From the Record:
Governor Corzine wants state workers to take unpaid furloughs as part of a new plan to offset a recession-fueled budget deficit now projected to grow to nearly $3 billion.
The governor on Tuesday put forward another revised budget, his second since January, that shows his plan to deal with a combination of declining tax collections and an increasing demand for services such as unemployment benefits.
These latest fiscal steps — designed to meet the state’s balanced budget requirement — include using $850 million in just-approved federal stimulus money, redirecting $157 million from some state trust funds and taking $179 million more from already raided state surplus funds.
An additional $100 million would be raised by offering an amnesty program to those who owe the state tax revenue.
The state would also save $35 million by forcing state workers to take two unpaid furlough days before the end of the current fiscal year, in June.
Corzine said at an afternoon news conference in Trenton that the furloughs are necessary and legal.
“We are adjusting almost everything else in the budget,” he said. “We think we need to have some fair sharing of this [from the employees].”
…
Total state tax collections are now $1.3 billion behind original revenue estimates for the fiscal year that began on July 1, 2008, said state Treasurer David Rousseau.In January, Corzine proposed $812 million in spending reductions when the revenue shortfall was projected to be $1.7 billion.
At that time he also proposed using more than $475 million in surplus funds to plug the budget hole.
Now the shortfall is expected to grow to $2.8 billion by the end of June, with some revenue sources, including corporate and income taxes, off by more than 10 percent, Rousseau said.
“Our revenue collections reflect the pervasive impact from the global economic crisis,” he said.
…
So far the total impact of the troubled economy on the New Jersey budget — in increased aid to help stem its impact and in falling tax revenues — is $3.6 billion.Some of the new moves proposed by Corzine, such as redirecting money from state trust funds, will have to be cleared by the state Legislature. Lawmakers, however, have yet to approve the $812 million in spending adjust-ments the governor put forward last month.
“One thing is certain: The next few months will not be easy,” said Senate Budget Committee Chairwoman Barbara Buono, D-Middlesex.
hurrah!
on GMA (around 705 pm), something clot and bc talked about a year or so ago …
mortgage writedowns “pit neighbor vs. neighbor.”
of course, GMA cheery-picked two families who aren’t even in the same state, but it’ll be interesting when these issues actually hit neighborhoods.
President Obama is going to pay our mortgages!
From Bloomberg:
Obama Housing Plan to Cut Mortgage Payments, Stem Foreclosures
U.S. President Barack Obama will today outline an estimated $50 billion plan to stem a surge in home foreclosures that will subsidize cuts in mortgage payments for millions of struggling borrowers.
Obama intends to make loan modifications the centerpiece of plan that also gives bankruptcy judges more power to help borrowers keep their homes, said people familiar with the matter. Obama, in Phoenix on the second stop of a two-day swing through the U.S. West, will announce details at 10:15 a.m. local time as he campaigns for his economic recovery package, deputy White House spokesman Jen Psaki said.
“We must stem the spread of foreclosures and falling home values for all Americans and do everything we can to help responsible homeowners stay in their homes,” Obama said yesterday in Denver, where he signed legislation providing $787 billion in spending and tax cuts intended to revive the economy.
MBIA splitting into two companies, structured finance and public debt. When I first heard it on CNBC a few minutes ago, I thought good bank/bad bank split, with structured being the toxic side. But given the state of public debt, the split might better be described as bad bank/badder bank.
IMHO, $50 billion isn’t enough to do anything.
The only piece of the plan that will work are cramdowns. This is the only way to push lenders towards mortgage modifications that work. Likewise, it will ensure that lending standards remain appropriate in the future.
grim says:
February 18, 2009 at 7:14 am
Are you walking around with a 10-gallon hat? I think at a minimum you have stirrups…..you are such a friggin’ poser….
how much is the estimate on the tax credit for home purchases? is it close to $50 billion? why do I feel like I’m getting @#%&ed!
chifi are you staying in Middletown?
yikes (2)-
I like that you don’t even have to prove hardship to get gubmint mortgage subsidies.
Looking forward to my new, reduced mortgage…
Nah, no hats. Nothing but conference rooms and the inside of the Westin.
Did manage to get to downtown Dallas last night, over to the West End. Spent a few minutes in Dealy Plaza where a homeless guy gave us a Kennedy Assassination tour. (please, this is not your cue to start a a tinfoil hat thread, you know who you are.)
Talked to a colleague that went over to Fort Worth, said she saw a steer.
sas,
Did you write Confessions of an Economic Hitman?
“Worst Is Yet to Come:” Americans’ Standard of Living Permanently Changed
Poor Americans. How will we ever be able to stop spending?
http://finance.yahoo.com/tech-ticker/article/176478/%22Worst-Is-Yet-to-Come%22-Americans'-Standard-of-Living-Permanently-Changed?tickers=WMT,WFMI,FDO,%5EGSPC,%5EDJI,RTH
crossroads says:
February 18, 2009 at 7:21 am
chifi are you staying in Middletown?
Moving to Colts Neck in 2 weeks. However, if you are asking, I think Middletown is a great place to live if it suits your needs.
grim says:
February 18, 2009 at 7:24 am
Nah, no hats. Nothing but conference rooms and the inside of the Westin.
grim: raking up Starpoints? booya!
dallas is about 15 years away from being a real city. i was downtown 2 weeks ago and though efforts seem to be in place it’s really a desperate place.
chifi
good luck. nice town
I don’t get the math.
Rescue plan cost: $50,000,000,000
Current late borrowers: 5,000,000
Underwater owners: 10,000,000
Total late/underwater: 15,000,000
Amount per loan: $3,330
What does this fix?
grim says:
February 18, 2009 at 7:16 am
IMHO, $50 billion isn’t enough to do anything.
The only piece of the plan that will work are cramdowns. This is the only way to push lenders towards mortgage modifications that work. Likewise, it will ensure that lending standards remain appropriate in the future.
GRIM –
So you’re saying you agree with this? You think it’ll work? Perhaps i mis-read the post.
Paraphrased from WSJ web site: I drove a new car off the lot and am now upside down on my car loan. Why are car loans different from house loans?
From last night…
Stu – You are a straight shooter – period. Thanks for always taking the time to explain things to me.
Pat – No offense – really – for real.
JBJB (472) “Americans fall into two distinct categories today: Those who remember how devastating the policies of Jimmy Carter were, and those who are about to find out.”
I keep saying it feels like the 70’s.
And Sas…We just all have differing opinions. All we can do is draw on what we know at the time.
My daughter and her husband went to see “Slumdog Millionaire” when they were just here for a visit. From what she said, the folks on that show thought the kid was a cheater because he could not possibly possess the knowledge he called on to answer the questions. Personal experience = knowledge. Everybody can only process the inflow of information from the filter they have developed over years of experience.
I feel you really want to help others. You feel we risk turning into Venezuela – your filter. I do not – my filter.
I think it will work, doesn’t necessarily mean I like the situation. But at this point, we’re in it. When I say work, I mean keep people in homes, not put a floor under house prices.
We’ve got to be clear that in order to be eligible for a cramdown, the borrower must go through bankruptcy. Isn’t this the point of bankruptcy? Remember, bankruptcy is the cure, not the problem.
Going forward, this will create a new risk for holders of primary residence mortgages. This provides a new form a recourse that didn’t previously exist. This new risk will ensure that lending standards remain appropriate going forward. And yes, that means lending standards will tighten or stay tight as a result. Fewer people in the future will qualify for loans.
Regarding a floor in home prices, realize that those who never intended to live in the house (flippers, get-rich-quickers, dreamers) will all still walk away.
http://online.wsj.com/article/SB123491755140004565.html
A Florida Court’s “Rocket Docket” Blasts Through Foreclosure Cases
“2 questions, 15 seconds, 45 days to get out; “What’s to talk about?” says a judge.
Here in Cali, no court system to worry about. Foreclosures being done pretty quickly.
Grim 17
More math:
-median US home price at peak (2006) was 230K (per us census)
-Total late/underwater: 15,000,000
-Assume a generous 10% LTV ratio at loan inception
-assume that the entire group is or will soon be underwater.
-10% LTV = 207K loan (median case)
– to return to an average 10% LTV in the median case where the 230K home is now worth 207K each household needs 20K knocked off their mortgage
-20K * 15,000,000 = $300,000,000,000 (Billion)
Note that this plan only works if the homes do not drop much more then 10% otherwise the home owner is just as underwater as before. Current (2008) median home price was about 206K. US median home price has dropped about 9% so far.
To really pull off Obama’s plan and have a real effect you would need about 1 trillion
A little anecdote:
Yesterday while filing my business license, someone walked in and asked where the foreclosures are. He was directed to another part of the room. There was a good sized pile of papers there. I don’t know if those were the ones that hadn’t been computerized or filed or what. But it doesn’t look good for Staten Island, even though “it’s different here”.
Grim
creating a floor by rescuing irresponsible people who overpaid by reducing principal and tightening lending standards. where does the next wave of buyer come from? the tax credit isn’t lighting a fire under my a$$. the plan is a slap to the face for responsible people renters and owners alike
where does the next wave of buyer come from?
Stimulus Package #7
grim
as you said before but speculators will still walk and if I remember correctly 05 and 06 %40 of all home purchases were 2nd homes
Given the mortgage insurer downgrades by Moodys yesterday, mortgage insurance pricing has nowhere to go but up. Piggybacks? Don’t exist anymore.
Where does that leave borrowers?
What is next? Government subsidized mortgage insurance? Federal National Mortgage Insurance Corp?
I hear it is so bad they are driving certified pre owned benzs and BMWs in Bergen County
lostinny says:
February 18, 2009 at 7:29 am
“Worst Is Yet to Come:” Americans’ Standard of Living Permanently Changed
Poor Americans. How will we ever be able to stop spending?
http://finance.yahoo.com/tech-ticker/article/176478/%22Worst-Is-Yet-to-Come%22-Americans‘-Standard-of-Living-Permanently-Changed?tickers=WMT,WFMI,FDO,%5EGSPC,%5EDJI,RTH
as you said before but speculators will still walk and if I remember correctly 05 and 06 %40 of all home purchases were 2nd homes
Judges already have the ability to cramdown liens of second/vacation homes.
If these homes represent a substantial portion of the distressed market, shouldn’t the already existing cramdown ability have some effect?
17 Grim and 23 Kettle
Who is doing the math when they propose these options? Are they assuming a- prices will not drop anymore and/or b-most won’t be eligible for the bailout so each person would get more then just 3300?
grim
good point but is it easier to walk away from a second home then go through bankruptcy?
Lost
bread and circus. You dont want the natives getting to restless. The feds dont want the public ire currently focused on the banks turning to them. The government has to appear to be doing something even if it has a net negative impact, other wise natives tend to get restless and that is bad for a politicians health.
Until the long term consequences of a politicians actions are somehow linked back to that individual nothing will change
Personally, I’d much rather have seen some sort of capital gains forfeiture arrangement for bailed out homeowners.
The taxpayers will help you stay in your home by providing a zero interest rate loan to cover some of the principal, but they must forfeit real estate profits with the taxpayers when they sell. Your house becomes a place you live, and will no longer function as an investment vehicle. You can still build equity and utilize the tax benefits, but those cap gains go to pay back the taxpayer, a public-private partnership of sorts.
SO the bailout is now approaching 11 trillion with Obama’s recent package. how long before the bailout exceeds GDP (about 15 trillion). before june?
The bailout is now approaching 11 trillion with Obama’s recent package. how long before the bailout exceeds GDP (about 15 trillion). before june?
Be interesting to see in 2010 when America is composed only of Government Workers and illegal aliens, how the tax structure will work.
Westfield comp killer
MLS 2612847
Bought 2006: 1350000
OLP: 1325000
LP: 1240000
DOM: 77
this is stu on gator’s treo. The math is done when these stimuli are proposed. There is not enough debr to solve the issue. The gubmint is playing a game of confidence building, only they are so out of touch with reality and economics that they think false floors will work. Only thing that will work is to let the market find it’s floor.
ChiFi: when I said pass line last night, I was referring to full odds which is almost only even money bet in da house. so is doubling a win in video poker.
grim (28)-
The gubmint- via FHA- is the only viable mortgage insurer left now.
they are more focused on payments not principal reductions. Lower rates and extending mtg terms. principal reduction will be with banks agreement with govt kicking in half. prob will be income determination, there will be scammers everywhere.
xroads (32)-
When a BK petitioner has no equity in his first and second residence (which is the case for many these days), the remedy is Chapter 7 (liquidation).
No need for a cramdown there.
Wall St is hiring like it’s 1999.
You call this a recession?? Give me 2 of them so I get a job like this.
Broadpoint Capital, Inc., a broker-dealer subsidiary of Broadpoint Securities Group, Inc. (NASDAQ: BPSG), today announced that Russell Certo and Glen Capelo have joined the firm and were named Co-Heads of its Rates group.
Amherst Securities Group Expands Senior Management Team, Hires Four Veteran Mortgage Professionals
Company Broadens Securitization Expertise in CMO Business, Expands into ABS
41
so after lowering rates and extending terms the bank will write down principal? not bad for being a screwup.
vodka (35)-
IMO, it doesn’t approach getting interesting until the bailout exceeds GDP.
Once that happens, I think we’ll start to see cascading and amplified effects on every new tactic employed to delay the inevitable. Too bad those tactics will also hasten the inevitable.
42 clot
thats good to hear
“Governor Corzine wants state workers to take unpaid furloughs”
How about they take a 2 year furlough just to see if anyone notices??
Hard to stamp the imprimatur of “full faith and credit” on a bag full of air.
From MarketWatch:
Housing starts falling at more than 100% annual rate
U.S. Jan. housing starts down record 56% in past year
U.S. Jan. housing starts much worse than 525,000 expected
U.S. Jan. single-family permits down 8% to 335,000
U.S. Jan. housing starts, permits fall to record-low levels
U.S. Jan. housing starts plunge 16.8% to 466,000 rate
“Government Workers and illegal aliens, how the tax structure will work.”
at least they will pay their mortgage on time.
Good news for housing inventory, terrible news for the economy.
http://www.ritholtz.com/blog/
The issues are being addressed on “the Big Picture” today…
Check out his 1 -2 -3…
Housing boom continues….
U.S. MBA’s Mortgage Applications Index Jumped 46% Last Week
http://www.bloomberg.com/apps/news?pid=20601103&sid=aOeZDukq8gVQ&refer=news
From Bloomberg:
U.S. Housing Starts Fell in January to Lowest Level on Record
U.S. builders broke ground in January on the fewest houses on record as a lack of credit and plunging sales exacerbated the worst real-estate slump since the Great Depression.
Housing starts plunged 17 percent last month to an annual rate of 466,000, lower than projected, according to figures from the Commerce Department today in Washington. Building permits, a sign of future construction, also decreased.
Builders are struggling as record foreclosures swell the glut of homes on the market, undermining efforts to revive demand and lighten inventory by cutting prices. President Barack Obama today is expected to announce measures designed to stem repossessions and the drop in home values.
“There simply is no demand for new homes,” Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said before the report. “Builders are more worried about trying to sell the units they have constructed or potentially still are constructing.”
…
Housing starts declined in all four regions, led by a 43 percent plunge in the Northeast and a 29 percent drop in the Midwest.
Housing starts should be 0.0 today. Who needs new homes when we have so many of them already? We need corn farms.
grim (49)-
Short PCL is a nice place to be right now.
Next step will be forced moratoria on new construction of any type. Frankly, most localities in the US should’ve gone this route 18 months ago.
Of course, PCL is also a big component of IYR, thus SRS. :)
sas, am I the paid pump/dump guy?
#2 yikes: That is why all prospective buyers will need to bid a minimum of 30% off of list price. 30% minimum.
If I’m buying a house is there a good way to play this?
I’m thinking we buy a place with only her on the mortgage. She “loses” her job( she’ll be doing this anyway after the baby for several months). We get a 30% cramdown, her credit craps the bed for a while, we live on my credit. We get 30% of our house for free?
This doesn’t make me a bad person right? I mean if a bank did this, they would only be following the laws as written.
#3 grim:and falling home values for all Americans and do everything we can to help responsible homeowners stay in their homes.
So the responsible have to bail out the irresponsible?
Why should the government be propping up the value of housing, or any other asset class?
Clot,
depending on what happens in the bond market things could get very dicey very quickly if rates start an upward trend. if you think interest on your CC sucks try paying the interest on a 10 trillion!
The Postmaster General made $800k last year. No wonder stamps are so expensive!
34. Grim
then everyone becomes a tenent with an absentee landlord and well, there goes the neighborhood. Mow and water the lawn? Why bother. Fix that leaky roof? Nah.
What are the chances this thing was on the up-and-up?
How much action do you think Stanford had on his own side?:
http://www.stanford2020.com/news_viewpress.php?release=340
#5 grim:The only piece of the plan that will work are cramdowns.
And that will destroy the value of housing IMO.
h-rep (59)-
The mortgage guys I know are reporting that they are now processing approvals using the exact scenario you are laying out.
Frank
Housing starts should be 0.0 today. Who needs new homes when we have so many of them already? We need corn farms.
With an aging population we are set to see a drop in the actual amount of housing needed. yet builders are still building….
when does RE101 fire up his bulldozer
(59)-
To clarify- I mean, processing approvals using only one of two family incomes. NOT telling people to get mortgages, then “lose” jobs.
http://www.nytimes.com/2009/02/18/business/18carteret.html?ref=business
someone is building in nj
Housing Starts came in below expectations (466k vs expectations of 529k), and registered the lowest reading on record (going back to 1959)……..of course given the oversupply in the housing stock it begs the question why the number is above 0 to begin with, but we can ponder that on another day…….
#21 grim: So what is a prudent course of action in your opinion for someone looking for a house now?
How do you factor this uncertainity (cram downs) into the equation?
I give up. Maybe Chile isn’t such a bad place for a long vacation.
Clot – Re “no need for a cramdown when the petitioner is commencing a ch 7 liquidation case” – ch 7 generally isn’t an option for those who make above the state median income, so these people are forced into filing a ch 13 case where they have the option to hold onto the house if they want, provided they become current over a 5 year period, even if they have no equity at the time case begins.
#60
Why should the government be propping up the value of housing, or any other asset class?
because other govts. around the world are heavily invested in our assets(if you can call them that) we’ll be at war
Housing plan bigger than anticipated. “Incentives” offered for borrowers who can keep current on their re-worked mortgages.
Brick wall, here we come.
“sas, am I the paid pump/dump guy?”
damn I’m tired, ugh…
I guess I need to apologize to the boards.
When I made my pump & dump comments, I made them too broad & general, and everyone got ruffled.
and trying to explain myself without getting too specfic i think tended to make matters worse.
so, i will just withdraw those comments for now.
(keywords: for now)
:)
SAS
lost (72)-
See you there.
OBAMA’S ANTI-FORECLOSURE PROGRAM FEATURES $75 BLN STABILITY INITIATIVE
Well, dems are already undoing parts of Stimulus law. Hope they would just undo the whole thing.
“Sen. Schumer has pledged to undo a provision included in the stimulus package that will make it nearly impossible for New York’s banks to hire foreign workers through the H-1B visa program.
The amendment to the stimulus bill, proposed by Sens. Bernie Sanders, I-Vt., and Chuck Grassley, D-Iowa, originally would have banned the visas for any company that received money from the Troubled Assets Relief Program, or TARP. A compromise lifted the ban, but companies will still be required to hire from the growing pool of laid-off American workers first. Advocates say that the mandate is so onerous that it will virtually stop banks from bringing foreign workers into the country.
According to a report released last year by the Partnership for New York City, roughly 13,000 workers in New York, New Jersey and Connecticut are here on H-1B visas.”
herring (73)-
Thanks for providing the detail that I didn’t.
The Hughesrep strategy is a good one. Perhaps I’ll refinance my current multi under my name only and Gator can buy the next house. This way, who ever loses their job first will take the credit hit. It will serve as an incentive for each of us to work harder. On the negative side, the law of unintended consequences is working overtime. As usual, I’m with Grim on this. Only thing that will help housing is not to try to stop the value decline. Cramdowns should simply force banks to do what they should have been doing since late 2006. That is, renegotiate mortgages at better terms instead of losing the farm on foreclosure after foreclosure. Tightening mortgage credit will serve to strengthen the banks, reward the good borrowers and will hasten the return to affordability. Now all the sheeple need to do is learn to save a little.
since i’m opening up a little:
there is chatter about calling me, SAS, out.
whatever floats your boat, go for it.
but if you have that much energy, look into what I say, rather than what my background is, who I am, where did I come from, what does he do?
i admit, i can’t always backup with what I say with hardcore facts, but I tend to share some experiences and try to communicate a point with true life stories ( i know sometimes I go off & rant, or get a little loco). stories that if you dig, you may be surprized what you learn.
SAS
Fromthe Big Picture:
“The mad attempts to avoid any and all foreclosures is counter-productive. The foreclosure process is how an over-priced market returns back to normalcy. That is what is now happening, and excess interference will only slow down the eventual return to a healthy economy.”
SAS: You’re a freak!
SaS, I believe you, so please don’t send the goon squad after me.
“SAS: You’re a freak!”
whew.. that makes me feel better.
for a minute, i thought I was turning into a creampuff.
SAS
sas is a superfreak
SAS
when do we get to see your photo albumn
Amount per loan: $3,330
What does this fix?
JB,
It’s my understanding that the funding would be used to lower interest rates; Obama would basically be buying points on behalf of the borrower. These points would have to be matched in-kind by the lender.
So, with a median mortgage balance of about $210k, this program would buy about 1.5 points per loan and the lender would need to match this.
How much would good would 3 points do for the typical underwater buyer? Probably not much I would guess.
Our system rewards elected officials for steering public money to constituents. Every member of the House has their 2010 re-election bid pinned on how much pork they send home from Washington. Same with cram downs, auto bailouts, bank bailouts, etc. All based on who donates and who votes.
BoE seeks more authority to create money
Bank of England to seek more authority to create money as interest rates reach base point
LONDON (AP) — The Bank of England revealed Wednesday that its policy makers had unanimously agreed to ask the government for the authority to create money in a bid to kickstart the economy as its ability to cut interest rates further dwindles.
…
With little headroom left on the base rate, the committee also voted unanimously to seek government approval for measures aimed at raising the supply of money in the economy.
This process, known as quantitative easing, is aimed at helping increase the level of funds in the banking system to boost lending by commercial banks.
http://finance.yahoo.com/news/BoE-seeks-more-authority-to-apf-14396325.html
WASHINGTON (Reuters) – President Barack Obama’s plan to deal with the U.S. housing crisis will help as many as 9 million families restructure or refinance mortgages to avoid foreclosure, according to a summary released by the administration on Wednesday.
http://finance.yahoo.com/news/Obama-mortgage-plan-to-aid-up-rb-14398090.html
Wow. Four million jobs saved yesterday, nine million families saved tomorrow. We’re on a roll.
Like CA, NJ should cut more than 10,000 state workers to reduce budget.
This whole bailout is a total loser. I am now waiting for the next bailout and the real start to Great Depression #2.
I cannot wait for the USA debit card. $3,000 to buy a new 63 inch plasma TV and surround sound system.
92
how many people are getting screwed?
Death of Corporate Bonds Is Worth Investigating
…All these bazookas may morph into something more lethal — like a financial version of an ICBM. The U.S. is banking on Asia’s savings to finance its current and future stimulus efforts. There’s virtually zero chance the money approved thus far by Congress is sufficient to revitalize U.S. banks. More than 15 years after Japan’s asset bubble burst, that nation’s banks still aren’t lending money as hoped. The U.S. Treasury’s future borrowing efforts will bump up against those of Japan, China and Europe. This crisis has a drip-drip-drip dynamic that tends to make what seems implausible one day real the next. Expect today’s debt-issuance estimates to appear quaint by comparison a year from now.
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=a1mfcutzMBjY
“A ‘fraud’ bigger than Madoff
Senior US soldiers investigated over missing Iraq reconstruction billions”
http://tinyurl.com/bvgtab
“All based on who donates and who votes.”
It is also about how many times they vote. Professional voter fraud organisation (ACORN) got billions in the porkulus package and you can be sure that the money is well-spent. For more detailed example, see Venezuela (or Russia). Extra 10M people added to voter rolls overnight..
http://www.bloomberg.com/apps/news?pid=20601079&sid=apT9qJiOMQ2E&refer=home
(89) Rent – Just thinking out loud here. What if that $200 or $300 extra a month (not spent on mortgage interest) keeps the underwater borrower in their home. Wouldn’t they then spend that money on other things – or save.
Maybe the thinking is money on interest for a mortgage is money not spent in your community.
As much as mortgage cramdowns sound like a bad idea, it’s probably the best idea for the current situation.
If the struggling homeowners are forced into a shortsale, what’s the difference between somebody else buying the house for lower than the outstanding mortgage versus just lowering the principal for the owner? In the end, as unfair as it is, lowering the principal will be a quicker fix than anything else.
“With campaign stops for Barack Obama and Hillary Clinton, a trade mission to Israel and other trips for business and pleasure, Gov. Jon Corzine spent all or part of 105 days outside of New Jersey in 2008, according to a Star-Ledger review.”
http://www.nj.com/news/ledger/jersey/index.ssf?/base/news-12/123467560323100.xml&coll=1
hype,
can i use that debit card for ammo and food?
Did they forget to tell the people on Wall Street that the markets opened? Man, they are dead as Julius Cesar.
101
because your rewarding the irresponsible party.
I want my home’s value to decline, president Obama!
Why should my middle class suburban house be valued at 7X median NJ household income?
I didn’t leverage it up to the hilt to go on vacations and add marble countertops. I saved a lot of cash so that someday I could move up to another house. This isn’t my one and only home for a lifetime. What I need is for real estate markets to clear, and for real estate prices to reflect real income and affordability.
Instead the government wants to use taxpayer money (read – my money) to help support the illusion that people who borrowed and spent, and drove up real estate to unsupportable levels, still live in “million dollar homes” even if they are just 5br/3ba on 0.4 acres. So everybody is supposed to stay in the homes they bought, regardless of their income and ability to pay, and all home prices must be maintained. We must not let the market clear, because that would just be too embarrassing for the imprudent and the ignorant. (Homebuyers and banks). What garbage.
Did Jon just say that state workers will be forced to take TWO unpaid days off before June?!????
What the fcuk Jon?!?!?!?! Two!!?
It should be two days every month until this ish is sorted out. Shameful tit suckers.
#69-
unintentional comedy or perfect timing btw.
hahahahah
Renty (91)-
Monkey see, monkey do.
#101 So the people who have been responsible get screwed by being forced to pay an artifically high price? I don’t think so.
I’m sitting here watching the announcement of Obamas RE Mortgage Bail Out.
Looks to me that instead of selling in 2005 I should have refinanced for way more then I could afford and now have my Uncle Sam buy down the principal I can’t afford to pay back.
Guess being responsible is now a thing of the past.
There’s just a couple of things I’d like to see in the next few years. Full disclosure, and justice served.
Most Americans, most banks, and nearly all politicians, are scared to death of these two things occurring. Says a lot about people when they argue against justice – because they know, underneath all the talk about “saving the system”, or “saving homeowners” that they are as guilty as hell, and don’t morally deserve a dime of my money.
http://www.bloomberg.com/apps/news?pid=20601087&sid=acZD302IjIb8&refer=home
#94 AllHype: Well I found a 40 inch flat screen (Samsung) on AMAZON for $800, was going to buy it (cash), maybe I should wait.
W8 (101)-
Short sales are the best, cheapest solutions. Why?
– Non-judicial in nature. Bank saves $$$ on lawyers, fees, filings, title, etc.
– every instance of borrower failure is realized and dispatched post-haste. No years-long dragging out of acknowledging consequences of failure on part of lender and borrower.
Of course, all the above will be ignored by the gubmint. They are determined to turn us Japanese.
101
why not give those who waited for affordability %20 down to purchase a house. those with good credit of course
#101 – In the end, as unfair as it is, lowering the principal will be a quicker fix than anything else.
I agree. I encourage our congress to engage in pre-emptive principal write downs on all mortgages.
I also look forward to the future cash-only housing market.
grim
did you bring the bike to Dallas?
111.
Billy
what you said.
I should have gone for the two foreign cars and went on at least 4 nifty vacations.
Boy, do I feel foolish.
Fcuk this country. Run by a pack of goddamned criminals.
well said clot
Clot, finally we agree on something.
105, 110 – Moral hazard was abandoned months ago when the gov’t started bailing out the banks. Do you think it’s ok for the gov’t to bail out corporations but not its citizens?
#120 clot:Fcuk this country. Run by a pack of goddamned criminals.
Yeah, but you can be proud to be an American where at least you know your free.
If the gov’t should writedown the principal of any homeowners, the homeowner should be required to pay back the money in the case they sell the home for a profit.
Example. If a homeowner has a mortgage of $300k that is written down to $250k, they should pay back $50k if they sell the house in 10 yrs for $310k. If they sell the house for $265k, they don’t make any profit and have to give the $15k profit to the gov’t.
#123 And what about all the people who played by the rules over the years? Where is our bailout? What do we get? Is our reward in heaven?
Clot, ref 120: True enough, but 88 percent of the incumbants got re-elected to the gang of 435.
#125 Example. If a homeowner has a mortgage of $300k that is written down to $250k, they should pay back $50k if they sell the house in 10 yrs for $310k. If they sell the house for $265k, they don’t make any profit and have to give the $15k profit to the gov’t.
And what do prospective buyers do in the meantime?
W8 101
do you cure a heroin addict by handing handing him more heroin???? withdrawal must happen one way or another. you are suggesting that we continue to supply heroin in order to avoid withdrawal
Does anybody really think this money is going to keep people in houses…paying?
3b says:
February 18, 2009 at 9:47 am
#94 AllHype: Well I found a 40 inch flat screen (Samsung) on AMAZON for $800, was going to buy it (cash), maybe I should wait.
______________________________________________
Yeah wait. In bailout nation that we live in, we need to bleed the gubbmint as much as possible before the whole house of cards comes crumbling down
Save a little for ammo too. You will need at least 1000 rounds for the next 3 years.
Why is it I have to go all the way to India to find stories like this?
http://www.telegraphindia.com/1090216/jsp/frontpage/story_10542302.jsp
barbara 119
Hear, hear!
sl
#129 kettle: From the brief amount I have read regarding the plan, it is fashioned so that banks will bring interest rates down so that a borrowers monthly payment will be no more than 38% of their income, than the government steps in and brings the % down to 31% by additional modifications.
What are the additional modifications, mtg write downs, even lower interest rates?
So the dead beats get great low rates, and everybody else gets market rates ( whatever they might be)?
This is a plan, this is fair, what a disgrace!!!
#125 – Principal write-downs will only exacerbate the problem. If the lien holder has no expectation of repayment of even the principal amount what do you think will happen to the mortgage market & loan requirements?
Underwhelmed by that Frontline piece last night. That was pretty underwhelming. I liked Krugman’s quote blaming Paulson’s not bailing out Lehman as “the cause of a second Great Depression”. Nope the cause was about seven years ago after Greenspan lowered the rates to 1% for over a year and Paulson and his cronies leveraged up and securitized stuff out the wazoo with no concern for tomorrow. The second Great Depression was an inevitability at that point Mr Nobel Prize Winner.
Who would have guessed CNBC would have done a better job reporting the collapse than Frontline?
don’t forget a floor is put in place so for those of us who waited for affordability to return get screwed too
Countdown to the Bi muzzle – 8.5 points to go.
here is what I see. average american is being asked to pay taxes out the nose in order to fund pensions/gold plated healthcare for retired auto union employees and state workers and now to pay other people’s mortgages as well. What is going on here? We have working people sitting in rentals with no health insurance paying taxes to support non-working people with crazy benefits and to keep overextended homeowners in their homes when they should really be renters as well. It is absurd
why do I keep hearing that falling house prices are at the center of the crisis? wouldn’t it be the unprecedented rise in house prices that caused this mess?
#136 – Underwhelmed by that Frontline piece last night
Agreed, it was more of a timeline than a piece of investigative journalism. No difficult questions were asked of any of the participants, pretty disappointing.
W8
home values WILL NOT break even with peak in 10 years. No Chance! well, unless we go all Wiemar, but then the question is pointless anyway.
so once again the tax payer pays for individual excess and gluttony while responsible individuals get hosed. It must end somewhere. if this goes on long enough it well end due to an effective collapse of the dollar or some sort of social revolution.
how long do you think the responsible individuals will continue their behavior as everyone else gets a free ride. once they stop floating the rest of the nation its gets ugly very quickly.
It we hit 90 on SRS today, I am buying drinks for everyone.
Grim,
How can you force a cramdown on a lender when there’s some town in Sweden or China that owns the MBS the loan is packaged into?
good points, grim. so simply filing bankruptcy will allow you to get a cramdown? this makes sense for a lot of people to do. especially people who are older and don’t have to worry about credit or buying five years from now, are near retirement, etc. good advice.
best route to file bankruptcy? anyone have experiences with it?
grim says:
February 18, 2009 at 7:52 am
I think it will work, doesn’t necessarily mean I like the situation. But at this point, we’re in it. When I say work, I mean keep people in homes, not put a floor under house prices.
We’ve got to be clear that in order to be eligible for a cramdown, the borrower must go through bankruptcy. Isn’t this the point of bankruptcy? Remember, bankruptcy is the cure, not the problem.
Going forward, this will create a new risk for holders of primary residence mortgages. This provides a new form a recourse that didn’t previously exist. This new risk will ensure that lending standards remain appropriate going forward. And yes, that means lending standards will tighten or stay tight as a result. Fewer people in the future will qualify for loans.
Regarding a floor in home prices, realize that those who never intended to live in the house (flippers, get-rich-quickers, dreamers) will all still walk away.
139
current tax payers will not be flipping this bill. generational accounting will be put into place and our future generations will eat this. god forbid boomers step up and pay for some of this
what does median income have to do with home prices? Yachts, SLs, 7 series and summer waterfront vacation rentals in hamptons are all high compared to mediam income, should we lower their prices. A home is a luxury and not everyone should have one. In the 1950’s people lived in the bronx or brooklyn in slum like housing until their 40’s when they finally saved up for a little cape in the suburbs, today people want a mcmansion waiting for them when they get home from the honeymoon.
A.West says:
February 18, 2009 at 9:41 am
I want my home’s value to decline, president Obama!
Why should my middle class suburban house be valued at 7X median NJ household income?
There was an 8% spread to be had on FAZ this morning for those with a quick index finger. Stupid oatmeal and coffee urge. Damn you!
HEHEHE says:
February 18, 2009 at 10:21 am
Grim,
How can you force a cramdown on a lender when there’s some town in Sweden or China that owns the MBS the loan is packaged into?
__________________________________________
This is is why the program will fundamentally fail. This whole thing is a big show to keep the population from rioting. This is only for Obama to show the sheeple that he is doing something. This will not stop the housing crash, only slow it down a little bit.
143
where? I’ll be there
at least I’ll get a free drink out of this
The current White House Chief of Staff said something to the effect of “Never let a crisis go to waste.” Those that want to expand government influence, and those that want government to do something about the crisis, pretty much account for all the voices in the debate. Our elected representatives will do whatever the focus groups, opinion polls, emails, and phone calls tell them to do.
Clot (120):
The moral hazard has been present since the initial bailout of Bear. Then we started funding bonuses of executives who oversaw the destruction of our country (IB’s). We followed this up by rewarding the insurers of these nuclear investment vehicles. Then it was the auto makers who have been f’ing up by not standing up to the unions since before I was born. But we weren’t done yet. We don’t say boo when our newly elected leaders pass the largest bill in history packed with pork or when our local leaders raise taxes instead of making necessary cuts.
The price tag for all of this moral hazard is around 10 to 11 trillion and sadly it has done nothing more than transfer wealth from the middle to the upper class.
Clot, don’t get mad…get moving. If the gubmint can give money to GS who shorted RE, then I feel absolutely no shame in shorting RE myself. Lord knows, those who behaved properly are getting the short straw and it ain’t about to change.
#137 That is why for those of us who stil want to buy (and I am not sure I do any more)bid at least 30% off asking price, minimum.
154
unfortunately there are still too many stupid people paying stupid prices. I’ll wait
HE (136)-
Frontline’s game is politics, not money. Not surprised Faber’s piece was better. It should have been.
3b #126: If I have a choice between having my job and having bought our house in 1996 with a mortgage we can afford and some equity that we didn’t cash out for a gourmet kitchen and being 10 years out from having it paid off; or getting a ‘bailout’ and being scared witless that I’m going to lose everything even WITH that, I’d rather be me thank you very much — and not NEED a bailout.
Stu
The price tag for all of this moral hazard is around 10 to 11 trillion and sadly it has done nothing more than transfer wealth from the middle to the upper class.
multiply that by 3 or 4 and you will have the real price tag
Stu (153)-
“Clot, don’t get mad…get moving.”
I’ve been moving so fast, I haven’t had time to get properly mad.
Added to my PCL short this AM. Now, all I want is the bi-muzzle.
Jill (157)-
Are we right in assuming that you are OK with paying for the mortgage fraud of your neighbors and your local Countrywide office?
And, you are OK with your children being saddled down in 25 years with the debt of a generation of dead people?
vodka (158)-
Right in the middle of all that, we need some bank-held derivatives to start failing. Let’s get this party started!
Mr. O is in an impossible spot. I wonder if he knows it. One the one hand, if he doesn’t come up with a plan that convinces the market that there is a tidal wave of money coming to stop house price declines, the market will crash. On the other, if he does come up with such a plan, I think there will be massive popular backlash from all of the responsible people out there (which is really the vast majority of americans).
I feel like an idiot that I bought a home with a 20-year mortgage and paid it off, especially after I saw some “pitiful” homeowner on TV this morning with a gorgeous granite and stainless steel kitchen complaining, while sitting at her kitchen island (the likes of which I don’t have), about a lost job and being behind on her mortgage. How is it right for me to pay for her to live in luxury?
marv (163)-
I’d like to pay one of these folks back with a bullet between the eyes when they jump my fence this Summer and make for my garden.
This will begin to happen. People who can commit fraud and freeload off their neighbors will do anything.
Marv, did you see the CNBC “House of Cards” piece?
This isn’t about bailout out the pig at the trough buyer as much as it is about a show of confidence. The cheers from the irresponsible are just a byproduct.
That said, I’m in a rioting mood lately.
Stanford Takes Page from Ponzi Playbook
“Assets that suddenly become very risky lost value rapidly, since they carried such a low rate of return. Losses beget losses, which beget more losses. We all know how the story ends.
Meanwhile, even as it acted as enabler to Wall Street’s (and Main Street’s) incessant greed, the federal government now insists on pointing fingers and acting as savior for a system it was complicit in creating.
Where was the SEC to root out Madoff and Stanford before investors lost billions? Where was the Federal Reserve to act on its own findings about the risks of exotic mortgage lending?
Yet, even now, we’re counting on these same institutions and politicians to invest nearly $1 trillion of our money to rescue us.
How low-risk is that investment strategy?”
http://www.minyanville.com/articles/GS-jpm-bac-Fed-ms-/index/a/21173
GE testing lows again today, as is C. WFC setting new depths and JPM is looking at dipping its toe in zombie lake.
Clot this ain’t Texas you can’t cap somebody for stealing your tomatoes.
#157 jill: Well IMO you are screwed too, because this will impact the value of your house even though you purchased in 1996.
With this plan the days of ever being able to accurately price a house is over.
“With this plan the days of ever being able to accurately price a house is over.”
I totally agree. We are creating zombie homeowners. Prices will fall eventually, but it is senseless to try to wade into the market while they are being manipulated.
#163 mary: I saw the same on House of Cards, bimbo wife detailing how they redid their kitchen, all granite stainless steel etc bought all new furniture carpets etc. And than the husband saying the banks don’t care and they are not white trash.
Now they are not white trash, they are worse.
The Bush High Deductible Medical Plan, implemented in 2004, and readily adopted by Private Companys like AT&T, would have been reasonable, if also mandated for all State & Government employees, especially Teacher & Police. Share the Pain.
#170 skeptic: Well I will be taking a stroll out in the housing market this Spring just to see.
And I plan to bid 30 to 50% off asking price depending on the house.
God help the realtor who tells me I will be insulting the seller.
Than of course there is the propert tax situation, and in my town preliminary increase looks like another $700 to $800 a year increase.
The house of cards piece was very fair, I thought. It laid blame equally at hands of lenders and borrowers. My parents are very liberal and instinctively hate big banks and sympathize with the little guy, but after watching that show even my mom was disgusted with the sense of entitlement the homeowners had.
3b– I have been looking since the end of December. Unless things are greatly different in your area from where I am looking, then I must tell you it is a waste of time. Even the foreclosures I’ve looked at were priced within 10% of peak.
“preliminary increase looks like another $700 to $800 a year increase.”
You live in Montclair 3b?
Totally agree with skep-tic, even the foreclosures are too much.
Has anyone negotiated rents lately? Since I am not purchasing anything for awhile, I am looking in the Edgewater/Weehawken/West New York River Road area and the rents for a 2 bedroom are listed in the $ 2200 – $ 2400 range. Would it be embarassing to try to get a year lease for say $ 1800?
3b-
Don’t waste your time. The only players in the game right now are suckers and idiots…on both sides of the trade. On top of that, we’ve entered a realm in which the asset cannot be valued.
I include the REO holders in that statement, too. Banks can neither manage their REO inventories nor- in many cases- even get them to market.
US Economy Strains Under Weight of Unsold Items
The unsold cars and trucks piling up at dealerships and assembly lines as consumers cut back and auto companies scramble for federal aid are just one sign of a major problem hurting the economy and only likely to get worse. The world is suddenly awash in almost everything: flat-panel televisions, bulldozers, Barbie dolls, strip malls, Burberry stores. Japan yesterday said its economy shrank at an 12.7 percent annual pace in the last three months of 2008 as global demand evaporated for Japanese cars and electronics. Business everywhere are scrambling to bring supply in line with demand. Downsizing can be tricky, though. No one knows how much worse the economy will get, and while everyone waits for the recession to peter out, businesses are grappling with how to cut costs and survive without sabotaging their ability to grow when the economy picks up. And there is a lot to cut.
“There is over-capacity in everything,” from “retail to manufacturing to housing,” said Richard Yamarone, chief economist at Argus Research. “If capacity is too large, you don’t need that many people employed, which is another reason we’re seeing such high job losses.” As long as capacity far outstrips demand, businesses have little reason to expand, buy new equipment or hire workers.
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/16/AR2009021601391.html?nav=igoogle
What happens a few years down the road when a borrower who’s gotten a workout markets his home and stands to make a profit?
I’ve heard nothing all morning about the taxpayer being made whole on this one. Hell, even GM at least nods toward the taxpayer in their pipedream of a “plan”.
Am I correct in assuming there are no mechanisms for the taxpayer to be made whole at the end of this mess?
Bank of America just paid the treasury 412 million divided. Other than that welcome to Zimbabwe.
180 Clot
I haven’t heard a thing about money going back to the taxpayer. However, someone earlier in the thread did make the point that profits, if any, when sold, should be returned to the government or taxpayer. Although, I don’t see how giving the money to the government will guarantee that it will make its way back to the general public.
“Would it be embarassing to try to get a year lease for say $ 1800?”
Embarrassing is paying asking or retail for anything in this wacky market.
Frugal is the new sexy/smart.
I posted this last night, thought I would post again:
There is a war going on, but your being hoodwinked while you stuff your face with cancer causing chicken fingers:
As tax revenues decline, the fed can operate with deficits. By law, states and counties must balance their budgets. Given that federal law and regulations create program requirements and expenses for state and local government, growing deficits will exacerbate the tension between the federal government and states and between states and counties.
In state and local government, you have people who work hard and make the operations of government go, often with surprisingly little resources. Watching more than $10 trillion of bailouts go to a handful of large banks is disturbing to them.
Before passage of the stimulus package, California was not reimbursing counties for mandated programs. California counties were threatening to withhold payments to the state or sue. Right before house passage, a group of eighteen governors issued a press release supporting the Administration’s proposal. If you look at the list, it is the ones that should be hurting the most.
The stimulus package is designed to provide money to ease the financial pain that the states and municipalities are experiencing. The stimulus package is expected to cost $789 billion. The financial stability plan is expected to add $2.2 trillion to the $8.5 trillion authorized by the US Treasury and the Federal Reserve for bank bailouts. Behind the scenes, the states had to get their half a trillion or so to go along with the bankers getting another $2.2 trillion.
The stimulus money will most likely push the state problems out to Sept-Oct. States will need more money in 2010 federal budget which will go into effect on October 1, 2009.
SAS
shocked, i am absolutly shocked!
No buyers for Citi’s ‘bad bank’ operations
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090217/REUTERS/902179997/1036
Government pension agency braces for recession
The deepening recession spells trouble for a little-known government corporation that insures the pensions of 44 million workers and retirees. The Pension Benefit Guaranty Corp. already has an $11 billion deficit that seems sure to grow larger as Corporate America suffers through the worst economic crisis since the Great Depression.
http://biz.yahoo.com/ap/090216/pension_bailout.html
“Am I correct in assuming there are no mechanisms for the taxpayer to be made whole at the end of this mess?”
We are past this point. Worry more about the USA being whole and not the taxpayers.
Any takers on this point… How do you feel Obama’s new housing plan will effect the NJ housing market?
“How do you feel Obama’s new housing plan will effect the NJ housing market”
It won’t! Not enough money and when the government controls it, less than half will even make it to those who need it.
Bread and Circus.
#186 – kettle1 – The Pension Benefit Guaranty Corp. already has an $11 billion deficit that seems sure
If I remember right these guys tried to cover their losses in the summer by doubling down on MBS.
Actually, you have to be careful where you shoot. Some nut on Long Island “defending his property” shot a kid standing in his driveway. Turns out trespassing is only a crime if it is not in the driveway or front walk or front steps. Turns out people have a reasonable expectation not to be shot when delivering a pizza to wrong addess. Who knew. However, if the kid was even on his front yard grass he could have gave him a shot, but fenced in backyard would have been better. However, shoot to kill shots should only be inside house or outside house when life is in danger. Sadly, all you get is a warning shot or a shot in the leg for someone swiping your cucumbers. Better to invite them and ask them to threaten you once inside so you can get a clean kill shot.
Clotpoll says:
February 18, 2009 at 10:55 am
marv (163)-
I’d like to pay one of these folks back with a bullet between the eyes when they jump my fence this Summer and make for my garden.
This will begin to happen. People who can commit fraud and freeload off their neighbors will do anything.
#130 3b, the problem comes when your 30% off offer is instantly accepted. What are you going to do? ;-)
183
The markdowns in wholesale are getting insane.
I quoted a job last week that had about $100K worth of HVAC stuff on it. Four or five comapanies were all within a couple thousand of each other.
One company came in at $81K, another company matched it, at this point I bowed out. The contractor ultimately bought it for $69K.
I’m seeing this constantly. Fear pervades every part of the construction industry.
Clot, et al
As has been pointed out before, 99% of the current bailouts are not for the US but for the foreign nations that funded all of the RE growth.
Oh and our #1 creditor is about to be broke…. nothing to worry about though
Japan’s Downturn Is Bad News for the World
As Hillary Clinton visits Tokyo for her first trip as secretary of state, she will find a country in the midst of its worst recession in 50 years. Japan’s economy is contracting across the board: Exports have cratered, industrial production is on track to plummet 30% from a year ago, and the Japanese government projects that GDP will drop 12% from last year. The world’s second largest economy, Japan is also the largest holder of U.S. Treasury bonds. Recently, many economists and scholars in the U.S. have been looking backward to Japan’s banking disaster of the 1990s, hoping to learn lessons for America’s current crisis. Instead, they should be looking ahead to what might occur if Japan goes into a full-fledged depression.
If Japan’s economy collapses, supply chains across the globe will be affected and numerous economies will face severe disruptions, most notably China’s. China is currently Japan’s largest import provider, and the Japanese slowdown is creating tremendous pressure on Chinese factories. Just last week, the Chinese government announced that 20 million rural migrants had lost their jobs. Closer to home, Japan may also start running out of surplus cash, which it has used to purchase U.S. securities for years. For the first time in a generation, Tokyo is running trade deficits — five months in a row so far. The political and social fallout from a Japanese depression also would be devastating. In the face of economic instability, other Asian nations may feel forced to turn to more centralized — even authoritarian — control to try to limit the damage.
http://online.wsj.com/article/SB123483257056995903.html?mod=googlenews_wsj
I think O’bama will throw around some of that money but I think this plan is going to end up in the Hope Now junk heap.
They’ll give it a whirl and then realize there’s too many moving parts and too many unintended negative consequences for it to work.
should be post #173.. not #130. Sorry
John
Sadly, all you get is a warning shot or a shot in the leg for someone swiping your cucumbers. Better to invite them and ask them to threaten you once inside so you can get a clean kill shot.
There is no such thing as shooting to wound. a firearm is a lethal weapon and most courts will view its use as an attempt to kill someone (ignoring whether such action is justified or not for the moment).
If you are going to point a gun at someone and pull the trigger you had best be aiming to kill. Anything else is negligence as you have now tried to use a lethal weapon for a non-lethal purpose.
you never point a firearm at anything or anyone unless you are prepared to finish the job
Note i am not an attorney
#195 hehe: Hope Now junk heap.
Along with Pocket Change you can believe in.
#192 I will hit the bid.
said before, will say it again,
nationalization, the real kinf, not the Citi/JPM flavor is a foregone conclusion. the question id how many trillion do they waste before sucking it up and doing it?
Greenspan backs bank nationalisation
”It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” he said. “I understand that once in a hundred years this is what you do.”
http://www.ft.com/cms/s/0/e310cbf6-fd4e-11dd-a103-000077b07658.html?nclick_check=1
#178 Clot:On top of that, we’ve entered a realm in which the asset cannot be valued.
You have confirmed my biggest fear, how do you value the asset.
Probably a stupid questions, but would you not think that someone in the NAR would understand this, and realize just what a threat this is to the housing market?
Transactions will dry up almost completely.
John,
Housing as a luxury? I’m afraid that you missed something in your argument.
There are cars and there are luxury cars. There are houses and there are luxury houses. I don’t agree that your luxury items shouldn’t have the same weight put on them in terms of median income.
Rich people don’t become rich by giving their money away. Just because some fools became weathy over the last few years and turned the status-quo upside down doesn’t mean that rich people are going to continue to throw their money away.
Here is the Geithner/Summers plan to put a floor under housing prices.
http://www.treas.gov/press/releases/tg33.htm
#176 stu: No I live in River Edge. We went from having one of the lowest property taxes in Bergen County, to the 3rd highest in about 6 years.
We are 3rd behind Teaneck and Begenfield.
(ACORN) got billions in the porkulus package
So Jamil can regurgitate lies from the same folks whose action and inaction contributed to the mess we are in now.
Jamil SFTU for once and try to constructively be part of the solution instead of an A-HOLE.
And Stu – the stimulus now adds up to $15 trillion? Where the hell does that number come from? I guess the same place that Jamil got his acorn reference: you know the same folks who coined the term porkulus and have Joe the Plumber lead policy meetings.
Have these folks have no memory? Where was their leadership when it could have averted some of the pain of the situation that the economy is in? Holding lectures for Islamofascism Week I suppose, how did that work out?
Furthermore how is it that your much vaunted conservatives in the house who voted to a member against the bailout manage to put their own pork into a bill that they voted against? I don’t suppose those folks will refuse the aid that their states will receive in the package.
I don’t expect the legislation to make things better overnight – no reasonable person does or has made that proposition. We don’t need the same old BS from the A-Holes in this country who offer nothing more than political sloganeering matched with utter ignorance on the facts and history that underscore any of the challenges that our country may face. I would hope that maturity and intellect would prevail but it seems that many would rather fiddle while our country burns.
#139 Skep – Exactly. It is absurd and it should be criminal. At some point, the great unwashed masses will rise up from their couches, brush off the Dorito crumbs and ……look for the remote that is stuck in the cushions. God, is it really hopeless?
#175 skeptic: I know, but what the heck, I have nothing to lose.
BC
here is a question for you….
With eastern europe on the bring on collapse, and given that such an event has a very good chance of taking western europe with it, which will in turn become a global collapse due to counter party risk; are the feds floating the nationalization plan publicly so that they can use nationalization as a rapid reaction plan?
http://2.bp.blogspot.com/_9ZzZquaXrR8/SZiBowQ0lSI/AAAAAAAAC8g/NllhBTnZYt4/s1600-h/ClaimsOnEastEurope.jpg
Oh and dont forget the swaps that the FED executed with EU banks as part of a stealth EU bailout by the FED.
to be fair its not just the EU, we bailout the global banking system
Reserve Bank of Australia
the Banco Central do Brasil
the Bank of Canada,
Danmarks Nationalbank,
the Bank of England,
the European Central Bank,
the Bank of Korea,
the Banco de Mexico,
the Reserve Bank of New Zealand,
the Norges Bank,
the Monetary Authority of Singapore,
the Sveriges Riksbank,
the Swiss National Bank.
New Plan:
Since there is both a housing credit for buying a new home and an auto credit for buying a new vehicle, a buyer in the market for both should buy a mobile home to qualify for both.
Kettle,
You can find the SAS photo album here.
http://www.bertisevil.tv/
Lets review,
Speaks in a funny language that is almost childish
Lives in a brownstone on the Upper East side.
Hmmmm
#203 sean: A floor under housing prices? No, it will just put a big whole in the new floor.
201 3b
if your talking about RE the only way is up it can’t go down never never ever. they’re not making anymore of it you know
#211 Sorry should be HOLE.
http://www.nypost.com/delonas/2009/02/02182009.jpg
Genius. Yet True.
A single family home is a luxury. I grew up in a two bedroom apartment in the bronx and my mom and dad had four kids. At the age of 50 my father bought his first house, a 3 bedroom 1.5 fixer upper on a 40X100 lot. In fact the estate my Dad bought it from we heard from the son that their dad bought the plot in 1910 and saved till 1923 to build a house on it from a kit he bought in the sears catalog, all the while he lived in a dump in brooklyn for 20 years. Flash forward to when we sold it in 2004, some flipper with zero down who spoke around 3 words of english who already had five other homes bought the house after looking at it for 15 minutes. The original owner paid cash for house, saved for plot then saved for sears house. My Dad put down 60%. Lots of lots of skin in the game, life savings of 20+ years for first two owners who both stayed in house till their death. Housing should be a luxury reserved for savers not for zero down sub prime sludge with no skin in the game. Those folks should stay in their run down one bedroom rentals or at best a small coop.
Nicholas says:
February 18, 2009 at 11:55 am
John,
Housing as a luxury? I’m afraid that you missed something in your argument.
Is that a picture of our president?
Alap says:
February 18, 2009 at 12:04 pm
http://www.nypost.com/delonas/2009/02/02182009.jpg
Genius. Yet True.
“I live in River Edge”
isn’t hot dog heaven in River Edge?
SAS
Rich and Rude
New research has turned that wisdom upside down. The richer people are, the ruder they are, according to Dacher Keltner, a psychology professor at the University of California, Berkeley.
Keltner and co-researcher Michael Kraus videotaped 100 undergraduate students who didn’t know each other, and studied their body language during one-minute gaps in conversation.
The results were clear: Students from a higher socio- economic background were more likely to be rude during the silence. They would doodle, fidget or start grooming themselves. Less-privileged students made far more effort to engage with the other person, making “I’m interested” signals such as laughing or raising eyebrows.
In short, the richer people were a lot ruder, while the poor were a lot more polite.
The psychologists viewed the results as basic animal behavior. The higher up the food chain you are, the fitter and stronger you are. The wealthier animals are signaling that they don’t need anyone. The poorer animals are ingratiating themselves because they need help.
#216 –
No, I interpret it as a chimp who writes all these stimulus packages for us. Others may see it the way you describe.
#208 kettle; Speaking of Western Europe, my brother came back Monday past from England after a 10 day trip.
Told me it is grim across the board there. They are all waiting for the next shoe to drop.
“You can find the SAS photo album here”
ha ha good one bloke!
“Speaks in a funny language that is almost childish”
yup, true.
“Lives in a brownstone on the Upper East side”
correction, uws & bergen
SAS
#217 sas: I believe it is in Hackensack, just to the south of R E.
bailout accounting so far: 9.2 trillion
For commercial paper, we have allocated $1.8 trillion;
· The Term Auction Facility, which provides negotiated rate for banks to borrow from the FED, has allocated $900 billion;
· Other assets have $606 billion;
· Finance company debt purchases, like the Fannie and Freddie bailouts, have received $600 billion;
· Money Market Facilities have $540 billion;
· The Citigroup bailout cost $291 billion;
· Term Security Lending has $250 billion;
· Term Asset Backed Loan Facilities (TALF), designed to help credit cards and business loans, has $200 billion;
· The bailout for AIG cost us $123 billion;
· Discount Window Borrowings has been allocated $92 billion;
· Commercial Program Number 2, which helps banks buy commercial paper from mutual funds, received $62 billion;
· Discount Window Number 2 has $50 billion;
· The Bear Stearns bailout cost $29 billion;
· Overnight loans have received $10 billion;
· Secondary credit is at $118 billion;
· Federal Deposit Insurance Commitments (FDIC) which guarantees loans, has received $1.4 trillion;
· Guarantees on GE Capital are at $139 billion;
· Citigroup’s second bailout took another $10 billion infusion;
· The Troubled Assets Relief Program (TARP) we heard so much about has $700 billion;
· The earlier stimulus package this year cost $168 billion;
· Treasury Exchange Stabilization Fund took $50 billion;
· Tax breaks for banks are at $29 billion;
· And Hope for Homeowners devoured $300 billion
. Obama’s stimulus for 787 billion
203 Sean
I suddenly want to poke my eyes out.
OMG OMG 3 year ING CDs at 1.75%
Orange ING CD Options
Term Annual
6 Month 1.25% 02/18/2009
9 Month 1.25% 02/18/2009
12 Month 1.75% 02/18/2009
18 Month 1.75% 02/18/2009
24 Month 1.75% 02/18/2009
30 Month 1.75% 02/18/2009
36 Month 1.75% 02/18/2009
48 Month 2.00% 02/18/2009
60 Month 2.00% 02/18/2009
btw 3 months ago ING had 4.3% one year cds, that is big old drop for such a short time, mama going to get spanked with the ugly stick all of 2009 as her cds roll over.
I looked up the salary for the post master general and it is not 800,000$ a year.
It turns out that post master officer pay is congressionally limited to 120% of the vice presidents pay. The vice president doesn’t make that much money.
The most any post master general makes in the US is around 250,000$ a year. In other countries they can make up to 2.9 million dollars a year though.
Check this for more information.
http://www.postalreporter.com/big-pay-increases-for-top-postal-officers.htm
Honestly, before you post some of your guys information do some basic fact checking. It doesn’t do you any good to promote ignorance and your future comments will be discounted.
Sean [#132] says:
February 18, 2009 at 10:12 am
Why is it I have to go all the way to India to find stories like this?
http://www.telegraphindia.com/1090216/jsp/frontpage/story_10542302.jsp
————–
Because there is some BS in the article:
“there is no petrol or diesel to be bought for an entire stretch of 184km on this highway (Penna TurnPike)”
Because they are far away from PA, they can get away with some stretching of the truth.
Interesting anecdote… An uncle of mine told me, “Why aren’t you buying a house, I read in newspapers that you can get a house for $5k or less. Don’t you have enough savings”. I wept at the pity they must have felt for me :)
Kettle,
You need to stop piling on the knee-jerk Democrats with your facts as it ends up in a reflex of their putting their foot in their mouth.
It amazes me these sheeple still think there’s a difference between the two major parties in this country:)
Hirono (205): Hopeless optimism my friend.
Plus, I never said 15 trillion.
“The price tag for all of this moral hazard is around 10 to 11 trillion and sadly it has done nothing more than transfer wealth from the middle to the upper class.”
Join me on the dark side. It’s much better for your bottom line and mental state.
#227
Potter’s base salary rose from $186,000 in 2007 to more than $260,000 last year. On top of that, he received a “performance” bonus of $135,000. Between Potter’s salary, bonuses, retirement benefits and other perks, total compensation was more than $850,000.
http://abcnews.go.com/Business/story?id=6899700&page=1
John,
There are homes and there are luxury homes. I’m afraid that you need to break out of the little box that you have been living in most of your life.
When I travel the country all I see are SFH. There are occasional deposits of Townhomes and maybe some condo’s but they are the exception not the rule.
If you are going to make the generalization that housing is luxury then you had better make sure you are looking at housing generically, which it seems your not. Citing ancedotal evidence about your ‘hood, back in the day, doesn’t change the fact that the vast majority of Americans live in single family homes.
Housing, aka shelter, is not a luxury it is one of the primary core needs of a population. Food, Shelter, and Family are the big three that you need to take care of first (and in that order).
The main thrust of your argument, that a SFH is a luxury and it is being returned to luxury status, couldn’t be farther from the truth. A SFH has never been more remote (luxury) then it has been in the last few years. The price in real terms, such as how many years of labor it will cost me to obtain this SFH, was at an all-time high.
That is one of the main reasons why I haven’t bought a house. I just cannot afford one (rationalize the purchase) at this time but yet my household makes more then 78% of other American households.
Why is it I have to go all the way to India to find stories like this?
I agree, this story is pretty much stretching the truth. I just drove in mid January from Maryland to Ohio over the Pensylvania Turnpike. I traversed the route from Breezewood to Columbus.
I have driven the route about 30 times in my life and I didn’t notice anything out of ordinary other then the turnpike is still undergoing improvements. They closed one rest stop but it has been closed for at least 2 years from what I remember.
Sensational yes but from what I saw untrue. You can get gas in Breezewood and at every 30 miles on the Turnpike. All shops at every rest stop were open.
I don’t traverse the Ohio turnpike.
Actually, SFHs are at historically overally low affordabilty rates. I recall the banks being very strict with large down payments and interest rates being high. The actual price of houses may be a lot higher but getting one is a lot easier, back pre-redlining and being able to count you wife’s income it was much harder to get a home. The world has changed a lot in the last 30 years. Credit is still too easy to come by.
hirono: “(ACORN) got billions in the porkulus package
So Jamil can regurgitate lies from the same folks whose action and inaction contributed to the mess we are in now.”
So you are saying that ACORN has not been caught, indicated and convicted on voter fraud in several states (including the biggest voter fraud in the history of WA state)?
You are entitled to your opinion, but facts are facts.
HEHE
please excuse me, but my sarcasm meter is out for calibration….
i assume you are being sarcastic?
as you said there is only 1 real party in the US, 2 heads on the same dragon.
# 205 – Amen, bro
Potter’s base salary rose from $186,000 in 2007 to more than $260,000 last year. On top of that, he received a “performance” bonus of $135,000. Between Potter’s salary, bonuses, retirement benefits and other perks, total compensation was more than $850,000.
I apologize for my previous comment then. Seems like the data I provided showed information from 2006 authorizing pay increases for the Postmaster General.
Retirement and Benefits that amount to 455,000$ a year. Crazy.
Apology accepted.
Seems like limiting the pay of executives only applies to the private sector. But when it comes to the guberment’s own people, they keep getting raises. Even Senators are this year I believe?
So you are saying that ACORN has not been caught, indicated and convicted on voter fraud in several states (including the biggest voter fraud in the history of WA state)?
Only Sean Hannity is saying that, dude.
RE: 231 RE: postmaster general
Fcukin teet suckin pig!
I hope he works for his 850K at a faster clip than the post clerk at my local branch!
Low affordability rates? What metrics are you using to produce your affordability rates. If you are using the NAR home price affordability index it has already been proven to be garbage. I still disagree, housing isn’t affordable.
Home prices are too high, period. Don’t confuse purchase price with monthly nut, they are not the same. Acheivable doesn’t mean affordable.
“Actually, SFHs are at historically overally low affordabilty rates”
John,
Another crock of s*it. Supporting data?
#203
“Here is the Geithner/Summers plan to put a floor under housing prices.”
unbelievable. so it claims to exclude “speculators,” but it seems to exclude all owner-occupied housing from the definition.
it also gives $1000 per year bonus payments to deadbeats who stay current!
Hoboken story for Frank. (Frank don’t get your panties in an uproar over this one).
Heard a story today from a coworker who owns a place in Hoboken. A woman my coworkers knows put up her two bed condo for sale, an older walk up brownstone. She paid 90k for it a decade ago.
Offer came in after house was on market for about 6 months, offer was 600k, she attempted to bargain and get another few grand. Buyer of course walks away and there are no other offers.
Who they heck are advising these people?
John 234
Look at pages 7 and 9
you are full of it
http://www.scribd.com/doc/12454619/Housing-1
In particular notice the chart
“Home price as a multiple of household income” (pg 9)
People buying first time starter homes belong in first time starter home neighbohoods not mcmansions. For example a fixer upper cape in good old Levitown Long Island the birthplace of the surburbs can be bought today for 250K!! Out on Long Island a 27 year old newlywed couple can easily be making 65K each for a household income of 130K, which brings the house in at less than 2x income. Wait you say that would mean the 27 year olds actually finished college and have a full time job, or does not have a criminal record and landed a good civil service job OMG!!!! What about affordabilty for the unemployed, criminals, deadbeats and people on welfare!!! Problem is that young couples making 130K did not want a fixer upper cape and leased two cars and put 5% down on a 600K and is now in debt up to their eyeballs and are now claiming homes are not affordabale. Yea they are right 4 bedroom, 2 bath center hall colonials with 100 by 100 plots with a two car garage all redone in a nice neighborhood are not affordable!!!
”
3b– I have been looking since the end of December. Unless things are greatly different in your area from where I am looking, then I must tell you it is a waste of time. Even the foreclosures I’ve looked at were priced within 10% of peak.”
Oh yeah? When I said the same thing, everyone here attacked me with the so-called “comp-killers”. When I said that O will make everything possible to place a bottom, everyone here jumped to discredit me.
I guess you are all blinded by your wishful thinking. Your crash has yet to come.
I am all for fair housing prices but against false impressions and gloom and doom cheerleading.
#201 3b:Probably a stupid questions, but would you not think that someone in the NAR would understand this, and realize just what a threat this is to the housing market?
3b Will answer his own post.
I could see many realtors spinning this mtg write down madness, to make it a positive.
A (informed) prospective home buying couple is out looking for a house, but is conecerned about values and thier down payment and expresses this concern to their realtor.
Bobbi (with an i) or Jim “Bud” their realtor listen to these concerns with a sympathetic nodding head, but know because they are trained professionals, that they can put this couple at ease.
Bobbi/ Jim “Bud” inform their clients that homeownership is what made and will continue to make the USA the great country that it is.
Our President in fact our entire leadership and government understand this vital fact.
Because of the critical role that housing plays in our country, they have come to the rescue of the housing market, that really was only hurt by all the doom and gloomers.
Please bid on the house, but do not insult the sellers, by throwing in low balls, as they are sophiscated and understand full well our governments plan for the housing market.
Once you have bid and closed on the house, the government is guranteeing that you will not lose any money.
If house prices continue to decline (which they won’t), simply declare hardship, and the government will readjust your payment so that it fits your lifestyle needs.
Worried about losing your down payment? Don’t be, the government will pay it back to you on a monthly basis, which puts more money in your pocket so that you can go out and spend,and make our country great again.
What other vehicle allows you to have your initial down payment paid back you on a monthly basis, and puts the money back in your pocket (to spend) where it belongs.
In addition your new and improved monthly payment may also pay you back more than your initial down payment, again giving you the added flexibilty you need to live the lifestyle you deserve.
Not only that, but since prices are guaranteed by the government, they will have only one way to go and that is up!!!
You will reap all the equity gains which will help you fund the retirement you so richly deserve.
And not only that, since our government understands the vital role housing plays in our country and economy, you can still write off your mtg interest and property taxes to fully utilize those wondeful tax breaks that only homeowners can claim.
And do not forget the intangibles of homeownership, the warm and fuzzy feeling you will get knowing that you now have a house of your very own, where you too can create wonderful family memories,and decorate it the way that truly reflects your unique sense of style and taste.
It is a win-win situation for all. Don’t delay!!! Call Bobbi or Jim “Bud” at Your Finally At Home Realtors NOW!!!
Kettle,
“as you said there is only 1 real party in the US, 2 heads on the same dragon.”
Of course, divide and conquer the sheeple for their and the establishments benefit.
I think sas is about to call John out.
BTW, Does the board think that the percentage of dual income families is set to decline? Part because of the shedding of jobs and part because the single largest expense is reverting to the mean?
246, that stat is misleading. Homebuyers are usually 30-50 at peak earning years with a good full time job. Mediam income includes, 19 year old slackards living at home, 90 year old grandmas and the unemployed in the average. A good town most home buyers have at least a college degree, so from the cenus table it should be a multiplier of the household income of household headed by a college educated male 30-50 with a full time job. Not multiplied by a number that includes the guy stacking the shelves at blockbuster. The census tables of most good BC towns shows that number at being close to 150k in a lot of neighborhoods.
#221 SAS
UWS is still too close to Sesame St to allay my suspicions.
there goes the wife’s mad money!!!
zieba says:
February 18, 2009 at 1:15 pm
BTW, Does the board think that the percentage of dual income families is set to decline? Part because of the shedding of jobs and part because the single largest expense is reverting to the mean?
unexpected for CNBC
http://www.cnbc.com/id/15840232?video=1037869511
Maria, it’s never coming back. Living standards will never be the same. You can’t have an 8 trillion negative wealth effect from housing. You cannot have a 10 trillion dollar hit on capital markets. You can’t have a bunch of insane government programs and bailouts and everything else. Nothing makes sense, the consumer knows it. It’s indefinite. America will never be the same. We have trillion dollar deficits Maria for 10 years.
SNIP
Indefinitely! Maria this is here to stay. Our country will never be the same. We have permanent damage to our financial system which is in a depression…residential…it’s all…it’s in a depression. By the way I think there is a 50 percent chance we are going into a full scale depression. That’s my view and it’s not getting fixed.
John,
Please take the BS down a notch today.
#249
“Oh yeah? When I said the same thing, everyone here attacked me with the so-called “comp-killers”.”
mw– those comp killers are the current reality which most sellers are not facing. Unless you have the patience to find the 1 or 2 reasonable sellers out of 100, i think it is a waste of time to look to buy right now. that was my point.
3b (201)-
No. They are like starving chihuahuas, living from meal to meal.
“…but would you not think that someone in the NAR would understand this, and realize just what a threat this is to the housing market?”
#253
John– the median income numbers were equally misleading with respect to the subset of likely buyers back when the price to income multiple was 4. When the multiple went to 8, nothing changed except the ratio.
CNBC: Goldman Partners Borrow To Cover Margin Calls
Posted by Equity Private, Feb 18, 2009, 1:06pm
That’s what happens when you leverage your Goldman stock to buy “alternative investments.” Now your Goldman stock is down 60%+ in two years, the hedge funds you bought have taken a similar bath, you are facing margin calls of “tens of millions in some cases,” and Muffie Benson-Perella won’t return your calls.
The situation is liquid, even if your limited partnership interests are not.
http://dealbreaker.com/2009/02/cnbc-goldman-partners-borrow-t.php
“those comp killers are the current reality which most sellers are not facing. Unless you have the patience to find the 1 or 2 reasonable sellers out of 100, i think it is a waste of time to look to buy right now. that was my point.”
#258 skep-If they were “comp-killers” one could use them to make a killing. As you admit they are not and it is a waste of time to ask for those discounts.
#249 MW: The crash is already here, whether you undestand that or not.
The question is how severe it gets,and what effect if any this pathetic government attempted manipulation wil have.
As far as comp killers it appears you cannot or will not undestand what they are.
As far as wishful thinking, you suffer greatly from that disease The reasons are two-fold.
One, you are are the ding-dong that stated ” Wall St incomes by far will gurantee the high level of North Jersey real estate prices”.
In this environemnt that has to go down as one of the most if not most stupid, delusional, and wishful thinking comments ever posted on this board since its inception.
Second, from your postings it appears you want the housing market to fall, but only for higher prices houses, not yours.
You want the peak price or more for your house, so that you can buy a more expensive house with a lower payment, or money left over.
In effect you want it on both ends, a decline in prices, just not a decline for your house.
As far as the reo’s and the still high asking prices nobody is debating that.
However, for the most part they are not selling, what does that tell you about the market?
It should tell you it is not working, as the fundamentals do not support the asking prices.
This thing was written by and for idiots:
Homeowner Affordability and Stability Plan
Executive Summary
The deep contraction in the economy and in the housing market has created devastating consequences for homeowners and communities throughout the country.
Millions of responsible families who make their monthly payments and fulfill their obligations have seen their property values fall, and are now unable to refinance at lower mortgage rates.
(Was “ability to refinance” added to the Bill of Rights? People who bought a house and took a mortgage they could live with are not significantly affected. If all interest rates go up due to government profligacy, nobody will be able to refinance at a lower rate.)
Millions of workers have lost their jobs or had their hours cut back, are now struggling to stay current on their mortgage payments – with nearly 6 million households facing possible foreclosure.
(Sounds like the logical aftermath of a credit-fueled boom. Let the economic adjustment begin!)
Neighborhoods are struggling, as each foreclosed home reduces nearby property values by as much as 9 percent.
(Neigborhoods are not people, so this is an odd personification. More accurately, many people in many neighborhoods are struggling. And the authors mistake correlation for causation. A neighborhood with a foreclosure is more likely to be near economically depressed areas or company closures, and is likely to be filled with other people in similar situations. Birds of a feather flock together.)
#262
“If they were “comp-killers” one could use them to make a killing. As you admit they are not and it is a waste of time to ask for those discounts.”
i think you have a reading comprehension problem.
“When I said that O will make everything possible to place a bottom, everyone here jumped to discredit me.”
MW,
Here we go again. You can’t manipulate, price fix, hope, freeze, etc.. It’s all a temporary band aid. You may be able to prolong the agony, Japan, not change the course. Market forces can not be altered by any govt.
That said, they are doing a damn good job at building a foundation for another bubble. Thank you.
253 john,
wrong again. While the census data does include the spectrum, what it shows is that housing has become more expensive for everyone over time.
On top of that the average american has increased their debt load at a geometric rate.
The high income neighborhood in BC you reference is a subset of the top 1% of the entire nation and as such are extreme outliers relative the rest of the population in terms of income.
In the chart i reference also notice that income adjusted to 2008 dollars is approximately the same for the entire period, it has not gone up. that means that the increase in home to income ratio has been driven by an increase in home prices. This means that affordability has gone down.
thanks for playing though
The Fed: Federal Reserve’s not stoking inflation, Bernanke says
While do I feel he has a bottle of KY warming lotion just in case he has too!!
#234 John: You are rambling and incoherent again. Only because you are a Bronx boy will I cut you some slap.
#267 BC Bob: Hey MW is in finance and works on Wall St, and has not a clue what you are talking about.
#267 BC Bob:That said, they are doing a damn good job at building a foundation for another bubble. Thank you.
Where do you forsee the next one? Gold, other commodities?
Japan has nro blown any new bubbles since the collapse of theirs in the 90’s.
Kettle I hear your pain, real income did fall greatly for realtors. Everytime I stick my toe in the market the good neighborhoods are holding up somewhat. Favorite response was yea they are going to fall 20% as the wall street types won’t have the bonus money, but it will just be like 1992 as the 20% off will make it affordable for the doctors, dentists and lawyers who were priced out. Sad as it sounds that is the reality in saddle river and alpine. It is the wannabe neighbor hoods with the pseudo rich with the faux stainless steel GE profile appliances who are getting spanked the hardest.
“#267 BC Bob: Hey MW is in finance and works on Wall St, and has not a clue what you are talking about.”
3b,
You think she had a clue regarding spreads, lifting a leg?
John #253…
“Median” is median — you are trying to define it as “median in places that I like, or median of salary ranges that I approve of”.
Some unsolicited advice: I wouldn’t overestimate the incomes of everyone. The only impact it has is that of lowered self esteem. At the end of the day, a happy family in a small ranch is a more desirable outcome than an unhappy family in a McMansion. Your posts show an exaggerated estimate of how much money one needs… which can only lead to unhappiness.
We could drive ourselves crazy by defining a median as the median wealth of the top 500 people in the world… or 50 or 5…
S
SAS, I love the war stories and conspiracy theories (especially Madoff-related), keep ’em coming. I’d love to have an UWS meet-up and pick your brain over this stuff, perhaps at George Keeleys or one of the quieter bars on Amsterdam in the 80s.
– Herring (26 yr old, non-$300-jean-wearing, non CIA/KGB/Mossad, UWS brownstone renter)
3b [271],
Right now there’s a bubble in supply, paper.
Yippee! I qualify for the borrower bailout…AND, I don’t even have to stop paying my mortgage.
This is too good. Finally, a crap sandwich that I can bite into gets served.
grim my post #250 is in moderation, not sure why.
I bet I can jam a workout through my lender before the credit bureaus can even figure out how to score a mortgage workout.
Hell, I bet they end up not even counting workouts against FICO.
Dopes.
MW 262
The problem is that there are not any qualified sellers…. boo hoo
in the 90’s RE bubble, the peak was only about 17% above the historical median value for the CS index. This bubble is 170% above the median CS index value. That is an entire order of magnitude. If that doesnt mean anything to you, then let me help. the housing market is F’d! the 90’s housing bubble saw the NY/NJ metro area drop as far below the mean as it rose about. The bubble was approximately symmetrical.
Once again let me explain. if we follow the same pattern, and we are probably worse off because of the massive amount of leverage used in this housing bubble; then your 700K mcmansion will be going for 2ooK at best in 2012.
Best case scenario for you at this point is that we do not overshoot (as likely as jesus himself putting a bid on your house). In this case your 700K POS Mcmansion will be going for about 300K.
cheers
#277 BC Bob: Sorry BC, was not thinking, forgot all about that.
There is enough supply to paper all of Wall St from Broadway to Water st.
“Yippee! I qualify for the borrower bailout…AND, I don’t even have to stop paying my mortgage.”
Clot,
Don’t know why anybody would continue to pay?
Mortgage Insurance – Anyone know where I could look to get mortgage insurance (in case of loss of a job), or supplemental unemployment insurance, that would be reasonably priced? Thanks.
#274 BC Bob: Same as yesterday, don’t want to stimulate John.
BC (282)-
It appears to me that those current on their mortgages will have the easiest time obtaining the workouts under this new program. Since I am current and can afford the payments, I’ll keep paying until my workout is initiated. Least threat to my credit score that way.
what about renters who lose their job..that is hardship, are they going to subsidize rents too?
Clot (285) –
Are you underwater on your mortgage? AFAIK, this program applies to only those cases.
I seem to fit O’s definition of “hardworking American who plays by the rules”. Bully for me.
Unfortunately for the pigs in DC and WS, I’m just not a sucker.
#273 John: Have you talked to any one in the medical or legal field lately?
They are hurting too. All will be affected by this, no one, no, town, or no area is immune.
vic (287)-
Bought in 2005, put 20% down. I’m probably 5% or so upside-down.
I could be more underwater, but I beat down a distressed seller on the price and buried a 3% commission into the transaction, to boot.
“If the U.S. nationalizes banks, it should be to clean up a particular institution, get its balance sheet straight and get rid of management,” Patrick said. “The ultimate goal is to clean up banks enough so that private investors would be willing to invest capital in them. That is similar to what eventually happened in Japan.”
After all, as any fan of most zombie movies knows, you don’t kill a zombie by giving it more meat. It takes a fatal blow to the head.
The invisalign guy near me is still packing them in.
3b says:
February 18, 2009 at 1:51 pm
#273 John: Have you talked to any one in the medical or legal field lately?
They are hurting too. All will be affected by this, no one, no, town, or no area is immune.
Looks like there are strong disincentives in the Obama plan for people who lose their jobs to pull up stakes and look for work in a better location. Nope, for example, they’re going to try to keep Detroit home values from falling, and keep all the autoworkers there, with home, mortgage, and employers all subsidized by more productive people, hoping for the SUV boom to return or Magical Green Car boom to appear.
Is this a variable subsidy meant to supplement the 31% of Net Income? Or is this a plain vanilla reduction of principle?
What happens to those who are in the program but experience further cuts in hours of just get cut? Will they get reevaluated?
Is this for the life of the loan or a promo until the cash runs out? How can the gubmint estimate future obligations if the complement cannot be held constant?
Am I asking too many questions?
What is the ideal multiple for income/purchase price. People keep throwing out numbers from 2x to 10x.
Under normal circumstances, or in historical data, what is the average?
A west
how can Detroit home values fall??? you can buy a house for $1 a few city block for 10K or so……
Kettle1, let’s say the Detroit suburbs where the employed people live.
Fed downgrades economic projections for this year, sees no signs that housing is beginning to stabilize.
Clot (290) –
Nice! At least some of us will be able to get a bite out of the government pie.
However, if I interpreted this correctly, you may only be able to reduce the interest rate to around 5%. (Max LTV – 105%). Other than $1000 reduction in principal every year for 5 years, there is no principal reduction.
Here are CR’s comments on it.
“For homeowners there are two key paragraphs: first the lender is responsible for bringing the mortgage payment (sounds like P&I) down to 38% of the borrowers monthly gross income. Then the lender and the government will share the burden of bringing the payment down to 31% of the monthly income. Also the homeowner will receive a $1,000 principal reduction each year for five years if they make their payments on time.”
#300 Then the lender and the government will share the burden of bringing the payment down to 31% of the monthly income.
It would seem than that the only way to accomplish that would be by principal reduction.
New Plan to Help Around 9 Million Homeowners
ultimate oxymoron. only people who don’t own their homes are helped
Where is our Housing Bailout Rally?
The clock is ticking on Bi
3b(300) –
Yes, I stand corrected. Now, it is left to be seen if the banks play along and bring the P&I down to 38% DTI. They will have to book huge losses for massively underwater homeowners.
Buy the rumor sell the news.
Vic,
That’s the whole thing. There’s too many moving parts. They’ll end up scrapping this thing in a few months when it’s proving not to work out as they planned.
with O’s news on housing, stimulus, geitner trillions, Why can’t even get a small suckers rally going could be telling us that a bottom is indeed forming.
I guess all the suckers are broke.
John,
I laughed a little when you tried to make the argument that median income includes slackers and grandma’s and thus it looks worse then it is.
There were slackers and grandma’s counted before the housing bubble it shouldn’t matter that they are counted now.
Unless….
Slackers and grandma’s were not working before the housing bubble and therefore went uncounted. During the housing bubble jobs were so easy to find that Slackers and Grandma’s got low income wages just for extra kicks, you know cause jobs were just fallling out of the sky. Because of the huge unwashed masses getting low-paying jobs they dragged down the median income during some of the best earning years making housing look really unaffordable. The unwashed weren’t even in the market for houses!
(snap) wake up
Looks like SAS scared off the pump and dumpers.
this quote is from Mish
“I do not buy this “acted responsibly” nonsense. If a person took out a loan greater than 38% of their income they most assuredly did not act responsibly.”
which I agree with.
I don’t know what # comment it was but someone questioned what happens if a renter lost a job does the gvt. step in and help?
Bi,
We broke eighty again!!! 10 more points:)
http://www.thestreet.com/story/10464539/1/buffett-watch-the-oracle-sells-america.html?cm_ven=GOOGLEN
The Oracle of Omaha is selling America.
Bi,
Warren Buffet has joined these terrorist from njrereport!!! What’s this world coming to?
#310 – crossroads – I don’t know what # comment it was but someone questioned what happens if a renter lost a job does the gvt. step in and help?
I believe your thinking of zeiba’s comment at #294. It’s a good point too. There’s the potential for a never ending commitment with this plan. A financial Vietnam/Iraq in which we can never pullout.
From zeiba’s post;
How can the gubmint estimate future obligations if the complement cannot be held constant?
HOV is circling the drain.
FITBP
this bank stock makes citi look like a dream!!! Down 160 a share in the last six months!!!!!!
With regards to renters, the comment was made by house hunter @ 268 @ 1:17PM.
I didn’t take (have) the time like others to read or even skim through the proposal.
That type of ambiguous commitment is a rookie drafting mistake. Then again, its our tax dollars at work.
I’m actually with whoever said that they’ll scrap the whole no-quasi-homeowner-left-behind act once it blows up; whether internally or externally.
BC (314) –
“HOV is circling the drain.”
My target is 0.
http://www.newsday.com/news/local/newyork/ny-nypost0218,0,4187535.story
al sharpton is protesting monkey cartoon, he is quick.
Can somebody tell me how this woman thought she could afford her payments??? Housekeeper w/ 3 kids and a $3500/month mortgage?
” Another homeowner, Denise Parker, a mother of three who works as a housekeeper at two Midtown Manhattan hotels, bought a home in Springfield Gardens, Queens, in 2005 with an adjustable interest rate that, after two years, went up every six months. Her payments started at $3,500 and now are $5,050 a month, she said. She fell behind last year and her house is scheduled to be auctioned off on Friday.
“I refuse to leave the home that I’ve worked so hard to keep,” Ms. Parker, 42, told the audience. “I will not let the bank take my home and I will not leave.”
http://www.nytimes.com/2009/02/18/nyregion/18foreclose.html?scp=6&sq=Queens&st=cse
Kettle.
how’s this for CNBC bear…
Tough times on Wall Street are reaching all the way to the highest levels of the most storied former investment bank—Goldman Sachs—as partners there are being forced to borrow money to cover margin calls, according to sources within the firm.
Several Goldman Sachs partners have leveraged their Goldman Sachs stock to buy alternative investments such as hedge funds & private equity, and they have done so through their Goldman Sachs brokerage accounts.
http://www.cnbc.com/id/29260008
#319 – Can somebody tell me how this woman thought she could afford her payments???
How much do housekeepers make that she could even afford the initial payments?
I realize a lot of people didn’t think further than those initial monthlies, but $3500 has the to be the overwhelming majority of a house-keeper’s take-home.
I’m amazed she’s made it 3 years.
Actually Detroit suburbs are nice, weather is not great but it is not an entirely bad place(Grosse Point and Birmingham are really nice towns). The truth is with the way the economy is there moving jobs there is not a bad idea. The biggest issue is with the unions, fundamentally unsustainable, older, inefficient autoworkers make more than the engineers in Mich. People can be hired in MI for half of NYC. If the unions and democrats didn’t kill the goose that laid the golden egg we would be better off. The big three also have a management problem, they are run like the government.
Just got spammed with no less than 9 emails from FDIC reporting counterfeit and fraudulent certified checks from various banks…
The next fraudulent check will be from the fed.
sl
#295
“What is the ideal multiple for income/purchase price. People keep throwing out numbers from 2x to 10x.
Under normal circumstances, or in historical data, what is the average?”
**********
in NYC metro, 4x is long term average. Went up to about 8x at bubble peak. Currently, I would say it remains at 6-7x
#321 – That’s what i’m saying! I make ~$100k a year (with no debt) and i’m reluctant to carry a $2000/month mortgage.
#321 – That’s what i’m saying! I make ~$100k a year (with no debt) and i’m reluctant to carry a $2000/month mortgage.
You should carry as much debt as possible. How do you expect to get bailed out?
What are you gonna do? Wait for inflation to wipe you out?
Get the PPT some Viagra. These weak attempts to blow out the shorts is a real problem.
In Bergan County that qualifies for food stamps and the subsidized lunch program. I thought this site was restricted to good looking people earning over 250K a year who are hung like a well endowed donkey.
W8TING says:
February 18, 2009 at 3:06 pm
#321 – That’s what i’m saying! I make ~$100k a year (with no debt) and i’m reluctant to carry a $2000/month mortgage.
“in 2005 with an adjustable interest rate that, after two years, went up every six months”
everybody who took a loan like this never mentions the money they saved the first couple of years compared to a 30 yr fix. loan they now realize they should have taken. hmmm. we better bail them out too
Meredith Whitney leaving Oppenheimer to start own advisory firm
295 alap
its all here:
http://www.scribd.com/doc/12454619/US-Real-Estate-Look-Out-Below
the charts on pg 6 answer your question. the text on page 2 discusses the issue
W8,
better question: why would a house keeper want to be a debt slave to a 3500/month mortgage????
cut your losses move on and actually enjoy life.
skep-tic –
thanks for the answer.
Great news! Who is looking forward to getting up every morning, feeding your kids, getting dressed, and then pushing off to work to go pay your deadbeat neighbor’s mortgage. Hopenchange!!!!
30 yrs from now I am going to sue for reparations for past enslavement…as we are ALL slaves now… especially if you were prudent and exercised self restraint.
listened to the speech. now really convinced that our whole country is f.ucked.
sl
BTW.
Where’s ReTard?
sl
#331 – Because it’s the american dream! Didn’t you get the memo? Unless you own your own home (regardless of whether or not you can afford it), you’re not living the american dream.
JBJB (333)-
Wait til they conscript on of your kids to go fight in the war that will be required to end the massive depression we’re headed into.
The only known remedy for a depression is war.
SL,
shall we go ahead and start planning the costa rican compound? i have a feel that the pool of potential members is growing rapidly
W8 (336)-
You kids will be told they’re not living the American Dream unless they join the Army and kill some Chinese people.
The Obama mortgage plan
Below is a list of key elements of the plan outlined Wednesday by President Obama that aims to aid as many as 9 million households in fending off foreclosures:
Allows 4 million–5 million homeowners to refinance via government-sponsored mortgage giants Fannie Mae and Freddie Mac.
Establishes $75 billion fund to reduce homeowners’ monthly payments.
Develops uniform rules for loan modifications across the mortgage industry.
Bolsters Fannie and Freddie by buying more of their shares.
Allows Fannie and Freddie to hold $900 billion in mortgage-backed securities — a $50 billion increase
just give me some agent orange, AK-47 and some commando training and promise me some good shore leave and I am game. Just need to get that US Air pilot to lead me into battle. How many warbrides can I bring back again?
Clotpoll says:
February 18, 2009 at 3:29 pm
W8 (336)-
You kids will be told they’re not living the American Dream unless they join the Army and kill some Chinese people.
RE: 331
I roll in lower socio-economic circles every now and then.
The answer is because her friend had one. There were plenty of enablers who targeted various cultural ghettos. There was no concept of total price, amortization or anything of that sort.
How much do I have to pay to get “a house” and when can I close so I can call my friend and boast about it.
Total mania.
How about the pioneering retards who uprooted their families and moved to the desert in the name of square footage and stainless steel appliances?
75% of those municipalities are NOT going forward concerns. There is no tax base, crime, looting and murder will ensue shortly.
I visited one such place over xmas, have photos of unfinished model houses, bare hookups sticking out of the group, empty commercial lots, 100% cash house for sale ads. TOTAL FCUKIN’ INSANITY!
All this entitlement crap today is making me ill. I need a blog time out until tomorrow.
G’night.
Geithner = fail
#78 Zieba
Are you describing the Brooklyn migration down Rt78 to the McMansions in PA?
#334 Hopenchange!!!!
Yeah all we will have left is change, pocket change.
I suppose the charitible view of this housing bailout is that O and company believe it is a necessary means of placating the public while they go about blowing real money trying to fix the banks, which no real Americans like or understand.
The problem with this strategy in my opinion is that it is not the ire of the deadbeats O and company need to worry about. Most of these people probably pay hardly any taxes and (for the really politically calculating) they are a disorganized constituency which probably do not vote or contribute to campaigns in any predictable pattern (then again, if the O team is really cynical, perhaps they have already identified these people as reliably democratic).
In any case, I will state again that I think our leaders need to be far more worried about the ire of the tax paying, responsible public which votes far more consistently than the deadbeats.
Well,I gotta tell you, if my inbox is any indication, this policy is dead on arrival. Even the most die hard Obamabots are not happy about it.
Ha Ha, friend at MS told me they cut bonus last minute to traders, but MS makes a big deal about amount of money employees give to charity, so the day before final bonus number they hit all traders up for charity and everyone gave 100%, next day 50% of what they expected was given in bonus and near riot broke out, MS had to let people redo charity contribution and amount fell by 60%
new migration pattern for jersey
generation one slums of brooklyn
generation two Staten Island
Generation three middle class New Jersey
Generation four Bergan County New Jersey
Generation five slums of brookyn
“The problem with this strategy in my opinion is that it is not the ire of the deadbeats O and company need to worry about.”
The problem with this policy is that its a direct slap in the face of the responsible. Even some of his primary constituents are responsible people who struggle to pay their bills.
#295 – alap
What is the ideal multiple for income/purchase price. People keep throwing out numbers from 2x to 10x.
Alap,
1) depends on you & the neighborhood.
2) not to piss in Kettle’s charts at post #330 but they don’t tell the full story
… look at those interest rates & what they did to the leverage.
http://img.photobucket.com/albums/v89/fucttape/thenandnow.jpg
way back when, people didn’t buy nearly the amount of shit or the amount of house that we buy now. in proportion of prices to income, esp. if you look at minimum wage, it’s sick what you can buy now (minus the percentage of home ownership on mark-to-make believe prices, that’s a different kinda sick.)
so back in the mid 70’s my dad & mom own a one half of a duplex & my dad
walks to work so they did well during the oil lines. there’s zero kids during the first 3 years of marriage & they couldn’t afford the $50k 4 bedrm, 2.5 bath, 2 garage colonial listed in the newspaper on the day when I was born.
but let’s say they wanted to buy
that house vs the duplex… if the rule of thumb to buy is 2.5 times gross salary, then they were making under 25k, combined gross? that seems pretty low, no? well, the interest was sooo high they didn’t buy the 50k house, they bought the 25-30k house, almost dollar per dollar.
That’s why buying within historical ranges is key. There’s no winning,
it’s just balancing the asset price & interest price in relative markets
so as not to loose your shirt.
“The only known remedy for a depression is war.”
Clot,
Not Hope Now?
Gotta loves this headline “Judges tentatively order release of 58,000 Calif inmates”
WTF is MSM trying to scare the bejeebus out of us?
Bc 351 Unfortunately true. It will be the only card we have left to play.
iThink
No offense taken. You have a legitimate point. My goal was to point out median trends. While those do not apply to everyone they do act as a good rule of thumb as to where the market was, is and may go.
If you look at the charts again, what you will notice is that the ratio jumps up as the interest rates drop.
cheers
ithink ithink [#350]…
These days, 2.5x income buys almost nothing :(
Assuming a single income of ~100k, the best one can hope in good school areas like N.Edison or Plainsboro is an old 2BR Townhouse — which may be bigger than some “big” houses of a generation ago…
S
MIW [353],
When I first arrived here, this site, I stated 30-40% off RE peak, gold will trade up to 2,500, depression and war with China in 2013-2015.
You should have heard the responses that I received regarding that post, all the RE bulls. They seem to be somewhat subdued these days.
Sean–The story about California releasing inmates because of the state budget crisis has been reported before today, also in the MSM. Didn’t hear about it before today? I guess that would be the fault of the MSM too… Just sayin’.
BC Bob #356…
What about high asset inflation? Though that will wipe out savings of people like me, that may be a way to fix some of the budget problems.
#356 sastry:These days, 2.5x income buys almost nothing
Those days when 2.5 income can buy a lot are fast returning.
#357 BC Bob:They seem to be somewhat subdued these days.
They seem to be gone for the most part;with the exception of the 3 Stooges (you know who you are).
These days people look at buying houses in terms of just the monthly payment and how much appreciation they can get out of their houses.
Whereas in the 70’s, people looked at buying houses which they could comfortably payoff the principal in reasonable period of time, thats it. Have people ever tried to save 450K? For the most part, an average family earning median income can never save 450K in their lifetimes, but yet they have no hesitation buying a 450K home?!
#355 sastry – i know, it seems insane. but, gather up the 20% to plunk down (be in line with 2.5 to the total, not after the 20% down) cos as #359 3b says, it’s returning but a relative fast returning.
there was this great college ad on the radio a few years back that said, 5 years ago seems not too long ago but 5 years to the future seems forever… well, 2011 & 2012 seem forever right now but they’re not. & no you don’t have to time THE bottom because if you buy a lil’ before or after, hey, approximates aren’t an exact science & you’ll go insane doing that.
if the 100k individual is individual income, then say f’it, & push it to 3x’s. hell, try 3.5x’s if you’re single & snipped … you better have that 20% & a good dr.
“George Keeleys”
i think i know that place. Thats the place where they always have that huge St. Bernard dog haning outside the door?
yeah, the townhouse is just a hop, skip, and a jump away.
and that place Homer’s has the best sliders & milkshakes on the uws.
SAS
if anyone wants to learn some interesting stuff, look into the fraud around Vancouver 2010 & Olympic village.
black economy fraud at its best.
SAS
#361… Zack.
“For the most part, an average family earning median income can never save 450K in their lifetimes, but yet they have no hesitation buying a 450K home?!”
One factor is that the savings are “after paying for rent”, whereas owing a home results in some additional savings [even after taxes, etc.].
We pay about 1650 for rent, which, I think is more or less equivalent to a 2k mortgage — and when we “own” a home, we don’t have to continue saving for a down payment.
Of course, if the house turns out to be a declining asset, it is a bummer!
S
now, back to sesame street.
A…B….C…
SAS (singing)
Shiny is $22 away from the $1,000 mark.
Can we get there this week or do I have to wait until next to see shiny break this barrier?
Any thoughts?
“When I first arrived here, this site, I stated 30-40% off RE peak, gold will trade up to 2,500, depression and war with China in 2013-2015”
yup, I remember, you’ve stuck to your guns.
I haven’t heard the term “bitter renter” for awhile now.
SAS
“Pa. pension funds warn lawmakers of major losses”
http://tinyurl.com/cclqra
Your opinion?
Client is a widower getting married in 3 months.
Plans to move from Westfield area to South Jersey, and into his new wife’s home.
Bought the house in 1986. No mortgage. Doesn’t need any money from the house.
What should he do?
“Plans to move from Westfield area to South Jersey, and into his new wife’s home”
being a guy whom was married 5x.
moving into the other partner’s “house” is usually not a good idea.
and keep finances seperate, and the new wife shouldn’t but his name on anything.
how did i do?
SAS
ChiFi
Sell the house and hide the money from everyone. Then when armageddon comes, he’ll have a stash to survive on when he moves to some exotic place.
Well, this did not take that long,
Obama Plan for Housing is Flawed, Critics Say
The Mortgage Bankers Association also points out that responsible borrowers whose loans exceed property value by more than 5% will not be helped as much by the program — limiting its effectiveness in hard-hit regions like California, Florida, Nevada and Arizona, and some areas on the East Coast. Furthermore, the plan does not include assistance for those with jumbo mortgages, or loans held in private-label securities.
Another prevalent issue is the job market, as slashed work hours and rising unemployment hurt homeowners’ ability to make good on their loans. Sciacca references an example in the Obama plan of a family that refinances $200,000 of debt into a 5.16% mortgage from a 6.5% mortgage. “If people are out of work, how are they going to qualify?” he says. “I’d have to be making about $50,000 to $60,000 a year to be able to afford that. If I’m out of work, I don’t think I’m getting unemployment benefits of $50,000 to $60,000. If I am, I’m going to apply tomorrow.”
“It’s really good politics, very targeted, and going after people who look like they’re going to lose their house through no fault of their own,” says Wyatt. “But in reality, what’s going to be bringing things down are the millions of other mortgages that aren’t part of this plan. You can’t cure part of the market. You either stabilize all of the housing market, or you try to help a few, which doesn’t solve the problem.”
Wyatt believes that while the plan has a goal of helping millions of homeowners, it will probably affect just hundreds of thousands.
“This isn’t your father’s foreclosure process,” says Patrick S. Duffy, principal of MetroIntelligence Real Estate Advisors. “Left unchecked, the market could easily over-shoot and create more damage for years to come.”
CNBC
Housing Plan: A Break For Those Who Least Deserve It
is there a provision in the bill for the return of goods bought with refi money? I’d like to see those beemers and benz handed over before that markdown on principal.
Who am I kidding?
373 SG
“This isn’t your father’s foreclosure process,” says Patrick S. Duffy, principal of MetroIntelligence Real Estate Advisors. “Left unchecked, the market could easily over-shoot and create more damage for years to come.”
Not can overshoot- will overshoot.
chi (370)-
Sell it as fast as he can.
“the worst is yet to come,” according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American’s standard of living is undergoing a “permanent change” – and not for the better as a result of:
* An $8 trillion negative wealth effect from declining home values.
* A $10 trillion negative wealth effect from weakened capital markets.
* A $14 trillion consumer debt load amid “exploding unemployment”, leading to “exploding bankruptcies.”
“The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car,” Davidowitz says. “A lot of that is gone.”
http://finance.yahoo.com/tech-ticker/article/176478/%22Worst-Is-Yet-to-Come%22-Americans%27-Standard-of-Living-Permanently-Changed?tickers=WMT,WFMI,FDO,
wow these guys sure are gloomy….
Michael Panzner Foresees Wealth Destruction, Rising Crime, Guns
http://www.bloomberg.com/apps/news?pid=20601110&sid=aj9YrEC5DB6A
and some one is getting a little nervous
China Urges U.S., Europe to Protect Value of Debt in Reserves
China, whose $1.95 trillion in currency reserves are the world’s largest, called on the U.S. and Europe to protect the value of its overseas investments and said it plans to spend more foreign exchange on imports and acquisitions. “We hope countries whose currencies are the main holdings in our international reserves will take effective measures to cope with the financial crisis,” Fang Shangpu, deputy director at the State Administration for Foreign Exchange, told a press conference in Beijing today. “They should work to maintain economic and financial stability, and protect the interests and confidence of investors.”
http://www.bloomberg.com/apps/news?pid=20601080&refer=asia&sid=a1dlwxzO.o1U
Californian dream turns into nightmare
In Contra Costa County, a few miles from San Francisco and the millionaires of Silicon Valley, widespread poverty has returned to California. Buffeted by a housing collapse and a slumping economy, the county of 1m is struggling to cope with a sharp rise in the number of residents seeking welfare assistance. Applications for food stamps – vouchers for low-income earners that can be used to buy food – have risen 65 per cent in the county in the past year. There has been a similar jump in the number of applications for Medi-Cal, which provides health services for the poor, and other welfare programmes. Like the rest of the Golden State, Contra Costa is fighting a battle on two fronts. Demand for welfare assistance is rising as the US recession tightens its grip. But the county’s ability to support its residents is being hindered by a spending freeze tied to California’s projected $42bn (€32bn, £29bn) budget deficit – the biggest in the US.
http://www.ft.com/cms/s/0/c8b15014-fd26-11dd-a103-000077b07658.html
“Californian dream turns into nightmare”
thats too bad.
California is a great place, especially back in the 70s.
SAS
And pay attention kiddies…..
here is why BC and make love the shiny stuff
the ever stalwart Switzerland, if they arent safe who is?
Switzerland threatened with bankruptcy
Swiss banks have given billions of credit to eastern europe – now the customers cannot pay back the money. Switzerland is threatened with the fate of Iceland, says economist Arthur P. Schmidt. In countries such as Poland, Hungary and Croatia, the Swiss franc has become an important currency. Thousands of households and small firms took out loans in Swiss francs, and not in the national currency zloty, forint, or kuna because of lower interest rates. In Hungary, 31 percent of all loans are in Swiss currency. Amongst household loans, they are almost 60 percent.
http://www.creditwritedowns.com/2009/02/switzerland-threatened-with-bankruptcy.html
take a look-see
Western europe is wondering if they will have banks next week
http://2.bp.blogspot.com/_9ZzZquaXrR8/SZiBowQ0lSI/AAAAAAAAC8g/NllhBTnZYt4/s1600-h/ClaimsOnEastEurope.jpg
Now the fun is starting! the MSM is starting to compare the global bailout to zimbabwe
Gold hits record against euro on fear of Zimbabwean-style response to bank crisis
Gold has surged to an all-time high against the euro, sterling, and a string of Asian currencies on mounting concerns that global authorities are embarking on a “Zimbabwe-style” debasement of the international monetary system
http://www.telegraph.co.uk/finance/4682554/Gold-hits-record-against-euro-on-fear-of-Zimbabwean-style-response-to-bank-crisis.html
Well, survived layoffs part deux at my firm.
Clotpoll says:
February 18, 2009 at 6:47 pm
chi (370)- Sell it as fast as he can.
Anyone have a rec for Mountainside property?
Grim…includes you…..
Point here is sell per clot’s opinion with max proceeds….
sas says:
February 18, 2009 at 6:08 pm
“Plans to move from Westfield area to South Jersey, and into his new wife’s home”
being a guy whom was married 5x.
moving into the other partner’s “house” is usually not a good idea.
nd keep finances seperate, and the new wife shouldn’t but his name on anything.
how did i do?
SAS
SAS: right on target…they are going prenup route…..I am trying to watch his back without spoiling the romance piece…..
Iceland at the brink of failure
Iceland’s economic meltdown, fueled by its exposure to foreign debt, could bring the country to the brink of failure, according to research from Hennessee Group LLC. “Iceland had one of the highest standards of living in the world just a few months ago,” said Charles Gradante, co-founder of the New York-based hedge fund advisory firm. “Now after experiencing the fastest economic collapse in history, Iceland is suffering from soaring unemployment, as well as double-digit interest rates and inflation.” According to Hennessee’s research, the primary contributor to the rise and fall of Iceland’s economy was its growth as an international lender.
Like Iceland, Ireland’s external debt, at $1.8 trillion, equals 900% of the country’s $200 billion GDP. The United Kingdom’s external debt of $10.5 trillion equals 456% of its $2.3 trillion GDP. Switzerland’s external debt of $1.3 trillion equals 433% of its $300 billion GDP. Even though it might not feel like it right now, the United States is in better shape with $12.3 trillion worth of external debt and a $14.6 trillion GDP for an 84% debt-to-GDP ratio. Mr. Gradante said if more countries start suffering fates similar to that of Iceland, there could be a move toward more protectionist policies where countries favor their own industries at the expense of foreigners.
http://www.investmentnews.com/apps/pbcs.dll/article?AID=%2F20090217%2FREG%2F902179967%2F-1%2FRSS02&rssfeed=RSS02
can I make a 2010 prediction?
or is it too early.
SAS
thought from a banker on my rec league basketball team
“we’re f*cked. china’s just going to flood the market with US dollars and our monetary system will collapse. There’s nothing we can do.”
i just shook my head in agreement.
anyone?
marv says:
February 18, 2009 at 10:50 am
I feel like an idiot that I bought a home with a 20-year mortgage and paid it off, especially after I saw some “pitiful” homeowner on TV this morning with a gorgeous granite and stainless steel kitchen complaining, while sitting at her kitchen island (the likes of which I don’t have), about a lost job and being behind on her mortgage. How is it right for me to pay for her to live in luxury?</i
very good point, marv.
Clotpoll says:
February 18, 2009 at 10:55 am
marv (163)-
I’d like to pay one of these folks back with a bullet between the eyes when they jump my fence this Summer and make for my garden.
LOL, as usual
Make [367],
Tomorrow, between 2:30-5:30 AM, April futures. Why does it matter? It’s going much higher than that level.
“we’re f*cked. china’s just going to flood the market with US dollars and our monetary system will collapse. There’s nothing we can do.”
i just shook my head in agreement”
I somewhat agree.
I’m looking more to the middle east to open the floodgates.
SAS
“Western europe is wondering if they will have banks next week”
kettle,
The better question; do their enablers implode.
Chi,
Is that Richard from Westfield?
“Bill and Melinda Gates hate controversy, but the world’s top philanthropists do seem to be moving ever deeper into political lobbying. They’ve just given the Danforth plant science centre in St Louis $5.4m (£3.8m) to help them persuade African and other poor countries to “overcome regulatory hurdles” and allow the field testing of bio-fortified GM crops. So what is Danforth? Just a “charity” set up and funded by Monsanto”
http://tinyurl.com/c5lrlm
“”Doomsday Seed Vault” in the Arctic
Bill Gates, Rockefeller and the GMO giants know something we don’t”
http://tinyurl.com/ysd4gn
“Entrepreneurs Play Critical Role in the Economy”
http://tinyurl.com/aajers
“Weakness Unmatched in 35 Years”
http://tinyurl.com/cx3kfq
China’s exports got wacked but so did their imports. For better or worse, China and the U.S. are inextricably linked in an incestuous financial relationship. We need China to buy our debt to finance our annual federal budget deficit, and China needs to buy Treasuries to prop up its currency if they do not buy Treasuries the Yuan will plummet.
They won’t cash in their Treasuries anytime soon, and will keep buying Treasuries to prop up the Yuan. And what are we going to give them anyway? Dollars! Hahaha, might as well be pesos.
“Economies of major developed countries will shrink in 2009”
http://tinyurl.com/b4gq8b
so who is going to bail out Eastern Europe?
Germany can’t do it alone.
SAS
SaS, can’t fix countries that have little exports, back to the Dark Ages for them.
” I’m not dead well don’t worry you will be soon.” Month Python
http://www.youtube.com/watch?v=grbSQ6O6kbs
chifi,
Regarding widower…
Age? Kids?
I agree with Clot, given today’s world.
But also, if he is much older, is financially set and has kids/grandkids that he might want to leave stuff to that is another consideration.
If he needs the money, it’s a no-brainer. Dump it faster than a clap-riddled ho’.
Just sayin’
sl
Sean: Classic!
SAS: There is no one to ride to the rescue. They are toast.
395 BC
their enablers? oh, you mean the banks that covered their rears ends by handing them all the swaps and then extending the swaps?
Dont worry Giethner and Bergabe have it all under control……
gon ammo?
——————————
sl lmao clap-riddled ho’.
Whatever you say doc.
SAS
lets hear your 2010 prediction
Kettle trip to PA this week to get more.
Very close to my neck of the woods.
SAS
germany already had 2 bond auctions fail. germany is going to need a bailout. plus they are taking a big chance bailing out Opal
how does the US bailout europe???? who bails us out?
when will the idiots figure out that you have more claims on wealth then wealth that exists. the excess claims must be canceled. in other words bas debt must be canceled before the system can be fixed.
Make,
i am sick of all the idiots, i cant wait to move to albania and come to work for you
mike 410 e-mail me
1elttek at g mail
Kettle if you are looking for a cheap rental in a safe place check out my area. I know commute is a “B” but the security is worth it imho.
Ket OK
“sas says:
February 18, 2009 at 8:03 pm
“”Doomsday Seed Vault” in the Arctic
Bill Gates, Rockefeller and the GMO giants know something we don’t”
http://tinyurl.com/ysd4gn”
That’s been around for years. 60 Minutes did a piece on it a few years back. It’s actually pretty fascinating. They have different species of grains etc from all over the world, some dating back millenia.
vodka (411)-
Before you come to Albania, I need to discuss a small discrepancy in your dossier with you…
HE (415)-
Do they have Thai stick and Maui Gold seeds?
“40 tons of contraband coral gets man arrested”
http://www.msnbc.msn.com/id/29222985/
now we know where grim has really been…
sl
415 Dissid
I saw that piece… it was fascinating – and scary – at the same time.
sl
London Calling…
http://news.yahoo.com/s/afp/20090218/sc_afp/liberiaenvironmentagriculture
clot
dosier?
no problem, i’ll make an appointment to discuss that as soon as i get back from scuba diving in the carribean
“”Doomsday Seed Vault” in the Arctic
They are up to something and it ain’t good that is for sure.
Remember that war we were talking about if we figured it out I’m sure they did.
Kettle,
If you see Sir Alan tell him there’s some drug cartels in Mexico who’d like to speak to him.
sl,
what ever happened when the firefighters found that grenade in Grim’s house the other day
Firemen at Clifton house find live grenades
http://www.nj.com/news/index.ssf/fire/
ket, 424
they said….”Hey that dude is Da BOMB!
sl
we touched on the merits (or lack of) of O’ going to the streets with his sky-is-falling message last week.
I think it was a good idea to take the message to the people.. but was it premature?
The ‘daily beast’ sounds off:
http://www.thedailybeast.com/blogs-and-stories/2009-02-18/how-not-to-succeed-in-business
http://www.fresnobee.com/updates/story/1207508.html
Fun times! I was right there…no – not the blond in the picture..just watching…
Good night ya’all.
Things are pretty quiet round here now.
WSJ
FOOD & DRINK FEBRUARY 18, 2009
Buying Wine On a Dime Article
By DAVID KESMODEL
A year ago, Rick Jelovsek regularly paid $20 or more for a bottle of wine at retailers near his Johnson City, Tenn., home. But after stock-market declines shaved 20% off the value of his retirement accounts, he began choosing bottles in the $12 range.
“I’m making sure I’m going down in price, and I’m double-checking that it’s either [rated] a good wine or I’ve gotten a recommendation,” says the 64-year-old retired physician, who recently enjoyed a bottle of Spanish wine, Borsao Tres Picos Garnacha, for less than $12.
In Denver, customers “are drinking a little bit less, a little less quality, a little less expensive,” says Clif Louis, owner of the Vineyard Wine Shop, which mostly sells boutique wines. His sales have been down about 9% in the past seven months.
As recession grips the country, drinkers are discovering fine wines on a beer budget. The wine industry is less vulnerable to the downturn than other sectors, but total U.S. wine sales rose less than 1% by volume last year, the slowest rate this decade, according to Jon Fredrikson, an industry consultant with Gomberg, Fredrikson & Associates in Woodside, Calif. The downturn is most acute in restaurants, where total wine sales fell 10% to 12% last year as Americans dined out less, Mr. Fredrikson says. “Consumers have reined in their spending and are looking for value,” he says.
Moderately priced wines are drawing healthy sales. According to market-research firm Information Resources Inc., which tracks wine sales in food, drug and mass-merchandise outlets, sales of wines in the $11-to-$20 range increased 8% in dollar terms in the 52 weeks through Jan. 25. By contrast, sales of wines costing more than $20 rose a mere 1.6%, compared with 11% and 26% in the two previous periods, respectively.
The ample supply of quality wines for $10 to $20 has left some upscale wines, such as expensive Cabernet Sauvignon from California, collecting dust on store shelves. Still, thrifty consumers must be selective. “There are great values in the $10 to $15 range,” says Lisette Sehlhorst, co-owner of the Wine Merchant, a Cincinnati retailer. “I also think there are a lot of junk wines in that range.”
Howard Silverman, owner of Howard’s Wine Cellar in Chicago, says his best-selling wine is the 2007 Monte Oton from Spain, a Grenache that he sells for $7.29. His top-selling white wine is 2007 Las Brisas Blanc, a Spanish blend, which he sells for $9.99.
The prices mark a trend toward less-expensive varietals, such as Malbec wines from Argentina and the red wines from the Rioja region of Spain, and away from more expensive wines from other regions, such as high-end French wines, according to wine merchants and industry analysts.
There are bargains for high-end wines as well. Richard Rey, 45, an insurance-industry employee in Franklin, Mass., recently bought some Cabernet Sauvignon from California at a local wine store for $80 that was normally priced at $100. The owner indicated the wines weren’t selling much, so “he was giving me these great buys,” he said.
Some drinkers are cutting back altogether. Jane Vawter, a 45-year-old wine drinker in Trenton, N.J., has slashed her spending on wine since a lucrative contract for her information-technology consulting business ended. In good times, she said, she orders wine futures — wines that are sold several years before their release — from Bordeaux. “At this point, I’m not purchasing much of anything,” says Ms. Vawter, who is now working on a less-profitable contract. “I’ve stopped the mail order; I’m not ordering cases. I’ve also quit my wine clubs.” The good news: She has a collection of about 100 wines in her home to tap into.
The shift in consumer demand is creating concern among high-end winemakers and prompting some to revisit their strategies. Cameron Hughes, chief executive of San Francisco’s Cameron Hughes Wine, which buys surplus wine from high-end producers and sells it inexpensively under its own labels, says he knows of several winemakers looking at retooling their business model to offer wines in the $9-to-$12 range. “A sea change” is under way, he says.
At Jackson Family Wines, the closely held wine giant in California’s Sonoma Valley, sales of the Kendall-Jackson roster of wines, including its best-selling Vintner’s Reserve Chardonnay, priced at about $14, remain strong, according to Lenny Stein, president of Jackson Family Enterprises. But some of its higher-end wines are seeing softer sales.
As a result, the company recently cut its work force. “We need to be aggressively managing our costs, because the future is less predictable,” Mr. Stein says.
The economic tumult has been a boon for large winemakers offering many bottles in the range of $8 to $15. For instance, wines made by E. & J. Gallo Winery posted 15 of the top 25 increases in sales volume for U.S. wines sold in food outlets last year, according to Mr. Fredrikson. Gallo, a closely held company based in Modesto, Calif., declined to comment.
In the end, retailers are recognizing they can get some good deals for customers. At Woodland Hills Wine Co., a wine merchant in Woodland Hills, Calif., the store’s wine buyers cut back on inventory last year and are now buying wines selectively. Recently, for example, they negotiated with a distributor “sitting on a boatload” of a well-regarded Argentine wine, Achaval-Ferrer Quimera 2006, and offered it to customers for $29 a bottle, down from $40 previously, says wine buyer Kaj Stromer. “We probably sold two pallets worth of wine in a week,” he says, “so people are responding as long as they know they are getting a bargain.”
Bummer:
Greenwich, Connecticut, Home Sales Plunge 84 Percent in January
http://www.bloomberg.com/apps/news?pid=20601213&sid=aW3f58FHPo34&refer=home
Best description of the U.S. political system: Simpson episode where Kang and Kodos are in DC holding tenacles; both are running for president (it was the Dole/Clinton race) and Kang says: “You have to vote for one of us, it’s the two party system. Hahahahahaha.”
“The recently signed federal stimulus legislation will provide $850 million to help New Jersey get through the current budget year. But that doesn’t even shave a quarter off a $3.6 billion deficit.”
http://www.courierpostonline.com/article/20090219/OPINION/902190320/-1/newsfront2
Shovel ready projects. Hahahahahaha.
I think Corzine himself is a shovel-ready project. Like Joe Pesci in Casino.