Weekend Open Discussion – Part II

Posted on February 16, 2008 by grim

Now Open, Part II!

Prior weekend thread closed due to comment overflow.

This entry was posted in General. Bookmark the permalink.

234 Responses to Weekend Open Discussion – Part II

  1. lostinny says:
    February 16, 2008 at 5:55 am

    First!

  2. grim says:
    February 16, 2008 at 5:58 am

    Also looking for info on #2465417

    59 Mountainview

    MLS# 2254511
    Listed: 3/6/06
    OLP: $$599,900
    LP: $539,900
    DOM: 365
    Expired

    MLS# 2382449
    Listed: 3/7/07
    OLP: $499,900
    LP: $499,900
    DOM: 184
    Expired

    MLS# 2465417
    Listed: 12/2/07
    OLP: $475,000
    LP: $475,000
    DOM: 76
    Attorney Review on 2/13/08

  3. lostinny says:
    February 16, 2008 at 5:59 am

    Now that I’ve gotten my childishness out of the way:
    Jamey, grow up. Mitchell that goes for you too.

  4. grim says:
    February 16, 2008 at 6:00 am

    If a for sale listing in NJ includes in its remarks, “offers subject to bank approval” and the house is being sold “as is”- does that imply anything foreclosure related?

    Likely a short-sale.

  5. grim says:
    February 16, 2008 at 6:11 am

    Chatham Comp Killer

    MLS# 2448656 – 36 North Summit, Chatham NJ

    Purchased: 7/31/2006
    Purchase Price: $530,000

    Sold: 2/15/2008
    Sale Price: $512,000

  6. grim says:
    February 16, 2008 at 6:12 am

    West Orange Comp Killer

    MLS# 2422320 – 117 Garfield, West Orange NJ

    Purchased: 1/9/2006
    Purchase Price: $435,000

    Sold: 2/15/2008
    Sale Price: $417,000

  7. grim says:
    February 16, 2008 at 6:17 am

    Franklin Comp Killer

    MLS# 2448096 – 213 Driscol Ct, Franklin NJ

    Purchased: 8/4/2006
    Purchase Price: $314,000

    Sold: 2/15/2008
    Sale Price: $310,000

  8. grim says:
    February 16, 2008 at 6:27 am

    Chasing the market down..

    265 Parkside Drive, Union NJ

    MLS# 2225846
    Listed: 12/12/05
    OLP: $499,900
    LP: $480,000
    DOM: 139
    Expired

    MLS# 2285899
    Listed: 6/3/06
    OLP: $448,500
    LP: $465,000
    DOM: 182
    Expired

    MLS# 2386769
    Listed: 3/17/2007
    OLP: $448,700 (Price Increase)
    LP: $487,000 (Price Increase)
    DOM: 217

    Foreclosed – Bank of New York

    MLS# 2454701
    Listed; 1/15/08
    OLP: $399,900
    LP: $339,000

    Sold: 2/14/2008
    Sale Price: $325,000 (35% under original list price)

  9. grim says:
    February 16, 2008 at 6:32 am

    Soon-to-be Glen Ridge Comp Killer

    41 Glen Ridge Pkwy, GR NJ

    Purchased: 9/20/2004
    Purchase Price: $684,000

    MLS# 2466935
    Listed: 12/10/07
    OLP: $729,000
    LP: $684,000 (Got to be painful).
    DOM: 59
    Withdrawn

    MLS# 2489642
    Listed: 2/12/08
    OLP: $669,900
    DOM: 3
    Active

  10. Cindy says:
    February 16, 2008 at 6:36 am

    Grim – Any details about last night’s interview? When/ where will it air? What sort of questions? Did they appear to have a focus or agenda?
    Cindy

    BTW – Reading both “Creature” and “Secrets of the Temple.” “It is a fact of modern banking that promises-to-pay often exceed savings deposits by a factor of ten-to-one. And, because only about three per cent of these accounts are actually retained in the vault in the form of cash-the rest having been put into even more loans and investments-the bank’s promises exceed its ability to keep those promises by a factor of over three hundred -to-one.”

    “Competition was coming out of a new trend in industry to finance future growth out of profits rather than from borrowed capital.”

    Didn’t someone feature a Germany company taking just that approach building large cranes last week?

    “Between 1900 and 1910, seventy per cent of the funding for American corporate growth was generated internally, making industry increasingly independent of the banks.”

    This pretty much says it all:
    The name of the chapter…(2)
    “The Name of the Game is Bailout.”

    “It was stated in the previous chapter that the Jekyll Island group which conceived the Federal Reserve System actually created a national cartel which was dominated by the larger banks. It was also stated that a primary objective of that cartel was to involve the federal govenment as an agent for shifting the inevitable losses from the owners of those banks to the taxpayers.”

    Tons to read – Thanks again for the recommendations..

  11. grim says:
    February 16, 2008 at 6:37 am

    Soon-to-be Montclair Comp Killer

    96 Overlook Road, Montclair NJ

    Purchased: 6/29/2006
    Purchase Price: $1,125,000

    MLS# 2472693
    Listed: 1/9/2008
    OLP: $999,000
    LP: $969,000
    DOM: 38
    Active

  12. bi says:
    February 16, 2008 at 7:12 am

    buffett bought KFT so I bought PBJ (food ETF) yesterday.

    >BC Bob Says:
    February 15th, 2008 at 4:06 pm
    Bi,

    Thank you. I shorted Toll, 2 weeks ago, based on your long HB’s recommendation.

  13. Pat says:
    February 16, 2008 at 7:17 am

    Did anyone ever go back and followup on their “What would you Pay” houses from last summer? Maybe it was July 2006.

    Was the selling price anywhere near what you would have bid?

  14. lostinny says:
    February 16, 2008 at 7:24 am

    Pat,
    Every once in a while I look for sales info on domania or zillow. I don’t see it so I assume they took it off the market.

  15. grim says:
    February 16, 2008 at 7:26 am

    Pat,

    I just did.

    https://njrereport.com/index.php/2006/07/22/what-would-you-pay/

    MLS# 2270226

    129 South Beverwyck, Parsippany NJ

    Was listed at $1,000,000. I said I would pay $700,000.

    That property is *still* listed:

    MLS# 2464421 – $650,000

    Unfortunately, I would no longer pay $700,000 for that property. I revise my bid down to $500,000.

    jb

  16. grim says:
    February 16, 2008 at 7:26 am

    SAS gets the gold star:

    At first glance of the house, and knowing what type of market we are in and where it is going, I would say $650-$600. That price is baring doom and gloom scenario.

  17. Pat says:
    February 16, 2008 at 7:28 am

    It was so slow in the files, I figured somebody else was looking up MLS numbers.

    https://njrereport.com/index.php/2006/06/28/tell-them-how-much-you-would-pay/#comments

    I can’t get the mls number for my houses. gone.

  18. Pat says:
    February 16, 2008 at 7:29 am

    JB look at what you saved by renting! Mom would be proud.

  19. grim says:
    February 16, 2008 at 7:32 am

    Anonymous Says:
    June 28th, 2006 at 9:09 am edit
    Here is one that I have been looking at:

    MLS# 2275550

    http://www.realtor.com/Prop/1059682326

    Original Asking Price: $679,500 (early May), reduced to $668,000 (May 26th +/-). If memory serves it last sold in ’99 for $260,000, it seems that they renovated the kitchen, during their time in the house (maybe $50k cost). I just cannot get over the idea of over $600k and only 1.5 baths.

    Maybe I would be interested in talking at $465k.

    Sold for $430,000. My my, how times have changed.

  20. grim says:
    February 16, 2008 at 7:34 am

    BergenBuyer Says:
    June 28th, 2006 at 9:17 am edit
    Here’s a house in Franklin Lakes for $949, MLS 2622135. It’s been on the market a month and no takers. I’d be willing to pay $800, but considering it’s only been a month and they’re still in denial, they probably wouldn’t accept anything less than $930.

    Sold for $850,000.

  21. grim says:
    February 16, 2008 at 7:42 am

    Anonymous Says:
    June 28th, 2006 at 1:38 pm edit
    MLS 2289888
    OLP 699,000
    Current List 649,000
    Would seriously consider for 500,000 – 525,000.

    Believe it or not, this one is *still* for sale as well.

    Current asking is $579,000.

    Cumulative days on market: 675

  22. grim says:
    February 16, 2008 at 7:53 am

    Tenafly Comp Killer:

    MLS# 2745783 – 114 Lylewood, Tenafly NJ

    Purchased: 12/15/2005
    Purchase Price: $695,000

    Sold: 2/15/2008
    Sale Price: $680,000

  23. lostinny says:
    February 16, 2008 at 7:54 am

    Grim, you’re kidding with that last one aren’t you?

  24. grim says:
    February 16, 2008 at 7:57 am

    Paramus Comp Killer:

    MLS# 2747555 – 193 Concorde, Paramus NJ

    Purchased: 9/22/2007
    Purchase Price: $640,000

    Sold: 2/15/2008
    Sale Price: $620,000

    (I’ve got to ask… Why take a $50,000+ loss in under 6 months?)

  25. Sassy says:
    February 16, 2008 at 8:13 am

    NYT article re: tightening of mortgage lenders standards affecting NYC coop and condo purchases.

    Jitters for First-Time Homebuyers

    http://www.nytimes.com/2008/02/17/realestate/17cov.html?_r=1&ref=realestate&oref=slogin

  26. Ven says:
    February 16, 2008 at 8:19 am

    I am a renter with huge amount of cash sitting in CD’s and my situation doesn’t permit me to buy a house for next 1-2 years. My intent of accumulating this cash is so that I can buy a nice house.

    Isn’t it a good idea to hedge myself against risk of home price appreciation by going long on home builders? XHB, the S&P Home builder index (http://finance.yahoo.com/q/hl?s=XHB) is a good proxy for the home builders which I intend to buy.

    The pros

    1. I feel that home builders are discounted enough for further decline in home prices. I think equity markets are very efficient in pricing compared to housing and home owners.

    2. It is cheap to own these stocks than a house because I don’t need to pay taxes and mortgages and maintenance

    3. If, by any chance house prices go up, home builders are the first one to capture the appreciation since they are beaten down some much and again the markets are efficient to capture this upside potential

    4. Since I am planning to invest about 20% of my money in XHB, if the housing market deteriorates, it is even better because the house buying power my rest of the 80% of the money improves significantly.

    5.

    Cons
    1. Most of these home builders can go bankrupt and my investment in then can go down the tubes. But this can happen only in very highly deflationary environment which is even better for me because I am in a profession where I can with stand severe depression.
    2. The existing home builders can go bust in XHB ETF and some new ones can emerge as market leaders. In that case I don’t know the portfolio is readjusted.

    So I would really appreciate you comments on this. Especially I would love to hear counter arguments to mine.

  27. victorian says:
    February 16, 2008 at 8:21 am

    I am a recent immigrant to this great country and this is one of the main reasons that i feel that the country is faltering. In most cultures, being smart is considered the most desirable quality to have, but why are “nerds” so disparaged out here?
    Why is being dumb considered more socially acceptable than knowing the answers to most questions?
    http://www.nytimes.com/2008/02/14/books/14dumb.html?em&ex=1203310800&en=ed986aa2c486c13d&ei=5087

  28. Sassy says:
    February 16, 2008 at 8:24 am

    NYT Short Sales Gain in Allure

    http://www.nytimes.com/2008/02/17/realestate/17lizo.html?ref=realestate

    EARLIER this month, Asaf German, a real estate lawyer, closed a deal in Oceanside in which a homeowner who had paid $700,000 for a house two years ago now agreed to sell it for $465,000. Yet somehow, as Mr. German put it, “it was a win-win; the deal helped everyone involved.”

    As it turns out, the seller, an inexperienced speculator, hadn’t made a payment on the mortgage since he had bought the house — which a pipe rupture had at one point submerged in three feet of water, Mr. German said.

    On a day in early February, there were at least 656 short-sale listings in Suffolk County and 210 in Nassau, according to Mel Kussoy, a real estate broker with Century 21 American Homes in Westbury. In all of 2006, there were at least 18 short-sale listings in Nassau and 46 in Suffolk, Mr. Kussoy’s search revealed.

  29. dbba says:
    February 16, 2008 at 8:35 am

    victorian ,

    That article is a classic example of the today’s teenage mentality in US. I hate today’s teenagers in US. 70% of them think they can either become a pop star/football player/NBA/ etc etc and get rich somehow. I bet 90% of them will end up flipping burgers in Wendy’s in 10 years.

    One teenager was asked ‘Which is the biggest country in the american continent’ and she/he answered ASIA !!!!!!!

    This is sad !

  30. Pat says:
    February 16, 2008 at 8:39 am

    26

    1 Cons. “this can happen only in a very highly deflationary environment.”

    – – –
    Why? Under what other economic conditions are suppliers eliminated and/or consolidated?
    Review leverage effects.

  31. Clotpoll says:
    February 16, 2008 at 8:43 am

    think (395, yesterday’s thread)-

    Thanks. An impressive piece of weaponry.

  32. Clotpoll says:
    February 16, 2008 at 8:46 am

    bi (12)-

    “…buffett bought KFT so I bought PBJ (food ETF) yesterday.”

    Keep investing like this, and pretty soon you’ll be eating PBJ…the stock and the sandwich.

  33. Clotpoll says:
    February 16, 2008 at 8:47 am

    bi (12)-

    Thanks again for daring me to short XHB.

  34. njrebear says:
    February 16, 2008 at 8:55 am

    Thank you. I shorted Toll, 2 weeks ago, based on your long HB’s recommendation.

    I missed out on this chance. I didn’t see bi’s post. Grim should list all of bi’s recommendations on the front page!

  35. R Patrick says:
    February 16, 2008 at 8:55 am

    Sassy (25) :

    Because Paramus had huge speculation because the taxes were much lower due to all the retail/commercial ratables

  36. chicagofinance says:
    February 16, 2008 at 9:19 am

    Clotpoll Says:
    February 16th, 2008 at 8:46 am
    bi (12)- “…buffett bought KFT so I bought PBJ (food ETF) yesterday.”
    Keep investing like this, and pretty soon you’ll be eating PBJ…the stock and the sandwich.

    clot: The correct response is “…so BUY and HOLD KFT for 5 years as Buffett will…”….idiocy….

  37. chicagofinance says:
    February 16, 2008 at 9:22 am

    victorian Says:
    February 16th, 2008 at 8:21 am
    I am a recent immigrant to this great country and this is one of the main reasons that i feel that the country is faltering. In most cultures, being smart is considered the most desirable quality to have, but why are “nerds” so disparaged out here?
    Why is being dumb considered more socially acceptable than knowing the answers to most questions?

    vick: um…..watching to much TV and hanging around with people under 25?

  38. Everything's 'boken says:
    February 16, 2008 at 9:26 am

    26
    ‘I am in a profession where I can with stand severe depression.’

    Hubris.

  39. chicagofinance says:
    February 16, 2008 at 9:31 am

    Isn’t it a good idea to hedge myself against risk of home price appreciation by going long on home builders? XHB, the S&P Home builder index (http://finance.yahoo.com/q/hl?s=XHB) is a good proxy for the home builders which I intend to buy.

    NO: homebuilder stock prices DO NOT EQUAL cost of whatever home you are looking to purchase in NJ/NYC

    The pros
    1. I feel that home builders are discounted enough for further decline in home prices.
    BASED ON WHAT?

    2. It is cheap to own these stocks than a house because I don’t need to pay taxes and mortgages and maintenance
    IF YOU BELIEVE IN EFFICIENT MARKETS, THEN BY NO ARBITRAGE, ISN’T THIS FACT ABOUT THE COST OF CARRY ALREADY REFLECTED IN THE PRICES

    3. If, by any chance house prices go up, home builders are the first one to capture the appreciation since they are beaten down some much and again the markets are efficient to capture this upside potential
    THERE ARE MANY VARIABLES THAT MAY IMAPCT PUBLICLY TRADED HOMEBUILDERS

    4. Since I am planning to invest about 20% of my money in XHB, if the housing market deteriorates, it is even better because the house buying power my rest of the 80% of the money improves significantly.
    REMEMBER: HB STOCK PRICES DO NOT EQUAL NJ/NYC HOUSING MARKET

    5.
    YES

    Cons
    1. Most of these home builders can go bankrupt and my investment in then can go down the tubes. But this can happen only in very highly deflationary environment which is even better for me because I am in a profession where I can with stand severe depression.
    PHARMACIST?

    2. The existing home builders can go bust in XHB ETF and some new ones can emerge as market leaders. In that case I don’t know the portfolio is readjusted.
    ONE OF THE MAIN REASONS THAT INDEXING IS GARBAGE

  40. njrebear says:
    February 16, 2008 at 10:03 am

    cf,
    What are your thoughts on CFA training programs? Which training program would you recommend?

  41. Cindy says:
    February 16, 2008 at 10:08 am

    Grim – last comment I saw RE: your interview was 4:49PM 2/15/08 #315

    “I’m going to be crucified by the NAR/NJAR for the things I’ve said.”

    Care to elaborate or no?
    Did they have a preconceived agenda? Did you do the “repeat the question before you answer it” deal? How do you feel it went?

  42. Bloodbath in Winter 2007 says:
    February 16, 2008 at 10:48 am

    the robin hood of real estate … keep it up grim

  43. Ven says:
    February 16, 2008 at 10:51 am

    1. chicagofinance Says:
    February 16th, 2008 at 9:31 am
    ChicagoFinance,
    Thanks for responding. Just to make few things clear I am a long term housing bear and hence the accumulation of cash instead of buying an abode which fleeces you off. At the same time I am pragmatist trying to protect myself from housing inflation if it realizes (I believe the probability of this happening is very low, but still if it happens I don’t want to be screwed).
    Here is my response to yours
    Isn’t it a good idea to hedge myself against risk of home price appreciation by going long on home builders? XHB, the S&P Home builder index (http://finance.yahoo.com/q/hl?s=XHB) is a good proxy for the home builders which I intend to buy.
    NO: homebuilder stock prices DO NOT EQUAL cost of whatever home you are looking to purchase in NJ/NYC
    Ven: Then what would be a better hedge against the home price appreciation if it occurs in NY/NJ?
    The pros
    1. I feel that home builders are discounted enough for further decline in home prices
    .
    BASED ON WHAT?
    Ven: I don’t have so much time to delve deep into the financials of the national HBs. But, while the national house prices went down only 8%, the value of the home builder stocks went down by 60% from the peak. I understand this is the effect of leverage of the HBs. But, at the same time, shouldn’t the effect the leverage work wonders on upside?
    2. It is cheap to own these stocks than a house because I don’t need to pay taxes and mortgages and maintenance

    IF YOU BELIEVE IN EFFICIENT MARKETS, THEN BY NO ARBITRAGE, ISN’T THIS FACT ABOUT THE COST OF CARRY ALREADY REFLECTED IN THE PRICES
    In friction free world efficient market hypothesis works. But, you need to have patience to wait out for the reality to set in and the markets to adjust to reality which may or may not happen in our life time. Housing markets are very sticky compared to equity markets.
    3. If, by any chance house prices go up, home builders are the first one to capture the appreciation since they are beaten down some much and again the markets are efficient to capture this upside potential

    THERE ARE MANY VARIABLES THAT MAY IMAPCT PUBLICLY TRADED HOMEBUILDERS
    Ven: Sure I agree, what ever the factors may be, shouldn’t the valuation of HB be correlated with home prices to large extent?
    4. Since I am planning to invest about 20% of my money in XHB, if the housing market deteriorates, it is even better because the house buying power my rest of the 80% of the money improves significantly.
    REMEMBER: HB STOCK PRICES DO NOT EQUAL NJ/NYC HOUSING MARKET
    5.
    YES
    Cons
    1. Most of these home builders can go bankrupt and my investment in then can go down the tubes. But this can happen only in very highly deflationary environment which is even better for me because I am in a profession where I can with stand severe depression.
    PHARMACIST?
    You guessed it right my wife is a Pharmacist and I work for a company where I will be the last employee to let go. Even if I am let go, I can survive for ever as I have other assets which pay me constant income (My family owns big chunk of farm land in another country). In fact I would really gain a lot from deflationary scenario and I welcome it.
    2. The existing home builders can go bust in XHB ETF and some new ones can emerge as market leaders. In that case I don’t know the portfolio is readjusted.

    ONE OF THE MAIN REASONS THAT INDEXING IS GARBAGE
    Ven: Yes, what’s the alternative?

    I would love to discuss these scenarios if body has time and interest.

  44. njrebear says:
    February 16, 2008 at 11:04 am

    Ven,
    I don’t have so much time to delve deep into the financials of the national HBs. But, while the national house prices went down only 8%, the value of the home builder stocks went down by 60% from the peak.

    I’m no expert but i think you should also be gauging HB valuation against existing and new home inventory rather than only real estate valuation.

  45. BC Bob says:
    February 16, 2008 at 11:09 am

    “buffett bought KFT so I bought PBJ (food ETF) yesterday.”

    bi,

    I am long HNZ. Positive the staples, negative the discretionary. Don’t only lift one leg of the spread. You know what occurs, as a result of this scenario?

  46. RentinginNJ says:
    February 16, 2008 at 11:09 am

    Isn’t it a good idea to hedge myself against risk of home price appreciation by going long on home builders?

    I think the biggest problem with using homebuilders as a hedge against rising home prices is that the two aren’t necessarily inversly correlated.

    Stock prices are generally forward looking; pricing-in what the market thinks is going to happen in the future. Home prices, in a falling market, tend to be backward looking. Sellers chase what their neighbor got last year or last month and only very reluctantly drop the price.

  47. BC Bob says:
    February 16, 2008 at 11:20 am

    Ven,

    If your family owns farm land, forget about HB’s. Start planting, hedge in Chicago. Better yet, hedge like farmers,long beans hedge with long wheat. Buy some John Deere’s and start/increase your production of grain. It’s right under your nose and you can’t sniff it out?

  48. pretorius says:
    February 16, 2008 at 11:21 am

    27, 29,

    It is a common theme in history for cranky adults to complain about the latest generation of children. But in the US at least, each generation has worked to achieve higher educational attainment and greater wealth than earlier generations.

    A dispassionate and objective review of the facts reveals that American kids today aren’t doing that bad.

    For instance, high school advanced placement test results just came out. A higher proportion of students is taking the tests, and the pass rate continues to grow. By this measure at least, kids are getting smarter, no dumber.

    By the way, the 3 states with the highest pass rates on the AP tests – New York, Connecticut, and New Jersey – are in our backyard.

    And other important non-academic social indicators of youth behavior, like murdering and teenage pregnancy, have improved dramatically during the last 20 years.

  49. Dobe44 says:
    February 16, 2008 at 11:35 am

    njrealbear

    CFA prep programs are a must; there is just too much to study for without a guide.

    Schweser Prep is what got me thru 10 years ago.

    He was a prof at University of Iowa and had very practical but thorough lesson plans for all three levels.

  50. Cindy says:
    February 16, 2008 at 11:42 am

    As someone pointed out for New Jersey earlier in the week..you need to use the figures from the last few months to get a clear picture..

    From the Fresno Bee
    Sanford Nax

    “Sales of new homes in California slipped by almost one-third in 2007 as the state struggled through a severe real estate crunch, a building trade association reported Friday.”

    “Statewide, sales were off 31.1% and the median price fell almost 4% in 2007, but the numbers got worse toward the end of the year. In Decmber, total sales fell almost 67% from a year earlier. The median price fell 14.2%, the California Building Industry Association said.”

    “Fresno county was one of only three metropolitan regions where sales increased, but home builders said the 8.9% boost reported by the association was misleading. The year-end tallies showed an increase because the early part of 2007 still was fairly strong in the Central San Joaquin Valley, but sales declined substantially in later months, said Mike Miller, division president of Lennar Homes.”
    “That was an anomaly and doesn’t reflect reality,” he said.

    “The decline is reflected in December’s monthly figures: Sales in Fresno County were off 8.3% compared with the year previous when median prices fell 10.6% to $295,500.”

    In addition, home builders in the Valley offered sharp discounts and incentives on inventory houses to get them off their books.”

    “Miller said the rising number of foreclosures does not bode well for the builders. Those houses compete with new homes for a limited number of customers.”

    “Two years ago, we only had seven foreclosures a month, and now we’re up to almost 200.” he said. “If we continue to run at that pace….that could be 2,400 buyers. That could be 25% of the market.”

  51. Bloodbath in Winter 2007 says:
    February 16, 2008 at 11:47 am

    pret – do you have a link for such ‘ap testing’ information?

  52. chicagofinance says:
    February 16, 2008 at 11:50 am

    njrebear Says:
    February 16th, 2008 at 10:03 am
    cf, What are your thoughts on CFA training programs? Which training program would you recommend?

    njrebear: Depends on your style and your personal schedule….if you are a pure self-starter, then they provide little, if any, incremental benefit. If you are busy or possibly a bit scattered, then I would strongly recommend it. Don’t cram for this exam. Learn the stuff (or if you have already learned it – reinforce it properly). Don’t take a review leading up to the exam. Take a review so you understand what you need to do, and then have several months to study…..

    In terms of the best current reviews…..I will defer to pret-a-poseur or any other current participant in the sequence. My data is about 10 years old.

    Remember: the CFA doesn’t get you anything…I personally know 3 people with CFAs that are basically pieces of paper, because they did not bring the other (more important) skills to the table….

  53. chicagofinance says:
    February 16, 2008 at 11:52 am

    grim unmoderate – did cram? do it?

  54. njrebear says:
    February 16, 2008 at 11:54 am

    Dobe44 ,
    Thank you very much!

  55. chicagofinance says:
    February 16, 2008 at 11:57 am

    I’m going to chop this up and see what happens….

    chicagofinance Says: Your comment is awaiting moderation.
    February 16th, 2008 at 11:50 am
    njrebear Says:
    February 16th, 2008 at 10:03 am
    cf, What are your thoughts on CFA training programs? Which training program would you recommend?

    njrebear: Depends on your style and your personal schedule….if you are a pure self-starter, then they provide little, if any, incremental benefit. If you are busy or possibly a bit scattered, then I would strongly recommend it. Don’t cram for this exam. Learn the stuff (or if you have already learned it – reinforce it properly). Don’t take a review leading up to the exam. Take a review so you understand what you need to do, and then have several months to study…..

  56. chicagofinance says:
    February 16, 2008 at 11:58 am

    again?

    njrebear: Depends on your style and your personal schedule….if you are a pure self-starter, then they provide little, if any, incremental benefit. If you are busy or possibly a bit scattered, then I would strongly recommend it. Don’t cram for this exam. Learn the stuff (or if you have already learned it – reinforce it properly). Don’t take a review leading up to the exam. Take a review so you understand what you need to do, and then have several months to study…..

  57. chicagofinance says:
    February 16, 2008 at 11:59 am

    njbear: I have a moderated answer at 52…eventually the slacker will release it

  58. njrebear says:
    February 16, 2008 at 12:08 pm

    cf,
    Thanks in advance :)

  59. chicagofinance says:
    February 16, 2008 at 12:09 pm

    Mr. Diagram:
    Do not overthink this scenario. Step back and consider the basics. Income is supposed to drive home prices (stop laughing!). As a result, your best theoretical natural hedge is to focus on your household’s earning potential and attempt to keep pace (or better exceed) the inflation in wages for the area where you live or wish to live.

    So investing in continuing education, skill enhancement, and being flexible to opportunity is of paramount importance. Of course where the rubber hits the road is being able to monetize such a commitment of time and effort.

  60. bi says:
    February 16, 2008 at 12:20 pm

    33#,34#, acctually, my XHB trades were very successful so far. I started to accumulate from $19+ at the begining of this year and saw my first purchase down 20% in a few days to $15+. with my average price of $17+ and unloaded from 20 to 23 with return of 15% in less than a month. now i am back to long XHB again. my short term play now is long XHB, QLD and DUG.

  61. bi says:
    February 16, 2008 at 12:24 pm

    32#, i read an article recently saying you would still beat the market significantly if you followed buffett after buffett disclosed his purchase. clot, follow the money.

  62. chicagofinance says:
    February 16, 2008 at 12:26 pm

    Ven Says:
    February 16th, 2008 at 10:51 am
    Ven: Then what would be a better hedge against the home price appreciation if it occurs in NY/NJ?

    USE iShare IYF

    Ven: I don’t have so much time to delve deep into the financials of the national HBs……But, at the same time, shouldn’t the effect the leverage work wonders on upside?
    BY DEFINITION YOU ARE POINTING OUR INEFFICIENCY IN CORRELATION OF YOUR PROPOSED HEDGE

    In friction free world efficient market hypothesis works. But, you need to have patience to wait out for the reality to set in and the markets to adjust to reality which may or may not happen in our life time. Housing markets are very sticky compared to equity markets.
    BY DEFINITION YOU ARE POINTING OUR INEFFICIENCY IN CORRELATION OF YOUR PROPOSED HEDGE

    Ven: Sure I agree, what ever the factors may be, shouldn’t the valuation of HB be correlated with home prices to large extent?
    ARE GOLD COMPANYS OR ENERGY COMPANYS STRONGLY CORRELATED WITH THEIR UNDERLYING RAW MATERIALS….AREN’T YOU INTRODUCING ALL MANNER OF OPERATIONAL RISKS TO YOUR HEDGE?

    In fact I would really gain a lot from deflationary scenario and I welcome it.
    NO YOU WOULDN’T…..THIS COUNTRY WOULD TURN IN MEXICO, BRAZIL, OR SOUTH AFRICA

    ONE OF THE MAIN REASONS THAT INDEXING IS GARBAGE
    Ven: Yes, what’s the alternative?
    IN GENERAL? ACTIVE MANAGEMENT…..HERE, NATURAL HEDGING

  63. Sean says:
    February 16, 2008 at 12:44 pm

    Slash sues his realtor.

    Overpaying and Suing

    Former Guns N’ Roses guitarist Slash bought a home in the Hollywood Hills for $6.2 million in January of 2006. When he was only able to get $5.7 million from a buyer last December, he determined that he had paid too much for the home.

    The loss prompted Slash to file suit against his real estate agent. The guitarist claims that the house isn’t what the real estate agent described. Among his chief complaints: the house is too small and lacks privacy.

    http://homeguide123.com/articles/Celebrities_Not_Immune_to_the_Real_Estate_Crisis.html

  64. skep-tic says:
    February 16, 2008 at 1:21 pm

    #25

    read that NYTimes article this morning and found it ridiculous, as usual.

    The example of the “prime” buyers they gave was a teacher/law student couple who were looking to buy a $630,000 condo. Assuming teacher was making $50k, they were trying to buy something that was 12.6 times their current income! No wonder the bank was a little worried.

  65. Ven says:
    February 16, 2008 at 1:29 pm

    1. Ven: Then what would be a better hedge against the home price appreciation if it occurs in NY/NJ?
    ChiFin: USE iShare IYF
    Ven: IYF sounds like a good candidate. But, I feel the problem with IYF is that this whole mess of financial derivatives is not really played out yet. More over I think HBs would better correlated with house prices even in NJ/NY due to availability of credit for housing, regulation and other any unexpected factor which we can’t foresee.

    Ven: I don’t have so much time to delve deep into the financials of the national HBs……But, at the same time, shouldn’t the effect the leverage work wonders on upside?
    ChiFin: ITION YOU ARE POINTING OUR INEFFICIENCY IN CORRELATION OF YOUR PROPOSED HEDGE
    Ven: Can you please please …

    Ven: Sure I agree, what ever the factors may be, shouldn’t the valuation of HB be correlated with home prices to large extent?
    ChiFin: ARE GOLD COMPANYS OR ENERGY COMPANYS STRONGLY CORRELATED WITH THEIR UNDERLYING RAW MATERIALS….AREN’T YOU INTRODUCING ALL MANNER OF OPERATIONAL RISKS TO YOUR HEDGE?
    Ven: Yes, Gold miners are highly correlated with gold miner index. Keep in mind that I am trying to play the index is so that I can mitigate the operational risk.
    In fact I would really gain a lot from deflationary scenario and I welcome it.
    NO YOU WOULDN’T…..THIS COUNTRY WOULD TURN IN MEXICO, BRAZIL, OR SOUTH AFRICA
    Hey, weather you know it or not life is not so bad in these countries if you have money.
    ONE OF THE MAIN REASONS THAT INDEXING IS GARBAGE
    Ven: Yes, what’s the alternative?
    IN GENERAL? ACTIVE MANAGEMENT…..HERE, NATURAL HEDGING
    Even active management sucks lot of times and I enjoy spend time producing some thing real than the educated guessing game.

  66. Ven says:
    February 16, 2008 at 1:29 pm

    ChiFin: ITION YOU ARE POINTING OUR INEFFICIENCY IN CORRELATION OF YOUR PROPOSED HEDGE
    Ven: Can you please elaborate…

  67. ADA says:
    February 16, 2008 at 1:31 pm

    #51 bloodbath

  70. Everything's 'boken says:
    February 16, 2008 at 1:56 pm

    re 66
    What makes you think an architect had anything to do with it?

  71. Tom says:
    February 16, 2008 at 2:14 pm

    I have all my savings in 1 bank.
    I am too paranoid of these banks going out of business. I am thinking of splitting my savings across 2 or 3 banks.
    Which banks you guys think will survive this crisis and will be standing 3 years from now ?

  72. pretorius says:
    February 16, 2008 at 2:28 pm

    Bloodbath,

    Here you go. http://professionals.collegeboard.com/profdownload/ap-report-to-the-nation-2008.pdf

    My sloppy reading of a New York Times article on the results caused me to make a mistake in my earlier post. New York had highest scores, but New Jersey and Connecticut weren’t in top 3.

  73. ithink-ithink says:
    February 16, 2008 at 2:39 pm

    grim,
    Do tell, who did the interview? Did Stossel’s pushbroom tickle?

  74. chicagofinance says:
    February 16, 2008 at 2:43 pm

    Ven Says:
    February 16th, 2008 at 1:29 pm

    Mr. Diagram: you have moved beyond the general theoretical arguments and are looking to parse things at a level that I would describe as semantics….

    You have provided sufficient evidence to be categorized by clot as overly analytical…..

  75. BC Bob says:
    February 16, 2008 at 2:51 pm

    Who says WS is not compassionate?

    “Unusual perks: Goldman Sachs covers sex changes”

    http://money.cnn.com/2008/02/08/news/companies/gender.fortune/index.htm?section=magazines_fortune

  76. chicagofinance says:
    February 16, 2008 at 2:51 pm

    Ven: I don’t have so much time to delve deep into the financials of the national HBs……But, at the same time, shouldn’t the effect the leverage work wonders on upside?
    BY DEFINITION YOU ARE POINTING OUT INEFFICIENCY IN CORRELATION OF YOUR PROPOSED HEDGE

    In friction free world efficient market hypothesis works. But, you need to have patience to wait out for the reality to set in and the markets to adjust to reality which may or may not happen in our life time. Housing markets are very sticky compared to equity markets.
    BY DEFINITION YOU ARE POINTING OUT INEFFICIENCY IN CORRELATION OF YOUR PROPOSED HEDGE

    HB Stocks: If you think they are spring loaded, why would you use them to hedge, when the same potential also put them in bankruptcy in a recession/depression. You want to dynamically hedge returns, and this tool would make such an effort overly cumbersome and realistically futile.

    Housing markets sticky: OK then. If you are saying that price action in real estate is fundamentally different than stocks, why are you looking to fine tune strategy with something that is AT BEST a blunt force instrument.

  77. pretorius says:
    February 16, 2008 at 2:55 pm

    Ven,

    You might be able to find a better hedge in the futures market. There is a contract that enables an investor to take a long or short position in New York area home prices.

    http://www.cme.com/trading/prd/re/housing.html

    Is anybody here trading these futures?

  78. Clotpoll says:
    February 16, 2008 at 3:31 pm

    Ven (43)-

    Are you bi’s brother?

  79. Clotpoll says:
    February 16, 2008 at 3:34 pm

    ven (44)-

    Generally, when a significant number of companies within an index are possible bankruptcy candidates, going long is taking a bit of a flyer, don’t you think?

    If you’re sitting in CDs right now, that should tell you something about your own appetite for risk. Going from that into the mosh pit known as XHB might be a little much for your central nervous system.

    Just saying.

  80. Clotpoll says:
    February 16, 2008 at 3:38 pm

    bi (60)-

    How much shorter-term can your investment strategy be?

    “…my short term play now is long XHB, QLD and DUG.”

  81. Clotpoll says:
    February 16, 2008 at 3:41 pm

    Ven (65)-

    “Gold miners are highly correlated with gold miner index. Keep in mind that I am trying to play the index is so that I can mitigate the operational risk.”

    Why can’t you just figure out who the good miners are? There’s only a handful. And…the fundamentals on the bad ones are so bad, a sixth-grader could see it.

  82. njpatient says:
    February 16, 2008 at 4:20 pm

    27 victorian
    I’ve been asking exactly that question for three decades, and I’ve lived here my entire life. I don’t know the answer.

  83. Confused In NJ says:
    February 16, 2008 at 5:10 pm

    75. BC Bob Says:
    February 16th, 2008 at 2:51 pm
    Who says WS is not compassionate?

    “Unusual perks: Goldman Sachs covers sex changes”

    Interesting, in the last two weeks news articles say, Goldman Sachs and the Government of Iran cover Sex Changes. I wonder if there is a connection between the two.

  84. homebuyer says:
    February 16, 2008 at 6:17 pm

    Could someone tell me if its possible to get the how to get mortgage information on a home?
    Specifically I would want to know the lender and outstanding loan for a bergen county house .
    Thanks

  85. Bloodbath in Winter 2007 says:
    February 16, 2008 at 7:13 pm

    just a random question: Buying a house with a pool in an in-ground pool backyard. thoughts?

    Any good/bad experiences?

    I know it is sort of a waste in the northeast, since we’d only have it to use from may-sept … but we’re still interested.

  86. Ann says:
    February 16, 2008 at 7:16 pm

    85

    I think it depends on the condition of the pool and how much you would use it. Heaters help extend how early you can use it and if you have a shady yard, they are a definite plus, although that’s another expense for energy costs.

  87. Willow says:
    February 16, 2008 at 7:21 pm

    #85

    Definitely include the pool in inspections. If it’s not in good shape, it can cost lots to fix. Even filling in a pool costs a lot of money.

  88. lostinny says:
    February 16, 2008 at 7:22 pm

    Blood in the water
    My brother just put an inground pool in with all the bells and whistles- heater, special lights, he’ll be adding a waterfall soon- why I don’t know. While I’m not sure if it’s something I would do personally, I am quite sure I will be over there far more often once the weather gets warmer to take advantage of it. :)
    It is an expense and can add to higher property taxes. However, like everything else, you have to decide what’s important to you. Some would rather have granite kitchens and 4 person showers then a pool.

  89. Bloodbath in Winter 2007 says:
    February 16, 2008 at 7:27 pm

    Thanks. as i’ve said before, we’re passing on NJ and moving to Bucks County, PA … and since i’ll be 90 mins away from NYC and 30 mins from PHilly, a pool would be a fun touch.

    I think we’ll be able to get a place like this for under 400k in the next six months.

    http://www.realtor.com/search/listingdetail.aspx?mlslid=5143415&ml=3&typ=7&sid=c312744ab97e43f9847d6435417bcef0&lid=1089895139&lsn=1&srcnt=1#Photo

    a place like this reads nice, but no photo of the pool is probably a bad sign …

    http://www.realtor.com/search/listingdetail.aspx?mlslid=5058605&ml=3&typ=7&sid=830c6f805cdd4cd0a13987e0d0f89776&lid=1085595198&lsn=1&srcnt=1#Detail

  90. kettle1 says:
    February 16, 2008 at 9:03 pm

    4 person shower…. in a private home….. hmmm now you have my attention!

  91. John says:
    February 16, 2008 at 9:06 pm

    The heck with the CME I am building a paramutual style betting system for housing.

    I hate AMT!!!

  92. lostinny says:
    February 16, 2008 at 9:08 pm

    Oh Kettle,
    Just a metaphor for people that want things they don’t need. Don’t get all Freudian on me.

  93. kettle1 says:
    February 16, 2008 at 9:22 pm

    just busting your chops lost

  94. kettle1 says:
    February 16, 2008 at 9:23 pm

    the wife wants to go look at open houses in the mendham area for fun tomorrow, any suggestions?

  95. Hard Place says:
    February 16, 2008 at 9:28 pm

    Kettle1,

    Take note of all the properties selling around the area. Play one seller against the other. Watch them all squirm as the inventory in Mendham is fairly high, especially on the higher end.

  96. kettle1 says:
    February 16, 2008 at 9:41 pm

    whats the best way to find open houses, just drive around? or is there some sort of listing?

  97. BC Bob says:
    February 16, 2008 at 9:55 pm

    “You might be able to find a better hedge in the futures market. There is a contract that enables an investor to take a long or short position in New York area home prices.”

    pret,

    Are you recommending this contract or asking a question pertaining to this?

    Based on current settlements, a $2 mil condo in NY [Feb, 08 contract] will lose 220K by 2/1/12. Troubling for Gold Coasters.

  98. pretorius says:
    February 16, 2008 at 10:29 pm

    BC Bob,

    Yes, that would be the one of the contracts somebody should check out if he’s thinking of speculating on the direction of New York area home prices.

    But Gold Coast homeowners shouldn’t be too concerned about the contract you mentioned. Housing futures have tended to predict larger price declines than actually occurred.

  99. Sassy says:
    February 16, 2008 at 10:31 pm

    64 Skeptic

    I noted the ratio of salary to purchase price too. I think I’ve lived in NYC for too long, I naturally assumed one half of the couple must have been a trust fund baby. Not a big trust, but enough to help with the discrepancy between income and mortgage.

  100. RentinginNJ says:
    February 16, 2008 at 10:32 pm

    the wife wants to go look at open houses in the mendham area for fun tomorrow, any suggestions?

    Bring a barf bucket. You will need it when the agent starts blowing sunshine up your a**.

    I went last week in the Denville area. I heard all about “what a wonderful time to buy” it was because “interest rates are low” and “sellers are willing to negotiate” and “they” are saying “prices are going to recover next year”. I also heard a new one; “many people are relocating to NJ for jobs, supporting the market”.

  101. Clotpoll says:
    February 16, 2008 at 10:46 pm

    Rent (99)-

    Yeah, right. Meanwhile, every day when I download MLS info, the agent roster is purged of 30-50 names.

    Why in the world would any individual or company move to NJ? I can’t think of a single reason. We are totally f-ed.

  102. mikeinwaiting says:
    February 16, 2008 at 10:57 pm

    Kettle 93 Bag it use the money saved on gas to go out to brunch.Spend all your Sundays
    at brunch while they chase the market down.
    Then fat & happy when the leaves fall from the trees you go for an open house drive.By
    then they may be serving brunch to get you there!

  103. RentinginNJ says:
    February 16, 2008 at 10:57 pm

    Corzine considering “deep and painful cuts” for next year’s budget

    Gov. Jon Corzine is considering making more high-income residents ineligible for tax rebates, closing some state parks, reducing hours at motor vehicle offices and slicing aid to colleges, hospitals and towns, according to administration and legislative officials familiar with his plans for a no-frills state budget.

    While no final decisions have been made on the budget Corzine is due to present later this month, the officials confirmed Corzine’s warnings of “deep and painful cuts,” saying virtually all areas of spending except aid to local school districts [editors note: Sounds like Corzine & the NJEA have reach an accommodation] are on the chopping block.

    While Corzine has said he does not want to slash the state’s $2.2 billion rebate program because checks from Trenton offset the state’s high property tax burden, officials said he is considering sending checks to fewer residents by tightening income-eligibility limits for non-seniors.
    …
    “The governor’s guiding principles are maintaining public safety, caring for the most vulnerable in society and preserving his commitment to property tax relief,” she said. “But it will be necessary to cut at nearly $2.5 billion just to keep (the next budget) at last year’s level of $33.5 billion, and additional reductions may also be necessary.”

    http://www.nj.com/news/index.ssf/2008/02/corzine_warning_of_deep_and_pa.html

  104. BC Bob says:
    February 16, 2008 at 11:01 pm

    pret,

    I would not go near that contract, nor would I advise others.

    You state that the futures have not been a reliable indicator. How many years are you calcuating and what has been the error factor? Is the contract cash settled or are you subject to delivery?

  105. mikeinwaiting says:
    February 16, 2008 at 11:07 pm

    Clot 100 That many sh*t.Well more for you.
    Yes we are f*ed in spades.I may stay here for fam & work but I’m getting the idea its
    better to rent & keep my DP invested.The return is better & I can’t imagine the taxes by the time I retire.I would be leaving then anyway.

  106. pretorius says:
    February 16, 2008 at 11:10 pm

    BC Bob,

    I haven’t participated in the housing futures market, but I’m thinking about it. During my research process I turned up an analysis that concluded housing futures prices have tended to overshoot ultimate price declines.

    Why wouldn’t you go near the contract?

  107. pretorius says:
    February 16, 2008 at 11:30 pm

    BC Bob,

    Here’s a report that might answer your first question.

    http://www.ofheo.gov/media/WorkingPapers/WorkingPaper081.pdf

    Is your second question a serious one?

  108. spazz says:
    February 16, 2008 at 11:32 pm

    #40, njrebear:

    I just recently passed Level 1 of the CFA in Dec 2007.

    How I did it:

    Schweser Study Guides
    Schweser Practice Exams
    Schweser QBank
    (All of which you get in Schweser’s “Essential Solution”)

    Nothing in the exam is especially difficult conceptually. There is just a lot of material to learn.

  110. rhymingrealtor says:
    February 16, 2008 at 11:55 pm

    Sorry for an off topic, but with so many computer literates here, I am looking for help. I have a JVC hard drive camcorder, came with software for editing however it is not an mov or mpg,I don’t know how to convert and don’t like the editing software it came with I want to use windows movie maker. Does anyone know how to convert to mpg? I have had it for over a year and have done nothing with my videos except watch them on tv, I would like to get creative. TIA

    KL

  111. kettle1 says:
    February 17, 2008 at 12:15 am

    RhymingR 109

    I believe that JVC uses Mpeg2-ps format. Windows movie maker is notorious for having issues with mpeg2 files. i checked the JVC site and all of the harddrice camcorders on the site use the Mpeg2 format.

    take a look at this
    http://www.papajohn.org/MM2-Importing-Video-MPEG2.html

  112. kettle1 says:
    February 17, 2008 at 12:17 am

    KL

    the short and dirty of it is that you need to convert th file to a different format. converting to (DVI-AVI) will maintain the quality of the file.

  113. kettle1 says:
    February 17, 2008 at 12:18 am

    you can also try this,

    I finally solved the Windows Movie Maker 2 bug. You have to go to Tools->Option->Compatability and uncheck half the filters…you decide which half…uncheck until it works, prob solved

  114. HOUSE OF CARDS says:
    February 17, 2008 at 12:19 am

    Prices Offered Up to 50% Off During D.R. Horton’s ‘UnAuction’ Sale – February 16 and 23 Only!

    SIMI VALLEY, Calif., Feb. 8 /PRNewswire/ — D.R. Horton has announced
    unheard of savings up to 50% off on a variety of homes at 23 participating
    neighborhoods throughout Southern California. Unlike any Sale homebuyers
    have ever seen, D.R. Horton’s UnAuction presents dramatic sale prices and
    unbeatable new home value without the auction hassle. The UnAuction’s homes
    will go on sale promptly at 10 a.m. on Saturday, February 16 and again on
    Saturday, February 23 only.

    http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/02-08-2008/0004752623&EDATE

  116. Lurking Renter says:
    February 17, 2008 at 1:25 am

    http://www.nytimes.com/2008/02/17/nyregion/nyregionspecial2/17RsubprimeNJ.html?_r=1&scp=1&sq=foreclosure&st=nyt&oref=login
    Mortgage Crisis
    Someone to Speak for Borrowers in Trouble

    Last year more than 1.4 million first-time mortgage holders defaulted on their loans, the first stage of the foreclosure process, according to Mark Zandi, the chief economist at Moody’s Economy.com. A Federal Reserve Bank of New York study of 75 percent of the subprime loans held by homeowners in New York, New Jersey and Connecticut found that as of late last year 9.9 percent of those examined were in foreclosure, or about 12,147 of 123,200.

    In New Jersey, the study reviewed 3,062 subprime loans held by homeowners in Newark and found that 16.6 percent were in foreclosure. In Elizabeth, 15 percent of the 2,295 subprime loans studied were in foreclosure; and in Paterson, the figure was 12.8 percent of the 1,997 subprime loans reviewed.
    (…)
    In Bridgeport, Conn., a city that in 2006 had some of the highest subprime lending rates in the state, Julissa Soto, a housing counselor with Acorn, a housing advocacy group, said that demand was so high that the organization recently trained its 21-year-old administrative assistant as a counselor.

    “We’re totally bombarded,” said Ms. Soto, who is 25.

    The homeowners reach out when they are at wits’ end, and almost beyond help. “They’re frantic, and they don’t know what to do,” Ms. Soto said. This month, she counseled a family with problems that are becoming more and more typical, requiring that the counselors act both as therapists and financial advisers. A Bridgeport police officer and his wife, a schoolteacher, had taken out a mortgage with an adjustable rate, and their monthly payments now totaled more than $3,000. “He had perfect credit,” Ms. Soto said of the officer. “Their car got repossessed. He feels ashamed that he can’t provide for his family.”

  117. grim says:
    February 17, 2008 at 6:08 am

    From the APP:

    Lending troubles

    On a Friday last month, tears were flowing at Reflections Senior Social Day Care on Route 9 in Berkeley.

    The center would close its doors later that afternoon. The bank foreclosed after its owner, Sylvia Jones, a registered nurse, was unable to make her rising mortgage payments. On Jan. 4, the sheriff’s department served her with an eviction notice.

    “I am so upset and don’t want it to close and can’t stop crying,” said Lillian Vitti, 89, of Manchester’s Whiting section, sitting at a table eating cake. “We became a family. We help each other and we are going to miss each other.”

    Jones fell behind on payments on her $420,000 commercial mortgage, a U.S. Small Business Administration-backed loan that she took out in mid-2005. “Save Our Seniors! Bank Kicking Us Out!” read a sign in front of the building.

    The economy has been reeling from a slowdown in the housing market, particularly spurred by the spate of foreclosures of subprime residential loans.

    But what’s happening with commercial mortgages? These are the loans paid by business owners such as Jones and by landlords who own office buildings and strip malls.

    In a nutshell, commercial mortgage delinquency rates, which consist of businesses that were at least 30 days late on a payment, have risen slightly, from 1.1 percent in the fourth quarter of 2006 to a forecasted 1.7 percent in the fourth quarter of 2007, according to Foresight Analytics, an Oakland, Calif.-based real estate marketing consulting firm.

    Likewise, in the area that includes Monmouth, Ocean, Middlesex and Somerset counties, mortgage delinquencies rose from 1 percent in the third quarter of 2006 to 1.7 percent in the third quarter of last year, the firm said.
    …
    Bill Kitley, senior vice president at Capmark Finance in Middletown, said the increases in delinquencies are likely a result of some landlords’ freedom to borrow too much money, sometimes for as much as 90 percent of the purchase price.

    “When you are up that high, (and) you lose a little bit of income, you are at a much greater risk of default,” said Kitley, an instructor at the Kislak Real Estate Institute at Monmouth University.

    Bankers are keeping an eye on the situation.

    “Certainly, bankers are more attuned to the current economic environment and the potential impact on commercial real estate transactions,” said James Vaccaro, president and chief executive officer at Long Branch-based Central Jersey Bancorp. “I don’t think that has yet manifested itself in terms of actual problems or a heightened amount of delinquencies.”

    A recession would affect consumer spending patterns. If companies are hit with a decline in business, it may show up a little in mortgage delinquencies, said John E. McWeeney Jr., president and chief executive officer of the New Jersey Bankers Association. “Everyone is concerned about the economy and the effect a recession would have.”

  118. ReadyToBuy says:
    February 17, 2008 at 6:43 am

    grim:

    we’re bidding on a short sale in hunterdon… it’s reasonably priced, but we want to bid 10 percent under. do bank’s go for this? we’ve been told by our agent that we can put our bid in, and wait until the bank collects other bids and meets at some undisclosed time in the near future…

  119. njpatient says:
    February 17, 2008 at 7:17 am

    107 pret
    Aren’t the futures pegged to Case/Schiller? If so, referencing OFHEO will get you in trouble.

  120. ReadyToBuy says:
    February 17, 2008 at 7:38 am

    njpatient –

    how to futures work – in layman’s terms

  121. Shore Guy says:
    February 17, 2008 at 8:12 am

    # 59 ” Income is supposed to drive home prices (stop laughing!).”

    Although this has been true of the past 100 years, it may not be true, in the strictest sense, right now (and for a limited time). At the moment, we have a generation that grew up during the depression, and then faced the horrors of world war, and then accumulated great amounts of wealth. But, because of their early experiences, they tended to horde their wealth. Now they are dying off and passing on large amounts of capital to their children and grand children. I suspect that it is this intergenerational wealth transfer that is allowing the prices of housing to outpace incomes to such a degree; however, this can only happen over a limited term because boomers, Xers, etc, are not accumulating similar wealth.

  123. Confused In NJ says:
    February 17, 2008 at 8:19 am

    103.RentinginNJ Says:

    http://www.nj.com/news/index.ssf/2008/02/corzine_warning_of_deep_and_pa.html

    Interesting point made in the full article was NJ legislature was considering last year several measures including repealing the special 9% Pension increase granted in the last stock market bust. Corzine torpedoed that idea. Too bad, it was an attempt at correcting the underying structural problems. The Largess is not sustainable. Eventually there will be no assets left to sell.

  124. chicagofinance says:
    February 17, 2008 at 9:11 am

    http://www.thesopranostate.com/contents.htm

    I like Chapter 10’s title

  125. chicagofinance says:
    February 17, 2008 at 9:12 am

    pretorius Says:
    February 16th, 2008 at 11:10 pm
    BC Bob,
    Why wouldn’t you go near the contract?

    pret: I had little to do with the underlying index…..

  126. chicagofinance says:
    February 17, 2008 at 9:13 am

    pret: It has little to do with the underlying index…..

  127. chicagofinance says:
    February 17, 2008 at 9:15 am

    ReadyToBuy Says:
    February 17th, 2008 at 7:38 am
    njpatient –

    how to futures work – in layman’s terms
    http://en.wikipedia.org/wiki/Futures_contract

  128. Frank says:
    February 17, 2008 at 9:23 am

    RE inventory up by 1200 since last week.

  129. gary says:
    February 17, 2008 at 9:44 am

    I don’t have a lot of time this morning but if you all didn’t read the 2008 Real Estate forecast in today’s Bergen Record, please do so. Of course, it’s full of the standard b*llshit contradiction – read it and you’ll see.

    They still spew whatever the RE industry says as if it’s gospel.

    Mrs. Gary went ballastic this morning reading this bullsh*t and suggested that we all chip in for a full page ad in The Record, Star Ledger, etc. equipped with the charts and data that show the real numbers. You know, the stuff that the RE charlatans don’t want you to see.

    More later…

  130. rhymingrealtor says:
    February 17, 2008 at 9:50 am

    Thanks, Kettle.

    I don’t know why my camera gives me .mod’s instead of mpg’s but I will try the filter.

    KL

  131. Ann says:
    February 17, 2008 at 9:51 am

    121

    I don’t know anyone my age who bought a house without help on the downpayment from their parents. My dad gave us the downpayment for our first townhouse, we wouldn’t have been able to buy it then without it.

  132. rhymingrealtor says:
    February 17, 2008 at 9:56 am

    Kettle1

    There were no filters there to check off? )-:. I am ready to sell this camera and get something else. Any reccomendations?
    Going to PA today, actually making a special trip to buy candles (-:
    Thanks
    KL

  133. kettle1 says:
    February 17, 2008 at 10:05 am

    KL

    the .mod file is an audio file, not a movie file. sry about the trouble.

    I might recommend the following. I just got one and love it. but otherwise i like the canon video camera’s that use miniDV. its an older “tape” type format that is very reliable and you dont tend to run into the conversion issues.

    check this out though
    http://www.aiptek.com/Merchant2/merchant.mvc?Screen=CTGY&Store_Code=AS&Category_Code=DC1

    i have the hidef 720p model. but you might like the highdef one also. depends on what you might use it for

  134. spam spam bacon spam says:
    February 17, 2008 at 10:08 am

    can someone give me an address for MLS Number: 2387387

    TIA…

  135. dinra says:
    February 17, 2008 at 10:30 am

    Anyone knows the what a 2BR 2BA townhouse with finished basement in Berkshire Hills, Denville sold for in the last 2 months?

  136. spam spam bacon spam says:
    February 17, 2008 at 10:44 am

    And MLS ID# 2478728 while I’m at it…

  137. lisoosh says:
    February 17, 2008 at 10:47 am

    Surprised by the speed with which the GSMLS is rising. Last couple of years everyone talked about the Superbowl and the spring selling season but nothing was really added until after Spring Break. Admittedly, a lot of the inventory is old rehash, so when the real stuff starts coming on…..holy cr@p.

  138. lisoosh says:
    February 17, 2008 at 10:48 am

    I’ll add. My informal yardstick for panic is when the GSMLS hits 37k. Don’t know why, that is just my number. Thought we would get there last summer, would put money down that we will this year.

  139. lostinny says:
    February 17, 2008 at 10:52 am

    I need some help. Any idea what the projected COL increase is this year? Next year? Last year? Whatever?

  140. spam spam bacon spam says:
    February 17, 2008 at 11:04 am

    lisoosh,

    where do I find ttl MLS#’s for county/state?

  141. 3b says:
    February 17, 2008 at 11:35 am

    #89 Blood: I think we’ll be able to get a place like this for under 400k in the next six months.

    If it is listed at 425K now, and you expect to get it for under 400k in 6 months, why not just bid on it now?

  142. Cindy says:
    February 17, 2008 at 11:38 am

    When I purchased in 1999/closed Jan of 00 the banks were lending 2-3X salary in CA. I had a 5% down loan but that wasn’t the norm. You put down 10 to 20% for a conventional loan. That was just after the 1997 tax law, enabling folks to sell every two years and pocket the profit, had gone into effect.

    People here will admit that because of that tax change, they were prompted to sell and relocate to the Central Valley either to retire or take on lower paying jobs. We saw a huge influx of home buyers from the Bay Area to the north and from the LA/San Diego area to the south. The law allowed them to take cash from real estate now and cash from real estate later. (Previously, it was a once-in-a lifetime rule.)

    Big bucks in hand, they could buy our lower-priced real estate outright or make huge down payments. The prices soared 1999 to 2006. “Locals” began using “alternative loan vehicles.” Banks began to lend on 120% equity. The problem was exasperated by the “investors” and new builders who wanted a piece of the action and the constant
    “flipping” of properties every two years.

    The “new money” coming into our area is what did us in. Stockton (focus of the 60 minute piece) got hit even harder because of their close proximity to the Bay Area.

  143. 3b says:
    February 17, 2008 at 11:38 am

    #100 many people are relocating to NJ for jobs, supporting the market”.

    NJ for jobs? What jobs?

  144. 3b says:
    February 17, 2008 at 11:44 am

    #129 gary Me and my better half also read the same drivel.

    Woudl definitely contirbute to your idea of taking out a one page ad etc.

  145. 3b says:
    February 17, 2008 at 11:47 am

    #137 lisoosh: I am seeing rehash, plus a lot of new listings coming on in my town. 15 brand new listings since right after Super Bowl, and its only mid Feg.

  146. pretorius says:
    February 17, 2008 at 11:48 am

    “Ann Says:
    February 17th, 2008 at 9:51 am

    I don’t know anyone my age who bought a house without help on the downpayment from their parents.”

    Ann,

    I bought my first place without help from parents. I was 25.

    Downpayment (3%) plus closing costs came to around $15,000. I didn’t have $15,000 in my checking account so borrowed from my 401(k). It was one of the best decisions I’ve ever made.

  147. Sybarite says:
    February 17, 2008 at 11:50 am

    2478728
    Readington Twp.
    501 Stanton Station Road
    $444,900

    This MLS # corresponds to land for sale:
    2387387
    Bethlehem Twp.
    186 TURKEY HILL ROAD
    $325,000

  148. Shore Guy says:
    February 17, 2008 at 12:04 pm

    “Unusual perks: Goldman Sachs covers sex changes”

    Is that so that people who made bad calls can still work on the Street without being noticed?

  149. spam spam bacon spam says:
    February 17, 2008 at 12:06 pm

    ty Sybarite…

    we’re looking for land, maybe land with a house that needs a lot of work, maybe land with a nice house that we could add horse facilities to, maybe land with a nice house and nice (horse safe) horse facilities, or maybe land with nice horse facilities and no house…

    Making us crazy! :)

  150. afe says:
    February 17, 2008 at 12:14 pm

    Anyone have the status of 2478974?

    TIA

  151. Shore Guy says:
    February 17, 2008 at 12:17 pm

    # 124 of course, “See no Evil” Law Enforcement and Court Jesters” also has a ring to it. Speaking of that, has anyone else noticed the Yakuza-like tatooing of NJ law enforcement in recent years?

  152. pretorius says:
    February 17, 2008 at 12:21 pm

    Every single day, a realtor based in Bergen County posts the same set of homes onto craiglist.

    What makes it really annoying is she writes a list of 30 towns, including my town, at the bottom of each post. So every time I search for homes in my town, it brings up her entire list even though she isn’t marketing any homes in my town. I know I’m not the only person who is tired of this tactic. It is a JV effort that diminishes her credibility as a professional.

    I wrote this realtor a polite note in which I asked her to improve her behavior. She hasn’t.

    What can I do to persuade her to stop including the list of towns in her posts?

    Should I call her directly? Should I complain to her boss?

  153. Shore Guy says:
    February 17, 2008 at 12:23 pm

    # 132 “Ann Says:
    February 17th, 2008 at 9:51 am
    121

    I don’t know anyone my age who bought a house without help on the downpayment from their parents. ”

    I am not talking about a down payment of $20-50k. What is happening is that as the WWII generation is dying, they are transferring hunderds and hundreds of thou\sands of dollars to the kids and grandkids. Flush with that “found” money they are in positions to spend more than they could otherwise justify, either by making larger downpayments or using investment returns to pay the difference between what they can pay from wages and the cost of the mortgage.

  154. Shore Guy says:
    February 17, 2008 at 12:30 pm

    For those interested in the book cited above:

    http://www.app.com/apps/pbcs.dll/article?AID=/20080217/NEWS/802170438

    TRENTON — “It’s not a joke. New Jersey leads the country in corruption.”

    [snip]

    In ” “The Soprano State: New Jersey’s Culture of Corruption,” co-authors Bob Ingle and Sandy McClure use newspaper stories, unpublished material and fresh reporting to detail the depth and pervasive culture of corruption in New Jersey.

    “It’s connecting the dots for people, even if they’re familiar with what’s going on; the book will connect the dots for people,” McClure, who is now re-tired, explains.

    “The Soprano State,” dedicated “for taxpayers everywhere,” chronicles corruption in New Jersey at every level — from questions that remain unanswered about disgraced former Gov. Jim McGreevey, who resigned under a cloud of suspicion after announcing he was a “gay American,” to attorneys general who turned a blind eye to the law, and to the leaders and underlings who have made a home within New Jersey’s political landscape for decades.

    “Sometimes people joke that New Jersey’s sky-high taxes are almost justified by pointing to the Legislature — a collection of misfits, self-serving loons, and boss-created puppets — and asking, “where else could you have so much entertainment in one place?’

    “Lawmakers have managed to create a kind of paradise on earth for themselves where part-time work delivers big perks while they’re on the payroll and yields even bigger payouts when they retire, since taxpayers foot the bill for overly generous pensions and health care for life for them and their dependents.

    “People of conscience, morals, and ethics would feel a tinge of embarrassment about this, but the Jersey pols have long since moved past this. They created an oligarchy (rule by few) that morphed into a plutocracy — a corrupt government in which funds are used to sustain private wealth and keep officials in power.”

    — An excerpt from chapter 4 of “The Soprano State.”

    [snip]

    Ingle, who once worked for the Associated Press and who has worked in New Jersey since 1993, is a Friday afternoon regular on Millennium Radio’s New Jersey 101.5 FM’s “The Jersey Guys” show.

    McClure was an investigative reporter in the Gannett State Bureau and worked as a reporter for half a dozen newspapers in New Jersey and Pennsylvania. She covered New Jersey politics exclusively since 1989.

    [snip]

    A long string of federal indictments of state, county and local politicians and New Jersey’s well-known reputation for political corruption prompted the idea.

    McClure didn’t sit on the idea for long. She immediately called Ingle about collaborating on the book. He had a simple response.

    [snip]

    Over the next 2 1/2 years, Ingle and McClure sought out every bit of dirt that soils New Jersey politics.

    “They told us to “write whatever you want,’ and they underestimated our ability,” Ingle said with a chuckle.

    [snip]

    “They told us they were overwhelmed,” Ingle said.

    The original manuscript consisted of more than 110,000 words in 15 chapters, but was eventually pared down to the 10 chapters that are “The Soprano State.”

    St. Martin’s Press lawyers pored over the manuscript and questioned the pair on a laundry list of items that appear in the book. People in New Jersey are well-acquainted with many, but not all, of the stories. Ingle and McClure joked it was probably harder for an outsider to believe what is really going on here, so they thoroughly documented everything that went into the book.

    “Editorial writers had a field day when it was reported (Jon) Corzine made not just one but two ethnic jokes about Italian-Americans. The New York Daily News labeled its brief article “How Not to Run for Public Office’ and said, “Jon Corzine, the Wall Street moneybags seeking the Democratic nomination for the U.S. Senate in New Jersey, came under fire for ethnic slurs against Italians. In the first alleged incident, during a political gathering at an Italian restaurant in Newark, Corzine was introduced to a lawyer named David Stein. “He’s not Italian, is he?’ Corzine reportedly said. “Oh, I guess he’s your Jewish lawyer who is here to get the rest of you out of jail.’ Later Corzine was introduced to an Italian-American contractor. “Oh, you make cement shoes,’ Corzine quipped, according to a witness. A spokesman for the candidate denied the first remark and apologized for the second.

    “Corzine was caught lying during the 2000 Senate campaign, something pols in New Jersey seem to think they can do and no one will notice. When a group of black ministers endorsed him, they were offended with press questions about how much the wealthy Corzine had donated to their churches. Corzine watched while one stepped forward and said Corzine gave only what he put into the collection plate. That idea blew up when records showed his foundation had given $25,000 to an influential black church. Corzine’s explanation was out of Bill Clinton’s playbook: “My foundation is different from Jon Corzine,’ he explained. The foundation was controlled by him and his wife.”

    [snip]

    “We footnoted everything so anybody can go and check it out,” Ingle said.

    [snip]

    “The Soprano State” may resonate easily with New Jerseyans, but the book is also meant for a national audience and could serve as a textbook on corruption, Ingle and McClure said.

    [snip]

    About 30 percent of the original manuscript didn’t make it into the book. Ingle and McClure said the unpublished material could serve as a foundation for a sequel. The two authors have set up a companion Web site, http://www.thesopranostate.com, where they plan to update the book with the most recent tales of corruption.

    They might use examples such as that former state Sen. Joseph Coniglio, D-Bergen, who was indicted by a federal grand jury just last week on corruption charges.

    The book also details other reporting by competitors on corruption in the state. Ingle and McClure say they agreed early on that their colleagues in the New Jersey press corps should be credited for work and dedication to rooting out corruption, and used the reporters’ own words to get their points across.

    “The state parole board had a bad reputation for letting mobsters and racketeers out of jail — both before and after (Angelo) Prisco. And the state Department of Corrections kept some of those inmates comfortable over the years.

    “One of the state’s major mobsters, the late Samuel Corsaro, got two breaks from Republican Governor Tom Kean and his appointees — first a pardon by Governor Kean, and later a speedy release by the man Kean appointed to the state parole board and Gov. Christie Whitman made its chairman.

    ” “Samuel Corsaro, known to authorities as a major figure in the Gambino crime family, was paroled Feb. 14 (2000,) after serving the bare minimum before becoming eligible for early release,’ record reporter Thomas Zolper wrote. “Unlike other violent criminals who sometimes wait months or years for a parole hearing, Corsaro was heard within weeks of eligibility.’ ”

    “There are a lot of examples of where I just said “I can’t say it better than they did,” Ingle said. “So we give credit where credit is due.”

    [snip]

    “Read it, and read it again,” Ingle suggested. “It will make your blood boil.”

  155. Cindy says:
    February 17, 2008 at 12:35 pm

    (153) Shore Guy…I agree! Money that wasn’t there before has entered the RE market. It skews the entire income to home price ratio. I don’t know how many trust fund babies there are around here but there is an influx of new money to our area and it did make a difference in the sales price.

    Do you see it changing?

  156. Shore Guy says:
    February 17, 2008 at 12:45 pm

    155 I suspect it is a temporary thing. Unless folks husband their resources, they will spend through it and then there will be no meor “going to the found-money well.”

    I know a guy who is very overextended. It turns out so is his brother. Their mother recently received a settlement for a med mal issue, or something like that, and was going to use the $ to ease her barely-middle class old age. But the btothers seem to have persuaded her to “lend’ them the $ and split it 3 ways, with their sister. The brothers seem to be so far in debt they cant do anything to get out and they will use the borrowed money to keep the wolves from the doors for a bit longer. The sister will use it for a child’s tuition.

    I have serious doubts that the brothers will have any prayer of paying off the debt to mom. In the end, she will be out her nest egg, they will be back where they are now, and come the next crisis there will be no “found money” on which to draw.

    Similar things are happening with people and legacys they receive after the death of a parent. It becomes like trying to nail jello to the wall, it just dribbles away..

  157. Sybarite says:
    February 17, 2008 at 12:56 pm

    AFE:

    Under contract; anticipated closing on 3/14/08

  158. Cindy says:
    February 17, 2008 at 1:07 pm

    (156) Shore

    I have heard a few nightmare stories involving “reverse mortgages” as well…

  159. Ann says:
    February 17, 2008 at 1:12 pm

    152

    How can (or why) you stop a realtor from posting on craigslist? Think of all the scummy crap that is on there; I think a realtor posting houses is not a problem.

  160. RentinginNJ says:
    February 17, 2008 at 1:13 pm

    #100 many people are relocating to NJ for jobs, supporting the market”.

    NJ for jobs? What jobs?

    The realtor supposedly has an account with a local pharma company, finding housing for people who relocate to NJ for a job (part of a relocation benefit). So, from her narrow perspective, she sees people coming to her office that have relocated to NJ for a job. She thinks this is “normal” and happening everywhere in NJ.

    What I gently explained to her was that she is missing the big picture. She isn’t seeing the two people leaving NJ for every one that moves in. After all, I asked, if so many people are moving here, why are there so many homes for sale & why are most of them just sitting on the market? She wasn’t aware that 72,000 more people left NJ in 2006 than moved in. Nor did she realize that the relocations she was seeing weren’t a result of job creation, but rather filling existing positions for the most part. And, on a net basis, good jobs are leaving the state and being replaced by retail & government workers.

  161. Ann says:
    February 17, 2008 at 1:14 pm

    153 Shore

    Yeah, I didn’t get hundreds of thousands and I won’t. Sigh. Must be nice. I did get a down payment and most everyone I know my age got some help to buy their first place.

  162. BC Bob says:
    February 17, 2008 at 1:23 pm

    “I haven’t participated in the housing futures market, but I’m thinking about it. During my research process I turned up an analysis that concluded housing futures prices have tended to overshoot ultimate price declines.”

    pret,

    What futures data have you analyzed? The CS index started trading in the middle of 06.

    Anybody thinking about hedging with this is just playing with themselves. If someone
    think prices will fall and is in for the short term, the better option is to sell and take the loss.

    One one side of the equation you have a futures contract that settles in cash. On the other side of the equation you have an asset that trades in an illiquid market. How does one hedge in this manner? Your future may expire in 2/09. However, based on market conditions, your physical may not sell for another year out. A farmer can hedge his harvest, an oil producer can hedge his inventory based on their delivery schedule. A homeowner can not structure a true hedge.

    In conjunction with this, there is zero open interest in this contract, on a relative basis. How does a $20 trillion illiquid industry hedge in a futures market where the total contract size is a fraction of the physical?

    Some months there are zero contracts that trade, for certain cities. You can’t even hedge hedge your self cleaning oven. You want to speculate. How about placing a market order for 5 contracts and have this represent a large % of the open interest? Talk about market volatility.

    I don’t even pay attention to the index as a barometer of the industry. Things are much worse than this index indicates. The index excludes new consrtuction, where heavy discounting is occuring. It excludes condos, which represent the largest declines. It also excludes investment properties, i.e., flippers. Hello?

    It’s just an exercise in mental m%sturbation allocating any time devising ways to hedge using this index. Speculate? It would be wise to place a limit order and be prepared to hold long term, go out years. Better yet, just stay away until participation increases.

  163. pretorius says:
    February 17, 2008 at 1:29 pm

    BC Bob,

    Thanks for the colorful comments on the housing futures.

    Obviously you know more about the futures market than I do. Will the housing futures become more liquid? How long will it take?

  164. spam spam bacon spam says:
    February 17, 2008 at 1:33 pm

    Downpayments?

    I didn’t get schi**.

    My father BORROWED money from ME… (and he’s got 2 houses…let’s not go there)

    And yes, we came up with 20% for a full doc loan from (both self-employed) income…

    We actually ended up putting 25% down because we bought a little cheaper house than what we had been looking at…

  165. njpatient says:
    February 17, 2008 at 1:36 pm

    129/144
    Gary/3B

    I’m in as well

  166. afe says:
    February 17, 2008 at 1:40 pm

    thanks sybarite!

  167. schabadoo says:
    February 17, 2008 at 1:40 pm

    Ahh, another cold weekend, another chance to watch the Open House next door.

    It’s getting to the sad/pathetic stage: they probably average one couple per weekend, with the same newish realtor sitting in there hour after hour, just staring out the window.

  168. njpatient says:
    February 17, 2008 at 1:47 pm

    152 pretorius
    That is damn annoying.

    I’m all for calling her directly.

  169. 3b says:
    February 17, 2008 at 1:56 pm

    #153 shore guy:What is happening is that as the WWII generation is dying, they are transferring hunderds and hundreds of thou\sands of dollars to the kids and grandkids. Flush with that “found” money.

    Talk to some attorney’s who do trusts and estates, not as much money as you might think from the WWII generation.

    Plus with people living longer today, there is nursing homes/assisted facilities living.

    Much more difficult to hide assests today, like houses etc.

  170. BC Bob says:
    February 17, 2008 at 2:03 pm

    pret [163],

    I certainly hope it does. I would love to trade it. However, if you placed a small market order, at this time, you would move the market like WB.

    It won’t be a viable market to trade until you have institutional participation. The problem, they are not involved in the cash market. future?

  171. Clotpoll says:
    February 17, 2008 at 2:29 pm

    ready (118)-

    The bank has an appriasal in hand (and probably 1-2 BPOs) that give them an idea of market value. Just like any other seller, they probably won’t sell at a substantial discount to that value.

  172. Ann says:
    February 17, 2008 at 2:37 pm

    Question on people’s used crap…

    We’re looking for a dining room set since we have a real dining room now.Trying the second hand route first.

    How much does (or doesn’t) used furniture retain its value?

    I say it doesn’t at all, since it’s such a PITA to pick it up and it’s never going to be exactly what you would have bought new, unless it’s something really quality or antique.

    These people on Craigslist, for example, think they are going to get thousands for their old stuff, that is still functional no doubt, but it’s used. I say a couple of hundred bucks and someone to move it for you is a good deal. But they’ll be on there asking thousands?

  173. crossroads says:
    February 17, 2008 at 3:06 pm

    172 Ann,

    your right people do tend to over value their crap. not just their houses.

  174. mikeinwaiting says:
    February 17, 2008 at 3:27 pm

    Ann 172 we bought a nice set on Craigslist for 500.The hole ten yards table 2 leafs, 6 chairs, server, china cabinet.But you must pick up as to see condition, rented uhaul 140.We sold our set to people who bought are home.As you are in new home you may want to buy new.We are renting so this is cool till we buy.Used furniture worth sh*t.
    Lady wanted 500 for glass tables for living room we waited her out 200.4 pieces real nice.Dinning room nice to no damage serves the purpose.

  175. chicagofinance says:
    February 17, 2008 at 3:32 pm

    pretorius Says:
    February 17th, 2008 at 11:48 am
    I don’t know anyone my age who bought a house without help on the downpayment from their parents.”
    Ann,
    I bought my first place without help from parents. I was 25.
    Downpayment (3%) plus closing costs came to around $15,000. I didn’t have $15,000 in my checking account so borrowed from my 401(k). It was one of the best decisions I’ve ever made.

    pret: I can’t argue with your personal results, but the way your characterize your actions makes my fur (or is it back hair) stand on end. To say that you did anything other than take a calculated risk that worked out is reckless.

    I did something with real estate at 27 years old that was ten times more reckless, and by the grace of G-d I wasn’t flattened.

    The problem with drawing conclusions from singular results, and not a repeatable process, is that you tend to ascend to even bigger risks, and improperly measure their magnitude. Sooner or later, regardless of probably, your timing will be wrong, or better stated, your luck will out.

    Why don’t you restate your results relative to the overall experience of real estate purchasers at the time you bought in the location you bought.

  176. lostinny says:
    February 17, 2008 at 3:50 pm

    No one has answer for me about COL increase? :(

  177. schabadoo says:
    February 17, 2008 at 4:11 pm

    But they’ll be on there asking thousands?

    You want to find the people who are moving, or bought new stuff already. They often have ‘need to sell by…’ in the post.

    You’ll find them very agreeable.

  179. Bloodbath in Winter 2007 says:
    February 17, 2008 at 4:34 pm

    February 17th, 2008 at 11:35 am

    #89 Blood: I think we’ll be able to get a place like this for under 400k in the next six months.

    If it is listed at 425K now, and you expect to get it for under 400k in 6 months, why not just bid on it now?

    Because we’re in the boat that thinks prices are going to continue to fall. Maybe it’s just us, but we think that despite all the hype about how the market is going to pick up, we’ll only see an uptick at best this summer.

    Reasoning: rates on 30 yr mortgages are not going down fast enough, and i don’t think that magically, the house hunters will have saved 10 or 20% necessary for the downpayment by this summer. I do not have facts to back this up. (It is also unlikely that you have facts to refute this. It is pure speculation.)

    Our guess is that by the fall, when those who haven’t sold realize the summer window has closed … that’s when steals can be had.

    I think the key time to buy will be after summer but before the election. Another pure guess – rates will stay reasonable up until the election, and then in 2009 they will go upward. How far is anybody’s guess.

  180. Bloodbath in Winter 2007 says:
    February 17, 2008 at 4:37 pm

    (duh – should obviously preface this with the fact that i thought the winter of 2007, as my name indicates, would have been the bottom. obviously, it is/was not.)

  181. pretorius says:
    February 17, 2008 at 4:47 pm

    Chicagofinance,

    “Why don’t you restate your results relative to the overall experience of real estate purchasers at the time you bought in the location you bought.”

    Suburban condos and townhouses outperform the housing market at the peak of the real estate cycle and underperform during the downleg of the cycle.

    I knew this when I purchased my first place, a suburban condo. Using home price appreciation in the same town as the benchmark, my condo outperformed by a couple of percentate points.

    But price appreciation alone ignores the true extent to which wealth creation is made possible by owning real estate. That is because real estate is very financeable, an attribute I used to my advantage.

    After I bought the initial condo, I called up a bank and convinced them the place was worth 20% more than it actually was. They give me a HELOC that used a loan-to-value ratio of 97% of this bogus value.

    I used the HELOC proceeds to pay a 10% deposit on a new construction condo that I ultimately flipped for a nice profit.

    By way of this sequence of events, I turned a couple thousand bucks into a nice chunk of $. The IRR was somewhere between 100% and 1,000%.

    Yes, I benefited from the real estate boom. But skill and clever timing played a very big role, and I had the discipline to pull back as the market began to peak.

    “I did something with real estate at 27 years old that was ten times more reckless, and by the grace of G-d I wasn’t flattened.”

    Could you elaborate?

  182. Ann says:
    February 17, 2008 at 4:50 pm

    mike, schbadoo

    I’m thinking the people who post on there have no clue what their stuff is worth either. Good advice on find the ones that need to sell. Sounds like you got a good deal Mike. We’re just looking for decent and functional, we’re open on style. New furniture is so outrageously priced and doesn’t seem to be that well-made anyway.

  183. Ann says:
    February 17, 2008 at 4:51 pm

    Bloodbath

    I agree on your thoughts about after the election.

  184. Ann says:
    February 17, 2008 at 4:55 pm

    181 pret

    Come on, be honest, lots of this housing stuff is luck. Were the people who bought int the mid-nineties geniuses, or were they just at the age and time of life when people buy.

    Was I stupid for not buying in the mid-nineties, or was I still in college?

    I bought when I was 27 and ended up profiting a bit from the bubble, but we had just gotten married and were at the point of our lives.

  185. Outofstater says:
    February 17, 2008 at 4:56 pm

    Interesting report on boomers and wealth – no clue as to how reliable it is:

    http://www.tiburonadvisors.com/
    08.01.18_CW_KeyHighlights.html

  186. pretorius says:
    February 17, 2008 at 5:03 pm

    Ann, yes I concede that some luck was involved. Repeating what I did a couple of years ago wouldn’t be possible in today’s housing and credit markets.

  187. lisoosh says:
    February 17, 2008 at 5:07 pm

    181 – Just felt a little bit of vomit rise up in my mouth…..

    “Yes, I benefited from the real estate boom. But skill and clever timing played a very big role,”

    Yup, vomit.

  188. schabadoo says:
    February 17, 2008 at 5:07 pm

    Any info on mls #2485164?

    Thanks in advance.

  189. DINJ says:
    February 17, 2008 at 5:13 pm

    Went to an open house today with an agent so bored she had her portable DVD player plugged in in the kitchen with a stack of DVDs.

  190. kettle1 says:
    February 17, 2008 at 5:28 pm

    Analyze This:
    Hoaxer Haunts
    Earnings Calls

    from WSj

    Some big companies have had a surprise during their earnings conference calls this quarter — and it has nothing to do with the weak economy.

    At least seven times just the past three weeks, a mystery caller has cleverly insinuated himself into the normally well-manicured ritual of the quarterly calls. As top executives of publicly traded companies respond to securities analysts’ questions about their balance sheets, he impersonates a well-known analyst to get called upon. Then, usually declaring himself to be “Joe Herrick of Gutterman Research,” he launches into his own version of analyst-speak.

    http://tinyurl.com/ywlob2

  191. kettle1 says:
    February 17, 2008 at 5:30 pm

    dont worry, citi is a solid bank no funny money here

    Citigroup has barred investors in one of its hedge funds from withdrawing their money, and a new leveraged fund lost 52 percent in its first three months, the Wall Street Journal reported Friday.

    The largest U.S. bank suspended redemptions in CSO Partners, a fund specializing in corporate debt, after investors tried to pull more than 30 percent of its roughly $500 million of assets, the newspaper said. Citigroup injected $100 million to stabilize the fund, which lost 10.9 percent last year, the newspaper said.

  192. pretorius says:
    February 17, 2008 at 5:31 pm

    Lisoosh,

    I didn’t mean to cause that reaction.

    But I spend weekend after weekend scouting out investment opportunities in Hudson County waterfront neighborhoods. Completing a supply and demand analysis of a submarket, finding a deal there with an attractive valuation, lining up financing, finding a buyer willing to buy a place from a flipper when the place doesn’t actually exist yet, and organizing two closings takes a little bit of effort.

  193. lisoosh says:
    February 17, 2008 at 5:49 pm

    Pret – What you are describing, especially this part:

    “lining up financing, finding a buyer willing to buy a place from a flipper when the place doesn’t actually exist yet, and organizing two closings”

    was being done by ex-shoe salesmen every day of the week in Florida. And they were making money too.

    Do it regularly today, or in a years time and I will be truly impressed.

  194. chicagofinance says:
    February 17, 2008 at 6:26 pm

    pretorius Says:
    February 17th, 2008 at 4:47 pm
    “I did something with real estate at 27 years old that was ten times more reckless, and by the grace of G-d I wasn’t flattened.”
    Could you elaborate?

    pret: I had just graduated from Chicago, and I was obsessed with maximizing the relo package that was given to me by my then employer. As a result, in addition to having all my closing costs paid, I had 1.5 points used to pay down my mortgage.

    Anyway, I wanted to buy a condo in Hoboken in 1998, but I had $80,000 in school debt on my head, and nothing behind it. I wanted to move in with my girlfriend to save money, but no one in both sides of the family would allow it unless we were engaged. As a result, I put $10,000 on a credit card and bought an engagement ring. So I am sitting with 90K debt and nothing else. I my relo was going to expire by June 1998.

    So I got creative.

    I got engaged, but legally and financially there was no link between us. My wife had a 403(b) with about $15,000 in it, but she wasn’t working because she was finishing her M.Ed., teaching as an unpaid intern, and getting certified to teach in NJ.

    Anyway, she had no savings and about $50K of debt on her head. I decided the only way to make sure we could keep the cash flow under control was to reduce all of the interest rates on our debt.

    I went through and found all the best teaser rates out there, and transferred the entire $140K in debt on credit cards in HER NAME ONLY. Back then there were no 0%, so it was a hodgepodge of 3.99 – 5.99%.

    Then I emptied out her 401(K) and put the proceeds in my bank account. She paid the 10% penalty, but she paid no other taxes that year because she had virtually no income.

    I let everything sit for 90 days, and then I went to mortgage brokers and banks to find the best deal.

    Back then the “piggy back” was just invented, so I took a 80% 30YF LTV with a 3M LIBOR 10% Piggyback.

    We spent the next 4 years doing a britzkrieg, while I played credit card roulette….we also paid entirely for our own wedding and also performed a complete gut reno on the condo………

    Was I smart? NO WAY……I was the most stupid f—ing idiot alive that deserved to be scr-ewed. Only my persistence and shrewdness, along with investing prowess and DINK status allow us to triumph between 1998-2002…..remember, I got whacked by a dot-com in 2001………

  195. Vince says:
    February 17, 2008 at 6:31 pm

    I have been a regular reader of the posts on this site. I will give my 2c and like to know what others think about it.
    As long as the price of crude is high, the problems in the US economy will persist and continue to worsen. Inspite of the Fed downplaying the inflation numbers, influential Ben will not be able to ignore the numbers for long and will have to start raising fed rates. This will see the further weakness in housing.

  196. ReadyToBuy says:
    February 17, 2008 at 6:52 pm

    Vince –

    The fed will ignore the numbers for as long as they can. And Pols will rally to bailout speculators. In short, they will do whatever they can to inflate prices.

    But you’re right… Eventually, this will catch up to them. I’m just hoping sooner than later. I really want to buy a house soon.

  197. lisoosh says:
    February 17, 2008 at 6:56 pm

    Clot –

    Was taking a long peruse of the MLS in Som/Hunt. The sheer volume of houses out there at $600+ and $800+ and even $1mil and up is unbelievable.

    Is there are a market at all for this volume? For even a reasonable portion of it? Are these people who hear “subprime” and think that none of this applies to them? Or is this the top of an avalanche?

  198. Clotpoll says:
    February 17, 2008 at 6:57 pm

    pret (152)-

    Craigslist is a forum for losers, selling to losers.

    Sounds like that’s exactly where you need to be.

  199. lisoosh says:
    February 17, 2008 at 6:58 pm

    On another note;

    For those who like contemporary architecture, thought this house in Bridgewater was interesting:
    MLS # 2441945
    Not a fan of high great rooms but liked the front aspect of the house. Would make a great museum.

    And would any realtor have the backstory on this house in Somerville:
    MLS# 2447812

    Just curious. It looks like a house with a story.

  200. Clotpoll says:
    February 17, 2008 at 7:00 pm

    soosh (197)-

    The avalanche is about to begin. There’s no market- anywhere- for the sheer volume of this stuff.

    The next leg down is for 2004 prices on this stuff to become 2002-03 prices. Sit tight for a few more months, and you’ll be well-rewarded.

    BTW, Somerset Co lis pendens are being posted daily now. It’s all I can do to keep up with them.

  201. Clotpoll says:
    February 17, 2008 at 7:06 pm

    soosh (199)-

    The Bridgewater listing is on Mountain Top Rd. Not impressive; it’s a gloomy house on a choppy stretch of overpriced road. It wasn’t so long ago that all that stuff was 400K. We’ll be there again.

    The Somerville thing is on Mountain Av. They’ve been trying to sell it for years. A veritable POS. Just a big grossout.

  202. Clotpoll says:
    February 17, 2008 at 7:09 pm

    Bath (179)-

    Just admit it: you’re a market-timer, trying to catch the bottom.

    If you don’t catch the bottom, you’ll still continue trolling banks and looking for the best CD rates. You’ll be doing it when you’re 78 years old.

  203. Clotpoll says:
    February 17, 2008 at 7:13 pm

    Ann (184)-

    It’s not really about luck; it’s just that we need to be reminded every ten years or so that the only reason to buy a home is because one needs a place to live. Bear or bull…when the primary concern becomes making- or saving- $$$ on it as an investment, the buyer is as good as done.

  204. lisoosh says:
    February 17, 2008 at 7:14 pm

    #201 Clot – Thanks. Guess the Bridgewater house just photographs well, looked interesting.
    The Somerville house looks like some old institution. Thought it might have some “story”. Just a regular POS? Oh well.

  205. Clotpoll says:
    February 17, 2008 at 7:16 pm

    soosh (187)-

    I upchuck into my mouth at least once a day. And, it usually isn’t caused by anything I read here.

    If it makes you feel any better, my gut feeling is that Pret is this board’s odds-on-favorite for the person who ends up living out of a grocery cart. He is nothing less than a modern-day Pangloss.

  206. Clotpoll says:
    February 17, 2008 at 7:20 pm

    pret (192)-

    ..and, a fertile imagination.

    Piece of advice: when you start living in your car, don’t sleep in the back seat.

    It feels more comfortable at first, but you get better back support by fully reclining the driver seat. It’s also safer.

  207. Confused In NJ says:
    February 17, 2008 at 7:21 pm

    “Safe” NJ Bond Market Trouble

    http://www.nj.com/news/ledger/index.ssf?/base/news-13/1203226574272060.xml&coll=1

    Guess Corzine likes “Swaps”.

  208. Stu says:
    February 17, 2008 at 7:32 pm

    “Ann Says:
    February 17th, 2008 at 9:51 am

    I don’t know anyone my age who bought a house without help on the downpayment from their parents.”

    My wife and I bought our multi family with 20% down and no debt to our name nor help from our folks. Didn’t have to raid our 401Ks or IRAs either. How? 10+ years of renting each (both of us had a minimum of 1 roommate and I often shared with 3 others. At one point, I rented a basement in Clifton (which was illegal to sleep in) for $200/month.

    It really helps to be frugal and commit to saving every dime. It also helped to get out of the techs within 20% of the top.

    I’m still driving my first car, my 95 civic hatchback. Need I say more?

  209. Bloodbath in Winter 2007 says:
    February 17, 2008 at 7:38 pm

    Clot – Sad, you’re right. Probably trying too hard to time the market, but with no end in sight, who can think we’re close?

    As for chasing the rates … that’s only the case now because of how much we have saved (all for the house). Once we use that, we’ll just have a small chunk for emergencies, and wont bother hopping around.

    Your latest thoughts on mortgage rates? up? down?

  210. Bloodbath in Winter 2007 says:
    February 17, 2008 at 7:49 pm

    just wanted to tip the hat to grim – wife and i started reading BLACK SWAN (per JB’s recommendation) and it’s outstanding.

  211. Ann says:
    February 17, 2008 at 7:59 pm

    208, Stu, that’s great. My only point was in response to Shore, that I literally don’t know anyone my age who bought a house without some sort of help on the DP from the parents.

    I’m ultra frugal BTW, and the only way my dad had the money to give us was by being ultra frugal.

  212. grim says:
    February 17, 2008 at 8:15 pm

    Northern Rock goes National…

  213. Secondary Market says:
    February 17, 2008 at 8:22 pm

    i would love some dp help. unfortunately my parents don’t have it and the in-laws are too cheap to hand out money. plus i paid for my own wedding and learned the extreme frugalness (is that word) of our family.

  214. pretorius says:
    February 17, 2008 at 9:06 pm

    Clotpoll,

    I don’t own a car. The only real estate I currently own is my primary residence which is financed conservatively. My home makes up a minority of my assets.

    Chicagofinance,

    Thanks for sharing the details. Why aren’t you still hustling like that?

    I remember what it was like to have a negative net worth. It sucked at the time, but getting the right education in this country is one of the most accretive investments a person can make.

  215. Sean says:
    February 17, 2008 at 9:14 pm

    Apologies if this was already posted, but it is definetly worth a read again.

    By Eliot Spitzer
    Thursday, February 14, 2008; Page A25

    Predatory Lenders’ Partner in Crime
    How the Bush Administration Stopped the States From Stepping In to Help Consumers

    everal years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers’ ability to repay, making loans with deceptive “teaser” rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

    Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

    Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices.

    What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

    Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

    Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

    In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government’s actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

    But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

    Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

    When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

    The writer is governor of New York.

    http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html?nav=rss_opinion/columns

  216. spam spam bacon spam says:
    February 17, 2008 at 9:23 pm

    Do you need “it”?

    I find many people forget what they want long term and satisfy their immediate needs, first. They end up with no savings towards buying something that takes time to save for.

    You gotta have rules…

    1. If an item we want/need costs $100.00 or more, we need to compare it in three different places before we buy…prevents overpaying from impulsiveness and also prevents impulsiveness. (We’ve since raised our limit to $500 as we have more disposal income, but you should still set your limit even if you’re a millionaire…)

    2. Take just enough cash into the store to buy the item you are going in for. Leave the credit cards in the car.

    3. Do not buy something when you see it for the first time. If you see something you didn’t know existed and think you cannot live without it, you must wait 5 days before purchasing it. Chances are, you won’t go back. If you do, well then, you earned it :)

    4. When you see something you want, REMIND yourself that you are saving for something bigger. Clip out a picture of your dream home, a college degree, a bank statement with a million dollar balance, or whatever, and put it on your fridge. You don’t need to carry it around with you, but if you can VISUALIZE “it”, when you see something you’d like to buy, by having a picture you can quiickly close your eyes and remember what your bigger goal “looks like”; this momentary pause is usually just long enough to realize you are probably making an impulse purchase.

    5. Realize newer or bigger isn’t always better. If it’s broken, not working or otherwise in a mode of failure, then by all means replace it. But if something works well, or supplies good service in general, think about WHY you’d like to replace “it” with the newer/bigger one…if they are not REAL reasons, then think about the resources wasted by buying the bigger/newer thing. Just that thought alone caused me to replace a failed control panel for my 5 yr old dishwasher ($180.00) versus buying a whole new dishwasher; (the repaired dishwasher would have ended up in a landfill and I would have consumed [wasted] the resources used to manufacture the new one…)

    As far as bigger houses like mcmansions, my mother always said, “Who the heII wants to clean it or heat it”?

    Just some thoughts from someone who saved their downpayment by themselves…

  217. Clotpoll says:
    February 17, 2008 at 9:29 pm

    bath (209)-

    Rates don’t matter anymore. I think they will stay in a very narrow +/- range from where they are now. We’re at a historic low, and we’ll be there for a while. Digest this fact, and get past what the f-ing rate is. For the next few years…for you…the rate is going to be great. It certainly shouldn’t be the reason you decide NOT to buy.

    The big thing is, banks don’t want to lend anymore. If you have a big downpayment saved and have good credit, you’ll be the exception. Your solvency and creditworthiness will compel your lender to make that loan to you.

    Buying a home is not going to be your biggest challenge. Your biggest challenge will be learning how to give yourself permission to undertake reasonable risks to achieve a better return on the money you don’t put to work in your housing purchase.

    While you are younger and at the height of your earning potential, you simply cannot pursue the investment strategy of an 80-year-old. It is no more and no less than a future loss brought forward.

  218. Clotpoll says:
    February 17, 2008 at 9:37 pm

    sean (215)-

    So much for the Republican Party being the upholder of states’ rights.

  219. Clotpoll says:
    February 17, 2008 at 9:58 pm

    grim (212)-

    Does this mean the Union Jack will replace the Northern Rock logo on Newcastle’s jerseys? God, I hope so. Even bringing back Keegan can’t keep us from sucking eggs. I’m sick and f-ing tired of looking at that pink splotch of failure on my team’s kit, game after painful game. Put the damn Newcastle Ale logo back on, put a peace sign on…but for God’s sake, get the logo of the only lender ever to be even more messed up than Countryslide off my damn team’s shirts:

    “The U.K. government announced Sunday it will nationalize troubled mortgage lender Northern Rock, according to published media reports.

    Finance Minister Alistair Darling told a news conference that the government would take over the bank temporarily because offers from the private sector were not in taxpayers’ best interests, Reuters reported.

    “In the current market conditions we do not believe the two proposals deliver sufficient value for money for the taxpayer,” Reuters quoted Darling as saying. “So the government has decided to bring forward legislation to bring Northern Rock into a temporary period of public ownership.”

    The finance minister was referring to competing takeover offers, one from a consortium led by billionaire Richard Branson’s Virgin Group, and one led by the bank’s management. Government officials had told both groups last week they needed to sweeten their bids, Reuters added.

    Northern Rock was a prominent casualty of last summer’s credit crisis, which was triggered by the subprime meltdown in the U.S. After the bank found itself unable to finance its money market operations, depositors swarmed its branches demanding withdrawals. In September, The Bank of England was forced to bail out the company.”

  220. Stu says:
    February 17, 2008 at 10:08 pm

    spambaconspam,

    I always calculate what something will cost me per day to own.

    When you start to do the math, you realize that if you don’t commute to work via your own automobile, that you are betting off renting a car each weekend for example.

    Or spend $10 on lunch each day and $5 on breakfast. That’s $75 per week, or $300 month. I’d rather invest $300/month.

    Another good one is the cost of eating dinner out twice a week. That works out to about $80 per week or $320 per month.

    And for those carrying credit card balances, calculate what you end up paying in interest on every purchase. It’s maddening.

  221. Lincoln78 says:
    February 17, 2008 at 10:15 pm

    So if everyone is scrounging for the “best” CD rates and only finding ones in the 3-4% range, what is the drawback in investing in Everbank WorldCurrency (foreign) CDs, which are FDIC insured for the bank failing.

    I can understand the exchange rate fluctuation risk, but these rates are significantly above what you’ll see at a standard US bank (e.g. ING).

    Could someone help me understand if i’m missing something?

  222. John says:
    February 17, 2008 at 10:20 pm

    Interesting – do they still need their women on wall street diversity program?

    I mean the women can now become men.

    Also can I change back, or is this a one way trip? Does GS onlly pay for one sex change per employee, what if I am fickle?

    Finished my taxes yesterday and this country is insane. Had a third kid in 2007 which threw me into AMT along with the fact my interest income shot up in 2007 from bonds and CDs that rolled from lower rates in 2005 and I was forced to sell a stock due to a cash merger. Ok so I can easily afford the third kid and for having her I am being punished, lets see if I was some subprime stockton bum I would be getting govt checks pretty soon, instead AMT wacked me for an extra 10K. So I guess while I wait to trade up I will roll all my money into tax free state bonds and tax friendly mutual funds and growth stocks with lower dividend payments. If anyone has any good tips on investing strategies that keeps an eye out to avoid taxes would love to hear it.

    Shore Guy Says:
    February 17th, 2008 at 12:04 pm
    “Unusual perks: Goldman Sachs covers sex changes”

    Is that so that people who made bad calls can still work on the Street without being noticed?

  223. Stu says:
    February 17, 2008 at 10:22 pm

    Ummm. 3-4%? Why bother? You could do a corporate bond fund and get 5-6%. I would suggest muni’s, but they’re getting scary.

  224. Stu says:
    February 17, 2008 at 10:25 pm

    John,

    Welcome to my nightmare. (AMT)

  225. Everything's 'boken says:
    February 17, 2008 at 10:29 pm

    #217
    ‘The big thing is, banks don’t want to lend anymore.’

    On odd position for ones whose primary business is loaning money.

  226. Stu says:
    February 17, 2008 at 10:42 pm

    Banks want to lend and ‘need’ to lend to stay in business. Even if they are paying only 3% on CD’s and savings accounts, they still need to cover their overhead as well. Raising the interest rates on loans would only make it more difficult for them to stay in business.

    Clot is correct, the smart guy wins over the next few years. For those who didn’t feel the need to compete with their consumerist buddies over the last 10 years, their about to have their day in the sun. Those reading this blog on a 30″ flat screen monitor? Well enjoy the high resolution. It will make it easier to read the fine print on the foreclosure notice.

  227. John says:
    February 17, 2008 at 10:49 pm

    stu any tips

    ANZ Bank Drops as Smith Says Credit `Bloodbath’ Will Cut Profit

    By Stuart Kelly

    Feb. 18 (Bloomberg) — Australia & New Zealand Banking Group Ltd. fell to a 2 1/2-year low in Sydney trading after Chief Executive Officer Michael Smith said the “bloodbath” in debt markets will erase profit growth this year.

    Provisions including $200 million on derivatives linked to U.S. debt insurer ACA Capital Holdings Inc. will “offset” forecast profit growth of 11.5 percent in the year ending Sept. 30, the Melbourne-based bank said today.

    The upheaval in global debt markets “is a financial services bloodbath,” said Smith, who joined ANZ from HSBC Holdings Plc last year, at a briefing. “Credit costs are going up, well above underlying earnings growth.”

  228. R Patrick says:
    February 17, 2008 at 10:57 pm

    CLot,

    Usually I have a lot of respect for what you write but Craigslist is a great place to buy and sell stuff. Maybe not houses but kitchenwares ect.

  229. jmacdaddio says:
    February 17, 2008 at 11:22 pm

    I was the first one to show up at an open house in Quailbrook in Franklin Twp. The realtor was on the phone for personal reasons when my knock at the door startled her.

    Quailbrook condos and townhomes are pretty nice, but there’s tons on the market. This realtor showed me at least 10 which were up for sale – some cul de sacs seem to have every other unit for sale. She mentioned at least three which were in various stages of foreclosure. And once I seemed to like the property (good location, move-in ready) then she tried to get me to think that “another buyer” was “interested”.

  230. Jim says:
    February 17, 2008 at 11:47 pm

    “Our guess is that by the fall, when those who haven’t sold realize the summer window has closed … that’s when steals can be had.”

    I thought you said that this winter is when there will be good deals? Aren’t you buying in PA since you got priced out of Beregen County? What happened to that brilliant strategy of yours of buying a foreclosure when all those ARMs reset?

  231. Clotpoll says:
    February 18, 2008 at 7:54 am

    patrick (228)-

    My bad. My statement was meant to be in reference to only the real estate section of Craigslist. The rest of it is pretty cool.

  232. Clotpoll says:
    February 18, 2008 at 7:55 am

    mackdaddy (229)-

    There are foreclosures galore in Quailbrook.

  233. chicagofinance says:
    February 18, 2008 at 8:20 am

    John Says:
    February 17th, 2008 at 10:20 pm
    If anyone has any good tips on investing strategies that keeps an eye out to avoid taxes would love to hear it.

    closed-end muni bond funds…although you pay cap gains on appreciation…

    BTW – I love the AMT…simplicity…it should be the default tax system

  234. AMS in NJ says:
    February 18, 2008 at 6:32 pm

    Post #100. That may have been an agent out of my office; I’m hoping not as I’d be embarrassed.

    Post 160. You’re correct; although there’s a # of pharma companies sustaining an influx of relos, the outbound contingency is so much higher.

    Post 135: Dinra, I just closed a deal this past december, 2BR 2.1 BA Berkshire Hills. The range is anywhere from $375K to $400K. That segment took a nice hit. In June 2008, the average sale price was $417K. For some reason the smaller units are faring better (2 BR, 1.1 BA, no basement) holding at around $320K.

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