 3 million people per year and the tremendous earning and wealth creation powers of the American people.”
Comforting. Yet we rely on savings, from former rice paddy workers who are earning approx $2/hr, to fund our current account deficit. They live in huts, yet we borrow from them to pay for granite countertops and flat screens, to the tune of $3B per day.
http://www.designglut.com/crudenecklace.html
Best gift for our friend’s wife who thinks oil is going $100 plus.
BC, ChiFI, Grim, skep, kettle, even clot sometimes, really have a sound grip on the big picture and I have learned alot from them. Heck they even made me money.
I’m touched really ;)
pretorius Says:
December 14th, 2007 at 3:39 pm
The death of US manufacturing is a myth promulgated by the mainstream media. 2006 was a record year for output and profits in the US manufacturing sector.
pret: dig a little deeper please…just because you have a U.S. domiciled firm in the manufacturing sector does not imply “:made in the USA”.
202 Exactly
Ex: Motorola US Company, phone manufactured in China
make money Says:
December 14th, 2007 at 3:52 pm
albani: I want the next outing in Tirana!
I only buy used as I don’t want to increase my carbon footprint, it is just so 2006 to buy new products, Thing Green Baby!!!
“pret: dig a little deeper please”
I already dug deep.
http://www.gpoaccess.gov/eop/2007/2007_erp.pdf
“just because you have a U.S. domiciled firm in the manufacturing sector does not imply ‘:made in the USA’.”
I agree. That’s why I used info on industrial production that happens in the US.
196 mm
don’t forget that we’ve got more than a year of Bush’s wise leadership ahead of us.
#193- Like I said, none of us may want the govt to do it, but they sure seem willing to do anything possible to prevent people from losing their houses. Right or wrong.
Vote Ron Paul and maybe this won’t happen.
bergen 209
Not to beat a dead horse, but the GOV can try what ever it wants, the bottom line is that it will not work
! they may be able to delay the inevitable, but they cannot stop it
Oh, and VOTE RON PAUL
pretorius 195, etc
I can’t judge everything on your ‘made in the USA’ list since you didn’t put enough specifics to judge. But I can tell you that last Christmas I bought my wife an iPod from the Apple website and it was shipped directly to our house from…China. Do you suppose that iPods are manufactured in the USA and warehoused in China?
pretorius Says:
December 14th, 2007 at 4:11 pm
“pret: dig a little deeper please”I already dug deep.http://www.gpoaccess.gov/eop/2007/2007_erp.pdf“just because you have a U.S. domiciled firm in the manufacturing sector does not imply ‘:made in the USA’.”
I agree. That’s why I used info on industrial production that happens in the US.
pret: record year? In inflation adjusted terms maybe? The g-odamned manufacturing/indutrial sector is a paltry 20% of the economy….
come on people when are we going to get this motley crew together somewhere?
New in NJ,
The most valuable parts of an Ipod are made in the United States and Japan. These parts are sent to China for assembly.
pret: this one sticks in my craw….because I tire of your endless bias…..upon relfection, I would agree, industrial production has increased, but I would guess that the bulk of the increase is composed of two sectors
#1 Boeing and it’s supply chain
#2 Auto manufacturing other than from the Michigan based auto industry.
That said, you need to look beyond the top line? Why? Because accounting standards for WIP (work-in-process) suggests (for these massive durable goods) that much of what is capitalized onto the balance sheet occurs in operations outside the U.S., but is reported as a finished good sold out of U.S. based warehouses and finishing manufacturing facilities.
Your data appears to be once again full of confirmation bias, and your arguments sprecious.
Never trust a man with two first names – Ron Paul
make money 181
“Your kid is aproaching Kindergarden age…you’ve got to be kidding me with this school change. he’s gonna have to go to 1st grade to a new school in NNJ, wow big culture shock.”
You’re seriously not beating up on a mom who doesn’t want to make her kid switch schools? Give me a break. Do you have kids?
Pre,
this is from the NY times, so where is the IPOD really made???
An iPod Has Global Value. Ask the (Many) Countries That Make It.
Article Tools Sponsored By
By HAL R. VARIAN
Published: June 28, 2007
Who makes the Apple iPod? Here’s a hint: It is not Apple. The company outsources the entire manufacture of the device to a number of Asian enterprises, among them Asustek, Inventec Appliances and Foxconn.
But this list of companies isn’t a satisfactory answer either: They only do final assembly. What about the 451 parts that go into the iPod? Where are they made and by whom?
Three researchers at the University of California, Irvine — Greg Linden, Kenneth L. Kraemer and Jason Dedrick — applied some investigative cost accounting to this question, using a report from Portelligent Inc. that examined all the parts that went into the iPod.
Their study, sponsored by the Sloan Foundation, offers a fascinating illustration of the complexity of the global economy, and how difficult it is to understand that complexity by using only conventional trade statistics.
The retail value of the 30-gigabyte video iPod that the authors examined was $299. The most expensive component in it was the hard drive, which was manufactured by Toshiba and costs about $73. The next most costly components were the display module (about $20), the video/multimedia processor chip ($8) and the controller chip ($5). They estimated that the final assembly, done in China, cost only about $4 a unit.
One approach to tracing supply chain geography might be to attribute the cost of each component to the country of origin of its maker. So $73 of the cost of the iPod would be attributed to Japan since Toshiba is a Japanese company, and the $13 cost of the two chips would be attributed to the United States, since the suppliers, Broadcom and PortalPlayer, are American companies, and so on.
But this method hides some of the most important details. Toshiba may be a Japanese company, but it makes most of its hard drives in the Philippines and China. So perhaps we should also allocate part of the cost of that hard drive to one of those countries. The same problem arises regarding the Broadcom chips, with most of them manufactured in Taiwan. So how can one distribute the costs of the iPod components across the countries where they are manufactured in a meaningful way?
To answer this question, let us look at the production process as a sequence of steps, each possibly performed by a different company operating in a different country. At each step, inputs like computer chips and a bare circuit board are converted into outputs like an assembled circuit board. The difference between the cost of the inputs and the value of the outputs is the “value added” at that step, which can then be attributed to the country where that value was added.
The profit margin on generic parts like nuts and bolts is very low, since these items are produced in intensely competitive industries and can be manufactured anywhere. Hence, they add little to the final value of the iPod. More specialized parts, like the hard drives and controller chips, have much higher value added.
According to the authors’ estimates, the $73 Toshiba hard drive in the iPod contains about $54 in parts and labor. So the value that Toshiba added to the hard drive was $19 plus its own direct labor costs. This $19 is attributed to Japan since Toshiba is a Japanese company.
Continuing in this way, the researchers examined the major components of the iPod and tried to calculate the value added at different stages of the production process and then assigned that value added to the country where the value was created. This isn’t an easy task, but even based on their initial examination, it is quite clear that the largest share of the value added in the iPod goes to enterprises in the United States, particularly for units sold here.
The researchers estimated that $163 of the iPod’s $299 retail value in the United States was captured by American companies and workers, breaking it down to $75 for distribution and retail costs, $80 to Apple, and $8 to various domestic component makers. Japan contributed about $26 to the value added (mostly via the Toshiba disk drive), while Korea contributed less than $1.
The unaccounted-for parts and labor costs involved in making the iPod came to about $110. The authors hope to assign those labor costs to the appropriate countries, but as the hard drive example illustrates, that’s not so easy to do.
This value added calculation illustrates the futility of summarizing such a complex manufacturing process by using conventional trade statistics. Even though Chinese workers contribute only about 1 percent of the value of the iPod, the export of a finished iPod to the United States directly contributes about $150 to our bilateral trade deficit with the Chinese.
Ultimately, there is no simple answer to who makes the iPod or where it is made. The iPod, like many other products, is made in several countries by dozens of companies, with each stage of production contributing a different amount to the final value.
The real value of the iPod doesn’t lie in its parts or even in putting those parts together. The bulk of the iPod’s value is in the conception and design of the iPod. That is why Apple gets $80 for each of these video iPods it sells, which is by far the largest piece of value added in the entire supply chain.
Those clever folks at Apple figured out how to combine 451 mostly generic parts into a valuable product. They may not make the iPod, but they created it. In the end, that’s what really matters.
Chifi,
My view of this country is mostly positive. I guess this makes me biased. This is a contrast to the complainers who spew negativity all day long.
Somebody said “we have given up our manufacturing base.” I disagree and believe the evidence supports me.
I do agree the accounting is complicated. US-based manufacturers are experts at so-called transfer pricing which allocates value creation in whatever way minimizes taxes.
NJ Buyer 176
I won’t say what town in case my realtor reads this (ha ha) but our target areas are Ramsey, Allendale and Mahwah. We started looking at Wyckoff and Ho-Ho-Kus and I got totally overwhelmed and it seemed to be the same housing stock anyway, although they are both nice towns.
I still can’t figure out the Ramapo-Indian Hills High School thing though. Do you know who goes where?
We haven’t had a good game of Lowball! in a while. Are the numbers too depressing?
pre
My view of this country is mostly positive. I guess this makes me biased. This is a contrast to the complainers who spew negativity all day long.
Positive thoughts wont get you a full tummy at the end of the day. I personally think that the US is in a lot of trouble both socially and financially. but facing a problem is the first step in fixing it. Singing happy-happy-joy-joy while the boat sinks does not stop the water from rising
My view of this country is mostly positive. I guess this makes me biased. This is a contrast to the complainers who spew negativity all day long.
Is it really positive or complacent?
Maybe you’re reading the other poster’s views incorrectly? I don’t read complaining, I read some criticism where posters believe things can be changed for the better. You know, to keep this country great.
“My view of this country is mostly positive.”
I agree, if you drive a John Deere combine and/or header. Beans in the teens.
Kettle1,
Household incomes and net worths are at or close to all time highs.
The social situation (crime, divorce, educational attainment) is better than it’s been in decades.
Thirdworlders with your outlook leave act by leaving their countries. Are you willing to do the same?
US manufacturing isn’t dead, it’s just producing more goods and equipment with fewer workers thanks to advances in technology. GM can produce a car today with a fraction of the labor they needed 30 years ago, so if you planned on becoming a 3rd or 4th generation assembly line worker, think of something else to do.
Ann (218)-
Some of these guys- if they even had kids- would send ’em out to work at the age of five.
Ann (218)-
PS- Don’t you know how easy it is to shuttle from rental to rental every year or two?
Tell the kids to suck it up.
No self-respecting kid of an LOD is gonna be a bagholder…no, sir.
vodka (223)-
What’s wrong with singing happy-happy-joy-joy?
That’s one of my favorite songs! However, I can’t sing it like these two:
http://www.bdt.com/david/images/rs001.jpg
“kettle1 Says:
December 14th, 2007 at 4:39 pm
come on people when are we going to get this motley crew together somewhere?”
Yeah – when?
pret (226)-
Resorting to the “love it or leave it” argument is not bolstering your case.
226 pret
wow – the old “if you don’t like America why don’t you just leave” argument. You’ve been studying with reinvestor a bit too much.
Net worth?
Ask me about American net worth and where it’s gone in 2010.
re 221
Franklin Lakes and Wyckoff can choose between Indian Hills and Ramapo.
Oakland is strictly Indian Hills.
vodka (213)-
“…come on people when are we going to get this motley crew together somewhere?”
I’ve got three cases of Krylon (meant to line soccer fields- ha!), a 30-06, a 30-30, a Winchester 22-410 over/under, a grenade launcher (in pieces), half a case of Knob Creek and a bad attitude.
We can either meet in some sissy-ass bar that serves $14 glasses of bad Chardonnay…or do this thing right.
And, I know for a fact that Grim’s got a boat (with paddles) and a gun. Should get us far.
I say we hit Harrison and show them what proper hooligans can accomplish.
Indian Hills-Ramapo,
FYI the old way was Wyckoff to Ramapo, Oakland to IH. FL was split geographically. They changed it recently to the current system. Just a thought in the event they ever changed it back and you lived in FL, you could find yourself goegraphically stuck to one school.
I’ve found out today a few of you are in my territory tracking houses, I hope you guys are all in another price range.
great dynamic rent vs. buy calculator for those who haven’t seen it:
http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=1&oref=slogin
Clot,
No Chardonnay in Harrison. I can imagine the stares, from the natives, if someone asked for it? However, they will accept the Krylon, only if it adheres to blacktop.
clot #228– trick question—we all know having children is not a dominant economic strategy.
pretorius Says:
December 14th, 2007 at 5:08 pm
Kettle1, Household incomes and net worths are at or close to all time highs. The social situation (crime, divorce, educational attainment) is better than it’s been in decades. Thirdworlders with your outlook leave act by leaving their countries. Are you willing to do the same?
pret: I’m going to use the best simple analogy I can think of to describe the United States.
It’s called Major League Baseball.
If you know anything about the game, you would recognize a number of things:
1. record attendance and revenue
2. ever higher salaries for it’s players
EVERYTHING IS GREAT! (a.k.a. pret-a-manger decree)
but think
3. game built more on strategy than pure athleticiam
4. long running game that is less action packed
5. draws on history and tradition
Why record attendance?
6. the way the game is marketed, there are a lot of extra tickets purchased for pure reasons of access or other non-baseball reasons
7. most fans use the stadium as an entertainment venue not to watch a baseball game
8. tremendous business support causing greater elasticity availble in pricing at least in the short run
note:
8. the amount of people under 20 that are interested in baseball is dropping dramatically
WHAT DOES THIS SAY ABOUT THE FUTURE?
It says one day that if there was an olympics in baseball (better example might be basketball) we would no longer be the de facto winners.
When there ceases to be broad cultural support for baseball, business spend will dry up. Look at professional boxing and how the UFC is now killing it. Unthinkable?
The U.S. becomes irrelevent in the future…unthinkable?
Analogy over..
If you do not see the real danger of this country becoming a sack of mediocrity then you are blinding yourself.
Our one saving grace……most of our competitor countries love our culture and are churning out a good swath of useless, ADHD, unemployable, moronic kids like ours. However, winning by default is not the way to win in the long run…
#220 pret: even Kudlow, the king of happy,happy joy,joy, admits we have given up our manufactuting abse, he went through the %’ declines the other night over the last 30 years.
“This is a contrast to the complainers who spew negativity all day long.”
like I said, pre, you’re sounding more like reinvestor by the day.
Next you’ll be telling us we’re anti-American.
By the way, are you aware that the link you posted that supposedly stood for the proposition that America’s manufacturing base is expanding (and I can understand why you’d want to turn to the President’s cheerleading report) contains the following:
“manufacturing employment decreased for the ninth consecutive year.”
and:
“Manufacturing, which has made small investments in IT capital compared to the other sectors shown, has had the slowest
recent growth in efficiency.”
Furthermore – take a look at table B-12 in the link that you posted. Were you aware that total manufacturing value added as a percentage of GDP has been SHRINKING FOR THREE DECADES?
Thanks for the link.
#216 chgo: pret is a hopeless case, has massive illusions of grandeur, and believes he knows at under the tender age of 30. He is like an incessant yappy puppy.
clot – you’ve gotten into that whiskey proper already, I think. I’ve got to head home and do the same.
242 chi
If you don’t like baseball, why don’t you just leave America?
243
you quoted Kudlow!
*snort!*
what is the best way to look up recent sales in middlesex county (specifically east brunswick)
#130
bi,
I would start out by asking some of the most successful people you know who they use and go and meet with those attorneys to talk about your needs and see if you match up well with them and if not to get recomendations. The giude, Best Lawyers in America is not a bad place to look also. Martindale Hubble can be used as an information gathering source but it is not where I would start.
Ron Paul on Cramer tonight beat up on fed lovefest.Great!
#167 clot: In the end it will be better get way, all around.
#160 reinvestor: You are a debtor looking for a government hand out. The majority of people here have plenty of assets, and we all enjoy making money.
Buying a house at the peak of the market and then trying to flip it, is not making money;its stupidity.
#248 njpatient: Oh he is my hero, Goldilocks? I just love it. Actually pret could be Kudlow’s faithful side kick, like Sancho Pancho.
254
I just wanted to say “kudlow” and “snort” in the same post….
pret:And what happens when Wall St takes a really big dump, and it is going to child.
Its happening already much as you refuse to understand that. If you had any viable connections and experience on the street you would already know that.
Listen to me and learn child. When the Street cuts, it cuts with a vengeance, you have absolutely no idea. Once that happens, it will amke a man out of you. Then lets talk about Hudson County.
Shopping galore nationwide at Countrywide:
http://countrywide-foreclosures.blogspot.com/2007/12/14442-reo-offered-for-sale-on.html
#107 bi: We love you bi, your our man , yeah!!!
Folks,
Looking for some information on a closing that may or may not have happened today. MLS 2423765. Can anyone see closing price? Clot had mentioned that it may take some time to reveal but here’s hoping I get lucky. If the price is not there, can someone tell me the listing realtor so I can contact?
Also, would someone pls pull address for the following listing: 2454671?
As always, thanks for doing these lookups.
#96 bi: All those lsitings and more will be back after the holidays,and into next year.
mojo,
2423765 – Still UC – No update
2454671 – 51 RIDGEVIEW DR – Atty. Review
#90 bi:the real estate market should rebound quickly.
So now the real estate markets problems are being casyeded by Hillary and the media, and all that has transpired over the last few months has nothing to do with it, nothing at all?
And now when the media focuses only on Hillary, the real estate market will come bouncing back?
Thank you so much for your analysis and your help. Only you are able to present things as they really are.
#84 Ann All the talk about the sellers going through heck is all fine and dandy, but it really sucks being a buyer right now too.
Well good luck, but if it really sucks, then you do not have to go ahead with it.
I know you want your child to be in school by Kindergarten, but it would not be the end of the world if he or she started in their permanent school by 1st grade.
Just a thought. But good luck all the same.
BOOYAHHHH! Mountain Lakes..
176 Morris Avenue, Mtn. Lakes, NJ
5 Bedroom / 2.5 Bath Hapgood
Purchased: 4/29/2003
Purchase Price: $875,000
GSMLS# 2417284
List Date: 06/15/07
Original List Price: $996,500
DOM: 163
Sold: 12/13/07
Sale Price: $820,000
It’s been a while since you could get a Hapgood in the $800s.
Clot,
Harrison;
Small urban town sandwiched between Newark and NYC. “The Beehive of Industry”. Known for Frank E. Rodgers, the longest serving mayor in American history. Known for soccer, where Harrison High School owns 21 state championships, most in state history. Hates Kearny, hates North Arlington. Very diverse. New home of the NY/NJ MetroStars. Filming site of the Sopranos. Home of Ray Lucas (who played for the NY Jets, New England, Baltimore, and Miami of the NFL) and Daisy Fuentes. Used to have the most bars per square mile. Possibly the weirdest HS mascot: Blue Tide.
376 Lakeview Drive, Wyckoff NJ
Purchased: 7/14/2005
Purchase Price: $1,249,000
NJMLS# 2739298 (multiple listings)
List Date: 8/18/2006
Original List Price: $1,350,000
Sold: 12/14/2007
Sale Price: $1,200,000
“Don’t know if it’s true or not but when I was growing up (next door in Kearny) there was a rumor that Harrison was in the Guiness Book of World Records for having the most bars per square mile than any other town in the US.”
http://www.soccerpubs.com/boards/index.php?act=Print&client=printer&f=3&t=15870
Close…
34 Wedgewood Drive, Montville NJ
Purchased: 5/5/2004
Purchase Price: $913,000
GSMLS# 2419789
Sold: 12/14/2007
Sale Price: $915,000
(Post commission loss $43k)
34 Lindabury Ave, Bernardsville NJ
Purchased: 6/9/2004
Purchase Price: $561,000
GSMLS# 2458681
Sold: 12/13/2007
Sale Price: $570,000
(Post commission loss $20k)
thanks for the comps, grim
good times…
We’ve got some great sales tonite folks. Pay close attention to those purchase dates.
131 Bunker Hill Road, Wayne NJ
Purchased: 10/13/2004
Purchase Price: $480,000
GSMLS# 2428175
Sold: 12/14/2007
Sale Price: $450,000
JB,
Half way there, to 2001.
Good L*rd man, did you even make one mortgage payment?
281 Riverwalk Way, Clifton NJ
(Short Sale)
Purchased: 7/12/2007
Purchase Price: $435,000
GSMLS# 2429056
Sold: 12/14/2007
Sale Price: $415,000
Half way to 2001 & the worst is yet to come.
BC I thought Guttenberg Hudson Cty. had the most bars per square.Hit most of them in my youth & I mean youth as long as you could belly up to the bar with cash no problems.
Grim 272 He is lucky if he didn’t sell it would have been worse down the road.
guess who on this blog fits following profile:
1) have tons of cash but don’t know where to use except donating to uncle Ron (Paul) or uncle sam (for alcohol use tax);
2) vote ron paul and hate bush;
3) hate greenspan; wish volcker running current fed;
4) credit like virgun;
5) think all recent home buyers are either low IQ or low FICO or both;
6) have golden nugget under pillow and 10 gallon gasoline in closet;
7) rent;
8) hate hillary since she is too tolerant;
9) have a crystal (low) ball;
10) only enjoyment is other peoples misfortune.
so sad
“State helps high-risk doctors pay malpractice bills”
http://www.nj.com/news/index.ssf/2007/12/state_helps_highrisk_doctors_p.html
SAS
mikeinwaiting,
If we ever have get together with members of this forum, I’ll tell you some stories about Guttenberg.
I really like the faded siding, it looks so lived in. And what a bargain price!
http://homes.realtor.com/search/listingdetail.aspx?mlslid=2734798&ml=3&typ=7&sid=bc13fe291c3140bf85f0097aeafa8f45&lid=1087999336&lsn=3&srcnt=4#Detail
Since it’s a weekend thread and OT is allowed:
Chifi, any comments whether you’d manage being a passenger in a Mumbai rickshaw in the link I posted the other day? (the three-wheeler auto rickshaw?)
http://www.youtube.com/watch?v=RjrEQaG5jPM
Bi,
4) credit like virgun
whta is “credit like virgun”??
OT,
but this is how you do it. fight the power!
Vodka fan nearly kills self by glugging 2L rather than surrendering it at airport
GARY Bouchers was still their last time I went down to the old hood.
SAS Torte reform would be cheaper but this is Jersey.
The response to this was just sooo predictable. You’ll need to realize that most here wish to wallow in negativity. They hate anything positive as it shines light on their dark colored glasses. They don’t want any light. They prefer the dark side.
Expect to be tarred and feathered for expressing this!
pretorius Says:
December 14th, 2007 at 4:55 pm
Chifi,
My view of this country is mostly positive. I guess this makes me biased. This is a contrast to the complainers who spew negativity all day long.
A gloom and doom convention, what a great idea. The only excitment will be Kettle brandishing his cat o nine tails when giving Inpatient a well deserved beatdown.
Look, it’s gone far enough with you guys here. Just keep it here. The world has no need or want for a doom and gloom convention.
njpatient Says:
December 14th, 2007 at 5:36 pm
“kettle1 Says:
December 14th, 2007 at 4:39 pm
come on people when are we going to get this motley crew together somewhere?”
Yeah – when?
BC Bob,
I believe you are correct, every four corners has/had at least on bar,you can picture them it’s a small town, I can see them all, they were also sprinkled in the middle of the blocks, it has changed a little but not much. I’m in if its in Harrison.
Ann,
I am a mother and am not beating up on you, however……. you have plenty of time b4 september, you could buy in early august and be in by september. I also believe a move after kindergarten is not so bad, also no matter what you hear about schools you don’t know em till you try em.
KL
Bullspit. I’m not looking for a damn handout, I’m looking for what’s mine. What’s mine is a favorable environment for investing which you and your ilk would like to screw up.
Too bad you won’t succeed.
You guys aren’t into making money, if you were, you would have brought a damn house a long time ago.
3b Says:
December 14th, 2007 at 6:48 pm
#160 reinvestor: You are a debtor looking for a government hand out. The majority of people here have plenty of assets, and we all enjoy making money.
Buying a house at the peak of the market and then trying to flip it, is not making money;its stupidity.
“You guys aren’t into making money, if you were, you would have brought a damn house a long time ago.”
Does 1985 qualify as a long time ago?
very OT
http://theultimatebootlegexperience.blogspot.com/
Bi, that characterizes damn near everyone here. My only exception to your brilliant characterization is:
1)Most don’t have any cash because they never invested in any property to generate the gains to have cash.
2) They probably love Hilliary. There is a rather persistent infestation of radical liberal element and assorted leftists here.
bi Says:
December 14th, 2007 at 8:17 pm
guess who on this blog fits following profile:
1) have tons of cash but don’t know where to use except donating to uncle Ron (Paul) or uncle sam (for alcohol use tax);
2) vote ron paul and hate bush;
3) hate greenspan; wish volcker running current fed;
4) credit like virgun;
5) think all recent home buyers are either low IQ or low FICO or both;
6) have golden nugget under pillow and 10 gallon gasoline in closet;
7) rent;
8) hate hillary since she is too tolerant;
9) have a crystal (low) ball;
10) only enjoyment is other peoples misfortune.
re101 Most people are not negative but you
would have to be blind not to see whats coming down the road.I think we all realize that our country will suffer in this correction but it has to be so that avg. person can again buy a home & those who shouldn’t rent.Exotic mortgages fueled this & many people will suffer because of it.Whats done is done so those looking to buy may show some glee that they will be able to buy a home that will not put them in the poor house.They don’t control it though some foretold it that isn’t negative
its called smart.
101
Bullspit. I’m not looking for a damn handout, I’m looking for what’s mine. What’s mine is a favorable environment for investing which you and your ilk would like to screw up.
So you have a RIGHT to a favorable investing environment????? ROFLMAO
well you know i have a similar problem with my right to hookers and blow being screwed up by those nosey cops!
[265] BCB:
Used to have the most bars per square mile.
I thought that honor went to Rahway…
I-Think, you rock!!
Investor 101
opposing points of view are always welcome, they make for interesting conversation, but please leave the vitriolic commentary out
“What’s mine is a favorable environment for investing ”
ReInvestor, if there is a favorable environment for investing always, everyone would retire a millionaire at 45. Investing themes come and go in cycles; you need to know when to catch the wave. But when the tide goes out, we get to see who is swimming naked.
On the other hand, Bi could perhaps assist you with some pant-upping.
[290]
50.5 & bi,
“Don’t ask the barber whether you need a haircut.” – Warren Buffett
#207 – Pretorius – Once again, you may want to read the links that you post on more than a cursory level.
If you look at the PDF you posted, in particular Table B-46 “Employees on Non-agricultural Payrolls, by Major Industry 1959 – 2006” you’d see that the majority of the gain in industrial employment has been in construction. Non-durable and durable goods manufacturing has lost a bit over the years, with service industries really picking up a lot around `89 or so.
While industry may be making more cash (and we can argue if this is indicative of inflation or not) they haven’t been hiring more people, it’s been less. If you remember that the overall population is growing at the same time then industrial job base as a percentage of the pop. total is most certainly shrinking.
mojo (259)-
Stuck at an Apple again. Sorry…
Pretorius – this is a pretty nifty .pdf, thanks for posting it. Table B-93 “Sales, profits and ….”” you can really see the inflationary spike after the dot bomb/911 Fed cuts.
Lots of very good info in here.
Oooh, Table B-77 has “Consumer credit outstanding, 1959-2006”. The revolving debt really ramps up after `93 or so.
#280
Thanks for the memories! The only thing missing in the street scene video are the camels, the water buffalo, the cows, and the monkeys!
Talk about white knuckling it!
Let me tell you something, I don’t want to read about your prurient activities on this damn board. No one wants to know about you being a moral degenerate.
Kettle1 Says:
December 14th, 2007 at 9:28 pm
101
Bullspit. I’m not looking for a damn handout, I’m looking for what’s mine. What’s mine is a favorable environment for investing which you and your ilk would like to screw up.
So you have a RIGHT to a favorable investing environment????? ROFLMAO
well you know i have a similar problem with my right to hookers and blow being screwed up by those nosey cops!
kl (286)-
If it’s Harrison, it should be a bar crawl. Why just hit one? Sounds like quite a variety.
Look, have you ever tried right clicking your mouse and copying the post you’re referring to so readers know what the hell you’re talking about? It’s pretty easy to do that. Try it sometime.
Kettle1 Says:
December 14th, 2007 at 9:52 pm
Investor 101
opposing points of view are always welcome, they make for interesting conversation, but please leave the vitriolic commentary out
Hey make,
Good effort by the Knucks tonight. They made it into the 4th quarter before quitting.
Wanna see effort? Man U v Liverpool and Arsenal v Chelsea this Sunday. Like two Super Bowls on the same day!
ReTard (290)-
“There is a rather persistent infestation of radical liberal element and assorted leftists here.”
But, the only person constantly whining for the gubmint to rig the game and bail him out is you.
dreamtheaterr Says:
December 14th, 2007 at 8:48 pm
Chifi, any comments whether you’d manage being a passenger in a Mumbai rickshaw in the link I posted the other day? (the three-wheeler auto rickshaw?)
yan: I’ve been in a cab in Cairo; yeah business as usual :(
Reinvestor,
I find you truly fascinating. While you accuse most people here of being liberal terrorists, you are the biggest s.oh.cial.ist in the room. As a neo-con in his own mind, you reject direct “welfare style” handouts in favor of a new kind of s.oh.cial.ism; one where the rules of the game are rigged so that you always come out ahead. If the business cycle of the free market turns on you, the government should change the rules to “let you win”; like a petulant toddler who’s mommy & daddy always let him win at Chutes & Ladders lest he throw a temper tantrum and demand the he be allowed to win.
Make no mistake, at the end of the day. You are no different than the far left. You just take your welfare check in a different form.
“What’s mine is a favorable environment for investing which you and your ilk would like to screw up.”
Reinvestor, this is a very interesting statement. You talk about it as if a favorable investment environment is for you and you alone (e.g., It’s mine! Mine! Mine! Mine!). I agree with RentingInNJ. Not only are you looking for a handout, you sound like a spoiled brat who never learned how to share his toys.
Comp killer: Livingston NJ
23 Chelsea DR , Livingston, NJ 07039
Date Sold: February 23, 2007
Date Officially Recorded: March 22, 2007
Sale Price: $ 1,730,000.00
same property relisted for sale over last summer finally sold October 22, 2007
Date Officially Recorded: October 26, 2007
Sale Price: $ 1,500,000.00
Sorry, don’t have the MLS number but this info came right off public records on nj.com website. Figure in the 5 or 6% commision the seller had to pay the broker, that’s another $75,000 loss, for a grand total loss to the seller of $305,000 or 17.6% loss on their investment (guess the owner thought they’d better cut their losses after the jumbo mortgage debacle last August). I’m telling you guys out there who would need to use jumbo mortgages up here in Essex county and Bergen county, it’s a different market now than the comps from last summer would suggest. Wait it out just 1 more season for the real fallout- that’s coming from the son of a prominent Northern NJ builder.
ReTard has to be grim’s alter ego. The BP fastballs he tosses are always good for another 10 posts. No living being with opposable thumbs can possibly be that stupid.
OK grim…come clean, you little traffic wh#re.
ChiFi (308)-
Isn’t Mumbai Rickshaw a boy band?
Inflation rise limits Fed’s options on rates
By Daniel Pimlott and Michael Mackenzie in New York and Krishna Guha in Washington
Published: December 14 2007 15:28 | Last updated: December 14 2007 21:55
US inflation jumped to an annual rate of 4.3 per cent in November, explaining why the Federal Reserve remains reluctant to cut interest rates too aggressively in spite of the risks to growth.
The data showed the continued pressure on prices from high food and energy costs and highlighted the risk the economy will face at least a brief period of “stagflation” as growth slows and inflation rises
Now they’re in a box can’t cut & if fed raises the credit sit. & street tank.It was only a matter of time before energy & food cost made there way into CPI #s.As they cook the books it took longer than it should.Brief period now thats open ended.
http://www.ft.com/cms/s/0/cc8cb43a-aa57-11dc-a779-0000779fd2ac.htmlhttp://www.ft.com/cms/s/0/cc8cb43a-aa57-11dc-a779-0000779fd2ac.htmlhttp://www.ft.com/cms/s/0/cc8cb43a-aa57-11dc-a779-0000779fd2ac.html
Don’t you dare try to say that I’m on welfare. I work for a living. When one works or puts his money to work, there is supposed to be an environment conducive for that. It’s a little like your body requiring oxygen in order for you to live. People in my tax bracket pay the bulk of the damn taxes in the country, not you who don’t invest, so yes, the government should pay attention to us and make sure that the environment is favorable. It’s in their interest and much as it is in mine.
RentinginNJ Says:
December 15th, 2007 at 12:20 am
Reinvestor,
I find you truly fascinating. While you accuse most people here of being liberal terrorists, you are the biggest s.oh.cial.ist in the room. As a neo-con in his own mind, you reject direct “welfare style” handouts in favor of a new kind of s.oh.cial.ism; one where the rules of the game are rigged so that you always come out ahead. If the business cycle of the free market turns on you, the government should change the rules to “let you win”; like a petulant toddler who’s mommy & daddy always let him win at Chutes & Ladders lest he throw a temper tantrum and demand the he be allowed to win.
Make no mistake, at the end of the day. You are no different than the far left. You just take your welfare check in a different form
With all the layoff news out there, the Wall St. job market is still hot.
” Mizuho dismissed its entire CDO-underwriting group Wednesday, only a year after luring most of the New York-based team from Calyon and getting slapped with a $750 million lawsuit as a result.
…
The laid-off professionals’ employment outlook isn’t as grim as it would seem, however, as an unidentified broker-dealer has already offered jobs to most of them. Those accepting will join that shop’s New York office next month. ”
http://www.securitization.net/article.asp?id=1&aid=7839
You know, I’m starting to get sick of this shlt. Just because someone doesn’t share in you guy’s gloom and doom outlook, they have to be a “fake” or someone else’s alter ego. Give me a damn break and accept the fact that there are those who don’t share your views and who will never accept your views.
Clotpoll Says:
December 15th, 2007 at 7:41 am
ReTard has to be grim’s alter ego. The BP fastballs he tosses are always good for another 10 posts. No living being with opposable thumbs can possibly be that stupid.
OK grim…come clean, you little traffic wh#re.
Dense as a chocolate torte…
Yeah….gloom and doom people….everything is great here…nothing to see….move along….next. Just gloom and doom….go about your business….the dollar/real estate/local & State economy/inflation/real income….is great! Just wonderful! Come on!
OK grim…come clean, you little traffic wh#re.
I’m not clever enough to pull that off.
Great map, hat tip to Palmetto over at Ben’s blog for the link:
http://strangemaps.wordpress.com/2007/06/10/131-us-states-renamed-for-countries-with-similar-gdps/
Здравствуйте, comrades of Mother Jersey!
From the WSJ:
In Capital, Steps
Weighed to Fix
Mortgage Mess
Some Draw Inspiration
From Depression Era;
The Do-Nothing Option
By MICHAEL M. PHILLIPS, JAMES R. HAGERTY and GREG IP
December 15, 2007; Page A1
Washington’s leaders have been pushing many policy buttons to stem the worsening housing and credit crisis. They’ve yet to find the off button, however, and that’s prompting a search for more-aggressive solutions.
[snip]
This past week, the Center for American Progress, a liberal think tank, proposed that the government buy some mortgage-backed securities and create a new agency, the Family Foreclosure Rescue Corp. It would issue new, more affordable fixed-rate mortgages for those facing foreclosure whose homes are worth less than what they owe.
“There will be a louder discussion about do variations on this theme make sense, and could you pull it off?” says Ellen Seidman, a former economic adviser in the Clinton administration now at the New America Foundation.
Alex Pollock, a resident fellow at the American Enterprise Institute, a market-oriented Washington think tank, says Congress and the White House should review the history of a defunct federal agency known as the Home Owners’ Loan Corp., created in 1933 when thousands of banks were failing and millions of Americans couldn’t pay their mortgages.
The agency acquired distressed mortgages from banks at a discount and refinanced them on easier terms. It was wound up in 1951 and returned a small surplus to the U.S. Treasury, Mr. Pollock says. He says it’s unclear whether the U.S. eventually might need another such agency but not too early to start work on contingency plans.
http://online.wsj.com/article/SB119767636780730449.html?mod=hps_us_whats_news
Eh, Grim…
Yesterday around 1:15 pm I tried to post a message ( #128) and got “awaiting moderation”–I had posted #136 informing you of this. Was there something wrong ? I would greatly appreciate a reply…Thank You,
Bob
No1bobbo@hotmail.com
From the NY Times today:
“The increase in incomes of the top 1 percent of Americans from 2003 to 2005 exceeded the total income of the poorest 20 percent of Americans, data in a new report by the Congressional Budget Office shows.
“The poorest fifth of households had total income of $383.4 billion in 2005, while just the increase in income for the top 1 percent came to $524.8 billion, a figure 37 percent higher.
“The total income of the top 1.1 million households was $1.8 trillion, or 18.1 percent of the total income of all Americans, up from 14.3 percent of all income in 2003. The total 2005 income of the three million individual Americans at the top was roughly equal to that of the bottom 166 million Americans, analysis of the report showed.”
Whole article is here:
http://www.nytimes.com/2007/12/15/business/15rich.html?ref=us
Unlike previous downturns, this housing slump is affecting even areas and properties that should be immune. Prices are rising in some places, but not as much as they were, and the pace of sales is down almost everywhere. The hottest markets have likely already been weakened by tighter loan restrictions in the wake of the subprime mortgage mess.
http://biz.yahoo.com/bizwk/071210/dec2007bw2007126806599.html?.v=1&.pf=real-estate
REinvestor:
Some of us are homeowners, equity investors, as well as doom and gloomers. I am one of them. Fortunately for me, I’m doing fantastically shorting Real Estate.
How do you like dem apples buddy?
And just be happy that I’m doing so well. Lord knows that I’ll be paying taxes on my gains as you’ll hopefully be writing off your losses on your ‘long’ REinvestments. Perhaps some of MY taxes will go to pay for YOUR bailout.
So before you start spouting more ill-informed propaganda about how real estate is always a good investment, perhaps you might stop for a moment and think about how stupid your arguments are.
Need some advice.
I am thinking of buying in North Plainfield next summer, prefarably townhouse. Can someone tell me about the neighbourhood ? I wont be interested in school-district as by next summer both my children will be in college. I just want a safe neighbourhood, and a decent resale opportunity if we decide to sell after 5 years.
It is people like you who have deliberately attempted to ruin the market with short selling. Better watch yourself, there’s a short squeeze coming to your neighborhood soon.
As to stupid arguments, how smart is it to bet against America? You gloom and doomers like to constantly bet against America with baited breath waiting for a financial catastrophe that will never come. Sure, they’ll be hiccups every now and then, but this country will always stand as the beacon for personal freedom and economic power.
stuw6 Says:
December 15th, 2007 at 10:45 am
REinvestor:
Some of us are homeowners, equity investors, as well as doom and gloomers. I am one of them. Fortunately for me, I’m doing fantastically shorting Real Estate.
How do you like dem apples buddy?
And just be happy that I’m doing so well. Lord knows that I’ll be paying taxes on my gains as you’ll hopefully be writing off your losses on your ‘long’ REinvestments. Perhaps some of MY taxes will go to pay for YOUR bailout.
So before you start spouting more ill-informed propaganda about how real estate is always a good investment, perhaps you might stop for a moment and think about how stupid your arguments are.
“As to stupid arguments, how smart is it to bet against America?”
Hey 50.5, I was short the US dollar from 2004 to mid 2007. Smart, I don’t know? However, I would have been damn stupid to be on the other side of that trade.
Every Investment Down Turn has Alternatives. In the 1929 Crash, hard core investors simply jumped out windows, problem solved. The working class, whose lives were not embedded in investment worship, sold apples and got by.
This article underscores the changes in America with the neuveau class of royaly. I guess the peasents will be allowed to live in houses with 100 year mortgages, much like the old share croppers and indentured servants. Looks like the Royal Houses of Bush & Clinton will continue to vie for the position of King.
PeaceNow Says:
December 15th, 2007 at 10:15 am
From the NY Times today:
“The increase in incomes of the top 1 percent of Americans from 2003 to 2005 exceeded the total income of the poorest 20 percent of Americans, data in a new report by the Congressional Budget Office shows.
“The poorest fifth of households had total income of $383.4 billion in 2005, while just the increase in income for the top 1 percent came to $524.8 billion, a figure 37 percent higher.
“The total income of the top 1.1 million households was $1.8 trillion, or 18.1 percent of the total income of all Americans, up from 14.3 percent of all income in 2003. The total 2005 income of the three million individual Americans at the top was roughly equal to that of the bottom 166 million Americans, analysis of the report showed.”
Whole article is here:
http://www.nytimes.com/2007/12/15/business/15rich.html?ref=us
“It is people like you who have deliberately attempted to ruin the market with short selling.”
50.5,
Can you please discuss this with Lloyd Blankfein.
“I suppose you could call this the age of the white-collar tramp.”
Ex ITN reporter and CNBC employee who was fired now living on streets due to excessive debt.
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=502079&in_page_id=1770
FED closing Barn Door after horse escapes
AP
Fed Taking on Abusive Lending Practices
Saturday December 15, 11:49 am ET
By Jeannine Aversa, AP Economics Writer
Federal Reserve Officials Plan Steps to Crack Down on Shady Mortgage Lending Practices
WASHINGTON (AP) — People taking out home mortgages may gain new protections soon against shady lending practices as the Federal Reserve seeks to back even the riskiest borrowers, already hit hardest by the housing and credit crunches.
Rules expected to be proposed Tuesday would apply to loans made by all types of lenders, including banks and brokers. The plan from the Fed, which has regulatory powers over the nation’s financial system, could be finalized next year. The effective date would be know then.
The Fed is considering:
–barring lenders from penalizing subprime borrowers — those with spotty credit or low incomes — who pay their loans off early.
–forcing lenders to make sure that borrowers, especially subprime borrowers, set aside money to pay for taxes and insurance.
–restricting loans that do not require proof of a borrower’s income.
–examining lenders’ failure, in some cases, to consider a borrower’s ability to repay a home loan.
–improving financial disclosure so people better understand the terms and conditions of their mortgages and get this information when it is most useful.
–curtailing abuses in mortgage advertising.
“We have an obligation to prevent fraud and abusive lending,” the Fed chairman, Ben Bernanke, said earlier this year. “At the same time, we must tread carefully so as not to suppress responsible lending or eliminate refinancing opportunities for subprime borrowers.’
The issue has taken on heightened importance given the meltdown in the housing and credit markets that has led to record numbers of home foreclosures. The crisis has raised the odds that the economy might fall into a recession, roiled Wall Street and has given Democrats and Republicans much fodder to blame each other.
On prepayment penalties, consumer advocates say these deter homeowners from refinancing on more favorable terms. Those penalties can be hard on borrowers who want to get out of adjustable-rate mortgages that reset from a low introductory rate to a much higher one they have trouble paying off.
Mortgage industry representatives say prepayment penalties ensure that lenders receive a minimum return if loans are paid off early. They also say people with mortgages that include such penalties often get a benefit of lower upfront costs or lower interest rates.
Of the nearly 3 million subprime adjustable-rate loans surveyed by the Mortgage Bankers Association from July through September, a record 4.72 percent entered the foreclosure process during those months. At the same time, a record 18.81 percent of the subprime adjustable-rate loans were past due.
When home values weakened, borrowers were left with loans balances that eclipsed the value of their homes. They also were clobbered when their loans reset with much higher interest rates.
As for the idea of setting aside money to cover taxes and insurance, consumer groups worry that subprime borrowers do know about these expenses or might not be able to budget for them. These groups also have raised concerns about lenders quoting subprime borrowers monthly payments that do not include taxes and insurance costs.
The Mortgage Bankers Association has some problems with mandating escrow accounts — where those costs specifically are set aside each month — for borrowers. The association does support efforts to make sure borrowers have the appropriate information about their obligations to pay taxes and insurance.
The Fed says loans to subprime borrowers typically do not include such an account, while loans to people with better credit and lower risk to the lender usually do.
The central bank also says that lenders sometime will make a loan without documenting or verifying a borrower’s income. Lenders may charge higher rates for such loans, the Fed says.
Mortgage lenders say these loans are appropriate for many borrowers, including those who are self-employed and cannot easily document their income. Consumer groups say many borrowers who could document their income are not aware they are getting a loan at a higher interest rate. These loans are sometimes called “liar’s loans” because critics believe they can be used to perpetrate fraud.
Majority Democrats in Congress have been vocal in urging the Fed to act against abusive practices.
Massachusetts Rep. Barney Frank, chairman of the House Financial Services Committee, and other House Democrats said in a recent letter to the Fed that tougher rules are overdue and “needed to help eliminate the kinds of predatory lending practices that exacerbated the current subprime lending crisis.”
The House has passed legislation that would put into law some of the same actions the Fed is considering. A similar bill is pending in the Senate. Supporters are heartened the Fed is moving ahead because they think the Fed might be able to finalize action before Congress does.
MORTGAGE MELTDOWN
Interest rate ‘freeze’ – the real story is fraud
The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value – right now almost 10 times their market worth.
The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.
And, to be sure, fraud is everywhere. It’s in the loan application documents, and it’s in the appraisals. There are e-mails and memos floating around showing that many people in banks, investment banks and appraisal companies – all the way up to senior management – knew about it.
(continue reading here)
http://tinyurl.com/343tc2
Confused Thats all we need now more gov. regulations.The cow has left the barn already.
This will only make it harder for low income people to get loans.I would say that investors
would be much more cautious in future after getting burnt so bad.Its all for show.So now people in cash businesses can’t get a loan great.Just what they want once you show income gov. can tax it.
In an effort to solve they will make it worse.
All of them should be shown the door both sides.
Who the hell gave the fed all this power with no oversite, answerable to none.This whole monetary system is dam joke & guess what, its on us.
336. mikeinwaiting
There in the problem lies. If this were simply a reasonable amount of Domestic Mortgages given by Domestic Banks, defaulting, problem might be manageable.
But as in 335. MORTGAGE MELTDOWN
Interest rate ‘freeze’ – the real story is fraud
The problem becomes International, on a scope never realized, before with insidious complexity, beyond Domestic Control.
The Government OverSight or Lack There Of, enables this to happen, then thinks it can appease the masses by putting Martha Stewart in Jail.
The Government needs to uncover the real cause of this Fiasco, and 1. Jail them, and 2. appropriate their ill gotten gains, starting with the Treasury Secretary.
335 Anastasia Beaverhausen found a very interesting read. You all should follow the link.
http://tinyurl.com/343tc2
For the lazy among us, here are a few other interesting quotes from the story:
“The goal of the freeze may be to delay bond investors from suing by putting off the big foreclosure wave for several years. But it may also be to stop bond investors from suing. If the investors agreed to loan modifications with the “real” wage and asset information from refinancing borrowers, mortgage originators and bundlers would have an excuse once the foreclosure occurred. They could say, “Fraud? What fraud?! You knew the borrower’s real income and asset information later when he refinanced!”
The key is to refinance borrowers whose current loans involved fraud in the origination process. And I assure you it was a minority of borrowers whose loans didn’t involve fraud.”
I then googled the author of the article who happens to be a seasoned immigration lawyer.
The following are his comments from a blog article he read around the 1st of the year:
My name is Sean Olender and I’ve been expecting a housing bust since 2002. The shift to lax lending and mind boggling repayment terms 2003 to 2006 surprised me and prolonged the boom longer than I imagined.
Clients come to my office with incomes of $45K to $60K who have taken $600K or $700K interest only ARM mortgages to buy houses with ZERO down. A guy was in last week who was 22 and worked in construction with an income of $45K and a $700K neg am mortgage on a house he closed on 11/2006. These loan to income ratios are unbelievable. I wouldn’t be so amazed if it was one person, or three. But it’s almost every person who walks into my office. The most disturbing part is none of them understands any of their loan terms — not even the interest rate. They only know their monthly payment and they don’t know it will change in the future. They don’t believe me when I point out the terms in their own loan after they bring in their papers.
But the one thing that informed me for sure the boom was over and the downturn had begun was when a friend of mine bought a condo in a suburb of St. Paul. This friend is partly supported by parents and probably works 20 hours a week.
Bubbles in any asset (stocks, bonds, real estate, beanie babies, etc.) are defined by price increases as outsiders pile in to buy the asset. People on the outside see and hear about the money being made and want some of the action. The increased demand results in a self fulfilling prophecy that drives up prices. Eventually there are no ‘greater fools’ to pile in and at that moment the market shifts. It’s like musical chairs when the music stops.
Asset bubbles function like a Ponzi scheme but because the action isn’t controlled by a single person or group, it’s legal.
It’s been a long time waiting, but my friend signed papers in December 2005 and closed in January or February 2006. That for me is proof positive that the top was reached. I had lunch with an economist friend of mine in May 2006 and told him that the top was reached a few months earlier and he didn’t believe me. I drew a graph and he kept it. We’re having dinner tomorrow night and I expect I will be treated for my foresight because the data is bearing out my predictions at a slightly faster pace than I’d suggested at our last dinner.
Low rates aren’t going to save this. The fact that rates are near 45 year lows and the market is in free fall indicates that this is about more than rates. If rates stay low, this will be a terrible, drawn out slumping market with significant price depreciation, but probably causing only a short recession in the broader economy — perhaps two or three short recessions as we skip along the bottom of this mammoth credit bubble. But if rates should rise 1 or 2 points, the fast credit and money supply contraction from bad loans being written off might spell a depression.
And I know that all of this has started from the fact that a single person bought a single condominium. It means there’s no one left on the outside waiting to get in. No matter how loose the credit is, absent digging up corpses and giving them stated income I/O mortgages, there’s simply no one left — no ‘greater fool’ to rescue everyone who is in the market now — because I’m fairly sure that everyone is now in the market.
Having a fixed rate loan and not having to worry about foreclosure is nice, but a careful thinker will realize that it’s nicer for the bank than the borrower. If you buy a place for $161,000 and have no problems making the payments, but four years later someone buys an identical place next door for $98,000, it’s hard to feel good about being able to afford one’s mortgage payments. Not least it will make it almost impossible for a large group of people to freely move about because even if they can afford to make their mortgage payments, they won’t be able to afford to sell their houses without a deficiency judgment and the resulting credit stigma (which in my view is better than taking a $60,000 after tax hit to assets on an income of $25,000 a year).
The larger economic and social effects of this bubble will be very different than the last. This time those piling into the market weren’t day traders, investors, risk takers. This time it was EVERYBODY and that’s going to make the ride down have disturbingly broad effects on American society.
Posted by: Sean Olender | Dec 22, 2006 1:26:26 AM
Yes, since 2002. Actually, my wife and I bought a place in 2000 and I thought Bay Area prices were lofty then after having risen smartly from 1998 to 2000. But I figured if there was a small drop in prices of 5% to 10% that it wouldn’t sting too much, so we did buy. But by then end of 2002 and into the start of 2003 I was stunned by how long prices had been rising. It made me downright nervous and we sold at the end of 2003.
I think that fundamental values were way off even back in 2003 — when rents, incomes, inflation and historical price movements are considered. I think there should have been a long period of flat prices or a drop in prices equal to 15% or 20% in real terms back in 2003/2004. But what happened after that was AMAZING.
I remember applying for a loan to buy a house in 2000 that was about 2.5 times the annual combined income of my wife and me. The lender scrutinized us fairly carefully. I’m self employed, so I had to provide three years of tax returns and sign an authorization for them to contact IRS directly for income information to make sure I didn’t fake the returns. They wanted bank statements, credit reports, my wife’s pay stubs going back years. They took it very seriously and my wife and I have good credit and the house was 2.5 TIMES OUR ANNUAL INCOME. We only put down 10%. We were nervous because it was such a big purchase and the responsibility of a mortgage seemed so serious.
Fast forward to 2006 and the average new mortgage is 8 times annual income, 10% down payments are seen as overly conservative, and there is virtually no investigation in to one’s actual income. I’ve had one man in my office who is illegally in the United States and he took over his sister’s $650K mortgage because she couldn’t make the payments. He said that she was unemployed at the time she bought the house and just wrote down that she made $90K a year. They didn’t ask for any proof of her income. She used a HELOC to make the payments for a year and then couldn’t so she asked him if he wanted the house and he took over her loan payments and moved in.
The loose credit is unbelievable. I can’t figure out why there isn’t worse price inflation unless (gasp) we’re really facing one of the most serious threats of price deflation since the Great Depression and 10% annual credit expansion is the only thing temporarily holding this place together. But it’s stunning that you can grab a homeless person off the street, get him a shower and shave and buy him a set of clothes and he will be able to borrow up to $600K on a stated income loan. It’s stunning that consumer and producer prices haven’t risen faster.
Whatever comes of this, it’s not going to be good. And I worry that the American character (and associated savings habits) is unprepared for such a shift and the results will be political instability that some interests may use to force through very bad policies and laws. We’ll have to wait to see.
Posted by: Sean Olender | Jan 1, 2007 5:40:07 PM
Someone ought to email this guy a link to njrereport.com
He would fit right in.
Confused Right there with you 1,2 & a whole lot more.Fat chance of that though.I have a post but didn’t want to seem crazy well its sitting in a tab.Why not.Penned earlier today.
DAMM I lost it.Needed rewrite anyway.
Grim, Clot,
Thanks for your help. I’ll inquire again during the week to see if this deal actually closed.
Clot at 312
Entirely possible, but strictly for accuracy remember that grim isn’t really getting paid for this, which makes him a sl*t, not a wh*re.
317 reinvestor
Why are you complaining that we think you’re not real, considering that the only alternative is that you’re real and an idi*t.
By the way, what’s “gloomy” about falling prices?
If prices had been falling this fast in the Hundred Acre Wood, even Eeyore wouldn’t have been gloomy when his house disappeared.
I ain’t gloomy – I’m godd*mn ecstatic!
334 – All of the proposed moves (some of which I actually think may be a good idea, even if nanny-like because some people are too damn stupid to think of taking taxes into consideration and they are a danger to others as well as themselves) will actually hasten the drop in housing prices by making it harder to access credit.
330
There were no jumpers in ’29
Myth
Ann-
congratulations on your purchase – if you love the house, as you say, then, that’s great. but as far as changing schools after kindergarten, i’m afraid i have to agree with some of the other posters. i’m a mom, and i understand how you want to protect your kids, but, really, i don’t think it’s such a big deal to move – especially in elementary school. my kids have had to move and while they were mad at me at the time, they got over it, and prospered. in fact, in some ways, they were happier – they’ve certainly become more flexible, and have had to learn how to adapt to a new environment and people.
they also have a sense that although the house and school may be different, our family unit, both immediate and relatives, is very stable. i think that helps a lot.
Btw, grim – the 2nd weekend thread is always welcome. The bberry only loads about 400 comments.
345 ‘soosh
Agree
101 –
Most of the people on this blog want something very basic – for American families to be able to afford homes without going into financial distress. Financial distress that can pull those families apart.
On the other hand you seem to claim the right to get rich quick on the back of the misery of those same American families when they do become distressed.
And you have the unmitigated gall to pronounce others as “un-American”?
Lisoosh,
There’s no shortage of affordable places to live in this country.
Check out West Virginia, Mississippi, and North Dakota. Plenty of homes for sale in the mid 5 figures in those states.
I’m thinking about doing a 20% lowball on this one. whatta ya think?
http://homes.realtor.com/realestate/rayville-la-71269-1086847705/
Please. What’s unamerican here is the constant gleeful chatter over short sells and falling prices. What’s unamerican is the celebratory attitude over what you believe are declining prices. There is real concern over obtaining basic housing, there’s resentment and hate against those who bought when they were supposed to. Don’t try to say that you’re priced out in NJ, you can buy a house here or somewhere else if you want to. The problem is that you want to wait for lower prices. Lower prices won’t matter if you can’t get a mortgage. You people have sown the seeds of your own purgatory of non ownership. You’ll never buy a house and I’d never sell you any house I had.
And you have the gall to imply that I’m unamerican. I love and support this country. You do not.
lisoosh Says:
December 15th, 2007 at 4:34 pm
101 –
Most of the people on this blog want something very basic – for American families to be able to afford homes without going into financial distress. Financial distress that can pull those families apart.
On the other hand you seem to claim the right to get rich quick on the back of the misery of those same American families when they do become distressed.
And you have the unmitigated gall to pronounce others as “un-American”?
#352,
do 20% off this one, it’s a better deal.
http://homes.realtor.com/search/listingdetail.aspx?ctid=2959&typ=7&sid=f04efcc5d90b4c0eb93e80a27c3ebded&lid=1083765252&lsn=3&srcnt=21129#Detail
The price is no joke, homes sell for $1 in this part of the country.
I wrote: There is real concern over obtaining basic housing, there’s resentment and hate against those who bought when they were supposed to.
I meant to write: There is no real concern over obtaining basic housing, there’s resentment and hate against those who bought when they were supposed tohere is
frank [354],
Absolutely, but I think you need an urban assault vehicle to escort you to and from your house. That and bullet proof windows and you got yourself a deal.
RE prices seem to have collapsed in FL and CA last month. Has anyone noticed major price movements in NJ in the last 2 months? How’s the REO market?
Pret – I don’t really appreciate the disengenuousness.
Sure, I can buy a tumbledown shack on the river in Mississippi for $10,000. Or for $30,000 I can get a coal dust covered hovel in West Virginia under shadow of a slag heap. Or for $40 a pleasant little 3 bedroom ranch in the middle of a tundric wasteland in North Dakota where the wind is so strong trees won’t grow. Or perhaps I should buy up land in some long forgotton Texas ghost town on a now defunct railway.
I don’t even need to travel that far – I could buy a crack house in Camden or Trenton, wouldn’t that be fun?
The point would be affordable, non-health threatening and in an area with enough employment opportunities to support the population. And preferrably where they are not adverse to teaching kids about evolution and the correct application of scientific methodology.
There are plenty of people in Cleveland and Detroit and Tuscon and Las Vegas and Denver in financial trouble. Cheap does not really mean affordable. Lots of people moved to North Carolina because it looked affordable who suddenly found themselves without an income, and in an area with little demand for the hordes who descended there.
The boom didn’t just mean price increases on the coasts, it also led to massive overbuilding and speculation in “affordable’ areas that now have their own problems.
BC and 3b are right – you need to open your eyes and broaden your horizens a little. I grew up in an area dominated by mining towns during a massive recession in the UK. Nothing is affordable, or particularly pleasant in an area with 30% unemployment and no future in sight.
Lisoosh,
I grew up in southern Africa. My horizons are broad, and my instincts have proven correct. Settling in America is the cleverest decision a human can make.
#356,
If this house was in Nawark, NJ I would buy it today, I even considered going to Detroit but it’s too far.
#359,
Have you considered Detroit, MI? you may change your mind.
Pret – I have several family members in South Africa, and until recently Zimbabwe.
They are the most sheltered, coddled and unrealistic people I have ever met.
My aunt didn’t even know how to pack her own suitcase or put on her own boots.