Barrons: NYC prices could fall 30%

From Barrons:

Manhattan on Sale
Manhattan’s luxury real-estate market is rotting, as Wall Street layoffs and tight credit squeeze demand. Why prices could slip another 30%.

ON A RAIN-DRENCHED AFTERNOON LATE last week, Michael Shvo, a renowned megabroker of Manhattan apartments, showed up at 20 Pine Street to answer our questions about the troubled development.

A stone’s throw from the New York Stock Exchange, 20 Pine once seemed a symbol of the area’s post-9/11 renaissance, sprouting Armani-designed apartments with oversized windows, exotic woods and recessed, virtually silent shower heads. Where Chase Manhattan built a vault for its first headquarters, there is now a swimming pool and Turkish bath. But for all its virtues, 20 Pine is starting to look like just another victim of New York’s luxury-housing bust.

Reports have circulated that the owner of the 409-unit building, Boymelgreen Developers, may unload 80 apartments for just $652 per square foot, about half the current asking prices. Shvo, 36 and perfectly coiffed, acknowledged the existence of “20-25 offers from bottom fishers,” some as low as $600 per square foot. But the offers didn’t seem to concern him. “The developer,” he sniffed, “isn’t interested.”

Not yet. First came Miami, Las Vegas and Phoenix. Now Manhattan’s high-end housing market is cratering. With Wall Street firms stepping up layoffs, and money for big-ticket mortgages drying up quickly, prices for new york apartments and townhouses of $5 million or more have been falling and may well drop by another 30% before finally bottoming out. That could help turn the Big Apple into the ugliest housing market in America.

PRICE CUTTING HAS BECOME SAVAGE. The 14-room Park Avenue apartment of the late socialite Brooke Astor — which Barron’s highlighted in that earlier story after its price had been cut from $46 million to $34 million — is now down to $29 million and probably has to be cut further.

But even with dramatic reductions like that, the inventory of unsold luxury housing is ballooning., a Website that pulls together listings and insights from a variety of brokers and buyers, now shows 795 New York apartments offered for $5 million or more, up from 518 a year ago.

Realty brokers, the industry’s natural cheerleaders, are now unabashedly glum about the high-end market. “The $5 million-and-above market is inventory-rich and buyer-poor,” says Dolly Lenz, a broker to the stars and vice chairman at Prudential Douglas Elliman.

The price of a property, she says, “has to be 25% off the last sale for it to be a bargain. People have no sense of urgency. A sense of urgency is what the real-estate market needs as a stimulus.”

In short, the market is almost unrecognizable from a year ago. “People used to call and say ‘I have a Russian,’ and that meant you were supposed to drop everything,” says Leighton Candler of Corcoran Group, another top broker. That’s changing: The ruble buckled and so did oil. And the dollar is up sharply, making U.S. prices all the more expensive.

Says marketing chief Louise Sunshine of the residential developer Alexico Group: “We have definitely noticed a switch from international buyers to more of a U.S.-based and local purchaser base.”

The damage in Manhattan is spreading well into the suburbs-from Saddle River, N.J., to Greenwich, Conn., to South Hampton, N.Y.

The high end of the greater New York market “has been holding up better than that in many of the larger metro area markets,” says Celia Chen, the housing economist at But she sees continued drops ahead for luxury and other housing in and around the city.

“House-price depreciation in New York will likely be greater than the national average this year, as the impact of the lost jobs on Wall Street hits” the local economy, Chen says.

Indeed, Ivy Zelman, a former Credit Suisse analyst who was among the first to call a national housing bust, figures that the New York housing market is headed straight down.

“When we look at New York City, we look at a price-income ratio that historically has been four times income, versus three times nationwide,” says Zelman, who now runs her own firm. At 7.7 today, that ratio is “significantly higher than normal” because prices have only started falling. “If you want simply to get back to the median, it would be a 46% correction,” says Zelman.

She adds: “If I had to pick one market in the country with the most challenge and the most substantive rate of decline [ahead], it’s New York City. It has the greatest number of job losses among the higher earners.”

This entry was posted in Economics, Housing Bubble, National Real Estate, New Jersey Real Estate. Bookmark the permalink.

141 Responses to Barrons: NYC prices could fall 30%

  1. Laurie says:

    Wasn’t this article from the Sat NY Times real estate section??

  2. Sean says:

    All I heard on the way home tonight on Bloomberg was Gold. Gold, Gold Gold. Sigh almost like a James Bond flick.

    O’bama’s state of the Union is tomorrow night, and we also have a day or two of Bergabe with his semiannual report up on the Hill Tuesday and Wednesday. Tie that in with Timmay and the bad bank or no we don’t want to nationalize plan and we are in for a rocky week.

    I am going to up my reserves from 10% to 20%.

    All Disclaimers….

  3. Stu says:

    Essex, your opinion is about as valuable as a case of syphilis.

  4. paul says:

    I am reading this website probably over 2 years now. It is very helpful site and this site was first to point out there is issue in the housing market… But now my point is everybody is becoming nagative in thoughts and thereby pulling the market and thereby economy of America down.
    Can this site lead in this by showing the poeple the right way and positive thought and there helping America back?

    Any thoughts?

  5. grim says:

    Can this site lead in this by showing the poeple the right way and positive thought and there helping America back?

    This site has little to no effect on the market.

  6. silera says:

    Once the condo/coop prices in the city reach an attainable level former nyers turned nj residents might be the first to flock back to the city.

    I rent a single family home in NJ because I couldn’t afford to buy during the boom nor could I afford to rent in the neighborhood I’d grown up in anymore.

    I don’t think I could get accustomed to the city again but revalueing both rental, and house prices could also remind us all that cities and suburbs alike need more than “monied” or over extended residents to make them neighborhoods.

  7. grim says:

    What is with all these Bergen Co restaurants shutting down?

    Westwood’s Backwoods BBQ & Grill closes doors

    Backwoods BBQ & Grill in Westwood has closed, chef and partner Jay Lippin said today, chalking the restaurant’s long-term failure up to a combination of the declining economy and having a space that was just too large.

    The restaurant, which previously housed Simon’s, was one of Westwood’s largest dining spaces, with room for as many as 200, including outdoor tables in the spring and summer. Without the party room, Lippin said, the restaurant would have been more successful. “It was just all that extra space,” he said.

    The restaurant sometimes lost money just being open, Lippin said. Lunch service was discontinued in favor of a to-go soup operation. Lippin also began closing Tuesdays, in addition to Mondays, because there simply weren’t enough customers to pay the bills.

  8. confused in nj says:

    The Government owns 80% of AIG and it is still leaning towards bankruptcy.

  9. Sean says:

    re: #5 Paul – The current reverberations in the market are due to a sobering up and a realization that the debt we have incurred since the early 1980s cannot be repaid. It is not negative thoughts that are dragging the markers down, it is a flight to safety do to this sobering realization. We haven’t even begun to really become negative.

    As far as a solution there really is only a few choices. The debt needs to be forgiven, or there needs to be massive inflation. Nobody else really has another solution other than perhaps if someone invents viable fusion power, but right now that is science fiction.

  10. Stu says:

    “This site has little to no effect on the market.”

    I would say no effect Grim. Actually, if people followed half of the advice given here, our economy wouldn’t be in the sh*tter. I honestly mean this!

  11. lostinny says:

    I asked this question the other day but no one answered. If one buys a coop and your neighbors stop paying maintenance fees, are the rest of the neighbors responsible to pay the non-payers’ share?

  12. Clotpoll says:

    Paul (5)-

    I’m very bullish of personal armaments. I also think that when AIG passes the -$1,000,000,000,000 mark, they will turn the corner back to prosperity.

    “Can this site lead in this by showing the poeple the right way and positive thought and there helping America back?”

  13. Stu says:


    What is forgiven debt? Debt is never forgiven. It is paid back one way or another.

    As for the market being low, it is historically exactly where it is supposed to be. Companies are valued based on earnings and earnings are deplorable. Listen to the earnings reports people. A company that has 1/4th earnings that it had a year ago deserves to be valued at a quarter of the price. It doesn’t help that so many public companies have not even begun to make the necessary cuts to return to profitability. P/Es expand when growth is accelerating. P/Es contract when growth is slowing. Over the next year, I doubt there will be many companies even turning a profit. The market is doing what it is supposed to. It sucks, but what do you expect when the government continues to do the complete opposite of what is needed with such great consistency. The decision to go short was easy. It’s too bad that so few have the patience and experience necessary to see these bubbles when they are occurring and act on them.

    Of course a particular person here thinks I should have been indexing all along.

  14. Clotpoll says:

    grim (6)-

    If it did, the Dow would’ve hit 0 last February.

    “This site has little to no effect on the market.”

  15. Sean says:

    re: #14 Stu – What happens to Credit Card debt in bankrupcy?

  16. Sean says:

    #6 Grim – The Blogosphere is a collective just like the borg.

  17. Stu says:


    In normal times, retailers are charged per swipe (and pass this fee on to the customer with higher prices) and card holders pay higher interest rates to cover the defaults. In times like these, the government will backstop the credit card card companies since the modus operandi is to socialize the losses.

    All of these socialized losses will soon kill this countries history as a safe bet for foreign investors of our national debt. And when that happens, it will lead to one friggin scary war.

  18. safeashouses says:

    “We have definitely noticed a switch from international buyers to more of a U.S.-based and local purchaser base.”

    What happened to the monied Europeans gobbling up NYC and preventing a bust, not to mention the ones that would pay 550k for a cape cod in a train town?

    Was that pret who claimed that?

  19. Clotpoll says:

    safe (19)-

    pret = roadkill


  20. Sean says:

    re#18 Stu – bankruptcy now or bankruptcy later, unemployment will see to it. The policy of avoidance will kill us all.

    Here is my plan for “Stimulus”, give the debtors “some” debt forgiveness and give the rest of us cash. The equity and bond holders get blown out since after all these companies (banks) are insolvent, just look at their stock prices and bond spreads. I know of many banks that didn’t play the game and will survive, so the too big to fail is bull.

    We cannot replace the machine that built up 10 Trillion in securitized loans over the last decade, that has already been proven.

    Time for action is now, what remains of the markets will go to all to hell without it.

  21. Clotpoll says:

    BTW, Al, I’m not a Johnny-come-lately to advocating a bit of the ultra-violence. I think I’ve been a consistent advocate of violent solutions to problems ever since I began posting here.

    America is a violent country. Always has been, always will be. When we have peacetime, we squander it by searching for new enemies and new ways to employ violence. Violence is the motor oil for our dialectic process.

  22. Essex says:

    4…you mean that it stays with you and eventually makes you crazy? BTW….better half had her best year ever…(no, not gloating)…but ‘if’ I was Frank I would ask….bah dah dum!!! What recession???? (sarcasm off)

  23. Essex says:

    22.Parts of America are pretty violent….I mean to tell you….but you learn not to put yourself into harm’s way….Darwinism of sorts…and you learn how to fight….or run.

  24. House Hunter says:

    friend at work went into NYC this weekend, dead. Macy’s was giving things away…an employee there told him Christmas was bad,now is worse. They are closing stores on LI

  25. House Hunter says:

    Hubby told me there have been 32 bank robberies in NJ since Jan 1st…I know of one in New Hope PA and Ringoes NJ

  26. House Hunter says:

    everyone at work is really cranky, it’s palpable

  27. Essex says:

    I dunno….things have been pretty good around here since I embraced satan as my personal lord and savior.

  28. kettle1 says:


    you too???? maybe we saw each other at the ritual sacrifice over the weekend!.!.!

  29. confused in nj says:

    Obama can implement some easy fixes, which should lead to stability:

    1. Deport all illegal aliens
    2. Deport all criminals
    3. New rule, all Public Sector employess Pension & Benefits cannot exceed the average Private Sector Pension & Benefits.
    4. Any criminal act committed in Public Office is automatic Death Penalty.
    5. CEO’s can only earn 100x’s average employee salary
    6. All Major Medical Services & Insurance will be non profit. Drugs cannot have more then 5 of the same type. Work on something else!

    The list goes on & on.

  30. kettle1 says:


    re #2, unfortunately Australia is already fairly populated….

  31. Jay says:

    Ex-Fed governor feels ‘accountable’ in economic crisis
    Federal Reserve’s actions likely contributed to meltdown, Bies says

  32. confused in nj says:

    31. Kettle

    Antarctica isn’t!

  33. Dink says:


    Do you know if the Trop in AC has an full pay VP machines? I’ve googled, but can’t seem to find any definitive answers.

  34. kettle1 says:

    boy this headline inspires confidence….

    Hillary Clinton pleads with China to buy US Treasuries as Japan looks on

    US Secretary of State Hillary Clinton has pleaded with China to continue buying US Treasury bonds amid mounting fears that Washington may struggle to finance bank bail-outs and ballooning deficits over the next two years. “It’s a safe investment. The United States has a well-deserved financial reputation,” she told Chinese television stations at the end of her diplomatic tour of Asia. “We are truly going to rise and fall together. Our economies are so intertwined, the Chinese know that to start exporting again to their biggest market the United States has to take some very drastic measures with this stimulus package, which means we have to incur more debt,” she said.

  35. Clotpoll says:

    Jay (32)-

    That’s OK. If she were to take the seppuku route, I’d call it even and forget all about it.

  36. comrade nom deplume says:

    [36] clot,

    I’d volunteer to be her second, with the katana.

  37. sas says:

    “If one buys a coop and your neighbors stop paying maintenance fees, are the rest of the neighbors responsible to pay the non-payers’ share?”

    I think it all depends on your coop contract/bylaws.

    I don’t think the neighbors are responsible, but I would suspect a raise in your maintance fee would be on the way.

    and, if your coop board was smart, they would have cash saved up for situations like this.

    just my 2 cents.

  38. comrade nom deplume says:

    [31] ket,

    fairly populated???? Aus has about 20 million or so (give or take a couple of mill). There’s LOTS of open space in Aus. though quite a lot is not arable and they have nasty creepy crawlies there, and if you stay six months, tax whammo, I believe.

  39. Clotpoll says:

    vodka (35)-

    Like two tarantulas intertwined in death throes.

    I like tarantula/Hillary metaphors.

  40. comrade nom deplume says:

    [37] Ket

    and firearm ownership is illegal. Totally illegal.

  41. kettle1 says:

    Junk in GM’s trunk could lead to blowout

    General Motors is battling to survive collapsing auto demand, tight credit and uncertain prospects for recovery in its biggest markets. But its most-pressing crisis is simpler: too much debt. As GM begins a second round of make-or-break concession talks with creditors and its major union, analysts and bondholders are raising concerns its restructuring plan does not go far enough to scour its balance sheet. The risk is that even if GM wins the high-stakes deals it needs to eliminate some $28 billion in debt by issuing new shares, it could end up wiping out those gains by borrowing even more from the U.S. government.

  42. sas says:

    “friend at work went into NYC this weekend, dead.”

    i am not sure if i agree with this.
    the area of the townhouse seems like things are fine. not dead.

    however, i have noticed a few more a burrito place close down.


  43. sas says:

    “however, i have noticed a few more a burrito place close down”

    opps, i mean a burrito place close down.


  44. safeashouses says:

    #41 comrade

    I think handgun ownership might be, but they defntely have shotguns and rifles. Some of the ranchers in South Australia used to fax us copies of their rifle permits as 1 of their ids when they were applying for mtgs.

  45. Stu says:


    Now go find them royals.

    I think I have a 50X multiplier for March 29th. That turns a 99.6% JOB into a 104.6% experience. Join VPFree (Yahoo group) and if you contribute enough dialogue, they’ll show you the back door into the lesser known AC VPFree. This is where the juicy tidbits are. FYI Trop recently removed their only >100% return, their 1 Pair (Kings or Better) Joker Wild (JW) which paid 100.65% with perfect strategy, which is no easy feat on a joker game.

  46. Aardvark says:

    sas (38)

    we dont want your 2 cents.. If you do not have an answer to the question asked keep your freaking mouth shut!!!!!!!!!

  47. kettle1 says:

    comrade 41

    well what do you expect, its a continent of criminals!!!!!

    /sarcasm off

  48. Steve says:


    All due respect, what this blog has done, consistently, is to provide a crystal clear perspective on the consequences of reckless wall st, corrupt/inept politicians, and foolish homebuyers.

    Reality is what it is. Cowering under the bed in denial, thinking happy thoughts, helped usher in today’s 1997 price levels. Unless our country wakes the f— up, we risk massive consequences. Plenty of pain is locked in to come, but it can get worse.

    In the Depression, equities dropped something like 89.2%, 25 years to get back to break even.

    A few sobering thoughts to ponder, should we wish to forget our history, courtesy Wiki:

    Effects of depression in the United States
    * 13 million people became unemployed. In 1932, 34 million people belonged to families with no regular full-time wage earner.
    * Industrial production fell by nearly 45% between the years 1929 and 1932.
    * Homebuilding dropped by 80% between the years 1929 and 1932.
    * In the 1920s, the banking system in the U.S. was about $50 billion, which was about 50% of GDP.
    * From the years 1929 to 1932, about 5,000 banks went out of business.
    * By 1933, 11,000 of the US’ 25,000 banks had failed.
    * Between 1929 and 1933, U.S. GDP fell around 30%, the stock market lost almost 90% of its value.]
    * In 1929, the unemployment rate averaged 3%.
    * In 1933, 25% of all workers and 37% of all nonfarm workers were unemployed.
    * In Cleveland, Ohio, the unemployment rate was 60%; in Toledo, Ohio, 80%.
    * One Soviet trading corporation in New York averaged 350 applications a day from Americans seeking jobs in the Soviet Union.
    * Over one million families lost their farms between 1930 and 1934.
    * Corporate profits had dropped from $10 billion three years ago to $1billion in 1932.
    * Between 1929 and 1932 the income of the average American family was reduced by 40%.[63]
    * Nine million savings accounts had been wiped out between 1930 and 1933.[56]
    * 273,000 families had been evicted from their homes in 1932.
    * There were two million homeless people migrating around the country.
    * One Arkansas man walked 900 miles looking for work.
    * Over 60% of Americans were categorized as poor by the federal government in 1933.
    * In the last prosperous year (1929), there were 279,678 immigrants recorded, but in 1933 only 23,068 came to the U.S.
    * In the early 1930s, more people emigrated from the United States than immigrated to it.
    * The U.S. government sponsored a Mexican Repatriation program which was intended to encourage people to voluntarily move to Mexico, but thousands were deported against their will. Altogether about 400,000 Mexicans were repatriated.
    * New York social workers reported that 25% of all schoolchildren were malnourished. In the mining counties of West Virginia, Illinois, Kentucky, and Pennsylvania, the proportion of malnourished children was perhaps as high as 90%.
    * Many people became ill with diseases such as tuberculosis (TB).
    * The 1930 U.S. Census determined the U.S. population to be 122,775,046. About 40% of the population was under 20 years

  49. Aardvark says:

    It really pisses me off when blowhards get on a site and act like they know what they are talking about and in reality they have no clue.. just blowhards – look it up…

  50. Essex says:

    47…now that just seems to merit a “suck off you cum guzzling wh*re” retort.

  51. sas says:


    sure bloke, anything for you.


  52. Essex says:

    SAS….pure class.

    It is the nice guys you gotta watch…they don’t telegraph their punches and you are on your ass before you know what hit you.

  53. Wag says:

    Lost (12) – The New York CO-OP Bible, by Sylvia Shapiro gives a very good overview of the CO-OP, Condo ‘way of life’. I have a copy that you are welcome to. For what it is worth, SAS is quite right in that ultimately, the board decides almost every outcome.

  54. yikes says:

    clot, dont let anyone talk you out of the anarchy. most of the laughs i have reading this blog involve mad max-like scenarios.

    i dont actually believe any of that WILL happen, but we move into the house soon, and i’m going to start loading up on the essentials.

    also, im thinking about adding a shotgun to the arsenal. only have a sig sauer now, figure a shotgun/rifle and perhaps one more handgun should be sufficient.

  55. Essex says:

    Ah the joys of home ownership…..don’t forget the razor wire —

  56. yikes says:

    and i’ll echo what others did: no anarchy for me. strictly for protection.

  57. yikes says:

    Ah the joys of home ownership…..don’t forget the razor wire –

    maybe around the garden, but that’s it

  58. Essex says:

    No yikes….you will want to secure the place if the proverbial shit ever hits that fan….it is one thing to break a window and another to crawl through razor wire to get in……

  59. Essex says:

    if you are not thinking of the fun you can have with anarchy then you are not hanging out with the right bunch of fellows.

  60. yikes says:

    schabadoo says:
    February 23, 2009 at 2:04 pm

    But if they jump, they can’t pick up their $4 Starbucks coffee in the moring.

    Is there any way we could put to rest this meme? It’s tired and inaccurate.

    Dunkin Donuts – $2
    Starbucks – $2.20

    actually, the drink i get is always $3.73, i believe (except in NYC, i believe it’s 4.17). tall white chocolate mocha. i’ve never understood why someone would buy a coffee that you can easily make at home. but hey, what do i know.

  61. lostinny says:

    38 sas
    That’s what I thought. If they raise they maintenance fees, you’re paying the neighbor’s share anyway. I know you can ask to look at the coop’s financials. But what I don’t know is what is a safe number to see?

  62. lostinny says:

    54 Wag
    Thanks! Would you mind dropping me a note? You can get my email from Grim.

  63. Wag says:

    Lost (63) – Of course, you can get mine from Grim as well.

  64. lostinny says:

    64 Wag
    Will do!

  65. lostinny says:

    Co-worker went on vacation last week to Costa Rica. His luggage was lost on the layover in Haiti. They stayed at a 5 star resort. While they were out, the room was broken into, locks on the luggage were clipped and all the cash was stolen. They didn’t take any cameras or anything else valuable, only the cash. While they were sightseeing, they noticed bars on windows and barbed wire on fences. When they asked the tour guides why the locals did this, the tour guides told them it was a Spanish cultural thing. I wonder what Spanish culture that is.

  66. Barbara says:

    I sometimes laugh on this blog when people talk about escaping the chaos to come by moving to some banana republic. The third world isn’t going to be any better than here if TSHTF.

  67. Seneca says:

    Question for the Realtors with short sale knowledge:

    Can you make an exploding offer on a short sale? Can I say the offer expires within one week? Or, when dealing with bank approvals, is there really no way to require fast turnaround? If I have to wait 3 months for an answer, I would probably want to drop the price by another X% assuming the market continues to drop which is a forgone conclusion.

    Is making an exploding offer on a short sale pointless?

  68. Essex says:

    67…..Just warmer and a lot cheaper.

  69. kettle1 says:

    barb 67

    i think that in a real SHTF scenario places such as russia, eastern europe ans parts of latin america could far better then the US and western europe. As i have saud before, these populations have had to deal with a collapse of local government and social services in recent history. eastern europe and the US have not and the populations wouldnt really know how to handle it. Of course i am referring to a real break down which is unlikely except in the most extreme cases

  70. lostinny says:

    67 Barbara
    I do have to agree with Essex here. IF/when TSHTF, I’d rather be where its warmer.

  71. Barbara says:

    I don’t agree. In America, we own 5 of everything. At the end of the day, goods would be sold locally at flea markets, lack of services would be tolerated short of healthcare emergencies and labor would be bartered. Some of this actually happened in the early 90s. I remember the trash pickers in my town, would take the stuff to flea markets on Sundays. I still think we are pretty resilient when need be.

  72. lostinny says:

    70 Kettle
    Barbara does have a point. Also, like you say, they have had to deal with the collapse of government and services and somehow handled that. But we have not. So how does living somewhere else make us able to deal with it better? Are you saying we would learn by example? Or even learn more quickly because we were thrown into it, as it were?

  73. Barbara says:

    lostinny, its not a mater of weather, its the difference between being mugged VS being kidnapped and beheaded.

  74. Dissident HEHEHE says:

    “lostinny says:
    February 23, 2009 at 9:14 pm
    Co-worker went on vacation last week to Costa Rica. His luggage was lost on the layover in Haiti. They stayed at a 5 star resort. While they were out, the room was broken into, locks on the luggage were clipped and all the cash was stolen. They didn’t take any cameras or anything else valuable, only the cash. While they were sightseeing, they noticed bars on windows and barbed wire on fences. When they asked the tour guides why the locals did this, the tour guides told them it was a Spanish cultural thing. I wonder what Spanish culture that is.”

    Good friend’s dad retired and moved to Costa Rica. He does not venture out in public anyplace without an armed guard.

  75. kettle1 says:

    lets see where this goes…. the germans riot much easier then the americans do. the seeds are sown.

    Will Germany deliver on the Faustian bargain that created monetary union?

    If Der Spiegel is correct, the German finance ministry is drafting rescue plans to prevent default on the edges of the eurozone leading to a full-blown collapse of Europe’s monetary system. This is an entirely appropriate policy in economic terms. One dreads to think what would happen if the world’s twin reserve currency were to disintegrate at this stage. But what about the solemn pledge to voters by Germany’s political elites – promiscuously given over the years – that monetary union would never leave them on the hook for the debts of half Europe? The vast imbalances that have been allowed to build up under the seductive protection of EMU leave German taxpayers facing bail-out liabilities that exceed the cost of reparations after the First World War, in proportional terms. The political ground has not been prepared for this. EMU was foisted on the German people without a referendum, in the face of deep public scepticism and scathing criticisms by the professoriat. This failure to secure a mandate for such a revolutionary undertaking is coming back to haunt them.

    Berlin is at last having to deliver on the Faustian bargain made by Germany’s political class when it swapped the D-Mark for French acquiescence in reunification. It must either go the whole way towards EMU fiscal union and take responsibility for Italy’s public debt (111pc of GDP by next year), Austria’s loans to Eastern Europe (70pc of GDP), the adventures of Ireland’s ‘Canary Dwarf’ (€400bn or so in liabilities), and Spain’s housing collapse (1m unsold homes), or jeopardize its half-century investment in the political order of post-war Europe. Letting EMU fail at this stage would have far higher costs than never having launched the project in the first place…….

  76. Dissident HEHEHE says:

    It is a real debate. As this thing unwinds and the likelihood of violence increases you have to ask yourself if it is safer in a rural environment.

  77. Essex says:

    I know a lot of surfers who go to Costa Rica — some even own places there….bottom line the population there lives on very, very little…and the take-a-way I have been told is that it opens your eyes to how little you really need to get by….something we all can probably appreciate.

  78. kettle1 says:


    help 76 in mod

  79. Barbara says:

    “While they were out, the room was broken into, locks on the luggage were clipped and all the cash was stolen.”

    Who the hell leaves CASH in their hotel room???

  80. Essex says:

    76…if it really goes….and I mean burning cities goes….we’ll hit some land the family owns out in the sticks of PA….having been a country boy before…I look forward to the extended camping trip aspect of the whole thing….but you do have to have provisions for that scenario….in a big way.

  81. lostinny says:

    74 Barbara
    I didn’t think of it that way. And I hope I really don’t have to one day.

  82. lostinny says:

    79 Barbara
    More people then you’d think.

  83. Dissident HEHEHE says:

    Sometimes Mish just makes me cry I laugh so hard:

    “We announced on February 10, 2009, a Capital Assistance Program to ensure that our banking institutions are appropriately capitalized, with high-quality capital. Under this program, which will be initiated on February 25, the capital needs of the major U.S. banking institutions will be evaluated under a more challenging economic environment. Should that assessment indicate that an additional capital buffer is warranted, institutions will have an opportunity to turn first to private sources of capital. Otherwise, the temporary capital buffer will be made available from the government. This additional capital does not imply a new capital standard and it is not expected to be maintained on an ongoing basis.

    My Translation: “This new capital will not cost anyone anything. It will be dispensed by magic fairies and recovered at a later date. We cannot share exactly how this magic works because under the rules of the magic ministry, we would be stripped of our magic hats and lose the rights to dispense magic if we did. Trust us. This is the proverbial free lunch that everyone says does not exist. However, like magic pixie dust, it does exist, it really does.”

  84. Steve says:

    I’d prefer to be living in the NJ Blog compound, with Clot and SAS well armed on the perimeter; ChiFi and Stu running the books; Grim managing our barter trade – made possible thanks to BC’s extensive gold stash & opportunistic commodity trades.

    Some good Chilean wine or maybe a few bananas would just be a bonus.

    We might even have a disinformation campaign amongst the locals, with Reechard, Pret, 50.5 and Ducky all deployed. Kettle could handle any additional surveillance required.

    With places of course, for plenty more of our talented folks around here.

  85. kettle1 says:

    re costa rica and SHTF (hehe, barb, lost)

    Needing an armed guard seems to be a consequence of not integrating into local society. I have met a couple that moved to the west coat of CR (friend of a friend sort of thing). According to them if you do not integrate yourself into the local society then needing an armed guard can be real.

    This principle seems to apply to most places. If you are willing to relocate and integrate into the local society then you will fare much better then otherwise. In some latin american areas towns are very tight nit and if you make an effort to “join the team” you will be brought into the family.


    American lifestyles take immense amounts of infrastructure to support and maintain. what you may have seen i the 90’s was still based on a intact and functioning infrastructure even if one step removed.

    If SHTF we can expect the infrastructure (social and physical) to become spotty and intermittent. some places will do OK others will be abandoned and still others will rot in place.

    Not to e a broken record, but the number of elderly people int he US that require subsatntial medical support is going to have a huge impact on everyone else. amily will have to try and support elderly loved ones as best they can with limited resources that will make what they had before seem like mana from heaven.

    The US will be forced to move back towards nuclear extended families that were much more common before the industrial revolution. Some will handle the sudden and rapid change and others wont it will be one heck of a game of roulette.

    some people bust on Nom for his compound, but having a plan is a huge 1st step even if the plan needs refining. How many people have even considered such possibilities?

  86. RentL0rd says:

    Regarding which country/place fares better when TSHTF, there’s an interesting article I read (it’s either Newsweek or Time) about India’s poor.

    According to that author, India’s vast number of poor will act like a stabilizing force when the rich and middle class suffer and their affordability plummets. When you are really really poor, the only way you can go is up.

    I am not entirely convinced, just stating what I read.

  87. Barbara says:

    85. kettle
    with all due I think its a bit of a fantasy. Roads won’t crumble if left for a couple years, even 5 years. The old? They will die at home. Its what happens when people get old. We just sanitize it via hospitals and hospice.

  88. Essex says:

    85….Me…..from the front gate door….very tough to enter….very secure….to the elevation .. to the basement with the ‘bunker style’ front slot facing windows…to the very elevated top floor with a full sweep….my place will not be an easy entry point for anything except possibly a tank….and if it comes to that….nice to know ya.

  89. Essex says:

    heck our roads suck after every winter….I am pretty sure someone is skimming the quality concrete funds and selling crap to pave with…..but we have a pretty aggressive suburban assault vehicle if and when it gets too bad.

  90. kettle1 says:


    perhaps, although i wouldnt exactly consider it a fantasy ( i consider that a desirable thing). but maybe i am way off base. hopefully we never find out. but as always plan for the worst and hope for the best.

    maybe we can debate the matter at a GTG over a drink

  91. Barbara says:

    kettle imo its a matter of lux living VS getting by on the basics.

    My drinks must consist of a small diorama of a southeast asian village rendered in wood sticks, floating on top of a tall flourescent liquid.

    Girly drinks!

  92. kettle1 says:

    not trying to start down the conspiracy theory road but……

    if you listen to the talk from europe to japan to china, the call is for broad and thorough regulation of international banking. the only way this is done effectively is with a supranational entity, a UN of banking but one that has real authority.

    any such organization will have extensive influence over individual nations monetary policy and hence their entire well being.

  93. Clotpoll says:

    seneca (68)-

    No way, no how. Won’t work.

  94. kettle1 says:


    my drinks are usually clear and to the point, occasionally a shade of green or brown and include my name sake (ketel one)

    ….my blog name is intentionally misspelled

  95. Dissident HEHEHE says:

    “kettle imo its a matter of lux living VS getting by on the basics.”

    Yep, but that’s exactly what the government doesn’t want you to do:)

  96. Clotpoll says:

    vodka (70)-

    Are days like today not extreme enough? Do we have to wait for the print of AIG’s 60bn loss last quarter? Do we need to hear that first 1mm jobless report?

  97. kettle1 says:

    AMEX offers $300 to cancel cards

    In a marketing turnabout, the largest U.S. credit card company by purchases is offering select members a $300 gift card to drop its card, according to a notice on its web site.

  98. kettle1 says:

    clot 99

    the extreme i am referring to goes beyond today but isnt far off. Once store shelves start to become empty and the national supply chains break down then thinks tumble quickly. logic and reason take a back seat when you have an empty belly.

    international shipping has already faltered. if trucking in the US falters then things get interesting quickly.

  99. Outofstater says:

    #47 Now that is just rude. You might want to consider acquiring some manners.

  100. Clotpoll says:

    vodka (100)-

    I think we’ll see that by midsummer.

    “if trucking in the US falters then things get interesting quickly.”

  101. Clotpoll says:

    stater (101)-

    You want I should find him and shoot him?

  102. sas says:

    if the SHTF, i will get my family & Juanita’s family out.

    I have it planned out already, i just have to call favors.

    but, once that is done, i will come back. I ain’t gonna miss this party.


  103. Outofstater says:

    #50 Ah, forgive me. I see you’ve acquired a mirror. That will have to do.

  104. grim says:

    From the Star Ledger:

    Newark-based IDT tech company plans to relocate

    Newark-based telecommunications company IDT is fleeing its oversized, expensive headquarters on Broad Street and consolidating a block away.

    IDT, which has shed two-thirds of its employees over the past few years, will move out of 520 Broad St. by May, company Chairman Howard Jonas said this evening. The old building, owned by an affiliated company, might go into foreclosure and is not currently on the market, he said.

    “We can’t afford the building we’re in now,” Jonas said. “We’re going to have to see if we can work things out with our lenders.”

  105. Outofstater says:

    #103 Clot – Not quite yet, thank you.

  106. Steve says:

    Clot (98),

    AIG numbers are simply mind-numbing-

    As this sucker accelerates, with multiple massive bailouts/nationalizations on a scale of C, BAC, AIG, I fear it will reach a point where even the US govt cries uncle quicker than we realize. There are too many points of failure, now and coming in the future, for anyone to deal with effectively as the pace increases and pols can’t even pull a trigger on a DOA bank.

    Somebody better grow a pair, damn fast.

  107. Clotpoll says:

    Everybody sleep tight tonight. Asia’s got the hang of this epic fail thingy:

    HONG KONG (MarketWatch) — Asian shares slumped Tuesday, some to multiyear lows, after a broad sell-off on Wall Street left the Dow Jones Industrial Average at levels not seen since 1997.

    In response, New Zealand’s NZX-50 Index broke below the 2,500 mark and was last down 2% at 2,488.77 — its low point since March 2004.

    Japan’s Nikkei 225 ended the morning 3.1% lower at 7,184.50, after briefly dipping below its Oct. 27 closing low of 7162.90. South Korea’s Kospi Composite was off 0.2% to 1064.20.

    “We are now seeing some of the concerns [about the economy] turning into reality, and we know there are unsolved issues … that could delay a recovery for the global economy further. At this moment, risk aversion is very high across the global stock markets,” said So Jang-ho at Samsung Securities.’

    China’s down even worse after the open.

  108. Nurburgringer says:

    me and the missus went to Costa Rica 2 weeks ago. Hell getting down there (over 20 hours door to door), and not as cheap as you may think, but beautiful country anyway.
    Arenal (skip it), Monteverde (don’t miss it), and Montezuma (the beach) for 8 days.
    BTW – on our first morning after crashing at 2AM in a hotel in a dingy little town near the airport I left my card in a Banco Costa Rica ATM machine. The next person in line ran after me to return it.
    The inevitable bout of Montezuma’s revenge was a little easier to take thanks to that hombre sincero.

  109. Cindy says:

    Here ya go Clot –

    General Growth Properties: $1.179 Billion of past due debt…

  110. Clotpoll says:

    Steve (109)-

    I began to understand today why the UK is seriously considering letting their zombie behemoths simply fail.

    Too bad we don’t even seem to have that luxury of time. Things are really accelerating in a bad way here. Of real concern to me are the signs that long-dated Treasuries are beginning to crack. Mortgage repricings today were especially nasty.

    You don’t hear any talk about the Fed’s agency paper purchase the past few days. Methinks these guys already know rates are only headed one way…and it’s not the way they want.

  111. kettle1 says:


    most food supply chains only have about 24-72 hrs worth of stock. if trucking starts falter shortages can showup that quickly and they can be very random

  112. Clotpoll says:

    Cindy (112)-

    Thank you for that goodnight kiss. Of real distress in that article is the following:

    “In addition, we have suspended our cash dividend…”

    A REIT that doesn’t pay dividends is not a REIT.

    However, I’ll be assuaged by the following:

    1. the bi muzzle is nigh

    2. Frank is gonna be gone for a long, long time. Especially if he tried to give his margin clerk his earlobes as extra collateral.

    3. We now live in a world where the guys in 3 pc suits seem delusional…and the guys in robes with “End is Nigh” sandwich boards strapped over their shoulders seem perfectly rational.

  113. Cindy says:

    Night Clot..

  114. Essex says:

    Ha! I was thinking that too….a couple of years ago the “Depression is Near” crowd seemed nuts…now…not so much.

    My plan includes a complete cleaning of a large basement and some goof old collecting of canned goods….good eatin!

  115. Steve says:

    Clot (113)

    The implications are damn scary.

    The ramp up took years, but the payback seems to be coming at us like a tidal wave….and the water’s getting sucked out to sea at a record pace.

    It’s kinda disturbing, when the most bearish among us are consistently being proved to be… too conservative.

  116. JBJB says:

    All this gloom and doom talk, as well as calls for taking up arms, remind me of these old Reagan quotes:

    “Freedom is never more than one generation away from extinction. We don’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.”


    “Government does not solve problems; it subsidizes them.”

  117. james says:

    Well I have to say my armageddon plans involve taking to the seas. I figure Ill drop my wife and kid off in a pre designated area in NJ, remote but accessible via land and sea. They should be safe there. I will return to defend my home and organize my militia. I am getting fat now so that I have some reserves if calories get lean.

  118. kettle1 says:

    what i find disturbingly fascinating is the disconnect between the general public and and groups like this one.

    I suppose its like stocks. once you hear about it on the evening news its too late…

  119. chicagofinance says:

    Clotpoll says:
    February 23, 2009 at 10:35 pm
    Cindy (112)-

    4: and Depeche Mode is our true sonic guiding force….

  120. lisoosh says:

    lostinny says:
    February 23, 2009 at 9:32 pm

    “70 Kettle
    Barbara does have a point. Also, like you say, they have had to deal with the collapse of government and services and somehow handled that. But we have not. So how does living somewhere else make us able to deal with it better? Are you saying we would learn by example? Or even learn more quickly because we were thrown into it, as it were?”

    I would go with Barbara in that whole debate.
    If the SHTF, REALLY hits the fan there are 2 choices:

    1. Familiar location, people are a known entity, familial and other personal connections.

    2. Unfamiliar location where you stand out like a sore thumb as the “rich foreigner”. Culture unknown and no backup from friends and family.

    If things are bad, you are better off knowing the lay of the land, having some close people you can rely on and understanding the thought processes of society at large.

  121. lisoosh says:

    kettle1 says:
    February 23, 2009 at 11:18 pm

    “what i find disturbingly fascinating is the disconnect between the general public and and groups like this one. ”

    Actually – I am a little concerned about being too much in an echo chamber and hubris. Few people are right all the time, and it is easy to get cocky and carried away. We all need multiple reality checks these days.

  122. lisoosh says:

    kettle1 says:
    February 23, 2009 at 11:18 pm

    “what i find disturbingly fascinating is the disconnect between the general public and and groups like this one.”

    Repost due to bad choice of words –

    Actually ket, I’m a little concerned about hubris. These days we all need constant reality checks.

  123. chicagofinance says:

    This short film has an excellent soundtrack….
    “A Little Country Drive In Branchburg”

  124. cobbler says:

    Assuming the current crisis/depression originates primarily from the excessive and unsustainable levels of debt, the two principal ways to resolve it – essentially, by reducing consumption by at least 20-25% – are either via mass bankrupcies (which would result in the extreme misery for part of the people, and not necessarily the guilty ones – say employees of the BK businesses), or via a significant (I mean 50-100% overall within a 2-4 year period) managed inflation (which would result in more widespread but less severe misery – but will provide a fertile ground for the demagogues like say Mr. Santelli as well as some posters here, and likely will lead to bushlike government coming back). I don’t think O’bama thought about this conundrum when deciding to run. Politically, D have a better chance to stay in power if they choose the 1st solution – but it goes against everything they stand for. Thus, we are not seeing anything done at all to resolve the issue.

  125. still_looking says:

    OLYMPIA, Wash. – The state is sending out hundreds of thousands of $1 checks to the state’s neediest residents. It’s a plan that’s supposed to bring millions of dollars worth of food stamps to the state by March.

    ———–your hard earned tax dollars put to good use….——- Unbelievable!


  126. Qwerty says:

    An interesting video — the taxpayer-funded ACORN group says people have “a right” to a house, and they’re squatting in foreclosed houses:

    Stuart Varney: Do you think you got a right to these houses?

    Bertha Lewis: I think the homeowners have a right to stay in those homes until the administrations plan can be implemented…yes I do.

    Stuart Varney: They got a right to the house even though they haven’t paid their bills?

    Bertha Lewis: They have been paying their bills…I think it’s a false thing to say that people haven’t been paying their bills.

    Stuart Varney: No, their delinquent on their mortgages.

    Bertha Lewis: Well, they maybe delinquent on their mortgages but there are people still do that.

    Stuart Varney: They haven’t been paying their bills

    Bertha Lewis: There are millions of millions of people who are…

    Stuart Varney: Doesn’t matter, they haven’t been paying their bills.

  127. KareninCA says:

    Today, as I pondered Essex’s posts of Sunday night (“I have a gorgeous blonde who tolerates me – and a little girl who worships me)(plus his bizarro abusiveness towards some of the women posters: “I wouldn’t cross the road to piss on your grave”) I realized – hey, we have an Abusive Drunk here, and a misogynist to boot! Essex, the blonde is a transvestite, and the little girl is going to need some serious therapy down the road.

  128. KareninCA says:

    Actually, given your anger, she needs therapy now. seriously.

  129. james says:

    SAS, your cover has been blown.

    “Operation Trojan Horse is a program designed to learn the identity of potential opponents to martial law. The program lures potential protesters into public forums, conducted by a “hero” of the people who advocates survival training. The list of names gathered at such meetings and rallies are computerized and then targeted in case of an emergency.”

  130. sas says:


  131. sas says:

    “Health spending takes rising share of U.S. economy”

  132. Miami Beach condos says:

    Prices in Miami have fallen much sharper than that. But, now is a great time to invest in NYC real estate.

  133. PGC's wife says:

    looking for info on a recent sale:
    300 Newark Street unit 6G
    Hoboken, NJ

    date & price would be helpful.

    PGC’s wife

  134. PGC's wife says:

    Any other comps in the building would be appreciated as wel.


  135. Happy Daze says:

    Have NYC area realtors finally changed their tune
    from James Brown to Bruce Springsteen?
    You know
    from “Get up, get on up! Get up, get on up!”
    to “I’m going down, down, down, down…”

  136. Rango says:

    First time visitor to this site and I think everyone here needs to get out of their fantasy mode and get back into the real world. Guess you all have nothing else to do and think you are all experts in finance and social sciences. Wrong — you are all a bunch of morons. ‘
    Have a good day.

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