From Bloomberg:
New 20% Down Payment Makes Savers From Profligate U.S. Spenders
The U.S. housing crisis may accomplish what years of parental hectoring couldn’t: Turn Americans from spenders into savers.
Spending will fall because homeowners can no longer use rising real estate values to borrow cash — $837.5 billion in 2006, according to a report by former Federal Reserve Chairman Alan Greenspan and James Kennedy. With mortgage lenders requiring down payments of 20 percent, the average household, which puts away less than 1 percent of after-tax pay, will have to save 10 percent for 10 years to buy a home.
The housing market shaved almost 1.6 percent off gross domestic product growth in the first quarter and cut in half the growth rate of consumer spending, which accounts for more than two-thirds of the economy, said Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania.
“The loss of housing wealth is the difference between a recessionary economy and a growing economy,” said Zandi, an adviser to presumptive Republican presidential nominee Senator John McCain. “Consumers have powered the global economy for the past 25 years. For the foreseeable future, maybe the next 25 years, the savings rate will move higher.”
The worst housing crisis in at least a quarter century still has a long way to go, Zandi said. It will take until 2015 for the median home price to return to its July 2006 peak of $230,200, while home sales and residential construction will never again reach the record highs of 2005 and 2006, he said.
…
The residential housing decline will “change the structure” of the U.S. economy by forcing Americans to save, said Neal Soss, chief economist at Credit Suisse Group in New York.“The days of wine and roses are over,” said Soss, who worked at the Federal Reserve for former Chairman Paul Volcker in the 1980s. “We were drunk on money. Getting sober is a painful process.”
From the Star Ledger:
BlackRock close to Pa. move
BlackRock, one of the world’s largest investment funds, is “very close” to a deal to move 1,200 employees from Plainsboro to Philadelphia, according to three executives with knowledge of the negotiations.
New Jersey officials had made a strong bid for the project, offering a lucrative package of tax breaks if the company agreed to move to New Brunswick.
But the bi-state bidding escalated in recent weeks, when Pennsylvania offered a better package of tax breaks to move to the center-city location in Philadelphia, according to the executives, who requested anonymity because a final deal has not been inked.
“All I can say is there is no formal agreement,” said Kevin Ortiz, spokesman for the Pennsylvania Department of Economic Development.
From NBC:
CORZINE CALLS ECONOMY A CRISIS, GROWTH THE SOLUTION
It’s bad and getting worse, so says Governor Corzine about the nation’s financial status.
On the same day he was named to head the Economic Committee of the National Governor’s Association, Corzine says, the economy is hitting a “crisis point.”
He spoke to union workers in Atlantic City this morning, promising to do all he can to keep New Jersey’s economy moving forward.
“This whole economy could collapse, I think it’s very, very close to that now,” says William Mullen, President of the N.J. State Building and Construction Trades Council.
“I think we’re almost in a ‘recessionary’ time in New Jersey, the unemployment is mounting.”
State leaders point out gas prices are up, foreclosures are up, inflation is up, healthcare costs are up and so are the national and state debts.
“There is major erosion of the economic wealth of the country going on,” says Corzine.
From USA Today:
Economic pain: ‘Payback’ for debt-fueled growth?
So this is what a day of reckoning feels like.
Already down 23% from its October high, the Dow Jones industrial average touches a two-year low. The Labor Department says wholesale prices are rising at their fastest pace since Ronald Reagan’s first year in the White House. Embattled automaker and American icon General Motors suspends its dividend to stockholders. The last time that happened? 1922.
In Washington, somber statements came from both ends of Pennsylvania Avenue. President Bush, meeting reporters at the White House, acknowledged, “It’s been a difficult time for many American families.” On Capitol Hill, Federal Reserve Board Chairman Ben Bernanke warned lawmakers, “The economy continues to face numerous difficulties.”
If it wasn’t clear before Tuesday, it is now: This is no ordinary economic crisis, and it won’t be over anytime soon. In fact, problems are multiplying. A year ago, the financial virus seemed confined to subprime mortgages, defaults on loans given to those with less-than-perfect credit. Now, much of the banking system appears rickety, and the U.S. economy has slowed to a crawl. But thanks to robust demand from still-growing countries such as China, the prices of commodities from oil to food have soared — hitting Americans from the gas pump to the grocery checkout.
“There’s no hope of an early recovery at this point,” says economist Kenneth Rogoff of Harvard University. “The best-case scenario is we have a long but mild recession — and that’s the best-case scenario.”
From the Bloomberg:
Fannie Mae, Freddie Mac May Halt Dividends on Losses
Fannie Mae and Freddie Mac, the beleaguered U.S. mortgage-finance companies, may cut common stock dividends to preserve capital after their shares fell 80 percent this year, data compiled by Bloomberg show.
Freddie Mac will probably halt its 25-cents-a-share quarterly payment and Fannie Mae will likely eliminate dividends after more than $11 billion in combined losses since last year, according to Bloomberg dividend forecasts. Washington-based Fannie Mae has paid shareholders for three decades, while Freddie Mac, located in McLean, Virginia, increased its payout every year since 1990 before lowering the awards in November.
“NLPC Blasts Fannie Mae and Freddie Mac for Lavishing Contributions on Jesse Jackson as Companies Near Collapse”
http://tinyurl.com/6693wq
For may of us that 20% requirement is going to be the final thing to put us ahead of many of the RE-speculators ect we were competing with.
It won’t affect high income towns with families buying homes for other family members as much.
Affordable housing suit filed.
http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20080716/NEWS01/807160369/-1/newsfront2
Mt. Laurel appeals housing rules.
http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20080716/NEWS01/807160375/-1/newsfront2
Story: New house popped up on MLS in the area we’re looking. Wife is smitten. So much so that I call the agent Monday and she asks if i have an agent and says she can ‘help me out’ if I become her client.
Wife EMAILS agent to ask about a viewing this weekend. Wife notes our lease isn’t up for 7 months, so we can’t move immediately. Agent: “Oh, I’m sorry honey, but I’ve got a hot house here. I’ve had a lot of calls already, and two people are really hot for it and I expect it to be gone by this weekend.”
Wife, who is an avid NJ Re Report reader, laughs and says, “Oh, well how about this – when I see it on MLS in a month, I’ll give you a call, and you can show it to me then.”
It reminded me of the scene in Rounders where Matt Damon talked about playing Johnny Chan: “he comes over the top and tries to bully me like I’m some f’in tourist.”
Some of the agents are such a joke.
(fwiw, the house looks damn good, but the sale price seems too good to be true.)
The whole credit industry for years has been training lower and middle income consumers into spending more right now and paying it later rather than saving for it now and buying it later. Using credit isn’t bad but the whole mentality people use with credit is just off and not good for them.
The same thing that’s been going on with the mortgage market in recent years I believe has been going on in the consumer credit market for many years. The effects are less subtle but it has led to an increase in pricing.
An example, instead of saving away for a few months or a few years for a flat screen tv, someone just puts it on their credit card and pays interest instead of making interest.
People won’t be able to just learn to save 20% for a down payment without learning to handle money and credit correctly. Everyone should pick up “The Millionaire Next Door” because it will take forever to get everyone on that A&E show where that bald guy yells at you and cuts up your credit cards. :)
#2
“There is major erosion of the economic wealth of the country going on,” says Corzine.
So he had better hurry and raises taxes while people still have some wealth!
/ sarcasm
Tom please stop making sense.
We live in America. We are entitled to instant gratification and to lead a lifestyle we can not afford. Says so right in the Declaration of independence with the pursuit of happiness line
If 20% downpayments come back in vogue I think we are looking at 1999 or earlier prices. Not many people have 80k to put down on a cape in a train town or a mcmansion out in west bumbleville
1 grim
So far there are only 3 Little Patients. I am considering having 1197 more and going to live in whichever state gives me the best package.
I haven’t told Mrs. Patient yet.
Oooh. I get to be the first to bring up an oil topic today.
I guess we all know the answer, but why isn’t there more pressure for the government to do something about oil prices by having the oil companies and their refineries give up some of their record prices and go to more sustainable profit levels “for the good of the country”. You know, just like how the American citizens are constantly encouraged to spend money?
One thing I read recently indicated that the profit refineries have been making for the same amount of oil has nearly doubled. Or at least give up the subsidies. In the past, it seemed that the refineries were mostly owned by third parties, now more than half are owned by the big oil companies like exxon mobile, bp, shell, etc.
A may article in the NYT seems to indicate that oil companies are feeling it as consumers are doing things to conserve gas. Hopefully they get used to doing that even when gas prices go back down.
“CORZINE CALLS ECONOMY A CRISIS, GROWTH THE SOLUTION”
Njpatient calls world hunger a crisis, food the solution.
bairen,
yep, that’s the point. There are a lot of things that need to be done to bridge the gap between the economic classes in this country. House prices should go down. There was a chart in one of my blog postings from a HUD paper. It showed that the high income groups typically buy homes that are typically 1 times their yearly income while the middle class was somewhere around 3-4 and the lower income group was 4-5 (I forget the exact numbers). House prices need to come down so that lower and middle income families can live in decent homes and still have money for things like education for their kids, other savings and investments to be able to live better lives.
All the credit that’s been given to the lower and middle income groups to be able to live seemingly richer lives, winds up going up to the high income groups. I have no problem with money floating up the corporate food chain, but when the lower to mid income groups are fed more and more credit because they don’t make enough, so that we can keep feeding the high income groups that just increase their profits and give themselves insane bonuses without passing that down to their employees who drive the economy just doesn’t make sense. Just like the lax lending practices lit a fire under house prices I believe the same happened with consumer goods in general.
I never thought I’d be saying stuff like this.
njp
Tell the Mrs everthing must be in even numbers to be balanced. Then after #4 tell her 4 is unlucky in Chinese culture. After #5 point out 6 is very lucky in Chinese culture.
You’re on your own for the other 1,194.
From the WSJ:
Europe’s Economy Takes a Hit
U.S. Turmoil Raises Odds of Slump;
Bankruptcy Rocks Spain
By MARCUS WALKER in Berlin, JOELLEN PERRY in Frankfurt and JONATHAN HOUSE in Madrid
July 16, 2008; Page A1
Just a few weeks ago, Europe thought it could escape the worst of the global slowdown. Now it looks like the euro zone, the world’s second-largest economy, is headed for a hard landing and perhaps recession, compounding growth troubles around the world.
…
The rising risk of recession in Europe shows that despite the strength of emerging markets such as Russia and China, the economic downturn that began in the U.S. last year is spreading to other regions. That is battering hopes that the global economy might have “decoupled” just enough from America’s that the rest of the world could ride out a U.S. slump relatively unscathed.
…
The ECB continues to predict the 15-nation euro zone will suffer only a gradual slowdown. At a news conference earlier this month, President Jean-Claude Trichet admitted second-quarter euro-zone growth would disappoint and warned “the third quarter will probably not be particularly flattering either,” but stressed the bloc’s “sound” fundamentals. The bank’s official forecast is that the euro-zone economy will “trough” in the second quarter and expand by around 1.8% this year and 1.5% next year.
“They are wrong,” says Olivier Gasnier, economist with Société Générale in Paris, who predicts the euro zone will grow by only 1.1% this year — thanks mainly to a first quarter whose strength probably won’t be repeated — and an anemic 0.4% next year.
From MarketWatch:
Mortgage filings up 1.7% last week, MBA says
Mortgage applications filed last week rose a seasonally adjusted 1.7% compared with the previous week, driven by an uptick in homeowners interested in refinancings, the Mortgage Bankers Association reported on Wednesday.
Applications were down 17.4% compared with the same week in 2007, the Washington-based MBA said.
Refinance applications increased 6.9% for the week ended July 11 as opposed to the previous week, as homeowners took advantage of falling interest rates charged on mortgages, according to the MBA’s weekly survey.
Applications for mortgages to purchase a home, however, were down a seasonally adjusted 1.7% on a week-to-week basis.
#17 Tom
I think higher interest rates, food, and energy prices combined with tighter lending standards will bring housing down to more affordable levels with the masses.
It is disgusting how credit card companies chase after college kids and how predatory some student loans are. It’s not much different then drug dealers hanging out near schools and playgrounds. Get them hooked young and they are yours for life.
Just wait until they see the dismal numbers on the “back -to -school” buying. Maybe then they will get that the consumer is tapped out. Or…credit cards will be trotted out and put even more families into precarious positions. I don’t think there is enough disposable income for the usual purchases.
Maybe I’m wrong and others are doing better than I am but I don’t foresee buying any new items this year. No raise in a year like this is really taking its toll.
Ah damn I never did post the June sales data, did I.
Chuck opens his trap again on Finance, wonders if uptick rule should be put back in.
“U.S. Senator Charles Schumer questioned whether the SEC should restore the so-called uptick rule, which barred traders from short-selling stocks when prices are falling. The rule, scrapped in June 2007, was implemented after the Great Depression to prevent raids on companies.”
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHAEqg4vEeCY
Hey Chuck, go work on the strength of the dollar, and stop worrying about people making money on the downside. If you make it a one sided game with only one outcome people won’t play and then you will really see a liquidity crisis.
(23) Not sure if you posted them, Grim. I’m just going by what I see happening in my little neck of the woods. The consumer can’t consume..they are buying food and gas.
23 grim. We just all assumed people got smart and there were no sales? :)
“This whole economy could collapse, I think it’s very, very close to that now,” says William Mullen, President of the N.J. State Building and Construction Trades Council.
[2],
Prudent chap.
Corzine better start attracting more businesses and taxpayers to NJ.
New Jersey’s Pension Fund Ends Year With $4.4 Billion Loss
New Jersey’s state employee pension fund lost about $4.4 billion, or 3.1 percent of its assets, during the 12 months ended June 30.
Holdings totaled $77.7 billion, according to a preliminary report posted on the Division of Investment’s Web site. The pension, operated on behalf of more 700,000 current and retired state employees, had assets of about $82.1 billion in the previous year, when it returned 17 percent.
The pension system incurred a 4.9 percent loss in June alone, a time when the Standard & Poor’s 500 Index declined 8.4 percent.
William Clark, the division’s director, said diversifying away from stocks and bonds into commodities and private equity tempered the loss, which he called “disappointing.”
Declining investment returns come as the state faces a pension shortfall, which totaled $28.3 billion as of June 30, 2007, according to actuarial reports commissioned by the state. New Jersey also confronts $58.1 billion in estimated future costs for retiree health-care benefits.
http://www.state.nj.us/treasury/doinvest/pdf/cpf_values.pdf
“There’s no hope of an early recovery at this point,” says economist Kenneth Rogoff of Harvard University.”
[3],
What about the idiotic Hope Now plan? How we fallen off the slope of Hope?
bairen [13],
From the get go, 2005, I’ve stated that we would revisit 2001 prices and probably overshoot to 1998-1999.
Well, do we party like its 1999?
Tom [15],
Socialize losses and force companies to cough up profits? USA Manifesto?
bairen,
It doesn’t seem to just be college kids. According to this, GE Money (Consumer Finance) has been targetting minorities with higher interest rates. Looks like they came late in the game buying up some subprime mortgage companies just before the peak and have been trying to unload them. From what I hear the hole division is up for sale. Looks like they really made some questionable decisions and are going to be feeling the pain. They’ve sold off some of their loans for hundreds of millions of dollars in loses.
They might have made some with their stainless steel appliances during the bubble but their consumer financing strategies are probably going to catch up with them. GE Money also handles the store credit cards for Home Depot and I’m sure the housing troubles are going to really hurt.
Airlines aren’t doing great so their jet engine sales probably wont’ be doing well either. It seems they had at least a couple big gov’t contracts in Iraq and from the news on how those went it seems like it was practically free money for most contractors.
Such a large and iconic American company that was so well diversified really seemed to screw up in regards to consumer finance and it’s hurt their share price. The value of GE used to be greater than the sum of it’s parts but analysts no longer think that is true, especially with so many of it’s parts in trouble. Some people have been suggesting they break off more parts but they parts they’ve been trying to get rid of having been attracting much interest.
I don’t know if they ever did sell of WMC though. All the news I read was that it was up for sale but I haven’t seen any recent news other than selling off some of the subprime loans.
“Maybe I’m wrong and others are doing better than I am but I don’t foresee buying any new items this year”
Cindy,
Unfortunately the masters have other ideas. You’ll be buying Bear, toxic loans, Indy Mac, Freddie/Fannie. Dig deeper into your pockets. We allow the upper crust to walk away with zillions while they obliterate their balance sheets and pass it on to you and me. Investigate the fed, treasury and the sec.
Sean [24],
He’s pissing in the wind. The uptick rule was in place during the dot com implosion. Does Chuck offer another scapegoat for that bust?
BC Bob,
I wouldn’t call it socializing anything. In the early part of this decade we were in a recession and the 9/11 attacks made things worse. The American people were asked to keep spending and going on with our lives to keep our economy going. For many people this didn’t include spending the money they had but money they had yet to make in the form of using their credit.
For the most part, the American consumers did that and what we saw was that companies took in larger profits and didn’t pass that back down the way a healthy economy should. It was passed along to the top executives through insane salaries and bonuses, even when the companies financials and stock prices weren’t so hot.
Now it’s the American consumer that is suffering, and as a result so is the economy. I don’t know if you were being sarcastic or not, but I’m not saying they should operate at a loss, it’s just time they stop bleeding us for all they can get and return the favor.
re: 34 – BC Bob, Chuck is not going to blame his constituents, or propose any kind of legislation to regulate them.
(35) Wow, Tom. That was good. You just helped me recall all of the tourists returning to NYC.. going to shows and on buying sprees etc. Remember those
commercials with all of the actors in the streets?
Just caught up from yesterdays posts.
Grim, glad I was able to make the mini GTG.
Wrenching time I’m sure.
If you want to hit some good\bad dive bars in area let me know. Wife away fri & Sat with kids.
#30 BC Bob
“Well, do we party like its 1999?”
Only if we still have incomes and food.
Tom,
If the idiots didn’t pull out equity to buy gas guzzlers, we would not be experiencing this problem today. They can bitch and moan all they want. However, it’s time John Q looks at himself in the mirror and take responsibility for his/her own actions. Nobody was forcing us to splurge like some drunken sailors. It’s all fine and dandy when assets are appreciating at 10% a year. Did anybody offer to share their profits with the unfortunate at that time? It’s time to suck it up. Somebody is in a pickle, well my question is, how did they get there? Why should the prudent be burdened with this fiasco?
The oil comapnies don’t determine the price of crude. It’s market driven. Blame the maestro’s. They devised this game plan. Who’s responsible for a currency that has lost over 40% of its value?
CEOs of Investment banks accuse each other of
heresy and treason.
http://online.wsj.com/article/SB121617167587756521.html?mod=mktw
Kind of related to oil and since it was one of you @#*%ers that got me thinking organic I want to pimp this company again that sells a mail-order organic lawn care program now that I applied my first treatment :) It’s rare that I like a company enough to tell people about them. Using lawn care products that aren’t petroleum based and safe for kids and pets feels good to me. I like that it’s mail order because I don’t have to remember what to do when or deal with getting stuff locally or paying the tolls and gas to get them. Contact with the company has been very good too.
I’ve been spending some more of my recreational internet time trying to figure out how to get my lawn looking better because reading too much about housing, oil, the economy got to be a bit depressing. Yeah it’s fun to bash the people that try and pretend nothing is going on and the companies that got us in this mess but in the end, all indications are that this is going to be a pretty hard hit to the economy.
Did any of you guys that were talking about a reel mower pick one up?
Clotpoll,
Are you seeing lenders pull back to 80% max on 1st mortgages? I’m not seeing that at Chase
BC Bob – Let me know if I am understanding this mess correctly:
If the gov had reined in the mortgage companies when they should have (evidently they have had the power to do so since 1994 but only used it a few days ago) we would not be dealing with a mortgage crisis and only have the inflation issues which could be addressed with a raise in interest rates. But since we have the mortgage mess, a raising of rates would cripple the housing industry so everyone feels like they are in a double bind and have their hands are tied.
If this is not the general scenario can you spell it out in those kind of terms..
Thanks
From the NYT:
More Homeowners Consider Taking in Boarders
By JOHN LELAND
Published: July 16, 2008
BALTIMORE — When Barbara Terry fell behind on her mortgage payments earlier this year, she did the previously unthinkable. Through a local housing organization, she and her daughter, Imani, 9, rented part of their single-family house to a stranger.
http://www.nytimes.com/2008/07/16/us/16share.html?ref=us
Donald Trump, 15 seconds ago on Howard Stern:
“This is a great time to buy real estate. You can make good deals today.”
He bought some building for $100 million, so I guess this is his way of defending that purchase.
[43]
Would like to add that I don’t buy that 20% down is becoming the new thing. If you have 20% down great, it might get you the best financing terms, but I had a bank tell me just yesterday that they could finance us with as little as 3% down (and we have 20% to put down).
If 20% down becomes a requirement, it will destroy the housing market (way beyond what were seeing today). It would eliminate just about all first time buyers on the East and West Coasts and most suburban areas of the Mid West.
If you have good credit and good income, banks will loan you the money. Of course banks are going to verify as they should but requiring 100K down on a POS in Edison, NJ or Irvine,CA would ruin their own business. Ain’t gonna happen.
I laugh at you guys with the 20%. Towns like saddle river, alpine, manahasset, Manhattan, Park Slope where just plain average homes sell for around 1.5 million are really going to get spanked. Fannie/Freddie won’t be buying Jumbos anymore and the cheap alternatives like Thornburg that did them are dead. A 1.5 million dollar home will require a downpayment of over one million. I already see some homes in Hamptons for sale for around a million where owner states with 20% down he will provide owner financing for the difference to make it confirming. Do the math one million dollar home, 20% is 200k, max loan is 417K, total is 617K so seller if financing 383K to make it work. You are going to see more of those deals to sell vacant million dollar homes.
Belmar, N.J. mayor takes shot at Staten Islanders
Guidos, Staten Island girls and blondes.
http://www.silive.com/news/index.ssf/2008/07/belmar_nj_mayor_takes_shot_at.html
# 21 “It is disgusting how credit card companies chase after college kids ”
What is disgusting, in my book, is how financially illiterate young adults are. They should have the ability to see that buying on credit while one’s income is low is a recipe for disaster. I don’t blame the credit card companies for going after the business. The chumps who buy into the buy-now-pay-later culture are the ones with the power to stop the train.
Hi BC Bob,
Can you send details to higuava at gmail.
Thanks.
==========
BC Bob Says:
July 11th, 2008 at 5:09 pm
Anybody fluent in Mandarin, looking for an entry level operations position? Positions in NY and NJ. You can get my email address from JB.
BC Bob,
“If the idiots didn’t pull out equity to buy gas guzzlers, we would not be experiencing this problem today. They can bitch and moan all they want…”
Who are the bigger idiots? The people buying the houses or those that were lending them the money? 10 years ago if you were making 35k a year and had a 20% down payment you’d have a hard time finding someone to lend you the money to purchase a 500k home. Not to long ago someone with the same salary wouldn’t have a hard time finding a lender that would even lend them the down payment. It wasn’t the people looking to buy homes that drove up prices, it was the banks that were giving away bad loans that made prices rise like they did. The secondary and derivative mortgage markets were hungry for more and more subprime loan products and the banks were happy to oblige by giving them out to anyone that would ask. The lenders caused this mess, the government didn’t do anything to stop it even though they made some noise as early as 2001 about it.
The prudent aren’t going to be bailing out most homeowners. Most in bad shape will lose their homes or be able to modify their loans. Where the rest of us pay will be in the bail outs of these lenders. While it’s sad that these homeowners will lose their homes it’s really just like they wound up paying very large rents for a couple of years with nothing to show for it. That gets offset a bit by them being able to live rent free for a few months during the foreclosure process.
“The oil companies don’t determine the price of crude. It’s market driven. Blame the maestro’s. They devised this game plan. Who’s responsible for a currency that has lost over 40% of its value?”
The price of crude is only about 50% of the price of gasoline. The big gas companies are always saying it’s not their fault because the cost of refining has been going up due to increased demand and limited refining capabilities. They fail to mention that the big gas companies now are in charge of over 50% of the refining output and that their refining profits have increased dramatically. Taxes make up about a quarter of the price of gas and taxes have been going down to ease prices but refiners have actually been making more profits.
I don’t buy the whole refining capacity argument either. It’s not like there is rationing at the pump or long lines like a few decades ago. The gas companies don’t want to build more refineries but they have been increasing the output from their existing refineries and still making record profits.
OK lets get back to naked shorting. I used to work in Sec Lending. Here is how it works most BDs will only make you actually borrow the shares if it is on their “hard to locate” list. Otherwise they just make an affermitive determination that they could locate the shares if they have to and let you trade away. Securities whose cusip is on afirmative determination that day get automatically processed. Now lets talk Reg T, normally you are stopped at only borrowing up to 50% on margin trades for this type of activity. But here is the kicker a short sale where you are borrowing from an away broker is exempt from REG T so you can borrow up to 98% and just get marked to marketed daily via loanet based on the DTC end of day value. But once again, the BDs have a way around that. For instance, SB DTC broker 6 has old GLs and shell BD numbers from the Solomon, Shearson 418, Hutton 467, numbers and sep GLs and blotters/P&S statments they still have on books. So technically your broker at Citi “borrows: from Solmon Brothers who made an affirmative determination they could locate stock. So then in your master Smith Barney Prime Brokerage account you can go short Fannie to the tune of 100 million by putting two million down. Of course SB credit department verifies via DB/S&P reports that the amount you are in for does not exceed you entire new worth or value of your company or hedge fund. In that case they make you start unwinding. Back in 2000 I saw stuff like DRKOOP and Pets.com being borrowed 6X and when original owner entered into loanet to get his stock back the person he loaned it to loaned it again and again and again. So much was the craziness that firms like Schwab back in March 2000 were technically intraday bankrupt according to net capital requirements.
Enjoy the ride.
# 47 The hit those towns take will be in direct proportion to the artificial boot they received because of insanely
-easy credit terms since the mis 90s. The current “values” would never have been achieved absent the financing that was available. Any “spanking” should have been anticipated by anyone who was conscious and who had an ounce of fincial literacy.
Mrs. Shore and I watched people financing homes that they had no business buying and asking ourselves “what are they, and the bank thinking?” As it turns out, many were not thinking; they were caught up in a fairy tale. That folks who made very bad decisions may get hammered does not distress me in the least. As I sit in my paid off home, and look at zero debt, and incresed savings (even with the down market), I do not regret for one moment passing up opportunities to purchase various occasional-use properties that we looked at and just could not justify buying, given the prices.
Unless imprudence is punished in the marketplace, imprudence will rule.
http://www.belmar.com/File_Library/Summer%20Rentals/july%204,%202008%20summer%20rental%20news.pdf
The original Belmar newsletter.
NYT: Consumer Prices Surge 1.1% in June; Most Since ’82
#40 BC Bob: Amen brother Bob.
And the arrogance and sense of entitolement that went along with this whole madness was simply shameful.
Everyday people driving around in expensive leased cars, massive home renovations, 3 and 4 vacations a year, with one of course being to the islands in the Winter, so you can come back with a tan in February.
No, no sympathy
Rich: Thanks for yesterday’s information on that hosue in River Edge.
#48 – lostinny – Great link. The full letter(.pdf warning) is hysterical.
#52 I thought that the refineries had been at capacity for years. No production facility can run at 100% because of required maintenance and downtime. It was also my understanding that the oil companies haven’t built any new refineries because the permitting process makes it unprofitable for them to do so.
As far as the mortgage lenders and homebuyers go, I think both are to blame. They both went into these crazy loans with the delusion that they were prudent. A pox on both their houses.
Debt has increasingly permeated this economy for years and now it’s all coming apart at the seams and there isn’t a thing we as individuals can do about it except look out for ourselves and those we care about.
Ah damn I never did post the June sales data, did I.
I wasn’t going to say anything because I know that you have bigger things on your mind right now. However, I must say, the monthly sales charts is the NJREREPORT highlight of the month.
54 Thanks Shore. I love the fact that they do that. I can’t wait to see what the SI @$$holes have to say in defending SI against Belmar.
If you have good credit and good income, banks will loan you the money. Of course banks are going to verify as they should but requiring 100K down on a POS in Edison, NJ or Irvine,CA would ruin their own business. Ain’t gonna happen.
You obviously haven’t being looking to buy a house in 1993-1994. My friends were first time home buyers. First time they went to banker in 1993 – with about 2-3 years of work history and about 5% downpayment. They were literally laughed at.
20% down, ALL paystabs for last 3-4 years and such.
And banking systemn were in a lot better shape than it is now.
20% down minimum might come a lot quiker than you think… And If you do nto have 20% down – well than your rate will be A LOT HIGHER so it won’t make sense to buy.
Welcome to NORMAL Lending.
P.S> it will not kill housing – housing will just have to drop 20-30% off prices no – it will bring it backt to reality.
And May Be, Just may be we will see builders bulding STARTER HOMES/TOWNHOUSES again????
58 Toshiro
Got it. So embarassing to have to utter the words I’m from SI when asked.
Outofstater,
Every year we consume more and more gas yet every year the gas companies don’t seem to have a hard time keeping up. We don’t have a gas shortage. The gas companies are not applying for permits to build new refineries but are applying for permits to expand existing ones. Since 1975 I think there were only a a couple permits granted for new refineries according to this page that counters some oil myths.
Regarding financing, the majority of the problems are with non-prime loans. Non prime loans go to people with poor credit and generally have a hard time managing money. I’m not saying their not to blame but it’s like giving a can of gasoline to an arsonist and hoping everything will be ok.
We’re all going to feel the effects of the credit problems.
#62 – 20% down minimum might come a lot quiker than you think… And If you do nto have 20% down – well than your rate will be A LOT HIGHER so it won’t make sense to buy.
Thanks Al. I was starting the write a long response about risk premiums but that sums it up nicely.
As far as Gas guzzlers – current work force should be mobile, but home ownerships make it less mobile. Current solution – drive longer!!!
I moved 3 weeks ago to a new rental home 7 miles away from work. Love it! Before it was “22 miles – short commute”, according to people at work.
I haven’t fill my gas tank in 3 weeks!!!! And I think I will fill it up less than once a month now (according to my mileage ~400/15 gal Gas tank, 14 miles drive to work x 20 days = 280 miles. So I have 120 miles/month for groceries (on the way to work)/entertainment.
Even more importantly I haven’t realized the toll it was taking on me: I was arriving home/at work agitated, and upset and irritated and it would take me some time to unwind. Now I am arriving relaxed, and I have extra hour in my day!!!
High gas prices are no issue for me now.
Sell your house, move closer to work. It will also solve schools inequality problem as population will be a lot less segregated by race/income levels.
I think in the next 10 years we will witness
THE GREAT RESTRUCTURING OF AMERICAN SOCIETY IN A WAY NO ONE OF US CAN PREDICT/IMAGINE.
I do not know what it will be, but the suburban utopia in a way we know it is disappearing.
#63 – I know what you mean. Of course, if you’ve lived on the island long enough you know it’s all the fault of uncouth people from Brooklyn and the Bronx.
#45 NJGator:
And why did she have to take in a boarder?:
“Miss Terry bought her home six years ago, in a hilly neighborhood in northeast Baltimore, for $92,000, with a government-backed mortgage and monthly payments of about $800. She had never owned a home before, and was excited to move out of subsidized housing.
After two refinance loans, like many homeowners she does not understand her current mortgage, which is an interest-only loan. What she knows is that her payments are now more than $1,000 per month, and that she cannot afford them. ”
I’d be curious to know why she needed to refinance twice and does she own a new SUV and a plasma TV?
Grim,
If no one else here commented on the mortgage overlord comments coming straight from the newsman from the Simpsons episode with the insects, I wanted to say that I liked it.
Regarding financing, the majority of the problems are with non-prime loans. Non prime loans go to people with poor credit and generally have a hard time managing money.
Problems are concentrated in subprime Loans??? yea right. Check Alt-A, and NEg-ARMS or Any arms delinquency rates… \
They are PRIME!!!
http://www.huntingtonnews.net/columns/080606-kinchen-columnsmortgagebankers.html
“For example, while subprime ARMs represent 6 percent of the loans outstanding, they represented 39 percent of the foreclosures started during the first quarter. Prime ARMs represent 15 percent of the loans outstanding, but 23 percent of the foreclosures started. Out of the approximately 516,000 foreclosures started during the first quarter, subprime ARM loans accounted for about 195,000 and prime ARM loans 117,000, but the increase in prime ARM foreclosures exceeded subprime ARM foreclosures with increases of 29,000 and 20,000 respectively over the previous quarter.”
So the real reason – ARMS of all kinds!!!!
People took ARMS because housing prices were to high and they could nto afford Fixed rates. With neg arm you would be paying 900$/month PITI for first year on 600,000$ home. Thats your reason for Foreclosures!!!
#40 BC Bob,
You forgot to mention granite, stainless, imported tile, plasma, entertainment rooms with stadium seating.
# 55 But what is 13% inflation between friends.
67 Toshiro
Yeah thats what they keep saying.
# 71 “You forgot to mention granite”
In defense of granite, we have a kitchen that is in need of updating; things are wearing out. When one starts looking at counter material, it is amazing how little difference in price ther is between solid-surface tops and engineered stone, and there are a heck of a lot of solid-surface countertops that are more expensive than engineered stone. We found no difference in price between a high grade of granite and engineered stone. The only cheap alternative is laminate. Once one goes for anything else, the price is about the same. Mrs. Shore and I went into this process saying that there was no way we would get stone, now we have settled on it.
LL you think saying your from SI is bad, try Garfield. I have acquired the habit of saying I’m from Bergen County, 15 miles from New York City. If they ask further I’m begrudgingly outed. Funny how your automatically judged based on where you grew up even though your nothing like the town’s populace. Wholly the reason I went to school in South Jersey to avaoid the stigmatism that comes with a Garfield address.
So, with all the doom and gloom in the news this morning and the poor outlook for the economy, what does the market do this a.m.? It opens up?
29 BC
“What about the idiotic Hope Now plan? How we fallen off the slope of Hope?”
It’s being re-tooled. It will be called Hope Later.
75 Pain
I can’t even think of a way to phrase that. I mean what can I say? I’m in one of the boroughs? Big f’in deal. :)
#75
Pain,
Too funny. I was once on a work lunch when I asked someone where they lived. They replied “Rutherford”. I said, “no way, I grew up there, where do you live”. To which he replied, “well then I should tell you I live in Passaic Park”. It was hysterical. He told me it was easier to just say Rutherford (right across the river) rather than deal with the heat he took from anyone who knew the area.
He grew up in Pennsylvania and only worked in NYC.
I know people who stopped going on cruise ships because of HELOCs and cash out refi’s, what one once refined became a floating sizzler.
re: #77 njpatient – send that one into Leno he is always looking for new writers.
#64 Tom: The majority of the problems may be in sub-prime, but I know a few people who are or should I say were prime, who are having grave difficulties as well.
You are mistaken if you believe this is jut contaiend to sub-prime. Everyone was playing this game.\
Every homeowner I know has at least one HELOC, or home equity loan, some more than 1, and they have been using them aggressively.
Al, you seem to have some of your facts and figures wrong.
“Problems are concentrated in subprime Loans??? yea right. Check Alt-A, and NEg-ARMS or Any arms delinquency rates… \
They are PRIME!!!”
Subprime aren’t the only non-prime loans. Alt-A loans are considered non-prime loans by the federal reserve bank of ny and most other people. Negative amortization doesn’t indicate whether a loan is prime or not. There are subprime, alt-a and prime negative amortization loans.
ARMs aren’t the only loans in trouble. In NJ 68.5% of subprime were and 45.8% of Alt-A mortgages were ARMS. According to this 2007 article 13.5% of US mortgages originated in 2006 were subprime compared to only 2.6% in 2000
The quote you provided doesn’t provide the whole picture. There are more prime loans than non-prime loans. Even though there were more prime ARM foreclosures than subprime ARM foreclosures, the percentage of subprime ARM foreclosures was much greater.
77- ROFL!!
Damn you Shorts!! – Even Wells Fargo and Intel cant push the market up.
Miss those days when bad news used to be good news…
3b:
“#64 Tom: The majority of the problems may be in sub-prime, but I know a few people who are or should I say were prime, who are having grave difficulties as well.”
You are mistaken if you think I think the majority of the problems may be in sub-prime. :) I probably didn’t word that correctly.
In my opinion, the majority of the problem is because lenders were eager to give out as much money as they could. This drove up the price of houses. When they weren’t giving out enough prime loans they turned to more alt-a and subprime loans to be able to keep up with the demand of mortgage backed securities.
The artificially inflated home prices hurt everybody.
if 20% down is the new requirement, this basically eliminates almost all first time buyers. in reality, won’t FHA just own the market?
The 2007 Alt-As are most troubling.
http://seekingalpha.com/wp-content/seekingalpha/images/alta_2.gif
The artificially inflated home prices hurt everybody.
Wrong – they benefited greatly people who have sold their house in the 2004-2007 period. Many people got few hundreds of thousands Tax FREE.
And for immigrants from California -:) it is huge as they got 500K-1 MIL for thir houses. moved to cheaper locale, bought 200K very nice house, banked 300K…
Not bad – to get paid few hundred thousand for living in a house for few year. Who needs work???
skep-tic Says:
July 16th, 2008 at 9:53 am
if 20% down is the new requirement, this basically eliminates almost all first time buyers. in reality, won’t FHA just own the market?
How long can goverment sponsor everybody’s housing before it goes bankrupt/ Hyper inflation starts???
#17
“All the credit that’s been given to the lower and middle income groups to be able to live seemingly richer lives, winds up going up to the high income groups. ”
simple solution: live within your means.
“Wrong – they benefited greatly people who have sold their house in the 2004-2007 period. Many people got few hundreds of thousands Tax FREE.”
Some people made out, including the banking executives, but it’s not over. What do you think is going to happen to the economy as more banks collapse and more tax dollars have to be put in to fix the problem?
Ok maybe it won’t “hurt everybody”, lets change that to, few people will be untouched by the effects.
[16] NJP
Nom calls consumer sentiment a crisis, scotch the solution.
#35
“it’s just time they stop bleeding us for all they can get and return the favor.”
do you understand that corporations owe a legal duty to shareholders to make money?
I am new to the board… I posted this late last night…
Goto http://www.businessjive.com
Powerpoint, animation explaining in full detail how the shorts are crushing the markets with stock they do not even have ( said ) legal custody of…
Very sobering…
#51
“The prudent aren’t going to be bailing out most homeowners. Most in bad shape will lose their homes or be able to modify their loans. Where the rest of us pay will be in the bail outs of these lenders.”
there is a loss in there. who takes it?
Cindy :44
BC Bob – Let me know if I am understanding this mess correctly:
If the gov had reined in the mortgage companies when they should have (evidently they have had the power to do so since 1994 but only used it a few days ago) we would not be dealing with a mortgage crisis and only have the inflation issues which could be addressed with a raise in interest rates. But since we have the mortgage mess, a raising of rates would cripple the housing industry so everyone feels like they are in a double bind and have their hands are tied.
~~~~~~~~~~~~~~~~~~~~
I’m not BC Bob, (and I didn’t stay in a hotel last night) but I’ll give you my retrospective perspective.
You’re probably right when you think that if the government had managed the money supply better we wouldn’t be in the mess we see today. After 9/11 and the dotcom bubble, the economy needed a boost. Lower interest rates were the way to achieve that end. And Greenspan cut rates from 6% in Jan 2001 to 1.75% in December of that year. This created some nice returns starting in 2002 as measured by SP500.
The Fed kept the rates stable in that 1% area until summer of 2004, when they started raising in quarter point increments almost monthly til summer of 2006. Then they started cutting again, with some “panic” 3/4 points drops.
It is my opinion that it would have been better not to drop interest rates so low once the broad market started to rise in 2003, and not jerked around raising and lowering after that. A steady hand was needed, instead we “fed the beast” The economy was jumping and it was good.
But the economy is fed by consumer spending. The consumer was taking equity out of their homes in huge numbers to make their dream purchases. Cars, Trucks, Boats, Big TV’s.
This created a need for creative financing, thus was born the Mortgage “Broker”…whose sole function was to take applications and place the loan. Their paycheck was determined by how many loans they could close. And they were (and remain today) unlicensed and unregulated. A prescription for disaster. This is where the toxic loan products reached full bloom.
In hindsight, I think the easy money policies led to creative financing that put families in jeopardy. If you look at some of these foreclosure stories, there are some folks that could never have purchased the home they’re in today. These people should have been renters.
Stable Money Supply and reasonable lending practices could have avoided this mess.
I cant wait for the human version.
http://www.physorg.com/news135003243.html
yes there were macro factors at work, but at the end of the day every single person involved in this had a choice. no one had a gun held to their head saying “take this loan.” talking about these people as if they are children or halfwits who should be held responsible for their choices just because some people higher up the food chain also made bad choices is absurd.
shouldn’t
(95) Thank you Fiddy…granted “Stable money supply and reasonable lending practices could have avoided this mess…”
Now…Where do we go from here?..From what I understand they are starting to crack down on lending practices -way too late….
I want to know why they are not raising the rate from 2% to stem inflation?
My guess is that they are afraid of further job losses and the impact higher rates would have on an already battered housing market..
Is that why we are not having rates increase ala Volker?
(100) make that Volcker…
Cindy,
I think that what I heard this morning is that raising interest rates would further increase prices, until the USD strengthens. However, I must admit that I’m not sure I heard the analysis correctly.
I’ve been wondering the same thing.
isnt the free market supposed to solve all of our problems?????? but what about the speculators driving up oil and all of the rouge shorters drive fannie and freddie to bring by naked shorting???? I am confused, is a free market a good or bad thing today?
#48 lostinny
Who is dis guy kiddin? Does he knoe how much we spend on beer, cover charges, and hair gel in belmar?
All I know is that people are going to lose jobs anyway because of inflation. People are going to lose homes because of inflation. If I want the fed to be concerned about anything it is inflation…
NOT the housing market.
cindy,
raised rates would cause a marked increase in un employment and would seriously hit the real estate market. , it would be the stake through the heart, of that hasnt already happened. But the night is darkest before dawn. There is no way out of this situation without pain. we are heroin junkies who want to come clean without going through withdrawal. Not gonna happen!
104 Mah peeps
Don’t you know there is no letter “r” in SI?
skeptic:
“simple solution: live within your means.”
I agree with the last part but not that it’s simple. It’s not like these people decided to live beyond their means and strong armed the lenders into making that happen. The credit industry has been enabling and encouraging this practice. This has helped drive up prices in many areas which makes it harder for people that want to live within their means to do so. Around here, someone making 80-100k/yr should be able to live in a decent sized home for about $400k. I’m not talking a McMansion. Instead, the homes most people would consider decent were going for 600-700k. I’m talking about 1950’s capes and ranches that haven’t been remodeled. ANd as someone mentioned recently, look at what the credit card companies are doing to college kids, giving out credit by counting grants and scholarships as income. I remember when I was in college and being told this. I said, “I don’t get it, you know that money is already going to be spent, how can you give me credit based on money you know I won’t have?” Just got a blank stare and a sports cup.
“do you understand that corporations owe a legal duty to shareholders to make money?”
Yes, do you understand that you can’t do that by chasing short term gains at the expense of long term viability? These practices only benefit short term investors and executives that took large bonuses while the money was coming in.
“there is a loss in there. who takes it?”
The banks already sold off a percentage of their loans through institutions such as FannieMae, FreddieMac and the other smaller companies that sprung up. The JG Wentworths for banks. A number of mortgages were FHA insured. Banks that gave out deposit backed securities are have endangered their customer’s deposits and the FDIC may have to pony up to secure those deposits, like what’s going on with IndyMac. There are talks of other types of bailouts.
Nobody held a gun to the heads of lenders either. They chose to give out these loans where in the past they wouldn’t have. The extent of the problems indicates that there was more going on. I mean if you went out with any realtors during that time or talked to any loan officers or even watched tv you would have seen all the crap spewed to encourage people to buy, cash out equity, etc. One of my family members was house hunting and the way her realtor was talking you’d think everyone would have to buy a house now that they could barely afford because in another 2 years a starter home will be $1,000,000 and they couldn’t afford that.
People should have been smarter, but they’re not the only problem, not by a longshot.
(106) Kettle1 – So we stay the course at 2% until……????? In the 70’s when Volcker raised the rates there was serious unemployment and many went out of business. Home loans were going for 14%. I guess I would rather see that than this slow death by inflation…Just sayin.
#75 Pain
Garfield really is something to hide yourself from. I would do it too.
<– Lodi guy ;-)
Ah, who am I kidding. I hide my hometown too.
err… buyers should have been smarter. There are probably other typos/errors in there but I tend to only proofread the last line after I post :)
#102 sybarite: Raising interest rates will no raise house prices, only speed the decline.
Skeptic, just think of it this way…
If you had $50million to invest in something, and you wound up lending to people you knew might have a hard time paying you back and you lose money, is it their fault for asking you for it, or yours for giving it?
3b,
Sorry, I wasn’t referring to home prices, but rather consumer goods.
another oil sell-off day!. $40+ is too far but it should be under 100 after summer.
Tom, it’s like you are saying, oh, banks made credit available– how are people supposed to resist?
Easy. Don’t buy things you can’t afford. No one owes you a house, a flat screen, new car, etc. Rent. I am renting and most of the people on this blog are renting. What is the problem with living within your means? Have we really devolved to the point where average people shouldn’t be expected to grasp this concept?
#113
“If you had $50million to invest in something, and you wound up lending to people you knew might have a hard time paying you back and you lose money, is it their fault for asking you for it, or yours for giving it?”
It is BOTH of their fault, but the problem is that you and I (not them) are expected to take the loss.
109 cindy,
I am suggesting that we immediately raise rates and continue to raise them! I am a huge fan of Volker. Such actions will be painful, but would be in out best interest
#117 skep-tic
We are taken/will the loss in many ways.
1) Through higher taxes and more government debt to fund the coming bank bailouts
2) higher loan rates. Especially if the major mtg insurers go bust.
3) Higher costs of food & energy due to weakening dollar.
4) Lower value of dollar as the dollar is exported for trinkets and and baubles from overseas caused by an artificail demand created by loose lending policies and the heloc crowd.
I’d go on but I don’t want to depress myself.
Constituents must be lighting up the switchboards in Congress. The House Finance committee meeting this morning starring Bergabe are all using raised voices and talking about inflation. They all seem nervous, and are actually asking tough questions.
Barney Frank calling for second stimulus check and supplemental aid to state and local governments.
Ron Paul is up now.
bi 115,
another oil sell-off day!. $40+ is too far but it should be under 100 after summer.
hmmm, i need to buy more energy stocks, before they jump up.
(118) Kettle 1. I know no answers. I just feel like inflation is killing this country anyway – our dollar is a joke.
I DO live within my means but my means have changed. With no raise and the increases I continue to see in utilities, food and gas it doesn’t seem to matter that I still drive the Hyndai I bought in 2001 or live in the 1100 sq. ft. home I purchased in 1999. I have had to cut my standard of living….Not everyone got HELOCed up the ass but we are all suffering for it today.
So is a GRIM appreciation GTG in order in the next few days????
(except saturday night, i’m on baby kettle duty)
#122 Cindy
Exactly. This bust and the inflation that it is causing is going to hurt even the prudent.
The HELOC crew and those who lived right on the edge are going to get really hammered.
“It is BOTH of their fault”
It’s both their fault but borrowers can ask for all they want and it doesn’t become a problem until the lenders start handing out cash.
“but the problem is that you and I (not them) are expected to take the loss.”
I agree it sucks and we had no say in what was going on. That’s why I feel the government should have protected our interest by putting a stop to this nonsense early on. When federal money is involved, our tax dollars, I feel they have a duty to do something.
I take issue with banks claiming “losses”. They made a ton of money during the boom. That money went to pay big commissions, salaries and bonuses to a lot of people. The money was going out too fast in my opinion for money that was being generated from such obviously risky practices. Non-prime loans by definition are riskier.
actually, if congress has its way, the HELOC crew will not get hammered. they will get the value of their debt written down and a below market refi. but the gov’t is not going to confiscate all of the junk they spent their HELOC money on during the last 5 yrs
Grim – I guess I picked the wrong day (yesterday) to post before reading any comments in the thread. So sorry to hear that you are going through a rough spot now. The Gators are ready, willing and able to help you drown your sorrows at an upcoming GTG.
(124) Bairen – I guess I should count myself lucky but I do not see where it is going to end. Not at this rate anyway.
Well, at least I’ll say this for Bernanke…regulations are at least in place now on new mortgages and that is more than his predecessor did….
Cindy Says:
July 16th, 2008 at 11:06 am
Not everyone got HELOCed up the ass but we are all suffering for it today.
C: now we finally have you talking as if you were from NJ!!!
BC (34)-
I’m just looking for my shorts. Guess I need to go find some more.
Got SKF?
(128) Hi Chicago! Yeah – You guys are definitely rubbing off on me… It’s a good thing..
Sean (41)-
Been waiting for a while for all the BSDs to blame it all on Goldman.
x (43)-
I’m with you. Not seeing that at all.
People who are light the downpayment can still go FHA, easy as you please.
Once Fannie/Freddie are nationalized, I think the whole conventional market goes back to 1957 underwriting standards, though.
ICSC Predicts 144,000 Stores Will Shutter in 2008
Largest Percentage Increase in Store Closures in 14 Years
Read the article.
It’s a study in irony.
“we originally said 4500 stores will close”
“ooops, 144,000 will close instead”
“more stores will open, not to worry”
“we can count on the new stores, they are ‘new concepts’ from familiar names” (Starbucks, here we come again…)
Clot (132)
All I’m seeing is a 5% reduction to max LTV for conventional in NJ (declining market policy)…now max 90%. That’s been here for a while
John (52)-
Pardon me if this is too simplistic a question, but how do the BDs ultimately avoid the failure-to-deliver part…especially on long-term short positions?
Clot (132)
As long as the mortgage insurers stay in business we’ll continue seeing LTV’s over 80%.
Should I short MGIC, Genworth, and Radian now?
speaking of heloc’d up the a**…
I did some digging on an owner of a bldg I’m interested in…
63 mortgages and cancellations (pay off-most likely using new mortgage/heloc to pay off one being canceled)
in…what for it….8 years.
x (134)-
Yep, that’s old hat. All the sharp guys are figuring out work-arounds to it.
Are you seeing lots of gifts and gifts-of-equity (Nehemiah & Nehemiah-style loans)?
Those are cool.
oooops
s/b “Wait for it”
I’ll never make it on Broadway if I mess up the punch line…geez.
x (136)-
I’d rather just short everything financial, via SKF.
You have a nice little entry point today. I think all the talk about naked shorting has scared some people out of this ETF, even though the talk doesn’t apply to this particular vehicle.
All disclaimers. After a few Knob Creeks, I also believe I can fly.
Tommy Boy: You are performing a good bit of grandstanding. Let me work to poke some holes….
“The price of crude is only about 50% of the price of gasoline. The big gas companies are always saying it’s not their fault because the cost of refining has been going up due to increased demand and limited refining capabilities. They fail to mention that the big gas companies now are in charge of over 50% of the refining output and that their refining profits have increased dramatically. Taxes make up about a quarter of the price of gas and taxes have been going down to ease prices but refiners have actually been making more profits.”
Have you reviewed the financial results of pure play refiners and also the integrateds that contain refining operations? If not, then you should.
Honestly, it is easy for someone in your position to complain. However, if this morass is viewed in holistic and historical perspective, I don’t see what the big deal is.
You demand precision from individuals that have at best blunt force instruments, and at besy indirect control of the actors in the market.
I openly agree that there are a whole host of people who are culpable, certainly even criminally. However, you should worry less about what government owes the people, or what some evil gordon gekkos in the corner office have done, and more about YOU as an informed actor CAN PERSONALLY DO to take advantage, or else if altruism is a priority, then HELP OTHERS.
x (136)-
“Should I short MGIC, Genworth, and Radian now?”
Come to think of it, that should qualify as mutilation of a corpse.
FHA loans are nonsense. Most of BC and Nassau County even middle class starter run down homes are still 500K and livable homes, older renov on a 60 by 100 plot with 4 bedrooms with run you 750K, the FHA limits make you put down a ton that most people don;t have. So FHA props up houses in the sticks or crap houses. For us who work in NYC and want a decent commute and good schools it is not of any help. The good houses are over the limit and want 20% and no loan over 417K. In fact I looked at an estate sale recently that was for sale for 750K that had a buyer with 20% down. She was willing to take offers for less than that offer if it was non contingent upon sale of another house and buyer could show they were taking a mortgage less than 417K as evidenced by proof of evidence of 333K plus closing costs in bank. So the did not get that so they sold to 20% person who paid 5-10K extra plus they have a higher interest rate. The buyer is out money on day one and is paying extra each month for 30 years. Big deal on 20%.
the house looks damn good, but the sale price seems too good to be true
In cases like that, it usually is. We started looking to buy end of May of this year and on only the second day of looking we walked into this fantastic house. We walked in and basically said, “this is the one, we can’t believe we found it so quick”. The house was a 3 bed 2 bath mint condition cape with completely finished basement and HUGE backyard. The price was $299,000. We freaked. We were ready to offer full asking. The house sold for $340,000 in 2004 and i was excited to be getting it for $40,000 less than the 2004 sale price. We later found out that day that the house was a short sale and the guy had 3 mortgages! We also found out that day there were 5 people going back and forth on the house. I wasn’t even going to fathom the idea of a bidding war in this market. I’m sure it still went for under 2004 asking.
They just do a buy in notice or Clotpoll Says:
July 16th, 2008 at 11:34 am
John (52)-
Pardon me if this is too simplistic a question, but how do the BDs ultimately avoid the failure-to-deliver part…especially on long-term short positions?
Clot (138)
I’m in I.T. now and work on the loan origination system. I don’t really watch what comes in the door anymore…thankfully
You can’t do gifts-of-equity to manipulate LTV unless it’s a non-arm’s length transaction, which is only a small % of total deals out there. I think it can only come from a direct relative too…no cousin’s. I guess the sellers could always claim they’re related to they buyers. I’ll bet there are plenty of underwriters who would believe it.
“My name is Mr Wong and Mr Galackiewitz is my son”
The best stories of gift funds come from the Hacidics in Brooklyn and the Asians in Fort Lee…always come up with 6 gift letters from 6 cousins.
97 skep
“talking about these people as if they are children or halfwits who should[n’t] be held responsible for their choices just because some people higher up the food chain also made bad choices is absurd.”
Agreed, and speaking of which, we should give out medals for wit to each of these people. I’d give them each half a medal.
#147 njp
Would you give them the front or the back of the medal? :)
Clot (140)
I was looking at SKF lately but figured the real money has already been made in that one. I did buy some SH, however, which is counter to S&P 500.
All disclaimers apply
chicagofinance Says:
July 16th, 2008 at 11:39 am
Tommy Boy:
That’s where I stopped reading.
just watched the cspan feed. it sounds like some of the politicos are starting to get a little nervous
[149] If everyone here is right, it should be going higher.
[140] That’s my drink of choice as well. Cheers.
(152) it’s correcting right now… down almost 25 per share.
it’s gonna remain extremely volatile while the financials’ boat is getting rocked.
lots to be made (with caution) and liberal use of buy/sell limits. Don’t be greedy, just make money.
the usual disclaimers: I’m just a turnip who fell off the haystack… don’t listen to me.
sl
“FHA loans are nonsense. Most of BC and Nassau County even middle class starter run down homes are still 500K and livable homes, older renov on a 60 by 100 plot with 4 bedrooms with run you 750K”
correct me if I am wrong, but isn’t the new FHA limit for the NYC metro area 729k?
[123] Kettle,
I don’t know if a mini-GTG just happened or not, but for a Grim Appreciation GTG, we would have to get Grim in on it.
I am in the City on friday after work, so city works for me then.
I haven’t yet attended a GTG so Grim, Patient, BC, and Kettle are on my list for rounds 1-3 (and probably to round 7 in Grim’s case. Perhaps I should just buy the bottle).
Thoughts??? Suggestions??? I know there was just a GTG but this is for Grim, folks.
please see the below link for current FHA limits in NY. Current for NYC area is $729,750
https://entp.hud.gov/idapp/html/hicost1.cfm
I bought early 2000. Had to have 20% down, and hit the 28/33 rule. It was brutal. They found an unpaid medical bill from 1989 for $87. that I had not paid; that was a bfd and I had lots of ‘splainin’ to do! I sold in 2006 (yippee!) and have been a happy renter since.
I left out ChiFi and barien on the drinks list. My bad.
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2008
New egghead stuff on subprime.
The FHA limit is “technically 729K but hardly anyone is doing it and it expires at year end.
The easy short money has been made and now it is the retail investors jumping late on the bandwagon. They are going to get smoked harder than a bong in a cheech and chong movie.
if max mortgage is $729,750 and you can put a minimum of 3% down, this would allow you to buy a $752,000 home in the NYC area. You just need to come up with roughly $23,000 DP. this is still pretty loose credit if you ask me
Yea go to chase.com and enter a mortgage great than 417K in Nassau and watch the jumbo rate come up. Fannie/Freddie/Hud don’t set the rates. Just cause they will buy it does not help your rate on about 417K, that is whey jumbo loans are still dead.
Except for the fact you need a 292K income to pay the mortgage.
skep-tic Says:
July 16th, 2008 at 12:49 pm
if max mortgage is $729,750 and you can put a minimum of 3% down, this would allow you to buy a $752,000 home in the NYC area. You just need to come up with roughly $23,000 DP. this is still pretty loose credit if you ask me
[1]
“That legislation “was not enough to turn around the perception of the state’s business climate,” Sen. Joseph Kyrillos (R-Monmouth) said.”
Ya think?
Boy, when high-tax, high-cost Philadelphia can be made attractive to business, that is how you know NJ really sucks. For years, the flow was the other way, out of Philadelphia, because of ridiculous city taxes. Of course, this deal would not have happened without the KOZ incentive but, damn, Rendell is still eating Corzine’s lunch and hasn’t even moved on to dessert yet.
And who wouldn’t prefer Philadelphia over New Brunswick? Like its a close choice???
documenting income definitely is a current nail in the coffin for housing. when downpayments really go up to a minimum of 20% we will see sales completely crash. I am just saying we do not seem to be there yet. please anyone who does this for a living correct me
#159 nom,
no worries. Looking forward to meeting you at a GTG.
From MarketWatch
HOME-BUILDERS INDEX SLIDES TO RECORD LOW; NO NEAR-TERM TURNAROUND SEEN
The home builders’ sentiment index fell two points in July to record-low 16, with all three components of the survey also dropping to historic lows, the National Association of Home Builders reported Wednesday. At 16, the NAHB/Wells Fargo housing market index shows that only one-in-six home builders has a positive view of the market. New subdivisions have become ghost towns, with current sales dropping off and with the traffic of prospective buyers drying up in recent months. Few builders anticipate any improvement in sales in the next six months.
bi Says:
July 16th, 2008 at 10:51 am
another oil sell-off day!. $40+ is too far but it should be under 100 after summer.
Wow – Now I am ready to say that oil will be 200 before september!!!
I don’t really think 20% is such a big deal. When I sold my coop and my Moms house a few years ago everyone had the cash and even now people have the cash. Crap areas with subprime mortgages galore are dead as the price run-ups were the walmart clerks tapping easy money via 3/27 no doc teaser loans.
The better neighborhoods have buyers but they are all fence sitters waiting for the bottom to hit, they have the cash but why buy? If you got your 300K deposit in the bank at 3% interest and housing is falling 10% a year you would be nuts to make a million dollar purchase when you will lose 100K equity and 9K a year interest in year one which is almost a loss of 10K a month!!!
In fact when I had the realtor take me out in the rich neighborhood a few weeks ago she said she has buyers with the cash just going back and forth dickering on price then the buyer takes a few weeks break comes back when prices are cheaper and does it again. One, two, theee years down the road they will buy. The downpayment is not the problem people want a deal and don’t and don’t want to lose their life savings by jumping in to soon.
John Says:
I don’t really think 20% is such a big deal.
John, you need to think outside of this area (nationally) Sure, many people here are able to save 20% but in the flyover states and down south, money ain’t the same. Everyone makes $40,000/year and saving $5,000 is a big deal.
John– do you really think there is an abundance of 1st time buyers with six digits in the bank? the median downpayment for 1st timers nationally in recent years was 3%
Stuff White People Like: Statistics
White people hate math. If you want to befriend white people, mention “that weird Asian calculus teacher who drew perfect circles” and how much you hated his class (bonus points if you mention how your parents made you get an even worse tutor who was more clueless than you and smelled bad). However, white
people are fascinated by “the power of statistics” since the math has already been done for them. Some magazines, like TIME, have a section in each magazine that has some interesting statistics ($80 trillion: the amount spent by the US in the Iraqi war) followed by absurd, barely related ones (4,317 yards: the
distance covered if you were to take all the ammunition shells fired by US soldiers in Iraq since the war started). White people who read TIME will quote these statistics, but even non-TIME reading white people will throw in stats they read in a less-than-credible study. It’s not unusual to hear such things
as “I don’t mind this neighborhood since I’m not Republican. 80% of them are anti-minority, you know” or “I don’t think you should let Sally play softball because 70% of softball players are lesbians”.
White people love sounding smarter than their peers and will jump at any chance to use a statistic if it’s applicable to the conversation in any way. The more absurd the statistic, the more clever and original you will seem. Stats can also hide negative feelings. If you meet a white person who wishes went to a
school that they refer to as the “Harvard of the (Region where the university they attended is), they may say something like “Good thing I didn’t go to an Ivy since 35% of their graduates reported being unhappy with their lives”. It is considered rude to laugh and you should instead smile or throw in another
appropriate statistic if handy.
The only time you should not use a statistic is to ask a white person if they knew “that (random number) % of statistics aren’t true”. You will be seen as being unoriginal, not funny, and will get stared at.
That whole 20% thing is sketchy. First, I think people with less than 20% but large incomes will still get mortgages (rates are another story). Then there are the recent cases where people with large incomes and 20% were told they needed 25% because the area in which they were buying was classified as a “declining market”.
For all you Bergen County fans, most of Bergen, if not all was classified as a declining market. Yes, even Wyckoff, Glen Rock, Franklin Lakes etc.
Clot, are you playing casino?
SKF down 14%.
x (149)-
I think the easy money is yet to come in SKF. Wait till JPM, C, BAC, WFC, WM’s next earnings.
I think we’re on the edge of seeing the inverse of the Law of Large Numbers. Now, tiny moves in actual dollars on these issues will equal huge percentage losses (or gains, for those short).
All disclaimers. In seventh grade, I also thought sniffing glue was a novel idea.
bi (173)-
Please refer to a chart that tracks this stock for more than one day.
If you have access to such things…
x (146)-
“My name is Mr Wong and Mr Galackiewitz is my son”
I’ve seen stuff that makes the above seem conservative. And, in certain parts of NJ, you can still claim half your county as blood relative…
175#, the mean reversing of financials has way to go. Citi is still under target $16 set a few days ago by short sellers. I wont be surprised to go back to 20’s before summer ends.
John (160)-
“The FHA limit is technically 729K but hardly anyone is doing it and it expires at year end.”
Exactly. From Day 1, the secondary market applied jumbo parameters to anything over the old limit, so from 418K and up, it’s been SOSDD.
And, the secondary mkt has put their own parameters all over “regular” FHA loans, demanding minimum FICOs, etc. FHA internal guidelines don’t have this stuff. Their own rules don’t even mention FICO!
So all we need to do is make it through the summer and then, all is well!
Plume (164)-
“And who wouldn’t prefer Philadelphia over New Brunswick?”
If you look at Philly like it was an entire human body, New Brunswick would be the equivalent of its arsehole.
Maybe I should start stocking up on non-perishable things.
# 175 bi: wont be surprised to go back to 20’s before summer ends.
Based on what parameters? What possible scenario would lead to a turn around at Citi over the next 6 weeks or so?
Are you factoring in their earnings announcement this week? Ah why bother;never mind.
bi (177)-
“…the mean reversing of financials has way to go. Citi is still under target $16 set a few days ago by short sellers. I wont be surprised to go back to 20’s before summer ends.”
bi, was your famous oil call based on this “mean reversing” thingy? If so, please share the highlights of your algorithm.
I want to know how C ever sees a 20 handle again after another quarter or two of 10-12 billion writedowns.
#171 skeptic: exactly my point.
I think bi is about to get mean reversed.
175- Bi
Thank you! It makes me feel much better to have gotten back in today :).
Cant believe I got out of SKF at 140.
yes. maybe not in the hicks. but layoffs so far has been 40 something senior management. I know tons of mid twenties to early 30s couples getting married where both make in the high fives and low sixes. Heck houses are down to almost 450K in some commutable neighborhoods. 20% is only 70K. Heck with wedding money and a little trip to the bank of mom and dad a couple can swing that and with two incomes for a few years the mortgage is an absolute joke to pay. Bottom line everyone I work with in the starter home market are newly married have two incomes and parents to support them. Us old farts looking for trade up houses are the ones with the problems. We are on one income, have a few kids a stay at home wife and are in the prime time to get laid off. Plus we can’t even move into a cheap one bedroom as we need the room.
heck near me the starter home notion is a quaint concept. kids take parents out to a few pos capes for 450K and then parents say I will loan you some extra coin for a better house. Basically store clerks and border jumpers are buying starter homes in so so neighborhoods.
July 16th, 2008 at 1:19 pm
John– do you really think there is an abundance of 1st time buyers with six digits in the bank? the median downpayment for 1st timers nationally in recent years was 3%
Cant believe I got out of SKF at 140.
150 for me. Not much better.
John, we have a negative savings rate in this country. These 20 somethings don’t have savings. They have student loans to pay off. I’m 27, and only know about 3 people who my age actually have legitimate savings accounts. Even so, I’m not sure they can afford to put them towards a down payment at these prices. Also, we are going into a big economic downswing. Those 20 somethings are looking at falling wages or losing their jobs outright.
20% was the norm because banks typically got 80% back on a foreclosure. Banks have been lucky to get 60% back on foreclosures which tells me, at the current list prices, banks should be requiring 40% down to shield themselves from the risk.
#187 John: in short I disagree across the board.
[187] and [189]
You can find examples of both these scenarios, but I would think that the overwhemming majority of first time buyers don’t have even 10K to put towards a DP, DINKS or not.
To your point John, we have a couple that we are still friendly with from our days in So. Cal. The wife’s parents “loaned” them 400K to buy a ocean facing townhome in La Jolla for 1 million. They have since had twins and needed to move, they could only get 825K for the place but it didn’t even matter to them. This is the excpetion not the rule. Most of our friends, some who have very high paying jobs, have so much debt that they couldn’t scratch together anywhere near 20% needed for a standard 500K home but they have ample income to make the monthly PITI. This is why I don’t beleive it’s realistic to think we are going back to the good old days of 20% down. The demographic of home buyers is different now. I agree w/ Skeptic, income verification for sure, perhaps even front/back ration analysis, but not all the cash up front. If so, transaction volume will come to a halt.
CALIFORNIA has more hi-tech jobs and companies, much better weather, and you’re gonna tell me that NJ RE can’t fall another -10-20%…LOL…mean reversion is gonna be a B#$CH in order to return house price affordability and income ratios back to normal…I’d rather be owning stocks than illiquid overpriced, RE with taxes guaranteed to rise each and every year.
SoCal home prices drop 29.3 percent in June
Wednesday July 16, 1:52 pm ET
By Elliot Spagat, Associated Press Writer
Southern California home prices drop 29.3 percent in June from last year
SAN DIEGO (AP) — Southern California home prices plunged 29.3 percent in June compared to a year ago, a research firm said Wednesday.
DataQuick Information Systems said the median price for new and resale homes and condominiums stood at $355,000 last month in a six-county region, down from $502,000 in June 2007.
The median price fell 4.1 percent from $370,000 in May.
Driven by the sale of foreclosed homes, sales picked up from May to hit a 10-month high, but last month’s tally still marked the slowest June since DataQuick began keeping statistics in 1988.
The June average is 28,488 sales, with the peak reached in 2005 when 40,156 homes sold.
A total of 17,424 homes and condos were sold last month, up 3 percent from May but down nearly 14 percent from June 2007.
DataQuick president John Walsh said the market has been slowed as the availability of mortgages has tightened.
“The mortgage market turbulence is putting quite a bit of activity on hold,” he said. “Even some very well-qualified households aren’t getting mortgages these days, although this could all change fast if liquidity comes back.”
Foreclosure sales continued to drive the market in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.
DataQuick said more than 41 percent of homes resold in June had been in foreclosure during the previous 12 months.
That was up from about 39 percent in May and up from about 7 percent a year earlier.
The median price has fallen because of depreciation, especially in inland markets, and because of the steep drop in home financing in the jumbo category, which until recently was defined as loans above $417,000, DataQuick said.
Before the credit crunch hit in August 2007, nearly 40 percent of Southern California sales were financed with jumbo loans.
Jumbos last month accounted for 16.3 percent of sales in the region — up from 15.7 percent in May, according to DataQuick.
187, John, I know a few Gen Y whose parents chipped in for a down payment. 20% is not that difficult for a professional couple.
I see either expensive upper management getting let go or newbies who add no value let go. The non-pension eligible gen x and y are doing ok asaik.
John– to echo what ben is saying– among people I know it is the same thing– we are not better off. Many people I know went for JD or MBA and have a lot of debt from that, plus debt from undergrad.
Now we are all 30 or so, married, starting to have kids. Can’t live in a studio apt anymore, so you are paying at least $2500-3000 or more a month in rent on top of $1000+ per month in student loans. And once you start getting into baby mode, that second income starts to become a lot less than certain (as you know).
The people I know who didn’t go back to school and aren’t married and starting families you would think would be better off financially, but they have spent the past 8 yrs since college hitting bars 4 nights a week and going to Miami and Vegas 5-10 times per year. So they are in bad shape too.
I know that there are people out there who do have the cash but most of them are getting it from parents. My guess is that this description fits the late 20s early 30s people you are seeing buy houses.
The biggest problem in this country is that we had a false sense of wealth. The fact is, the average American’s savings account is $0 and most of them are actually in debt. They thought their home equity was their money. Now that’s gone, families are suddenly realizing they are dead broke. That’s why foreclosures are up. That’s why car repo lots are full. That’s why everyone is trying to sell their SUV or their gold jewelry. On top of it, we are all getting slammed with inflation at the food store and the gas pump. That leaves even less money for people to put towards a house.
Grim,
I’m very sorry to hear about your personal problems. It’s good to see you back on the blog again. You’ve done a great service to the community with this blog, and helped a lot of people avoid financial ruin.
Regards,
Ed
http://www.nj.com/news/index.ssf/2008/07/newark_officials_to_break_grou.html
From the Wall St Journal
Financial shares led a broad stock-market climb after Wells Fargo posted solid earnings and Washington regulators said they plan to crack down on short sales of banking and GSE stocks. Oil prices plunged for a second straight day. 2:01 p.m.
Wells Fargo posted solid earnings???
#193 Booya,
I’m seeing asking price down 25 to 30% since Spring 07 in nice towns. I would think 20% down YOY in NJ sales price is only a matter of time.
Houses like this (4 BDr on 1.5 to 2 acres) were listing for 575 to 650k in Warren in Spring of 2007.
http://tinyurl.com/6yyt58
This one’s at 459k
There are a few similar houses in the 500 to 550k range.
Some even listed around 600k (I guess they forgot to change their calendar from 2006 to 2008)
113 Tom
“If you had $50million to invest in something, and you wound up lending to people you knew might have a hard time paying you back and you lose money, is it their fault for asking you for it, or yours for giving it?”
Yes. It is.
#199 – Financial shares led a broad stock-market climb after Wells Fargo posted solid earnings didn’t hemorrhage buckets-o-cash .
Does that read better?
Nuts – no strike-through tag allowed.
#202 toshiro,
I think solid earnings in the way diarhea is a solid compared to water.
I totally disagree. I partied very hard for a very long time. So much was I spending that at one point on a 45K income I had a share house in the hamptons, a ski house, went on two vacation twice year and an apt in the city and a jeep wrangler for skiing and a benz convt for the hamptons. I went out on average five nights a week. When I got married my wife moved into my cheap apt and I stopped going out. I was able to bank 100% of her salary and 20% of mine and within two years had a big downpayment.
The point where it hit me that I was out of control was my friend who worked for IBM was out in Rosyln at Howard Sterns house and Howard was being Howard and bragging that he had a Jeep, Mercedes, Hampton House and a place in the city and my friend told Howard that his friend John also has those things, Howard said well I have to meet your friend John if he is so well off!
The good news was I was able to hang onto all those great memories and my Benz which finally made it out of my garage after years of neglect and is scheduled to get restored next month. Place is very slow on business so is doing it at a good price.
If a guy or girl has a cheap coop or rent stablized place all he has to do is stop spending and move the spouse into his/her place and the money will pile up quick. The problem is the newlywed couples don’t want to eat pizza with a coupon and watch a library video on saturday nights, they don’t want to save for a house. You don’t need a nickle when you get married but once married you do need to save.
Tom,
is it your fault for loaning to people who you new where high risk?
as NJ patient would say
“easy answer to an easy question”
YES
When I bought my first NJ house in 1978 my purchase delimeter was a house whose mortgage level did not exceed 2x’s income. In my case a $125K house with $45K down, and an $80K mortgage, on an annual salary of $40K. I considered the house to be an Appreciating Asset. When I bought my last NJ house in 2006, my purchase delimiter was how much could I afford to lose, if the house went to zero, which in my case was $365K, with zero mortgage. The house in 2008 is now valued at @ $325K and dropping fast. But, because I never expected it to retain purchase value, it’s acceptable as a Depreciating Asset. Interesting how expectations change over the years.
N.J. lost 4,100 jobs in June
New Jersey employers shed 4,100 jobs last month, largely in manufacturing work tied to the struggling housing market, according to state data released this afternoon.
The state’s unemployment rate fell a tick to 5.3 percent in June, and remained below the national rate of 5.5 percent, the New Jersey Department of Labor and Workforce Development said. But the N.J. jobless rate still stands at a higher level than it has for the past 12 months
All of the job losses came from the private sector. The public sector added a net 100 positions, driven by an increase of 400 jobs in local government, the state said. Federal jobs in New Jersey fell in June, while state government jobs were flat.
“New Jersey’s employment situation over the first half of the year was directly in line with the job losses that occurred nationally,” New Jersey Labor Commissioner David Socolow said in a statement. “During the first six months of 2008, New Jersey’s total nonfarm employment declined by a total of 14,100 jobs, or 0.35 percent, while the nation lost 438,000 jobs, or 0.32 percent over the same period.”
Besides the decline in manufacturing for building products, the state was hurt by the shutdown of South Jersey trucking firm Jevic Transportation, which cost 1,000 jobs. There is also some evidence retail shops are laying off extra workers as consumers cut back on spending, the state said.
http://www.nj.com/news/index.ssf/2008/07/nj_lost_4100_jobs_in_june.html
Barien I would take it at 380,000 and be pleased the wife as well. A little big for our tastes, but since we have a big family who like to visit it would work. I think at the price I listed would be a come to jesus moment for the seller, but I wouldn’t pay more.
John– I just don’t see the current period as being too similar to 20 yrs ago. Houses then were selling at what– 4 times median income instead of 7-8 times, which is the case currently. College and graduate school tuition has also gone up at triple the rate of inflation for the past 20 yrs. It seems to me it was much easier to p*ss away your 20s back then and recover financially. unfortunately, most people still try to pretend otherwise
“All of the job losses came from the private sector. The public sector added a net 100 positions, driven by an increase of 400 jobs in local government, the state said. Federal jobs in New Jersey fell in June, while state government jobs were flat.”
and the welfare state beats on. I would laugh if this wasn’t so sad. This state is truly doomed, adding more sheeple to the payroll while the people who pay their salaries are leaving in droves.
The drag is that most people who bought a home could trade-up and that mobility was killed….killed…by…The….Man…..
#205
The problem is the newlywed couples don’t want to eat pizza with a coupon and watch a library video on saturday nights, they don’t want to save for a house. You don’t need a nickle when you get married but once married you do need to save.
Took some convincing to have my wife move back home in my parents basement but we scracthed and saved every penny for nearly the last year. Unfortunatley it’s not 20% down but is substantial for our price range ($300,000-320,000)
Moving into 285sq ft basement really shows you what you’re made of.
#196 ben – Exactly!
By the way, I just got a phone call from my son (22) asking if it was true that Wachovia had failed and people couldn’t get their money. He said his boss had heard it on the news. Um, maybe someone should start some rumor control?
skep (210)-
Exactly right. I’m glad I’m not 22-23 y/o right now. One or two years of goofing off, and you’re in a hole you’ll never exit.
Believe me, I’m not down on goofing off in your 20s. Gotta let your freak flag fly sometime.
My nephews are 21 and 23. They both act like 60 y/o men, bitch and moan about everything, work all the time…and can’t even have a proper drink and carry a conversation. Good little sheeple, doing what they ought to do.
They are both crashing bores.
#209 painhrts
I think this time next year comparable houses will be in that price range.
stater (214)-
It’d be more fun to accelerate that rumor.
Northern Rock was only the first.
I’m waiting for somebody to come up with a business that caters to people who are queued up in bank run lines.
I live the life John is describing (videos on Saturday night, never going out to restaurants, bars, etc, no vacations) and I do save money. My point is that this behavior is very unusual among people my age from what I can tell and that even if you adopt this lifestyle, whereas 20 yrs ago you could have saved a downpayment in a year or two, currently with prices being so high I think it takes 3-5 yrs. So if we are really going back to 20% downpayment as the minimum, housing is going to be absolutely dead for a lot longer than I thought
I also recognize that I sound like a 60 yr old man. I need to get a cardigan.
That is how I convinced the wife to wait and hitting her over the head with JB’s data didn’t hurt. Finally clicked with her about a month ago, plus the death spiral her retirement acounts took made her think something was fishy.
Outofstater – Don’t worry Wachovia just hired
former Treasury Undersecretary Robert K. Steel to run the company. Steel, a former vice chairman of Goldman Sachs, had been the Treasury Department’s point person on efforts to address the financial crisis.
!!!!!
Perp walk for Carla? Look at her smiling in the picture below carrying her starbucks coffee on the way into the court house, wonder if she will implicate Corzine?
http://www.nj.com/news/index.ssf/2008/07/feds_launch_probe_of_carla_kat.html
kettle,
as NJ patient would say
“easy answer to an easy question”
YES
Apparently not as easy as I thought it would be.
I’m really surprised at what people think is going on. around 2004-2005 I went along with someone while they were house shopping. Their mentality was they better buy before prices rise even more. Other people that were shopping around the same time said similar things. I kept saying just wait a couple of years for the market to correct and I got looked at like I didn’t know what I was talking about. It completely surprised me that most people could see what was going on.
Had a conversation with one of these people recently and they were implying that house prices were good now. I told her I thought I thought homes were still overpriced and tried to explain why. She said her husband said the same thing but she doesn’t agree because he didn’t follow the housing market as closely as her.
I wanted to grab her and shaker her. Luckily she got outbid on one a couple of houses she was very picky and didn’t find anything else and gave up.
After the last housing spike in this area prices fell back in line with where they should have been. This last one was much bigger and had much larger impact financial institutions and we haven’t seen the last of the troubles.
Why do so many people feel that the rate of increase for the cost of housing, food, gas and other consumer goods can outpace incomes by such a large degree and not be bad?
#223 Sean
Would that be a 2 for 1 special?
John, I agree with everything you said. The problem is, the average American in their mid twenties to early 30s has not started saving a dime yet. In fact, they hold too much debt to save any time soon.
Clotpoll,
How is your SKF today? Do you want lunch from my XLF proceeds?
Sean (223)-
Damn! Carla has as much grease in her hair as Miss Process behind her. She’s almost a female Ara Hovnanian. Quick, put an oil rig on her head!
She’s gonna look purty in an orange jumpsuit.
I think she will also be all the rage in federal lockup…
Frank (227)-
Just bought more. Didn’t think it’d be back in the 160s so soon. Thanks for the lunch money offer, though.
Tell me again…why do I wanna be long financials between now and Monday?
Wells Fargo, Price 26.840 Change 6.330 % Change 30.863
Love to see the margin calls on people short wells tommorrow morning. you are going to see some nice munis and investment grade bonds pop up for sale in morning as hedgies sell the good to pay for the bad.
229- Clot.
No Soup for you!! :)
Here’s everything you need to know about Carla’s future:
“The criminal inquiry is being conducted by the office of U.S. Attorney Christopher Christie…”
clot 218,
offer an instant text/email service that will alert you to a notice of bank failure (or suspected) and that can automatically transfer your balance to a secondary bank account upon confirmation of text/email.
But seriously, wtf is going on with SKF??
Most of the blogs say that it is because of options expiring.
Wells Fargo is the baby in the bath water. How do their results impact the rest of the grime?
#222 Sean: Ms. Whitney of Oppenheimer was quoted in today’s NY Times as saying Wachovia’s prospects are bleak.
John (230)-
For every WFC, there’s five dead men walking.
@223
can’t wait to see that greasy michael jackson lookalike frog marched. hopefully that corrupt monkey of an ex boyfriend of hers is next.
vodka (233)-
I was thinking more along the line of personal stooges who will bring you things like nail polish, lattes, pork rinds and sudoku puzzles.
I got married in Sept 1998 and had saved 80K by December 1999 when I bought my house all on a combined income of 110K. But was helped by the fact bank interest rates were good and the little money I had in stock went up. Even on 55K if you deposit 100% of your paycheck into the bank and the money market is 5% it builds up quick. Plus the 20K in wedding money at 5%. RE was also drivin by 1% bank yields in the days of 20% home appreciation. In 1999 stocks were up a ton, interest rates were high so even though houses were going up in value it was easier to catch up. That all changed in 2001-2004.
skep-tic Says:
July 16th, 2008 at 3:14 pm
John– I just don’t see the current period as being too similar to 20 yrs ago. Houses then were selling at what– 4 times median income instead of 7-8 times, which is the case currently. College and graduate school tuition has also gone up at triple the rate of inflation for the past 20 yrs. It seems to me it was much easier to p*ss away your 20s back then and recover financially. unfortunately, most people still try to pretend otherwise
clot, hope you didn’t put money into your mouth. SKF down 23%
What could a 250 lb lesbian drug-running biker mama do to Carla in lockup?
bi (240)-
Not nearly as often as you put your foot in yours.
Check your call with us this Monday AM.
“Tell me again…why do I wanna be long financials between now and Monday?”
Oversold short squeeze like today.
Exactly right. I’m glad I’m not 22-23 y/o right now. One or two years of goofing off, and you’re in a hole you’ll never exit.
Although, the upside to being 22-23 is that you are probably too young to have bought a bubble home and you probably don’t have kids to worry about (or pull out of school etc.). So, if NJ implodes, you are probably in a decent position to get out.
If you decide to stay, you probably have years ahead of you before you even need to think about buying a home. You really have time on your side. When you’re in your 30’s and living in an apartment and already have a kid/kids, it’s not so simple.
At 22/23, you also have the benefit of watching the meltdown at a young enough ago to do something about it. If you are smart, you can learn from watching everyone elses misery.
Frank (243)-
Yeah, except today wasn’t really that much of a squeeze on SKF. It’s volatile both ways (10-12% moves) even on sleepy days, and the floor under it is rock-solid from a technical standpoint.
I will now make the bi-like prediction that financials resume their death spiral by Friday afternoon.
Every possible disclaimer. As if anyone would need that, after I invoke the name of bi.
re: (235) 3b – “Don’t worry”
I will remember to to include
//sarcasm off
Rent (244)-
It is a sad day when the best thing about being young in NJ means that you’re unencumbered enough to be able to flee the state when things go from gray to black.
[232] clot,
Only until Obama takes office. Then Christie is gone, and any investigations he started will be “reviewed.”
looks like we had a mirage today on Wall St.
SAS
and, your damn right 5 times is exspensive.
why you think I’m still working while all my friends are retired and done moved away.
doens’t help I also pay for schools for the grandkids.
oh well.
SAS
“I also recognize that I sound like a 60 yr old man. I need to get a cardigan”
hey brother…
I like cardigans.
SAS
#244 Clot re: volatile
Trickle down effect, congress just “got” it yesterday and today based upon their nervous and angry reactions as well as calls to provide additonal stimulus checks and subsides to state and local gov. Klink and Bergabe’s testimony and the media’s latest Spin is to promulgate doom and gloom.
Wait until Joe six-pack gets his 401k statement in the mail and then decides to reallocate his mutual fund in a BudInBev fueled rage.
249…Kurt Cobain, Mister Rodgers….versatile look for any man.
450K in some commutable neighborhoods. 20% is only 70K.
Ummm… that $90 K
Lot’s of stories today John, okay maybe your not my girfriends husband, you have seen everything and done everything with everyone.
Your Brian the dog from Family Guy.
KL
italics off
I have not seen and done everything. But I do notice the 20 somethings in the office don’t do much of anything. I mean they have cell phones, internet, cable, texting, blogs, emails etc. Heck they don’t even start drinking till after college. As soon as I turned 12 and got my first paper route I was out roaming around. Heck we had one black and white TV tuned to Merv Griffin every night at eight pm and a phone I was not allowed to us. Sitting home was a nightmare. It was a nightmare being home for every single kid back then pre mcmansions Heck I remember many a night in High School going out to a rock concert or a bar and getting blotto’ed, in fact once I got blotto’ed at a blotto concert. Anyhow, with no phones or emails we went out a lot. The kids today just sit like lumps. I guess if you go out a lot you see a lot. I was telling a guy this week who is 29 all the celebs over the years I saw in clubs/bars and he said he never saw any. I asked him how often does he go out to clubs with his guy friends, he said 4-5 times a year. Back in the 1980s/1990s my friends went out 4-5 times a week for around 20 years.
Interesting article this week I read about the Jones Beach Bums reunion. Bunch of kids from the 1970s who every day went to Jones Beach all summer on the bus when in HS/College. No camp, no AC, cable, internet or use of phone at home, they went their 7 days a week. Sell a few cans of soda/beer for around $20 buck profit on the side and you had a great day. I also did that $1 soda, $1 bud, $2 dollar Heinken. Great times. If you cleared enough on a good HS day you had enough coin for roy rodgers and some $3 dollar pitchers over on Bell Blvd. Oh the good days. Kids back then had more memories by 18 then the kids today have at 30.
[11] barien says
“There is major erosion of the economic wealth of the country going on,” says Corzine.
So he had better hurry and raises taxes while people still have some wealth!
Reminds me of a statement by Edwin Edwards, a lifetime politician in Louisisana: “If we don’t get Dave Treen out of office, there won’t be anything left to steal.”
Tom Says:
July 16th, 2008 at 11:57 am
chicagofinance Says:
July 16th, 2008 at 11:39 am
Tommy Boy:
That’s where I stopped reading.
Tom-Tom: I have placed you on double-secret probation. You bristle when those with conventional opinions regarding real estate question your disparate views. However, you ignore someone who presents you with a fact based retort of your “blame the people in charge” and the “evil corporations” rhetoric. I am not accusing you of being a zealot, but maybe of being a little mentally lazy…..
141 chifi
“Have you reviewed the financial results of pure play refiners and also the integrateds that contain refining operations? ”
it’s my understanding the folks trapped in the refining business are not doing well.
John Says:
July 16th, 2008 at 4:54 pm
I also did that $1 soda, $1 bud, $2 dollar Heinken. Great times. If you cleared enough on a good HS day you had enough coin for roy rodgers and some $3 dollar pitchers over on Bell Blvd. Oh the good days. Kids back then had more memories by 18 then the kids today have at 30.
JJ: I still remember my friend getting his driver license and three of us went to a pool hall on Northern Blvd. I must have been 17. We bought a bunch of beers and then at 2AM, we went to the only place open in Northern Queens. The White Castle on Bell Blvd.
I can still remember squishing c%ckroaches on the salad bar at the Sizzler on Northern just east of Bell Blvd.
njpatient Says:
July 16th, 2008 at 5:10 pm
141 chifi
“Have you reviewed the financial results of pure play refiners and also the integrateds that contain refining operations? ”
it’s my understanding the folks trapped in the refining business are not doing well.
Obviously this fact would be news to Tom-Tom, our blog GPS System.
Tom-Tom:
Again, that’s about as far as I got. I’m guessing that the rest of your comments weren’t much better.
Tom Says:
July 16th, 2008 at 5:16 pm
Tom-Tom: Again, that’s about as far as I got. I’m guessing that the rest of your comments weren’t much better.
I will now refer to you as The GPS….
156 Nom
“I don’t know if a mini-GTG just happened or not, but for a Grim Appreciation GTG, we would have to get Grim in on it.”
Ridiculous.
Sent you email.
“I am in the City on friday after work, so city works for me then.”
Johnny Utah’s?
Well looks like I’ll miss the gtg if its held this weekend. Grim whether it happens or not, I think its obvious that the people here really appreciate you.
169 john
“a few years ago everyone had the cash and even now people have the cash.”
It’s a good think you’re hysterically funny and quite informative, because sometimes you’re a boob.
187 john
“layoffs so far has been 40 something senior management.”
Not my experience.
“I will now refer to you as The GPS….”
Refer to me however you want. Even with people I disagree with I don’t tend to be disrespectful especially if I don’t know the person and I choose not to waste my time reading and responding to such comments.
194 NNJ
“20% is not that difficult for a professional couple.”
LOL – so all these 0-down neg am option ARMs were taken out by folks who wanted to put their cash to work elsewhere?
195 skeptic
Spot on.
Agree with every word of that.
3B
There are a few banks that didn’t spend the last decade in the sandbox and consequently aren’t covered in dog$hit and urine.
205 john
You’re an old man. When you went to college, college was (a) sufficient to catapult you into a good career and (b) cheap.
Now, college is (a) necessary but not sufficient and (b) costs, on an annual basis, as much as a very nice new automobile and (c) is just the preface to the even more expensive JD/MBA/MD.
UPenn Law cost me $40K/year. How much education debt did you have when you left school?
In short, the Howard Stern story was (a) interesting, (b) funny and (c) completely worthless in determining what sort of shape today’s first-time home-buyers are in (unless you are contending that they are all grizzled old farts who spend their non-work hours yelling at the neighbor kids to get off the lawn).
My experience with the layoffs, any non officer(no director in title, worker) over the age of 50 should be very concerned, all non-productive workers who are paid relatively well. While I have seen some management laid off it is much more typical where I am to offer them some kind of a package and suggest they retire, or look for “Other Opportunities”. But even that has not been too many people that I have seen. My new term is the employee wasn’t laid-off, fired, etc. they are “involuntarily seeking opportunities outside of the firm”, once I master ridiculous doublespeak and deception I will be ready for management.
210 skeptic
writing the hit-parade today.
213 joe
“Moving into 285sq ft basement really shows you what you’re made of.”
I bet it gives you some fun perspective on the cranks who blame everything on the “fact” that “kids today” are “spoiled.”
236 clot
Yes. Unless it’s 6.
From MarketWatch
Quick rescue for Fannie and Freddie? Not so fast.
The quick rescue for Fannie Mae and Freddie Mac hammered out on Sunday doesn’t look like it’ll be quite that quick.
More about the political wrangling at the link above
But we already know the inevitable.
254 john
Shorter john: Today’s kids are lazy. When I was a boy, I stayed drunk for two decades. Why are today’s kids so lazy?
“LOL – so all these 0-down neg am option ARMs were taken out by folks who wanted to put their cash to work elsewhere?”
Ok not exactly a direct comment, but from the NJ non-prime data that was put out by the FRBNY, 20% of Alt-A morgages were non-owner occupied compared to .5% of subprime. There were probably more but were reported as owner occupied as seems to happen a bit in this area. There were hardly any negam subprime mortgages but 15% of the NJ Alt-a mortgages were negam. The average interest rate at origination for Alt-A was 4.77% and the average rate was 7.11% while there was only a .75 point difference with subprimes.
It seems that a lot more of the alt-a loans were used for investment properties than subprime. Even though the alt-a loans should have less risk, some of the data is troubling and I think that the problems with the alt-a will be worse than the subprime laons. From what I remember, NJ seemed to have a higher proportion of alt-a loans than other states.
277- ROFL!!!
There seems to be an assumption in a number of posts today that layoffs are generally a result of organizations “cutting the fat” by getting rid of some highly paid low-producers.
Businesses are going belly-up. Entire segments of organizations are getting pulled out at the roots.
Folks are getting canned from secretary on up.
278 Tom
That pretty much points to where I was going – many of these folks were “investing” in real estate. If they had had that cash, that’s where it would have gone.
They didn’t have the cash.
“I stayed drunk for two decades”
I didn’t mean to imply that there was anything wrong with that…
njpatient-
I want to petition Grim to host a thread restricting postings to –
1. John
2. ReInvestor
3. Clot
4. njpatient
I smell a mini-Series of a cross between Chris Rock/ Seinfeld.
Maybe, throw in Bi in place of Mr. Steinbrenner.
I sort of understand John’s point of view. My next door neighbor’s son and daughter, for instance, still live at home and they are in their late 20s. The son drives an escalade and has a motorcycle for fun. My secretary’s son still lives at home and drives a BMW.
Even a lot of people in their 20s who appear to be independent of their parents are still basically supported by them. I know two women my age who are married but whose fathers pay their credit card bills so they can go shopping for new clothes every weekend. I know another couple who both drive BMWs and go on frequent vacations to the carribean and vegas despite being writers and who are also shopping for a new condo with gift money.
What I can’t decide is whether this type of thing has always existed and I just had no idea until I managed to get admitted to a college full of rich people, or whether today’s young adults really are more freeloading than the generations before them.
Regardless, it seems obvious to me that if you are not born into such privilege, the world is significantly more of an uphill battle financially than it was a generation ago.
282 njpatient:
Ah, thought you might have meant they were putting their deposit money towards better investments, sarcastically. I think the data supports what I thought you were saying and what you actually said :) A lot of these people just didn’t seem to know how to make good investments
The negam loans were most likely flips that went bad. I can’t imagine someone getting a negam loan for a rental property unless they were hoping to refinance later, considering you couldn’t really buy, especially for no money down, and have the rents cover the mortgage and taxes in most cases.
[263] patient
Got your email, thanks.
As for Grim, I think that a Grim Appreciation GTG (or mini-GTG) is missing something WITHOUT GRIM.
Course, if you want a mini-mini Scotch Appreciation GTG, I am good with that.
Tom Says:
July 16th, 2008 at 6:24 pm
Even though the alt-a loans should have less risk, some of the data is troubling and I think that the problems with the alt-a will be worse than the subprime laons. From what I remember, NJ seemed to have a higher proportion of alt-a loans than other states.
GPS: So what is your point?
skeptic, John,
I think the big difference is that those people may not be able to do the same for their kids, as their parents did for them.
286 nom
“As for Grim, I think that a Grim Appreciation GTG (or mini-GTG) is missing something WITHOUT GRIM. ”
Yes. When I said “ridiculous” I was pulling your leg.
It came right off.
284 skep
“the world is significantly more of an uphill battle financially than it was a generation ago.”
Certainly the US is.
Has anyone ever stayed up two nights straight(excluding njp) and then tried to read a thread in ten minutes after two glasses of merlot? It’s a very Pink Floyd and cloudy experience. Maybe Lucy in the Sky.
My sister, a newly retired teacher, had surgery yesterday on an extremely rare form of cancer. Another retired teacher, who taught for years on the floor directly below hers, recently had his surgery for the exact cancer. Something like 1 in 4 in 1000 in something. A Pink Floyd and cloudy thing happens in a small industrial town with constant coal mine fires.
When she came out of recovery, there was a call on her cell. The result were in for her final AP calc students’ test results, and they mostly got 5’s, which made her smile. She said she liked that our Fonzie girl got 100’s on her math final, despite the attitude thing. My daughter somehow passed 1st Grade.
She told me that one of her regrets over the years is that her plain old 9th graders no longer are taught checkbook balancing, home budgeting, paycheck review and basic 1040 prep. She used to do this. But when no-child-left-behind entered the pic, she was told to cut the practical stuff because they needed the time for all the testing.
It’s a very Pink time.
Kind of how the sky is pink above houses just before a heavy snow storm.
Tom Says:
July 16th, 2008 at 5:58 pm
Even with people I disagree with I don’t tend to be disrespectful especially if I don’t know the person and I choose not to waste my time reading and responding to such comments.
GPS: You don’t seem to understand the empirical implications of Keynesian economic policy, but you are more than willing to trash a whole host of parties in a rather blithe manner…..
[290]
“it came right off”
Great, another weekend warrior injury that I will have to explain to my wife.
Where did this GTG come from?
Where, when?
I think I might be able to make it out.
You guys can talk me out of law school.
Grim
Its been talked about all day.
i wonder – why hasn’t one pundit in the last six months gone on TV and said, AMERICA YOU PEOPLE NEED TO LIVE BELOW YOUR MEANS!
is anyone out there saying, NEVER CARRY A CREDIT CARD BALANCE UNDER ANY CIRCUMSTANCES?
291 Pat
I wish your sister my best.
Oh Pat I’m sorry. I don’t know how I missed that post. Best wishes to your sister.
“Where, when?”
Friday, Johnny Utah’s from 5:30 on?
(never actually been there)
Superb
I’ll be there
296
why???
law degree doesn’t mean you have to be a lawyer.
But it is one of the best educations you can have for just about any other field.
I have a 3 foot tall stack of LSAT prep stuff just waiting…. :-)
sl
She’s cool, njp.
She got in 35 years of teaching math before age 57. It was all she ever wanted, anyway.
She used to flip pancakes in A.C. in college to pay for credits to finish her math degree. I’d go and stay with her when I was a kid to give my mother a break. I remember sleeping on the floor in some dive of a boarding house with a bunch of Irish guys, and have free run of A.C. I’d get kicked out of fancy department stores for trying on the ball gowns. I was 8. (Hah. Fancy. Ilene’s.)
Johnny Utah’s , loc please?
http://www.johnnyutahs.com/
25 West 51st St.
Is there a word for people who make decent money (let’s say, a combined salary of about 200k) who dont spend money, but save it and invest?
Those people certainly aren’t consumers, are they?
I’d love to see the reaction on some folks’ faces when a financial adviser says, ‘you need to have six months living expenses (not just mortgage) in the bank in case of emergency.’
I assume for most people (wife, two kids), this is about $30,000 sitting in an interest-baring account.
What % of Americans do you think have that? What % do you think strive for that?
for clott
Darpa in the news…
DARPA today has a long-term, $3 billion program to help make such a “Metabolically Dominant Soldier.” In other words, the military is studying how to use technology and biology to meld man and machine and transcend the limits of the human body. Described the project director, “My measure of success is that the International Olympic Committee bans everything we do” The $3 billion program is definitely trying to achieve transhuman performance goals.
http://tinyurl.com/67owgt
Grim , sorry can’t make it to city. More than a hike from Vernon, getting home would be a real trip after the festivities.
OT Did lunch today at the Crab House in Edge water. Nice place, good food & reasonable for lunch. View great.
poor carla jon,,pay for the legal?
Ket 317 http://harrietklausner.wwwi.com/review/the_cobra_trilogy_zahn
Same concept, these books are fiction on just the type of soldier described.
279: i read out some choice bits of your post to the husband, and he recommends today’s dilbert…
301: skeptic… that was effing brilliant.
skeptic,
I generally agree with most of what you say. I think the only difference is that I feel lenders and the government should be held to a higher standard in these matters because an individual can only do so much damage while banks are in control of a lot of people’s money and should have more respect for it. Same for the agencies that might have to bail out them out. That way people who were responsible with their money don’t have to help clean up other people’s messes.
Kettle,
Did you ever post the cash flow for you solar project? Did I miss it?
renting,
no, here it is.
2 kw @ 18 – 20K
4.5 kw/m2/day
4% average utility inflation over the next 30 yrs (expected life span of panels)
ROI (25 yrs) of 170 – 200 %
payback 8-10 yrs ( i expect less then that thought due to my views on energy)
(298) Pat – I’m thinking of you right now..I hope the surgery went well. Sounds like your sister has time to rest – I hope you are close enough to spend some time with her.
Pink Floyd – I saw a black t-shirt over the 4th of July W/E that had Floyd the barber from Mayberry – You know – The Andy Griffith Show.
Well…he was pink.
And of course it said “Pink Floyd.”
#317 kettle1
If they can create a female supermodel version, i would love to hear that John story.
#306 Laughing – Dave Ramsey has been saying that for years.
#313 Pat – Sorry to hear about your sister. I hope everything goes well for her.
“the only difference is that I feel lenders and the government should be held to a higher standard”
I will never forget when I first moved to NYC after college and was opening a bank account at Chase. The guy in front of me in line was opening an account as well and deposited $30,000 in cash. Then he said he wanted $100 back. The teller told him that it would be 5 business days or some BS before he could make a withdrawal. The guy started screaming at her “What do you mean– I just handed you $30,000. Either you give me $100 back right now or I will pull my entire account and go down the street.” Obviously, she gave him the $100.
I think banks are generally pathetic and are looking to screw their customers more than anything else. But they get away with it because people do not pay attention to their bills and do not save any money, so banks feel they can get away with screwing them and even if people decide to raise a fuss, they aren’t really losing much because they don’t have much in the way of deposits anyway.
y’know, if real estate prices *really* drop in midtown, http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2008/07/15/eafarms115.xml
could be a reality. swoon.
311 grim
See you (and any others) there
Still looking
“law degree doesn’t mean you have to be a lawyer.But it is one of the best educations you can have for just about any other field.”
Agree with this. My father in law has a law degree from a good law school and found it incredibly useful in his work as a general contractor.
Gonna do my best to make it this friday.
I find the JD generally useful in the field of sleep deprivation research.
Johnny Utah’s? Friday? time???
vodka (317)-
This is how the Incredible Hulk happened.
Oh…wait…that was a comic book.
sx (258)-
Kurt Cobain’s name is invoked at least once in almost every thread here.
vic (290)-
Sort of a lightning round of dunces.
WSJ editorial page, keeping it real:
“It’s not exaggerating to say that the world is fleeing the dollar in what amounts to a global run on Washington itself – from Capitol Hill to the White House to the Federal Reserve. The world’s investors are saying they lack confidence in U.S. leadership.
That’s certainly true of the Fed, where Mr. Bernanke looks increasingly like a professor shocked to find that the world has rejected his academic theories [ouch]. Yesterday’s dreadful inflation numbers are as stark a repudiation of Fed policy as you could imagine: up 1.1% in June alone, 5% for the last 12 months, the highest in 17 years.”
njpatient and grim,
I think I will try and make it. Not sure yet.
The site njrereport.com is good site, thanks, admin. And see this [url=http://reminderroeb.150m.com/state_hot_water_heater.html] state hot water heater [/url]