From Bloomberg:
IMF Cuts Global Forecast on Worst Crisis Since 1930s
The International Monetary Fund cut its forecast for global growth this year and said there’s a 25 percent chance of a world recession, citing the worst financial crisis in the U.S. since the Great Depression.
The world economy will expand 3.7 percent in 2008, the slowest pace since 2002, according to a document titled “IMF Background Paper on the Update of the Global and Regional Outlook” obtained by Bloomberg News at a meeting of Southeast Asian deputy finance ministers and central bankers in Da Nang, Vietnam. In January the fund projected growth of 4.1 percent.
It’s the third time the Washington-based institution has cut its forecast for 2008 after downplaying the threat of a U.S. credit squeeze to the world economy last July, when it predicted a 5.2 percent expansion this year. Central banks will need to conduct policy “as flexibly” as the circumstances warrant, the statement said, adding that the European Central Bank has room to lower borrowing costs.
“The financial shock that originated in the U.S. subprime mortgage market in August 2007 has spread quickly, and in unanticipated ways, to inflict extensive damage on markets and institutions at the core of the financial system,” the statement said. “The global expansion is losing momentum in the face of what has become the largest financial crisis in the United States since the Great Depression.”
The IMF gave a 25 percent chance that global growth will drop to 3 percent or less in 2008 and 2009, a pace the fund described as equivalent to a world recession.
From Bloomberg:
New Jersey Farmers Rally to Save Agency From Corzine Budget Ax
Memo to Governor Jon Corzine: It still says “Garden State” on the license plates.
About 500 farmers and supporters yesterday paraded tractors and horses through the streets of Trenton, the state capital, to protest Corzine’s plan to eliminate New Jersey’s agriculture department. The governor says the move is necessary to cut costs. Farmers say the savings is a pittance and flouts the state’s heritage.
“Who’s going to keep the garden in the Garden State?” said protester Frank Carrajat, 28, who farms hay on 400 acres (162 hectares) in Mendham, about 30 miles west of New York City. “The ramifications of losing the department would be huge if it were to happen, for agriculture and for everybody else.”
Corzine, 61, who grew up on a family farm in Willey’s Station, Illinois, proposed the move as part of $2.7 billion in spending cuts to help close a budget deficit. He would shutter agriculture and two other agencies, personnel and commerce, to save $2.5 million.
The first-term Democrat and former Goldman, Sachs & Co. chairman also wants to eliminate at least 3,000 state jobs, scale back property-tax rebates and cut aid to towns, hospitals and colleges.
…
New Jersey is the most densely populated U.S. state, more often associated with crowded cities and clogged highways than fields and farms. Yet agriculture is one of the state’s largest industries, with 9,900 farms and related food businesses generating $82 billion a year for its economy, equivalent to about 18 percent of gross state product.
The state is one of the country’s top 10 producers of cranberries, blueberries, peaches, peppers and tomatoes, according to the farm agency. New Jersey has more horses per square mile than any other state.
From DealBook:
Wall Street-Bound Graduates Watch, Wait and Worry
AT business schools, nail-biting has become a career strategy.
As the turmoil on Wall Street continues, M.B.A. students are nervously watching and waiting, hopeful that the jobs they found last fall will still be there a few months from now.
“Positive thinking, positive thinking, that’s what I tell myself,” said Matt Fink, 25, in his first year at Columbia Business School and a summer intern-to-be at a major bank. “You hear Bank of America, Citigroup, Merrill, Lehman, Bear. Every day, one of them is the lead story in the news. And that’s where many of us have jobs. You just have to hope for the best.”
Since June, Wall Street banks have disclosed more than 30,000 job cuts, and more are expected. It is unclear whether these cuts will include the thousands of students that firms have already hired from colleges and business schools. The anxiety increased last month when Bear Stearns collapsed, prompting scores of students on spring break to call their career offices to check on the status of their jobs.
From the Wall Street Journal:
Fannie Mae Tightens
Rules For Mortgages
By JAMES R. HAGERTY
April 2, 2008; Page A3
Fannie Mae announced a new round of tightening in its standards for home mortgages it buys or guarantees.
The government-sponsored provider of funding for home loans told lenders Monday it will require a minimum credit score of 580 for most loans it buys on an individual basis. Credit scores, which range from 300 to 850, are designed to measure borrowers’ likelihood of repaying loans. In the past, Fannie had no minimum score. The company said it will still acquire loans with lower credit scores in certain circumstances.
Among other changes announced to lenders, Fannie also said it will increase the period needed for borrowers to “re-establish” their credit history after a foreclosure to five years from four years. Fannie said it would allow shorter recovery periods for borrowers with “documented extenuating circumstances” that caused the foreclosure.
Separately, Fannie last week told loan servicers — companies that collect loan payments — that they can increase their forbearance period on delinquent borrowers to as much as six months from four months to allow more time to seek alternatives to foreclosure. Fannie hopes that move will reduce the number of loans on which it needs to recognize losses, though it may be only delaying the pain in some cases.
In response to growing default-related losses, Fannie and its main rival, Freddie Mac, have tightened their loan standards and added fees for riskier types of loans in a series of steps announced over the past few months. Those moves have raised costs for borrowers and drawn protests from some politicians and home builders.
From the WSJ:
Housing Slump — in New York ?
Manhattan Loses
Bulletproof Luster
As Home Sales Fall
By MICHAEL CORKERY
April 2, 2008; Page C15
Long insulated from the gale-force winds buffeting most U.S. housing markets, the New York City market is showing signs of softening just as Wall Street layoffs could put a further damper on demand.
Manhattan has been one of the hottest housing markets in the country, with prices of many homes more than doubling since 2003. But real-estate agents agree that tightening lending standards and eroding consumer confidence — which have crippled housing markets across the country — are starting to slow the New York City juggernaut.
“I don’t know anyone in the industry who can say that their business was the same as it was last year,” says Doug Heddings, a senior vice president at Prudential Douglas Elliman, who runs a sales team in Manhattan.
Just how much of a slowdown, though, is a matter of debate. Sales volume of condos and cooperatives in Manhattan dropped 34%, to 2,282 units, in the first quarter from a year ago, an unusually sharp decline, according to Miller Samuel Inc., an appraisal-and-research firm that tracks New York real estate. But a separate report issued Wednesday by Halstead Property LLC, a Manhattan-based real-estate firm, showed a 1% decline in sales in Manhattan when compared with a year ago.
Unlike many cities, New York doesn’t have a multiple-listing service for homes, which can complicate efforts to calculate sales information. Analysts often use data from individual companies in the industry, which can at times show discrepancies.
…
But slowing sales volume, not lower prices, can be an early sign of a weakening market. Meanwhile, many brokers agree that the number of homes for sale is rising and buyers are becoming more tepid. “We are not looking at a robust real-estate economy going forward,” says Jonathan Miller, president of Miller Samuel Real Estate Appraisers.
Mr. Heddings, of Prudential Douglas Elliman, says buyers have been backing away from sales across the city, from the Upper West and East Sides to Lower Manhattan. “People are nervous,” he says. “More and more people are backing away at the 11th hour, just before signing a contract.”
Signs of waning sales come as New York’s economy prepares for a wave of job losses on Wall Street. But real-estate agents say it could be six months to a year before the housing market feels the brunt of Wall Street job cuts.
…
Another cause for concern is the number of condominiums being built amid the slowing market. This year, developers are expected to complete 10,200 condos, more than double the 4,100 that were built in 2006, according to REIS Inc., a real-estate research firm.
Agents aren’t anticipating the sharp drops in prices that hammered New York real estate during the Wall Street collapse in the late 1980s and early 1990s, when about 100,000 people lost their jobs, according to Moody’s Economy.com. The research firm estimates about 33,000 people will lose their jobs amid the current financial stress.
From the WSJ:
Mortgage Securities Back
Fed Loan to Bear Stearns
By GREG IP and GREG HITT
April 2, 2008; Page C2
The securities backing a $29 billion Federal Reserve loan to Bear Stearns Cos. consist primarily of “mortgage-backed securities and related hedge investments,” the Treasury Department said.
The disclosure, in a letter to the Senate Finance Committee staff, is the first official comment on the securities behind the controversial loan, made March 16 to facilitate J.P. Morgan Chase & Co.’s takeover of Bear. The Fed made the loan with the Treasury’s approval, fearing Bear would otherwise fail, causing a serious disruption in financial markets.
Based on the makeup of Bear’s balance sheet, outsiders have surmised that the securities consisted of residential and commercial mortgage-backed securities. The Fed has declined to provide any underlying detail so far. It has retained money manager and adviser BlackRock Inc. to manage an independent entity that will hold the securities.
The Fed will lend $29 billion to the entity, and J.P. Morgan will lend $1 billion. Under the deal’s terms, the Fed will be repaid first from proceeds of the sale or maturity of the securities, and J.P. Morgan will be paid last, so it will bear the first $1 billion of losses.
Because any profit or loss would affect the annual surplus the Fed remits to the Treasury from interest on its $800 billion portfolio of securities and loans, either ultimately would be borne by taxpayers.
From the Record:
Corzine may sue to stop Bloomberg
Governor Corzine is considering a lawsuit to oppose New York City’s plan to charge motorists who enter Manhattan’s busiest zone.
The New York City Council approved a plan Monday that would charge an $8 fee for anyone driving below 60th Street.
Corzine said in a statement Tuesday that the city’s congestion-pricing plan – which is still subject to approval by New York State Legislature – is unfair to New Jersey motorists. A lawsuit against New York could be filed if the plan moves forward as is, he said.
“I will only support a congestion-pricing plan that is fair to New Jersey commuters, and this plan is not,” the governor said in the statement issued by his staff.
In a statement, a spokesman for New York Mayor Michael Bloomberg said Corzine seems to be using a double-standard.
“We don’t understand why it’s okay for the New Jersey Governor to hike tolls on New York cars on the Turnpike and Parkway to balance his State’s budget, but New York can’t raise revenue dedicated expressly for mass transit improvements for commuters across the region,” said John Gallagher, without mentioning those higher tolls are still just a proposal.
“That seems to be a double standard, and we’re certain that our plan is not only fair and equitable, but also that it will withstand any legal challenges he brings,” he said.
From MarketWatch:
Mortgage applications volume down as refis drop
The volume of mortgage applications filed decreased last week, down a seasonally adjusted 28.7% compared with the previous week, the Mortgage Bankers Association said Wednesday.
Applications for loans to purchase homes and to refinance existing mortgages were up an unadjusted 4.8% for the week ended March 28, compared with the same week in 2007.
Mortgages to purchase homes dropped a seasonally adjusted 11.8% last week, compared with the previous week.
Refinancing applications took a 38.1% dive on a week-to-week basis, according to the MBA’s latest survey. In the week ended March 21, applications surged in response to lower interest rates.
From MarketWatch:
IMF to further cut world growth forecasts: reports
The International Monetary Fund now expects the U.S. economy to grow by only 0.5% in 2008, while European growth is set to slow to 1.3%, news reports said, citing leaked documents. The IMF is scheduled this month to release the latest version of its twice-yearly World Economic Outlook. The IMF in January had trimmed its 2008 U.S. forecast to 1.5% and projected European growth of 1.6%. The IMF now sees world growth of around 3.7% in 2008, down from its previous forecast of 4.1% and the slowest pace since 2002, Bloomberg reported, citing a document obtained at a meeting of Southeast Asian finance officials. The IMF sees a 25% chance world growth will slip to 3%, meeting the criteria for a world recession, in 2008 or 2009, the report said.
From Forbes:
A Subprime Schooling
Add another group to those feeling the impact of the U.S. subprime mortgage meltdown: students and educators.
According to the National Center for Education Statistics, 28% of funding for America’s public schools comes from local property tax. Property tax revenues, which in many areas of the country had grown along with property values, are poised to remain flat or even shrink in coming years.
“Homeowners that were in this crisis felt it first. It became a problem for the city when we saw our homes vacant,” says Douglas Palmer, the mayor of Trenton, N.J. “When Wall Street started feeling it, it became a problem for the federal government. This cycle now is coming for the school budgets.”
As city and school officials across the country draw up budgets for the next school year, they’re facing less money than desired and, in some cases, pressure to cut taxes.
Like many states, New Jersey has a property tax equalization program, which transfers funds from wealthy suburbs to poorer cities, meaning a foreclosure in the suburbs trickles down to Trenton.
Palmer describes the cycle in his city: Loss of tax revenue from foreclosed homes; foreclosures in a neighborhood bringing down property values; loss of tax from these lower values when properties are reassessed.
“You see it all across the country. We haven’t even hit bottom yet,” says Palmer.
From the NY Daily News:
Queens sees biggest jump in city housing foreclosure auctions
The number of city homes on the foreclosure auction block surged dramatically in the first quarter of 2008, a report released Tuesday revealed.
The biggest jump was in Queens, where the number of foreclosure auctions was 90% higher than the last quarter of 2007, according to PropertyShark.com, a real estate Web site.
“While Manhattan foreclosures are almost nonexistent, Queens has single-handedly taken New York City foreclosure levels to new heights,” said PropertyShark’s Ashleigh Rose Clark.
Citywide, foreclosure auctions were set for 918 homes in the first quarter of 2008, a 52% jump over the 606 homes put up for auction in the fourth quarter of 2007.
The city has 3 million households.
“These are the highest quarter levels of foreclosures we have seen in the New York City metro area since we began to track them,” said Clark.
In Queens, the number of foreclosure auctions hovered around 200 throughout 2005 and 2006, rose to around 300 through 2007, and took off this year.
In the past three months, there have been 508 foreclosure auctions in Queens, a dramatic rise over the 268 in the previous quarter.
In comparison, Brooklyn saw the number of foreclosure auctions rise about 40%, from 103 to 140.
…
Staten Island also saw a dramatic spike in foreclosure auctions, where the numbers jumped 411% from the first quarter of 2007 (34) to the first quarter of this year (174).
In the Bronx and Manhattan, the news was not nearly so bad, PropertyShark found.
In the Bronx foreclosure auctions increased marginally to 73 from 72. In Manhattan, where the real estate market remains strong, foreclosure auctions actually dipped 15%, from 27 to 23.
Allendale Comp Killer
2 Kayeton, Allendale NJ
Purchased: 3/19/2004
Purchase Price: $623,000
MLS# 2413199
Sold: 4/1/2008
Sale Price: $600,000
4% under the 2004 purchase price!
Ridgewood Comp Killer
113 Circle Ave, Ridgewood NJ
Purchased: 6/1/2006
Purchase Price: $653,000
MLS# 2440592
Sold: 3/28/2008
Sale Price: $592,500
#11 Where’s castleking?
Grim, do you have any comp killers for Summit, Madison, Chatham?
“It has retained money manager and adviser BlackRock Inc. to manage an independent entity that will hold the securities.”
[5],
You just gotta love this. Now the fed creates its own SIV.
Teaneck Comp Killer
425 Glenwood Ave
Purchased: 1/20/2003
Purchase Price: $169,123
Sold: 3/31/2008
Sale Price: $165,000
2.5% under the 2003 purchase price!
“#11 Where’s castleking?”
bairen,
JB allows him on the site approx once every 6 months. I’m sure they have a good laugh about it, of course with some scotch?
Speaking of Castle King, I hope he is digging deep down when he clicks on the make a donation link. Oh, by the way, it’s located on the top right hand corner of the main page.
“there’s a 25 percent chance of a world recession”
Anyone following the Shanghai Index?
Mendham Comp Killer
21 Pembroke Drive, Mendham NJ
Purchased: 12/15/2006
Purchase Price: $517,500
MLS# 2458741
Sold: 3/31/2008
Sale Price: $475,000
#16 BC Bob
castleking was kind of fun. Much better then my Baghdad Bob who appears occasionally.
Maybe I missed something, but in reading through yesterday’s posts, it occurred to me that no one mentioned the one attribute a long-time professional brings to the table….experience. Aren’t you paying for knowledge? If you have seen it all (or something like it) before, it helps in making informed decisions and not wasting anyone’s time. That goes for teaching a child to read or closing a deal on a house.
Time is the double-edged sword. Over time, if you are inept at what you do, you earn a horrible reputation or you are culled from your chosen field of work….. experience – time on task matters. Ideally, the big bucks go to those who have honed their craft.
ADP up 8k
BC Bob(18)
“Anyone following the Shanghai Index?”
http://bp2.blogger.com/_pMscxxELHEg/R_EoldDCIfI/AAAAAAAABx4/dIZD7rMOfsY/s1600-h/Shanghai.jpg
About 40% off from its high. Not pretty.
From the Press of Atlantic City:
FamilyCare fraud: Keep audits coming
You thought this wouldn’t happen? This is New Jersey, where scamming to get something you’re not entitled to is an art form – and one that predates “The Sopranos.”
The Office of the State Auditor revealed Monday that almost 1,000 state residents managed to enroll themselves in NJ FamilyCare – the state/federal program to provide low-cost health coverage to the working poor – despite having incomes well above the income limits for the program.
In three cases, self-employed applicants with annual incomes of $295,000, $186,000 and $177,700 respectively managed to get into the program, which sets an income cap of no more than $74,200 for a family of four. The audit also found 15 FamilyCare members who hid capital gains of $100,000 or more, including three who hid gains of more than $700,000.
The state auditor also looked into the Medicaid program and found the kind of fraud that probably arose on Earth sometime very shortly after Adam and Eve arrived: The state paid a provider $30,000 for 48,000 adult incontinence briefs – and received only 10,000. It paid $8,181 for a wheelchair that should have cost $5,705. And so on … and on … and on …
Any of our resident pharma folks have any information on whether the announced Genta layoffs were in Berkley Heights?
From the Record:
9 state parks may be shut
No swimming at Shepherd Lake in Ringwood this summer. No historic tours of the Steuben House in River Edge. No singing around the campfire at High Point State Park.
Governor Corzine’s plan to close nine state parks and reduce operations at three others threatens to take a lot of fun out of the Summer of 2008 — unless the state Legislature finds a way to plug a $4.5 million funding gap in the state budget.
The plan, announced Tuesday, is scheduled to take effect July 1 with the layoffs of 80 state employees. Corzine says drastic cuts are needed to balance the state budget, but critics see the closures as betraying New Jersey residents, who have spent $2.2 billion over the past decade buying land for preservation.
“This is not something that we choose to do,” Corzine said, adding that budget problems “can only be corrected with tough choices.”
It’s nearly showtime for Bernanke, his show goes off at 9:30 with heat expected on the Fed’s role in Bear’s bailout. Although I doubt Schumer will lay into him, Dodd might.
http://www.nytimes.com/2008/04/02/business/02fed.html
grim:
5.5 commission on a sale ..
Little high right?
re: Fannie and Freddie.
I believe they also killed Zero downpayment option.
Fannie’s latest guide is linked below. There are a bunch of new rules coming on-line starting June 1, 2008.
These new rules should make it allot tougher to get a Fannie or Freddie backed low rate mortgage, eveyone else will be left to the alternative markets, and those interest rates will be brutal.
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0808.pdf
From MarketWatch:
Analysts: Banks could lose $50 bil. on home equity loans
Analysts for Deutsche Bank said Wednesday that they expect six large U.S. brokers and banks to lose as much as $50 billion in the first six months of 2008 because of rising problems related to home equity loans. Analysts slashed estimates for Merrill Lynch, Lehman Bros., Fifth Third Bancorp, National City, KeyCorp and Suntrust Bank accordingly. Deutsche Bank attributed the expected losses to “an acceleration in home price declines, lower indices and possibly newer issues with monolines, such as problems with insurance on home equity securitizations.”
From Bloomberg:
Manhattan Apartment Sales Fall Most in 18 Years as Buyers Wait
Manhattan apartment sales plunged the most in 18 years last quarter as buyers faced the prospect of a recession and job cuts at Wall Street securities firms.
First-quarter sales fell 34 percent from a year earlier and inventory rose 4.6 percent to 6,194 units, New York-based real estate appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The median price of a Manhattan co-operative apartment or condominium increased 13.2 percent to a record $945,000.
“If it continues along this pattern, we’re in a period of transition to a weaker market,” Miller Samuel President Jonathan Miller said in an interview. “You typically see a slowdown in sales activity precede a slowdown in pricing.”
So, to anyone out there waiting to buy because of price, how are you going to know when the time is right, in other words, when the market has hit the bottom or close to the bottom?
Or will there be other factors that play in (personal factors, lease is up, etc.)?
By the way, my motivation in asking this question is just curiosity. As most of you know, I just bought and won’t be moving for a long, long time barring extreme circumstances.
I’m not really surprised at the prospect of a global recession. We are not the only ones who have been gorging on credit for quite a while and the pullback will affect even more countries.
It might be the only thing to cushion the dollar.
Of course SOME nations will benefit. The billion dollar question is which ones?
We plan to make the dive and start looking this Summer. One reason being i believe we are ready and prices have come down in out price range. Secondly is that we’re quite tired of living in my parents basement :)
“If it continues along this pattern, we’re in a period of transition to a weaker market,” Miller Samuel President Jonathan Miller said in an interview. “You typically see a slowdown in sales activity precede a slowdown in pricing.”
[31],
Simply anecdotal.
# 32 Consumer debt is going to be one of the keys, I suspect. It doesn’t matter how much one wants something, if the money is not there fuggedaboutit.
bairen,
Chatham Comp Killer
I’ve been following some sales in Chatham and the dam is leaking. This house was reasonably priced for the current market and sold recently. Don’t have the MLS #.
6 Woods Lane
3/9/06 – $875k
11/27/07 – $850k
#32 – Ann
For me, the rent to own ratio is the primary determining factor on when to buy. As soon, as this ratio comes in line with the historical data, it is time to buy.
So, to anyone out there waiting to buy because of price, how are you going to know when the time is right, in other words, when the market has hit the bottom or close to the bottom?
Despite what the discussion here would lead you to believe, very few here are trying to be market timers, or playing “pick the bottom”.
Instead, the decision to buy is based on affordability and a sense of value. None of my currently active clients care about picking a bottom. In fact, they don’t mind additional price declines after they buy (believe me, I make it abundantly clear to them that they have no chance of catching a bottom). It doesn’t mean they’ll overpay, but they clearly have no intention of purchasing a property that doesn’t represent a good value to them.
A couple of decent developments near me have quite a few houses that appear to be chasing each other down. LISTING prices are around 2004 levels.
Seems some people (realtors? sellers?) are wising up and starting to get serious about meeting the market.
when do the monthly charts come out for sales and inventory? i thought they come out on the first of the month?
Of course if we do start looking and are disgusted we’ll probably end up renting until the time is right.
jlx,
Typically a few days into the new month. Agents are still entering sales data for the prior month.
32
Personally I don’t care too much about hitting the mythical bottom. If I can time it to +/- 6-12 months I’ll be happy. The next house I buy will be one I will be in for the forseeable future.
I’m looking in northern Ocean, southern Monmouth preferably within 10 miles of the shore. Prices are starting to drop and the homes I’m searching for don’t seem to be moving real fast. If I keep 40 or so in my search folder, maybe one per week will go off of the market for whatever reason. 6-8 will drop their price in ridiculously small increments.
I’ll complicate my move further by selling our townhome, some of which I’ll need for a downpayment. The few sold recently in my development are maintaining their prices however, which is obviously good. Throw in a first kid on the way, and I have a busy year ahead of me.
the time to buy would be when inventory gets down to about a 4-5 month supply… i think they say it’s about 10 months or so nationally
Although I do have preliminary March numbers from NJMLS for Bergen County.
The numbers are ugly
Bergen County Sales (NJMLS)
Single Family, Condo, Coop, Townhouse
March 2004 – 708
March 2005 – 702
March 2006 – 644
March 2007 – 658
March 2008 – 417
Down 37% YOY
http://www.nytimes.com/2008/04/02/washington/02housing.html?th&emc=th
Just look at the s**t-eating rictus on McConnell’s and Reid’s faces! That’s probably the same face they make when they service their mistresses…
A bailout is imminent for subprime borrowers and borrowers who couldn’t rough out a budget on the back of an envelope.
I know it’s been said here many times and innumerable ways, but f**k me for borrowing responsibly. I likely wasted thousands of dollars simply by reading a contract and owning up to the terms contained therein.
Sick-making. Just sick-making.
Bergen County Sales (NJMLS)
Single Family, Condo, Coop, Townhouse
YTD 2005 – 1925
YTD 2006 – 1670
YTD 2007 – 1724
YTD 2008 – 1133
Down 34% YOY
From the AP:
Bernanke Warns of Possible Recession
Federal Reserve Chairman Ben Bernanke warned Congress on Wednesday that the economy may shrink over the first half of this year, which would signal the start of a recession. Yet, he didn’t offer assurances of further interest rate cuts.
prepared testimony to Congress’ Joint Economic Committee, Bernanke didn’t use the word recession. But it’s the closest he has come to date to suggesting that possibility, given a trio of crises — housing, credit and financial — that has pummeled the country.
“It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States’s economic health. Under one rule, six straight months of declining GDP, would constitute a recession.
It’s not a recession, it’s just that the GDP will contract slightly over the next 6 months.
This is great news.
46 grim
but ah… if there’s a month over month increase, the nar will exclaim “housing rebound!!” we’ve hit bottom!!
grim (2)-
“Positive thinking, positive thinking, that’s what I tell myself,” said Matt Fink, 25, in his first year at Columbia Business School and a summer intern-to-be at a major bank. “You hear Bank of America, Citigroup, Merrill, Lehman, Bear. Every day, one of them is the lead story in the news. And that’s where many of us have jobs. You just have to hope for the best.”
This is funny. I hadn’t thought about this for a long time, but when I got out of school in 1980, things were so bad that I had no job offers, no prospects, nothing. Hell, there weren’t any jobs to be had. I knew by the end of my 2nd year that my first post-collegiate job would be tending bar…or attempting to dupe my parents into sending me to grad school (snake eyes on that one).
And, indeed, my first job was tending bar. Also made a few bucks playing money game soccer. Didn’t even seem unusual at the time. None of my friends had real jobs, either.
but ah… if there’s a month over month increase, the nar will exclaim “housing rebound!!” we’ve hit bottom!!
They’ve been saying that every month, despite what the numbers are.
Anyone know if 139 Candace Lane in Chatham Township ever sell? I think it was last listed at $859k. It was on the market for a LONG TIME…
135 Candace just came on the market at $949k and I would be following intently to know how far these guys will have to come down to get a sale. They bought on 12/02 for $730k.
18 BC
“Anyone following the Shanghai Index?”
WHEEEEEEEEEEEEEEEE!!!!
53
true dat
39: Not trying to time the bottom, just waiting for a price that seems like a decent value to me (i.e., a price that doesn’t make me feel like a chump). I think there are at least a few like me out there.
And, because this would be a second home in a vacation community (shore), there is a good chance that prices will not recede to my “comfort level.” I am prepared for that eventuality. I’ll just continue renting. No big deal…
Comfort level? I’m eager to see prices fall back to where, if need be, seasonal rental income would more than cover the carrying costs (assuming little or no mortgage debt–I’m an assiduous saver), and am aware that I would just be transferring some of my savings from one low-yield vehicle to another, in this case, a house. So the possibility of zero cost or a modest profit, should my finances suffer a setback, is the goal. Wife and I did the numbers back in 2002, and made them work, at least in pursuit of this modest goal–and rental prices in Ocean County shore towns have inched up since them. So, adjusted for slightly increase income potential, that’s kinda my target.
Yeah, I know: I’m a schmuck. As Morrissey sang, “These are the riches of the poor.”
BC (14)-
As you always say, they can’t tamp more $hit into a backed-up septic.
So what to do? Create a nice, new septic system, for all the fresh-vintage turds.
Just for me, I’m proud to say that my tax dollars are going to Blackrock to pay management fees for what is, frankly, an Enron-style, off-balance sheet shitpile.
# 50 It’s not a recession, it’s just that the GDP will contract slightly over the next 6 months.”
And a company that ends up in the red has not suffered a loss it just encountered a “negative profit event” or maybe “inverse profitability.” The American people must look friggen stupid to the people inside the beltway.
I guess Iraq is not a way but an “absence of peace.”
From MarketWatch:
U.S. economy in ‘very difficult period,’ Bernanke says
The outlook for U.S. growth has worsened since January and the possibility of a recession can’t be ruled out, Federal Reserve Chairman Ben Bernanke said Wednesday. “It not appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke said in testimony prepared for the Joint Economic Committee of Congress. “Clearly, the U.S. economy is going through a very difficult period.” His testimony supports the view that the Fed is not done cutting interest rates. The central bank has lowered its target overnight lending rate to 2.25% from 5.25% last fall, the largest percentage decline on record. Bernanke suggested the central bank is slowing down the pace of its rate cuts. “Much necessary economic and financial adjustment has already taken place, and monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year,” he said. Inflation remains a concern, he noted, and some signs indicate that the public expects prices to continue rising.
Cindy (21)-
Stop making sense.
War even
Clot #52 –
If that became the case again, it might just derail the college machine that exists now, where even the illiterate are pushed into going and the classes are dumbed down to meet their needs.
That gravy train might be over.
Shore,
Kahnian Banana
57
Watch out for summer rental prices this year. Just anectdotal on my part, but walking along the boardwalk in Point Pleasant Easter weekend I saw a lot of summer rentals still available.
From The Big Ben Dictionary:
Mugging: A sudden transfer of wealth from an unexpected donor to an assertive donee.
Here is another in Chatham Borough near me. 4 Sussex Ave. Anyone know if it sold?
It started in the Very high 800’s and as recently as a few months ago it was listed in the very low 800’s. I think people are living there now but I know the home was pulled off MLS a while ago.
32 Ann
“So, to anyone out there waiting to buy because of price, how are you going to know when the time is right, in other words, when the market has hit the bottom or close to the bottom?”
I don’t think I can time the bottom, but because the RE market turns incredibly slowly, unlike, say, the NYSE, I do think I can come close. In any event, I’m not buying now because I will be moving in winter 09/10, and it would therefore be stupid to buy. Beyond that, even if I were staying in NJ for the rest of time, I wouldn’t buy until at least then, because I believe that we are still closer to the top than to the bottom. I base this on what I know of current pricing charts, and what I now of the inverted parabola of previous downturns, on what I know about the state of US financial institutions, and on other aspects of the current US economy that are worse than they’ve been for a long time and are too legion to list for you in one post without pissing everyone off.
All that being said, I’ll be buying in the winter of 09/10, because that’s when I’m moving, and I expect prices in the northeast generally to have fallen at a minimum by another 10% in nominal terms by then.
# 64
Grim,
I don’t know whether it is an absence of sufficient coffee or an absence of sufficient knowledge but that one went right over my head.
38 victorian
That’s as good a metric as any.
Ann – I would say also that I go in large part on instinct, not merely on numbers. Folks who let a computer decide when to invest are the folks who often get us in real trouble (see Of 1987, Crash).
And to add one last point, Ann, I would prefer to miss the bottom late than miss the bottom early (notwithstanding that I would bet heavily that, in buying in the winter of 09/10, I will miss the bottom early).
Lastly, when I buy, I will be buying the house I live in until I retire.
Don’t worry about a bottom. When it turns it won’t V out of the bottom, like commodities/stocks. It will be more like a L. The bottom component of the letter, stretched for a long period of time.
I would rather buy 5 years after the bottom is in than 1 year too early.
Shore,
Economist’s Corner: Is it a duck?
Many economists and politicians have the same aversion to the word recession. In the late-1970s, Alfred Kahn, Jimmy Carter’s chief economic advisor used the ‘r’ word in one of his discussions with the press and was sharply reprimanded by his boss President Carter. In his next meeting with the press, Mr. Kahn acknowledged the error of his ways by promising to never use the word recession. Instead he chose to use the word banana. He concluded his comments to the press by singing the Depression-era tune, “Yes we have no bananas, we have no bananas today.”
What tune is Benny singing this morning?
All of y’all are making a lot of sense today. Cindy, ‘soosh, Jamey, victorian, BC, make, clot, shore, grim.
Aww shoot – I love you guys!
Now – someone send in the clowns.
April usually will see a spike up because the Spring market is open. Only year over year will make it clear as day. They will still say we’ve hit bottom.
what BC says at 73 and 74 most strongly informs my buy-in philosophy.
…And people have the nerve to call me grim?
“A severe recession is going to hit Hoboken”
Hoboken Now was hanging out in our “office” (the downtown Starbucks) last week, where we started chatting with a guy (late 30s). He was there with his newborn son, but he was also talking on the phone and flipping through the paper, looking for work. He’d recently been laid off from his job in risk management at Citibank.
And he doesn’t think he’ll be alone for very long.
“A severe recession is going to hit Hoboken. More people are going getting laid off. Between now and Labor Day, you’re going to see more and more guys lose their jobs on Wall Street.”
He blames the subprime loan crisis and the credit crunch for the impending doom.
“They’ve been giving out loans that aren’t worth anything. These days, companies can make $100 billion but it’s not worth anything. People are getting burned holding onto stocks. Sell everything you have.”
“Half this town works on Wall Street. It’s going to be a bloodbath. You’re going to see lots more Wall Street guys in Starbucks reading the Post. It’ll be good for bar owners, bad for condo owners.”
Nice screen capture from Big Picture..
http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/2008/04/02/sg2008040236655.gif
Ahh, yes, I remember.
soosh (63)-
Wouldn’t be bad at all. In fact (and we’ve discussed this before), recessions are not necessarily bad things. They are sort of the forest fires of the economic realm, burning out the scrub and dry underbrush, so that new growth can eventually occur. Although I wasn’t livin’ large in the early 80s, I have memories of great times with family and friends that I wouldn’t trade for the biggest portfolio on Earth. Sometimes having money is way more stressful than having none at all…especially when one knows the bad times won’t last forever.
I think right now, we could all use a pullback from the mad spending on nothing and- more important- a pullback from the idea that mindless expenditure is both a necessity and a right. Also, when was it decided that an economy with endless growth (and never a recession) is the right of every citizen in the US?
The gubmint’s fear of recession and the junkie-like denial of both its existence and meaning probably mean that it will be far deeper and protracted than necessary. Perhaps the lesson we learn this time around is that denial is way worse than facing the reality.
patient (76)-
Don’t bother, they’re here.
Looking at the current economic decline and the impending presidential election a story about Albert Schweitzer comes to mind. I dont know if it is true, but it makes a point anyway.
Albert was standing with his son looking over a field where people lay dying and the bodies of those who had already died were being burned to stave off disease and he turns to his son and says “someday, son, this will all be yours.”
I wonder if the next president will regret having won.
From MarketWatch:
U.S. factory orders, shipments fall in February
Orders for U.S.-made factory goods dropped for the second month in a row in February, as factory shipments hit their lowest level since September 2006, the Commerce Department reported Wednesday.
Overall factory orders fell by 1.3%, more than expected, after dropping by 2.3% in January.
Shipments, meanwhile, dropped 2.1%, the most since falling 3.8% in September 2006.
Economists surveyed by MarketWatch were expecting factory orders to fall by 0.7% in February.
Orders for durable goods in February were revised to fall by 1.1%. Shipments of those goods also declined, falling by 2.7%, the most since September 2006.
sHORE 59,
Actually you are correct, we are not in a war in Iraq. War can only be declared by congress. Since congress has not declared war on Iraq, that means we are involved in a Police Action. i do not think that we have been involve din a war since korea. Not 100% on that but pretty sure.
Joey (77)-
Except, there was no Spring market in either ’06 or ’07. The two best months- relatively speaking- for sales in ’07 were January and February. Remember, the first subprime casualties were in early February ’07, and the rest of the year was a snowball of write-downs, credit contraction and slowing RE sales.
Only 10 more months to the Super Bowl.
Guys:
Which ones do you think are the best market blogs out there (besides this one, of course :) ) ?
Some of the ones i know – Big Picture, Calculated Risk, Nourini’s blog, Interfluidity.
Most of these are macroeconomic blogs. Any good unvarnished day-to-day market ones?
Jan and Feb 07 actually looked pretty good from a contracts standpoint, but that fizzled out.
Jan and Feb 08, on the other hand, were unremarkable.
If there was any shot at a spring market recovery, it was 07, and it never materialized.
This year doesn’t stand a chance. The spring market is done, gone, over. You missed it.
Ann 32
I think JB captured it best. I am not waiting for a particular median price in a town I want to live in. That figure would be retrospective anyway. When I see the right price or think I can get the right price, I will make an offer. Until then, all bets are off. afe
# 86
Whilst I accept the technical accuracy of your constitutional assertion that we are not in a war, the supreme courts deferral to the executive’s use of military force and the congresses failure for 40-odd years to assert primacy over the authorization touse military force except to “repulse invasions,” the notion that “war” cannot occur without congressional decleration is for all practical purposes false.
Frankly, I would prefer the congress grow some….ummm…well I would prefer the congress develop some spine and force the issue using appropriations power, but there is no sign that such a thing will occur anytime soon. Despite the lack of a decleration, when we have 100,000+ troops in combat gear, using combat weapons, supported by combat aircraft and combat ships, firing missiles, dropping bombs and collecting prisnors of war, we are — declared or not — fighting a war. Whether we should be or not is a matter for a different forum, but at war we are and it has ramifications for housing since we are borrowing the money to fund it.
#79,
So far I don’t see it, but I would to pick up a cheap condos in Hoboken.
57….a MOZ quote….that made my day. Thanks!
Hard Place,
I thought 139 Candace was U/C?
Since you know Chatham, can you assess whether the dam will hold? Spouse is looking almost exclusively in Chatham and I had been resisting because I don’t feel the need to pay for status. But schools/access are good and I would consider Chatham if I thought it would hold.
Any thoughts from you and the assembled Chatham gurus?
And [18] BC Bob, yes, I have been following Shanghai down. Minimally invested there but down. Think I may have to use the losses to offset my State Street gains (unless a Dem gets elected, then my 3K per year loss offset will be worth more after 2008).
#3 grim,
would that trigger a lot of people to try to close before June 1st to avoid the stricter guideline?
Jamey (47: All the politos are smiling cause they want to be re-elected. They all sat by watching this mess unfold and now they MUST do something to help out banks, errr, I mean homeowners.
I am in the same boat as you, I feel like a total sucker spending wisely and saving money. All these bailouts will not stop the decline in house prices. Houses will become much more affordable in the next 18 months.
What is the real crime is what America will look like in 2, 5, and 10 years from now. Lots and lots of credit zombies walimg around. People will die with their boots on. We will have a significant decrease in our standard of living.
would that trigger a lot of people to try to close before June 1st to avoid the
stricter guideline?
Not at all, we’ve seen a number of similar guideline changes over the past two years that didn’t manifest in any notable rise in activity.
I don’t think these changes are at all major, aside from perhaps the foreclosure limits.
Possibly the biggest change was the implementation of the CSBS/AARMR Nontraditional/Subprime mortgage guidance on a state level.
That didn’t spur any kind of rush or increase in buying/closing activity.
When we hit January 20002 prices and have unwound the majority of the RE bubble and we may be at bottom. Bubbles sometimes overcorrect on the down side so maybe we could hit January 2000 prices if we are lucky for a really good bottom.
I am looking to buy and will start shoping when we hit 2003 prices and will take my time. Remember, in Spring 2004 the market was overpriced and already in mania even though we technically peaked in Spring 2006. Going back to overinflated 2004 prices is just like the sucker tech rally in the 1stQ of 2001. We still have the second shoe to drop.
# 97
But at least they won’t have to cut the price on their house.
grim Says:
I don’t think these changes are at all major, aside from perhaps the foreclosure limits.
I agree, FNMA never really did a whole lot with loans under 580 fico. 620 was always the prime and alt-a cutoff
Ron Paul is up on CNBC!
grim, thanks for the response.
Follow up: Isn’t it true that the conforming loan limits for NJ has risen from the 417K recently? what is the new limit?
79 grim
“A severe recession is going to hit Hoboken”
Not the part of Hoboken that’s near Manhattan.
#32 Ann,
I’m sort of with “Victorian” in terms of indicators. In my specific case, I’m flush with cash for a hefty downpayment so I’m not as sensitive to interest rate rises as others might be.
I calculated that if I hold out for a 10% reduction in home price, it’s worth enduring up to a 1.5% raise in interest rates. Should they rise, I mean.
Wow, Benny actually answering Ron Paul in a serious manner. Is this a first?
Bernanke : We will not let prices fall at 10% a year
http://www.marketwatch.com/news/story/bernanke-fed-has-learned-great/story.aspx?guid=%7B2D1CE935%2D1F06%2D459A%2DAA9A%2D0C5A1F05F662%7D&dist=hplatest
“would that trigger a lot of people to try to close before June 1st to avoid the
stricter guideline?”
If people acted rationally and on an informed basis, then yes.
But no.
“Not the part of Hoboken that’s near Manhattan.”
patient,
True. Obviously, just the west side of town.
Follow up: Isn’t it true that the conforming loan limits for NJ has risen from the 417K recently? what is the new limit?
Not exactly, a new category of loan was created, the “jumbo conforming”. This category is not pooled and traded with traditional conforming loans, it exists as a separate entity. It also carries a premium over “traditional conforming”.
“Bernanke : We will not let prices fall at 10% a year’
bear,
However, we have no problem inflating at 10% a year.
Kennedy is going after Bernanke now, and Bernanke is punting…….
Bernake hedged on Kennedy’s question about regulating derivates.
The “jumbo conforming” limits are as follows:
AC Metro – $453,750
NY Metro – $729,750
Ocean City/Cape May – $487,500
Philly Metro – $420,000
Trenton-Ewing – $440,000
vic (89)-
Housing Panic is kinda funny, but the moderator’s tone is so snarky, it’s hard to take (at least for me) for more than a post or two.
Also, the regular posters there are submental. They don’t really add anything. Most of the time, the threads are gigantic flame wars.
106 meter
“I’m sort of with “Victorian” in terms of indicators. In my specific case, I’m flush with cash for a hefty downpayment so I’m not as sensitive to interest rate rises as others might be.”
This brings up an interesting point (at least, it’s interesting to me). I think a number of us on this board are in a similar position; i.e., we have significant down-payment ability and are therefore rather price-elastic when it comes to interest rates, but are looking for actual declines in real prices.
Meanwhile, the pols (and MSM and etc.) are stuck in the mindset that cheap credit drives growth (or in this case, spurs home purchases) but that declines in real prices are a Very Bad Thing. They’re even doing their best to devalue our cash on hand (the down-payment funds).
So, to the extent that there is any pant up demand, the folks in charge are doing precisely the opposite of what will get that pant up demand to step off the sidelines.
Nom Deplume,
Chatham/Summit/Millburn are those top towns that have not taken a huge dive yet. It will eventually succumb to the market pressures as people start to lose jobs and the other less prestigious towns decline further. It’s happening, but at a bit slower pace than the less prestigious areas. Subprime has hit the less affluent towns, but the HELOCs and Prime/Alt-A’s defaults will probably hit these towns most given the owners are better credits. From what I’m seeing in terms of listing prices, many sellers do not get it and are listing at peak and peak plus prices and letting their houses sit on the market. It’s been stated on this site many times, but the only ones that seem to sell are houses that are priced to the current market. Seems to be slightly at/or below peak for these towns.
Anecdotally my sister bought in 1/05 in Short Hills. Her neighbor sold her house in 5/07 for 15% more than my sister paid. I was offered the house first because my sister knew my neighbor well and she would consider doing a sale w/out a broker. I asked her what she was looking for in price and when she gave me the peak plus price, I said thanks, but no thanks. It would have been nice to live next door to my sister since we have similar aged kids, but the price was not right. I’m still living in my 2BR in NYC w/ 2 young kids (which why I chose “Hard Place” as a signature). Unfortunately the current owner paid probably the highest price in the area. At the time some other houses sold for peak or peak minus 5% prices. Houses that do sell are now not breaking the old highs. I’m personally holding off until 2009 before I even start looking. A real good deal and I may buy in 2009, but more than likely I will wait until 2010. I think we are only in the 2nd inning of price declines.
Nom (95)-
Chatham will hold its value better than the lower-tier twps., but it will not be spared the bloodletting. No town or area will be spared.
hard place
My brother and I grew up in NYC in a 2-bedroom and we turned out ok. Don’t let ’em rush you.
(96)-
These new Fannie guidelines will be built into mortgage programs well-before June.
Whenever Fannie/Freddie make such announcements, their new parameters get baked in almost immediately.
Vermont does not seem to have done itself any favors electing Cummings.
117 njpatient
The problem with that* thinking is that cheap credit is no longer a foregone conclusion, as you well know. I expect mortgage interest rates to rise over the next couple of years, which will impact lower-end sales (and trickle upward). Those with cash in hand are in a position of strength from a housing perspective, in spite of (and perhaps even because of) rampant inflation.
* “Meanwhile, the pols (and MSM and etc.) are stuck in the mindset that cheap credit drives growth (or in this case, spurs home purchases) but that declines in real prices are a Very Bad Thing. They’re even doing their best to devalue our cash on hand (the down-payment funds).”
#117
“So, to the extent that there is any pant up demand, the folks in charge are doing precisely the opposite of what will get that pant up demand to step off the sidelines.”
patient– disagree with you here. it has been abundantly demonstrated that 1st time buyers (who drive the entire market) do not have cash for downpayments. that is why they have dropped off the map now that 100% loans are difficult to come by. the people on this board are not representative of the broader population of potential buyers. If you want to get transaction volume up, you need the return of easy credit. this is why I think as the RE crash gains momemtum this year we will see the return of 100% loans backstopped by Fannie/Freddie and made widely available– it is the only way to stop rapid price declines
BC (112)-
I’d be thrilled if Bergabe could cut inflation DOWN to 10%/year right now.
New Fed motto:
“Hey, we’re not Zimbabwe”
grim,
any idea what the mortgage spread premium is like on a jumbo conforming (up to 729,750) and a jumbo (over 729,750)?
grim Says:
April 2nd, 2008 at 9:26 am
So, to anyone out there waiting to buy because of price, how are you going to know when the time is right…
Despite what the discussion here would lead you to believe, very few here are trying to be market timers, or playing “pick the bottom”.
Grim,
Nail on the head. I purchased in Dec ’07, loyal blog follower, partial contributor and RE Bear.
MLS# 2438743 – There it is, money where my mouth is. Train Town…hell the drain is 1500 feet away.
OLP $629,000. Listed 3 times.
Do you know what is funny? I had the seller pay me 12,500 for closing and the RE agents only received commission on 437,500, but the sale prices is 450,000.
Also, check out the previous sales prices. 3% YoY appreciation since 1997 and the house had improvements.
Again, thanks everyone for the support and information. Smart buyers know value.
Co-op, condo sales dive in Manhattan
Wednesday, April 2nd 2008, 4:00 AM
Further signs of a slowdown in Manhattan apartment sales surfaced Tuesday, though the average price rose to a record $1.72 million in the first quarter, appraiser Miller Samuel said.
Co-op and condo sales fell 34.3% to 2,282 from first-quarter 2007. Apartments available for sale rose 4.6%, to 6,194.
The report comes on the heels of a Bloomberg News report about slowing sales in January and February.
Wall Street bonus recipients usually spend big on new homes during the first quarter. But the threat of future layoffs at Bear Stearns and other firms – plus tougher lending standards for home mortgages – dampened the market.
Wealthy people are continuing to buy pricey places, but more buyers are dropping out of the market because they can’t afford the mortgages.
“It’s a false premise that Manhattan buyers are insulated from the greater difficulty of obtaining financing that we’ve seen in other parts of the country,” said company President Jonathan Miller. “You’ve got open houses that are packed – but people aren’t making the purchases.”
123 meter
I’d rather rates rise without inflation (as should be the case), though I otherwise agree with you
Victorian (89)Says:
“Which ones do you think are the best market blogs out there (besides this one, of course :) ) ?”
They’re not really blogs, but I read Value Line and Barron’s weekly. If your really nice to me, I can teach you how to legally access Value Line online for free.
124 skep
if you’re saying that our elected officials, in their infinite wisdom, will aatempt to cure a recession brought on by a cheap-credit-inflated RE bubble by bringing on a cheap-credit-inflated RE bubble, I won’t argue.
In other positive economic news. Our company (a financial printer) has decided to shut down 40% of our cold set web print capacity. A lot of layoffs for the common man. Of course, I would not be surprised to see positive employment numbers forthcoming on Friday from our trustworthy friends in the white house.
njpatient,
sticking it out in NYC in my 2BR for now. I’ve got a 2yr old and 3 month old. Eventually we’ll put the two of them together in one room. Right now the kids get the room and the wife & I are on a pull out couch. Wife and I are on the same page and plan to stick this out. Though we did put some bids on houses in 2005 after the first kid, she let me do the bidding and I still lowballed back than. After being significantly overbid each time, we just decided to rent for a while. Never regretted the decision. Neither does my bank account.
Sean (113)-
“Punt”, as in vomit?
TJ,
Nice place, congrats. That was a fantastic deal.
It does not even matter if home prices have hit bottom or even if they have reverted to their normal 1% appreciation. In both cases it is better for the first time buyer or trade up buyer to take that extra 3K a month they would spend on the house and bank it in a 3% money market. Unless rates are shooting to the moon, each month you have 3K more to put down and we all know on a 30 year mortgage that 3K will cost you 9K by the time you factor in interest. So if I am saving 9k a month by waiting why on earth is my rush to jump in. Now when you factor in this is not 93-98 when houses were merely flat in price and demand was low this is a period when prices are falling like 2K a month on homes I like, so now I am saving 11K each month I wait to buy a home. Who cares about missing the bottom, each month you save so much you could miss the bottom by 10 years and still come out ahead.
Their is a buyers strike cause people are being rationale about purchasing a home.
128 TJ
you still rock.
134 hard place
You’ve got a good woman.
133 Stu
I’ve spent many a long night at the printer. Now I know where you get your trading chops – no place better for insider info! ;)
Frankly Ann, I think Clot really had MY number when he argued that many people on this board would never buy. We genuinely wanted to for a period of time, but we just found what looks like a great rental, and if the due diligence checks out, I will be happy to stay there indefinitely. We have the cash to make a minimum 20% DP; we have a relatively high household income and high FICOs. We’re just beginning to see a home ownership as an anchor now. I’m finally starting to get attention from overseas headhunters, and with my husband’s firm headquarted in London, we’ve begun to seriously consider getting the hell out of Dodge while the getting is good. It just seems to me that for us at least, mobility offers too many advantages over owning to making buying a wise choice for the foreseeable future.
Can someone please tell me the sale history for
MLS# 2501382 over the past say…5 years. Something’s strange about his one…
Thanks.
skep (124)-
Agree with you. Powers-that-be have decided that the cure to too much spending will be…spending.
re: (135) Clot he nearly lost it, he defintely had the taste of vomit in his mouth
after Kennedy grilled him.
Bernanke needs to go.
Schumer is no up and is talking about derivatives…..
From Bloomberg:
Moody’s Is Worst Subprime-Bond Rater, Fitch Is Best
Moody’s Investors Service is the least accurate assessor of the risks of subprime-mortgage securities among the three largest credit-ratings companies, while Fitch Ratings is the best, according to UBS AG.
Moody’s assigns Caa2 or lower ratings to just 12 percent of the 292 bonds underlying benchmark Markit ABX indexes that UBS analysts expect to default. Both Fitch and Standard & Poor’s tag 57 percent of the bonds with equivalent rankings, according to a report from the New York-based analysts yesterday. A rating of Caa2 or CCC is eight levels below investment grade.
“Fitch has been the fastest of the rating agencies to recognize and correct its subprime mistakes,” UBS analysts including Laurie Goodman and Thomas Zimmerman wrote. “S&P has largely caught up with Fitch, but Moody’s trails badly.”
“how are you going to know when the time is right…”
My goal is to buy a permanent house that I can comfortably afford on 1 income. I want to buy a house, live there and pay it off as soon as possible. No interest in a house as a vehicle for leverage. For me, owning a home is about security. Once you have a paid off home, you have eliminated a major expense from your life. You are better able to weather setbacks (such as losing a job, illness, etc). So my metric is really personal, as I believe is really the case with most people.
We have been inching toward this point for the last year, but this year I think things are shaping up to bring us rapidly closer to our goal. I believe prices will be down at least 10% by the end of this year which will put us in range. So my plan is to start looking in 2009, assuming this happens. If it does not, I will simply keep renting, since I am saving a ton of money by doing so. I am comfortable renting forever if it is the smarter play for myself and my family. But I do think buying will start to look attractive in about a year, especially given that I expect inflation will remain high long term.
#140 njpatient Says:
133 Stu
“I’ve spent many a long night at the printer. Now I know where you get your trading chops – no place better for insider info! ;)”
I have nor never will act on insider information. My valuable employment, my honorable character and the threat of time in a federal penitentiary are great incentives. Though, I do learn a lot from reading the annual reports we (used to) print.
Par,
Purchased 11/29/2006 for $361k. Was listed for as high as $529k prior to that purchase, the prior listing sat on the market for 187 and was reduced down to $379.9k over that period.
Currently listed at $399k, 9 days on market.
SHORE 92,
i agree that regardless of constitutional definitions we are at war. My point was to point out the inane political twisting of words. Bush constantly hypes illegal spying and other ridiculous policies based on the idea that we are “at war”. But when ever opposition comes up, he immediately points out that he only needs congress’ permission if he wants to declare war on iraq, so of course he does not declare war.
131- Stu
Pretty Pretty please??? :)
But seriously, you are one of my favorite contributors to this blog. As Grim said a while ago, the real value in this blog lay in the comments.
Victorian: email me at stuw6 at yahoo dot com.
From the AP:
Factory Orders Drop Double What Expected
Orders to U.S. factories fell for a second straight month, a worse-than-expected performance that reinforced worries that the risk of recession is rising.
The Commerce Department reported Wednesday that factory orders dropped by 1.3 percent in February, about double the downturn that economists had been expecting. Orders had fallen an even bigger 2.3 percent in January, the largest decline in five months.
The falloff in demand was widespread, with steep declines in orders for motor vehicles, various types of heavy machinery and demand for iron and steel.
Many economists believe a prolonged housing slowdown and credit crunch have already pushed the country into a recession. Federal Reserve Chairman Ben Bernanke, testifying before the Joint Economic Committee on Wednesday, said that the economy could shrink over the first half of this year, his most pessimistic assessment to date.
147 stu
I meant merely to poke atcha.
149 kettle
the Yoo memo is out today. Interesting reading, to the extent that tin-pot dictatorships are interesting.
Watching Bernake again. He does not speak with ease. Does anyone else think BC Bob, would make a better Fed Chairman??
KL
“The Commerce Department reported Wednesday that factory orders dropped by 1.3 percent in February, about double the downturn that economists had been expecting.”
That’s GREAT news – the bottom is in sight!
njpatient:
I kind of figured that was your intent. But no harm done in me clarifying my position. ;)
rhym(155) – Clott for President, Grim, Vice President, BC for Fed Chairmen, Patient, Attorney General of course. Think of the possibilities…
rhyming
but of course.
nj patient 154
“Yoo memo”????? i may have left my brain at home today
Chifi – Treasury
Gary – Housing and Urban Development
ran across this today…
Is this what is in store for NJ when they finally sell off the toll roads to private companies???
“States Take Detour To Fund Road Repairs” There is a little “gotcha” in the leasing of toll roads that is not commonly known. The companies that lease the roads will demand a non-compete clause that prohibits the building of new roads or even upgrades to existing roads, if the improvements are presumed to lower traffic on the toll road. Colorado has signed a ONE HUNDRED YEAR non-compete in order to grease the lease bail out an ill-advised, little used, and outrageously expensive toll road. The first thing the lessee (A Portugese concern) did was announce an increase in tolls. Once the new tolls are implemented the road will cost about 25 cents per mile.
clotpoll 52
Stuff like this makes me think that it’s just cyclical and the 22-30 y.o. complaining about not getting ahead is normal.
“Fitch has been the fastest of the rating agencies to recognize and correct its subprime mistakes,” UBS analysts
Is this UBS trying to squeeze other IBs?
OHOHOH
Can i get a spot in DARPA?????
Thanks Grim…
kettle – Yoo’s the guy whose memo justifying torture was FOIA’ed – just got released. His legal reasoning can be roughly summarized as “the end justifies the means”, which is a legal principal with a long history in many countries in the world.
department of energy could be fun too
Ket(165) Secretary of Defense does not interest you?
patient 167
i read that, just forgot the guys name. Thanks :)
Patient – Yoo was the rubber stamp in Justice for Bush and Cheney as I recall? If not a rubber stamp, then a facilitator for all things in grey areas?
I remember looking at that house sometime in 2006. small lot…I thought it waould be almost like living in a condo. I can’t believe they listed as high as 529k for that sized home and lot in that area…even if the schools are top notch. That shows how crazy the market had gotten. I’m sure that they can get about $350 for that house…again, as I can’t imagine what they could have done to improve it over the past year???
Patient,
I think that the US using torture will be one of the biggest mistakes we would have made when we look back on it in a few decades. We have lost any and all moral high ground now that we have crossed that line. The funny (in a very sick way) thing is, is that torture ia a very poor method of intel gathering as someone will say what ever they have to to stop torture. The info gained this way is 90% useless. With all of the tech we have there are much better methods.
In my opinion if we are going to cross such lines, then lets actually enact a Total War. Just like good old rome used to. If we level say 2 cities in Iraq and kill anything and everything that moves; except for a small number of survivors who we let live so that they can tell of the horrors inflicted, then there will not be any of this protracted guerrilla combat. History shows this to be a very effective, very brutal method.
171 wag
Yes – he was the CYA man.
Wag,
Sec of D?!?!? I’m in! I was just thinning that DARPA and dep of E have a lot of fun toys! but then again nukes and stealth bombers could probably keep me entertained as well :)
kettle, wag
here’s a good analysis from a former colleague:
http://www.salon.com/opinion/greenwald/2008/04/02/yoo/index.html
Dude! (46 & 48)
You stole my thunder!
Pretty steep drop for the quarter, eh?!
You guys renting are smart. If house prices are stagant their is no reason to rush. The realtors also push the tax advantages of a home but fail to tell you it is a myth. I just did my taxes this week and I had 6k in mortgage interest which only resulted in $1,700 in tax savings and my $8,200 in property taxes were not deductable due to AMT. So I got a whooping $1,700 off for owning a home!!!
Lets see a duel income couple can do $31K 401k, $10K 529, 8K Child Care Flex Spend, 8K Medical Flex Spend. 2k Transist check and can put all their money market and CD money into tax free bonds. I have talked to numerous couples who bought a house for “tax savings” yet barely put into their 401K or even have a flex spending and don’t even bother with transist check.
The other thing a realtor won’t tell you is that home tax deductions are “below the line” deductions which are far less valuable than “above the line deductions” like 401Ks.
So keep renting and maxing out those juicy at work “above the line deductions” and enjoy your extra cash and freedom to move without the anchor of a home holding you back.
last day at my regular job for a few months…off to do some training and a “shortish” deployment. I’ll try to log in if I can get access to the Web and let you guys know what I’m seeing. Otherwise…I’ll start lurking and posting sometime in the fall or early winter. Adios.
Shore Guy –
Have been following this blog for 6 weeks or so. Find your posts particularly insightfull for my situation.
Any opinions on the current state of Ocean City market that you wish to share?
Thanks
#87 Clot
All meant was that there should be more sales in April than March of this year and they will say we’ve hit bottom :)
Sales drop off and inventory continues to rise
NJMLS Bergen County
April 1
2004 2005 2006 2007 2008
3,342 3,288 5,330 5,526 5,956
16 units away from May 1, 2007
Wag,
I like your idea. But I don’t know, I think I want Grim front and center (no offense Clot). But here is my simple reasoning. (1) I love Grim’s calm manner of handling idiots. He is not easily provoked. That is what I want in the prez. (2) Clot would make a much more effective VP taking out all operatives who are undermining “THE PLAN FOR WORLD DOMINATION”… :)
I agree with Clot ( I often do ) Housing Panic has great posts and alot, its good for info and laughs but the master is a sicko and so are their posters, you can’t get thru the comments and you are trapped you can not back button out of it. I used to enjoy SoCal mtge guy but he rarely posts and his regulars lack the variety we have here. This is the best blog w/the best regular commentors including our regular trolls.
KL
GSMLS still says there are 34,000 properties, is that acurate?
John (178),
Great comment about taxes. That’s exactly how I see it. AMT takes away tax benefits, also at a minimum you have to get over the standard deductions. Cap on homes over $1mm. Tax savings is not necessarily (annual mortgage interest * tax rate). It’s much more complicated and almost entirely less than expected.
What position will reInvestor and bi have in our newfound political party?
par!!!
Iraq?
John (178),
Welcome to MY world.
“What position will reInvestor and bi have in our newfound political party?”
Loyal opposition.
We would defiantly want both Bi and Re101 in the cabinet, as they would ensure that the rest of us look like allstars even considering an occasional screw up.
Is anyone monitoring the number of rental properties in NJ? I would imagine its on the rise as well as the number of homes for sale in the state.
You might be able to draw soon to be foreclosure stats mixed in there.
oops, definitely
This is why Bill Gross is buying muni bonds. For example this triple A 25 year PR Z bond exempt from Fed and NJ taxes is paying 6% a year tax free for 25 years. No cost to own, no maint and no taxes on the 6%. Munis are supposed to be low paying but for someone in NJ/NJ in the high AMT tax brackets this bond is paying the equivlent taxable yield of 10%. Mr. Gross is going long in the short term in Munis as he feels the yield and safety far outway the risk of going long. Mind you I would say keep your duration short but I know a few people who are letting 10-20% of cash go into longer dated munis as they are screaming buys.
CUSIP 745220ER0
Quantity Available 400,000
Min Order Size 25,000
Order Multiple 25,000
Settlement Date 04/07/2008
Yield to Maturity 6.000 %
People say the rich have to put their money somewhere so they will move from the sidelines and buy houses soon. But until munis fall in yield there is not much of a rush to sell 6% tax free to move into a money pit house. We need lower yields on munis and higher house appreciation for that to happen.
par,
Reserves?
#179 – par4156 –
Stay safe.
NJ patient,
Waht i find most disturbing about the yoo memo, is not the memo itself, as bad as it may be, but The fact that so many common citizens in the US will perform herculean leaps of logical to justify the US torturing people and how we are still different from anyone else who does it. I have had conversations with a fair number of people who have been drinking the whitehouse coolaide. Power will always corrupt a number of those who hold it, but when the averge joe will willfully ignore what ever they must in order to justify the acts of their leaders, is when i become disturbed.
A farmer asks, “Who’s going to keep the garden in the Garden State?”
Hasn’t that ship sailed? I mean, it seems to me that NJ needs an Ag dept. about as much as South Dakota needs an Urban planning dept.
How many of these NJ “farms” are nothing more than McMansions on farm assessed property? Gentleman/Hobby farms that basically produce nothing for sale.
Sorry, but growing McMansions and subsidizing wealthy horse owners isn’t exactly my idea of agriculture.
John (178),
Smart, cogent post and tax analysis. You clearly are penalized by the AMT. If there’s any way to shift your income to at least get hit with it every other year, you might at least defray some of the damage.
Most homeowners outside of high income, high property tax states like ours might see some boost in disposable income by owning property, but, as a long-term tenant myself, I’ve always suspected it’s overstated for many of the reasons you cite.
Amazing the state bilks people 2.2 billion for land reservations for parks and you still have to pay to get on them? Then Corzine is going to shut some of them down. Awesome. What are the odds they sell the land down the road?
http://www.northjersey.com/news/njpolitics/17213272.html
You know I bet Corzine starts closing schools if he gets re-elected.
Vernon Hill, ex-CEO of Commerce Bank, has 7 acres of farm assessed woodlands surrouding his 46,000 square foot home. Yes, you read that right, 46,000 square feet.
No problem, I’ll pick up his slack, he’s a starving farmer and I’m a rich businessman.
Closed sales of SFH for March according to the Monmouth/Ocean County MLS as of today.
Monmouth County
March
2002-422
2003-385
2004-486
2005-463
2006-438
2007-442
2008-282
Ocean County
March
2002-414
2003-332
2004-404
2005-410
2006-371
2007-408
2008-220
John (178) and John (194)
Very well said John.
njcoast,
Thanks for sharing the Monmouth/Ocean numbers.
Top 50: the most stable and prosperous countries in the world
http://www.timesonline.co.uk/tol/news/world/article3617160.ece
USA keeps sliding down the list
Clotpoll Says:
April 2nd, 2008 at 10:30 am
soosh (63)-
“I think right now, we could all use a pullback from the mad spending on nothing and- more important- a pullback from the idea that mindless expenditure is both a necessity and a right. Also, when was it decided that an economy with endless growth (and never a recession) is the right of every citizen in the US?”
I couldn’t agree more.
#199
I agree about the gentleman farmers but agriculture is still actually a multi – billion dollar industry for the state. NJ is one of the biggest producers nationally of cranberries, tomatoes and other crops.
Do need to toughen up on the tax breaks for agriculture though so that it cannot be abused the way it is now.
Anyone have an opinion of the Vanguard Inflation-Protected Securities Fund?
Mitchell – just read a story about the sewer systems in Raleigh backing up due to over development. One exploded and swallowed up a Corvette. Now they are banning waste disposals.
Bummer. Sounds like many of those new developments will be swimming in sh*t in a few years. Guess they will just have to start raising taxes to pay to rebuild the system.
If they get a tax break for cranberries I need a tax break for my blackberry.
Firestorm,
1 Vatican, 3 Luxembourg, 4 Monaco, 5 Gibraltar, 6 San Marino, 7 Liechtenstein
Something tells me that this survey was slightly skewed by GDP in relation to its size.
I think they 20 euros I spent on lunch while passing through Liechtenstein on my way to Switzerland moved it up 5 spots.
Do need to toughen up on the tax breaks for agriculture though so that it cannot be abused the way it is now.
I agree, the fix is simple, immediately adjust the required revenue for inflation, based on the date it was originally set. Modify the legislation to adjust the required revenue for inflation on a yearly basis.
It would eliminate most, if not all, gentleman farms.
The original required revenue for farmland assessment, set in 1964, was $500. In 1964, gas was 30 cents a gallon, bread was 21 cents a loaf, a postage stamp was 5 cents. In 1964, $500 was a serious sum of money.
Today, the required revenue is still $500.
See the problem yet? I’ll gladly pay make up $500 in fake sales to show the required revenue to get the tax break.
Adjusted for inflation, the current required revenue should be $3,414.40.
Question?
Is selling $500.00 worth of a crop all you need to be considered farmland? Or are there other requirements?
If so, does anyone Homebrew? My hop trellis is ready to produce. With hop prices going through the roof, I will have that in no time.
“Protest Federal Reserve Theft of Your Tax Dollars”
“Fed giving $29B of your tax money to JP Morgan”
http://patrick.net/housing/contrib/fed_steals_tax_money.html
TJ,
The biggest requirement is 5 acres of “farmland”, which doesn’t include the land under the house.
http://www.state.nj.us/agriculture/FarmlandAssessmentGuide.pdf
http://biz.yahoo.com/ap/080402/bernanke_congress.html
WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke said Wednesday a recession is possible and policymakers are “fighting against the wind” in trying to steady a shaky economy. He would not say if further interest rate cuts are planned….
So, he is saying policy can’t fix the economy. This can not be!
Grim #123 – Agreed. That would trim quite a lot of fat. Any gentleman farmers left would at least have to put a bit of real effort in.
AMT was established in 1969 and also suffers from the same lack of inflation adjustment.
It should be impacting people making around $400K and upward, not $150K.
The man is keeping us down as always.
Neither gentleman nor farmer be.
– Lord Polonius
Patient (176) – Many Thanks. The article provides a excellent summation. The feeling I am left with in many things these days is the term used in that very article ‘no consequences’. The death of outrage persists.
219 stu
right.
It’s been a massive tax hike on the middle class these past few years. When folk discuss making the tax cuts permanent, I always point out that it’s the increases I’m worried about more than the cuts.
granted this isnt located in NJ, but yo have to wonder how long before this starts really showing up here….
“Usually the handwriting on the wall has already dried by the time they realize they have to find another living arrangement,” says Lou Tisler, the executive director of Neighborhood Housing Services of Greater Cleveland, a foreclosure counseling group in a city that ranks among the nation’s worst for lost homes. “They’re focused on the crisis at hand, not realizing there’s another crisis behind” it.
…In Kalamazoo, Mich., “people are doubling up” and moving in with relatives, Vice Mayor Hannah McKinney says. Almost 1,000 properties were seized in foreclosures in the county last year, and the city doesn’t have enough affordable apartments.
“You can’t take everyone who used to be a homeowner, who can no longer afford the home they’re in, and find a place in Kalamazoo, or I would imagine in any city,” McKinney says.
http://tinyurl.com/2yo2oa
I suspect that Corzine grew up on a ‘farm’ much in the way that GWB owns a ‘ranch.’
kl (155)-
The first thing BC would do is announce to the committee that he will not answer stupid questions or questions phrased in such a way as to be grandstanding to select constituencies.
That should effectively reduce his testimony time to about 7 minutes per session.
kl (155)-
“Watching Bernake again. He does not speak with ease.”
It’s hard to do when one is lying.
Merrill looking ot cut 10 – 15% of non-brokered staff . Lehman looking to do 10%, sparse details though.
R Pat (163)-
Nah. Believe me, in 1980, I wasn’t thinking about getting ahead. I was simply thinking about getting a job.
Don’t know how old you are, but things definitely sucked there for a few years.
vodka (168)-
We’ll put you in charge of the microwave plasma balls.
Stu (187)-
Political prisoners.
AMT Exemption Phaseout and Effective Marginal Rates
For 2007, the AMT Exemption is not fully phased out until AMTI surpasses $415,000 for joint returns. Within the $150,000 to $415,000 range, the TMT rates of 26% and 28% are effectively multiplied by 1.25, becoming 32.5% and 35%. The TMT rate for capital gains becomes 21.5% to 22% rather than 15%, because each dollar of capital gain causes 25 cents more of ordinary income to be taxed at 26% or 28%. These are the true marginal federal tax rates for most taxpayers owing AMT. These marginal rates for TMT exceed regular tax rates at the lower end of this income range. Therefore AMT liability (the excess of TMT over regular tax) typically increases as income increases above $150,000. Non-deductibility of state income tax under the TMT exacerbates this problem. Advice to accelerate income when you will liable for AMT is therefore exactly backwards for most taxpayers.
I have a ton of resumes on my desk; m&a, pe, asset backed sales, swaps trading, otc derivatives [sales,trading,operations], structured finance, fixed income trading, mbs, trade desk, analysts, etc..
I have never seen anything like this. I really wish there was an ETF, with Hoboken as the underlying. It would be my # 1 short.
soosh (210)-
“Guess they will just have to start raising taxes to pay to rebuild the system.”
Har! And in Raleigh, they’ll have plenty of transplanted NJ’ers who know how to raise a tax. And the rest of the sheeple won’t even bleat when it happens. Piece of cake.
TJ (214)-
The state has a list of approved farm products. The income has to be derived from products on that list.
Don’t know about hops, but last I checked, rotten fruit is actually one of the approved items.
What a sham.
229 Clott,
Cool, i bet i can buy a mighty large microwave over with a billion dollar budget!!! I could probably knockout radio communication in all of north america!!!
njpatient Says:
April 2nd, 2008 at 11:41 am
133 Stu
I’ve spent many a long night at the printer. Now I know where you get your trading chops – no place better for insider info! ;)
Patient & Stu:
The only night I spent at the printer. I think I had 15 Haagen-Dasz bars and about 2 gallons of coffee.
http://money.cnn.com/1999/03/23/markets/att/
#232,
BC Bob, “I have a ton of resumes on my desk”
How many of them are from Hoboken?
vodka (235)-
I would expect no less.
Frank [237],
Quick glance, about 30-40.
Can anyone tell me what happened with GSMLS # 2472728 ?
Thanks.
ChiFi (236):
“I think I had 15 Haagen-Dasz bars and about 2 gallons of coffee.”
The funny thing is, we probably charged AT&T about $50 per ice cream bar and $10 per cup of coffee.
Stu Says:
April 2nd, 2008 at 1:58 pm
AMT was established in 1969 and also suffers from the same lack of inflation adjustment.
It should be impacting people making around $400K and upward, not $150K.
The man is keeping us down as always.
stu: the AMT does not “suffer”…using the lack of inflation adjustment to snare more people may not have been part of the original strategy, but it ABSOLUTELY has been a painless and teflon way for Congress to stick it to the Blue States…..and don’t let anyone convince you otherwise. It is intentional and purposeful and has been for at least 15 years.
#214
TJ– where do you get your brewing supplies?
Stu Says:
April 2nd, 2008 at 3:01 pm
ChiFi (236):“I think I had 15 Haagen-Dasz bars and about 2 gallons of coffee.” The funny thing is, we probably charged AT&T about $50 per ice cream bar and $10 per cup of coffee.
Stu: less of a mark-up than John Malone and Leo Hindery charged Mike Armstrong for TCI.
182 Thanks for the info RichinNJ
Now I have to go back and find the sales figures for Bergen in March over the same time frame
2472728 – UC
Anticipated closing date was 3/15..
BC,
Look out!
Merrill Lynch to Cut Up to 10% of Non-Broker Staff
Merrill Lynch is now planning to cut 10% to 15% of its workforce–excluding brokers–sometime in May, CNBC has learned.
Merrill Lynch (NYSE:MER – News) CEO John Thain is expected to complete his review of headcounts at the Wall Street firm by the end of the month.
Unlike in the past, Merrill is not planning to make any major announcement about the layoffs. The firm is hoping to make the cuts as quietly as possible.
Job cuts are likely to grow at other Wall Street firms due to the sharp slowdown in business.
Lehman Brothers Holdings (NYSE: leh), for example, is likely to cut closer to 10% of its workforce rather than the 5% previously reported.
Lehman employed about 28,600 people as of Nov. 30, 2007, according to the company’s most recent annual report.
grim #246, so does that mean the closing didn’t go through as planned?
Re my question 32 When will you know the time is right to buy
Thanks for all the answers, very interesting. Sounds like a combo of value and personal factors overall.
Now if we could just ask some sellers why they are selling right now, but not-so-many of them hang out here : )
Wall Street cuts.
Most of the big firms are looking at another round. GS supposedly is upping their cuts from 5% to 15%, though it hasn’t been confirmed.
” if we could just ask some sellers why they are selling right now”
aside from strictly personal factors, if you are coming on market now as a seller, it seems to me you must either be (A) getting squeezed financially due to mortgage reset or job loss or (B) looking to cash out while prices are close to the peak. Otherwise, I would think you’d try to avoid selling in a market that is glutted
looks like some one is feeling the pain
http://newjersey.craigslist.org/search/apa?query=mendham&minAsk=min&maxAsk=max&bedrooms=&hasPic=1
That rent is equivalent to a 30yr @ 6% for 630K
A teacher I once had owned a six acre mansion in NJ and had a Christmas Tree Farm. He would plant a whole bunch of little home depot trees and every seven years would put up a sign and families would come and saw them down and pay him. He would plant again and wait seven years. He was a true gentlemen’s farm.
The worst example is a farm out on Long Island. He has a “farm stand” opened a few weekends a year selling “farm grown” fruits and veggies. The kicker is they guy does not grow a single thing on his farm. He buys wholesale some stuff from another farm and sells it. He sucessfully claimed that he had the correct amount of revenue from farm sales on his property and the rule never said the farm goods actually had to be grown on his property.
I think I will call my place a sod farm. I will sell the grass on my front lawn for $500 bucks and replant it each year.
JB [247],
It’s outright scary. Will be worse than dot com.
Looks like the UK RE market is about ready to pop any day now….
It noted that the price-to-income ratio is at an all-time high and this, combined with unprecedented levels of household debt (97 percent of GDP in 2007 compared with 59 percent in the Eurozone), calls for a significant correction.t
cnn: U.K., Spain housing markets face major corrections
http://tinyurl.com/26ps4u
kettle1 Says:
April 2nd, 2008 at 3:23 pm
looks like some one is feeling the pain
Look at the count for Hoboken:
http://newjersey.craigslist.org/search/apa?query=hoboken&minAsk=min&maxAsk=max&bedrooms=
3613.
236 chi
Funny – I worked on that TCI acquisition in ’98/’99
253 john
If you’re growing and selling grass, will you have an njrereport.com discount?
Skep-tic,
I go to two places, but prefer one. Usually I make the trek to Freehold and buy them from a place called the Brewer’s Apprentice. They are friendly and usually have most of what I need.
Sometimes I will go to Corrado’s in Clifton if I am in a bind. I have only been there a few times, but they are limited in some of their stuff.
In a real bind, I will order online from MoreBeer, NortherBrewer or MidwestBrewSupply.
This weekend I am making a Hazelnut Brown and Witbeir. 2 weeks ago I made a Belgian Dubbel and an Amarillo Pale Ale. I am however waiting for my kegging equipment to arrive. Kegkits.com – Great Prices.
“It’s very very very very very slow.”
Hope I did not leave out a very.
Quote from starving friskie bunch.
A bottom? LOL!!!!!!!!!!
Bleed’em dry………
BOOOOOOOOOOOOYAAAAAAAAAAAA
Bob
251
Yeah, I think there are always just the life experiences going on for some, sellers like you said, relocation, job loss, divorce, disability, death.
But I totally agree that there are a lot of people who don’t really need to sell right now, but have realized they may have missed the boat and are now glutting the market. People who want to retire/downsize. And my personal favorite, the buyer-uppers.
House lawmakers propose home-buyer tax credit
http://www.marketwatch.com/news/story/house-lawmakers-propose-10000-home-buyer/story.aspx?guid=%7B17F20A28%2DD032%2D4581%2DA0C2%2DC2467DA09A48%7D&dist=hplatest
How will the government make up for the loss in tax revenues if this goes through? Will they cut spending?
Can anybody share what were the consequences of homebuyer tax credit of the mid-1970s that this proposal is apparently based on?
Animal euthanasia as a recession indicator?
My wife tells me that more pet owners are opting for euthanasia over surgery or long-term care. She is working on getting me the monthly numbers, but she says she has noted a marked increase in owners opting for euthanasia.
I can’t say I’m excited about running the numbers, but I’m certainly interested.
I can only imagine that pet health care spending as a percentage of discretionary income has skyrocketted in the past few years.
She’s even had the “R” word mentioned as a justification.
The look on Bernanke’s face today drove gold up over 900 an oz, he did not even have to say anything.
TJ,
I’m sure you know this;
“Hops crisis brews trouble for craft-beer makers”
http://www.marketwatch.com/news/story/trouble-brewing-hops-shortage-slams/story.aspx?guid=%7B40F674E4-A2FF-4C75-A6B2-A8B48F95C245%7D&dist=TNMostRead
skeptic,
I’m neither getting A) squeezed financially nor B) looking to cash out
I guess there should be a
C) selling to hunker down in a rental
I agree it will be a bad time to be selling now but probably better than 2009 *fingers crossed*
BOOOOYAAAAAA,
How many graves have you been tap dancing on?
BC,
Sadly, yes.
Sean [264],
A thing of beauty. Every retracement, gold, should be followed by BB’s testimony.
10K tax credit is nothing. I need atleast 50K tax credit to dip my fingers in housing.
Beg Congress beg.
Beg me to buy a house
262 grim
I believe that. Didn’t you just post something about the increase in surrenders to animal shelters?
Although sometimes I think that we do too much medically for some animals when they get seriously sick. They don’t understand, hate the vet, can’t talk, and might prefer to go the Rainbow Bridge.
I had a dog that had a heart condition that turned into congestive heart failure. We got her drugs, which cost about fifty bucks a month, which gave her about six more months of quite a good life. That was worth it.
But then in her last days, I probably paid 500 bucks for X-rays to see her chest cavity filling up with fluid, something the vet diagnosed with a stethoscope as she was clearly straining to breathe, and then for draining the fluid which only gave us about two more days with her, when she was in total agony anyway. That was quite scummy of the vet IMO and a total waste of money.
njpatient Says:
April 2nd, 2008 at 3:39 pm
236 chi Funny – I worked on that TCI acquisition in ‘98/’99
Dan Somers is a pathetic drunk canuck. Stupid b-st-rd killed the company. Mike Armstrong withheld critical info from his best analytical staff and relied on bankers to grease the skids.
Malone and Hindery basically bled out every asset, so a bunch of the purchased items were half-hollowed out husks. It was all hidden through a series of consolidated partnerships, tax dodges and carry-forwards, and flim-flam aggressive accounting.
Makes me sick just thinking about it. What worse, Armstrong basically executed every operational manager and accountant because were could hit the bar being set by Ebbers.
BoooYaaaa
I miss you man!!!
242 chi
“it ABSOLUTELY has been a painless and teflon way for Congress to stick it to the Blue States”
without question.
Wag Says:
April 2nd, 2008 at 12:09 pm
rhym(155) – Clott for President, Grim, Vice President, BC for Fed Chairmen, Patient, Attorney General of course. Think of the possibilities…
njpatient Says:
April 2nd, 2008 at 12:12 pm
Chifi – Treasury
Gary – Housing and Urban Development
I LOVE THIS….
Bost gets stuck being Bergabe, and I get to eat his lunch as Hank the Crank…..
272 chi
SOP all too often
271 Ann
I really agree, and have a long dog story of my own that I won’t go into here, but it’s a really difficult topic and nice to hear a voice of agreement out there (some disagree with us rather loudly).
“BC Bob Says:
April 2nd, 2008 at 3:56 pm
BOOOOYAAAAAA,
How many graves have you been tap dancing on?”
Booyaa’s all old country class, BC. He likes to pour a nice single malt on the graves of his enemies. But first he filters it through his groin.
Here’s a very interesting anecdote that describes how an “asset bubble” builds up and what are its consequences.
Read it even if it confuses you a bit…things will be clear as you reach the end….
ANCEDOTE –
Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollar as there were only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, A and C now each own 1 dollar while B owned a piece of land that is worth 1 dollar.
The net asset of the country = 3 dollar.
3) C thought that since there is only one piece of land in the country and land is non produceable asset, its value must definitely go up. So, he borrowed 1 dollar from A and together with his own 1 dollar, he bought the land from B for 2 dollar.
A has a loan to C of 1 dollar, so his net asset is 1 dollar.
B sold his land and got 2 dollar, so his net asset is 2 dollar.
C owned the piece of land worth 2 dollar but with his 1 dollar debt to A, his net asset is 1 dollar.
The net asset of the country = 4 dollar.
4) A saw that the land he once owned has risen in value. He regretted selling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollar from B and acquired the land back from C for 3 dollar. The payment is by 2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan to C.
As a result, A now owned a piece of land that is worth 3 dollar. But since he owed B 2 dollar, his net asset is 1 dollar.
B loaned 2 dollar to A. So his net asset is 2 dollar.
C now has the 2 coins. His net asset is also 2 dollar.
The net asset of the country = 5 dollar. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 dollar. The payment is by borrowing 2 dollar from C and cancellation of his 2 dollar loan to A.
As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollar.
B owned a piece of land that is worth 4 dollar but since he has a debt of 2 dollar with C, his net Asset is 2 dollar.
C loaned 2 dollar to B, so his net asset is 2 dollar.
The net asset of the country = 6 dollar. Even though, the country has only one piece of land and 2 Dollar in circulation.
(6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blowed. An evil thought came to C’s mind. “Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollar in circulation, I think after all the land that B owns is worth at most 1 dollar only.”
A also thought the same.
(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollar coins, his net asset is 2 dollar. B owed C 2 dollar and the land he owned which he thought worth 4 dollar is now 1 dollar. His net asset become -1 dollar.
C has a loan of 2 dollar to B. But it is a bad debt. Although his net asset is still 2 dollar, his Heart is palpitating.
The net asset of the country = 3 dollar again.
Who has stolen the 3 dollar from the country ?
Of course, before the bubble burst B thought his land worth 4 dollar. Actually, right before the collapse, the net asset of the country was 6 dollar in paper. his net asset is still 2 dollar, his heart is palpitating.
The net asset of the country = 3 dollar again.
(9) B had no choice but to declare bankruptcy. C as to relinquish his 2 dollar bad debt to B but in return he acquired the land which is worth 1 dollar now.
A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net asset is 0 dollar. ( B lost everything ) C got no choice but end up with a land worth only 1 dollar (C lost one dollar) The net asset of the country = 3 dollar.
*******End of the story*********
There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting –
(1) When a bubble is building up, the debt of individual in a country to one another is also building up.
(2) This story of the island is a close system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island’s own currency. Hence, there is no net loss.
(3) An over damped system is assumed when the bubble burst, meaning the land’s value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the loser. The asset could shrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another piece of land but refrain to take part in the game. At the end of the day, he will neither win nor lose. But he will see the value of his money or land go up and down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like A ) and take part in the game. But you must know when you should change everything back to cash.
(8) Instead of land, the above applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.
263 grim
“She’s even had the “R” word mentioned as a justification.”
On the other hand, that’s obviously nauseating.
#259
TJ– thanks. Been thinking about getting into brewing at home. Regarding kettles– can you just use an ordinary stainless steel pot instead?
chi [275],
I missed that earlier post. I don’t want to be Bergabe, I like the Anti-Bergabe much more. I want to be the talent evaluator for Score’s.
Ann,
I have a pet with the same condition at the moment. The drugs are expensive but they are maintaining my pets quality of life for now. The hard question is when does it stop being about helping the pet and start being about you not wanted to go through the loss…. Unfortunately the line isnt very clear especially when the pet is only 3.
CB in SJ Says:
April 2nd, 2008 at 12:59 pm
A farmer asks, “Who’s going to keep the garden in the Garden State?”
Hasn’t that ship sailed? I mean, it seems to me that NJ needs an Ag dept. about as much as South Dakota needs an Urban planning dept.
grim Says:
April 2nd, 2008 at 1:04 pm
How many of these NJ “farms” are nothing more than McMansions on farm assessed property? Gentleman/Hobby farms that basically produce nothing for sale.
Sorry, but growing McMansions and subsidizing wealthy horse owners isn’t exactly my idea of agriculture.
********************************************
Oh man….. you went and made me break out the keyboard again!!!
I’m a farmer. Deal with farmers. BIG farmers. Horse boarding brings in money when the dirt gets dry.
Look, there’s a TON of famers working the land, incidentally keeping it “agriculture”…
Drive around outside the urban areas and you’ll see field after field for cows, hay, soybeans, corn, etc…
A LOT of these farms are RENTED. These poor guys don’t even own the land. They runs their machines and hope for a good crop.
You see some fields with cows or horses. You think it’s a small farm. They’re not. The dirt fields stretch beyond the hedgerows; the woods are farmed for timber, the farmer sells his eggs and meat, you name it… so you see a few fields and think gentleman farqmer. I see people working their a**es off sunup to sundown to make a buck or two, to feed those suits on wall street that make obscene amounts of money.
No Farmers. No Food.
Not even Twinkies.
skeptic
yes you can use a regular SS pot for making your wort.
I like http://www.doctorhousebubble.com although it’s focus is CA they do some macro things as well
With my legendary grammar & great sentence structure can I take the department of education.One plus I do have the stones to take on the teachers unions.
Shore guy SEC. of State?
Regarding the insider comments posted above.
Be careful about what you say here, I’ve received my second cease and desist this year.
3 months in, 2 C&Ds.
I wasn’t kidding when I said this place attracts lawyers.
Could we create a new position and nominate Re101 as federal jester???
C&D for corporate info i am guessing and not IP?.?.?
Spam Plenty of farms,working farms that is up my way.Sussex CTY.Great place to live if you can get to work.Not the uber rich ones real farmers,cattle & horse raisers.
I take that back, 2 C&Ds and 1 threat of C&D.
chi and stu,
$50 per bar?
Sounds like skaddenomics.
Grim,
Offer a compromise. Tell them you will Cease but continue to Desist.
288 grim
That’s why I very rarely post anything of substance (for which I apologize).
Ket 289 Wasn’t he on TV today.You pick there was a room full of them.For me its a toss up between Ben & Chuck.
skeptic,
Yes, ordinary SS is fine. Do not use aluminum.
However, it is ideal to boil all 5 gallons of wort, but it depends on the type of beer you a making. Most of the time you can get away with boiling 3 gallons of wort and adding 2 gallons of sterile bottled water.
Redacted to protect the guilty
https://njrereport.com/images/jbcd.jpg
(c) 2008 James Bednar
The above image is not a reproduction of any legal correspondence received by Mr. Bednar, it is both an original work of art as well as a parody. (there, I’m covered)
298
Defamation. LOL
You’ve heard of the ambulance chaser?
That guy’s a waaaahmbulance chaser.
#299
Hedge fund managers on the rampage.
RE101 as minister of propoganda/FCC Chairman/Homeland security chief…since he believes that bloggers and negative reports in the media are the acts of terrorists and control the markets
do we now start a njrereport legal fund raiser?
TJ– another question: are wort chillers really necessary?
Not worth my time to fight.
If you knew what this was over, you’d laugh. Nobody even responded to the comment that I removed, it was buried deep inside a 300+ comment thread, without a single reply.
Grim,
You should read 47 U.S.C.A. 230 and Donato v. Moldow, 374 N.J. Super. 475 (App. Div. 2005). I think that lawyer is wrong.
skep-tic,
Not necessary, but recommended. Cooling your wort quickly serves two purposes.
1) When you wort reaches 140 degrees, it is suceptible to bacteria. Taking a long time to get to 70 degrees will leave you wort exposed.
2) Protein haze. A cosmetic feature that does not impact taste. A beer that appears clear at room temperature will look cloudy when refridgerated. By not cooling wort quickly the protein that will rebuild into its usual chains during a slow cool. If it is shocked (temp lowered quickly) it will drop out of your beer and give a beer that will not have chill haze.
I use one. Homebrew is as simple or as complicated as you want it to be. I started with plastic buckets, packet yeast, canned extract and a teflon pot and made good beer. Now I have glass fermenters, wort chillers, keg equipment and SS pots.
I hope you get the point, I am heading out of the office and some the content in that last post was Engrish.
Ask away, I am happy to answer. I will be home shortly.
Also, if you have the best equipment in the world and do not follow all of the sanitization practices, you will most definately have bad beer.
I have to take a break from this blog periodically to keep my positive outlook as is generally my habit. Notwithstanding my absence, I see that I continue to be skewered. I don’t have limitless damn time, so I can’t read every post here, but tell me, what joke am I now being made the brunt of?
You underestimate the power of lies broadly and constantly published. Reality is essentially what we perceive it to be. Perceptions can be altered by pushing the wrong idea or concept. Basically, this is what marketing is about.
RentinginNJ Says:
April 2nd, 2008 at 4:51 pm
RE101 as minister of propoganda/FCC Chairman/Homeland security chief…since he believes that bloggers and negative reports in the media are the acts of terrorists and control the markets
A little clip from S.A.
Housing Market Tracker – It’s About Affordability, Stupid.
Let The Housing Chips Fall. “U.S. home prices are like a beach house supported by eight pillars: lax lending standards, low down payments, “teaser” interest rates, widespread real estate speculation, pliant appraisers, willing lenders, easy refinancing and a market for mortgage-backed securities… We’ve knocked out all of [these pillars]… At current levels, the average American still can’t afford the average house. Despite the creativity of its new policies, Washington can’t alter that math. The only mechanism to restore balance… is for prices to fall steeply to a true market level, and for losses (for consumers and corporations) to be recognized and absorbed.” (LA Times Op-Ed, Mar. 31st)
“Paulson’s ‘Civic Robbery’ to Finance Hyper Inflation”
http://www.financialsense.com/fsu/editorials/schiff/2008/0401.html
#304. Most legal correspondence is laughable.
kettle
That is the question, when is it about the pet and when it is about the human. I always said that as long as my dog could eat, drink, and walk, I would pay for the drugs etc. And then there was the one day that we woke up and she couldn’t eat, drink or walk anymore, her breathing was so labored and it was clear the drugs had failed. The interventions that took place after that was the line I crossed, and that I regret, both financially and because she was in so much pain at that point.
Sorry to hear about your dog. 3 is so young. Just got to take it day by day.
njpatient
Yeah, there are some fanatics out there and then some people who really suck in terms of how they treat their animals. A happy medium would be good.
carados in clifton has a wine/beer shop, and i believe theres a homebrew shop near princeton
northernbrewer.com
austinhomebrew.com
morebeer.com
ive ordered mostly from northernbrewer
#243 skep-tic Says:
April 2nd, 2008 at 3:01 pm
#214
TJ– where do you get your brewing supplies?
TJ – I’m very impressed with the list of beers you have produced. I wouldn’t have the patience.
twob,
See #259.
Have you ever gone to Brewer’s Apprentice? Do you like Corrado’s. I only go if I really need something.
Ann – I hear ya on the vets.
The last hour of my dogs life the emergency vet billed us $850. He was old and sick, and it was his time, but you only really understand that afterwards. They work you over big time with the tests.
My husband went back a couple of days later and raised h@ll and they knocked some of it off.
Rebagholder101
“tell me, what joke am I now being made the brunt of?”
Every time you show up, I think the bottom is in sight.
Rebagholder101
“Reality is essentially what we perceive it to be.”
If that’s true, then you are not entitled to object to the statement of fact that you are a clown. That is my perception of you, therefor it is reality.
Rebagholder101
“Reality is essentially what we perceive it to be.”
Also, please google “Ron Suskind” and “reality-based community”. You may be surprised.
317 ‘soosh
Depends on the vet – have had some great experiences with vets who really were helpful on the emotional/spiritual side of things, aside from the medicine, and others who were bad on both fronts. I think it’s much like doctors, lawyers and RE agents: if you find a good one, keep them in your rolodex.
Grim, is Mrs. Grim a vet?
TJ #128
For those who can’t access the MLS, which train town did you buy into?
njpatient,
I gladly accept the position of Housing and Urban Development. My first course of action will be to bulldoze the NAR headquarters and tell Lawrence Yun to go f*ck himself.
grim Says:
April 2nd, 2008 at 5:08 pm
Not worth my time to fight.
See what I mean?
And I know in response to that long-winded letter, you sent him a one-liner…probably something like…
Done.
#284 Amen, brother. If you eat, you’re involved in agriculture even if you don’t know it.
323 gary
I knew I made a good choice.
njpatient,
:)
#37 Hard Place
Thanks for the Chatham info. Summit, Chatham, Madison, may be the last to fall, but they will fall. Especially if the hatch men start roaming Wall st.
Oh no! I would have thought Gary should be Secretary of War. I would like to be in charge of the POW’s if Clot doesn’t mind.
Re: Pets
Unfortunately, the rise in euthanasia doesn’t surprise me. I would never continue treatment for a pet that I *knew* wouldn’t have any quality of life. That would be selfish of me to watch my pet suffer just to keep it alive. I am, however, guilty of spending $750 on tests for a ferret only to find out nothing could be done for her.
G$,
Basking Ridge Yo!
“Especially if the hatch men start roaming Wall st.”
Too late.
patient – true. My regular vet is great, though one of the partners isn’t so good with the owners (he told me he prefers his cats to his wife and doesn’t really like people much). Unfortunately this was an emergency center whose number 1 goal is maximising opportunities.
#288
liars -hem, lawyers sending cease and desists? I’ll be hitting that button on the top right now…
Kudlow tonight, I want to talk about the Peso
a.k.a the US Peso, put it on folks he is in rare form.
Fun Times!
I linked to a post previously about the sheriff from the Philadelphia asking a judge to stop foreclosure proceedings.
Here is a youtube video on it, the person in this video (not a great speaker) is pushing for a revolution on foreclosures, check out the picture hanging on the wall behind him, sadly comical.
http://www.youtube.com/watch?v=zHf2D3qnrfw
#210 lisoosh better to have a day of Sh*t instead of a life full of it. – LOL
Grim, 199
There are many farms out where I live (Cranbury/Plainsboro area). There are plenty more down in South Jersey what with the cranberry bogs and such. You just need to get off the interstates and “get lost” in your own state someday.
bruiser,
I think you misunderstood my point.
I support agriculture and I support farmland assessment.
I don’t support providing people like Vernon Hill with a lower tax rate for his mega-estate, because he says he “farms”.
There is more than a minor difference here.