From the Daily Journal:
New Jersey cuts will hurt homeowners
Gov. Jon S. Corzine wants to cut school aid by $75 million and aid to cities by $15 million to help close a $2.1 billion budget gap.
There’s no question some tough decisions on painful cuts will have to be made to make up the difference in lost state revenues because of the recession. Everyone is aware of the seriousness of the financial crisis affecting governments, private employers and employees, homeowners and taxpayers.
The cuts will affect everything from school breakfast programs to mosquito control to equipment for the state police. The governor even is proposing a wage freeze for state workers, which union leaders are rejecting, and reducing state payments to the pension fund. More cuts may be needed considering the state’s falling revenues and the deepening recession.
Unfortunately, it’s property owners who will pay the price for these cuts, not only because of a reduction in services provided by the state this year, but also in increased property taxes next year when the state will have a projected $5 billion budget deficit. Depending on the state of the economy and state revenues, the budget gap could be even more. It’s a simple mathematical equation: If the state cuts funds to schools and aid to cities, local property taxpayers have to make up the shortfall or schools and municipalities have to cut programs and services — a double whammy on local communities.
…
The country, state and local municipalities are facing some difficult financial times. Families are tightening their belts to weather this financial storm. Governments will have to do the same by cutting spending. They will have to reduce the size of government, share more services and consolidate to save money. They will have to seriously consider wage and hiring freezes for workers.If these things aren’t done, the financial hole taxpayers and the state are in will only grow deeper.
Frist!
From MarketWatch:
Worst December for layoffs on record, survey says
More bosses played Scrooge last month than during any December on record, as major companies kept up a steady pace of job reductions, according to outplacement firm Challenger Gray & Christmas.
Big companies announced 166,348 layoffs in December, up 275% from a year earlier, Challenger said Wednesday in its monthly informal survey of job cuts. It’s the largest number of announced layoffs in any December since Challenger began tracking them in 1993.
For all of 2008, companies announced a total of 1.2 million job reductions, the most since 2003 and 59% more than in 2007.
The financial sector accounted for about a fourth of the jobs eliminated in December. For all of 2008, the financial services industry announced plans to cut 260,100 jobs, nearly as many as the telecommunications industry cut in 2001 and 2002 as the dot-com bubble collapsed.
The auto industry cut 127,281 jobs in 2008, down from 158,766 eliminated in 2006.
The report comes two days before the Labor Department reports on December’s nonfarm payrolls. Economists surveyed by MarketWatch expect payrolls to fall 500,000 after the horrendous 533,000 loss in November. It would be the twelfth straight month of job losses, totaling 2.4 million. The unemployment rate is expected to rise to 7% from 6.7% in November and 5% in December 2007.
From CNBC:
US Could Lose 1 Million Jobs this Month: ING
New Year optimism is likely to be shaken by shocking numbers in the monthly employment report, with a loss of one million jobs coming “sooner than you might think,” ING Bank analyst Rob Carnell wrote in a research note.
“At the risk of sounding like ‘Dr. Evil’, there is a very real possibility of seeing monthly payrolls falling by a million in the next few months,” Carnell wrote.
Payroll losses could reach seven figures as soon as January or February, he added.
The latest nonfarm payrolls report is due out on Friday and analysts surveyed by Briefing.com forecast that 475,000 jobs were shed in December, slightly fewer than November’s 533,000.
But the volatile figure can be higher, with TrimTabs Investment Research analysts suggesting the economy lost close to 700,000 jobs in the last month of 2008.
Layoffs shmayoffs! It’s too the moon from here! The government is going to make us all rich again!
From Reuters:
US mortgage applications dipped before Fed move-MBA
pplications for U.S. residential mortgages slipped from lofty levels last week as homeowners slowed refinancings ahead of expected federal action to lower housing costs, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity fell for the first week in four, dropping 8.2 percent to 1,143.8 in the week ended Jan. 2. A week earlier, it hit a five-year high.
Borrowers may have slowed applications in anticipation of the Federal Reserve’s program to purchase up to $500 billion in mortgage-backed securities, which is aimed at lowering rates lenders charge to consumers, an MBA economist said. The Fed began its purchases on Monday, fueling a sharp drop in premiums that investors demand to own the bonds, and by extension, a probable drop in mortgage rates this week, analysts said.
From CNBC:
Planned Dec. Job Cuts Up 275% From ’07: Report
Planned layoffs at U.S. firms eased in December from the previous month’s seven-year high but they were up an astounding 275 percent annually as the year-old recession cut a huge swathe of destruction through job market.
The economic slump, which is likely to be the longest since the Great Depression of the 1930s, also produced the worst year of layoffs since 2003, outplacement company Challenger, Gray & Christmas said Wednesday in its monthly report on U.S. job cuts.
When is a cut not a cut? When it merely kicks the can down the road. How does deferring payments to the NJ public employee pension fund qualify as a budget reduction?
From the NY Post:
WPP’S OGILVY SLASHES STAFF BY 10% IN NORTH AMERICA
Madison Avenue is swinging the ax as it girds for a steep advertising decline.
WPP’s Ogilvy became the latest agency to resort to layoffs yesterday, when it cut 10 percent of its staff in North America, or 150 people, sources said.
The agency’s moves mirror those of its biggest clients, including American Express, which cut 7,000 jobs, or nearly 10 percent of its work force, in October.
Other WPP agencies – those in the US and UK, in particular – are expected to be getting pink slips next week, sources said. Its media-buying arm, GroupM, which houses Mindshare and Mediaedge:cia, is bracing for a smaller round of layoffs, they said.
With nearly 100,000 global employees, WPP’s layoffs are expected to number in the thousands.
From the Press of Atlantic City:
Atlantic City casino work force drops to lowest level since late 1980s
The casino industry, once thought immune to recession, lost more than 2,000 jobs last year as employment fell to its lowest level in two decades.
Casinos finished 2008 with 38,585 workers, the first time since 1987 that annual employment sank below 40,000, according to year-end figures released Tuesday by the New Jersey Casino Control Commission. Employment peaked at 51,560 jobs in July 1997.
Overall, the 11 casinos cut 2,125 jobs in 2008 through layoffs, attrition and seasonal adjustments in the work force. December saw a loss of 552 jobs, representing the fifth straight month that employment shrank.
One analyst noted that casino downsizing has a far-reaching effect on the southern New Jersey economy because of the gaming industry’s links to other businesses.
“Aside from the job loss, it comes from an industry that basically sets the tone for the area,” said Richard Perniciaro, director of business research at Atlantic Cape Community College. “It lets retailers know where their industry is going. It lets home builders know what’s going on in their industry.”
From the Daily Record:
Chester Twp. mayor: Landfill penalties stink
Two Morris County towns are among the defendants responsible for paying the state $43 million to cover the cost of fixing the environmental damage done at Combe Fill South Landfill, according to the terms of a settlement released Tuesday.
More than 200 defendants — including Chester Township and Washington Township — have two months to pay the state $12.7 million to cover New Jersey’s past remediation-related costs at Combe South, a 102-acre federal Superfund site off Parker Road in Chester and Washington townships.
Chester Township Mayor Bill Cogger called the settlement a “travesty for the taxpayers of New Jersey.”
“This is government suing government — the worst thing that our government can be doing for taxpayers,” Cogger said. “Residents (of Chester Township) will have to pay hundreds of thousands of dollars in addition to $120,000 in legal fees for a problem they didn’t create — we’re talking household garbage here.”
From the Star Ledger:
Towns, companies will pay $100 million to clean Morris Superfund site
Nearly 300 companies and two dozen towns agreed yesterday to pay nearly $100 million to clean up a polluted landfill in Morris County, settling a decade-old lawsuit filed by state and federal environmental officials.
The settlement, filed in U.S. District Court in Newark, provides about $30 million to keep the clean-up operation going for the next 30 years at the Combe Fill South Landfill, a Superfund site straddling Chester and Washington townships, authorities said.
The agreement, called a consent decree, also requires towns and companies that dumped waste and sewage sludge at the 63-acre site to reimburse state and federal authorities for roughly $70 million already spent on the clean-up.
“With this important settlement, we are recovering most of the money that (the federal Environmental Protection Agency) and the state spent to clean up this site,” said Alan J. Steinberg, an EPA official.
Among the hundreds of companies charged in the suit were Honeywell International Inc., Mars Inc., and Waste Management. Attempts to reach lawyers representing the firms were unsuccessful last night.
Officials in Chester and Washington townships did not respond to calls for comment. Morris County officials confirmed the settlement but said they were unable to provide details.
From MarketWatch:
U.S. Dec. ADP employment index falls 693,000
DL (7)-
How dare you challenge the secretariat!
The state of New Jersey is going to offer low-interest loans to people making under 97,000 for a family or 84,000 for one or two people and who live and work in Morristown. See this article on the Live Where You Work program:
http://www.nj.com/morristown/index.ssf/2009/01/state_to_offer_mortgage_help_t.html
grim (12)-
Friday’s number is going to be blowout.
From CNN
B.O. says we have “trillion dollar deficits for years to come.”
http://tinyurl.com/7qp8we
Who is going to lend us the money at 3%?
wow – those ADP numbers are grim……
Why do you think they moved the employ report from last friday to this friday?
Theme song for O’bamas Inaugaration:
Aftermath USA
When I crawled out of bed this morning
I could tell something wasn’t right
There were cigarettes in the ashtrays
They weren’t your menthol lights
There were beer bottles in the kitchen
And broken glass on the floor
Someone must have slipped me something
Passed out a couple days before
The car was in the carport sideways
Big dent running down the side
Never seen anything as frightening
As when I took a look inside
Smell of musk and deception
Heel marks on the roof-line
Bad music on the stereo
All the seats in recline
The aftermath staring me right in the face
I’ll get around to breaking even one of these days
My credit cards have all been maxed out
The meat in my freezer all thawed
The IRS laid the facts out
It’s all worse than I thought
The welfare lady said enough is enough
The kids ain’t been to school in weeks
Crystal-meth in the bathtub
Blood splattered in my sink
Laying around in the aftermath
It’s all worse than you think
raise your hand if you caught what is going around. I feel like a wet sock.
oh, saw the union rat again at a little extended care rehab facility last week. Didn’t look like any major renos were going on. I guess the big work dried up so now its any little non union handy man/plumber that’s going to feel their wrath.
“raise your hand if you caught what is going around. I feel like a wet sock.”
No, I haven’t received any of the $ available under TARP. However, I have applied.
Lowdown Snake
bairen vulture says:
January 7, 2009 at 8:25 am
From CNN
B.O. says we have “trillion dollar deficits for years to come.”
http://tinyurl.com/7qp8we
Who is going to lend us the money at 3%?
I can’t shake it, been fighting this thing since the day after Xmas. Keeps moving up and down. From sore throat, down to a chest cold and cough, up to the sinuses, now back down to the chest.
Feel like hell this morning, I shouldn’t have spent last night kickboxing.
22.
hehe I knew it would become a metaphor
From Bloomberg:
ADP Says U.S. Companies Cut 693,000 Jobs in December
Companies in the U.S. eliminated an estimated 693,000 jobs in December, the most since records began in 2001, a private report based on payroll data showed.
The drop in the ADP Employer Services gauge was larger than the median estimate of economists surveyed by Bloomberg News. Today’s report is the first to reflect methodological changes that ADP says will limit the differences between its calculations and the government’s payroll numbers.
Companies are accelerating the pace of firings as the recession plaguing the world’s largest economy heads into a second year. The Labor Department may report in two days that employers slashed jobs in December for a 12th consecutive month, putting total job cuts at 2.4 million for 2008, according to a Bloomberg survey median.
“Firms are continuing to react very quickly to the downturn in demand with a combination of layoffs and restricting new hires,” Nigel Gault, chief U.S. economist at IHS Global Insight Inc. in Lexington, Massachusetts, said before the report. “It’s a major drag on consumer spending.”
#16 – Bigger problem is the exit strategy. How does the government transition itself out when the entire economy is now predicated on government manipulation? All solutions result in short-term pain, therefore all solutions are unacceptable by the government.
Welcome to the New America.
re: #27 Grim you are assuming there is a strategy or a plan.
There is none other than head for the exists.
grim (27)-
“How does the government transition itself out when the entire economy is now predicated on government manipulation?”
The hyperinflation to come will take care of that. The whipsaw from deflation to Zimbabwean levels of crippling inflation will trigger even more civil unrest…if the civil unrest has not already reached a crescendo.
Gotta think that at some point, the calls for the abolition of the Fed and the SEC will gain some traction.
Strategy or Plan? More like throw everything, including the kitchen sink, against the wall. Hopefully, something will stick.
Obama to speak at 10:15-
I’m curious to see how/if he effects the market today
Also the 693,000 joblosses are all private losses, the # does not reflect the gov’t losses… OUCH
It is funny to think about this time last year, if a talking head started using the D word in a serious, here and now manner, how they would look crazy. 12 months later and we are digesting it without a lot of upset.
So what sounds crazy now that won’t sound crazy this time next year?
Take it away.
When I started this blog in the Summer of 2005, I said real estate prices would fall 30%. I was called crazy, it was an impossibility. At best real estate prices might be flat for a few years, but a decline? Never.
Now that prediction looks downright positive.
Kettle: Thanks for the info from yesterday about your experience with Adeno14. I was a little concerned but Lackland has a lot of experience with this new variant and I’m sure they won’t be taking any chances.
futures down sharply.
stu – spoke to wells agent and got quoted at 4.85 today. no points.
From the Record:
Little Falls steakhouse to reopen as casual eatery
A year after opening North Jersey’s most lavish steakhouse and planning two more, the South City Restaurant Group is getting out of the steak business entirely, hoping that a new, casual concept will be better suited for an unsteady economy.
South City Prime in Little Falls, which offered $20-an-ounce Kobe beef and dry-aged steaks topped with foie gras, will close Jan. 17 to make way for the restaurant group’s first Fire & Oak restaurant, which will serve rotisserie chicken, ground-to-order burgers and barbecued ribs.
Owner Graeme Dorras said Prime “was an expensive restaurant, and we thought we would continue to struggle along with everyone else. I believe we need to do something more in line with the economy and what people can afford.”
…
South City Prime is the economy’s third notable culinary casualty in the last few weeks. Silver Oak American Bistro in Ridgewood, a contemporary Southern restaurant, closed Dec. 27, although it may reopen under a new concept in the spring. And Joel’s Malibu Kitchen, a fixture in Ridgewood for 12 years, closed Dec. 21.
Two upscale Ridgewood restaurants shuttered?
Weakness in Bergen? Not possible.
clot,
if we see the deflation go as deep and the subsequent inflation as high as i think, then 70% off of 2006 highs might be to conservative.
In such an environment the only people buying land or homes will be those with cash. AFter the whiplash from deflation /hyperinflation, how many people will have cash much less a consistent job that isnt funded by the gov?
From the AP:
State unemployment claim systems overwhelmed
Electronic unemployment filing systems have crashed in at least three states in recent days amid an unprecedented crush of thousands of newly jobless Americans seeking benefits, and other states were adjusting their systems to avoid being next.
About 4.5 million Americans are collecting jobless benefits, a 26-year high, so the Web sites and phone systems now commonly used to file for benefits are being tested like never before.
Even those that are holding up under the strain are in many cases leaving filers on the line for hours, or kissing them off with an “all circuits are busy” message. Agencies have been scrambling to hire hundreds more workers to handle the calls.
Systems in New York, North Carolina and Ohio were shut down completely by technical glitches and heavy volume, and labor officials in several other states are reporting higher-than-normal use.
Well you can add me to the unemployed statistic. I did kind of ask for severance a year ago as I was bored, it just took them a year to bring it on. Perfect storm though, market tanks, pharma jobs dry up, our lease is up in 3 months, and just found out that we are having twins to add to our 2 and 4 year olds. Thrilled, but oh boy. Kind of have a SLIGHTLY emotional spouse at the moment. Double dose of morning sickness doesn’t help her.
Snip to our budget and snip to something else. Not sure which is going to be the more painful.
grim says:
January 7, 2009 at 8:52 am
I can’t shake it, been fighting this thing since the day after Xmas. Keeps moving up and down. From sore throat, down to a chest cold and cough, up to the sinuses, now back down to the chest.
Feel like hell this morning, I shouldn’t have spent last night kickboxing.
I have it too – I think we all got it through this blog…. Viruses are bad on the Internet…
The chesty cough is drivibng me crazy-.. I did get checked by a doctor – X-rays and suxch since it’s being going on for 3 weeks now… My doctor was coughing more than I did. I think he had different strand, As I am getting worse again….
Thanks Yikes!
I guess I’m getting close to refinancing myself then. I thought I did well at 5.5 on a jumbo (before they raised the conforming rates). Now I’m conforming with 4 years paid. I’m not going to waste my time until we see 4.75 or lower though.
Regarding whatthe’s post #14
The state government wants to help Morristown workers making less than $97,060 buy houses in Morristown.
Limits on home purchase prices range from $429,619 to $826,218
So a household making $97,060 is supposed to be able to afford a $826,218 house?
At what downpayment? What interest rate?
It must be the new math
kettle, sometime can you explain why you think we’ll be in a deflationary period for another two years? (you’ve probably done it before, but i miss a lot of postings…)
(is it a sign of psychosis that, as long as we have a decemt revenue stream, i think a deflationary peiod would be good for my family? …it’s the hyperinflationy period i fear, and feel i need to be prepared for.)
ML/BOA is doing massive layoffs this week.
A lot of Managing Directors were told that there are no jobs for them.
grim (36)-
Please update us when dirt sandwiches hit the menu.
When does the shooting start?
BERLIN/KIEV, January 7 (RIA Novosti) – Ukraine on Wednesday shut off the fourth and final pipeline pumping Russian gas to Europe, Gazprom deputy head Alexander Medvedev said.
Ukraine’s national energy company Naftogaz said the Russian energy giant had stopped supplying gas to Ukrainian pipes so there was no way for it to continue deliveries to Europe.
“Deliveries through the Sudzha station were reduced to zero at 7:44 a.m. [05:44 GMT].” Naftogaz press secretary Valentin Zemlyansky told RIA Novosti on Wednesday.
The latest closure added Austria, the Czech Republic, Romania and Slovakia to the growing list of countries receiving no Russian gas. The three other pipelines were closed on Tuesday, ending deliveries via Ukraine to Hungary, Serbia, Macedonia, Croatia, Bulgaria, Turkey, Greece, and Bosnia. Supplies to Italy, Poland, France and Slovenia are seriously disrupted.
Gazprom cut off gas supplies to Ukraine on January 1 after talks with Kiev on a new deal for 2009 and debt repayments failed late on New Year’s Eve. Naftogaz said on Tuesday that discussions would resume on Thursday.
According to Gazprom, Ukraine failed to deliver 65.3 million cubic meters of gas to consumers in Europe from January 1-4, and the Russian gas monopoly demanded that Kiev make up the shortfall.
The Gazprom official spokesman said on Wednesday that Ukraine had stolen another 21 million cubic meters of gas.
“In the past 24 hours under the pretext of technical requirements Naftogaz has stolen 21 million cubic meters more gas intended for delivery to Europe,” Sergei Kupriyanov said on Vesti news TV channel. “In these conditions we have no choice but to reduce deliveries by 21 million cubic meters.”
European Commission members and the leaders of the Czech Republic, which currently holds the rotating EU presidency, will meet in Prague later on Wednesday to discuss the gas conflict between Russia and Ukraine, a source in the European Commission told RIA Novosti.
http://en.rian.ru/business/20090107/119386966.html
clott,
tell me your thoughts on this. i recently called the mortgage arm for pru fox and roach (trident mortgage) regarding a construction to perm loan. broker said programs were still available with just 5% down of the final cost of construction estimates. and closing costs did not have to be sourced until the day of closing. even if this program comes right from their warehouse do you think this is legit? the upfront points have to be exuberant if it’s truly available.
“ML/BOA is doing massive layoffs this week.”
Frank,
Where’s the recession?
I think you need to snip something else and it ain’t your budget! Good Luck, actually infant twins is a full time job for two people, having one parent home the first year is important.
NJkiwi says:
January 7, 2009 at 9:20 am
Well you can add me to the unemployed statistic. I did kind of ask for severance a year ago as I was bored, it just took them a year to bring it on. Perfect storm though, market tanks, pharma jobs dry up, our lease is up in 3 months, and just found out that we are having twins to add to our 2 and 4 year olds. Thrilled, but oh boy. Kind of have a SLIGHTLY emotional spouse at the moment. Double dose of morning sickness doesn’t help her.
Snip to our budget and snip to something else. Not sure which is going to be the more painful.
This is BIG!! The virus is spreading all over the world.
“Satyam Computer Services Ltd. Chairman Ramalinga Raju resigned after saying he falsified earnings and assets, prompting a collapse in the stock of India’s fourth- largest software services provider. ”
“Raju unsuccessfully tried to sell two companies to Satyam last month in a final attempt to plug 50.4 billion rupees ($1.04 billion) of “fictitious” cash on the company’s balance sheet, he wrote in a letter to Hyderabad-based Satyam’s board today. Profits have been inflated for “several years,” he said. ”
http://www.bloomberg.com/apps/news?pid=20601091&sid=aSR2iC3g2LAQ&refer=india
Interesting Pulte homes pulled out of Long Island this week, sold every development,contracts pending, finished units, half finished units and plots to a local developer in bulk for 8 figures. That says one of three things, either they are crazy hard up for cash, LI market is dead for a few years to come or both.
#51,
Since when do you trust an Indian guy?
Well Let me see…
In other coutries when hyperinflation hit people move to safe currencies (US DOLLAR) where will US citizens run if hyperinlfation hit?? EURO – I do not think they are in any better shape…. Do you trust YEt that much? Yuan?
So in case of hyperinflation it wil be bad as we have nowhere to hide. Stock will be destroyed as buisnesses will not be able to operate.
There is not enough gold in the WORLD to be used as a “material currency” – at least at today’s gold prices.
So i’d say while high inflation – 15-20% is beneficial and desirable, hyperinflation will be bad, BECAUSE we do not have stable currency to peg prices to.
When we had hyperinflation in Soviet Union (Russia) all prices were tied to a dollar, and people were even getting salaries in dollar sometimes (illegal but a lot of companies did it).
Who woudl think that Satan’s Computers Services would do something wrong?
“Satyam Computer Services Ltd. Chairman Ramalinga Raju resigned after saying he falsified earnings and assets, prompting a collapse in the stock of India’s fourth- largest software services provider. ”
RE: 51
http://dealbreaker.com/images/thumbs/Satyam_Computer_Services_Ltd_070109.pdf
NJKiwi: congratulations! for morning sickness, my friend swore by preggie pops and seabands.
i swore as i threw up in the gutter. to each their own. ;)
When I started this blog in the Summer of 2005, I said real estate prices would fall 30%.
I am glad that I came across your name in Star Ledger article in 2005. The Google search lead me to you blog site. I was contemplating buy decision in 2005. Now I am going to wait out till 2010 at the least.
John (55) – LOL!
John – I am assuming the word Satan does not refer to Indian companies in general.
There are rotten apples in every society, so far I have seen more in US corporations than Indian ones.
So let me understand this, we can lose about 800k jobs a month from now until Memorial Day. So that’s about 4 million jobs in total. I can see these people going out and buying houses, new cars, TVs and expensive clothes.
Oh yeah, those CNBC guys and John have it totally right, the 2nd half recovery is just around the corner!!
Hooray!
Thanks John, that will be snipped. My wife has stayed at home with the first two and will with these too, I just have to get my job act together.
And Alia she will try anything at the moment! Never had it with the first two.
The bigger irony is that Satyam actually means “truth”
All Hype says:
January 7, 2009 at 9:40 am
So let me understand this, we can lose about 800k jobs a month from now until Memorial Day. So that’s about 4 million jobs in total. I can see these people going out and buying houses, new cars, TVs and expensive clothes.
At some point One wouls expect job losses to slow down – just like home sales neve go to 0….
Will it be at 10% unemployment or at 40% that is the real question.
I can state it before – Until goverment turns to protectionism, and policies that support manufacturing in the USA job losses will continue.
2ndary (48)-
Almost sounds too good to be true. There is so little construction-to-perm happening in my area that I don’t really follow this category anymore.
I think the only way that program can be for real is if they portfolio the loan…or they just plan to hold it and sell it off the line once it seasons.
vic (51)-
Add fraud to the US’ other two big exports, inflation and debt.
kiwi: lemonade, mint teas… and eating many small snacks throughout the day. drops in blood sugar brought the worst out (for me, ymmv).
Sean: ref 47, “So when does the shooting start?” The EU is sending a high level diplomatic team armed with a strong demarche and promises to buy Russian oil at $70 a barrel. (Sarcasm off)
All these analysts are a bunch of morons. CNBC is the worst. As far as local realty Jeff Otteau is the worst.
Bond of the day:
JFK AMERICAN AIRLINE TERMINAL MUNI BONDS
NY *NYC IDA AMRN-JFK ARP CPN:8 MTY: 8/01/2028 64971SCD(9)
ITW 10mm @ 11.50%
secured by leasehold mortgage for NEW AA terminal 8&9 at jfk
Joey, ref 43: that only shows that many people in gov’t and the RE industry still saw nothing wrong with the bubble.
Al (64):
Totally agree with you. Now that Bush is out of office, companies will now lay people off like there is no tomorrow and put the blame all on Obama. There will be no implementation of protectionist policies for at least a year so we will watch unemployment skyrocket.
@65,
yeah, it’s fishy but i almost want to get pre-qualed just to see the underwriting hurdles. if they aren’t too bad there are some nice plots of land in decent neighborhoods in philly for under 100K.
John (52)-
Pulte is toast. Dead man walking.
2nd (73)-
You buy vacant land in Phila. County, you’ve got brass ones.
Al 41; Grin 24 (this is getting like the Match Game): I caught my flu from a Romanian foreign ministry official at a conference the last week of October and am just now getting over it. I call it the Black Sea Crud. Many of my friends have the same thing, characterized by a cough that won’t go away.
DL,
that only shows that many people in gov’t and the RE industry still saw nothing wrong with the bubble.
Or spending over half of your GROSS monthly income on housing
clott, you sound like my parents. i’d stay in the center city box. my wife is afraid of her shadow but feels safe in our neighborhood, so i couldn’t stray too far from where we are.
it’s either build a sfr for $100 sqft. or pay $500 a sqft for a shoebox condo.
i’m still afraid of the suburbs.
DL (76)-
I have a follow-up question to your flu thing, but I really don’t want to ask it.
A rash is a flu symptom, right?
2nd (78)-
Why not just wait for the market in Philly to collapse, then just buy whatever you want?
Gotta think the dive where you are won’t take long to find bottom. The pretense of economic health in your area has evaporated pretty fast.
Joey says:
January 7, 2009 at 9:58 am
DL,
that only shows that many people in gov’t and the RE industry still saw nothing wrong with the bubble.
Or spending over half of your GROSS monthly income on housing
It is funny because after 401K, taxes, Flex, health insurance withdrawals my paycheck is about half of what my gross would be.
When I started this blog in the Summer of 2005, I said real estate prices would fall 30%.-
Don’t get to post often but I read most every day, I to would have bought if it wasn’t for this site. Thanks-
From MarketWatch:
U.S. deficit to total $1.2 trillion this year, CBO estimates
Economic stimulus plan will add to deficit, CBO says
CBO says recession will last ‘well into 2009’
zieba-
Feeling better about SRS now?
Welcome to the land of Maalox.
At least we can count on S&P and Moody’s to keep up the charade of the AAA rating on USTs.
Or else…
“Tough decisions… Painful cuts…”
With a thread title like this, expect a lot of moyels to join the readership here.
I think we’ll be able to register the effect when the “cutting” analogies begin.
Also, new posters with names like “Izzy”, “Hyram” and “Moishe”.
clott,
i’m there with you. however, we have our first child arriving in may and although my wife says she’s still on board with sticking in our rental, i fear the walk up might get to her. let’s hope not but at this point we’ve both agreed to sign a new lease in march. my wheels just started to spin a little after i heard about the construction to perm loan.
re: “protectionist policies”
We are not going to get out of this anytime soon our factories are gone and we are importing huge amounts of energy.
Even if we cancelled NAFTA and the WTO today and to returned to bilateral trade, conditioned on workers’ rights, human rights, and the environment it would take a decade to ramp up, and worst of all the younger workers at the bottom of the food chain won’t want to do that kind of work those brats the Gen Yers are too damm spoiled.
Moyels googling…googling moyels…
Curiouser and curiouser.
I don’t think you can go back to protectionism now that the globalization genie is out of the bottle without a corresponding decline in the standard of living. That means decreased perks, benefits, and entitlements in both the public and private sectors.
I like that bond of the day!!! If the relaxing of the AMT Munis are retroactive it will soar like a plane.
A headhunter just called and I picked up by accident, he actually has a job
Sean (89)-
We’d also be down to one trading partner, Canada:
“Even if we cancelled NAFTA and the WTO today and to returned to bilateral trade, conditioned on workers’ rights, human rights, and the environment it would take a decade to ramp up…”
John (92)-
Just give us a heads-up when you think the muni bubble is about to explode, ok?
Ye’sur, SRS should be good for a 5-10% scalp as will QID. I know there’s more, but government intervention made it for a trust noone environment and I go home with my chips.
Here’s the QID setup:
http://stockcharts.com/h-sc/ui?s=NDX&p=D&b=5&g=0&id=p19089520169&a=157454446&listNum=39
“We’re all fvcked, just to varying degrees”
BTW, Bergen country becoming unhinged, seeing more and more commercial vacancies on routes 4/17.
“muni”
ha ha ha
wouldn’t touch with a 10 foot pole.
but hey, that just me.
SAS
sas (96)-
Setting up to be the biggest pump-and-dump of all time.
i got the cold, too.
the stress of the house purchase, securing a mortgage, and crappy weather probably helped it.
hit me like a ton of bricks monday night and im lagging today.
#88 Sec
One thing to watch when you build your own place, is that your taste and layout may not suit others and that will hurt you when you try and sell.
My friends father built a place out in PA. The friend said that he had pulled ideas in from a lot of different houses they had lived in when she was young. While the 50K circular driveway was a bit OTT, the big problem I saw was that the layout was odd. There was a stairway off the kitchen that lead to a landing with a window. No doors just a landing. It looked weird. It was supposed to be like a sun room, but it just didn’t work. If he had replaced the window with doors to a 1 foot veranda, it would have looked a lot better.
Cookie cutter McMansions have one advantage, they are designed by an architect that has no emotional connection to the property. They are designed to appeal to the widest audience.
you blokes out there that are ill, you need some tomatoe & garlic soup.
-saute a bunch of minced garlic in olive oil.
-then, add some paprika, saute for a minute (don’t scorch)
-add a can of tomatoe juice
-add 1/2 cup red wine.
-heat everything up until hot.
quick & easy, and fixes in a snap.
just don’t buy food & ingrediants made in China, cause you will feel 10x worse, and will develop cancer in about a week or 2.
SAS
My bad prediction of the day:
Stocks will shake off early losses and finish the day close to 0 gain/loss.
(Remember, bad prediction for the day.)
“Setting up to be the biggest pump-and-dump of all time”
you got that right.
sounds like someone has been hearing me out regarding “pump & dump economics”.
SAS
sas (102)-
To me, munis are the logical first stop for retirees/conservative investors who are being forced into the risk spectrum.
This will be the one that enriches the brokers beyond belief and lops off little old ladies at the knees.
Got Friskies?
word to the wise:
if you don’t think there are pump & dumpers on this blog…
you best think again.
SAS
@99,
totally agree. we’re a long way from anything outside of an idea but would keep it traditional. i mean there is only so much you can do with a row home anyway.
It’s not looking good for a lot of us. And I just saw this on CNBC: http://www.cnbc.com/id/28536380 US Could Lose 1 Million Jobs this Month: ING.
That sort of thing is going to hammer cities across the nation.
“pump & dumpers”
for the blog record:
i ain’t a pump & dumper. everything i say, look into & research for yourself.
like i’ve said before, i’m just some idiot on the web whom hasn’t left Lodi since 77.
:)
SAS
What a concept: the ability to collect safe, predictable yield from states and municipalities that are hemorrhaging tax base and choking on corruption, mismanagement and insolvency.
Senate Dems accept Burris.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ai_6NYX8u5P4
This should be great for housing.
Blago should’ve named himself Senator.
General Real Estate Question:
If I am a buyer interested in a specific property in the current market, what is the best approach?
1) Select my favorite local RE Agent to show me the property (I don’t know any at all)?
2) Contact the listing agent (who usually will send another agent from the same RE Agency to be my Buyer’s Agent) for a showing?
3) Some alternative.
Any thoughts would be greatly appreciated.
make (110)-
Will the gubmint deliver a print on Friday?
IMO, all the unemployment numbers have been falsified from the get-go…but if there were ever a time they’d want to cook the numbers, it’s got to be now.
(113)-
that should be, a “negative 1mm print”.
SJ (112)-
Get your own agent. Dual agents (listing agent or someone for his company) cannot negotiate for you if you make an offer.
Clot(113)
They were lying about this when they didn’t really need to. Now that their back is to the wall please feel free to get the boots out to protect your toes from the BS.
Clot (115)
Thanks!
Let’s see how far O can drive down the markets while he talks…
I don’t think anyone can beat Shrub, Klink and Bergabe in this department.
You people don’t understand, it’s the media’s fault for all of this.
“If I am a buyer interested in a specific property in the current market, what is the best approach?”
Go to sleep and come back in 2010.
BC (120)-
Tell him to come over and help me dig.
Watch this movie clip please to put things in context, then go to my next post since we can only post one link.
http://www.youtube.com/watch?v=7GSXbgfKFWg
next link… IOUs…
http://www.latimes.com/news/local/la-me-tax-refunds7-2008jan07,0,7471181.story
Re the 2 month virus- a good excuse to use “Purple Drank”.
clot 46
dirt sandwiches???
you mean like this?
PORT-AU-PRINCE, Haiti – It was lunchtime in one of Haiti’s worst slums and Charlene Dumas was eating mud.
http://www.msnbc.msn.com/id/22902512/
NJkiwi says:
January 7, 2009 at 9:41 am
T”hanks John, that will be snipped. My wife has stayed at home with the first two and will with these too, I just have to get my job act together.
And Alia she will try anything at the moment! Never had it with the first two.”
kiwi,
also try anything with ginger – ginger ale, ginger cookies, ginger tea, etc. Helped my wife when she was carrying our twins.
How could NJ increase property tax? The property value is dropping and dropping!!!!
I am soooooo angry!
“Disbelief” is how 55-year-old John Kane, a financial adviser, describes his reaction to the assessed value of his home in Hampton, N.H., which soared 55% to $850,200 recently, from $549,300 in 2007. His annual taxes jumped 30%, to nearly $14,000. “We see empty houses, for-sale signs,” Mr. Kane said. “And they value our houses like this?”
http://online.wsj.com/article/SB123111472983052521.html
alia,
re deflation, will answer later, busy…. gotta keep client happy!
Oblamma keeping Sheila Bair.
She’ll fit right into the new secretariat.
NJkiwi says:
January 7, 2009 at 9:20 am
just found out that we are having twins to add to our 2 and 4 year olds. Thrilled, but oh boy. Kind of have a SLIGHTLY emotional spouse at the moment. Double dose of morning sickness doesn’t help her.
Kiwi: I am still feeling the need to defend “home schooling” my 2 year/2 month-old. Last night he decided that he was done with his bath and wanted to go to bed. He called out into the next room for “mama”, then turned to me and said “papa go downstairs…..to couch….go watch TV”.
This morning my wife is eating saltines and he says “….baby in tummy is upset…”
I think they ment the guy having twins is a pump and dumper.
sas says:
January 7, 2009 at 10:35 am
“pump & dumpers”
for the blog record:
i ain’t a pump & dumper. everything i say, look into & research for yourself.
like i’ve said before, i’m just some idiot on the web whom hasn’t left Lodi since 77.
:)
SAS
DL (128)-
In about 4-6 months, those won’t be teabags in those people’s hands.
Expect “tax revolt” to be one of Google’s biggest searches this year.
Even funnier, my assessment just fell 150K in my house in one year and taxes up $200 a year. They adjust rates when they adjust assessemnts. If you house fell to one dollar in value the cops, firemen and teachers still get paid.
134…adds a whole new meaning to the term “home School”…..
Q to the Board:
Is there an old wives tale that morning sickness = girl…..last time around my wife was completely free and clear…this time it’s as if she is looking at naked pictures of clot…..
Another one
http://tinyurl.com/8tqegj
Real-estate executive Steven L. Good was found dead of an apparently self-inflicted gunshot wound Monday in his Jaguar in a forest preserve outside Chicago, said the Kane County Sheriff’s Department.
Actually I stopped buying bonds Christmas Eve, I went crazy in December when they were crazy cheap. I think this bond run up was too quick and too fast. That said bid ask spreads are still so wide I ain’t selling what I bought. For now I will just bang out my mortgage the next few months and then start jumping back in on the corporate side after we get horrific 4Q, 1Q and 2Q numbers. But by then the companies left standing will be survivors and fear will be fully priced in. I loved an investment grade corporate last month at 14%, I am not even in like with an investment grade corporate this month at 7%. Plus Chi Fi made me take a hard look at my moral hazzard approach, basically my theory was Ben and Hank never met a bailout they didn’t like. Well there is a new sheriff in town and the viable bail out candidates have been bailed out and the new dogs are not getting a quick bailout in a hostile enviorment. That said my favorite was Larry Flint even ask for a “stimulus” package as X-rated sales have gone “limp”. Now that every pig wants a hand out the spigot will be turned off.
#136 that is an old wives tale but proved to be true in our house. 2 girls bad m/s both times but even worse with 2nd.
What will it take to put Madoff behind bars? Does the guy need to buy drugs on the street before he goes?
http://www.bloomberg.com/apps/news?pid=20601087&sid=arwjwFtMadRY&refer=home
Hype (140)-
This guy has friends and help all the way up to the top.
He is a flight risk, assassination risk and has violated his bail agreement, yet the judge “needs more time”?
Sounds like the folks at the top need him to go away more than they need him going to trial.
NJKiwi – Congratulations! Gingerly suggest that your wife try every old wives’ tale remedy there is – something will work. Sometimes it’s saltines before she even sits up in bed in the morning, sometimes it’s protein, like an egg, last thing before falling asleep. I know it’s miserable but it should be over by the 12 week point, right?
Secondary Market says:
January 7, 2009 at 9:54 am
@65,
yeah, it’s fishy but i almost want to get pre-qualed just to see the underwriting hurdles. if they aren’t too bad there are some nice plots of land in decent neighborhoods in philly for under 100K.
Sitting on my brain. The other day I was just searching land prices. With construction prices coming down and probably land prices bottoming first, it may make sense to build your own if you have the stomach for it.
clot,
bull market in these on the way?
http://bottle-wicks.com/images/Lighting%20Bottlewicks%20Gray%20Scale.jpg
awfully easy to re-purpose…..
clot,
how long before madoff has an “accident”
vodka (144)-
The classic Molotov c@cktail requires only a rag for ignition.
My Madoff prediction. Trial in 18 months. Plea before trial with sentencing in 6 months. He keeps his mouth shut and they don’t look too hard for the money. 2 years of freedom for silence and then off to minimum security for the rest of his life.
Some of those places don’t even have fences.
Or Madoff eats a bullet
“My Madoff prediction. Trial in 18 months. Plea before trial with sentencing in 6 months. He keeps his mouth shut and they don’t look too hard for the money. 2 years of freedom for silence and then off to minimum security for the rest of his life.
Some of those places don’t even have fences.”
I hear they even have conjugal visits.
For morning sickness try taking a Unisom before bed, and if she can stay awake, a half a Unisom in the morning, and another half in the afternoon. Doxylamine Succinate only, not the gel caps. Works great, if you can stay awake. As a Category B, it’s Much safer than any drug that would be prescribed (Category C’s).
I think a different pregnancy indicates a different sex. For what it’s worth, I was sicker with my daughter than my sons.
Congratulations!
Secondary Market says:
January 7, 2009 at 10:12 am
clott,
i’m there with you. however, we have our first child arriving in may and although my wife says she’s still on board with sticking in our rental, i fear the walk up might get to her. let’s hope not but at this point we’ve both agreed to sign a new lease in march. my wheels just started to spin a little after i heard about the construction to perm loan.
Sort of the same situation as you two years ago. My first child is now three. I stayed in a 4th floor walkup until he was 15 months. Dragging stuff from Costco and the stroller was a pain. Moved into an elevator building. Much happier. Of course we moved because a second one was on the way. Unless your on the first or second floor, you may feel similar to me.
Frankie Goes to Hollywood – Relax – You guys are worried about Jobs to much.
In efforts to limit bandwidth, I am multiposting in this one post.
morning sickness:If your morning sickness is beyond bland crackers, ginger candies, ginger anything, your next stop is calling your OBGYN and asking about Zofran dissolvable tablets.
[I’m sorry I can’t relate, I never had more than a bit of queasiness with my kid.]
latest respiratory crud I’ve seen a lot of it at work. Starts viral, goes bacterial, restarts at another site. I don’t have any magic bullets. Rest, lotsa fluids, take a multivitamin, advil/motrin/tylenol for fever, rest(!) See a doctor if you really aren’t improving or are getting worse.
the gastrointestinal bug usually viral, can be bacterial in bad cases. Keep hydrated. Many many small sips of broth, gatorade, dilute juice. Hie thee to the physician when you – can’t keep anything in (either end.) have pain – see blood coming out either end (goes without saying, no?)
Get your flu shot if you are still healthy. [do not start the vaccine debate, I ain’t listening to it.]
Rest, stay home – keep your virus laden fomites to yourself –
That’s all.
sl
John (152)-
You’re right. We’ve already proved you can sustain the world’s biggest economy by just selling each other houses and financial products. Other than people to fill those jobs, no other employment is needed.
Those other people are the suckers you need to get hooked on credit, so that they can eventually be neutralized and placed into lifetime servitude.
It just occurred to me that all new construction are mcmansions. Dont they make new capes or ranch homes anymore? Suppose i don’t want a 2,500 sq ft monster home…
Whats the logic/trend there?
I assume this was discussed to death in the past.
@151,
we’re on the second floor (previously had a 5 story walk up) so it’s not “that” bad. wife is 5 months and makes it up and down no problem. but like you said, add stroller, baby and costco items, it becomes a different ball game.
veto (155)-
If you build a wide variety of new homes, you cannot promulgate a bubble or ensure that there will be enough future multi-family suburban slum housing for all the people the banks and gubmint intend to impoverish when they pop the bubble.
There are already enough capes and ranches, the variety is being provided by the McMansions.
Think I’m nuts about trapping people in one place…or lifetime credit servitude…or suburban slums?
All the above ideas came from Elizabeth Warren. I just take them to a further point that she does.
Nick (158)-
That’s like saying you introduce variety into your diet of Big Macs and candy by eating dirty water hot dogs.
Re Madoff,
He certainly must know where some bodies are buried on Wall Street and in DC to still be walking the street.
I am talking to a selling prospect (CPA, no less) who has an excellent job offer in SF…but is 160K underwater on his mortgage. He is paying his mortgage fine here, but he really wants to take the job and move.
I suspect some “unforeseen circumstances” are about to befall him. He already had the wise idea to stop paying his mortgage (whew!).
Short sale!
Is there anyone who knows how to obtain data on how many US mail packages are sent per day/week/month?
It’s like an infirmary in here today, everyone’s either sick or pregnant. congrats to the parents to be and chicken soup for the rest.
155 veto
and to add to the lack of variety all the mcmansions are basicly identical; granite, 2 story entrace foyer, no closet space other then master walk in, 3 feet between neighbors home, and high ceilings. creativity is a thing of the past
Q?
how many “new listings” will come on by friday?
Just one of the many hazards of skiing
http://www.thesmokinggun.com/archive/years/2009/0106091vail1.html
136….You need to start hanging out here….http://www.urbanbaby.com/
(second time I have said that in as many days)
“madoff”
u blokes are focus too much on one person.
madoff is black economy instutionalization.
yeah, he knows people. those 2 suicides..weren’t suicides.
Madoff is alot more than 50 billion & there alot more Madoffs out there.
top down corruption (all the way to the IT guys who look over servers & firewalls).
but, hey.. what do i know?
SAS
[166] anon
I’ve been on that lift. I never knew the seats weren’t fixed.
I’d prefer that to the 2.5 hours I spent on a lift at Ragged Mtn., on the coldest day of 1978, after the lift motor and the backup motor both quit. It was my 2nd day skiing and damn near became my last.
and you trust the SEC and your little online brokerage account…
ha ha ha!!
SAS
I am talking to a selling prospect (CPA, no less) who has an excellent job offer in SF…He already had the wise idea to stop paying his mortgage (whew!)
As long as his new job doesn’t plan on running a credit check…
don’t worry,
Omama will save us.
sheep say:
omaaaama…..omaaamaa
bah!
SAS
#138,
John, smart money is talking, sell bonds now. I am seeing massive sell orders today.
coop (165)-
Way too early. Wait til the week after the Super Bowl. ;0
John,
I see that Frank has become your lackey. Enjoy ;)
Loved that RE Tax article in the WSJ. It’s only a matter of time before people take up arms. I am amazed that the isuse has managed to fly under the radar for so long. It’s past time for people to counter-balance the dream of home ownership with the idea of a huge ball and chain being shackeld to your leg. Once you buy in NJ, you are basically signing up to be the funding source for a corrupt and morally bankrupt political machine. This, more than any other reason, has kept me on the sidleines.
“8:38AM MGM Mirage announces CitiCenter changes; co is postponing the opening of the Harmon Hotel to late 2010 and canceling The Harmon residential condo component (MGM) 15.96 : Co announced certain scope changes related to The Harmon Hotel & Spa which include postponing the opening of the hotel to late 2010 and canceling The Harmon residential condominium component. The Harmon is just one component of the CityCenter complex. The Harmon as developed would have had approximately 200 residential units, of which 88 are under contract to be sold. Purchasers will be entitled to receive refunds of their deposits, but will be given the opportunity to purchase units at the Residences at Mandarin Oriental Las Vegas, Vdara and Veer Towers. With the cancelation of The Harmon residential component as well as other additional cost savings the company now anticipates total cost savings of approximately $600 mln up from its previously stated $400 mln. In addition, by postponing The Harmon Hotel by one year CityCenter will defer approximately $200 mln in construction costs to complete the interior fit out of The Harmon. Co says “By canceling The Harmon condominium component, we will be able to avoid the need for substantial redesign of The Harmon resulting from contractor construction errors. In taking these steps related to The Harmon we can remain focused on maximizing the operating performance of Aria, Mandarin, and Vdara to their desired levels.” All other components of CityCenter remain on schedule for a December 2009 grand opening.”
No recession there!
JBJB (176):
I’ve been telling my wife that the whole government in NJ (state, county, local) will be in for a rude awakening for years to come. There was no way that the people in the private sector could afford to continue to pay for the benefits of the public sector. It appears that time is coming sooner than later.
New York Times Bankrupt by May?
http://www.theatlantic.com/doc/200901/new-york-times
No recession here.
Simple solution to NJ State Pension Problems is readjust all Pensions to the maximum allowed by the Pension Benefit Gurantee Corporation (PBGC). This places all NJ retirees at the PBGC maximum level allowing them to have maximum parity with the Private Sector. Unfortunately that also causes a 50-75% reduction in their pensions.
Dang. Almost forgot. Pregnant women with morning sickness:
If you aren’t already taking Premesis (a prenatal vit that helps morning sickness) maybe this will help.
I took it during my pregnancy (maybe that’s why I wasn’t too sick?) I dunno.
sl
Grim, Clot or anyone else:
Can you give me some history on the following property ?,,,#3 daughter is interested in buying it….I have been trying to get her & family to wait until at least later in ’09 but she is determined to move foward to buy their own starter house. Oh well !:
Thank you Very Much,
CommanderBob
103 Overlook Dr. Dumont NJ
ML # 2849474 Cape Cod
Stu says:
January 7, 2009 at 12:33 pm
New York Times Bankrupt by May?
——————————–
Stu,
The NYT was morally bankrupt a long, long time ago.
Jim
Stu
Not to mention, the number of people who think paying egregious property taxes is a badge of honor. There are two primary drivers behind this thinking as I see it. One, they think high RE taxes mean better schools, despite almost no evidence to support such a claim. Two, they see high property taxes as a means to keep the rift-raft out of their neighborhood which adds to the exclusivity factor. They don’t often realize they are simply feeding a beast that preys on their standard of living, and the government’s appetite for corruption and bloat grows much faster than their salary.
veto says:
January 7, 2009 at 11:49 am
It just occurred to me that all new construction are mcmansions. Dont they make new capes or ranch homes anymore? Suppose i don’t want a 2,500 sq ft monster home…
Whats the logic/trend there?
I assume this was discussed to death in the past.
Simple math….
More House = More Profit for Builder
44 alia
kettle, sometime can you explain why you think we’ll be in a deflationary period for another two years? (you’ve probably done it before, but i miss a lot of postings…)
Why 2 more years of deflation? We will not exit deflation until a significant amount of the bad debt that has crushed the system has been purged or until the dollar collapses. Given that the dollar is unlikely to collapse in the near term we have to wait for the debt to be purged.
The catch is that no one, whether American, European, or Chinese wants the banks to come clean on the amount of bad debt they have. Such a move would crush the global finance model and cut off the massive revenue streams that governments and corporations reap from the global finance model. In the US, the alternative to coming clean on bad debts is a slow and drawn out write down combined with the government buying bad debt from the banks through primary and secondary channels with tax payer money, while at the same time handing the banks huge sums of cash to prop up their balance sheets, attempting to keep them solvent (including the shady level 3 assets).
I think that it will take about 2 more years to accomplish all of that. There are already huge stresses on treasuries and currency markets in general, so they cannot run the process to fast or they risk destabilizing the dollar, which they know and will not do at this point.
All the jobs programs, tax cuts, mortgage cram downs, are just bread & circus to keep you distracted while the public purse is passed around to the modern day robber barons. While the robber barons know exactly what they are doing, many of the politicians involved are doing whatever they are told they must do to “save” the system. A system that cannot be saved because the system of growth for the last 10-15 years has been based almost entirely on debt expansion instead of increased productivity of (useful) material goods. And no, Chinese candle holders and pillows from Pier 1 do not count as useful goods.
The other problem with this model is that of all the people who can afford said goods, they only need so many cars, or sinks, homes, tables, beds etc. The current system was based on generating artificial consumer demand and funding that demand with debt expansion.
You are looking at one of the “flaws” of capitalism. Systems can become too efficient. Once people have their basic basic needs met and all have new PC’s and plasma’s then how do you maintain economic growth? Either through massive population growth, by getting people to stop saving money and start buying unnecessary goods, or a combination of the 2. The global capitalistic production regime has become so efficient that it has exceeded the demand for “needed” goods of the world market.
Once deflation slows, we will likely see massive inflation, potentially hyperinflation, as the huge sums of cash that are being printed and given to the banks is currently being segregated from the open market by being deposited with the Federal Reserve (who then pays interest to the banks on these so reserves, hurray for double dipping). Once deflation slows and even moderate inflation starts, the banks will need to start putting the horded cash into public circulation. If Bernanke cannot pull the excess amounts of cash from the market as it enters you can easily end up with runaway inflation.
Also remember that once deflation slows and the government has taken on an astronomical amount of the bad debt (about 8.5 trillion to date), bernanke needs inflation to take place in order to devalue the debt. The catch is that given the amounts of money being printed and that will hit the market at some point it is unlikely that bernanke would be able to prevent excessively high inflation. The problem is that even if he finds a way to pull enough money out of the market and quickly enough, there will likely be severe financial consequences, such as investors shunning the US dollar due to valuation uncertainty as well as a plethora of unexpected consequences. (also not e the Federal Reserves proposal to offer its own class of debt if congress will give them authorization to do so, this could be another outre for devaluing debt)
(is it a sign of psychosis that, as long as we have a decent revenue stream, i think a deflationary period would be good for my family? …it’s the hyperinflationary period i fear, and feel i need to be prepared for.)
No, but it will be painful for everyone in the short term. Society as a whole will see a decrease in living standards and the aspects associated with that, the question is does your family feel less pain then most. It is possible to profit handsomely during such a period, but you could just as easily lose a huge amount. This is a question for the finance experts. Ask 3B or BC Bob
The problem with deflation is that it is, and will continue to disrupt supply lines and production chains. This will have a negative impact on everyone; the only question is to what degree. Both deflation and hyperinflation can be hedged against or insulated against but that is likely a contentious and long debate.
Cheers!
More House = More Profit for Builder
Fixed costs involved in new construction are relatively high, regardless of the size of the house. Therefore, by building a larger house you can spread these high fixed costs over a larger square footage effectively lowering the cost per square foot to build.
If the builder built a ranch, you would look at the ranch and proclaim that it was radically overpriced, especially compared to the much-larger McMansion.
The times needs to stop printing the paper version. It is only wasting the precious resources of this planet filling it with trash.
Per Dealbreaker;BAC layoffs this week, BAC commodity desk already gone, CMBS next up.
Looks like MER players stayed & BAC got the door.
#35
“spoke to wells agent and got quoted at 4.85 today. no points.”
saweet. i was at 5.0 two weeks ago. maybe we’ll be down to 4.5 in a month
“Interesting Pulte homes pulled out of Long Island this week, sold every development,contracts pending, finished units, half finished units and plots to a local developer in bulk for 8 figures. That says one of three things, either they are crazy hard up for cash, LI market is dead for a few years to come or both.”
#52
I’m going with C.
Frank you are soo right. I bought a lot of cheap stuff in December and wanted to unload a measly 50K in shorter term closer to par munis I already owned earlier this week. Fidelity bond trading desk actualy asked me not to put my teansy order in all at once for bids as it might move the market, mabye I could do a little each day, yea maybe they won’t be able to front run me. Used to be a few million to get that warning. Selling to me does not mean much. Some of the 10 bonds I bought at 7,500 in December are already at 8,500, sellers maybe be selling to lock in quick gains not because the sky if falling.
Frank says:
January 7, 2009 at 12:20 pm
#138,
John, smart money is talking, sell bonds now. I am seeing massive sell orders today.
I don’t get it, borrowing money at 4.85% to by an asset that is falling in value is insantity. The mortgage rates should be below zero percent. It makes no sense to borrow even at 1% to buy something that is falling in value. Buying assets that are trading at below their intrinsic value such as certain MBS lonas, bank loans or bonds makes sense buying assets that are overvalued on margin (house with a mortgage)is a dangerous leverage game.
skep-tic says:
January 7, 2009 at 1:08 pm
#35
“spoke to wells agent and got quoted at 4.85 today. no points.”
saweet. i was at 5.0 two weeks ago. maybe we’ll be down to 4.5 in a month
#112
“If I am a buyer interested in a specific property in the current market, what is the best approach?
1) Select my favorite local RE Agent to show me the property (I don’t know any at all)?
2) Contact the listing agent (who usually will send another agent from the same RE Agency to be my Buyer’s Agent) for a showing?
3) Some alternative.
Any thoughts would be greatly appreciated.”
if you are confident about the details of buying a house, maybe just skip getting an agent and go directly to the selling agent. you will sign a dual agency agreement, but I would treat him/her as if she was an opposing party (no duty of loyalty to you).
If you have more time, I would interview agents in the area to try to find a good buyer’s agent since you will be paying for the commission either way
Kettle1:
Thanks for your explanation. I agree with it wholeheartedly. I’m not looking to profit off of deflation, but will most likely be golden (physical) come hyperinflation time.
So how does the FED remove the excess cash from the market when they need to?
New thread, move it on over.
136. Chifi
Re: old woves tale, morning sickness = girl
True for me, I’m 8 months and still nauseous and ultrasound says its a girl.
This pregnancy is kicking my azz.
My boy was a breeze, I walked a large pitch and putt course the day before going into labor. Now I can barely manage the stairs to get laundry done.
bob (182)-
Sorry. Not my MLS.
#179
I am a Sunday NYTimes subscriber, but I am always an inch away from cancelling. They would like to think that outside forces are doing them in, but in reality it is their own biased reporting and obsessively narrow focus on ultra-luxury consumers that makes them irrelevant to most of their longterm audience
Guess what? Your mask is totally off and you’re nothing but a lowdown Marxist-Leninist commie. What do you want? State control of everything? Just be quiet and stop this sort of critism of democratic economic institutions. There’s absolutely nothing wrong with capitalism except for the free reign given to commies like you to undermine the system by making these sorts of comments.
You are looking at one of the “flaws” of capitalism. Systems can become too efficient. Once people have their basic basic needs met and all have new PC’s and plasma’s then how do you maintain economic growth? Either through massive population growth, by getting people to stop saving money and start buying unnecessary goods, or a combination of the 2. The global capitalistic production regime has become so efficient that it has exceeded the demand for “needed” goods of the world market
#193
“I don’t get it, borrowing money at 4.85% to by an asset that is falling in value is insantity. The mortgage rates should be below zero percent. It makes no sense to borrow even at 1% to buy something that is falling in value. Buying assets that are trading at below their intrinsic value such as certain MBS lonas, bank loans or bonds makes sense buying assets that are overvalued on margin (house with a mortgage)is a dangerous leverage game.”
I am not definitely going to buy this year, but if I see a good deal, I will. I am looking for a permanent house, so if I do not hit the absolute market bottom, I am not that concerned. that said, I agree with you w/r/t 99% of houses on the market right now
Clotpoll says:
January 7, 2009 at 9:02 am
Gotta think that at some point, the calls for the abolition of the Fed and the SEC will gain some traction.
lol
that’s why i come to this site!
lol
Frank says:
January 7, 2009 at 9:32 am
#51,
Since when do you trust an Indian guy?
grim, would you consider deleting this racist garbage written by the most clueless prick on the board?
Larry Flint & Joe Francis just joined the line for a gubmint handout:
Another major American industry is asking for assistance as the global financial crisis continues: Hustler publisher Larry Flynt and Girls Gone Wild CEO Joe Francis said Wednesday they will request that Congress allocate $5 billion for a bailout of the adult entertainment industry.
…
Flynt said in the statement. “This is very unhealthy as a nation. Americans can do without cars and such but they cannot do without seks.”
…
http://politicalticker.blogs.cnn.com/2009/01/07/Horn-industry-seeks-federal-bailout/#more-34724
(to avoid mod, I had to replace the “p” with a “H” in the link above)
The comments in the link I posted are great!
“I suppose Larry Flynt would argue that some of the stars are “too big to fail…” “
The home building industry has been devastated by the housing market bust. The builders argue that plunging home prices and sales are causing widespread suffering for businesses ranging from interior decorators to sellers of faucets, lumber and blinds. Massive government intervention is needed, they say, to boost home sales and prevent foreclosures from further flooding the market.Builders want a package of subsidies that would bring mortgage rates to just under 3 percent for the first half of this year. They also favor a tax credit of up to $22,000 for home purchases.Still, broad housing aid is not expected to be part of Obama’s economic stimulus plan. Housing relief seems more likely to be part of a separate bill outlining new rules for the remaining $350 billion in financial industry bailout money.