“What began as a housing slowdown in 2006 turned into crisis by the end of 2007”

From the Courier Post:

Expert: Housing downturn has another year

An economist and a consultant painted a less than rosy picture of the fiscal health of New Jersey and the people who call it home during an annual look at the recent economic outlook at the Atlantic Builders Convention.

The genesis of the crisis followed the 2001 recession and the aftershock of 9/11, when the federal interest rate reached 1 percent, the lowest ever, spurring a boom in the housing market.

“That fueled a boom with its irresponsible lending and borrowing on a national scale. The market promised to keep going and going and going like the battery bunny,” said Joseph Seneca of the E.J. Bloustein School of Public Policy at Rutgers University.

It didn’t.

The increase in income came nowhere close to the increase in home sales, putting things out of joint, Seneca said. “In the long run, they need to be equal.”

At the same time, employment growth in New Jersey was tepid, gaining an average of 23,300 new private sector jobs between 2004 and 2007, a third of the annual gains between 1992 and 2000.

By the end of 2005, first-time buyers stopped buying. “The market came to a screeching halt,” said Jeffrey G. Otteau, of the Otteau Valuation Group Inc.

If newcomers don’t buy a starter home, the seller has no money to buy a larger home and up the food chain it goes, Otteau said. Inventory rose, prices fell.

“What began as a housing slowdown in 2006 turned into crisis by the end of 2007,” Seneca said.

The result was a rise in foreclosures and mortgage payment deficiencies, as well as credit paralysis, where worthy borrowers cannot obtain credit even with falling home prices. Camden had the highest rate of foreclosure in the state between 2005 and 2007.

The last time the housing industry fell this much — in 1988 — it took 10 years to recover. The housing market is not close to the bottom of the cycle, Otteau said.

“The pace of home sales in 2008 is the weakest in the last four years. And a correction still has a year to run at least,” he said.

In New Jersey, there are 70,000 houses for sale now. Four years ago at the same point, it was 30,000. Otteau shattered the myth that the upper end of the market is immune. “The deepest decline in pace and sales strength were the brightest parts a year ago,” he said.

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96 Responses to “What began as a housing slowdown in 2006 turned into crisis by the end of 2007”

  1. grim says:

    From the NJ Herald:

    Middle-class squeeze Sussex residents face high rate of foreclosures

    This wasn’t supposed to happen.

    Several years ago, “Michelle” and her mother had a successful business and acres of property in Sparta, a township known for its affluence and quality of life.

    But it all spiraled downward last May, when Michelle was let go from the pharmaceutical company that had applauded her work. The lay-off was sudden, she said, just moments after she wished her supervisor a “Happy Mother’s Day.”

    Now Michelle and her mother, who asked that their real names and other specifics of their lives not be printed, are struggling to pay their $5,500-a-month mortgage payments, not to mention buy food or the gas or bus fare needed to get to job interviews.

    “Nobody wants to lose their home,” she said. “It’s not a beautiful mansion, but this is my mom’s hard work for many years. We don’t want to end up on the street, getting that call, ‘By the way, you can start packing.’ ”

    Home foreclosures are soaring in Sussex County and throughout New Jersey, according to sobering 10-year figures provided by the state Office of Banking and Insurance.

    Foreclosures filings in Sussex County rose by 44 percent from 2006 to 2007, and increased by 46 percent statewide. Total filings had hovered around the upper 400s and mid-500s from 1997 to 2005, before vaulting to 620 in 2006 and 892 in 2008.

    Home prices are down about 25 percent from their the market peak in about June 2005, according to Bob Brandon of Weichert Realtors in Landing.

    He chalks it up to a plague of overbuilding and a lack of arms-length transactions, sales in which people are ready and willing to use the home.

    “Houses never leave the market,” he said. “There are too many houses and not enough buyers.”

    Also, he said, some appraisers skewed their work to the whim of the banks and provided appraisals “that are way out of whack.”

    Much ink has been spilled on the subprime mortgage crisis that appears to have snowballed from late to 2007 and 2008 and spread to global markets. The default rates on these risky mortgages — offered at a higher interest rate to people who may or may not have stellar credit — led to foreclosure problems.

    Analysts are predicting more foreclosure filings statewide in the coming year, although banks renegotiate mortgage rates in up to 80 percent of those cases to avoid complete foreclosures, said Marshall McKnight, spokesman for the state Department of Banking and Insurance.

    But numerous factors — unemployment, marital problems, the high cost of fuel and food — cloud the silver lining. Homeowners who led a pleasant middle-class existence for years have spiraled into financial ruin and risk losing the walls that their backs are against.

    “I never thought in a million years this would be happening to us,” Michelle said.

  2. grim says:

    From the APP:

    Not working?

    Adrian Stevens can’t pinpoint the exact moment he decided to sell his restaurants and move to Florida, but he knows how he felt.

    He felt frustrated because his taxes and fees kept increasing. He felt confused because he didn’t know what would come next. And he felt sad because he had to leave New Jersey, the state where he was born and raised his family.

    “It’s death by 1,000 cuts,” Stevens said.

    More than two years after Gov. Corzine unveiled a strategy to jump start New Jersey’s economy, the state’s business climate continues to rankle executives and observers alike.

    They say the state’s chief attributes — affluent population, prime location and educated work force — are clouded by uncertainty over everything from how the state will resolve its budget crisis to new regulations.

    Until those issues are resolved, they say, employers will set up shop elsewhere.

    “The state has very serious challenges ahead of us,” said Mitchell Hersh, president and chief executive officer of Mack-Cali Realty Corp., a real estate investment trust based in Edison. “We have, in many respects, not made progress, and we’ve lost jobs to our neighboring states.”

  3. grim says:

    From the Journal News:

    Slow market causes woe for area homeowners

    For the past two years, the residential real estate market in the Lower Hudson Valley has resembled a stalemated chess game, in which buyers on one side and sellers on the other have refused to make a move.

    Those in the market to buy, driven in part by lower interest rates, are waiting for prices to drop to a level that represents better value.

    Sellers, on the other hand, not keen on seeing some of the vast equity they’ve accrued in recent years suddenly slip away, are holding firm on prices.

    They include homeowners such as Soneka Samakai, the owner of a contemporary three-bedroom Colonial in Garnerville.

    Samakai, a nurse, is selling her 2,200-square-foot, two-story home because she recently married and will soon move south with her husband, a doctor who recently completed training.

    Though Samakai understands the market has slowed considerably throughout the Lower Hudson Valley, she was reluctant to ask less than the $500,000 that the home first listed at, but has since lowered the price by $15,000, to $485,000.

    Equally vexing to Samakai is why buyers don’t instantly fall in love with the home, which features several updates, much as she did when she purchased it in 1999.

    “I just don’t understand it,” she said.

  4. grim says:

    From the NY Times:

    Recession Diet Just One Way to Tighten Belt

    Stung by rising gasoline and food prices, Americans are finding creative ways to cut costs on routine items like groceries and clothing, forcing retailers, restaurants and manufacturers to decode the tastes of a suddenly thrifty public.

    Spending data and interviews around the country show that middle- and working-class consumers are starting to switch from name brands to cheaper alternatives, to eat in instead of dining out and to fly at unusual hours to shave dollars off airfares.

    Though seemingly small, the daily trade-offs they are making — more pasta and less red meat, more video rentals and fewer movie tickets — amount to an important shift in consumer behavior.

    In Ohio, Holly Levitsky is replacing the Lucky Charms cereal in her kitchen with Millville Marshmallows and Stars, a less expensive store brand. In New Hampshire, George Goulet is no longer booking hotel rooms at the Hilton, favoring the lower-cost Hampton Inn. And in Michigan, Jennifer Olden is buying Gain laundry detergent instead of the full-price Tide.

    Behind the belt-tightening — and brand-swapping — is the collision of several economic forces that are pinching people’s budgets or, at least, leaving them in lit-tle mood to splurge.

    Wal-Mart Stores reports stronger-than-usual sales of peanut butter and spaghetti, while restaurants like Domino’s Pizza and Ruby Tuesday have suffered a falloff in orders, suggesting that many Americans are sticking to low-cost home-cooked meals.

    Over the last year, purchases of brand name cookies and crackers have fallen, according to Information Resources, which tracks retail sales.

    Sales of Nabisco graham crackers have dropped 7.5 percent, and Keebler Fudge Shoppe cookies have slipped by 12.3 percent. Not even beer is immune. Sales of inexpensive domestic beers, like Keystone Light, are up; sales of higher-price imports, like Corona Extra, are down, the firm said.

    Some are skipping drinks altogether. The number of people ordering an alcoholic drink fell to 31 percent last month from 42 percent last summer, according to a survey of 2,500 people conducted by Technomic, a restaurant industry consulting firm.

    “People have started to shift spending as if we were in a recession,” said Michael McNamara, vice president for research and analysis at MasterCard.

  5. bairen says:

    #1 “struggling to pay their $5,500-a-month mortgage payments”

    That’s P & I on a 700k mtg at 6.5 with $1,100 a month in prop taxes.

  6. bairen says:

    #4 Peanut butter…The next bubble

    How much of this skyrocketing food costs can be pinned on ethanol/ Plant less grains to grow more corn = higher grain prices. Corn going into ethanol = higher meat pries.

    Ethanol the big con. And those bozos in DC toss money at it to win Iowa and Nebraska.

    Lets drain our aquifiers and drive up our food prices to create ethanol which consumes as much energy as it produces.

    Typical shortsightedness by our pols.

  7. scribe says:

    From Seeking Alpha:

    How Housing Finance Actually Works
    by: Tom Brown posted on: April 27, 2008

    I’ve gotten a bunch of emails this week regarding my piece on the credit outlook for the bonds that make up the 2006 ABX indices, expressing wonderment that nearly 50% the bonds have already been paid down.

    “How do almost half of the sub-prime loans get ‘repaid’,” asks a typical correspondent. “Are these ‘refinanced’?”

    In a word, yes—one way or another. In the real world, the typical 30-year mortgage doesn’t last anything like 30 years. Rather, people sell their houses and move–and pay off their loans with the proceeds from the sales, then take out new loans to finance their new houses. Or, if they’re subprime, they might raise their FICO scores and refinance the existing property on better terms.

    Regardless, the way housing finance works, the vast majority of loans are repaid with the proceeds from new loans. In all, the typical 30-year mortgage loan lasts something like seven years or less. (A lot less, depending on the rate environment.) You shouldn’t be surprised that subprime mortgages tend to be repaid even faster.
    Repaid = Undefaultable

    Anyway, one of my points was that 2006-vinatge subprime loans that have been paid down–$282 billion of the total $600 billion originated–cannot default. It is, as they used to say on the Saturday morning political chat shows, a metaphysical impossibility. Which is one reason I believe eventual cumulative losses on 2006 subprime originations will be materially below what the conventional wisdom seems to believe.

    Ah, but skeptical readers come back, all this loan-refinancing mumbo-jumbo means is that the problem isn’t solved, but just being pushed into the 2007 vintage. That’s where things will really get ugly.

    Maybe. But that argument has a few problems. First, it implicitly agrees that, well, yes, my analysis is correct and eventual losses from the 2006 vintage won’t be as high as expected. I take that as quite a concession. Thank you.

    2007 Originations Much Lower

    But there are other problems, too. For starters, there just isn’t as much stuff to blow up among the class of 2007. Subprime originations came to just under $220 billion last year, according to Inside B&C Lending, or only a third of originations in 2006. Granted, the bonds aren’t performing as well as 2006’s (My own analysis, using the same bond-by-bond methodology I used to look at the 2006 vintage, shows an expected 21.2% cumulative loss on 2007 originations.) But even on that higher number, the sheer dollar amount of 2007 losses figures to be manageable assuming that 2006-vintage losses come in as I expect. For the cataclysm the bears expect to occur, both years have to blow up badly.


  8. Pat says:


    But with today’s mortgage crisis and rumored recession, is student housing still the ironclad investment it was said to be?

  9. WaitingToBuy says:

    From one year ago …


    America’s ethanol drive

    Apr 4th 2007
    From The Economist print edition

    IT IS not often that this newspaper finds itself in agreement with Fidel Castro, Cuba’s tottering Communist dictator. But when he roused himself from his sickbed last week to write an article criticising George Bush’s unhealthy enthusiasm for ethanol, he had a point. Along with other critics of America’s ethanol drive, Mr Castro warned against the “sinister idea of converting food into fuel”. America’s use of corn (maize) to make ethanol biofuel, which can then be blended with petrol to reduce the country’s dependence on foreign oil, has already driven up the price of corn. As more land is used to grow corn rather than other food crops, such as soy, their prices also rise. And since corn is used as animal feed, the price of meat goes up, too. The food supply, in other words, is being diverted to feed America’s hungry cars.

    Ethanol is not much used in Europe, but it is a fuel additive in America, and a growing number of cars can use either gasoline or ethanol. It accounted for only around 3.5% of American fuel consumption last year, but production is growing by 25% a year. That’s because the government both subsidises domestic production and penalises imports.…

  10. kettle1 says:


    yesterday you pointed out an article suggesting the huge potential of bio-diesel. the problem is that any fuel that is based on food, such as ethanol, biodiesel etc is ultimately a bad idea on a large scale and most likely only applicable is niche conditions

  11. kettle1 says:


    we already have a way to take out structures like the north korean underground runway. look up thermobaric weapons. these were highly successful in afghanistan when the enemy was hidden deep inside caves that protected them from most weapons.
    Thermobaric weapons work by 1st sucking all of the oxygen out of a cave or other underground strucker ( works above grouns also) and then it releases a pressure way that can crush a human. being deep in a cave doesnt protect you, because even if the pressure wave doesnt get you all the oxygen just got sucked out and now you suffocate.

  12. scribe says:

    From the NYT:

    Everybody’s Business

    Wall Street, Run Amok


    Published: April 27, 2008


    YOU may well be asking yourself, as I have asked myself, how on earth did the credit crisis on Wall Street become such a catastrophe?


  13. kettle1 says:

    re bio-fuels

    when you hear about bio-fuels remember the one core issue that no-one is talking about. most bio-fuels have an EROEI ( energy returned on energy invested) in the single digit range ( i.e 1-5). Any liquid fuel that has an EROEI of less then about 8-12 is generally a net loss of energy by the time you make the fuel and transport it to the point of use.
    There are exceptions. but our current infrastructure cannot be run on bio-fuels to any large extent without first shifting to a different sort of infrastructure (not based on gas and cheap gas). Akso consider that most current bio-fuels set ups require energy from oil or other fossil fuels as part of their manufacture. if they do not use oil or fossil fuel then the EROEI drops even lower and approaches -1 to 1

  14. kettle1 says:

    from global security dot org.

    The BLU-118B was successfully tested at the Nevada Test Site on 14 December 2001. During that test, a Guided Bomb Unit (GBU)-24 laser-guided weapon using the BLU-118B warhead was dropped from an F-15E attack aircraft. The laser-guided bomb was “skipped” into a tunnel and exploded with a delayed fuze, which produced a significant growth in overpressure and temperature in the tunnel. When compared to the standard BLU-109 explosive, results showed the new thermobaric weapon generated a significant improvement in overpressure and pressure-impulse in the tunnel complex. The test culminated a two-month accelerated effort to rapidly transition a developmental explosive to improve lethality against underground facilities. DTRA weaponized and delivered (within 60 days) 10 thermobaric-filled air delivered munitions (BLU-118B) designed to enhance lethality in tunnel environments.

    that NK runway should not be a problem

  15. njrebear says:

    Chicago plans show of force to deter its killing season


    “But Daley said joblessness does not justify violence.”

    I wonder how Daley will react when his pension check doesn’t show up…

  16. crossroads says:

    I dont think $5,500 a month is middle class. Middle class people should’nt qualify for a loan that size.

  17. scribe says:

    From the Home News Tribune:

    Local story about ethanol transport trains causing problems in Carteret.

    More rails for ethanol
    Carteret residents fed up with train traffic
    Home News Tribune Online 04/27/08


    CARTERET — Residents already weary from the rumble and fumes from trains idling on the tracks by their homes have been gritting their teeth as they watch a new rail line being installed.

    “Sometimes they pass and it’s very heavy and the whole house just shakes, my kids will wake up from the noise,” said Rosalyn Hernandez, who lives by the tracks on Monroe Avenue with her husband and two children, and says they are frequently awakened by trains at night. “It scares them, it even scares me sometimes.”

    Train traffic has increased, and most of the traffic through Carteret these days is tankers loaded with ethanol making its way from the Midwest to New Jersey’s chemical coast rails and processing terminals. It raises safety concerns among the residents.

    Demand for the gasoline additive has led to an expansion of the Motiva refinery in Sewaren, which in turn has boosted traffic for freight trains, according to Conrail. A new ethanol facility, the Linden Transload Terminal, opened last month at Tremley Point in Union County.

    “This business is pretty brand new,” said Jonathan Broder vice president and general counsel at Conrail. “It started up in true volume maybe two years ago.”

    To accommodate the increased volume, Conrail is expanding the line between the two facilities, adding an additional set of tracks to the two existing lines.

    Sandwiched between the two facilities are hundreds of Carteret homes adjacent to the tracks. To the irritation of elected officials, Conrail started the construction work last month for the new rail line without notifying them.


  18. heavy hitter says:

    #12 kettle

    “all the oxygen just got sucked out and now you suffocate.”

    You just described my third marriage

  19. cooper says:


    Why are we so good at making weapons for all sorts of occasions but so bad at making sense? ethanol is just a bad choice
    how about hydrogen?

  20. kettle1 says:


    destruction is easier then creation and all systems will tend towards disorder with energy being added to the system ( basic principle of thermodynamics).


    hydrogen is an energy carrier not an energy source, it essentially acts as a battery. Hydrogen has potential but first you need an energy source and once again our current infrastructure is geared for cheap oil/gas. to use any other energy source we must rebuild/restructure our infrastructure. there is no other alternative.

  21. kettle1 says:


    destruction is easier then creation and all systems will tend towards disorder without energy being added to the system ( basic principle of thermodynamics).

  22. Just me says:

    LOOKS like to me that PRICESS will need to fall a lot more?

  23. cooper says:

    “destruction is easier then creation”
    indeed, it is sad but true, thanks for the hydro info.
    i’m nursing myself today from too much kettle1 last night..

  24. Outofstater says:

    #22 So THAT’s why my house gets trashed by people, kids, cats and a dog. I wondered.

  25. grim says:

    Affinity fraud..

    Builder flees & 40 Hasidic families face eviction in Brooklyn swindle

    More than 40 Brooklyn families face eviction and foreclosure on condos they bought from a developer who pulled off a massive swindle and then fled the country.

    The families, all Hasidim from Crown Heights, paid developer Eliyahu Ezagui – one of their own – for the apartments before they were built at two sites: 770 Lefferts Ave. and 613 East New York Ave.

    “We trusted him, we thought we knew him, he told us he had the blessing of the grand rabbi. We had contracts, so we gave him the money,” said Jeff Minsky, who lives at 613 with his wife and six children.

    Ezagui, 47, did not give the buyers deeds when construction was completed in what is the single biggest local case of subprime mortgage fraud on record.

    The Ezagui group then used the deeds to take out more than $15 million in owner-occupied mortgages from 15 lenders, including Ameriquest Mortgage Co., Olympia Funding and Chase.

  26. SG says:

    Another body blow for financial sector

    In particular, the strategists believe that neither the economic outlook nor the level of loan defaults have yet deteriorated far enough to signal that things have gotten about as miserable as they can get. They reached this conclusion after examining conditions in previous financial crises that have hit various places around the world in the past 25 years.

    The current U.S. financial meltdown, estimated by the International Monetary Fund at about $1-trillion (U.S.), would represent about 7 per cent of U.S. GDP.

    The U.S. Conference Board’s Leading Economic Index, a composite of forward-looking economic indicators, has shown year-over-year declines for the past six months, but it still hasn’t fallen to the depths seen in previous U.S. banking crises.

    The strategists suggested that though the bottom for financial stocks may be in sight, “investors should wait until defaults rise to around 10 per cent and lead indicators fall. The turn in share prices may have to wait for the economic fundamentals to catch up.”

    Of course, there’s bad news and then there’s bad news. As the strategists point out, the IMF said earlier this month that the risks are rising that the current crisis could deepen into the more serious “systemic” category. And in systemic banking crises, financial stocks typically lose anywhere from 50 to 80 per cent of their value.

  27. SG says:

    Restructuring in housing predicted for the future

    ATLANTIC CITY — There will be a dramatic restructuring of housing demand in the future. “It will be a reversal of the pattern when housing moved farther and farther way from cities to outer areas,” said Jeffrey G. Otteau, of the Otteau Valuation Group Inc.

    “Baby boomers miscalculated. They did not plan well for retirement. They’ll see their income falling. They’ll be trading out and trading down on a scale like you never saw before,” Otteau said.

    Generation Y has little or no interest in suburban locations like their parents. They want a downtown which simulates a college campus lifestyle, Otteau said.

    Generation Y has had more opportunity to travel and experience the kind of lifestyles their parents did not have at their age, Tamar said. The housing shift in the future will bring a more European-type market, where first time buyers are closer to 40 years old, Otteau said. “It will be a luxury rental component for Generation Y buyers. This is a me-oriented generation, very selfish. They’ll pay up to $3,000 a month for rent rather than spend $4,000 a month for a mortgage. They prefer to eat out then cook.

  28. SG says:

    Assist-2-Sell office committed to saving homeowners more money

    Renee Zarelli and Robert Burtt know a good thing when they see it. For the last three years, this team has run the Assist-2-Sell office in Matawan.

    “Homeowners realize that selling a house and getting a good price requires the help of a Realtor who is experienced and professional, and more and more sellers are learning that this kind of service doesn’t have to mean paying a high commission,” said Zarelli. “We’re excited about Assist-2-Sell because it allows sellers to keep more of their home’s equity, without sacrificing any of the services they want and need from a real estate agent.”

    Explained Burtt, “The only difference between Assist-2-Sell and traditionally priced real estate companies is our compensation structure. We charge a low 3.75 percent commission that is a percentage of a home’s sale price. Which is a substantial savings compared to other traditional brokers.”

    “It really is a great time to buy a home,” explained Burtt. “Some of the best deals that I have ever seen are right now. The selection of houses is great, interest rates are at all time low, and would-be homeowners are sure to benefit from the new economic stimulus package.”

    To learn more about Assist-2-Sell Buyers & Sellers Choice Realty, call Zarelli or Burtt at (732) 583-9900. They also have a Web site, which can by found at http://www.Surf4NJHomes.com .

  29. SG says:

    NYTimes editorial,

    How Not to Develop New Jersey

    With little public notice, the state’s new commissioner of community affairs, Joseph Doria Jr., set up the task force and loaded it with builders and their supporters, along with a few advocates of affordable housing. The result: a blueprint for rolling back environmental protections and allowing greater traffic congestion.

    New Jersey clearly needs to plan for future development. But it needs a blueprint that carefully balances market-rate construction, affordable housing and environmental protection. Mr. Doria’s task force was so unbalanced, and produced such skewed recommendations, that it is necessary to go back to the drawing board.

  30. SG says:

    23 states face budget gaps in ’09

    Some states have already slashed programs and are trying creative approaches to gin up more revenue. New Jersey made nearly $1 billion in cuts, including under-funding employee pension contributions by 50 percent, and Gov. Jon Corzine (D) has called for no growth in total spending for 2009, a rarity in state budgeting.

    Although not detailed in this report, the governors of New Jersey, Pennsylvania and Texas are among those pushing to put tolls on state roads or privatize them as a way to raise money for the state.

  31. SG says:

    Outlook cloudy for local economy

    CHERRY HILL — Riding the rim of a roiling financial bubble can be exhilarating. The real skill comes in knowing when to get off, an economist said Tuesday.

    Citing the dot.com bubble, the subprime housing boom, and rising oil, grain and precious metal costs — which could become a bubble cluster — Joe Naroff, chief economist for Commerce Bank, said timing is everything. Fortunes are won and lost based on an investor’s position on these figurative bubbles.

    Fallout from the housing bubble could worsen, or it could start to rebound by year’s end, Naroff told more than 200 members of the business community at the Rutgers Business School quarterly business outlook.

    Whether the National Bureau of Economic Research officially designates the first quarter of 2008 a recession is irrelevant, he said.

    “Despite this very significant economic slowdown, I am not pessimistic because I see the cycle turning. The biggest issue locally is New Jersey is essentially bankrupt and Gov. Corzine can’t do what he needs to do to promote growth.”

    Another panelist, Linda Kassekert, chairwoman of the New Jersey Casino Control Commission for the last five years, has a similar view despite dwindling gambling revenues.

    Competition from slot parlors in Pennsylvania, Connecticut and New York have hurt Atlantic City, along with gas prices, a smoking ban and the general decline in the economy.

    “I’d give the Atlantic City economy a 65 in the short term, but I’m much more optimistic in the long term,” said Kassekert from the dais at the Clarion Hotel.

    Tom Geisel, president and CEO of Sun Bancorp, encouraged the audience not to take no from their banks if they need loans to expand a business.

    Fearful of making more bad loans, the banking sector could be making money tighter than needed, he said.

    “If banks aren’t lending money, they are not making money and taking care of their customers. Sit down with your banker and make them loan you the money. That’s how we put liquidity back into the system,” Geisel said.

    Panelist Linda Rohrer, trustee of a charitable foundation created by her father, former banker William G. Rohrer, said the tougher the economy, the more requests she receives for grants.

    A Realtor for more than 30 years, Rohrer acknowledged that her company, Rohrer & Sayers Real Estate, is struggling.

    “My company would definitely qualify as a nonprofit these days,” quipped Rohrer.

    On Monday, Rutgers University economists said in a report that New Jersey’s private-sector job growth ranked 41st nationwide each of the past two years in a sign that its high costs drove employers away.

    A report by Rutgers economists James W. Hughes and Joseph J. Seneca comes as bad news to business owners and workers, who had hoped the worst of the economic downturn was behind them.

  32. spam spam bacon spam says:

    Biofuels are a cost shift…

    (It’s a “look at the sparkly thing in my hand while I remove the wallet from your back pocket” kind of cost shift…)

  33. sas says:

    “The housing market is within striking distance of being back in balance, Otteau said”

    yeah right mack, and the moon is made of cheese too.

    people actually pay this guy for advice & research?


  34. Shore Guy says:

    # 12 “thermobaric weapons”

    I do indeed know about these, as well as various ground penetrating and bunker-busting munitions. The thing that this development points to is an increase in the aggressiveness on the part of Nort Korea. If George III gets us entangled with Iran, it will diminish our ability to respond to and repulse any North Korean incursion into South Korea. I suspect that the North Koreans would not allow the opportunity to pass were we to get into a tussle with Iran.

  35. jmacdaddio says:

    Speaking of the looming energy crisis, another canary in the mineshaft:


    It’s scary how the energy situation is playing out almost exactly as the Peak Oil theorists predicted. We can expect a decade of volatility before the decline really kicks in. Airlines will become the exclusive domain of the rich and business travellers again. Regular people will have to think long and hard about flying from Atlanta back to Lake Wobegon for Great Aunt Edna’s funeral (to steal a phrase from James Howard Kunstler, self-proclaimed energy and land use guru). It’s ironic that an airline for ze riche went belly up.

  36. kettle1 says:

    34 shore guy

    i disagree about north korea. the chinese have to much to lose to allow NK to start a new conflict on the peninsula. while china would allow NK to rattle the saber i do not think that china would allow anything more, and china has massive influence in NK as the majority of NK’s food and fuel come from china

  37. 3b says:

    #33 sas:The housing market is within striking distance of being back in balance, Otteau said”

    Gee, and I thought it was only starting to decline.

  38. 3b says:

    Today’s Record real estate has an interview with Dick Schlott, big north Jersey realtor from years ago. (sold to business to Coldwell Banker)

    He has come out of retirement and is joining some agency that will sell real estate in affluent areas.

    Anyhow he says that prices will not fall in the affluent towns, they will only slide.

    Whatever that means.

  39. BC Bob says:

    “CHICAGO (Reuters) – Trapped by rising mortgage payments and falling house values, a growing number of squeezed middle-class homeowners are tapping into their treasured retirement nest eggs to ward off foreclosure.”

    “We’ve had a few people coming through our foreclosure prevention class looking to use their 401(k)s to stay current,” said Tim Bolding, executive director of nonprofit lender United Housing in Memphis, Tennessee. “We’re talking doctors, lawyers and other professionals.”

    “The misnomer is that the housing crisis is restricted to poor borrowers,” he added. “But it has gone so much further.”


  40. lostinny says:

    38 3b
    “Anyhow he says that prices will not fall in the affluent towns, they will only slide.

    Whatever that means.”

    Maybe they’ll slide off a cliff.

  41. 3b says:

    #39 BC Bob:We’re talking doctors, lawyers and other professionals.”

    This is exactly the people in that sea of wealth in the NYC area that our young pret says is immune from this sort of thing.

  42. Jill says:

    Anyone know anything about this house? (NJMLS ID 2816716)

  43. 3b says:

    #4o lost:Maybe they’ll slide off a cliff.

    Yes, but at leat they will not fall. Because everybody knows that sliding is better than falling. It sound nicer too.

  44. Shore Guy says:

    # 36

    The Chinese influence cannot be understated. Nevertheless, if George III attacks Iran and we get mired in a complex conflict with Iran, notwithstanding the wishes of the Middle Kingdom, it would not surprise me to see North Korea take what might be a one-time opportunity to grab the South.

    In a matter of hours they could be well below south and our airlift capabilities are not sufficient to reinforce the South in short order and from where would we get the troops, anyway? Our sealift capabilities are predicated on a slow build-up to hostilities.

    We may rule the air and the seas but, if they gain control of all the land, I doubt we would see an Iwo Jima- or Inchon-style landing to recapture the south. Even MCArthur was only able to do so because we still had a toehold in the far south.

  45. lostinny says:

    43 3b
    I think sliding picks up more momentum.

  46. rhymingrealtor says:


    NJMLS ID 2816716

    11 Cleveland Ave
    act 398,800
    Sold 8/07 $421,000

  47. 3b says:

    #45 lost: How about swooning, or perhaps cascading? Anything but falling.

  48. lostinny says:

    47 3b
    Maybe gliding?

  49. Mikeinwaiting says:

    Ah! A swooning slide now that sounds good for upper haughtyvile. Maybe it can be a new dance to.
    For Pat bought eggs for 149 doz ex lg today. Local farmers market. So it will be eggs for breakfast, eggs for lunch, & eggs for dinner! Oh crap I forgot I can’t eat eggs. It sucks getting old.

  50. NNJJEFF says:

    Grim and other realtors on board,

    can you give me listing history of 2745917

    What does it mean when it said

    “Seller’s disclosure upon request”

    thanks in advance!

  51. Cathy says:

    Drove by 11 Cleveland in Waldwick this morning…nice corner property, however the driveway is really narrow and you can touch the neighbor’s house.

  52. Jill says:

    RR #46….do you know if this is a short sale or pre-foreclosure? Listed for less than purchase less than a year ago seems odd. Cathy, thanks for the heads-up…not sure if that’s a dealbreaker for the friend for whom I’m looking at it…she only has 1 car and is also looking at condos. She wants something she doesn’t have to do a lot of work on and this might do the trick.

  53. BC Bob says:


    Was this the slide he was talking about?


  54. lostinny says:

    BC 53
    Good enough for me.

  55. kettle1 says:


    this is a very interesting debate. the possibility is definitely there for an NK offensive and any scenario i have read about shows NK quickly taking the northern half of SK, but they do not have the military power to hold it. the territory would be reclaimed and NK probably dissolved with china taking a sizable chunk of NK.
    The trigger that is more of a concern to me is if we get mired in iran and friends, china may decide to take taiwan by force. we have defense agreements that compel us to respond to such an event and protect taiwan, but such an event could be the straw that finally breaks the back of the mighty US military

  56. 3b says:

    #53 BC Bob: Works for me. We have our definiton/illustration of slide.

  57. Mikeinwaiting says:

    Ket How about this one. China gives NK the green light as we are at it with Iran then goes for Taiwan. We don’t have a chance. They aren’t stupid it’s a move & a half.

  58. Mikeinwaiting says:

    Checkmate unless we go nuke.

  59. Shore Guy says:

    # 57 And since we cannot seem to keep our own government funded without China’s investment in Treasury Bonds, what are we really going to do?

    I believe the French had some experience with a situation not unlike this in the 50s.

  60. kettle1 says:

    59 shore,

    i am not sure what event you are referring to. could you elaborate?

  61. kettle1 says:


    you just described 1 way to start WWIII. such an event would probably pull NATO into it which means a good chunk of europe. there probably would be use of so called tactical nukes in your scenario, small yield nukes aimed at military targets such as naval battle groups

  62. kettle1 says:

    russia decided that the only way to reliable kill an aircraft carrier in a head to head conflict ( before they had sunburn missles) was with a low yield nuke in the middle of the battle group

  63. Shore Guy says:

    Dien Bien Phu 1954

    It was a battle the French could have won had they the heart for the fight and the treasury to finance it but by then their ability to project real power in multiple locations (recall wha was happening in Africa at the time) was diminished. This battle was the end of France as a world power, notwithstanding its nuclear forces.

  64. Mikeinwaiting says:

    Ket In my thoughts it would start out with the tactical nuke then escalate. I wouldn’t count on NATO except for the Brits I wouldn’t bet on any one else standing by us.
    Those folks are real allies, they don’t forget what we did in WW II.
    Can they launch those sunburns from air born platform, the old backfires maybe?

    Shore Yes they have us in both the military & economic box. We really need a leader of the Churchill caliber to get us on track. No one running now need apply.

  65. Mikeinwaiting says:

    Shore 63 The next step for us. Dreaming of past prestige, power, & glory like France.

  66. Shore Guy says:

    # 65 If we do not get back to behaving in the ways that made us great in the first place we will suffer the consequences. Folks go around emphasizing our military might, which is considerable, but military might can only be sustained via economic might and selling each other burgers is not economic might.

  67. kettle1 says:


    the sunburn ( also known as Moskut) missiles can be launched from air sea or ground platforms.

    mike 65


    shore 66,

    The US is the old soldier who is still convinced of his own might and superiority and will not recognize otherwise until being embarrassed by a rising power. like any other civilization our time in the spotlight has passed. this is not a horrible thing as it could allow us to focus on the more important issues such as the well being of our own citizens.

  68. grim says:

    From the Herald News:

    Copper thefts on the rise in Paterson

    PATERSON — Little by little, scrap metal thieves are sapping the value of homes that real estate agents such as Robert Sivori have to sell.

    Armed with sledgehammers and crowbars, they are invading vacant, bank-owned properties in search of copper pipes, stainless steel sinks and anything else that can be loaded into a shopping cart and sold by its weight.

    Sivori, a real estate agent who specializes in selling foreclosed properties, has already had three vacant Paterson properties stripped of their copper this year. And one of those properties, 110 E. Holsman St., was hit twice.

    A single haul can net thieves a couple of hundred dollars, but the damage they inflict is tremendous. Sellers lose thousands, if not tens of thousands, of dollars in revenue, while real estate agents are saddled with new headaches as they scramble to re-secure a property and find buyers who don’t get cold feet around ravaged properties.

    The problem is particularly acute in Paterson and other poor, urban areas where the foreclosure wave has struck.

    Between Jan. 3 and April 8, the Police Department took 17 reports of copper pipe thefts from homes, according to a review of police reports of burglaries. The majority of the complainants were either real estate agents, mortgage brokers or contractors.

    The police took four additional burglary reports from businesses, two of which were from scrap yards.

  69. Shore Guy says:

    There seem to be a number of cities, inside NJ and out, that would benefit from an oil lamp and a cow.

  70. BC Bob says:

    “Copper thefts on the rise in Paterson”


    The new bull market in housing.

  71. sas says:

    “Copper thefts on the rise in Paterson”

    this happened to me once. I owned a home, that I didn’t live in it full time. The bastards stole pipes, and appliances.

    not fun.

    and no… It wasn’t in Paterson. I don’t go anywhere near Paterson.


  72. kettle1 says:

    i guess the market for PEX is looking up

  73. spam spam bacon spam says:


    Thanks for the research from yesterday…

  74. chicagofinance says:

    Useless anecdote:
    I have a realtor in the family, and he always strikes me as having an air of calm and wisdom about him. For the first time in the 10-15 years I’ve known him, he seems visibly bothered about the current selling conditions. Enough so that he was discussed building other revenue streams into his business to hedge the potential of a protracted downturn. Note: he seemed more irritated and impatient about it, but I was still really surprised, because he is such an even-handed guy. His son works in his business and just leased a Bentley, so I guess times are not too tough….

  75. kettle1 says:

    mike shore,clott

    you might find this interesting, in an apocolyptic fashion.

    Post-Soviet Lessons for a Post-American Century:


  76. Essex says:


  77. sas says:

    yeah man..I agree.

    Free Wesley!


  78. bi says:

    72#, kettle, what is this PEX?

    55#, kettle, shore,

    if NK invades SK this time, i guess china will be the first to send troops to defend SK. Time is totally changed from 55 years ago.
    there is a lot of hot air between mainland china and taiwan but china will not invade taiwan since so many taiwanese politicans/businessmen have mistresses in china and they will not declare independence.

  79. BC Bob says:

    “Useless anecdote:
    I have a realtor in the family, and he always strikes me as having an air of calm and wisdom about him. For the first time in the 10-15 years I’ve known him, he seems visibly bothered about the current selling conditions”


    For the 1st time in 15 yeras he should be visibly upset. In addition to that, many more will be blindsided in regards to the next wave. There is a major storm coming. The winds will bring a new definition to the word recession.

  80. BC Bob says:


  81. BC Bob says:

    Dennis Gartman;

    Buy necessities, sell accessories.

    Not his calls, just thoughts;

    Buy Target, sell Coach.
    Buy Wal Mart, sell Abrecomie.
    Buy Heinz, sell Haagen Daiz.

    Buy your kitchen/bathroom, sell your boat/winnebago.

    All Disclaimers.

  82. kettle1 says:


    PEX is a type of plastic tubing that has become popular for use in indoor plumbing in place of traditional metal pipes or PVC. It would have little salvage value though so would be of little interest to someone raiding your home for salvage material

  83. reinvestor101 says:

    Why does everyone treat this jerk Otteau like old EF Hutton commerical (i.e. when EF Hutton talks everyone stops and listens). He’s wrong on the reasons why people will migrate from the suburbs into the city.

    The main driver for that migration will be fuel prices. The houses in cities were built very close together to maximize the number that could be built because transporation systems weren’t as extensive at that time. As transportation becomes more expensive, people will opt to live in places where driving can be minimal. Cities are ideal for this as everything that one might want is in close proximity.

    Investing in real estate in urban areas as well as investments in businesses that provide convenience by proximity looks very promising.

    SG Says:
    April 27th, 2008 at 10:50 am

    Restructuring in housing predicted for the future

    ATLANTIC CITY — There will be a dramatic restructuring of housing demand in the future. “It will be a reversal of the pattern when housing moved farther and farther way from cities to outer areas,” said Jeffrey G. Otteau, of the Otteau Valuation Group Inc.

    “Baby boomers miscalculated. They did not plan well for retirement. They’ll see their income falling. They’ll be trading out and trading down on a scale like you never saw before,” Otteau said.

    Generation Y has little or no interest in suburban locations like their parents. They want a downtown which simulates a college campus lifestyle, Otteau said.

    Generation Y has had more opportunity to travel and experience the kind of lifestyles their parents did not have at their age, Tamar said. The housing shift in the future will bring a more European-type market, where first time buyers are closer to 40 years old, Otteau said. “It will be a luxury rental component for Generation Y buyers. This is a me-oriented generation, very selfish. They’ll pay up to $3,000 a month for rent rather than spend $4,000 a month for a mortgage. They prefer to eat out then cook.

  84. kettle1 says:

    wow Re101,

    i actually agree with you!

  85. reinvestor101 says:

    Really? A prominent housing terrorist like you agreeing with a ardent supporter of America like me?

    Let me tell you something, Kettle. A damn blue moon must have just rose, because it’s damn near next to impossible for me to agree with you or anyone else here. As a matter of fact, I don’t even like to agree with anyone here. I will never give in to the dark side.

    kettle1 Says:
    April 27th, 2008 at 10:17 pm
    wow Re101,

    i actually agree with you!

  86. kettle1 says:


    you make me feel all warm and fuzzy inside :)

  87. kettle1 says:


    i believe it was john who was considering going to the Mohonk Mountain reserve for a vacation. i just got this is an e-mail from the local trail association.

    Fire Closes Minnewaska SP; Some Trails at Mohonk Preserve Also Closed

    Alert to Hikers

    A fire that burned more than 3000 acres in Minnewaska State Park Preserve this week has resulted in the park’s closure, including Sam’s Point, and is likely to last at least through Saturday, April 26, if not longer.

  88. jmacdaddio says:

    My goodness! First I agree with Reinvestor on the sorry state of the Knicks, and now on the energy situation. Who knew?

  89. Pat says:

    Why does everyone treat this jerk Otteau like old EF Hutton commerical?

    Because the one who sells advice based on interpreted data is the one who must be patrolled. Listening carefully is the only path to discovery.

    Any advice must be challenged and all results held to the highest professional standards.

    Some investors forgot this between 2002 and early 2007.

  90. Seeking a new handle says:

    What happens when China quits propping up our economy? And don’t say, ‘they won’t’ because of course it could happen.

    The U.S., by contrast, remains the beneficiary of the world’s generosity—no matter how bad our financial situation looks, countries like China and Japan keep pouring hundreds of billions of dollars into U.S. securities. They’re doing this not out of kindness, of course, but because the U.S. is a colossal market and they need us to keep buying stuff. The world can’t afford to have the U.S. fail, and so we are able to get away with behavior that would wreck smaller countries. Great for us, but when we look at Iceland’s predicament we should say that there but for the grace of China go we.

  91. Sean says:

    reinvestor101 – You espouse that you are really an “ardent supporter of America”.

    You would not know what a patriot is.If you ever meet anyone like a real patriot you will then learn what “support” really is. You are the true coward who will not face a lie. You will only perpetuate it, and like a malignant gangrene lie you will eventually be cut off.

  92. jmacdaddio says:

    This is one of the funniest pieces I’ve come across in a while:


    I saw it as a twisted take on Your Money Or Your Life. Why work for a living if you don’t have to? Just drastically reduce your expenses and you’re fine.

  93. Arr Elle says:

    “People have started to shift spending as if we were in a recession,” said Michael McNamara, vice president for research and analysis at MasterCard.

    Duh, I guess Mr. McNamara didn’t get the “We ARE IN A RECESSION” memo???!!!

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