From the NY Times:
Given a Shovel, Americans Dig Deeper Into Debt
For decades, America’s shift from thrift could be summed up in this familiar phrase: When the going gets tough, the tough go shopping. Whether for a car, home, vacation or college degree, the nation’s lenders stood ready to assist.
Companies offered first and second mortgages and home equity lines, marketed credit cards for teenagers and helped college students to amass upward of $100,000 in debt by graduation.
Every age group up to the elderly was the target of sophisticated ad campaigns and direct mail programs. “Live Richly” was a Citibank message. “Life Takes Visa,” proclaims the nation’s largest credit card issuer.
Eliminating negative feelings about indebtedness was the idea behind MasterCard’s “Priceless” campaign, the work of McCann-Erickson Worldwide Advertising, which came out in 1997.
“One of the tricks in the credit card business is that people have an inherent guilt with spending,” Jonathan B. Cranin, executive vice president and deputy creative director at the agency, said when the commercials began. “What you want is to have people feel good about their purchases.”
Mortgage lenders took to cold-calling homeowners to persuade them to refinance. Done to reduce borrowers’ monthly payments, serial refinancings allowed lenders to charge thousands of dollars in loan processing fees, including appraisals, credit checks, title searches and document preparation fees.
Not surprisingly, such practices generated dazzling profits for the nation’s financial companies. And since 2005, when the bankruptcy law was changed, the credit card industry has increased its earnings 25 percent, according to a new study by Michael Simkovic, a former James M. Olin fellow in Law and Economics at Harvard Law School.
The “2005 bankruptcy reform benefited credit card companies and hurt their customers,” Mr. Simkovic concluded in his study. He said that even though sponsors of the bankruptcy bill promised that consumers would benefit from lower borrowing costs as delinquent borrowers were held more accountable, the cost of borrowing from credit card companies has actually increased anywhere from 5 percent to 17 percent.
…
Just two generations ago, America was a nation of mostly thrifty people living within their means, even setting money aside for unforeseen expenses.Today, Americans carry $2.56 trillion in consumer debt, up 22 percent since 2000 alone, according to the Federal Reserve Board. The average household’s credit card debt is $8,565, up almost 15 percent from 2000.
College debt has more than doubled since 1995. The average student emerges from college carrying $20,000 in educational debt.
Household debt, including mortgages and credit cards, represents 19 percent of household assets, according to the Fed, compared with 13 percent in 1980.
Even as this debt was mounting, incomes stagnated for many Americans. As a result, the percentage of disposable income that consumers must set aside to service their debt — a figure that includes monthly credit card payments, car loans, mortgage interest and principal — has risen to 14.5 percent from 11 percent just 15 years ago.
By contrast, the nation’s savings rate, which exceeded 8 percent of disposable income in 1968, stood at 0.4 percent at the end of the first quarter of this year, according to the Bureau of Economic Analysis.
More ominous, as Americans have dug themselves deeper into debt, the value of their assets has started to fall. Mortgage debt stood at $10.5 trillion at the end of last year, more than double the $4.8 trillion just seven years earlier, but home prices that were rising to support increasing levels of debt, like home equity lines of credit, are now dropping.
I’m sure the Fed will save the day.
/ off sarcasm
Hmm.it’s such a boring topic. I want to live for today. Isn’t that an inherent right to be an american? Debt? Who really f*ck*ng care. Let the suc*er hold the bag!!oh much better let’s just print the greenback to pay for the debt. Afterall who has more sophisticate financial engineering expertise than us? And we will generate jobs too in this process. No a bad deal yeah!
How is the Real Estate market in Central Jersey, especially in Edison area? My dad wants to sell his townhome and move to south. He says he can wait for 6months to 1 year if the market is going to get any better.
Hi all… was in the Outer Banks for a week. Not that anyone really gives a f*ck. lol!
I opened up my emails and viewed all the listings. Apparently, a lot of the stupid bast*rds still think that anyone with 20% to put down is going to waste their money on their p*ss smelling dump.
News flash to the sellers: Anyone with 20% or better to put down is laughing at the online picture of your house as I write this.
Because, if you weren’t aware, if you don’t have 20% to put down and a FICO in the 800 range at least, you’re not a buyer. I’d spray that metal “for sale” sign on the front lawn with WD-40 on a regular basis to avoid rust because it’s gonna be there for a very long time.
#4 gary: Welcome back. The world is right again.
Gary,
Mrs. Shore and I were looking at some oceanfront houses in the OB not that long ago and what scared us off was the frequency with which the Virginia Dare Road gets oblitterated by the sea and the rapid reosion of the beaches there. Did you notice any concern about these things when you were there?
(276 yesterday) PeaceNow:
Yes, I did buy in Asbury Park.
The open house yesterday was dead, even though lots of people are in town. Maybe today will be different.
Shoreguy:
I second the vote for a GTG at Stone Pony, mid-week.
Shore Guy,
Not at all. None of the locals nor any media or such ever hinted to those concerns. Then again, we had nothing but sunshine all week.
3b,
LOL! Amen, my brother!
rhymingrealtor Says:
July 19th, 2008 at 5:58 pm
Chi, Why so hard on Tom? KL
Karen: First, I am sorry to hear about your situation.
I suspect that between now and the election, people are going to be upset and whipped into a frenzy about their lives and their financial situations. This environment is the last thing someone in your situation needs when you are just trying to keep your head clear. 2008 is going to be rough, things will be better in 2009, but things won’t be good around here until 2010. You’ve made the right choices, so pat (not Pat) yourself on the back. Best of luck to you.
What is my issue with the GPS? Intellectual laziness. Us GROUPTHINK!ers are here because we find utility in taking presented information and challenging it. If there is veracity to the claims, facts, or analysis, then it will withstand scrutiny. So it comes down to the old 80/20 rule……the first 80% of your understanding will take 20% of the time. However, to obtain true authority on a subject you have to put in the time.
So what? You have intelligent person, who appears well versed and scrutinizes a subject enough to find themselves in grim land. However, it is clear that this person is not just performing drive-by spam or trolling. So if you want to be taken seriously, you need to say things that make sense and not spew pandering nonsense authored by the same group of scum time and time again. The scum….people in the media looking for ratings or sales, or else people in poltics looking for office or else power to forward an agenda.
Skep is more diplomatic and cogent. Pat is sharp as a tack on her call….
#10 chgo” What makes you think things will be better in 09, and by things what do you mean? Just curious.
2009 is not necessarily good, nor 2010, but this year is clearly worse….I talk about long-run demand curves a lot. At this juncture, we are stuck with the hand we are dealt in the short-term. Given sufficient time, we can respond…..FYI – the banks (their businesses, not necessarily the stocks) are toast for at least 10-14 months.
Just as housing prices cannot maintain unsustainable levels, so too can you apply that logic to energy or food. Why? Think long-run economic responses by suppliers and demanders….
#12 Understood. Time will tell.
thinking about investing into a 2 family in northern bergen co. train town. What do you think? Anyone on here a landlord, to much head ache?
Moderated again? :(
So what exactly triggers moderation so I can keep it in mind for the future?
I wonder if I will see the collapse of the higher education system in my lifetime. The amount of debt that is foisted on young people, for a degree and education of questionable value, is criminal. I have had tenants who had mortgage sized educational loan debt that they will be paying off for the next couple decades.
16-
I think that the BS will stay the entry way into a “good” job (as defined by Demios paper posted here recently)
I told the union plumber in my building who makes more than the Dr’s that I hope if I have kids they consider a trade.
And as much as I sometimes hated “home projects” those skills have saved me a great deal of money and secondly allowed me to help friends save money.
RPatrick,
Those skills also help bring your beer expenses down to almost zero :)
BTW, anyone know the deal with this River Vale foreclosure? Looks like it was supposed to hit the auction block last week but was rescheduled. Based on the 93 sale price it doesn’t look like a bad deal. It’s been getting an unusual amount of search traffic on my site.
The notices don’t indicate if there are any other liens on it but I haven’t done a title search.
18-Tom
Yeah, I know so many Gen Y and onward who have no idea how to use tools, or understand the basic mechanical workings of things.
I know this guy and he could not understand how F(RPM, Gear, Fsprocket, Rsprocket )=Speed after 1/2 an hour of explaining. But he had the credit to buy a GsxR.
Drew 14,
I am currently a landlord, albeit in a not-so-desirable location. I would say that if you don’t mind living in a multifamily property with close neighbors, it’s worth it if the property is priced right, naturally.
However, a key consideration is the condition of the property, in combination with your handyness. If you can do many maintenance activities and repairs yourself, you can look for a home with some deficiencies for a good deal. If not, you should look for a home who seems to have been maintained really well by the previous owners. Properties that are owner-occupied usually fit that description better than strictly rental properties.
As for maintaining tenants, i’ve found that it’s been less of a hassle than I expected. If you treat your tenants with repect and respond to their requests in a timely fashion, they return the favor for the most part. You do have to be careful in your selection process to ensure that your tenants meet the requirements you are looking for, namely the ability to pay the rent on time.
All that said, it’s still been hard to find properties that cash-flow positively in halfway decent towns. I’m in a similar position as you, looking to buy a multifamily in a nicer town to owner-occupy. I plan to buy it and live in one of the units for a few years, and then hopefully fully rent it out. The problem is finding properties priced at levels that will cash-flow positively after moving out.
If you have any more specific questions, you can email rental.mgmt at yahoo.
RPatrick,
I know a guy like that too. Though he eventually learned a lot and did a good deal of remodeling in his home.
I liked the looks of the gsxr, there was a guy in my MSF class that rode one. Hopefully he knows what to do on the seat better than what’s going on under the seat. Those things are fast.
apparantly, iraqi prime minister is favoring his brohter:
http://news.yahoo.com/s/ap/mullen_two_wars
Orion, thanks for the update. I’ll keep my fingers crossed for you….
GTG at the Stone Pony? I’m definitely in.
8
Gary,
We even looked at some oceanfront lots. If I recall correctly, he current rules require that one not build any closer than sixty-times the annual erosion rate from the water. Soooooo many older homes are so very close to the water, and did not used to be. We found many great occasional-use places, oceanfront, in good shape and at a reasonable price. The reasonable price part got my suspicious mind wondering “why?,” and I soon stumbled across a State Web site dealing with OB erosion. We soon learned that they were only a good deal if one expected to have one of them for 5-10 years and could then find some sucker to buy the structure regardless of the danger from the sea.
Rental seems the only way to go in the OB.
What we are now looking for is a piece of land (improved or not) that has about 75-150 feet of oceanfrontage, and that sits at 30-45 feet or so above mean-high-tide. We prefer NJ and south. If anyone knows of a location that seems to fit this, let me know. I have been looking over topo maps and it is a real chore.
# 24 They tend to open a bit late, but even the Wonder Bar works for something earlier in the day.
Tom- Yeah big discussion with my co-worker going “you’ll be bored of the 600 in a couple weeks” and I was like “WTF” how much speed do you need? Hit a bump give it too much gas and be going 120. Nope don’t need that.
They are a fun bike but it’s like a riced up civic or a tract development mcMansion if everyone has one whats the point. Makes it easy to get parts but it’s hard to make it distinctive.
MSF is great, made me realize how little my friends really knew about riding. And that kept me alive and humble. Still crashed, still kept riding. Right now grad school trumps a new bike.
I keep an eye on craigslist every couple days for BMW’s used. I figure when things get a bit worse and if I still have my emergency fund intact someone (like the guy in the townhome next to me who never rides his yellow BMW sportbike) will feel the pinch and make a sacrifice sale. Then I might pull the trigger. But I want a “forever” home, car, bike ect. Buy it take care of it keep it.
“people in the media looking for ratings or sales”
probably obvious, but this is why you rarely see any articles or tv segments which even hint that borrowers may have been anything other than victims. I think 60 Minutes did a piece a couple of months back which sort of broke this mold (which is fitting, since they are perhaps the only news show with any integrity left).
you do not want to piss off your audience and advertisers by suggesting that they shouldn’t (aren’t good enough?) go out and buy a new car every three years, go on carribean cruises and own a $500 purse. Americans believe that what they have is who they are no one dares to question this ethic.
RPatrick,
From what I remember, the BMW bikes are nice. Well my favorite thing about them is the fuel gauge. I remember the first and last time I was on the highway when the engine cut out and I had to switch to the reserve and restart the engine without losing much speed. One time I was in the middle of a turn when I lost power, bike went one way I skid the other. Luckily nothing but minor road rash. After that though, I reset the trip meter after every fillup and had a good sense of where I was at.
that came out wrong, first and last time I went on the highway not knowing where I was in gas, not last time I was on the highway :)
skep-tic,
Are you talking about this 60 minute report on foreclosures where they describe what the lenders were doing as a “ponzi-like scheme” and giving out bad loans but didn’t care they were giving out bad loans because they were turning around selling them to wall st investors?
In fact they talk about how lenders were giving borrowers more than the value of the house so they actually walked away from the closing with thousands of dollars in their pockets. That sounds to me like they were bribing people into buying houses.
The report isn’t as one sided as you make it sound. But there’s the link above and people can watch it and make their own decisions.
Tom #19
Have you been to a sheriffs sale? Do you think that house in River Vale will sell for that judgement price or near it? I have never thought highly of buying a foreclosure, to much trouble, but after looking at that link I want to learn more. Any one trying to buy a foreclosurer?
Drew,
I haven’t been to one. When I first started looking most of the properties were going back to the banks. From what I heard from those that went, the bank representatives would try to bid the property up to what they considered fair market value even if that was above the judgment. Lately though, properties have been going for less than judgment, Sometimes up to 40-50%. Of the 14 properties that were recently purchased at auction, 11 went for less than the auction price. I have some more specifics on my sites blog if you want to see.
Also I recommend you at least read a book or two before deciding to get into foreclosures.
Tom i would like to see your blog. Please reply with add.
Tom– You come off as very conspiracy-minded. Maybe this is not your intent.
Regardless, to me the whole securitization dynamic was a simple game of hot potato. Again, in the beginning I believe that people high up in the chain actually believed they had “innovated” their way around the default risk.
But later on I believe the fees were simply too good and the fear of losing market share was too great, so they focused on the short term rather than the long term.
It is rather like GM with its stupid insistence on retaining market share while they extended more and more absurd loans on their customers.
And just like GM these banks are losing their @sses right now. Some people (maybe you) suggest that this was a scheme to siphon money away from the middle/lower class up to the rich. If so, it was a pretty poor scheme.
Your Debts and Debt Collectors You are responsible for your debts. Home Loan
This article is sad but true. One reason people are in dept is the tax burden placed on them by state, local, and the federal government. Most couple must have two adults working outside the home just to make ends meet. Might as well forget about saving. In the 1950’s when families were more thrifty, there was also not the tremendous tax burden placed on families. We need to trim government and ease the tax burden.
Drew,
There’s a link to my blog on the top right of my site where the foreclosure listing was. here it is fore convenience.
(28) And what’s wrong with a $500 handbag? :) Bored at my open house.
Fannie/Freedie:
From Bloomberg:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGn4Ioxg8g9s&refer=home
Ooops…that’s Freddie.
you should wear this with your $500 purse:
http://cgi.ebay.com/19THC-JEWELED-CROWN-STERLING-GOLD-VERMEIL-ALTAR-CHURCH_W0QQitemZ160253928122QQcmdZViewItem
skep-tic,
I don’t know that there was any type of conspiracy for the rich to screw the lower and middle classes, all I know is that the lower and middle classes were paying more and more for their homes while the higher income groups were paying about the same and sometimes less. Here’s a chart from a 2005 HUD/FHA report that led to me see that. And here’s another one showing how after the volume of money going out in primary mortgages dropped in 2003, with a very sharp drop in agency loans and an increase in non-prime loans, but we all know home prices kept rising. The chart is based on data from a FBRNY Staff Report.
I don’t know who would consider HUD or the Federal Reserve Bank of New York to be conspiracy sites.
“Regardless, to me the whole securitization dynamic was a simple game of hot potato.”
A ponzi-scheme is pretty much a game of hot potato.
In 2002 the FTC slapped Citigroup with a large fine for their “abusive lending practices” against subprime borrowers. Banks like Citigroup not only originates loans but also underwrites and trades subprime mortgage backed securities through it’s investment bank. So do you call it a conspiracy when so much of the “mistakes” happened in one house?
You have stated your position time and time again but you haven’t really backed it up except for the reference to the 60 minutes clip that doesn’t say what you think it says. You’re entitled to your opinion but if you’re going to keep trying to contradict what I say, at least show something to back it up so it doesn’t devolve into a back and forth where we both plant our flags and yell our positions. I didn’t come here to have a shouting contest but that seems to be where we’re heading.
I’m not tied to my opinion, it’s just that it’s based on the data I’ve seen from many different sources. If you have something to back up what your saying it may sway me, but you haven’t presented any.
Tom,
Yeah most of the bigger bikes have it. It’s hard for a sportbike to get the function of each tank and then with the leans getting it accurate. Though you were probably riding to aggressively for the street if you had that problem. Mine would make “unhappy” noises for about 40 seconds before the float bowls ran out.
As far as foreclosure auctions, that’s the same as car auctions. That pool is too deep for me to swim in. Most of the good deals are done before it gets that far.
I live in Fort Lee and all of this area, you have people who knock on doors and make low balls when lispendens are filed, because our newer residents are big on RE. Even co-op is not immune because they “family rent” It will be good for me when I get sick of this area.
People, this is a must read!
From The Economist:
http://www.economist.com/finance/displaystory.cfm?story_id=11751139
(42) Can’t do it: my wallet contains $15 today. And I ain’t one of those credit card junkies. Thanks just the same. My heart is already bejeweled.
skep-tic,
I tried to respond to you but now I have two comments in moderation. If I believed in conspiracies, it would be that there’s a moderation conspiracy :)
Obviously sarcasm, we all know grim has his hands full.
RPatrick,
Actually, with the spill, I should have known better. I just started off and the engine died. I thought I might have just stalled it then I took off and went into a turn shortly after that. It wasn’t a sports bike it was HD 1200XLS. I never was into speed, the most I probably ever hit on it was 100 once riding up on I95. I don’t ride anymore but it was my favorite way to get into the city when the weather was nice. Less tools, less gas, no worries about traffic or parking.
You’re right about the good deals going before auction. Of the dozens or so homes that are scheduled for a certain date, only a handful actually make it to auction. Either because the borrower works something out with the bank or sells it before the auction.
When it comes to co-ops the building generally tries to get it so nobody else does. I’m not sure how correct this is in regards to co-ops, but this is my understanding of what happens. At foreclosure, you’re not buying a house, you’re buying a mortgage, that’s true no matter what type of property. With a co-op you don’t technically own any property. You own a share of the building which gives you the right to occupy a unit. So when you buy the mortgage, after 10 days you can take possession of the property if nobody exercises their redemption rights. I don’t know if co-ops make things legally different or if co-op boards have a right of redemption or not, what I’ve heard though, is that the co-op board would rather try and buy the property and not let it go to foreclosure. I have a lot of questions regarding foreclosures and co-ops but haven’t really looked into them yet.
47-Tom
I almost bought the Nightster sporty. I love the look. You can with the right technique and sport bike tires ( which I suggest for EVERY bike ridden in this area ) get that bike to lean pretty well. The problem usually is the pipes. I realized by the time I bought the bike, the forward/up front controls, the temperature gauge, the higher pipes, ect I would be in about 10-11K
Or I could buy a 1200 R used from someone for 8K off of CL…..
I live in a co-op. The boards are basically god. If you have a good board ( and we do ) things run great, but especially in smaller buildings/complexes it gets really messy, sometimes very political. I don’t think they have right of redemption like a condo.
The no-renting policy made this place EXTREMELY affordable ( I was making 12K a year while in RN school). If it was allowed to be rented, some rich person would have come in and bought 10-20 of these because they were market positive on rent for the area. Other than that I would avoid co-op like the plague. I also knew that I needed to stay in the area ( RN school, now grad school ) and the closing costs would have been eaten by moving 2x times.
What you have with these because it’s Fort Lee is that people want to live here to commute to NYC colleges/NYP/Midtown jobs, and the Asian population wants to have family move in near by as they immigrate. So they keep buying everything that opens up in my complex. Good for me when I want to sell. The bad news is you are dealing with some very educated buyers who know the market like most of the people here on Grim’s board.
But yeah right now I am banking 15% of my pay pre tax, maxing the Roth this year, and trying to figure out a 529/cash/Student loan/bonds post tax plan for school. The bike well, i’m waiting.
A great example of being mentally lazy…..any dufus placing comments in the complaint box of this company…..
Cities, Customers Launch ‘Save Our Starbucks’ Efforts
By JANET ADAMY and ANNA PRIOR
July 20, 2008 3:48 p.m.
Now that Starbucks Corp. has disclosed the 600 locations it wants to shutter, a phenomenon is taking hold: the Save Our Starbucks campaign.
In towns as small as Bloomfield, N.M., and metropolises as large as New York, customers and city officials are starting to write letters, place phone calls, circulate petitions and otherwise plead with the coffee giant to change its mind.
“Now that it’s going away, we’re devastated,” said Kate Walker, a facilities manager for SunGard Financial Systems, a software company, who recently learned of a store closing in New York City.
Starbucks Closings: See a map with full listings of the scheduled store closings.
It’s an unusual twist in the saga of Starbucks, one of the fastest growing retailers of the past decade. For years, Starbucks gained attention when a town didn’t welcome it. Independent coffee shops complained about the big-muscled competition, and residents bemoaned the erosion of local character.
But ever since Starbucks announced this month that it would close 600 stores by early next year, as its business struggles, the rallying cause has switched to saving these endangered locations.
Ms. Walker is in charge of consolidating 525 people from seven of the company’s New York City offices into a new building in January. The Starbucks inside that building, at Madison and 44th, “was something that we were using to psych people up” about the move, she said.
Her hopes were dashed after Thursday night, when Starbucks released the list of the stores that it plans to close. She scoured the Internet to find a phone number for the company’s main office and jotted down a company post office box address so she can ask officials to reconsider. “I know it’s going to be tough but I’ll keep trying at it,” Ms. Walker said. “It’s sort of an extension of our office.”
Although the states with the largest number of closings are California, Florida and Texas, the impact is greater proportionally elsewhere. Mississippi, for instance, is slated to lose 41% of its Starbucks locations; North Dakota, 33%; Minnesota, 32%; and Nebraska, 30%, according to an analysis by William Blair & Co. analyst Sharon Zackfia. That calculation excludes licensed Starbucks stores.
Ms. Zackfia said that the states with the highest percentage of closures include many with low population density and signify that Starbucks “expanded before some markets were ready,” she said.
Online, several “Save Our Starbucks” petitions have popped up for various stores across the country, including locations in San Diego, Dallas and New York City.
Starbucks spokeswoman Deb Trevino said officials at the company are discussing how to handle such pleas; she would not give details of what they’re considering. “It’s not a simple answer,” she said.
The closures will mean Starbucks will eliminate some 12,000 jobs, which comes out to 20 for every location it plans to shut. In addition to creating jobs and generating revenue, Starbucks stores serve as key draws for other retailers, making the loss of one a blow to the surrounding area.
When rumors started to swirl about the fate of the Starbucks on Main Street in Madison, Miss., Mayor Mary Hawkins Butler said she immediately rang up Starbucks’ corporate headquarters. She didn’t know for sure until the store appeared on the list released Thursday night.
One resident asked her whether a petition might help change Starbucks’ mind, Ms. Butler said. She plans to call Starbucks to ask them to reassess that store.
Requests to reconsider are also coming from higher-profile entities. The to-be-closed list includes locations developed with Magic Johnson Enterprises. The basketball star has for 10 years helped open 118 stores in less economically robust urban areas that might not have otherwise attracted a Starbucks. Eric Holoman, the company’s president, said the firm plans to talk with Starbucks about “applying additional filters to be certain that closure is the only option,” he said.
Bloomfield, N.M, may also make its case to Starbucks, said Jo Duckwitz, who works in the city’s procurement office.
Ms. Duckwitz does not think the customers in this city of less than 7,000 people will sorely miss the cafe, but it is a potential blow to the city’s campaign to bring more shops to Bloomfield, she said. “We have very few retails outlets here, practically none,” Ms. Duckwitz said.
Ms. Walker, the New York facilities manager, has not determined whether there is another Starbucks nearby the new office that will appease employees.
“Knowing Starbucks, there’s probably one within a few blocks,” she said. “But that’s probably two blocks too far.”
ChiFi #49
Cuz poor folks need to blow more of their money on overpriced coffee drinks or because they need more deadend retail jobs…?
“Requests to reconsider are also coming from higher-profile entities. The to-be-closed list includes locations developed with Magic Johnson Enterprises. The basketball star has for 10 years helped open 118 stores in less economically robust urban areas that might not have otherwise attracted a Starbucks.”
Bairen 321 (yesterday’s thread)
As promised, I took one for the team today on Baron’s Black Wattle Superior. Purchased today at Lil Bros, $8.99/6 pack. Pours to a thin, copper/amber color with an off-white head which disappears quickly after a moderately vigorous pour. Fairly sweet aroma, initial malt sweetness followed by a nutty flavor (the wattleseed?) and a hint of hoppy dry/bitter on the back end. Interesting and unusual, but I don’t think I will be going back anytime soon. Just not my thing.
Disclaimer: I am not an expert, just a regular person who enjoys variety and novelty in my beer. I also eat things that most people will only use for bait. Consider this carefully and caveat emptor.
RPatrick,
I wasn’t even aware of the Nightster. Looks neat, though I don’t know how comfortable I’d be with the lower seat. On long highway rides I used to use the front pegs to stretch out a lot. Saw a review by someone about my height and he didn’t seem to have a problem with it though. I liked the older chrome air filter cover rather than the plasticky looking one. The rest of the black components are nice. The all black one with a black air filter cover looks really sweet. I like the security system and the integrated fork locks. I used to carry three locks, a big padlock for the forks and front and rear disk locks.
If I was going to get another bike though I was probably going to go with a Dyna or a Duc.
From what I heard about Fort Lee co-ops, a lot are pretty strict. You might be able to qualify for a 800k loan to buy a house and not be approved by the board. I guess with what was going on though that’s not saying much :) Rumor has it some co-ops are talking about going condo. Hear anything about that?
Ok Ok off topic…our neighbor got a contract on their house!! It started at 799k but when it went to the price it should be a…699k… the house went under contract within a week. I’m so glad for them, they are so nice and always worked so hard on their house…if it’s priced right it will sell. All the houses in our neighborhood that went up for sale this spring sold…interesting
Can someone with MLS access give me listing history of #2816134. It seems like its been recently gone back to the bank
Thanks in advance
RE #53…when I say “ALL” the houses I mean 3…not a lot but not insubstantial either
http://www.philly.com/inquirer/front_page/20080720_Fuel_cost_dampens_boat_activity_at_Jersey_Shore.html
“Just 10 days before this town’s big night – that annual floating spectacle known as Night in Venice – a meager 20 boats were signed up”
#55 Laurie: I believe you said you live in Franklin Lakes, well if that is true, there is still over 100 left to chose from, in late July.
As far say our neighbor’s house selling, hopefulluy for them it did, but it is not sold unitl it’s sold.
There is a house I am following in my town and it has had 3 contracts fall through before closing; the third one the day before closing.
several people in my neighborhood have been trying to sell their homes since fall 07. Several have gone from realtor to FSBO back to realtor. i was talking with several of these families lately and apparently most of them had offers at close to asking but the banks would not approve the loans. of the five homes within 1000ft of me that have been on the market none have closed and 3 have given up. One has already purchased a home in NC and is just going to rent their house here.
Some of the families purchased in the last 5 years, while the other have clearly HELOC’d to high heaven. One person said and the rest all agreed that ” i wont just give my house away”.
I live in a working class neighborhood that has a mix from blue collar to white. All 5 of the families are clearly feeling some heat. They also, all agree that they can ride out the storm, “CNN says we are close to a turn around”. I didnt offer any commentary on the situation as i do ot know them very well and what i have to say would not be welcome news. I have no ill will or schadenfreude towards these families they are all very nice people.
Unfortunately, as has been discussed on this board, most of the families dont seem to have actually read the details of their mortgages or considered the consequences as “real estate never goes down
!”. They all take the view that having a home is a method of building wealth.
I also think that as someone mentioned before that the unspoken idea is that home value is the only real way of moving up financially in today’s society.
359 Kettle: looks like for a lot of people owning home will not help them move up financially in today’s society, but in fact will do the opposite.
As a former home owner who will buy again, I just do nto get that line I am not giing my hosue away? Just exactly what do that mean.
It is hust a lot of empty huffing and poofing, that means nothing.
As a former homewowner I do not remember being that stupid, and pouting self righteous silliness as in I am not giving my house away. Perhaps they nee to be more concerned about somebody taking their house away
52-Tom
1.Yeah it’s a nice bike, but as I said if you want the pegs way out front ect you have to buy them. They have a big comfy seat too if you want to buy that as well.
2. One or two ( but not the one I live in, unfortunately ) are thinking about it. Generally it involves paying off the underlying mortgage ect. I am not an expert on this.
Some boards are strict, I sweated that interview. 23 year old kid, one year out of college, one year of “real” income. The one I am in they are pretty laid back as long as your numbers add up and you are not a jerk. I ran for the board once and almost won, and I realized that is a job for retired people not 20 somethings.
Most buildings if they are getting rejected it is because their finances are sketchy. Some buildings are screening for “a good fit” NYC co-ops well google that. It’s the last form of legal bias.
Self employed or having money appear in an account for a down payment, or family as tenant arrangements ( like I described before ) when the family is using the co-op as an investment property for a kid or a family member and there is a LLC involved or the interviewee has no clue about what is going on.
The other issue is if the person has an attitude, sounds stupid but people act entitled to the board. They don’t go in treating it like a job interview.
kettle1,
When people say “I won’t just give my house away”, a lot of times they mean, “I’m not going to pay to sell my house.” Which is what seems to be the case for many that purchased or heloc’d recently after factoring current values and fees.
3b,
they do not agree/understand that a house is in some sense no different then a commodity like oil. It is only worth what you can sell it for. To most of these people, selling for any significant amount less then what they paid for it is “giving it away”, as they paid X, there for the house is worth X. I do not believe that most people consider the plethora of factors that gets discussed on this board such as current taxes/ future taxes/ opportunity cost of money involved etc…
To most of these people a home purchase is not a business transaction, but an emotional one. And has been shown before by several studies, people would rather hold onto a depreciating “asset” then cut their loses. Its a mental block for most people.
FOR GRIM
i mentioned thi son the train ride home from the GTG
What am I doing wrong?
Okay, I’m tired of beating around the bush. I’m a beautiful
(spectacularly beautiful) 25 year old girl. I’m articulate and classy.
I’m not from New York. I’m looking to get married to a guy who makes at
least half a million a year. I know how that sounds, but keep in mind
that a million a year is middle class in New York City, so I don’t think
I’m overreaching at all.
Are there any guys who make 500K or more on this board? Any wives? Could
you send me some tips? I dated a business man who makes average around
200 – 250. But that’s where I seem to hit a roadblock. 250,000 won’t get
me to central park west. I know a woman in my yoga class who was married
to an investment banker and lives in Tribeca, and she’s not as pretty as
I am, nor is she a great genius. So what is she doing right? How do I
get to her level?
Here are my questions specifically:
– Where do you single rich men hang out? Give me specifics- bars,
restaurants, gyms
-What are you looking for in a mate? Be honest guys, you won’t hurt my
feelings
-Is there an age range I should be targeting (I’m 25)?
– Why are some of the women living lavish lifestyles on the upper east
side so plain? I’ve seen really ‘plain jane’ boring types who have
nothing to offer married to incredibly wealthy guys. I’ve seen drop dead
gorgeous girls in singles bars in the east village. What’s the story
there?
– Jobs I should look out for? Everyone knows – lawyer, investment
banker, doctor. How much do those guys really make? And where do they
hang out? Where do the hedge fund guys hang out?
– How you decide marriage vs. just a girlfriend? I am looking for
MARRIAGE ONLY
Please hold your insults – I’m putting myself out there in an honest
way. Most beautiful women are superficial; at least I’m being up front
about it. I wouldn’t be searching for these kind of guys if I wasn’t
able to match them – in looks, culture, sophistication, and keeping a
nice home and hearth.
* it’s NOT ok to contact this poster with
services or
other commercial interests
PostingID: 432279810
THE ANSWER
Dear Pers-431649184:
I read your posting with great interest and have thought meaningfully
about your dilemma. I offer the following analysis of your predicament.
Firstly, I’m not wasting your time, I qualify as a guy who fits your
bill; that is I make more than $500K per year. That said here’s how I
see it.
Your offer, from the prospective of a guy like me, is plain and simple a
cr@ppy business deal. Here’s why. Cutting through all the B.S., what you
suggest is a simple trade: you bring your looks to the party and I bring
my money. Fine, simple. But here’s the rub, your looks will fade and my
money will likely continue into perpetuity…in fact, it is very likely
that my income increases but it is an absolute certainty that you won’t
be getting any more beautiful!
So, in economic terms you are a depreciating asset and I am an earning
asset. Not only are you a depreciating asset, your depreciation
accelerates! Let me explain, you’re 25 now and will likely stay pretty
hot for the next 5 years, but less so each year. Then the fade begins in
earnest. By 35 stick a fork in you!
So in Wall Street terms, we would call you a trading position, not a buy
and hold…hence the rub…marriage. It doesn’t make good business sense
to “buy you”
(which is what you’re asking) so I’d rather lease. In case you think I’m
being cruel, I would say the following. If my money were to go away, so
would you, so when your beauty fades I need an out. It’s as simple as
that. So a deal that makes sense is dating, not marriage.
Separately, I was taught early in my career about efficient markets. So,
I wonder why a girl as “articulate, classy and spectacularly beautiful”
as you has been unable to find your sugar daddy. I find it hard to
believe that if you are as gorgeous as you say you are that the $500K
hasn’t found you, if not only for a tryout.
One of the studies on how people handle depreciation
Mental Depreciation and Marginal Decision Making
http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6WP2-45N4260-2&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=f915f2aafe8a468951f15cedb2c63545
regarding housing,
Also remember that many people have drank the coolaide and see their house as their retirement fund! even if the know the real deal, many will not accept that as the alternative is that they are screwed and will not be doing different european cruises every week during their “Golden Years”
#62 kettle; So true. It just confirms what I have long suspected, and painful as it is but most Americans are stupid.
3b and Kettle – I have been trying to figure out the “mentality” change as well.
Pre TRA86 (Tax code from 1986) all personal loan interest was deductible – cars, credit cards etc. Then they put in the tax law that made home mort. int deductible (even a second home if you lived in it for 14 days or 10% of the time you rent it.)but no break for renters and they did away with the int. deduction for CC and cars etc.
Almost as if to say owning is good – renting is bad.
Anyway – I digress…Anyway, with my “follow the money” mentality I wondered…when did it become okay to put everything you own under the collateral of your home? Well tax wise – it became the smart thing to do after 1986 for sure. You needed a second or to refinance to add cars, consolidate CC debt etc. and qualify for the deduction. It was the “smart” thing to do.
Cindy 67
Also consider that in NJ a home mortgage in No Recourse! so dump all of your CC, car loan, and any other debt into a mortgage and you could walk away from it all with nothing more then a mark on your credit for 7 years. Not all states are like this, but thats how it is in NJ. So someone with some business acumen could have decided to mortgage to the roof and plan on walking if it ever hit the fan.
3b,
I have recently started volunteering with my old boyscout troop and am currently working on putting together a series of presentation on personal finance and a few other subjects. Most of the kids seem genuinely curious if you present the info in a reasonable manner.
How is the Real Estate market in Edison, NJ area? My dad wants to sell his townhome himself (not using an RE agent). He says he can wait for 6months to 1 year if the market is going to get any better.
#70 David: If he means better as in a higher price, I can confidently say that will not happen.
In fact it may take him 6 mths to a year, to sell even if he prices it realistically for the market right now.
#69 keetle: My daughter is very interested in the topic. My Son (older), is still a w work in progress, but the light bulbs are starting to go off in his head.
Perhaps the Boy Scouts parent’s should listen in too.
kettle1,
I wonder if she’s this girl.
#51 willwork4beer
Sorry to hear the wattle seed didn’t work out. But you never know till you try it. Note I’ve never tried any thing with wattle seed as faf as I know.
Do you like German beers? I usually try different German brews and I’m never disappointed. They seem to have a crisp, clean taste and little carbonation.
So, if Tom’s goal [of finding the ultimate bad Dr. Housing Horrible] has merit, then don’t we need to track down all the successful flippers and get the cream back?
I mean, what about Jack and Sally. She’s a nurse and he’s a guy with a couple of bucks and a hammer. They live somewhere near North Brunswick. In the five year ended 2006, they flipped many properties. I don’t know how many.
So they got all the dough.
Tom says they were scammed by the Evilbrokerdoers.
They don’t act scammed. But if anybody buying a home (who happens to still be living in it) got one of the same mtgs as Jack & Sally, and is now blessed with some kind of Federal assistance, shouldn’t Jack & Sally get a chunk of pie, too? What I’m asking is for equal treatment under the law. If the law was broken by unethical banks tossing coupons, then Jack & Sally should get compensated, as well, right? They just happened to sell in time…but they were still scammed, no? So, they should get compensated for the risks they bore during any holding period, right, Tom?
#63 kettle1,
i read that one about year ago and was amused and horrified at the same time.
I guess it never occurred to her that the Plain Janes could be from wealthy families or met their husband in top schools they were attending. How many people meet their spouse in a singles bar?
Not all men are extremely shallow, some are just shallowy shallow. :)
can any one offer a guess as to what a 3 bedroom 2 bath split in edison might actually sell for right now (on stelton rd near train station). Everything is original 1950’s, NO updating done. A family member is considering selling. Just curious what this board thinks a real range might be….
Bairen,
Marrying for looks is probably one of the higher risk activities a person can do in terms of personal happiness.
bairen,
I suppose it never occured to her that a person who is smart enough to make that kind of money might prefer someone who is on their level intellectually first and looks second
Good article in Star Ledger how the Carpet Baggers in Congress have sold American Drug Safety to the third world for profits. Guess it doesn’t matter if you burn the Flag, the Country doesn’t exist anymore.
http://www.nj.com/news/ledger/topstories/index.ssf/2008/07/safety_issues_fail_to_halt_dru.html
Tom and Kettle-
I really hope that this is a very small portion of the female population. Being single again and reading stuff like that gives me a total inferiority complex about my own accomplishments at 28-29.
( No I do not have a BMW )
RP<
happily married here, so shouldnt be an issue for me ;) best of luck to you!
RP,
I wonder if such women are really prepared to be held to the equivalent standard. i.e. if i am bringing the money, ccars, boats and houses; then there is list that one might expect of her
74 Bairen. Poppa Beer taught me that there is good beer and better beer. IMHO a lot of German beer is the latter.
It happens all the time, people refinace their home to make some consumer purchases that are thrown away in months or a few years and the mortgage payments outlast the products exponentially.
#62 Ket, Bingo!
Just came across an interesting site. may i introduce….
http://bankimplode.com/
I have no stake in said website, but it seems to have a lot of interesting info!!! Bank write downs, failures etc….
Pat,
In my eyes it’s very simple. If I had a magic wand I could wave I’d bring us all back to square one and slap everyone for their silliness. But there’s no way to get the genie back in the bottle.
There was a big wave and some people rode it for big financial gains, others to financial ruin. The wave was created by the abundance of capital through the major increased securitization of non-prime loans which provided capital for practically anyone that asked for it.
It’s not like a whole bunch of people suddenly decided they wanted to own not rent or wanted a bigger/nicer home. People have wanted this for the longest time. Home ownership is a big part of the definition of the American Dream and that’s been around for more than 8 years.
For me, the issue of blame comes down to control. Borrowers can ask all they want for money but the banks control who gets it. They have to answer to their depositors, shareholders, insurers, etc. and the underwriters should have been doing their jobs if the banks got out of line. For those that issued these mortgages they had to answer to their investors and the credit rating agencies failed miserably.
It’s not like all banks participated in this. One of my blog posts references an article that shows how some NJ Community Banks kept to their regular lending guidelines and their share value has increased instead of plummeted. The other banks didn’t exercise the self restraint required by the people that entrusted their money to them. Namely depositors, shareholders and investors.
I don’t know what is so disagreeable with what I’m saying?
Like I said many times, I don’t feel sympathy for the homeowners that are losing their homes. There are some that were lied to by their mortgage brokers and realtors and other scam artists and I’m glad to see that action is being taken.
I don’t feel sorry for the 10’s or 100’s of thousand of people who only got hired because the banks were pulling in so much money. They well is dry, it’s time to go.
I definitely don’t feel sorry for the banks that had control of the money and should have had reasonable financial sense as opposed to the 35k/yr fast food worker buying a 500k home.
The people I feel most sorry for are the ones that qualified for and got traditional loans during this time that can afford to make their payments. They won’t get the same relief that others get.
And there will be relief. It’s not like the government is going to bail out the homeowner and leave the lender out. They’ll eventually work something out where they make the lender give the borrower a modified loan with terms they can afford which is a whole lot better for the banks than trying to sell the tons of foreclosures hitting the market. There will probably be some bailouts or other relief to the banks because we can’t let our financial institutions collapse.
It done tremendous amount of damage to our economy as a whole and will cost all of us a lot of money. I’ve posted a couple of comments with some links to back up what I’m saying but they’re in moderation and I’m not including links here in case that’s what caused them to get put in the queue.
Again, in my view, the bulk of the responsibility should go to the people that had control. I don’t think anyone can reasonably argue that it was the borrowers that had control.
someone was asking for a tally of write downs before….
here you go
http://www.bloomberg.com/apps/news?pid=20601110&sid=a5GaivCMZu_M
Kettle-
I think there is a list, and it’s silly. It’s like they are programmed ( and the guy was too ) ok I’m a yuppie I should have this car ect.
The BMW could be leased (have you seen what an M3 costs!). The party/tasting could have been on plastic. The apartment could have been option ARM’ed. Heck I saw and had on the LIE on the way out to a friends wedding that you could lease a masarati and I went “AHH that explains why so many of them have been around too” ( and if I wanted one I would least it, beat the crap out of the tires, tranny, and clutch and give it back 24 months later )
The thing is foundation. The thing is substance. Or I could be a generic NNJ 20-30 year old male. I have a lexus or a BMW, I have that spiky hair thing going on. I goto the gym, I drink beer. I have one of those cell phones you can send messages on with the big screen. I say YoYoYo frequently. I own at least 10 things with the Yankees logo on it. I listen to House and Rap music ( the second one baffles me )
Must be boring, to all be the same.
from the economist magazine
“Coincidentally, the ratio of FDIC’s fund to the total amount of insured deposits is similar to the capital ratios set aside by Fannie Mae and Freddie Mac”
YEEHAW!!! Fannie and Freddie are dead men walking, so what does that make the FDIC??? what does that make all of the deposits in the the forth coming failed banks?
Oh, and RP (90)
I take offense to you describing my habits in such a derogatory manner!!!
talking to myself :(
change… lol
you smokin some bad grass that the CIA ships in..
“_Obama_ outlines policy of endless war”
http://tinyurl.com/56bbub
change… lol
you smokin some bad grass that the CIA ships in..
“_O_b_a_m_a_ outlines policy of endless war”
http://tinyurl.com/56bbub
Yeah, Kettle, dat be me. Thx.
The list.
“As faith in bank bailouts dims, losses set to deepen”
http://tinyurl.com/63ntc9
“talking to myself :(“
I’ll trade ya kettle. :)
“Concern Mounts About FDIC Deposit Fund”
http://tinyurl.com/6qnhoa
50: starbucks is actually one of the better retailers out there, as far as how they treat their employees. part-time ppl can get health benefits, and they’ll give financial aid for further education to longtime employees.
63: i think i threw up in my mouth a little.
“Commercial bankruptcies soar, reflecting widening economic woes”
http://tinyurl.com/5fr3yv
“Freddie & Fannie Unconstitutional Bail Out Using What?”
http://tinyurl.com/6c5ud8
“The activist public, in other words, distrusts others to protect its interests and thus chooses to protect its own. The far larger passive public is passive not because it believes others will protect its interests, but because it doubts it can protect its own. Both publics listen to the reassurances of government and industry — if they listen at all — with considerable suspicion.”
from http://psandman.com/articles/explain3.htm
ok, so he’s talking about the environment and risk communication… but i think this is a brilliant statement about how people are relating to the fallout of the real estate bubble, as well. i admit to chafing a bit when ppl talk about “sheeple”… there but for the grace of grim go i, and all that. i really don’t think “everyone else” is stupid. but scared? convinced they are powerless? heck yeah.
say goodbye to WaMu….say goodbye my baby!!
(Billy Joel song)
btw-is Billy Joel dead yet?
sas
Peter Schiff on the current mess from sunday 7/20
http://www.youtube.com/watch?v=pw5E-47Uq7k
see 6:50 in the video where schiff comes in
WaMu still sends me 0% interest credit card offers. I have been using credit cards for 9 years and I have never paid interest. If they give me 0% interest card, they will never be able to make more than the 3% they charge when I do balance transfer. hihihiih
Tom Says:
July 20th, 2008 at 9:23 pm
GPS:
2 issues
#1 if your post has more than one hyperlink, it will be thrown into moderation – grim’s spam prevention measure
#2 ever heard of “reverse inquiry”? The banks chopped up, and spiced and diced a bunch of CDOs because major investors of scope were clamoring for higher spread product…why? Sovereign wealth funds bought tons of UST thereby driving down the yields.
How’s this one…..Joey Innocent takes an alt-a HELOC on his house and buys a gas guzzling SUV and spends the rest on Chinese manufactured crap at Wal-Mart….he indirectly sowed the seeds of his own demise….his behavior in aggregate created the conditions that drove up the price of oil and created a trade surplus between China and the U.S……oil money and the Chinese created some of the conditions that enticed investors to seek out underpriced risk….
But wait! everything is OK, a government spending “stimulus” plan will save us!
according to the youtube video. anyone feel stimulated?
chifi –
isn’t the rest of this year a great time to invest in the market/pump into 401k/ira/etc?
One idea we’re having (via the financial adviser) is maxing out the business 401k this year. we only briefly spoke to him about this on the phone, but we just got to thinking:
is it better to dump all 42k (or 40, whatever the max) in at once, or spread it out with like 8k a month for the rest of the year? does it really matter?
obviously, all disclaimers to your answer …
Just back from the sticks. No internet and no phone. Just you and nature. But riding horsies and shooting guns was fun!
I hope the gtg went well. Please plan another soon so I might actually be able to go.
Shore –
I asked this a few days ago, but what are your thoughts no a non-Jersey beach place? Perhaps you know of a beach town that may be up-and-coming? I’d like to think SOMEWHERE in Delaware would have potential, but our problem is that we’d like to keep it 2 hrs away, max.
Being in Bucks County, this presents a problem, and makes us think maybe a lake place would be the wiser investment. (A lake, of course, that empties into the ocean)
well, that came out wrong – a RIVER that empties into the ocean
or a really, really, really big lake
duh
speaking of WaMu…
some branches are cutting back store hrs.
need to confirm.
sas
This is shaping up t0 be one heck of a storm!!
A list of some of the bigger “goings ons” lately. sourced from various blogs and news sites.
1: $396 billion in asset writedowns and credit losses at more than 100 of the world’s biggest banks and securities firms as well as the $302 billion capital raised in response.
2: Fannie and Freddie are leveraged some 62 times. And assuming the quote from The Economist Magazine is correct “Coincidentally, the ratio of FDIC’s fund to the total amount of insured deposits is similar to the capital ratios set aside by Fannie Mae and Freddie Mac;If applied to the FDIC, that would mean that the $50+ billion in funds it holds now won’t be sufficient. Try $3 trillion.
3: FDIC wants to increase premiums on member banks For banks that are already in trouble, these higher premiums pose a serious risk of pushing them over the edge. But wait; don’t they pay those premiums to prevent them from crashing?
4: On Friday the SEC, the U.S. markets watchdog, amended its action from earlier in the week but limited the protection to 19 firms including U.S. housing finance giants Fannie Mae and Freddie Mac whose shares plunged on concerns they were undercapitalized.
FDIC Chairman Sheila Bair said in an interview with C-SPAN television”Again, overwhelmingly, banks are safe and sound and healthy,” so I think the industry will be able to absorb the additional needs to keep those reserves strong, she said.
HAHAHAHAHAHAHAHAHAHA (HAHA’s mine)
5: There is $75 trillion in global real estate, $50 trillion in annual global GDP, and $675 trillion in derivatives
6: Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, projects 150 bank failures over the next three years, with the highest concentration coming from states such as California and Florida where an overheated real estate market is in a fast freeze.
But what happens if these 150 failures include WAMU, CITI, Wachovia etc? 50 billion isnt going to cover the guarenteed depositis!
7: From the TIMES…….Britian is facing an “economic horror movie” because of a “toxic mixture” of a moribund credit market and volatile oil prices, according to a leading forecasting group.
…
Peter Spencer, chief economist at the Item club, said: “Both on the high street and in the housing market it is going to get a great deal worse before it gets better. We have already seen a housing crisis that has morphed from a credit crunch to a general collapse in confidence as prices have tumbled.
…
“The sharp fall in overall business optimism is very worrying and points towards a recession,” said Graeme Leach, chief economist at the Institute of Directors.
8: 1: $396 billion in asset writedowns and credit losses at more than 100 of the world’s biggest banks and securities firms as well as the $302 billion capital raised in response.
2: Fannie and Freddie are leveraged some 62 times. And assuming the quote from The Economist Magazine is correct “Coincidentally, the ratio of FDIC’s fund to the total amount of insured deposits is similar to the capital ratios set aside by Fannie Mae and Freddie Mac;If applied to the FDIC, that would mean that the $50+ billion in funds it holds now won’t be sufficient. Try $3 trillion.
3: FDIC wants to increase premiums on member banks For banks that are already in trouble, these higher premiums pose a serious risk of pushing them over the edge. But wait; don’t they pay those premiums to prevent them from crashing?
4: On Friday the SEC, the U.S. markets watchdog, amended its action from earlier in the week but limited the protection to 19 firms including U.S. housing finance giants Fannie Mae and Freddie Mac whose shares plunged on concerns they were undercapitalized.
FDIC Chairman Sheila Bair said in an interview with C-SPAN television”Again, overwhelmingly, banks are safe and sound and healthy,” so I think the industry will be able to absorb the additional needs to keep those reserves strong, she said.
HAHAHAHAHAHAHAHAHAHA (HAHA’s mine)
5: There is $75 trillion in global real estate, $50 trillion in annual global GDP, and $675 trillion in derivatives
6: Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, projects 150 bank failures over the next three years, with the highest concentration coming from states such as California and Florida where an overheated real estate market is in a fast freeze.
But what happens if these 150 failures include WAMU, CITI, Wachovia etc? 50 billion isnt going to cover the guarenteed depositis!
7: From the TIMES…….Britian is facing an “economic horror movie” because of a “toxic mixture” of a moribund credit market and volatile oil prices, according to a leading forecasting group.
…
Peter Spencer, chief economist at the Item club, said: “Both on the high street and in the housing market it is going to get a great deal worse before it gets better. We have already seen a housing crisis that has morphed from a credit crunch to a general collapse in confidence as prices have tumbled.
…
“The sharp fall in overall business optimism is very worrying and points towards a recession,” said [Graeme Leach, chief economist at the Institute of Directors.
8: Real Estate Crisis Threatens Spanish Economy
By Reiner Wandler in Madrid
Spain’s economy is in trouble. Rising property values earlier this decade lured many Spaniards into the market. Now that the bubble has burst, the crisis is quickly spreading through the country’s economy.
“I’ll give you a good price,” the man, who introduces himself on the phone as José, promises potential buyers. José has a flat in Seseña, a small town of 12,000 around 40 minutes by car from Madrid. Now, he wants to get rid of it — regardless of the financial hit he might take. The real estate agent who sold him the property insisted it was a safe investment for the future. But those promises dissolved into thin air not long after José had signed the contract.
ooops,
sorry for the messed up post :(
this was the intended list
1: $396 billion in asset writedowns and credit losses at more than 100 of the world’s biggest banks and securities firms as well as the $302 billion capital raised in response.
2: Fannie and Freddie are leveraged some 62 times. And assuming the quote from The Economist Magazine is correct “Coincidentally, the ratio of FDIC’s fund to the total amount of insured deposits is similar to the capital ratios set aside by Fannie Mae and Freddie Mac;If applied to the FDIC, that would mean that the $50+ billion in funds it holds now won’t be sufficient. Try $3 trillion.
3: FDIC wants to increase premiums on member banks For banks that are already in trouble, these higher premiums pose a serious risk of pushing them over the edge. But wait; don’t they pay those premiums to prevent them from crashing?
4: On Friday the SEC, the U.S. markets watchdog, amended its action from earlier in the week but limited the protection to 19 firms including U.S. housing finance giants Fannie Mae and Freddie Mac whose shares plunged on concerns they were undercapitalized.
FDIC Chairman Sheila Bair said in an interview with C-SPAN television”Again, overwhelmingly, banks are safe and sound and healthy,” so I think the industry will be able to absorb the additional needs to keep those reserves strong, she said.
HAHAHAHAHAHAHAHAHAHA (HAHA’s mine)
5: There is $75 trillion in global real estate, $50 trillion in annual global GDP, and $675 trillion in derivatives
6: Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, projects 150 bank failures over the next three years, with the highest concentration coming from states such as California and Florida where an overheated real estate market is in a fast freeze.
But what happens if these 150 failures include WAMU, CITI, Wachovia etc? 50 billion isnt going to cover the guarenteed depositis!
7: From the TIMES…….Britian is facing an “economic horror movie” because of a “toxic mixture” of a moribund credit market and volatile oil prices, according to a leading forecasting group.
…
Peter Spencer, chief economist at the Item club, said: “Both on the high street and in the housing market it is going to get a great deal worse before it gets better. We have already seen a housing crisis that has morphed from a credit crunch to a general collapse in confidence as prices have tumbled.
…
“The sharp fall in overall business optimism is very worrying and points towards a recession,” said [Graeme Leach, chief economist at the Institute of Directors.
8: Real Estate Crisis Threatens Spanish Economy
By Reiner Wandler in Madrid
Spain’s economy is in trouble. Rising property values earlier this decade lured many Spaniards into the market. Now that the bubble has burst, the crisis is quickly spreading through the country’s economy.
“I’ll give you a good price,” the man, who introduces himself on the phone as José, promises potential buyers. José has a flat in Seseña, a small town of 12,000 around 40 minutes by car from Madrid. Now, he wants to get rid of it — regardless of the financial hit he might take. The real estate agent who sold him the property insisted it was a safe investment for the future. But those promises dissolved into thin air not long after José had signed the contract.
$100 billion banknote to hit Zimbabwe amid soaring inflation
Laughing all the way Says:
July 20th, 2008 at 10:26 pm
chifi – isn’t the rest of this year a great time to invest in the market/pump into 401k/ira/etc?
is it better to dump all 42k (or 40, whatever the max) in at once, or spread it out with like 8k a month for the rest of the year? does it really matter?
obviously, all disclaimers to your answer …
LATW: Diversification reduces risk….you can diversify in many ways – examples:
1. asset classes
2. business sectors
3. size of institution
4. by taxabilty profile
5. by time (i.e. one-shot is higher risk)
chifi, (notice how I didn’t stoop to calling you chiface.. well sorta ;) )
#1, thank you for clearing that up.
#2, I’m familiar with the concept but from what I’ve been seeing there has been more spicing than dicing.
It’s like a butcher that sells grade A prime beef. Customers love it, it’s a good standard but the price doesn’t give you a lot of bang for the buck. So he finds some cheaper beef that’s of less quality but the price makes people try it. Some people are very happy and can’t tell the difference, other people must have gotten some bad cuts and aren’t happy. So the butcher decides to start selling it as ground beef and mixing up different cuts to even things out. People love it and love the price and demand rises.
This is where we’re probably going to diverge…
With the increase of demand the butcher has a hard time finding even decent meat and there’s more and more crap mixed in. But there’s been a ground beef grading association that’s been giving inflated marks to his new ground beef either through incompetence or collusion with the butcher. But the butcher isn’t too concerned. He knows his clients don’t eat the meat right away, they freeze it and won’t know for some time. Now even the bad cattle is scarce and he’s grinding any kind of meat he can get his hands on, he doesn’t care what it is. Eventually when people thaw it out and eat it they realize they didn’t get what they paid for.
The borrowers in this analogy are the meat wholesalers. They start out as legitimate businesses but by the end the butcher convinced some guy that works at the animal shelter to slip him some euthanized animals under the table. The guy didn’t think it was a good idea at first but the butcher threw a lot of money at him and told him everything would be ok.
“How’s this one…..Joey Innocent takes an alt-a HELOC on his house and buys a gas guzzling SUV and spends the rest on Chinese manufactured crap at Wal-Mart….he indirectly sowed the seeds of his own demise….his behavior in aggregate created the conditions that drove up the price of oil and created a trade surplus between China and the U.S……oil money and the Chinese created some of the conditions that enticed investors to seek out underpriced risk….”
And none of that would have been possible if the banks used more traditional lending guidelines and didn’t lend to this guy in the first place if he couldn’t pay for it.
Giving out all that credit has a similar effect in devaluing the dollar as printing more money does.
RE#54/58
3B…I don’t live in Fklyn Lakes. I WISH I had the income to live in Franklin Lakes. Altho they have no town water or sewers..Yikes nothing makes me run faster than the word septic tank…of the 3 houses that closed in our neighborhood 2 of them already closed and the other one just went under contract this weekend so we’ll see. I think one thing the uber agent that had the listings is very good at is finding qualified buyers and no, I don’t know how she does it.
194 make. I understand your point but I doubt that surgeon was pocketing 64k for the day. The surgeon’s fee was part of the total cost. MDs make good money but not as much as most people think. And Ben was right about cosmetic surgery, all cash just like your knee.