Preliminary November sales and inventory data for Northern New Jersey (GSMLS) is in. Please note that this data is subject to revision.
The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 500, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.
(click to enlarge)
The second graph is another view at the sales data for the full year. Please note that this graph does cross at zero.
(click to enlarge)
The third graph displays only November sales, 2000 to 2008 YOY.
(click to enlarge)
The fourth graph displays an overlay of Sales and Inventory from 2003 to 2007.
(click to enlarge)
The fifth graph displays the year over year change in inventory on a month by month basis.
(click to enlarge)
The sixth graph displays the year over year change in sales on a month by month basis.
(click to enlarge)
The last graph displays the absorption rate (not seasonally adjusted), in months:
(click to enlarge)
Bonus Graphs!
(click to enlarge)
(click to enlarge)
Foist
November 2008 Sales Pace is worth reviewing:
https://njrereport.com/images/nov08_salespace.gif
“Automaker bankruptcies would cost up to 3.3 million U.S. jobs”
http://tinyurl.com/3vy84g
2009 Financial Services Dinner
February 25, 2009 6:30 PM – 9:30 PM
Pierre Hotel, New York City
The Foreign Policy Association cordially invites you to join us for an evening with Sheila C. Bair, Chairman, FDIC, Richard Waugh, President and CEO, Scotiabank and Ronald E. Hermance, Jr., Chairman, President and CEO of the Hudson City Bancorp, Inc.
For more information, please contact Takako Fujiki at eventsdepartment@fpa.org or register online below:
http://www.acteva.com/booking.cfm?bevaid=171104
“Walking away from a mortgage no longer unthinkable”
http://tinyurl.com/4q5uq4
i don’t know why people are so soft & feel guilty.
If one is staring down forclosure… stay in the place, don’t pay the mortgage, ans stay there mortgage free until law enforement gives you a court order, then leave.
Meanwhile, you just made a sh#t load of jack.
Don’t feel guilty or sad in doing this, you have been lied to think that you should.
SAS
say..
whatever happened to Mr. At-a-wa (Otteau)?
lol.
wait a minute the wind is blowing this way so he must be over here.
yee!
SAS
“Home Videos Channels Community
The REAL Maverick: Present Economy worse than Depression”
http://tinyurl.com/4awu3g
From Bloomberg:
New York City 6.3% Jobless Rate Highest Since 2005, State Says
New York City’s unemployment rate jumped to 6.3 percent in November from 5.7 percent in October and 5.1 percent a year ago, the highest since February 2005, the state Labor Department reported.
Jobs in all financial activities in the city totaled 454,900, a loss of 16,400 over the past 12 months and 2,400 in November. The narrower field of securities and investment-banking firms, with 170,100 employees, shrank by 17,100 from a year ago and by 1,400 in November, the department said.
The effects of the economic recession could be measured in the city’s registering its first year-to-year “negative growth rate” since February 2004, Labor Department economist James Brown said. A November decline of 1,000 jobs in the city’s leisure and hospitality industry, to 306,000, came in a month during which jobs usually increase, he said.
“Historically, November has been the best month of private- sector job creation, with a 10-year average gain of 26,000,” Brown said. “This was the first loss for leisure and hospitality since the current data series began in 1990.”
As Wall Street firms continued to experience losses and credit remained tight, the effect spread throughout the New York City and state labor markets, the statistics showed. The state’s private-sector job count registered its largest month-to-month drop since October 2001, and New York’s 6.1 percent unemployment rate was the highest since April 2004.
From Crain’s:
Unemployment climbs to 6.3% in city
For most of 2008, the city economy continued to show year-over-year job growth. The nation hemorrhaged jobs, but the city posted gains.
No more.
The November unemployment rate in the city jumped to 6.3% from 5.7%, the highest level in nearly four years.
Private sector employment in the city fell by 17,100, or 0.5%, for the 12-month period that ended in November, the first month it has happened since February 2004, according to a report released Thursday by the New York State Department of Labor.
The city shed 20,900 private sector jobs in November, the largest one-month loss since 9/11, according to an analysis of Department of Labor data by Eastern Consolidated. The November losses wiped out all the job gains for the year, putting the net year-to-date private sector loss at 10,200.
“There’s no question the recession is here in full force at this point,” said James Parrott, an economist at the Fiscal Policy Institute. “And New York City is going to proceed to catch up to the bad news at the national level.”
Finally the bad news about GE is coming out. S&P lowered the rating outlook from stable to negative yet haven’t touched their credit ratings.
I’m surprised it took so long. Company hasn’t performed for stockholders since Immelt took over. I think they started investing in the tech bubble too late and they got into subprime late too. They bought WMC in mid 2004 after all the real money was already made.
Poorly run company from the top to the middle. The whole six sigma crap may or may not work in general but for a company the size of GE you can’t focus on the short term like the six sigma program does.
But it should have been obvious, you can’t expect a company to be profitable when you have a company run by a bunch of douchebags who think they’re cool because it says black belt on their business card.
Wish I waited a day to post my comments on politicians lieing about affordability and homeownership, the numbers would have strengthened the point.
It was total BS. Now that house prices are actually becoming affordable again, they’re trying to prop them up.
sas,
Those stories of people walking away always remind me of Jose Canseco walking away from his home. Basically just said it didn’t make sense to pay for a house that had more owed than it was worth.
I hope congress brings him in to testify on the foreclosure crisis. His previous testimony was hilarious.
Tom,
I think walking away is a no brainer.
if i couldn’t provide food… I’d skip for as long as I could.
hell, I am just lazy…I’d just skip until the courts tell me to leave then I’d say see ya!
in these conditions, I suspect its at least a year mortgage/rent free.
In my mind…its totally worth it.
especially if one lost a job.
SAS
1.21 Jigawatts !!!
“CONGRESS PASSES WIDE-RANGING BILL EASING BANK LAWS”
http://tinyurl.com/48y7te
“A NEW FINANCIAL ERA: THE OVERVIEW; ACCORD REACHED ON LIFTING OF DEPRESSION-ERA BARRIERS AMONG FINANCIAL INDUSTRIES”
http://tinyurl.com/3lhyab
“U.S. Proposes Letting Banks Enter New Fields”
http://tinyurl.com/5hesde
just hearing my buddy’s tale in northern virginia. brutal.
he bought a new construction townhouse in 2006 and just estimated that he is locked in at his place for the next 7-10 years. wife just got pregnant and he’s sorta pissed that they dont have a yard (have a small dog).
he’s basing that 7-10 month # on foreclosures on his street and empty foreclosed or unsold SFH in his community.
at least he doesn’t have an ARM.
you know, the more I think about..
I actually think Greenspan may have been correct all along when he blamed the housing bubble on the Wall.
“I don’t think that the [real estate] boom came from a 1 per cent Fed funds rate or from the Fed’s easing. It came from the collapse of the Berlin Wall,” said Alan Greenspan to a private Canadian audience”
I think this event was the catalyst, which lead to all sorts of schenanagans.
SAS
schenanagans that Greenspan clearly lead and paved the way.
but, with that sentence, he really answers the question, with the Greenspeak twist.
Greenspan, I gotta admit, he is a god damn master of words.
SAS
to see some of the stuff NY is going to be taxing … man, we’re happy to be out of that place
http://www.hollywoodreporter.com/hr/content_display/news/e3i6fbc6343575b26e1a0789b5f22a3be64
wonder if it will accelerate the riots?
Re: problems in NYC
I spoke to one of the janitors at the school today. He said all of their paychecks bounced. I’m not sure if he meant all in NYC schools or just that building. Either way, if the custodial staff can’t be paid, there is a lot more trouble ahead.
Mustard seeds, mustard seeds. Approximately 1100 people planted mustard seeds for the next growth in our economy.
God bless the homebuyer!!
Sincerely,
Frank
22. No way. A little ‘early’ for that? Holy cow.
24 Essex
I $shit you not. I truly hope it was a glitch and that all these people will get their pay in the very near future. If not, we are truly f@cked.
Lost 25 We are truly F**ked. It is going to be a unmitigated disaster. I am not in glee over this, one of the first times I posted here I said it was going to be very bad & we should have empathy for those caught up in it. I was jumped immediately, now it seems more get the picture of what I was referring to. Very few will walk unscathed throw the coming maelstrom.
throw = through
It would be one of my post with out bad spelling or grammer!
LOST
Hope you guys are doing well, stock up & keep low it is going to get real ugly.
MM
what sort of overdraft fee’s would a school get hit with for boucning an entire payroll????
I am not a wine snob. Not even close. I can drink any wine, cheap or complex. Nom took a cheap shot at me saying how can I clip coupons and drink pricey wine and my answer is that I’m a budget wine shopper. Not too many people I know buy a case when they find a good fresh vintage cheap and wait 5 to 10 years to crack it open. Plus my cheapness in most other areas allows me to afford the good stuff. BTW, Drug Fair has 12 pack cans of coke at 4 for $8. Not too shabby eh?
As for Qwerty’s strange post that reported that the French experts found the Napa wine better than their local ‘brew’, I say why not. Personally I like most California’s better than the French stuff in all varieties except perhaps Bordeaux (our heritage). My French brother in law agrees as well. Cali’s climate is more consistent and the soil is not overworked (yet). Champagne is not my thing at all. I hate it. Dom is way overpriced and is living mainly on it’s name recognition, as are many of the new Vodka’s on the market. Gimme a Smirnoff and I’m more than happy. The Grey Goose is quite smooth as well, but all of the others taste pretty much like Stoli to me. Plus if your gonna mix it, then who really cares as long as it’s not WolfSchmidt or Penn with the terrible headache you’ll end up with when you wake up.
As for the relationship of price to quality, there are plenty of quality wines in the 10 to 20 range that are quite palatable. Mondavi (Napa) is all good. When you head into the 30s, the complexity of the wines really expand. Especially the finish. I would agree that anything above the 30s requires both a very well-trained palette and a decent salary to make it worthwhile. The Opus Ones and Cask 23’s are damn good wines and flavor bombs, but definitely not worth their $150 price tags. One can find similar flavor bombs easily in the 30s with the proper amount of aging. But like I was trying to point out earlier to Qwerty, until you sample a $500 bottle of wine, you really should shut your mouth. It’s like a science experiment in your mouth. Only the absolute best grapes out of 1000s of acres are chosen and they are handled like plutonium by experts whose knowledge of winemaking has been passed through generations. You will have to trust me on this, but if you are willing to go to Napa, I can easily steer you to a tasting that has no charge and you will get to sample the ‘real’ deal with the owner of the vineyard who enjoys the good stuff just as much as you do.
Grim…nice charts. Can’t wait for the spring!
Don’t knock the Dom, Stu. Remember that bottle that survived 4 years and 2 apartment moves in our fridge. Who knows how many temperature changes it went through, but it was still the best bottle of bubbly I have ever had. Of course everyone was drunk by then and it was 10 degrees in the outdoor hot tub on that New Year’s Eve, so maybe my “palette” was not at it’s most sensitive.
To everyone else, Stu’s frugality is the real deal. Any ironic crazy willingness to spend money on frivolous luxuries like expensive wines are only the effects of my evil, bad influence. When I met him ages ago he would barely even drink the cheap stuff. Actually, I have distinct memories of trips to an LA Pic N Save when Stu lived in California just so we could pick up “amazing” $2 bottles of organic wine.
Re the lazy kids from the previous thread – When I used to manage people, this was a huge frustration for me. I used to manage the most junior people in our department, and based on the really low entry level salaries we’d pay, I’d be lucky to hire people with more than a year or two of full time work experience. These kids had no sense of business etiquette – plenty of calling out sick, showing up late, leaving at 5 on the dot and then would get offended when they got a 3% cost of living raise. Supervising these kids was essentially babysitting.
I had one particularly bad apple that I was forced to hire who called out sick within 2 weeks of being hired and had taken sick days on 2 separate occasions during his first month on the job. Within 2 months, he was late to work about 30 times. In addition, his work was mediocre, and he made lots of careless mistakes and missed deadlines.
I sent him an email about his tardiness issues and told him it was unacceptable. He immediately emailed back a resignation. I thought that odd, but was very happy that I would not have to go through the protracted HR process of firing him. I showed my boss his email, and she congratulated me.
About a week later, the kid is on a previously scheduled vacation day. He sends me an email from his personal email account with a subject line of Sept 15 (his scheduled last day). His email says “I’ve been thinking and I have decided Sept 15 won’t be my last day. I really like the work we do here, and I have decided to remain on staff. Best, Lucas” Kid thought he could just unquit via email and we’d all pretend nothing ever happened.
Sas,
F’g East Germans making us by houses we couldn’t afford.
Nom – Hope everything turns out okay with the puppy. DJ once chewed through a medicine bottle and drank over 50 doses of Lil Gator’s liquid Zyrtec. I was a wreck when I found him. Luckily they prescribe that for allergenic dogs and at over 50 lbs it wasn’t enough to do any kind of damage. Our vet was really great while I was crying over the phone. She said something like “I know one thing he won’t be this weekend….itchy!”. I was nervous for days, but all the dog wanted to do was sleep!
Alan Greenspan, Perennial Optimist
Alan Greenspan has a solution to the economic crisis: a rising stock market!
What, then, will be the source of the new private capital that allows sovereign lending to be withdrawn? Eventually, the most credible source is a partial restoration of the $30 trillion of global stockmarket value wiped out this year, which would enable banks to raise the needed equity. Markets are being suppressed by a degree of fear not experienced since the early 20th century (1907 and 1932 come to mind). Human nature being what it is, we can count on a market reversal, hopefully, within six months to a year.
http://seekingalpha.com/article/111477-alan-greenspan-perennial-optimist
After reading this article I am reminded of the episode of Seinfeld where George’s old neighbor who’s a retired mechanic takes a look under the hood at George’s car. George shoes him away after the guy’s daughter tells George the guy has dementia. Too late for George as he f’d up his car.
grim, CONGRATS!!!
(I still have the LSAT stuff! :)
sl
Stu,
You GO boogie-woogie frugal boy!!
(from another coupon clipper, never-pay-retail, happy to find a bargain me)
sl
Nom
You have mail, again.
sl
Nom, The benefit to an unsophisticated palate—i enjoy cheap wine.
why won’t you part with the name of the red??
It was a great wine, hubby and I enjoyed it a lot…except can’t seem to extract the name of it from you!
sl
njgator (31) –
that sounds about right, i really cant say much about the particular group of kids coming into the firm this year..
i feel like it gets worse and worse, i had a kid tell me that its not right that he has to commute 2 hours a day (i’m in consulting) and be there late. i told him the other day that he is lucky to have a job, and if he really wants, he could quit and find another one if he feels like this one isn’t treating him right. The worse part of it is, i had one of his parents call me to discuss the situation.
i fell off the chair when that happened, it was so incredulous.
i almost wanted to fire him right there and then, but i knew that it would be some violation of a policy at work.
39 crazy man in the corner….sounds like my 12 year old telling me it’s not his fault the teacher says he talks too much in class….it’s the kid next to him and she looks over at the wrong time….my response…”oh so the teacher is setting you up”? I highly doubt it… I tell him at every chance when something like this comes up and he “argues” it is not his fault to get over it, it is his fault…and he is responsible for his behavior. And I don’t fight his battles now, I sincerely doubt I will when he is 20
27 Mike
I’m aware. Unfortunately, we have zero storage room in our tiny little place. We don’t have the ability to stock up.
28 Kettle
The problem didn’t come from the school payroll secretary. Custodians are on a different payroll then other staff. This was a problem coming from the city. I’m just trying to figure out if it was a glitch and the pay is coming for them or if this is the beginning of the end.
41. He’s prolly just bored…..teach him to blend in and keep his mouth shut…..it’ll serve him well both in later life and dealing with a wife…..P.S….don’t forget to teach him as much stuff as you can at home….that is the stuff he’ll remember.
Hey Fiddy, you might find this interesting: Still see a wide gap between what we know to be true and what people are seemingly doing.
Remember that house I wrote about in September, in Bradley Beach MLS 20845158? You did some research for me on it. It turns out it was on the market in an exclusive in August, September for something like 770k, total shambles, no kitchen no furnace, big leak and mold, but a nice corner lot, little view of the lake, block or so from the beach. 10K per year in taxes alone.
Went on MLS as a foreclosure a couple of weeks ago, apparently bank bought it at 500k, asking 569k. I was told that several offers were received immediately and now it’s been signed. I was ready to offer half the asking price – this house needs 200K renovations. WHO is buying these properties for these amounts of money if the financial industry has layoffs like we’ve been reading about, NJ industry and construction are in the toilet – I still do not understand what I’m seeing!
This bubble has not deflated yet and given the way people are acting we are a long way from capitulation!
Not to be outdone by Bernanke-san, BOJ cuts rates from 0.3% to 0.1%.
The race to debase has begun.
From MarketWatch:
Standard & Poor’s cuts view on 12 major firms
Credit rating agency Standard & Poor’s cut its rating or outlook on 12 major U.S. and European financial institutions Friday, saying the move reflected its view of a deepening global economic slowdown.
S&P said it had also lowered its view on the overall strength of the banking sector in the U.S. and U.K., moving both countries out of the top tier in its assessment of relative regional strength as it forecast further volatility in funding markets.
“The downgrades and revised outlooks reflect our view of the significant pressure on large complex financial institutions’ future performance due to increasing bank industry risk and the deepening global economic slowdown,” S&P said.
“We believe significant government intervention intended to stabilize the sector and restore public confidence may balance these pressures to a large extent,” it added.
S&P downgraded the credit rating of 11 firms or their banking subsidiaries by one or two notches.
From Bloomberg:
Home Mortgage Modification Programs Are ‘Flopping’
Foreclosure prevention programs supported by the Bush administration that rely on lenders to voluntarily modify mortgages are “flopping” by putting some borrowers further into debt, according to a new report.
Half of November’s loan modifications increased monthly payments and a similar amount added unpaid fees and interest to the loan principal, the Association of Consumer Bankruptcy Attorneys said today. Modifications boosted mortgage balances by an average of $10,800 and only a third resulted in lower monthly payments, according to the Washington-based group.
Over the next four years, 8.1 million U.S. mortgages will enter foreclosure as the recession worsens and home prices continue to fall, Credit Suisse said in a Dec. 4 report. Banks, insurers and mortgage companies have recorded about $1 trillion of losses worldwide since the start of the global credit crunch in 2007.
“Excess mortgage debt is depressing home prices and consumer spending, and acting as a drag on the broader economy,” Alan White, of Indiana’s Valparaiso School of Law, said in the report. While banks and lenders have been able to write down the value of mortgages they own, “homeowners have gotten little or no relief,” he said.
Almost 53 percent of borrowers whose loans were modified in the first quarter were more than 30 days overdue by the third quarter, John Dugan, head of the Treasury Department’s Office of the Comptroller of the Currency, said last week at the National Housing Conference in Washington.
http://www.youtube.com/watch?v=q3ykWbu2Gl0
(77) BC – yesterday’s thread –
“By the way, I was at the Flutie game. It did happen.”
11-24-84 Miracle in Miami
Are you in that pile up or the stands?
Snow day?
grim, 46
nyah, nyah, nyah my currency’s cheaper than your currency!!
sl
http://www.pasowine.com/vineyards/profiles.php
Non- From this list of Paso wines, I am only familiar with the Peachy Canyon Zin and Justin wines.
I am pretty sure my friends would recognize several others as this is near the area where they go to the Pinot World each year.
Again IMHO – That entire area, Central Coast, is increasingly getting a name as an excellent source for red wines…in my circle of friends, it is giving Napa/Sonoma a run for their money – tourist dollars.
48….in case you haven’t noticed….unless you contributed big bucks to a campaign, no one gives a sh*t what happens to you or your finances.
“Home Mortgage Modification Programs Are ‘Flopping’”
I look at bunch of these and most the people would be better off staying with their current mortgage and paying down their debt.
So for most part, a loosing proposition.
Essex,
You are so cynical, don’t you know we are entering a new era of hope! (lmfao)
http://sec.online.wsj.com/article/SB122965017184420567.html
A dollar referendum – opinion WSJ
Currency markets reflect a lack of faith in Bernanke
We hope Mr. Bernanke considers this to be the warning it is. The Fed chief is saying what central bankers always say, which is that he’ll remove all of the excess money he is now injecting into the economy when the deflation fear subsides. But currency markets are a running referendum on that promise, and the dollar’s plunge is a sign that the world’s investors don’t believe Mr. Bernanke’s promise.
Keepin’ It Real Estate: The Other Side of the Rock-Bottom Mortgage
It’s wishful thinking that artificially low interest rates alone are enough to rehabilitate the housing market.
The mortgage industry has undergone a swift and ruthless downsizing over the past 18 months. While a necessary part of the corrective process, the market is ill-equipped to handle the onslaught of new loans that regulators are hoping to incite.
http://www.minyanville.com/articles/C-Paulson-jpm-bac-Fed-fre/index/a/20387
“Are you in that pile up or the stands?”
Cindy,
Actually, both.
(58) BC – Cool….You all just flooded the field – and in Miami.. did you tear down the goal post?
Here is the first infrastructure project that should be undertaken by the Ob-ma Administration…..
http://www.youtube.com/watch?v=7qcPo5619BU&NR=1
This is a odd recession, last night was at a party at the ritz with a few hundred people, town cars lined around the block to take people home, LIE and BQE at 10:30pm loaded with town cars, friend left around same time and lincoln was backed up once again town cars everywhere at same time. Other friends were at a party last night at ciprianis. Unemployed friend from GS on plane right now to south beach for weekend. I tell you people are sick of being broke. I think the mentality of someone lost the job on your block or family so you don’t want to be showy with a new benz or night on the time is wearing thin, it is not someones fault they still have a job, if 6% are unemployed how long can 94% cut back just to make the 6% feel better? Lets get out and spend spend spend and water those mustard seeds.
Big snow day! not one snow flake but school closures everywhere!
http://www.cancellations.com/visitors/postings.php
Folks this is where the problems with this generation starts, in the home from limp parents… we are in dire need of grit, true grit! (JW)
Say BC – If you have the time, because I can’t even imagine how busy you are just now…could you explain – just a bit – what the h@ll is going on:
So China and Germany are traders – the rest of Europe and US are consumers. I get that these currency changes have a huge influence on this relationship but with the consumers tapped out…do these “exporters” need to consume their own goods? Look for new markets? Make their products more attractive to us through currency adjustments? How do the currency changes influence this relationship? It is happening so fast and I can’t seem to absorb the currency issues thrown in with basic supply and demand.
What are the implications of the weak dollar and does it help us in any way, shape or form?
Copyright (c) 2008 Dow Jones & Company, Inc.
12/19 08:16 DJ Bush To Make Statement On Auto Makers At 9:00 AM EST
By Henry J. Pulizzi Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–President George W. Bush will unveil his plan to aid the U.S. auto sector at 9:00 a.m. EST Friday, the White House said.
Bush, who has been mulling proposals all week to throw a lifeline to General Motors Corp. (GM) and Chrysler LLC (C.XX), will make a statement in the White House’s Roosevelt Room.
God Bless the UAW!!!!!
(63) Wow, what a convoluted bunch of crap. Look, BC – you told me to watch the “Euro/Yen cross” months ago – I am blinded by the crosses and unwinds and carries…That’s all. What do you want me to watch now?
BC – still remember being at my grandma’s that thanksgiving weekend of the flutie pass. watching the game in her cramped brooklyn apartment (nobody else cared, i’ve always been a sports fan), i thought miami had it. as a young kid, you just pick the teams that are good and that you see on TV, so i liked miami.
i was crushed.
Cindy,
Watch this film and see if you find the flaws in reasoning and how much Bernanke’s “reasoning” has improved over 80 years:
http://www.lewrockwell.com/blog/lewrw/archives/024449.html
HONG KONG (MarketWatch) — The Bank of Japan cut its key interest rate to 0.1% from 0.3% Friday and said it would begin buying corporate debt and expand its purchases of government debt, after downgrading its assessment of the economy and warning a deepening recession lies ahead.
Clot/BC –
There’s no guide on HOW TO HANDLE DEFLATION FOLLOWED BY INFLATION, is there?
other than to stay liquid, hold onto your job, and not take on CC debt, any other strategies?
just from what i’ve read on this site in the last few months, you WANT a mortgage before inflation hits, because as your wages rise, your mortgage stays the same.
just looking for other tips/strategies to file away for when the doom and gloom hits
John,
Of course their announcement comes on quad witching day. Anything they can do to create the illusion of a merry X-mas.
Btw I leave Tuesday for X-mas in Detroit. I’ll let you know how “joyful” everyone is up there!
White House plans $17.4 billion auto-maker rescue: reports
FREE MARKET CAPITALISM AT ITS FINEST
Yikes,
Inflation has traditionally been good for commodities and commodity related stocks.
(60) Chicago – You may have something there. If the gov wants to employ people – It may as well be useful work…They could tear down swaths of houses then build community centers in their stead.
Old folks with nowhere to go could help the after-school crowd do their homework and baby sit for the single moms who need to go to work.
Profitable by March, who are they kidding?
Get Mrs O’leary’s cow to burn down detroit.
Grim, they didn’t say March 2009:)
If the funding is coming from the TARP, does Paulson have anything left of the first $350b?
GMAC is still desperately trying to gain access to TARP funding, but after this loan, is there anything left? Paulson has no choice but to ask congress to release the remaining funds.
#48 grim:”Excess mortgage debt is depressing home prices
But could we not argue that “excess” ntg debt was a resulet of exccess housing prices. And were we nto told that excess housing prices were good at one time?
John from my past trips there I can safely say there isn’t all that much left to burn.
All depends on that communist Bill Gross, he is blackmailing GMAC by withdrawing his already tender bonds to put them below the limt to become a bank so they can issue 2.75% FDIC bonds, he can re-tender them before 5pm today, guess he is bringing back greenmail from the 1980’s to make a few extra bps he is playing chicken at christmas with two million peoples jobs, I hope he burns for it.
grim Says:
December 19th, 2008 at 8:53 am
Profitable by March, who are they kidding?
All hail W, friend to workers, champion of industry, inspiration to the world!
#57 hehe: And what do we accomplish. Do we want to run prices back up to the peak and beyond, only to have them crash back down again?
How can the money come from TARP without GM becoming Bank Holding Company? I thought you had to have that status to get the money?
Detroit has a big casino, the Greektown casino, that is hemmorhaging money. That’s how messed up of a town it is, they can’t even make money on a business where the house always wins!
grim Says:
December 19th, 2008 at 8:55 am
GMAC does not so much want TARP but wants to issue those FDIC bonds so it can in turn loan the money to GM to make car loans, 25% of customers buying GM cars can’t get a car loan and the deal falls through.
If the funding is coming from the TARP, does Paulson have anything left of the first $350b?
GMAC is still desperately trying to gain access to TARP funding, but after this loan, is there anything left? Paulson has no choice but to ask congress to release the remaining funds.
May I propose a new Anthem?
The unbreakable union of free republics
Great America has welded forever;
Created by will of the peoples, long live
The united, mighty States United!
Be renowned, our free Fatherland,
Reliable bulwark of the friendship of peoples!
American flag, people’s flag
Let it lead from victory to victory!
Through tempests shined on us the sun of freedom,
And the great
LeninBush lit us the way.3b,
Therein lies the govt’s idiocy
They gave the money to GMAC and Chrysler Financial, technically they are finance compaanies, then in turn GMAC and Chrysler Financial loand the money to GM and Chrysler, that way he did not open floodgates to all other manufacturers. Remember, TARP gives him right to purchase distressed financial assets and make investments or loans to distressed financial firms, GMAC fits the bill.
82…don’t forget ‘liberator’ of Iraq.
Bailout fact sheet:
http://blogs.wsj.com/autoshow/2008/12/19/autos-bailout-fact-sheet/
61. John simple math…..OK? Unemployment at 6% does not — even in your world — mean that the other 96% are employed. Geezus Freakin Krist on a cracker.
Al was talking about bartering in russia yesterday……
heard an NPR piece where they were talking about the same thing on the way home
——————
Improved Chelyabinsk Health Care Still Falls Short
Reebin recalls desperate times 10 years ago when he had to barter and scrounge for basic medicines.
“The factories could not pay their share of the health insurance, so they would give me pipes,” he says. “I would go to another region and trade them for rice, bring the rice back here, and sell it just to keep the hospital open.”
http://www.npr.org/templates/story/story.php?storyId=98443958
Bush is so full of sh*t. Bankruptcy reorganization is not a disorderly process.
Bush speaking, i assume the markets will soar
Serious action and deep cuts will be required to show some semblance of viability by March. Not sure how this is done without union concessions, sizable layoffs, plant closures and asset sales.
Is this really better than a prepackaged/orderly bankruptcy?
Although I suppose that this all hinges on their definition of “viable”.
#89 SPeaking of idiocy. I wnet throught the mls for my town this morning and what to my wondering eyes did I see, but a new listing for the proverbial POS Cape at just under 500k,3bed 1 bath.
After all that has transpired this year, you would think that sellers/realtors would finally see Gee, all is not well.
Why even bother lsiting it at that price, and right before the holidays, it is insane.
And why would any kind of credible realtor take the listing?
As I have been saying, there is an incredible amount of denial still out there, something that I do not recall seeing during the last housing bust big recession in the early 90’s
The govt doesn’t want to lend TARp money to the auto makers because it would open up the possibility of other industries asking for TARP money. If GMAC and what ever Chryslers financial arm become banks, the govt can give them money via a back door method. Similiar to when Goldman and MS became commerical banks.
#93 Essex; Shocking isn’t it.
Grim,
EXACTLY. It appears they are essentially providing Debtor-In-Possession financing without using the term Bankruptcy used and without having a Judge with the authority to cram down concessions from GM, the UAW, or the bondholders.
Essentially its a plan that won’t work but will postpone the problem until March when they’ll come back again hat in hand and start the finger pointing up again.
“Stephen Roach Says Economic Recovery Would Be `Anemic'”
“Mark Mobius Sees `Beginning of Next Bull Phase’ in 2009”
If the second statement is true, we should see a recovery beginning in second half of 2009 or 1Q 2010.
Essentially its a plan that won’t work but will postpone the problem until March when they’ll come back again hat in hand and start the finger pointing up again.
Well, at least Bush and crew can say that the automakers didn’t fail on their watch.
#103 victorian:Mark Mobius Sees `Beginning of Next Bull Phase’ in 2009″
BAsed on what, did he say?
Why does the government insist on trying to delay the inevitable?
Unemployment in NYC is at it’s highest since 2005? If I recall, 2005 wasn’t a bad year for the economy. People were buying up houses like mad.
-Richie
Yikes
just from what i’ve read on this site in the last few months, you WANT a mortgage before inflation hits, because as your wages rise, your mortgage stays the same.
In theory, but the question is will you have a steady job? Unemployment will probably be through the roof during suck a period. So its something of a gamble to take on debt and expect very high/hyperinflation to devalue your debts.
Another factor to consider is that as we progress through deflation and before we hit high/hyper inflation, loans will be extremely difficult to get. You will need a substantial % of the purchase price in cash for a bank to loan money under those conditions, and if they think that there is a good chance their loan will be devalued by sudden and rapid inflation then who knows if they will even loan the money. Of course you could always buy for cash if thats within your capability.
This plan will work, bute now it is up to GMAC to throw a “sack party” for Bill Gross and get him to tender his bonds so they can become a bank.
Vic,
Most of the same clowns saying things will pick up the secons half of 2009 are the same clowns who claimed things will pick up the second half of 2008.
(67) HEHEHE – That was priceless.
“That sounds great in theory but will it work in practice?” …
Inflation sans wage inflation results in a lower standard of living.
IMHO, it is highly unlikely that we see wage inflation.
John,
How will it work? Unemployed people don’t buy cars? Moreover unemployed people don’t buy cars from companies that they know would be bankrupt but for the government.
Did you see people rushing out to open a bank account with Citibank recently?
(110) Grim – I’m with you on that one.
“Oil continues to slide as January contracts set to expire after this session’s close. Crude fell as low as $33.50 per barrel.”
re: #67 HEHE – Back in 1980 the Vokler Fed had to stop the printing press which caused three grueling years of recession.
The government had to make the case that the pain was worth it.
Here is their video from then showing Milton Friedman literally stopping the Fed Printing Press.
http://www.youtube.com/watch?v=J2yLzISKKHA
sas (6)-
That, my friend, is the plan.
I suggest this- strongly- to every one of my short sale clients, but very few follow the advice.
It’s like they think they should heap more misery on themselves for making a bad decision.
Then, there are the others who just deed-in-lieu or walk away. They don’t even have the gumption to make an honest effort to mitigate anyone’s loss…even their own.
Sas/Clot:
Remind me again why I put 20% down?
By the time this thing is over, I may be the only buyer in NJ from late 2004 who isn’t in foreclosure!
#113 – Does that mean Bi was wrong?
stu (30)-
’28 and ’29 Latour are the shit.
“More California Towns Face Bankruptcy”
http://online.wsj.com/article/SB122954346309915189.html?mod=special_page_campaign2008_mostpop
How stupid are the people in CA? All they need to do is stop paying for illegal immigrants health care and education and most of their financial problems will disappear. How dumb can they be?
Who is ready to go long on Oil?
Jim Rodgers is.
USO 200% long Oil.
Other OIL tracking ETFs.
DBE, USO, OIL, DBO
http://www.youtube.com/watch?v=8flpctWV1NU
Since Sam Bottoms died this week, the actor from Apocalyspe Now who played the pro-surfer turned soldier, Lance B. Johnson – Loved that scene when he was surfing, anyhow I would like to say “I Love the Smell of a Bull Market in the Morning”!!, God Bless you Sam where ever you are!
GGP selling South Street Seaport?
Cindy (65)-
I think BC would now advise you to watch your backside:
“Look, BC – you told me to watch the “Euro/Yen cross” months ago – I am blinded by the crosses and unwinds and carries…That’s all. What do you want me to watch now?”
grim (122)-
Who the hell wants it?
stu (116)-
Don’t look at me. I put down 20% too.
#124 – Faneuil Hall too, maybe we can pack it up and ship it off to Dubai? Think of what an amazing tourist attraction it would be. Drop Faneuil Hall into South Street Seaport on a bay in Dubai, and dock the QE2 there.
yikes (69)-
I’d add one thing to your list:
Anytime you have the chance to bet against “conventional knowledge”, “powers that be” or “book plays”, you must do it.
We are, as a nation, being led off a cliff by those entrusted with the most sensitive and powerful positions. Jim Rogers didn’t move to Singapore because he’s nuts or because he wants his kid to learn Chinese.
(123) Clot
“I think BC would now advice you to watch your backside.”
Duly noted…
#109 HeHe:Most of the same clowns saying things will pick up the secons half of 2009 are the same clowns who claimed things will pick up the second half of 2008.
Who are the same clowns who said there were no problems in the first place.
Simply amazing to me that after everything over this year, there are still some out there saying all will be well in a few motnhs. They should be tarred and feathered.
Maybe I should go out and bid full price on that POS Cape for 489k that I was talking about in an earlier post, since all will be well.
I must say; I think they should predict monster storms everyday.
My commute into work today was excellent; no signs of traffic.
-Richie
grim (126)-
Dubai? That ghost town?
Cindy,
Mind if i take a crack at it?
So China and Germany are traders – the rest of Europe and US are consumers. I get that these currency changes have a huge influence on this relationship but with the consumers tapped out…do these “exporters” need to consume their own goods? Look for new markets? Make their products more attractive to us through currency adjustments? How do the currency changes influence this relationship? It is happening so fast and I can’t seem to absorb the currency issues thrown in with basic supply and demand.
Yes, Exporter nations must either find a new customer to buy their stuff, or they must convince their population to buy up the slack demand, hence all the noise about china encouraging it population to become consumers. About 40% of China’s GDP comes from exports. If they cannot replace the lost export business to Europe and the US, then they could face a double digit decrease in their GDP.
One way they can try to maintain exports ( in theory) is buy devaluing their currency so that it is cheaper to buy their stuff then a competitors. By devaluing their currency, china could make their stuff cheap then similar products from Mexico or Vietnam for example. When they devalue their currency it makes the currency exchange more favorable for buying Chinese over the others. The problem with that is the entire idea of “beggar thy neighbor” policies. You can spark a race to see who can devalue their currency the fastest. It’s a very dangerous economic game to play.
Additional currency issues: There has been a big move out of US Agency debt and a jump in US Treasuries. This suggests that foreign investors are becoming nervous about lower grades of US debt and are looking for the safest option they can find (which is treasuries). The US dollar is also dropping again. This also suggests that foreign inventors are losing fair in the strength of the dollar and are looking for other safe havens for their money. The unwinding of the carry trades USDJPY/USDEUR was probably the primary driver in the increasing dollar over the 2nd half of 08. It looks like a lot of that unwinding has slowed pace hence a reduction in the demand for US dollars.
The current news of the US and Japan both cutting interest rates is partially due to a race to establish a new carry trade.
sx (92)-
Yep. One of the masters of the universe, there.
And people ask me why I short everything.
#106 Richie:Unemployment in NYC is at it’s highest since 2005? If I recall, 2005 wasn’t a bad year for the economy. People were buying up houses like mad.
It is going backwards instead of flat to employment increasing. With the massive amount of job lossses in the financial industry the numbers will only increase. Many of these losses have not hit the stats yet.
Clot,
Haven’t had a Latour yet, but know of them well. They were the first vineyard to age in stainless steel instead of oak. I find that almost any French Bordeaux wins over ours.
grim (97)-
“Viable”: able to wheedle, beg or cadge money with no offer of security or collateral for the borrowing.
First flakes are falling in Union with the gas prices ;)
# grim Says:
December 19th, 2008 at 8:55 am edit
If the funding is coming from the TARP, does Paulson have anything left of the first $350b?
GMAC is still desperately trying to gain access to TARP funding, but after this loan, is there anything left? Paulson has no choice but to ask congress to release the remaining funds.
From MarketWatch:
Paulson: With Auto loans, $350B in bailout funds finished
Paulson: It is clear Congress will need to release 2nd $350B
Paulson: I will discuss process for 2nd $350B with Congress
Cindy,
Thanks. I couldn’t stop laughing when they went into the “economists” chart explaining inflation. It’s good to know the government is still as “enlightened”.
Dubai story – My brother in law was offered a job over there about a month ago, he is an advertising guru and they needed someone to write American Style “Luxury” condo ads.
Salary offer was in the stratosphere all kinds of off the wall benefits, he gets all excited and calls me about it. I tell him that the desert will reclaim that city any week now and to wait a week or two and see what happens with the economy over there. He thinks I am nuts but waits a week before he calls back to accept the job and wammo no more job offer and they are laying off allot of foreigners and giving them about a month to get the hell out.
Stu – remember that French Bordeaux we had that my parents kept for almost 20 years stored upright in their dining room liquor museum (I don’t know why they keep these things when they don’t drink at all)? That was an amazing bottle of wine.
Now somehow, I don’t think the 7 year old Beringer White Zin will taste as good.
3B,
I just heard Mayor Bloomberg on the radio saying the same garbage, how things will be better next year, granted you don’t want people to panic, but a little honesty sure would help.
stu (135)-
I’m not turning up my nose at good, old Bordeaux, but really good Burgundy and N. Rhone stuff is my idea of fun.
The best bottle of wine I’ve ever had- to this day- remains the 1978 Clos de la Roche- Vieilles Vignes from Hubert Lignier. The ’85 ain’t bad, either.
SL, Doyle
I’m glad you liked it. Other folks from the party were also asking for the name.
I am not being cagey, I just don’t recall it and have to go back to look. But I typically don’t get home until 9 or 10 at night and don’t always have time to attend to this.
I will look and email you, I promise. And I will post it here as well. And I will check emails–been busy at work and home so I haven’t been up on that.
grim (138)-
Good. I need some entertainment. This should definitely trump watching re-runs of Punky Brewster:
“Paulson: I will discuss process for 2nd $350B with Congress.”
Stu/Clot/ Other Wine Aficionados –
Would you guys mind suggesting good cheap wines ($10 – $20) range?
http://thehill.com/leading-the-news/with-economy-in-shambles-congress-gets-a-raise-2008-12-17.html
Oh look Grim – We were wrong. Folks are getting raises….
Paulson Asks Congress for Other Half of $700 Billion TARP
Email | Print | A A A
By Robert Schmidt
Dec. 19 (Bloomberg) — Treasury Secretary Henry Paulson urged Congress to release the second half of a $700 billion bailout program after he exhausted the first $350 billion in less than three months.
Congress, which passed the Troubled Asset Relief Program on Oct. 3, “will need to release the remainder of the TARP to support financial market stability,” he said today in a statement released in Washington. “I will discuss that process with the congressional leadership and the President-elect’s transition team in the near future.”
#143 HEHE: And whether it is Bloomberg, or any on else, they never say why things will be better.
How about just saying we don’t know.
re# 132 – One thought is that the foreign flight to US treasuries and accepting no yield or negative yield might have more to do with investors worrying about the solvency of the banks in their home countries.
If you have a few hundred million to invest are you going to keep it in Euros in some Greek Bank? That money could evaportate faster than when Manuel Noriega took over the banks in Panama and “confiscated” the deposits.
re# 132 – One thought is that the foreign flight to US t-bills and accepting no yield or negative yield might have more to do with investors worrying about the solvency of the banks in their home country.
If you have a few hundred million to invest are you going to keep it in in some Greek Bank?
That money could evaportate faster than when Manuel Noriega took over the banks in Panama and “confiscated” the deposits.
HEHEHE – I totally turned around and emailed that to some buds…hilarious..stuttering and all. Happy days are here again…
Grim #150 in Mod no idea why unless you don’t like Panama
[135] stu,
You must have a taste for clay. I don’t.
IMHO, I have had far worse luck with bourdeax than with other regions, though I have stuck with them (particularly whites) because of price.
Kettle (132) Thank you. It is all moving too fast for me.
Have an awesome Friday everyone….
Clot: Getting creamed in SRS, for now. We be rolling the dice. Yes it is gambling not investing Chi fi.
Clot 145 – Brother of a good friend from college married a stripper and they named their first born daughter Soleil after Punky! Her older brother’s name is Ayden. We call them Satan and Olay.
Clot. Didn’t really get into the good wine thing until the late 90s. The 97’s out of California were unbelievable and IMO unmatched since then. And yes Gator, that Bordeaux was awesome. The somalier on the cruise who didn’t charge us a corkage fee in exchange for a taste was also quite impressed. I remember telling him that due to improper storage, it would most likely rival wishbone salad dressing. Wow, were we all surprised.
So Clot/BC, you all buying the shorts today? I wanted to wait until the miniscule bailout was announced and I’m feeling like the coast is now clear. Of course next week’s light volume might provide a better opportunity, but I want to be in well before the December Xmas numbers are announced.
And the traffic was the lightest ever this morning for me as well.
Nom – If we’re invited to the next party, we promise to bring a good bottle of red.
On Gator’s first trip out to Napa in the late 90’s, she bought a $17 bottle of 97 “Blue Tooth” Merlot from Trefethen. They bought the grapes from a neighboring dentist’s vinyard, hence the “Blue Tooth” label. Kept it for about 6 years and then shared it with the French brother-in-law. He pronounced it the best wine he had ever tasted. Man I wish I had bought more than 2 bottles of that. I was young and stupid (and probably too poor to buy more).
Sean, Dubai was such a huge bubble that they actually made new land. I wonder what the hell that city is going to do in the future.
Gator,
You actually were. I was casting about for emails and did not get everyone’s. Sorry, I tried. Heck, I would have even let you bring Stu, and the little gator would have had a blast (the kids had a great time playing with my wife’s Hess truck collection).
Clott,
in case Memphis wasn’t already well on they way to being Detroit 2.0 …….
FedEx to cut wages in face of downturn
http://www.ft.com/cms/s/0/45c13340-cd0b-11dd-9905-000077b07658.html
Vic (146)-
Many of these are under $10. Spain is where it’s at for quality/value:
Finca Luzon, Jumilla 2007
Panarroz, Jumilla 2007
Monte Oton, Borsao 2007
Protocolo, Castilla 2006- red, 2007-white
Conclass, Rueda 2007
Albarino, Martin Codax 2007
Rioja, Martin Codax 2006
Las Rocas de San Alejandro, Catalyud 2006
Rioja Blanco, Muja 2007
Chapparral, Vega Sindoa, Navarra 2005 or 06
Chardonnay, Vega Sindoa 2007
Priorato, Onix 2006
vodka (161)-
I’d put the gangs and criminals in Memphis against anybody’s, anywhere.
Gator,
Kettle jr gives Nom parties a resounding (ahhhhhhhhhhhhh) aka 2 thumbs up!
thanks again Nom!
Ah that is because Stu never emailed Grim to give you ours when he wanted to seek your professional advice. It is all Stu’s fault. It always is :)
Lil gator loves this year’s Hess Truck.
clot 163,
are you referring to the city government or the actual gangs?
Well I feel even better now. Thanks, Kettle.
Victorian,
I find the Coppola’s and Mondavi’s are all good in that price range. My brother swears by the Italian Barbera’s and we ordered one at Rao’s last week that was very good and probably about $20 retail. Will probably start poking around there more often. I find the New Zealand whites are pretty good and cheap as well as the Spanish reds. Everyone has different tastes. I like medium dry and Gator seems to like sweet. I prefer Merlot over Cab unless it’s a major meal I’m pairing it with or some great stinky cheese. If we ever get around to having a GTG that’s not at a bar (fat chance) then we’ll bring a few!
clott
will be down their for Xmas, need any “slightly” used firearms. here there is a special during the holiday season.
mike (154)-
Remember, it’s a sprint, not a marathon. :)
You just want to be there on the day everybody realizes things are turning to shit again.
Deep Throat dies at 95
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/19/AR2008121900228.html?nav=rss_email%2Fcomponents
vodka (166)-
Either. Actually, I always considered the Ford (the Memphis, not the Detroit) family to be a gang of sorts.
Gator,
careful, dont get John excited.
The Fords ran the best scam of all to build their fortune:
They were (and still are) undertakers. For years, whenever a black person died in Memphis, Ford would claim the body while it was still warm.
In order for the families to ever see their loved one again, they’d have to let Ford do the funeral. Didn’t take long for almost every black family of means in Memphis to pre-arrange their “departure” with Ford Funeral Homes.
vodka (169)-
Just go to the corner of Poplar Av and Pontotoc St. The Marines could re-arm themselves there.
vodka (169)-
The “informal” gun merchants in Memphis are also very customer-friendly. You never have to worry about removing a serial number from their fine line of products.
clot
I always considered the Ford (the Memphis, not the Detroit) family to be a gang of sorts.
“of sorts”????? they are actively trying to build their own little down home mafia. The wacky thing is how out in the open it is and they still get away with it.
Gotta get the extended kettle clan members to scadaddle before things get too messy.
You know memphis is going to to be Baghdad 2.0 before this financial crisis wraps up.
my friend also married a ex-stripper she is all hot but can get pregant, I think too many lines up her nose in the VIP room and lots of germs on 5’s and 20’s shoved up her pie hole rotted her eggs.
Kettle 173 – I need something to entertain me while my boss is out today.
I remember when one of our pubs broke the story on Deep Throat’s identity. Leaks like crazy. Yet the issue that detailed Teri Hatcher’s molestation was such a big secret that my staff had to sign confidentiality agreements to get our usual prepublication access. Everyone’s priorities are different, I guess.
I know the 2009 predictions call has already gone out. But, I’d like to ask a more specific question. Anyone has thoughts on inventory pace/levels for Northern NJ in the spring?
Would love to hear thoughts/predictions.
Vic, something different but the taste of familiar, Santa Cristina (red top/sangio). Eleven bucks at Joe’s.
Gator is taking a new CASA case for the holidays. Mom left the country for a few days and didn’t make any child care arrangements for her kids. Gonna be another fun one. Just call me sucker.
vodka (177)-
Look up Memphis crime stats in other down economies. Scary shit.
My formative years were spent there (didn’t really leave for good until 1980). From the time Dr. King was shot until I got out, it was a war zone. I lost a very good friend in a street shooting, and two private school girls my age got shot (didn’t die) in a 7/11 robbery in E. Memphis, of all places.
“You just want to be there on the day everybody realizes things are turning to shit again.”
The day? You’re being to kind Clot. The ‘year’ is more like it and I think its going to be 2009. Everyone is banking on Obama right now and he has been left with the biggest bag of crap to fix in the last 80 years. Add the auto bailout to this sh*t list as well (thanks W you epitome of weakness). If there is one thing that I feel the most strongly about, it’s the hyperinflation that will follow. I only hope I don’t wait too long to enter that trade.
“You just want to be there on the day everybody realizes things are turning to shit again.”
The day? You’re being to kind Clot. The ‘year’ is more like it and I think its going to be 2009. Everyone is banking on O-man right now and he has been left with the biggest bag of crap to fix in the last 80 years. Add the auto bailout to this sh*t list as well (thanks W you epitome of weakness). If there is one thing that I feel the most strongly about, it’s the hyperinflation that will follow. I only hope I don’t wait too long to enter that trade.
Anybody that thinks this bowser is headed anywhere but bankruptcy court, please call me. I’ll take all the action you want:
http://finance.google.com/finance?q=NYSE:PLD
clot,
Just go to the corner of Poplar Av and Pontotoc St. The Marines could re-arm themselves there.
Been there (for legit business)and had a very friendly gentlemen offer me quite the array of products that were available at “INSANE” prices since they all had a small defect (the serial #’s seem to have worn off somehow, must have been defective manufacturing).
he also suggested that i mention his name if i had any trouble in that part of town.
he actually gave me a card with a name and # on it!!!!
Hurray for capitalism!
“I have abandoned free-market principles to save the free- market system,” Bush said in a CNN interview airing the same day.
the RIAA has backed off on trying to bust people for downloading music
http://online.wsj.com/article/SB122966038836021137.html?mod=rss_whats_news_technology
happy friday!
Does anyone remember “Gung Ho” with Michael Keaton? The 80’s flick about subpar american automobiles…the scene starting at 3:40 is classic!!!!
http://www.youtube.com/watch?v=V_gLOUbQZgk&feature=related
#122 – GGP selling South Street Seaport?
Woodbridge & Bridgewater next?
Hopefully some Dubai investor buys SS Seaport and ships it back to the mid-east. If they promise to take all the American Eagle & Abercrombies in the cuty I’ll help them pack.
clot,
from my post Gotta get the extended kettle clan members to scadaddle before things get too messy.
pehaps i should clarify that given the context of our exchange….
Gotta get the extended kettle
clanfamily members to scadaddle before things get too messy.Now that I think about it Nardelli was the perfect choice to oversee the end of Chrysler. I mean, what does he have to lose?
Auto makers get bailed out, Paulson wants 350 billion more from the TARP. How did I wake up in France?
doh!
Former real estate bull admits, “I spun”
Working for realtors, David Lereah was famously optimistic. Not anymore. By Donna Rosato
As chief economist for the National Association of Realtors, David Lereah was famously optimistic. Now a private consultant, he’s abandoned what he calls the “positive spin.”
Q: Were you wrong to be so bullish?
A: I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right inline with most forecasts. The difference was that I put a positive spin on it It was easy to do during boom times, harder when times weren’t good. I never thought the whole national real estate market would burst.
Q: The NAR’s latest forecast calls for a slight increase in home prices next year. Thoughts?
A: My views are quite different now. I’m pretty bearish and have been for the past year and a half. Home prices will continue to drop. I think we’ll see a very modest recovery in sales activity in 2009. But we’ve still got excess inventories, a bad economy and a credit crunch that will push prices down further, another 5% to 10% more. It’ll take a long time to get back
to the peak prices we saw in many markets.
Q: Any regrets?
A: I would not have done anything different. But I was a public spokesman writing about
housing having a good future. I was wrong. I have to take responsibility for that.
-DONNA ROSATO
Clot,
a ford story for you.
A family member runs the finances for a private school in memphis. they get a phone call that one of their staff died over the weekend. the 18 yr old daughter was the beneficiary on the life insurance through the school.
Monday morning the school finance dept gets a call from a funeral home (ford) saying the school owes them 20K for a funeral they ran on sunday for the former staff member (didnt want the body to get cold did they?).
The mother of the staff member got the Ford Special at 20K and told them to bill the school as she would be receiving a substantial life ins payment.
When the mom finds out the money went to the staff members daughter instead she hires an attorney to sue the school.
So the school is now being sued by the mother and has multiple collection agencies trying to collect 20K for the staff members funeral.
oh, and the the staff member’s mother threatened physical harm against the staff member’s daughter if she didnt hand over the money and did so in front of the entire finance staff at the school!!!!!
yeehaw!!!
Time for another tax break? Perhaps this time they will eliminate income tax entirely.
http://www.nytimes.com/2008/12/19/business/19tax.html?_r=2&hp
uh oh?
Don Harrold (that looney stock picker who loves to rip on CNBC) has called for his customers to make sure they have food and water on hand.
So the goal of the next stimulous package is to try and keep it under $1 Trillion.
I don’t think the new administration understands what the word stimulate means.
Let me try and put it in terms politicians can understand. You go to a strip club and watch girls slither around half naked, that’s stimulating.
You throw one of those dancers a few benjamins to finish the job, that’s way past stimulous.
http://www.breitbart.com/article.php?id=081219150605.tto9ush5&show_article=1
ford doesn’t want the loan? i can’t tell if they are pissed and wanted serious cash, or if they think they’re solvent
Ladies and Gentlemen, brace yourself for the potential of Senator Al Franken…
http://senaterecount.startribune.com/ballots/
http://www.starpulse.com/Actresses/Frye,_Soleil_Moon/Pictures/
punky’s all grown up, wouldn’t mind knocking her box out
Krugman on Madoff…
The Madoff Economy
By PAUL KRUGMAN
Published: December 19, 2008
The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend.
Yet surely I’m not the only person to ask the obvious question: How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?
The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.
http://www.nytimes.com/2008/12/19/opinion/19krugman.html?_r=2
“The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it.”
Gator,
That’s been my belief for a while now. Most of the financial services industry doesn’t help generate money. They just try and get in the way of it to try and grab some.
ugh… in the way of the money flow i meant.
BTW – regarding the Coleman/Franken race, I just love the Star Tribune’s website and how much data is available. They actually have images of the contested ballots viewable online.
You can even play at home and cast your own vote as to how you think the ballot should be counted. What great fun!
Paul Joseph Watson The man who predicted the 1987 stock market crash and the fall of the Soviet > Union is now forecasting revolution in America, food riots and tax > rebellions – all within four years, while cautioning that putting food on > the table will be a more pressing concern than buying Christmas gifts by > 2012.
> adding that the situation would be “worse than the great depression”.
> > “America’s going to go through a transition the likes of which no one is
> prepared for,” said Celente, noting that people’s refusal to acknowledge
> that America was even in a recession highlights how big a problem denial is
> in being ready for the true scale of the crisis.
>
> Celente, who successfully predicted the 1997 Asian Currency Crisis, the
> subprime mortgage collapse and the massive devaluation of the U.S. dollar,
> told UPI in November last year that the following year would be known as
> “The Panic of 2008,” adding that “giants (would) tumble to their deaths,”
> which is exactly what we have witnessed with the collapse of Lehman
> Brothers, Bear Stearns and others. He also said that the dollar would
> eventually be devalued by as much as 90 percent.
>
> The consequence of what we have seen unfold this year would lead to a
> lowering in living standards, Celente predicted a year ago, which is also
> being borne out by plummeting retail sales figures.
>
> The prospect of revolution was a concept echoed by a British Ministry of
> Defence report last year, which predicted that within 30 years, the growing
> gap between the super rich and the middle class, along with an urban
> underclass threatening social order would mean, “The world’s middle classes
> might unite, using access to knowledge, resources and skills to shape
> transnational processes in their own class interest,” and that, “The middle
> classes could become a revolutionary class.”
>
> In a separate recent interview, Celente went further on the subject of
> revolution in America..
> >
> “There will be a revolution in this country,” he said. “It’s not going to
> come yet, but it’s going to come down the line and we’re going to see a
> third party and this was the catalyst for it: the takeover of Washington, D.
> C., in broad daylight by Wall Street in this bloodless coup. And it will
> happen as conditions continue to worsen.”
>
> “The first thing to do is organize with tax revolts. That’s going to be the
> big one because people can’t afford to pay more school tax, property tax,
> any kind of tax. You’re going to start seeing those kinds of protests start
> to develop.”
>
> “It’s going to be very bleak. Very sad. And there is going to be a lot of
> homeless, the likes of which we have never seen before. Tent cities are
> already sprouting up around the country and we’re going to see many more.”
>
> “We’re going to start seeing huge areas of vacant real estate and squatters
> living in them as well. It’s going to be a picture the likes of which
> Americans are not going to be used to. It’s going to come as a shock and
> with it, there’s going to be a lot of crime. And the crime is going to be a
> lot worse than it was before because in the last 1929 Depression, people’s
> minds weren’t wrecked on all these modern drugs – over-the-counter drugs, or
> crystal meth or whatever it might be. So, you have a huge underclass of very
> desperate people with their minds chemically blown beyond anybody’s
> comprehension.”
>
Red Truck (Cline) is my current cheap red favorite. $10. blend of Syrah, Petite Syrah, Cabernet Franc, Grenache, Mourvedre.
“ford doesn’t want the loan? i can’t tell if they are pissed and wanted serious cash, or if they think they’re solvent”
Ford’s plan must be to let the company fail then they can sell cars at 10x sticker price since they will be valuable collectibles in the future.
#166
“Spain is where it’s at for quality/value:”
less commonplace, but there are a lot of good cheap portugese reds out these days as well.
[166] clot
Spain represents good value, but spanish wines are always a bit thin for my tastes.
in the past year, the Torrontes out of Argentina were a pleasant surprise. And I have come to appreciate viogniers at times, though with some dissappointments.
Also, on the white front, find myself drifting back to chardonnay from NZ sav blancs (which have gotten pricey). My god, what’s next??? Drifting back to merlot???
[212] skep,
I know folks like it, but I could never quite get on the Red Truck. And Cline has been a vineyard that held promise, but has largely disappointed.
As for Santa Cristina, I did like it, but only certain years, and at $$ north of $10, it isn’t worth it.
This stuff is the shiznit…
http://www.njwineseller.com/sku9015.html?utm_source=Google%20Products&utm_medium=feed&utm_campaign=Powers%20Powerbox%20Cabernet%20Sauvignon%202006
Drifting back to merlot???
I never left it. Best thing that could have happened was Sideways. Lowered the price of most Merlot’s between 10 and 20%!
breaking on cbnc – auto union upset about bailout, asking obama to fix ‘unfair terms’
wow
http://www.wine.com/V6/Sagelands-Merlot-2006/wine/95086/detail.aspx
this is a reliable merlot from Washington state that you can usually find for $15
Stu Says:
December 19th, 2008 at 10:14 am
Victorian, My brother swears by the Italian Barbera’s and we ordered one at Rao’s last week that was very good and probably about $20 retail.
Stu: just slipped that one in….
chifi – It was the Rao’s in Caesar’s in Las Vegas. Don’t be so impressed.
Fed picks up an additional $3b in agency paper (par):
http://www.ny.frb.org/markets/pomo/display/index.cfm
Why the Fed has purchased $13.4b of this stuff since 12/5:
http://www.newyorkfed.org/markets/gses_faq.html
It terms of finding good wine from $10-$20, it is a never ending battle – you always need to work at it. I swear, just go here and these guys will hook you up….the advice will last as long as you have access to that vintage.
http://winelibrary.com/wiz_directions.asp
My opinion, go in with no prep other than a general idea of what you like, spend an hour picking up 12-18 differnt bottles, and try them over the course of two-three weeks. Figure out what you enjoy and quickly go back and buy them out…..it’s the only way.
NJGator Says:
December 19th, 2008 at 12:17 pm
chifi – It was the Rao’s in Caesar’s in Las Vegas. Don’t be so impressed.
Noted…because I actually was……
From the Star Ledger:
Unhappy holidays: Sovereign Bancorp to cut 1,000 jobs
Sovereign Bancorp today said it plans to eliminate approximately 1,000 jobs as part of a cost-cutting push.
The cuts will begin this quarter and continue through next year.”The decision to reduce our workforce was a very difficult one, especially during the holiday season,” Acting chief executive Kirk Walters said in a statement. “There is never a good time to reduce staff, but this step is necessary, particularly during this economic environment.”
Sovereign Bancorp., which is based in Philadelphia and operates branches in New Jersey, agreed to be acquired by Banco Santander for $1.9 billion in October. The Spanish bank already owns almost a quarter of Sovereign.
Gator seconds the recommendation of the Wine Library. I love going to that place.
Wine Library?
Gary Vaynerchuk has been known to peruse the blog from time to time.
Chifi 224 – The Vegas restaurant is quite good. Don’t know, nor will I ever know, how it stacks up to the real deal.
We were most impressed this trip with the Continental Breakfast at Payard Patisserie (also in Caesar’s). All you can eat of the best pastries I have had anywhere. The man is an absolute genius!
Gary’s a freak and yes, wine library is a pretty good place for advice, although their knowledge of wine makes it highly unlikely that you will find a bargain in there.
There’s nothing better than going into a dumpy old liquor store and finding an old dusty bottle that is underpriced by about 50%.
here’s another cali $10 table wine that is usually good:
http://www.wine.com/V6/Big-House–Red-2006/wine/95766/detail.aspx
NJgator:
I purposely slipped Rao’s in there to see if it would generate any feedback. ChiFi took the bait!
I can’t do the big house red. I didn’t like it at all when Lisa bought it home.
I was serious about that boxed wine though.
Stu – That’s my role in life – keeping you honest. It’s a full time job!
Some of you may already know this but for those that don’t.
The north fork of long island has some decent wineries and vineyards and is a good location for short wine tasting trips.
Of all the wine tasting destinations you can reasonably get to by car from this area, it’s the best.
Thanks!
New Jersey Wino Report
Roads suck, passed nearly a dozen accidents on my drive back home.
Snow blower won’t start either.
Tom,
I had heard that. They too have a decent climate for grape growing with the warm summer days and cool nights from the northerlies off the sound. Just a shortish growing season and probably inexperienced vintners. But time will change this. The NJ wineries I’ve sampled are terrible and their bottles were priced like Sonoma’s!
Snow blower Grim? You wuss! Get a shovel like us real men!
I hope mine starts when I get home later!
“I can’t do the big house red. I didn’t like it at all when Lisa bought it home.”
i really like southern French wines, so I enjoy the recent california takes on this style. but obviously taste is relative
[226] Gator,
I went there for the first (and only) time a couple of months ago. I felt like a kid in a candy store. The guy helping me was also a fellow Boston ex-pat.
Gotta see about getting my “library” card.
Stu: Whose Lisa? Freudian slip?
vodka (200)-
Pure Memphis, that story. Warms my heart at this time of the year.
Here’s my Ford story:
A few years back, my brother does a renovation on John Ford’s (now in prison, due to getting caught red-handed in the “Tennessee Waltz” bribery sting) kitchen and dining room. Quite an extensive job, top-of-the-line everything.
Well, just as my brother is putting the finishing touches on the job, a car comes plowing through the house, narrowly missing him and completely destroying the kitchen and DR.
Turns out Ford’s mistress found out Ford was “cheating” on her with his wife, so the mistress went out, got wasted & decided the best thing to do was drive her car through his house.
Ford tried to get my brother to come back and do all the work again, but he was so freaked out, he refused.
Chi (224) – You will have to share a few of the details at the next GTG, re Rao’s. Speaking of which, any plans for a Holiday GTG?
[240] Stu
Why wouldn’t your shovel start? Does it require a battery?
11:54AM General Motors: Fitch downgrades General Motors’ IDR to ‘C’ (GM) 4.11 +0.45 : Fitch has downgraded the Issuer Default Rating of General Motors to ‘C’, indicating that default is imminent.
GM up 12%!
Nom 242 – I think we all need to spend more time at the library. Maybe we can arrange a GTG/wine tasting there. I bought Stu’s father’s day gift there this year. The added bonus was that I got to enjoy his gift too.
Thanks for outing me, Stu. At least I kept my own name, so I have some sembalnce of a chance of remaining slightly anonymous.
Who cares, there are only like 100,000 Lisa’s in Montclair.
Gator (210)-
Funny? Both Franken and Coleman are inflammed hemmorrhoids.
I don’t drink much wine, but I’ll throw in my 2 cents.
I’m partial to Frog’s (not Stags) Leap Chardonnay. I’ve got a few cases in the basement of varying vintages. Always tough to find so I end up special ordering a few cases each time. From what I’ve been told, they don’t produce a heck of alot.
Who knows, but I dig it.
Clot 249 – Yes I realized Minnesota is f*cked no matter who wins. Franken should have stuck to writing medicore books and Norm is about to get indicted anyway. He and his wife have lawyered up separately and he’s trying to use the campaign cash to pay for his legal fees. I’m so proud to be an American.
There is no anonymity on the internet. IP addresses make sure of this.
And Nom, I don’t have a snowblower…I have THE snow blower. It was a nice writeoff ;)
Frog’s leap is good! Only had it once a few years ago, but it was memorable.
Serious action and deep cuts will be required to show some semblance of viability by March. Not sure how this is done without union concessions, sizable layoffs, plant closures and asset sales.
Of course, the rules of the game change on Jan. 20th. O comes in along with a strongly democratic majority in both houses. The pro-labor dems are likely to give the automakers a new deal that is more union friendly.
this is a solid $10 chardonnay from Argentina. just a touch of oak:
http://www.wine.com/V6/Alamos–Chardonnay-2007/wine/95159/detail.aspx
Grim 250 – even though we didn’t get to tour there, we really enjoyed checking out the Frog’s Leap grounds. Beautiful gardens and they gave us a nice glass of Merlot to enjoy while we were wandering around. They’re one of the last free tasting/tour places in Napa. I’m definitely booking a tour ahead of time for the next trip.
Speaking of booze and travel and other fun vices, I have convinced Stu that we need to take a gambling trip to Nawlins for the 1st weekend of Jazz Fest. Bayou GTG in April, anyone?
plume (215)-
Do you sandpaper your tongue before drinking wine? Wow!
Most of the complaints I hear about Spanish reds is that they’re TOO big, chunky, monochromatic and alcoholic.
Are you one of those guys that can bang out a bottle of port in one sitting (not that this is a bad thing…)?
“…but spanish wines are always a bit thin for my tastes.”
Stu 253 – You had Frog’s Leap in August. Your memory is terrible!
skep (255)-
True dat. Good stuff!
Hope you ladies have a nice weekend sipping your red wine, maybe a nice 1982 Zima from your wine cellar might get you though this frost night.
plume (215)-
Hard to find good Viognier outside the N. Rhone. It’s a bitch to grow.
Also, after you taste a Condrieu from Cuilleron or Vernay, you’re ruined for anything else.
http://www.thewinedoctor.com/tastingsprofile/cuilleron.shtml
John (260)-
Enjoy spanking it to your Punky Brewster memories. ;)
So what your saying Skep is, “Remember the Alamos!”
NJGator Says:
December 19th, 2008 at 12:25 pm
We were most impressed this trip with the Continental Breakfast at Payard Patisserie (also in Caesar’s). All you can eat of the best pastries I have had anywhere. The man is an absolute genius!
Gates: If you enjoy a dose of pomposity (seriously) check out the flagship….it is a nice place to drop $20-$30 up in the front on various sweet and/or caffeinated vittles…..decent vibe on a weekDAY afternoon….
Wag Says:
December 19th, 2008 at 12:37 pm
Chi (224) – You will have to share a few of the details at the next GTG, re Rao’s. Speaking of which, any plans for a Holiday GTG?
Wags: I’m apologize for the confusion. In my response post, the omitted word after “was” should be “impressed”, not “there”……
always on the lookout for good, affordable rieslings, but rarely find them. any recommendations?
I’m heading home early. Bet it takes a bit longer than the record drive in. Time to test those new SUV tires. I hope there aren’t too many Prius’ wrapped around any overpass pylons on my way home.
Hope you ladies have a nice weekend sipping your red wine, maybe a nice 1982 Zima from your wine cellar might get you though this frost night.
82? Couldn’t be that old, I don’t think I remember seeing it until junior/senior year in high school. Would have been 93 or 94 at the earliest.
Grim – you are correct, it was rolled out in 1994:
http://www.slate.com/id/2204596/
The Long, Slow, Torturous Death of Zima
skep (266)-
Look hard, you can get this for $7 to $8. Beats the crap outa Blue Nun, too:
http://www.drloosen.com/v01_drlriesling.htm
Who could’ve guessed that clear, sweet malt liqour wouldn’t become an American staple beverage?
Ahhh 1994, good times. Warren G and Nate Dog, Coolio, Ace of Base and Zima.
Almost time to go home – it is a ghost town at my work right now – everyone left around 11-11:30… I have some times tasks and can not leave until an hour from now.
I am going to need some “biofuel” before shoveling the snow tonight.
After all this wino talk…
Zima
b. 1993
d. 2008
http://en.wikipedia.org/wiki/Zima
As for me, I’m prefectly happy with some home-brewed mead, a good trencher full of pig intestine and a couple of Visigoth torsos turning on the spit.
Stu,
I can’t think of any good wine’s I’ve had out of NJ.
There are a couple of dozen out on the north fork. I found a list of north fork wines.
Castello Di Borghese I think is the oldest at over 30 years old. Pindar is the biggest out there so their tour is pretty cool. They have a cabernet franc dominted bordeaux called Mythology that I can sometimes find locally that was one of my favorites.
It’s been a while since I’ve been out there and the only other name that stands out was Osprey Dominion because it was a lot of fun.
You’re not going to a 2000 year old european winery that still has old ladies squashing grapes between their toes but the wines and the surroundings should make the drive worth it.
“No really, it’s true. Zima doesn’t show up on a breathalyzer, keep drinking.”
Also instead of wine in today’s weather Cognac might be be more appropriate.
grim (277)-
So were Quaaludes.
Zima went best with bad Fox TV in the mid 90’s – think Melrose Place and Beverly Hills 90210. Only way to watch that drivel was after you had a few Zimas.
Now we know for sure Al is Russian.
Straight to the hard stuff.
I keeps you very warm and fuzzy inside :)
It keeps ..
“TOO big, chunky, monochromatic and alcoholic.”
I thought we agreed we were going to stop talking about politics after the election?
#270
Thanks. Dr. Loosen–great name. Says what it does. I will check it out
ABC Nightline “Realty Check” from last night on Montclair:
http://abcnews.go.com/nightline
All this talk about wino…
I wanna know how ya’ll keep from getting the paper bag all wet… my bag disintegrates and then I gots paper all stuck to my lip. No one ever tells me, neither.
I like the feel of a crisp new paper bag. Means good times for the next few hours ahead.
sorry to interrupt the wine conversation but…
How do you guys think these low interest rates are going to affect prices over the next couple years? I was hoping to wait out the price drops until the beginning of 2011 or so. I wanted low interest rates THEN, but high interest rates now to drive down the price.
BTW Grim, thanks for the graph updates. Man was November ugly from a sales perspective!
#286
interesting piece. bubble mentality still infects the minds, even among those who claim to get it, like the realtor in the piece.
#289 waters. We will continue to have price drops no matter which way rates go.
waters,
I think this is for you and the domain name says it all stop buying houses.
#272
Grim, my Senior year as well. I still remember girls dropping jolly ranchers in their bottles of Zima.
In an episode of The Simpsons, “A Fish Called Selma”, a character said “Excuse me, I ordered a Zima, not Emphysema!” In the episode Co-Dependent’s Day, Homer Vows To Give Up all clear alcohol and Marge asks “even Zima?”. In the episode “Homer vs. Patty and Selma”, Lenny and Carl persuade Homer to go to Moe’s for a Zima after work, and in “That 90’s Show” Homer is drinking a Zima.
In Futurama episode “The Route of All Evil”, Fry complains that the metal shavings in Pabst Blue Robot make his throat bloody, to which Bender riposted, “Wah, wah, wah. Baby wants a Zima.”
Sorry, but history says even steep drops in interest rates won’t cause a bubble to reinflate.
Home Buyers Holding Off Despite Low Interest Rates
By THOMAS J. LUECK
Published: October 27, 1991
http://query.nytimes.com/gst/fullpage.html?res=9D0CE1D7153BF934A15753C1A967958260
DESPITE a steep decline in interest rates that has brought fixed 30-year mortgage loans to below 9 percent for the first time since 1977, home buyers are holding back across most of the nation in what experts say are stubborn fears that job cuts and other recessionary pressures will persist.
Elsewhere in the nation, home sales have declined steadily at the very time that interest rates have dropped most sharply.
“Lower interest rates help, but the real problem now is consumer confidence,” said Gopal Ahluwalia, research director for the National Association of Home Builders, a Washington trade group.
…
But overall, the enthusiasm that infused the housing market during the spring has cooled, and those who had hoped reduced interest rates would reignite it have so far been disappointed.
So, too, have a large number of economists and business executives who hoped a rebounding housing market would emerge as a key engine driving the nation out of recession.
Now, they say, other segments of the economy are proving too weak to support improved demand for homes.
“The main thing people are worried about is the broad outlook for the economy, and they are not willing to commit themselves to the most important investment they will ever make,” said Thomas Halloway, senior economist for the Mortgage Bankers Association of America.
Sounds awfully like something we might read in the Times this weekend.
Might be a good time to review where we are on the bust timeline:
https://njrereport.com/80sbubble.htm
Home Prices Do Fall
A Look At The Collapse Of The 1980’s Real Estate Bubble
Through The Eyes Of The New York Times
Wait, let me get this straight, the government resigned?
Belgian government resigns over Fortis affair: report
Belgium’s government has collapsed after a court found it tried to influence a bailout and sale of troubled bank Fortis, Reuters reported Friday. Earlier in the day, Belgian Prime Minister Yves Leterme reportedly proposed that his government resign over the affair. A spokesman for Leterme told Reuters that the cabinet agreed to the resignation proposal. Under the country’s constitution, Belgium’s king, Albert II, must decide whether to accept the resignation.
Why can’t we be so lucky?
Ride home was white knuckle the whole way, but few accidents to report. West 78 was completely stopped though.
Snowing pretty heavily in Montclair and we probably have 3 inches down so far.
Nice nightline piece with Roberta Baldwin, who we used to get some appeal comps. And that POS cape isn’t worth more than 200K IMO.
“Why can’t we be so lucky?”
Would the Burger King then run our country?
Seriously, is there anyone out there even entertaining the idea of buying a house today at an interest rate above 5% when Paulson has his 4.5% interest rate plan in the mix?
Would the Burger King then run our country?
Abe Froman, the Sausage King of Chicago
“Seriously, is there anyone out there even entertaining the idea of buying a house today at an interest rate above 5% when Paulson has his 4.5% interest rate plan in the mix?”
you can already get below 5% if you have good credit. I have serious doubts that the gov’t could do more to drop rates than they are already doing.
“Would the Burger King then run our country?”
It would be a relatively short reign since by 2032 Taco Bell will be the only restaurant to survive the franchise wars.
Nice Grim.
The Older comments button kicks ass.
Except for when we have to reference older posts ;)
Just upgraded to the new version of WordPress.
Not sure I like the comment paging, so I cut it off.
Seems a bit quicker.
Or site traffic is dead.
NJGator,
Don’t worry about your name being revealed. My name, not surprisingly, is Nicholas.
“It would be a relatively short reign since by 2032 Taco Bell will be the only restaurant to survive the franchise wars.”
it has already happened. Every franchise is molding into the same exact thing. Quiznos offers toasted subs, then Subway does, now Dominoes does. Subway offers 5 dollar footlongs, then Quiznos does. Dominoes offers pizza, now Subway and Dunkin Donuts does. Taco Bell offers Gorditas, then McDonalds offers flatbread chicken sandwiches. Everyone has a chipotle sauce on some item in their menu now. I now longer see any difference in any of these franchises because they choose to all offer the same exact thing rather than offer exclusive items.
INDEPENDENCE CMNTY BK CORP 4.90000% 09/23/2010 SR NT
Price (Ask) 90.000
Yield to Worst (Ask) 11.360%
Bonds are slow to reprice, watch this one rise in price on Monday after the good news of 1,000 layoffs as SOV is priced in.
My name is Lisa too. Now you must determine the ‘real’ Lisa between the two of us.
Oil is trading at 33.50$ a barrel on the NYME.
Sometimes I feel like that guy in the spoof of the twighlight zone who stares at the plate of mashed potatoes and keeps saying “this means something”.
I feel at some point in the future that all hands will be tipped and all the information will reveal something absurdly crazy.
#297 grim:Sorry, but history says even steep drops in interest rates won’t cause a bubble to reinflate.
That is what happened during the bubble burst in the early 90’s, falling rates, falling prices.
Sellers/realtors appeared to understand that last time, seems to be many who do not this time. Much greater denial now than the last downturn.
grim,
I like how haloscan, the comment service that CR uses does it. If you keep the comments popup open a notice shows up indicating how many new comments were added.
Don’t know if there’s a WP plugin for that but I’d be surprised if there wasn’t something similar.
Would reduce reloads from regulars who come back regularly throughout the day to check for new comments.
Alright I have a question that seems to be lingering in the back of my mind for a while now.
I know that there is a connection between gas prices and the cost of a barrel of oil but could someone help me understand how much time is necessary before those prices drops show up?
A barrel of oil is set to reach the US with a January 09 delivery date. That oil is then taken to a refinery and spends days? or weeks? being refined into fuel. That fuel is then put on a pipeline and the company the put the fuel on the pipeline can now retrieve a corresponding amount from the pipeline at any point in the line.
Thus it could be 30-40 days to ship, 10 days to process, and 1 day for the truck to deliver from the pipeline to the gas station. Gas sold today was bought almost two months ago right?
What will be the cost of gasoline two months from now then?
As long as your taking suggestions on website improvement, is there a button that will take you to the last comment instead of having to scroll all the way down?
My phone can display web pages really well but has crappy navigation features. Would be nice if you could add a button that would pop you to the end of the page since everytime I navigate away I start at the top of the page.
258 Gator
Damnit! I’ll be there in February.
Re 320 try t B Key and T key.
It is now raining in Montclair!
Citibank under 7 again. I think I know where the new Tarp is going.
auto bailout terms actually seem pretty smart (from Bloomberg):
“Under the terms of the plan, the government’s debt would have priority over any other creditors. The automakers also must provide warrants for non-voting stock, accept limits on executive pay, and give the government access to financial records.
No dividends may be issued until the loans are repaid. In addition, the automakers must cut their debt by two-thirds in an equity exchange.
For workers, GM and Chrysler would be required to make half of the payments to a union retirement fund in equity and eliminate a program that pays union workers when they don’t have work. Unions and management would have to negotiate a plan to have compensation and work rules in place by Dec. 31, 2009, that will make the U.S. companies competitive with foreign automakers. The requirements could be modified by negotiations with the union and debt holders.
GM and Chrysler will pay at least 5 percent on the loans, and would pay 3 percentage points over the London interbank offered rate should Libor exceed 2 percent.
The average cost of loans to high-risk, high-yield companies in dollars is a premium of 10.5 percentage points more than Libor, according to Standard & Poor’s Leveraged Commentary and Data unit.”
Nicholas,
I believe the cost of gas goes up in a nanosecond if it drizzles on a refinery, and it goes down only after enough junkies go cold turkey and need to be drawn back in.
Anyone else have Steppenwolf’s “The Pusher” in their head? C’mon, you know you have the vinyl….
[259] clot,
Sorry, I disagree. They taste thin. And I think my tongue has been sandpapered over the years, but so what?
When there is a summer GTG in Brigadoon, you can bring your own.
Essex 44 too funny:)
[242] Gator,
Sorry. These things tend to not get by me.
FWIW, you should have said “old girlfriend.” I wouldn’t have bought it, but it would have been a decent diversion.
SL and Doyle: Will try to post wine name tonight (after I get out a get a case ;-))
Weather report from Red Bank….snow turned to heavy rain about 2PM. Roads are wet and slushy, but mostly clear. Really not that bad.
Clotpoll says:
December 19, 2008 at 1:00 pm
skep (266)- Look hard, you can get this for $7 to $8. Beats the crap outa Blue Nun, too:
http://www.drloosen.com/v01_drlriesling.htm
Personally, I go with the Cornell guy…..I’ve bought cases of this stuff in the past…..bonus….you can actually drive up there in about 3-4 hours from here if you got the jones for it…..
http://www.drfrankwines.com/
grim unmod
[315] stu
Hmmm. Given your politics at times (I’m sure reinvestor thinks you wear a skirt), and the fact that two lisas can marry in Mass., that is a tough call.
But unless you are schizo (and contrary to the opinions of some on this board, I can parse a sentence), I will go with the Gator.
How’s it going with THE snowblower? As you said, Real Men use shovels. But I am still glad that its gonna wash away and I don’t have to shovel. Growing up in Mass., one learns to hate it after awhile.
#331 I’ve been there. Think I bought a bottle of sparkling riesling too (was many years ago). had a great time on a finger lakes wine tour. very nice weekend trip in fall
Just got back from the Short Hills Mall. Half empty, best time to go shopping is during a snow storm.
Bought the wife another piece for her collection they gave me 20% on Yurman that is never discounted and an additional $100 Bloomingdale’s gift card, which I then gave to my buddy who was shopping with me and he promptly used it and got another $100 gift card back which he gave back to me.
Got the wife a nice gift and a $100 gift card for the mother in law who will be in town next week.
Recession specials are always nice. :)
Don’t know the price of wine, the ladies always buy it for me.
I just referred to someone’s personality as an “autistic Rick Moranis character”. I am such an a%%hole :(
grim (300)-
When is our king going to replace the gubmint?
in terms of wines..I love this one for the price
2005 Robert Mondavi Private Selection Cabernet Sauvignon, Central Coast
Road report from NYC- Brooklyn side roads suck, main roads ok. Highway just wet. Staten Island, main roads suck less the side roads but still suck. Side roads awful.
Re: Wine
Fantastic Riesling- Darting Riesling Kaninett Duerkheimer Noonnengarten 2006
Found these wines in Tampa and I absolutely love the merlot-
Block 213 Merlot
Villa Mount Eden Fox Creek Red Zinfandel
Santa Margherita Pinot Grigio
By the way, I’m noticing that Cindy’s posts are starting to sound more and more as if she was New Jersey. I’m not sure if we should congratulate her or shame ourselves. Either way, I think she has been sufficiently trained, and at this point I wouldn’t be messing with her.
N.B. I assume her driving habits have changed too.
as if she was FROM New Jersey
Chi (331)-
Dr. Frank? That place has been there forever. Always makes good wine. Back in the day, wine guys in NYC would slip their late harvest riesling into German tastings. Nobody ever guessed Finger Lakes.
Nice call.
BTW, got your card today. Thanks. Is that kid in the picture yours or something? :)
chi (341)-
Using your car as a battering ram is very liberating.
Bank Failure Friday?
Clotpoll says:
December 19, 2008 at 4:22 pm
Chi (331)- Dr. Frank? That place has been there forever. Always makes good wine. Back in the day, wine guys in NYC would slip their late harvest riesling into German tastings. Nobody ever guessed Finger Lakes. Nice call.
clot: the blonde Eastern-European ice-princesses become putty in your hands if you fill them with a saccharine sweet Gerwutztraminer.
“Don’t know the price of wine, the ladies always buy it for me.”
hate to break it to you rookie.
but if this is the case… then that ain’t no lady.
:)
SAS
sas says:
December 19, 2008 at 4:36 pm
“Don’t know the price of wine, the ladies always buy it for me.”
hate to break it to you rookie.
but if this is the case… then that ain’t no lady. :) SAS
POSSIBLY THE BEST POST HERE IN MONTHS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
#278 Tom..every try the wine fest at Hopewell Valley Vinyards? Not all are that bad…also there is Crossing Vinyards over the river in Washingotn Crossing.
Cindy…looks like a testing of a new level from our friend in CA http://www.doctorhousingbubble.com/
Holy Cr@p! So many choices to drown my SRS sorrows in!
Thanks Guys, Appreciate the recommendations. This blog never dissapoints.
From the Hunterdon Hinterlands….
About 4-6″, mostly sleet now, that heavy crap that drags you down…makes you swear.
Horsies are wet from head to tail. Goat is dry. Goat is a girlie girl. She will *NEVER EVER* get herself dirty or wet. If the goat is wet, the goat is dead.
Chickens stood in the coop doorways all day. One ventured out. A Brahma hen. She flew about 40′ and stood there for no less than 1 hour. She then waddled back to the coop. At least she was safe away from the roosters… they rape the girls all day but are too chicken (did I just write that?) to come out in a little snow.
321 Lost – Bummer. Go again. You can never visit Nawlins too many times.
333 Nom – Going with the Gator is always a good bet.
Smooth sailing out of NYP for the early evening commute. Biggest problem I has was convincing the Auntie Anne’s cashier that my 50 cent piece was actually legal tender.
My GF and I travel the NJ wineries – we actually enjoy Hopewell, both the wine and the people there. It’s more expensive than it’s worth but I don’t mind supporting the local guy.
Someone asked about good cheap Rieslings – I’ve enjoyed Chateau St. Michelle from Washington State. They also have some good Gewurz as well.
352 Gator
You are right. I can never get down there enough. However, it doesn’t look like JazzFest is doable (sp?) this year.
so, when will the retail crash come?
Feb?
SAS
Psycho goat:
http://i23.photobucket.com/albums/b385/damonr/DSC01627.jpg
grim, my goat is in moderation…
House Hunter,
I’ve never been to that one and can’t remember if I ever tried their wine. I’m really bad with names.
Most of the NJ wines I’ve had were at a few events I’ve been to at Waterloo Village. One other NJ winery I’ve been too sticks out because I thought it was so bad but I won’t mention names.
I’m no expert so maybe I’m just way off base. Don’t know how to describe it but they just tasted off to me.
Some NJ microbrews though rock.
Oh, another interesting wine for the cheapo with flair:
http://www.casillerodeldiablo.com/es/ficha_productos_carmenere.php
sas says:
December 19, 2008 at 5:20 pm
so, when will the retail crash come?
Feb? SAS
WSJ
BUSINESS DECEMBER 19, 2008
Retailers Drop Prices to Avert a Flop
Last Weekend Before Christmas to Feature Huge Discounts as Stores Race to Liquidate Excess
By MIGUEL BUSTILLO and JENNIFER SARANOW
Retailers are gearing up to offer massive discounts this weekend to lure last-minute shoppers and try to salvage a so-far disastrous holiday season.
In a mad dash to liquidate excess inventories, chains are rolling out deeper and broader price cuts than last year, extending hours and offering even more generous promotions to their most loyal customers. The markdowns are particularly steep in clothing, which has been hit hardest by a consumer-spending downturn.
Barneys New York on Thursday began offering up to 75% off some clothes, reductions usually reserved for after-Christmas sales, when retailers make way for spring goods. Neiman Marcus Group Inc. also rolled out new sales Thursday offering as much as 65% off cashmere sweaters.
The sales were “a little deeper” than what was offered on Black Friday and “definitely more promotional” than those from last year, said Neiman spokeswoman Ginger Reeder. “It’s not the way we tend to do business, but we need to move merchandise.”
Store banners offer discounted prices to consumers in Beverly Hills, Calif., on Tuesday.
J.C. Penney Co. is planning about 300 “doorbuster” discounts on various items, up 80% from last year, and will keep stores open to midnight, one hour later than on Black Friday. Sears Holdings Corp. will offer up to 70% off on fine jewelry at its Sears stores, which will stay open this weekend until 11 p.m.
However, many retail experts believe the efforts will fall short, noting that it would take an extraordinary surge to make up for weeks of slumping sales this year. Retail sales for the six weeks to December 13 are off 2% from a year ago.
Some consumers said they won’t be part of any surge. Carol Akpan-Garza, 52 years old, a teacher and real estate broker in Round Lake Beach, Ill., said she finished holiday shopping last weekend and doesn’t plan to go again until the day after Christmas. “Hopefully, the discounts will be even deeper then,” she said.
Making matters worse, winter storms are bearing down on the Northeast this weekend that could keep some willing shoppers at home. “If this happens, even the grim reaper will look bullish,” said Barclays Capital retail analyst Bob Drbul. “You cannot make those sales up.”
Procrastinators have become more important to retailers’ December revenue, making the importance of the Saturday before Christmas second only to the Friday after Thanksgiving. Retailers expect to see more foot draggers this holiday season, since there have been only 27 shopping days between Thanksgiving and Christmas, compared with 32 last year.
Circuit City Stores Inc. is planning a rash of unadvertised specials on flat-screen televisions and other electronics to appeal to last-minute shoppers. “Like every retailer these days, we have fewer people coming in the door, and we are trying to make sure we do as well as possible with each one,” said Jeff Maynard, the retailer’s head of marketing.
In some cases, the promotions this weekend will be better than those offered on Black Friday, said Todd Slater, a retail analyst with Lazard Capital Markets. A number of retailers already have been offering lower prices on some items than they did during Black Friday, he said.
A survey conducted for the National Retail Federation found that on average, shoppers had completed only 47% of their holiday shopping by the second week of December this year, compared with nearly 53% last year. It found that 19% of consumers had not even started holiday shopping, up from 16.5% last year. A similar survey released this week from America’s Research Group found that 43.3% of consumers expected to finish holiday shopping this weekend, up from 33.9% last year.
“I expect it to be very, very busy” this weekend, with sales “better on a relative basis than prior weeks” this year, said Bill Taubman, chief operating officer of Taubman Centers Inc., which is extending hours at some of its malls to pull in as many shoppers as possible.
Of course, not every retailer believes in chopping prices just before Christmas. Best Buy Co. Chief Executive Officer Brad Anderson said he is not a fan of late-year discounts. “When it comes to that last minute, before Christmas, you can’t really alter shopping patterns,” Mr. Anderson said this week.
As dour as retail sales outlook have been, some analysts said the results could be even worse. “It’s hard to determine whether sales have been off because of procrastinators, or whether people are just not going to get out there and shop” at all, said Bill Martin, co-founder of ShopperTrak RCT Corp., which estimates sales and store traffic during the holidays.
ShopperTrak had predicted that holiday sales would increase a bare 0.1% this year. Now, “it will have to be a dramatic few days to even make that goal,” Mr. Martin said.
Wishful Thinking
Home Builders Want Mortgage Rates at 2.9%
The CEO of National Assoc of Homebuilders reportedly wants a govt program launched to lower interest rates on home loans to 2.9% along with an expanded homebuyer tax cut.
http://www.thetruthaboutmortgage.com/home-builders-wants-mortgage-rates-at-29-percent/?Sort=MostRecent
Oh I forgot to mention, Wednesday night the strip mall on Route 3 West was absolutely packed. It’s not a huge shopping center but I was surprised to see it so busy.
[353] gator
“Going with the Gator is always a good bet.”
Won’t stu have a problem with that???
Here is a nugget I dug up while researching federal guarantees. Its for those disputatious types that want to blame everything from sun spots to the Andrea Doria on the current administration.
September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
”There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,” Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan. . . .
. . . Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.
”The regulator has not only been outmanned, it has been outlobbied,” said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal . . .
. . . Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.”
Heck, if the New York Pravda reported it this way, then you know it has to be true that the Dems were covered with Fannie and Freddie pocket lint. And Frank and Co. wanted the spigots kept open to their constituents, and we all know where that led.
A agent just sent this to me. The graph would copy and paste, but the rest of his bs did.
Enjoy-
December 19, 2008
It’s been a heckuva year. With upheaval going on in all sectors of the economy, it will be awhile before the dust settles and we know the bottom of the market is behind us.
As you can see from the table above, the number of sales in December in northwest Bergen is up but prices are down. With sales activity relatively stable, inventory will not climb out of control and throw prices into a tailspin as has happened in other parts of the country. In fact, the New York Times suggests it’s a good time to buy in this article.
With the stock market showing stability over the last two weeks and growing confidence in the next administration, there’s reason to be hopeful in 2009.
vic (350)-
Buck up, mate. Gotta have days like this to rope in the dopes needed to send SRS to the moon again.
spam (351)-
And they wonder why a Hunterdon resident named his kid Adolf Hitler.
comrade,
…even a broken clock is right twice a day.
But I ask these questions anyway, NOT knowing the answers… find them out…
Was the oversight described above ever put into place?
Was the oversight described above a “ploy” to “open up” Fannie and Freddie to executive branch free-for-all a la “Iraq war:Hallibuton” style?
Now I’m certainly not saying FM & FM aren’t broken…they are. But I don’t think Boosh could “manage” his way out of a paper bag (see his earlier career(s)) and so I am immediately suspect about any “fixing” he wants to do…
Link (354)-
Amwell Valley Vineyards’ Seyval Blanc is a good bottle of wine, too.
*suspicious
cat was standing between me and ‘puter.
Clot –
Thanks. Not too worried. In honor of the zombie REITS, I am watching “Weekend at Bernies”. Forgot it was such a laugh riot. LOL.
Nick,
gas prices…..
are largely determined by the crack spread. the difference between what it costs to distill and process a barrel of gasoline and what they can sell it for.
the crack spread is based on the grade of crude oil used, the demand for the different crude distillate products and a number of other factors.
from a global perspective gasoline is a by product and diesel in the desired prodcut. The US imports large amounts of finished gasoline from european refineries because they do not burn the gas, the use more diesel instead.
google “crack spread” for more info
unmod?
vic (369)-
A classic. Pure comedy genius.
Comrade,
I’m digging.
So far, it seems like a good idea not executed.
But I find this:
Rep. Richard Baker, R-La., whose legislation would be the vehicle for restructuring how Fannie Mae and Freddie Mac are regulated, has a message for those who fear the housing market would be hurt by the changes.
“Just take a deep breath,” Baker says. “We have enjoyed and continue to enjoy the lowest mortgage interest rates in history. I suggest the Alan Greenspan effect is far more powerful than any action this committee might consider.”
“Was the oversight described above a “ploy” to “open up” Fannie and Freddie to executive branch free-for-all a la “Iraq war:Hallibuton” style?”
That’s my interpretation of it.
Seriously, hasn’t this president screwed up enough? Should we be really wishing the administrative branch had more control over the mortgage sector? Is the current treasury sec doing such a bang up job we’re all thinking “Damn Should have given the Treasury Dept the reigns from the get go!”?
No.
I tried to put most of my thoughts on crazy crap like that in this post about democrats or republicans being to blame for the economy at least as it relates to the housing bubble.
n
Republican demands to regulate Phony/Fraudy have been ongoing for years. They started way before Shrub became fuhrer.
Repubs have always known Phony/Fraudy is a giant Demosplat patronage dump, so they try to get in and bust it up to throw a wrench in their cogs.
[373] spam
That quote was consistent with the goals of Oxley and others to regulate them.
The legislation died, can’t say why right now. But there was a lot of talk even before then about reigning them in. Some banks (citi) even wanted them abolished.
Here’s a thought: Because the financials tended to back GOP, there may have been a backlash by the dems to protect the GSEs. Consequently, by protecting them from the big, bad conservatives, the dems were enablers that prevented regulation that might have averted part of this mess.
In any event, it’s all history now. We can’t put out the fire, we can only try to figure out who was playing with the matches.
“Repubs have always known Phony/Fraudy is a giant Demosplat patronage dump, so they try to get in and try and make it a giang Republiscam patronage dump“
There fixed it for ya ;)
Mike Morgan, on a roll today:
FRIDAY, DECEMBER 19, 2008
Headlines, Quotes and Thoughts -12-18-09
Paulson’s Bogus Bailout – The auto bailout absolutely stunned me. I never dreamed they would just hand the money over. Paulson gave them $17.4B, when they only asked for $14B and there are no strings. Sure there is a document, but with far less strings attached than either the Congress or Senate wanted. Shame on Paulson, and shame on our Congressman and Senators for not standing up to this man. He is evil, and as I have said for many months . . . if he is not the devil, he is as close as we get.
The lips of a king speak as an oracle, and his mouth should not betray justice. – Proverbs 16:10
China’s Hu Calls for Stability as Reform Celebrated – The Financial Times
China’s leadership has launched a series of measures to try to shore up the country’s economy as they brace for increasing numbers of people losing their jobs and potential for ensuing unrest.
Mike Morgan – China’s leader almost on a daily basis are warning of civil unrest.
QUOTE – “The biggest issue will be unemployment, and that can be a huge problem if not handled well.” Shi Mingshen, deputy head of the economic department at People’s Daily, the Community Party’s main newspaper.
The Case for Letting Chrysler Go Under – BusinessWeek
It has nothing exciting in the pipeline, and Ford and GM would be strengthened by picking up the pieces.
Mike Morgan – It is worth pointing out, Chrysler is a private company owned by Cerberus Capital Management. If Cerberus doesn’t want to save this company with a capital infusion, why in the world would the taxpayers want to throw money away? Not so fast. 60% of taxpayers polled did NOT want Paulson to give Detroit any bailout money . . . and I’d betchya if you polled the same group about a Chrysler bailout, we’d see a number of NO votes closer to 90%.
The Great American Shopper Hits a Wall – BusinessWeek
Households are overleveraged and underfunded, which means 2009 will be a transition year for savings behavior.
Mike Morgan – I chose that line from the article because it is at the heart of the problem as we look back and at the heart of the problem as we look ahead. We stopped saving decades ago, and we are now spending more than we make . . . AND dipping into savings. That is all changing. Now we are paying off credit cards and trying to save. But that is exactly what the government does NOT want you to do. The government wants to stimulate more spending on chachkas from China. The government wants you to buy more TVs and more jet skis and more boats and more of everything. Not once have we heard a government plan that includes saving and tightening our belts. Not once have we heard a government plan that included the “F” words frugal. No, the government wants you to continue to borrow and spend irresponsible. I don’t think that is going to happen, which means the only way out for us is a Depression to mete out the consequences of decades of irresponsible spending.
The True Costs of the Bailouts – The Week
Who’s lending us all this money? As of September – China $585B, Japan $573B and Great Britain $338B. Mike Morgan – The national debt stands at just under $11 trillion now, but our friend King Henry has committed us to another $7-8T and Obama is talking about spending $1-2T to jump start us. I still use old math, so my number tell me that this little housing/credit crisis has just doubled our national debt. And we have not yet even entered the mid-way point!
Slim Hopes – The Economist
This one is from the September issue, but I thought it was worth noting. A billionaire makes a surprising investment in the New York Times.
Mike Morgan – The billionaire is Carlos Slim of Mexico. Obviously, he and Sam Zell made huge billion dollar mistakes on their investments in our countries greatest newspapers. That’s a pretty sad statement for the state of our country. By the way, they are not alone in the Billionaire Bust Club. Add to the busted investments, Buffet buying Goldman Sachs at $115 (now $80) and GE at $22 (now $16) and Icahn’s investment in WCI going to zero. There are more, like Wilbur Ross and his jump into subprime and Soros buying Lehman just a couple of weeks before it exploded.
QUOTE – “Mr. Secretary . . . you’re picking and choosing. You have to set policy,” Senator Richard Shelby, complaining to King Henry . . . in September!!!! And here we are in December. King Henry is stronger and still doing as he pleases with no oversight, full immunity and behind closed doors!
Lennar Posts Narrower Loss But Says No Relief Is in Sight – The New York Times
Lennar’s CEO, Stuart Miller described the housing market as “the most difficult housing market that, I dare say, any of those of us in the housing industry have ever encountered.”
Mike Morgan – Lennar did narrow their loss, but it all depends on how you juggle the numbers, The big thing for Lennar and the other builders will be impairments. As I have noted for more than two years, the builders are not impairing project at the rate and level they need to in order to keep pace with the markets. Less than 50% of the communities in most builders’ portfolios have been impaired. And even though some of these have been impaired two and three times, the numbers don’t even come close to reality. Just consider this. Centex, Horton and other have sold land for less than 20 cents on the dollar . . . some for as little as 4 cents on the dollar!
Homebuilders – I believe I understand the housing markets and the builders better than anyone in the country. That has been my trademark for quite some time, and as many of you know, I have been way ahead of the curve. So let me make one important comment. A bailout of the builders is ludicrous. At least Detroit has factories and employees on the line. The homebuilders use subcontractors, so there is nothing to bail out. Many homebuilders use the very same subcontractors. Any bailout of the homebuilders will go to fatten the pockets of executives. Moreover, we don’t need all of the homebuilders that we have in the market today. Their product is fungible and we have at least a two year supply of inventory in the system now. Just as we will see a reduction of hedge funds and banks, we are going to see the bankruptcy of at least 25% of the homebuilders in today’s market.
What the Mortgage Bailout Means for You – BusinessWeek
If you’ve got an adjustable rate mortgage, you may qualify under certain conditions. If you’ve got a standard mortgage with a fixed interest rate, you’re not affected. . . . The deal almost certainly won’t stop the decline in housing prices.
Mike Morgan – Let’s face it. The mortgage bailout is a hoax. First, how are you going to force the owners of the mortgages to accept less. In fact, since most mortgages were bundled, sliced, diced and chopped up into pieces, there are multiple owners of these mortgages. They use a service company to collect payments and distribute these payments to the multiple owners. Second, we’ve heard of at least 20 different versions of how a mortgage bailout will work. Even looking at the best pieces of these plans, the common theme is how to decide who gets help and who doesn’t . . . and then how do you stop people from NOT paying their mortgages, just so they can qualify for help. AND, what about the folks that don’t have a mortgage. Is it fair for these folks to be subsidizing their neighbors?
Federal Share of Economy Soaring – USA Today
The government’s spending surge to ease the financial crisis and a worsening recession is increasing the federal share of the nation’s economic activity close to $1 out of every $4, the highest level since World War II. . . . The debt could rise “by more than $1 trillion a year virtually every year for the next 10 years,” says Senate Budget Chairman Ken Conrad. “And that’s before any policy changes.” (emphasis added)
Mike Morgan – I don’t care what numbers you look at, these are terrifying numbers. What is truly scary, is that we are not yet even spending to rebuild or spending for the future. We are doing nothing more than handing out money for the same old results, incompetence and obsolete business practices. That’s downright sad.
States Squeeze Cities, Spreading the Economics Pain – The Wall Street Journal
The worst budget crisis in decades is forcing states to cut funding to cash-strapped cities, which already are slashing police, fire-fighters and other services.
Mike Morgan – We are only in the third or fourth inning of this downturn, so look for more cities to file for bankruptcy. I’ve noted that I believe this Depression will turn violent, and with cutbacks in police, fire-fighters and hospital funds, the violence will be even more painful for all of us.
More California Towns Face Bankruptcy – The Wall Street Journal
Mike Morgan – States cannot declare bankruptcy, but cities can. And as the states cut back on assistance to cities and the basic services provided from the state level, we will see more cities file for bankruptcy.
Calpers Losses Further a Municipality’s Street – The Wall Street Journal
“Calpers could bankrupt us faster than anything else,” says Pacific Grove’s mayor Dan Cort.
Mike Morgan – We have yet to see the real effect of the real estate bubble on pension funds. Calpers is not alone in suffering horrible losses, as aggressive and ill-informed pension fund managers were lead by the nose into deals they did NOT understand. The pension fund bubble is the biggest Ponzi Scheme the world has ever seen. And when it pops, the devastation will be indescribable.
Is the U.S. Going Broke? – Forbes
This one is from September! – There is still time, and there are ways to put our fiscal house in order. But the longer we wait, the more likely we’re going to get hit by a true financial and economic earthquake. The earthquake will come via a collapse in the market for U.S. government bonds as domestic and foreign investors realize that the only way Uncle Sam can meet future pending obligations is to print massive quantities of money.
Mike Morgan – Very sad, considering that was September. Well . . . we didn’t do nothing. We did something. Unfortunately, giving absolute power to the man that is more responsible for this crisis than any man on earth, was probably the worst thing we could have done. Are we broke? Yup, and we’re making matters worse by borrowing more and spending like there’s no tomorrow. (Sadly, there may be no tomorrow for many Americans.)
The Madoff Economy – The New York Times
How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?
Mike Morgan – This was a great piece by Paul Krugman. And I loved the way he closed the article, because I am always talking about the “consequences” of what we have done, and that the bailouts are ignoring the consequence of what we have done. Moreover, the bailouts are creating MORE consequences for us. Mr. Krugman closed his piece with . . . “What we’re looking at now are the consequence of a world gone Madoff.”
The Hidden Pension Threat – BusinessWeek
New rules are hitting companies that are already down, and could make a painful recession worse.
Mike Morgan – B-I-N-G-O . . . and that is not a double bingo, since this article only deals with the new rules. The biggest problem facing pension funds is the losses they have racked up . . . AND the losses in real estate that have not even been quantified because we no longer mark-to-market. Just wait. The Pension Fund Crisis will be devastating . . . and it will hit us just when we need it most.
Russia’s Economy Turns Swiftly Siberian – BusinessWeek
Free falling oil prides and exposure to financing from the West are bringing the nation to its knees.
Mike Morgan – The bleakness facing most Russians is only getting worse. They have endured a triple whammy. One, the country is run by a den of thieves (just like the U.S. under Paulson). Two, their economy has been heavily dependent on oil and gas revenue. Three, the den of thieves running the country have massive exposure to the den of thieves running the U.S.
In String of Bad News, Omens of a Long Recession – The New York Times
Despite months of rescue efforts, hundreds of billions of dollars in government spending and an avant-garde apparatus of financial tools, the American economy has only worsened, and at a faster rate than anyone predicted.
Mike Morgan – If the market is a predictor of 6-9 months ahead, the market’s crystal ball is fogged up with all of the hot air coming our of Paulson and his band of merry thieves. As the article points out, analysts had hoped the worst was over. Instead, things are getting worse, and we are trying to fix the problem with the same free money that got us into this mess. We simply refuse to accept the consequences of our ways.
After a String of Grim Reports, Economists Say the Recession’s End is Not in Sight – The New York Times
This was the headline for the above referenced article as it was carried over to another page. It was a great article that hit it on the head . . . Consumers are scared. Credit is tight. Jobs are vanishing.
Company Crashes Set to Hit Record Next Year – The Financial Times
Record numbers of companies will go bankrupt next year with 200,000 insolvencies in Europe and “an explosion” of failed businesses in the US.
Mike Morgan – In fact, the article sees at least a 50% increase in bankruptcies in the US next year. Here are some other stats. In 2007 the US saw 28,322 bankruptcies. The FT article predicts 62,000 for 2009 . . . more than double 2007.
More Homeowners Walking Away from Mortgages – The Associated Press
Mike Morgan – I see this everyday in real time, and in real life. We receive several calls each week at our residential brokerage company, asking what to do when a homeowner is deciding between food for the kids or a mortgage payment. In Florida, the answer is easy. I’d say 95% of the people that call me are upside down with their mortgage, so my advice is to send the keys to the bank and rent. Florida is a non-recourse state, which means the lender can’t come after the homeowner, if the homeowner has given the underlying asset back to the bank. Other states that are non-recourse are Alaska, Arizona, California, Connecticut, Idaho, Minnesota, North Carolina, North Dakota, Texas, Utah and Washington. Arizona, California, Texas and Florida homeowners could crash the system, as home prices continue to fall.
Germany’s Recession is Picking Up Speed – The Wall Street Journal
Mike Morgan – Ooops, and they thought they were not going to feel the effects of the worldwide financial crisis as much as other countries. I’ve got news for you and everyone else in the world . . . unless you live off the land in Mongolia or the Amazon jungle, you are going to feel the effects of what Paulson and his band of merry thieves has brought to the world financial system. I still don’t understand why none of the media bobbleheads have not yet done an in depth piece about what Paulson was responsible for during his tenure at Goldman Sachs. He ran the company that created more different forms of derivatives and more volume, than any other ten companies in the world combined. And with more offices in more countries than any other investment bank, Goldman Sachs peddled the toxic assets to every corner of the world.
Costco Profit Up a Bit . . . BUT – Reuters
Costco Wholesale Corp’s quarterly profit rose slightly as strong results from its gasoline stations helped offset weak consumer demand for all but the most essential household items.
Mike Morgan – And that’s not all. The CFO said the trend is lower not higher. For all the bobbleheads talking about how the club stores were going to benefit from the Recession, because more people would be buying in bulk, I have two words . . . poppy-cock. You see, when consumer are broke, they stop spending money on everything but the necessities, and many consumers are living from paycheck to paycheck, so they can’t buy in bulk. The bottom line will be consequences. We are going to pay dire consequences for our decades of overconsumption and total disregard for saving for a rainy day. Moreover, not only didn’t we save, but we borrowed against everything we own.
Worse is Yet to Come – Forbes
Developing countries like China and India are dependent on exports to the U.S. and will be hard hit. . . . Brown-bagging your lunch costs half as much as buying it at a deli, and Ebags.com reported a 39% jump in August sales of lunch bags and coolers.
Mike Morgan – These were a few of Gary Shilling’s comments in September. Things are worse, and the worse is yet to come. Shilling points out that ALL spending will be cut, and the only one spending more will be the Federal Government.
Treasury Sued by Fox Business Network Over Rescue Plan Info – MarketWatch
Mike Morgan – That makes two. Bloomberg News is also suing, but nothing will come of these suits, and they will soon be forgotten. King Henry and Prince KakaKashkari will soon be gone. The lawsuits will be moot. King Henry has also given the finger to Congress and the Senate when our leaders requested information related to where is all the money going and what are the details. Sad. Very, very sad that we have one man with so much power . . . and no one dares to question him with any authority or handing out any consequences for King Henry’s arrogance and total disregard for our country.
Moderated in giant Mike Morgan post @ #379.
Link:
http://realestateandhousing2.blogspot.com/2008/12/headlines-quotes-and-thoughts-12-18-09.html
“And Frank and Co. wanted the spigots kept open to their constituents, and we all know where that led”
– Nom, if you are trying to blame the subprime crisis on FNM/FRE, that is blatantly untrue. FNM/FRE were indeed Phony and Fraudy, but it was because they were operating as hedge funds with their dabbling in interest rate based derivatives.
It is a convenient target of the right wingers to place the blame on poor people getting loans and the CRA.
FNM/FRE were not the ones who packaged these mortgages into securities, sliced and diced them multiple times, slapped AAA on them and sold them to investors. It was the I-banks and the government which allowed them to increase their leverage ratio 4 times over who caused it.
Sub-prime is just a symtom, excessive securitization and leverage is the cause
379-381 moderated. Don’t know why.
Federal Reserve is damned either way as it battles debt and deflation
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3834108/Federal-Reserve-is-damned-either-way-as-it-battles-debt-and-deflation.html
Wonder why Bi has not been around today to mock us with SRS charts :).
San Francisco Area Home Prices Drop Record 44 Percent
Home prices in the San Francisco Bay Area plunged a record 44 percent in November and the median fell to the lowest since September 2000 as foreclosure sales pushed down values, according to MDA DataQuick. A total of 5,756 new and resale houses and condominiums sold in the nine-county region last month, a 12 percent increase from a year earlier. The median fell to $350,000, down 7 percent from October and down 47 percent from the peak set in June, July and August of 2007, the San Diego-based research firm said today in a report. The Bay Area median has fallen 12 consecutive months on a year-on-year basis.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a1xEGQ34Oyw4&refer=us
unmod?
nice!
Yardeni wrote: “After one bubble bursts, the only way to get out of the resulting recession, and to avoid a depression, is to create another bubble.” That’s not what anyone wants, but it’s certainly better than the alternative—a downturn that would rival the Great Depression.
http://www.businessweek.com/magazine/content/08_52/b4114022505333.htm
Does anyone have a reference for a reputable attorney in Morris county (Morristown area, if possible), preferably familiar with rental properties and seller financing? Email me @ rental.mgmt@yahoo.com if you can help me out.
Thanks!
Morristown has plenty of legal issues. We are looking as well to engage the city into legal action. We have a law firm and they will hear from us. The mayor is a proven crook.
HC
254 Hammacher Schlemmer’s Snowblower? (everything in their catalog is *the* shiznit. as opposed to any old shiznit.)
312 and i’m alia. :) (have been wondering how to describe/introduce my husband, as “Mr Alia” just sounds so wrong…) i should have thought ahead when choosing my handle. and my poor sons. lil alia one and two?…
351 how many roosters do you keep? i’d think they’d all (or all but one) be sunday dinner by now?
HC,
Would you mind elaborating a bit on that at the email address in 390? I’m contemplating an investment property there and am curious as to your issues.
Ok, I’ll join in the NJ Wine Report (finally got home and shoveled out). Picked up a bottle of Cline Syrah 2007. Will give a review later. Anyone feedback/reviews on this one?
Cline has access to all kinds of pre-phylloxera old vines (mostly Mourvedre) in the Sacramento River delta. They are some of the best in the state.
I believe their Syrah comes from the estate vineyards in the Southern part of the Sonoma side of Carneros.
You have to be careful with Cline, because while their talent as vineyardists is top-notch, their winemaking can sometimes be amateur night. I visited with them years ago (over 15, to be exact), and they were much more interested in beer and cars than they were making wine.
Every now and then, I pick up the odd Zin or Syrah from them, and it’s very, very good. Maybe they’ve decided to actually be in the wine business.
Look at the bonus figures from Merrill. You call this a recession?? Give me this bonus any day.
3rd Yr Assoc – top bucket – 160K cash + 30K stock
http://dealbreaker.com/2008/12/bonus-watch-08-mer.php#comments
Nom 365 – Only meant to say that I am usually right.
Alia:
We’re a chicken rescue farm.
We have had, among all the normal animals, 2 blind roosters, a hen with 1 leg, 2 hens that were bred for meat that couldn’t walk due to being so heavy when full grown, etc…
Our eggs don’t support our costs, but it’s a lbaor of love that started innocently enough.
An article in the democrat about feral chickens in a Brooklyn junkyard prompted a rescue and we became known as the people that would “take in chickens”.
We have 2 coops. Both decent sized. One was cobbled together, 1 is specially designed and built for them. They like the cobbled together one better. :(
They are free range all day every day except when we get fox or hawk activity. Then they are in for 2 weeks.
We lose a lot, maybe 30-40 a year, but some have been here 7 years. And bantams, too! Go figure.
Our neighbors love our chickens as neighbors.
We spent a lot of money on the chickens. Even landscaped their coop “lawns” with stonedust and a brick border, built them a bridge across the creek, they get candy (dried papaya) and chicks are brooded in the house if it’s still dropping below 70* at night…
We don’t eat our chickens and ones that die (that we find) are “donated” to nature’s natural food chain, away from the coops.
They also don’t get softened water (hurts them) and are fed a vegetarian diet. (No melamine :)
Clot – We got some fairly excellent Zin from Bella in the Alexander Valley on the last trip. Only one more bottle left of it…sigh…
Alia 392 – I can start referring to Stu as “Mr. Lisa” if it will make you feel any better.
I come for news, not wine, but my local favorite is http://www.Valavineyards.com – in PA. $30 to $50 bottles, but very unique. Fun to go for a tasting. Plus it’s in the Brandywine Valley and there’s plenty to do for a weekend. Great restaurants in the area, too.
Don’t ask about the chicken (bantam Belgian Quail-yes that’s a chicken) that lived in a spare bedroom for 4 months.
“Grammy” She was cool. She ate all papaya colors except for red. Hated red.
Or the 6 chickens who had to be on antibiotics; they were brought in to the spare bedroom and so we could administer the medicine (in their water).
They got colds and their eyes swelled up so they couldn’t open them. They were sneazing and sniffling.
One rooster was well enough to crow at 4am about 10 feet and 1 one wall from my very VERY sleeping ears… Thank god they were only inside for 6 days. :)
My husband says “chicks dig his Jeep…”
http://i23.photobucket.com/albums/b385/damonr/JeepChix.jpg
very distressed: zillow (where i used to play… found njrr from a link they posted) has gotten rid of their discussion forums.
we exchanged a lot of useful info (it was a lot like njrr, only with more lolcats and less wine. but lots of guns, ammo, and emergency preparedness with a national scale flavor.)
i feel like grieving a little.
which wine does one drink with that?
399 yes, yes it would.
thank you.
400 i thought chickens couldn’t see red? i remember a curiousity shop we drove through somewhere in the midwest (roadtrip! across america! in 4 days and 3 nights! with friend’s boyfriend! why did we think this would be fun? why? because we were 20! yea!) where the proprieter took great glee in showing me his chicken glasses– tiny things with red lenses– that were supposed to keep them from pecking each other? (the schtick he did with the seal/whale penis was pretty good, too. i can’t tell if he was disappointed that i didn’t squeal or gratified)
Alia Was thinking about getting a chicken coop for eggs. Do you need to heat it, a lot of work etc? My wife ain’t having no chickens in the house! So I don’t know if it would work , plus plenty of hawks & foxes here abouts. Mountains Vernon NJ.Do have a dog to keep watch.
mike, i’m just a poser, spam’s the real deal. :)
all i breed are dustbunnies.
Alia sorry wasn’t reading carefully, spam what say you.
Clotpoll says:
December 19, 2008 at 7:03 pm
Moderated in giant Mike Morgan post @ #379.
yawn…..
I am surprised that this generated ZERO comments….
chicagofinance says:
December 19, 2008 at 10:43 am
doh!
Former real estate bull admits, “I spun”
Working for realtors, David Lereah was famously optimistic. Not anymore. By Donna Rosato
As chief economist for the National Association of Realtors, David Lereah was famously optimistic. Now a private consultant, he’s abandoned what he calls the “positive spin.”
Q: Were you wrong to be so bullish?
A: I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right inline with most forecasts. The difference was that I put a positive spin on it It was easy to do during boom times, harder when times weren’t good. I never thought the whole national real estate market would burst.
Q: The NAR’s latest forecast calls for a slight increase in home prices next year. Thoughts?
A: My views are quite different now. I’m pretty bearish and have been for the past year and a half. Home prices will continue to drop. I think we’ll see a very modest recovery in sales activity in 2009. But we’ve still got excess inventories, a bad economy and a credit crunch that will push prices down further, another 5% to 10% more. It’ll take a long time to get back
to the peak prices we saw in many markets.
Q: Any regrets?
A: I would not have done anything different. But I was a public spokesman writing about
housing having a good future. I was wrong. I have to take responsibility for that.
-DONNA ROSATO
Chi fi I gather you disagree.
Chi that was to 406.
chicagofinance says:
December 19, 2008 at 4:39 pm
sas says:
December 19, 2008 at 4:36 pm
“Don’t know the price of wine, the ladies always buy it for me.”
hate to break it to you rookie.
but if this is the case… then that ain’t no lady. :) SAS
POSSIBLY THE BEST POST HERE IN MONTHS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Dedicated to John…courtesy of SAS…
http://www.youtube.com/watch?v=riE-GI0PxnE
“Don’t know the price of wine, the ladies always buy it for me.”
hate to break it to you rookie.
but if this is the case… then that ain’t no lady. :) SAS
Dedicated to John…courtesy of SAS…
http://www.youtube.com/watch?v=riE-GI0PxnE
un mod?
Not sure why we bailed out Chrysler. They are privately held. Cerberus is saying that the company is not worth saving with their money. They just sold the assets to Treasury. Truly playing with house money.
Hank is going to have to kill a hostage to get that other 350B. MS? C?
I think that Cerberus has built their last car.
HO-HO
WSJ
Pay Attention to That Window Behind the Curtain
By JASON ZWEIG
If history is any guide, a lot of portfolios may get a makeover between now and 4 p.m. on Dec. 31, when the 2008 trading year will finally take its last putrid breath.
This cosmetology can lure more clients in good years and keep more clients from fleeing in bad years. While you mightn’t be able to stop it, you should be able to spot it.
Here are several ways that investment managers can gussy up an ugly portfolio at year end:
Window dressing. This tactic is old as the hills; the Pecora Commission, which investigated the 1929 crash, found that banks and investment firms scrubbed their lists of holdings on the last day of the reporting period “to present a financial statement of sound appearance.”
Money-market investors still window dress, says finance professor David Musto of the Wharton School. “There’s a flight to quality,” he says, “not just because the managers like quality but because they want to show quality.”
Commercial paper, short-term corporate debt, has higher yields than U.S. Treasury bills. But it is riskier. So money-market managers want it in their funds, but not in their funds’ annual reports.
This Dec. 16, the price of 15-day loans to companies with lower credit ratings fell, and the yield leapt from 3.6% to 4.73% overnight. Buyers likely stepped away because any money-market fund that bought after Dec. 15 would have to disclose the holding at year end.
Meanwhile, any money-market fund that does hold this paper can report a fattened yield. But this window dressing, warns Prof. Musto, is “transitory and doesn’t reflect what you’ll get long term.”
In much the same way, your stock-fund manager is likely to get rid of his worst dogs just before year end, making it harder for you to notice that he was running a kennel for most of the year.
Reading your December 2008 fund report alongside the one from June will ensure you don’t get a naively rosy view.
Painting the tape. In what also is called “banging the close,” managers run up the price of what they already own.
Changes in Nasdaq’s trading rules have made this tactic rarer. But it may not have disappeared. Consider the case of American Technology Corp., a San Diego-based producer of audio equipment. On Dec. 31, 2007, the company’s total market value jumped to $77 million from $58 million in a single day.
Why? The firm announced no news that day. Robert Putnam, Atco’s head of investor relations, says: “All we can guess is that some institution was doing something to make its statements look better” — in other words, buying extra shares at an artificially high price to boost the other shares it owned. Atco’s stock closed at its high for the day, up 33% from the day before — a pretty peculiar move for a stock that lost 35.5% for the year.
A fund that does this with a few dozen stocks would not only pump up its return, but also boost the fund manager’s revenues, which are based on the assets it manages. Next, the fund would bail out right after the New Year. On Jan. 2, 2008, Atco dropped more than 10%; it has lost roughly 80% for 2008 as a whole.
Painting the tape is a one-day wonder. Historically, 80% of all U.S. stock funds and 91% of small-company funds have beaten the market on the last trading day of the year — and roughly two-thirds have given most of that gain right back on the first day of the following year. “So we know how investors can avoid losing money,” says finance professor Dan Bernhardt of the University of Illinois: “Don’t buy small stocks or a small-cap fund on Dec. 31, and don’t sell on Jan. 2.”
Comparison shopping. Finally, mutual funds are required to compare their returns to the results of a “benchmark,” or index of market performance. The comparison is supposed to be fair; a fund owning little stocks in Europe shouldn’t measure itself against the Standard & Poor’s 500 index of big U.S. companies.
But fairness is a judgment call, so funds are free to use whichever index puts them in the best light. A study by finance scholar Berk Sensoy shows that 31% of U.S. stock funds pick a benchmark that doesn’t closely reflect what they own — but does make it easier to beat “the market.”
In recent years, smaller stocks did better than large, so the S&P 500 was easy to beat for many funds. But this year, small stocks lost even more than large ones, so you need to watch whether any of your mutual funds shift their benchmarks away from the S&P 500 to other indexes tilting toward smaller firms. If your fund starts comparing itself against a new benchmark, it is probably time to get a new fund.
spam spam bacon spam @ 9:45pm:
http://recipegal.com/other/genuineKFCsecretrecipe.htm
Grim,
This week’s report from the hinterlands…
Hunterdon County Comp Killers
GSMLS recorded 11 sales and 13 new listings in Hunterdon County this week. Three sales and three new listings made this list.
MLS# 2597109
59 NORMA RD
Bethlehem Twp
SLD: 08/20/04 $445,000
OLP: 08/01/08 $449,900
LLP: 10/29/08 $424,900
Withdrawn
DOM: 89
OLP: 10/31/08 $399,900
SLD: 12/18/08 $399,900
DOM: 14
10.14% off 08/04 sale price
11.12% off 08/08 OLP
MLS#: 2581558
85 CLINTON ST
Lambertville City
SLD: 08/20/04 $610,000
OLP: 10/02/06 $849,000
LLP: 04/02/07 $749,000
Expired
DOM: 182
OLP: 04/24/07 $740,000
LLP: 10/29/07 $639,000
Expired
DOM: 188
OLP: 09/21/08 $499,000
SLD: 12/17/08 $499,000
DOM: 19
18.20% off 08/04 sale price
41.23% off 10/06 OLP
MLS#: 2466393
7 CENTERVILLE RD
Readington Twp
SLD: 10/20/06 $555,000
OLP: 12/06/07 $525,900
LLP: 09/12/08 $488,900
SLD: 12/16/08 $474,950
DOM: 306
14.43% off 10/06 sale price
09.69% off 12/07 OLP
Hunterdon County FUTURE Comp Killers
Check out the last one. 105K off the 2000 sale price???
MLS#: 2617486
9 TAYLOR CT
Raritan Twp
SLD: 07/19/06 $680,000
OLP: 11/05/07 $699,000
LLP: 12/15/08 $549,000
Withdrawn
DOM: 406
OLP: 12/16/08 $529,000
DOM: 4
22.21% off 07/06 sale price
24.33% off 11/07 OLP
MLS#: 2617475
9 Morning Star Road
Readington Twp
SLD: 08/19/05 $775,000
OLP: 04/14/08 $750,000
LLP: 12/15/08 $699,000
Withdrawn
DOM: 245
OLP: 12/15/08 $675,000
DOM: 5
12.91% off 08/05 sale price
09.00% off 04/08 OLP
MLS#: 2616668
15 PRUNER FARM RD
Tewksbury Twp
SLD: 10/26/00 $1,055,000
OLP: 12/13/08 $950,000
DOM: 7
09.96% off 10/2000 sale price