S&P Case Shiller: December NYC Metro Area Home Prices

Updated the S&P Case Shiller Home Price Index graphs with the December release data. These graphs show all indicies for the NY Metro Commutable Area. As the name implies, this price index covers regions that are within commutable distance to New York City and does include other states. New to the series is the condo index, which has been added to the graphs.

The aggregate index shows home prices in this region peaking in June of 2006. The total price decline to date in the aggregate index is 14.98%. The tiered price index gives us a bit more visibility into the price movement of different categories of homes.

Low Tier (Under $320407) – Peaked in October 2006 and is down 17.21% from peak

Mid Tier ($320407 – $476338) – Peaked in September 2006 and is down 15.50% from peak

High Tier (Over $476338) – Peaked in June 2006 and is down 11.77% from peak

Aggregate (Overall Market) – Peaked in June 2006 and is down 14.98% from peak

The first graph is the year over year change in the index.

(click to enlarge)

The second graph is straight index value.

(click to enlarge)

It is still too early to be calling for any kind of bottom in the region. Unlike other regions that show home price declines beginning to slow, the declines appear to be accelerating in our region. In fact, the most recent data point is the steepest decline since the last cycle. The rate of decline peaked at 8.9% in March of 1991. See below:

S&P CS NY Commutable Year over Year Price Change
Jan 07 -0.34%
Feb 07 -0.91%
Mar 07 -0.91%
Apr 07 -1.56%
May 07 -2.35%
Jun 07 -2.94%
Jul 07 -3.20%
Aug 07 -3.35%
Sep 07 -3.60%
Oct 07 -4.09%
Nov 07 -4.61%
Dec 07 -5.48%
Jan 08 -5.80%
Feb 08 -6.70%
Mar 08 -7.48%
Apr 08 -7.98%
May 08 -7.74%
Jun 08 -7.04%
Jul 08 -7.03%
Aug 08 -6.60%
Sep 08 -7.12%
Oct 08 -7.67%
Nov 08 -8.63%
Dec 08 -9.19%

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

336 Responses to S&P Case Shiller: December NYC Metro Area Home Prices

  1. safeashouses says:

    This drop is like watching snails screw.

  2. yikes says:

    is anyone thinking about buying some of those $100 houses in Detroit just on the off chance that in 15 years that dump has turned things around?

    if you buy a house for $100 (or even $500), the taxes would have to be next to nothing, right?

  3. chaotic child says:

    Grim, thank you for your great work.

  4. ithink ithink says:

    grim, your tiers, when are those prices from?

    i disagree with the party like prince & y2k crowd.

    I don’t see a top tier price hitting the bottom tier price unless it truly is a POS. Take 15% off the peak mid-tear level of 476k & you’re still in the low 400s, I just don’t see hitting 330k, 30% off 476k

    … again, unless it truly is a POS, not-updated in 20 years, has septic/oil/well or the location/location/location is for crap, i.e. backed to a highway, under powerlines, sits downwind of the sewage treatment plant, etc. yadda & so forth

    and at that point, you get what you paid for.

  5. ithink ithink says:

    i mean top to bottom within tiers

  6. kettle1 says:


    not necessarily, the Detroit taxes can be brutal within the city limits.

    Detroit is dead for atleast a generation. losing proposition at best unless you have a 50 year horizon

  7. chicagofinance says:

    I need good girl’s names:

    Preliminary list:

  8. chicagofinance says:

    Doesn’t Nouriela have a good ring to it?

  9. ithink ithink says:

    #7 madison

    sarcasm off

  10. chicagofinance says:

    itit: Irvingtonia?

  11. chicagofinance says:


  12. chicagofinance says:

    I know someone named Brielle…

  13. chicagofinance says:

    I know….Cliftonia

  14. chicagofinance says:

    I got it…..
    Cameron Crazy….initials CCC

  15. ithink ithink says:


  16. 3b says:

    #4 I Think:I don’t see a top tier price hitting the bottom tier price unless it truly is a POS. Take 15% off the peak mid-tear level of 476k & you’re still in the low 400s, I just don’t see hitting 330k, 30% off 476k

    Why, why, why?? After all that has happened and will continue to happen why would you entertain that thought?

    What possible reason? Where are all the buyers who can and will,and are qualified to pay those prices?

    The stock market is back to 1997 levels, and housing prices in our area will only be a mealy 15% off peak prices, cannot be 30% or more??

    I don’t think so. There is no reason, now, or anywhere on the horizon that would indicate that housing prices in our area are not going to drop dramatically more.

  17. Hubba says:


  18. Stu says:


  19. Sean says:


  20. ithink ithink says:

    property values were fake & ferociousness. yes other areas get impacted, we all do in a ponzi, i.e. post y2k. but we didn’t all go into a great depression cos the internets failed us. if the greenspan oh-shit-cut-rates-to-avoid-the-railroads fate in 1880 didn’t happen in y2k, then saying it’s happening now cos it didn’t happen then doesn’t make sense. there was lots of inflated b.s. values & now lots of money is being printed to meet it half way.

  21. Dissident HEHEHE says:

    Kind of interesting how many people asked to see that Barron’s piece re NYC real estate today. I think the oh sh*t factor is finally sinking in for a lot of people.

  22. spam spam bacon spam says:


    (Passes spell check.)

  23. Dissident HEHEHE says:

    Sing of the times:

    Jobless ex-con asks for more prison time


  24. Dissident HEHEHE says:


  25. Dissident HEHEHE says:

    How about Vickie short for Vikram

  26. safeashouses says:


  27. Clotpoll says:

    noreply (from last thread)-

    “Maybe some of our upstanding citizens get there marching orders from this paragon of intellect and patriotism.

    Ladies and gentlemen and clot your hero
    Hal Turner…”

    Mr. No, there’s a big diff between acknowledging the constant presence of violence in America and being a sycophant of a right-wing nut job. Ever read Toffler? Ever read anything from people who play the “futurist” game? All their predictions are based on our constant, violent past.

    Violence is the grease for the gears of our dialectic. I don’t necessarily even like it, but it’s a fact. To ignore it- or pretend that it can’t or shouldn’t be used as a further catalyst for change is horribly myopic.

  28. 3b says:

    #20 You did nto answer my question/s. No offense, but just alot of gooboley-gook.

  29. Eileen says:


  30. Old Stan says:

    +1 Eileen

  31. Clotpoll says:

    Frank, take a guess at where I’m averaged in. I’ve got pad galore in my position; however, one day pretty soon, you’re gonna get lopped off at the knees.

    I hope you and your margin clerk have a nice relationship. You will need to rely on that someday soon.

    Thanks for the SRS short idea today, making money again today. You’re my hero.”

  32. victorian says:

    Cramer was bearish today, says sell into the rally.

    Rut Roh.

  33. Clotpoll says:

    “Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited.”

    Ben Bergabe, 5-17-07

    And this guy triggers a 236-point rally with another bogus pronouncement?

    I may tap the HELOC on my house to get even shorter.

  34. Clotpoll says:

    vic (34)-

    Today’s action was short-covers and pikers grasping at straws.

    Back to the slag heap for the veterans tomorrow.

  35. PeaceNow says:

    Thanks for the work, JB.

  36. Essex says:

    Big Speech for the O’man 2nite.

  37. lostinny says:

    Chi Fi
    Pay attention:

    Also, Lostella has a nice ring to it :)

  38. sas says:

    before you get hot & horny over that puppet Omama’s speech.

    just remember, he has a great FOCUS group.

    so, he will say things you wanna hear, and then turn away and do the exact opposite.


  39. grim says:

    From the Star Ledger:

    As Fortunoff’s heads toward bankruptcy, N.J. jewelers brace for losses

    As the Fortunoff department store chain swiftly collapsed into bankruptcy this month, a group of small jewelry makers from New Jersey were left with little hope of recouping their merchandise and a realization that they were burned twice in their desire to help keep the retailer alive.

    In the weeks leading up to Fortunoff’s bankruptcy filing, Novell Enterprises and a pair of other bridal jewelry makers shipped hundreds of thousands of dollars worth of wedding bands and engagement rings as part of an ambitious expansion conceived by the company’s owners.

    “This was a situation where companies were seduced by the concept of carrying on the Fortunoff name,” said Bruce Pucciarello, who is part owner of jewelry maker Novell Enterprises. “It was like they had a sinking ship, and they continued to take on passengers.”

    Fortunoff’s demise was cemented today in U.S. Bankruptcy Court in New York, when a group of six firms won an auction to liquidate the retailer’s assets. The company has 10 stores in New Jersey.

    By most accounts, the tight-knit group of bridal jewelry makers — who represent only a fraction of Fortunoff’s total vendors — have a slim chance of having their merchandise returned as part of the bankruptcy proceedings.

  40. sas says:

    omama=focus group


  41. grim says:

    From the Record:

    State approves Passaic County’s layoff plans

    The state Department of Labor approved Passaic County’s plan to lay off 148 youth detention center employees today, with conditions.

    In a letter to County Administrator Anthony De Nova, the state pushed the effective start date of the layoffs from April 1 – the county’s preference – to April 10, with the requirement that new letters giving notice to the affected employees be sent today.

    Passaic County officials had sent letters to employees on Feb. 13, before the state had completed its review of the proposed layoffs.

  42. grim says:

    From CNN/Money:

    Merck Lays Off About 750 US Sales Representatives

    Merck & Co. (MRK) has laid off about 750 U.S. sales representatives so far this year as part of a previously announced cost-cutting program designed to offset sluggish sales growth.

    Many of the affected sales reps were notified earlier this year but some received notices Monday, said Merck spokeswoman Amy Rose. Merck, based in Whitehouse Station, N.J., expects to have about 5,600 U.S. sales representatives following the employee terminations, implying the layoffs amounted to a 12% reduction in the U.S. sales force.

    The sales-force layoffs are part of the 7,200 positions company-wide that Merck announced in October it planned to eliminate by the end of 2011. The job cuts are intended to yield cumulative pretax savings of $3.8 billion to $4.2 billion through 2013. Merck has about 55,000 employees worldwide.

    Merck isn’t alone. Several of its large-pharmaceutical rivals have announced significant job cuts recently, including Pfizer Inc. (PFE) and AstraZeneca PLC ( AZN). In particular, the industry’s collective U.S. sales force is expected to continue to contract in coming years, as companies lose patent protection for top-selling drugs and deliver fewer new successful products from their research pipelines. The industry had built up sales-force armies during the 1990s and first half of this decade, who bombarded doctors with free samples, free lunches and other enticements designed to influence prescribing decisions.

  43. sas says:

    now that they looted the social security, now they want your 401k

    kiss it all goodbye

    “Miller Says 401(k) Plans Are High-Stakes”


  44. Sean says:

    O’bama just shorted the markets…

  45. Hard Place says:

    SAS – What are some of the better news sources in your opinion?

  46. Sean says:

    restart lending? hahahahaha!

  47. bi says:

    omama sounds like a ceo of ceos.

  48. Stu says:

    That Obama sure is an eloquent liar. He reminds me a lot of his lying predecessor, only I don’t cringe when he speaks. I cringe a few moments later when I process his words.

  49. Joey says:

    It sounds like Obama’s talking about economic protectionism again. I thought he was supposed to be against that

  50. Joey says:

    Or was that last week

  51. Essex says:

    meh….the man can speak. He has ideas…and can articulate them. A lot of the things he said tonight are concerns that the folks here have mentioned many times…I like his approach.

    And btw….not everyone is big pharma is looking for a job….but the sales forces have been bloated.

  52. Sean says:

    Alt energy is Al Gore and his hedgies, and now Obama is pitching historical revisionism, Karl Benz invented the modern auto and indeed patented it.

  53. Joey says:

    And now he just said America invented the automobile. I’m pretty sure Karl Benz of Germany did that. Let’s have some more whoppers

  54. Seneca says:

    Someone needs to strap Pelosi to her chair.

  55. Joey says:

    Beat me to it Sean

  56. Essex says:

    The man is addressing real issues here ladies….

  57. Essex says:

    Ferdinand Verbiest invented the first car in the year 1672. It was the first ever car invented and was powered by steam. Ferdinand was an experimentalist and a missionary to China. He built his car in China. Hence you could rightly say, the first ever car was made in China.

    In 1769, the first self-propelled car was designed and built by Nicholas Cugnot. His model of car was a three-wheeler.

    Francois Isaac Rivaz, a Swiss inventor, designed and invented the first ever car with an internal combustion engine. This car engine was fueled with a mixture of hydrogen and oxygen. This car was made in 1806. However, this design was not a success.

    The car models designed and built by Samuel Brown, Samuel Morey and Etienne Lenoir were also a failure.

    In 1881, Gustave Trouve not only designed and invented the first ever car powered by electricity but also demonstrated the functioning of this automobile at an International Exhibition of Electricity in Paris.

    Four years later in 1885, Karl Benz designed and built a car powered by gasoline. This car was made in Germany. This was the first ever car to be granted a patent in 1886. The rest is history and the world acknowledged Karl Benz as the “Inventor of the modern automobile”. He also invented the first ever car with an internal combustion flat engine in 1896.

    There have been dramatic changes in the field of mechanical engineering and today hybrid cars are in vogue.

  58. Sean says:

    By 2020 for education? Typical politican just like the 2013 budget deficit. Promise what you won’t be in office to deliver.

  59. bi says:

    the market should be good tomorrow as long as politicans don’t talk economy that much…..

  60. Stu says:

    “Typical politican just like the 2013 budget deficit. Promise what you won’t be in office to deliver.”

    Not if you’re Mayor Bloomberg!

  61. Joey says:

    Wait a minute, the recovery program was free of earmarks? De he mean full or free?

  62. Stu says:

    “the market should be good tomorrow as long as politicans don’t talk economy that much…..”

    bi, what level on the DJIA is good in your opinion?

  63. Joey says:

    lol. Good one Stu.

  64. Essex says:

    I wanna see some major infrastructure upgrades…..new roads…..my BMW is getting hammered by the crappy roads here.

  65. Essex says:

    I will bet only 40% of Americans are in the market in any meaningful way…..that being said….I watch one stock with great interest….as it holds a lot of sway over my household income.

  66. bi says:

    looks like he is still in campaign mode. keep blaming his predecessor

  67. victorian says:

    Seriously, the standing ovations are creepy.

  68. grim says:

    Wait a minute, the recovery program was free of earmarks?

    No no, you don’t get it. A stimulus bill, by definition is a spending bill.

    Those dollars need to be spent.

    It can’t be an earmark or pork if the goal of the bill is to just get dollars in the economy.

    Therefore the bill is free of pork or earmarks. Nothing but directed stimulus here.

  69. Essex says:

    His predecessor was a functional retard. And has left the place in shambles….come on.

  70. Essex says:

    I wanna see some perp walks for the former admin and their banking buddies.

  71. Essex says:


  72. sas says:

    “What are some of the better news sources in your opinion?”

    i scan all over.
    and I talk to insiders or try to catch interviews.

    I work closely with a person whom is starting to become main stream.

    look at alternative media.
    MSM is too far gone.


  73. bi says:

    63#, stu, economy should be run by professionals such as ceos and business owners. when polticos got in, the things are messed up. look when new guys come in, it is too their benefits to talk down economy and make them look so great later on.

  74. TomS says:

    These ovations are ridiculous…Pelosi freaks me out.

  75. sas says:

    omama is terrible.

    what a waste

    how many times will you be a sucker?


  76. JBJB says:

    Clot I believe said it best. Bush with a tan.

  77. Dissident HEHEHE says:

    Forgot O’bama was even talking tonight, Family Guy was on TBS.

  78. Essex says:

    Naw….the agenda is completely different.

  79. Sean says:

    We interrupt this message and the clapping for breaking (broken)news from the land of the rising sun.

    Japan Exports Plummet 45.7%, Deficit Widens to Record


  80. Joey says:

    Ah. Thanks for clearing that up grim

    No no, you don’t get it. A stimulus bill, by definition is a spending bill.

    Those dollars need to be spent.

    It can’t be an earmark or pork if the goal of the bill is to just get dollars in the economy.

    Therefore the bill is free of pork or earmarks. Nothing but directed stimulus here.

  81. sas says:

    Obama could just shorten this all up by saying:
    “don’t worry everyone, you’ll get your govt paycheck, see you next time”


  82. Essex says:

    As a forty percenter…..I will say that I would rather see my taxes go to places and working people rather than CEOs.

  83. Essex says:

    The bank bail out without strings was the last straw in a series of massive failures from the GOP. The Last Straw.

  84. Sean says:

    SaS if you needed to bug out where would you go? Not asking for coordinates either….

  85. cobbler says:

    If we all agree that keeping the consumers’ spending at 72% of GDP is impossible, from all the alternatives (private investment, govt investment, and exports) the only one available at this moment is govt spending – thus stimulus; otherwise, we just have an uninterrupted drop and increased misery. Amazingly small part of the plan is local-interest pork. I hope the friend of mine who lost his NIH grant-funded job at SUNY gets it back. Besides, I’d think USA borrowing money to build say a high-speed rail is immeasurably better than people borrowing to buy a McMansion.

  86. JBJB says:

    “agenda is completely different” The agenda is exactly the same, the recipients are now the unproductive…

  87. sas says:

    “SaS if you needed to bug out where would you go?”

    bug out?
    I don’t know what you mean.


  88. Sean says:

    SaS – leave town for greener pasture.

  89. Hard Place says:

    I’ve turned off mainstream media for some time now. Stratfor I’ve found fairly interesting because of the depth of the reporting. A friend shared the contents for a while, but it just got too dense to follow daily. Appreciate the articles you share. Thx.

  90. Joey says:


    all government spending is productive?

  91. Essex says:

    87…yeah lets slam some cops and teachers.

  92. sas says:

    hey grim,

    you around? or you out working on another masters?

    I am thinking about writing a post with several links, will it get stuck in the east german moderation?


  93. Essex says:

    Government can have a huge impact….going to the moon…the innovations that came from those efforts.

  94. Essex says:

    I define Bankers and investment types that get paid huge amounts of money for simply moving digits….an unproductive. And overpaid. That party is over.

  95. Sean says:

    Geoge Will just said it on ABC “cognitive dissonance”

  96. Essex says:

    You are witnessing a complete shift in this country….banks are culprits. Bottom Line.

  97. JBJB says:


    Are you trying to crate the worlds longest running strawman? Or are you really the full of shiat?

  98. Sean says:

    Essex – no offense to your opinion but I know people at Bear Sterns that are still working. Don’t think the part is over.

  99. Essex says:

    The whole thing fascinates me….this new dynamic. I love it. Pure theater. The GOP raped the nation….and now we get to see how badly the bloated butt hole.

  100. Essex says:

    Sean you can’t even spell the name of the firm…no offense.

    Yeah…I understand Sean…Wall Street has been very good to my mom’s brother…so?

  101. Sean says:

    Essex – there is only one party, as soon as you realize that fact you will be a better for it.

  102. sas says:

    “SaS – leave town for greener pasture”

    Lips are sealed on this one. sorry bloke.


  103. Stu says:

    “banks are culprits.”

    Essex, we finally agree on something!

    Market futures dropped a bit right as speech ended. Will there be a bounce tomorrow? I don’t know. Depends on how foolish the American sheeple are.

    This speech could have easily been given by any president in the last 40 years. It is surprising that they keep repeating the same promises and continue to fail to follow through.

  104. Essex says:

    98…Oh I am completely full of shit….and your point is????

  105. Essex says:

    104…Stu….I knew we has some common ground. Those bastards are the most unAmerican terrorists on the planet.

  106. Stu says:

    Essex, I’m not sure why it is, but you appear to rub almost everyone here the wrong way. This is tough to do in a place as tolerant as this. What gives?

  107. Essex says:

    Listen….you think I DREAM of living in a 3BR/2Ba ranch….in a second tier town….while dragging in a household income that in ANY OTHER STATE West of here….we would be living like GODDAM KINGS????? NO F’ing way….it sucks to pay out the ass to live here and we have sucker stamped on our foreheads…..

  108. Essex says:

    But I am *happy* he says gritting his teeth and giving a fake smile…..

  109. Sean says:

    Essex a few glasses of wine on my part, and no desire to spell check,so sorry. My point is the the game is afoot for control of the next bubble.

  110. JBJB says:

    This is probably the 15th or 16th consecutive SOTU where alt. energy was hyped, I don’t even know why they try.

  111. Essex says:

    111. They will never take my internal combustion car….hell it will be the last car I buy if I want my kid to go to college…..not joking.

  112. chicagofinance says:

    Essex says:
    February 24, 2009 at 10:21 pm
    it sucks to pay out the ass to live here and we have sucker stamped on our foreheads…..

    SX: Stamp on the forehead? I always assumed you had balls slapped across your nose, because you are a fcuking c0cksucker….

  113. Essex says:

    107….cause Stu…I generally dislike people….in all seriousness….I really do. I am a bit of a sociopath…I think it shows.

  114. chicagofinance says:

    JBJB says:
    February 24, 2009 at 10:22 pm
    This is probably the 15th or 16th consecutive SOTU where alt. energy was hyped, I don’t even know why they try.

    JB: please clarify…lost & I have a likely different definition for SOTU….

  115. Essex says:

    113….Case in point. The gayest man on the blog makes his big cameo.

  116. sas says:

    nevermind grim,

    I’ll just post another time.
    I’m getting sleepy.

    it had to do with the trillion stolen from the DOD & Pentagon, more money than all the stimulus packages.
    and connections.
    (aka. William J. Lynn III)


  117. Essex says:

    113….so ChiFin….do you ‘feel’ rich renting in a big hitter town?

  118. JBJB says:

    State Of The Union

  119. chicagofinance says:

    Essex says:
    February 24, 2009 at 10:26 pm
    113….so ChiFin….do you ‘feel’ rich renting in a big hitter town?

    I could not give less of a $hit about garbage like that….my wife grew up in rural PA and wants our kids to have horses and open space. I want a short commute. Having the train line/ferry into NYC is high priority. Getting to the beach in 15 minutes is the kicker…

  120. Stu says:


    I’ve been blaming the bankers since March of 2007 when I first became aware of the CDO game. Their propaganda of first blaming Clinton (RE capital gains break) and then blaming the Republican house and senate (repeal of Glass-Steagall) is pathetic. Especially considering how their lobby funded both of these decisions. Let’s face it, in capitalism, no self-regulation will ever be affective as greed triumphs.

    I still believe that more than anything, the demise of capitalism will eventually be attributed to the income gap between executive salaries and those of the blue collars and entry level white collars.

  121. Sean says:

    SaS – I know you don’t know any of us from Adam but at the same time you have intrigued a few of us here on this blog, a meet and greet to share stories in due.

  122. Essex says:

    Rock on Fellows….always a pleasure….

  123. chicagofinance says:

    sas says:
    February 24, 2009 at 10:26 pm
    nevermind grim,
    I’ll just post another time.
    I’m getting sleepy.

    Where is the cognac?

  124. Stu says:


    A smart fella like you has got some serious issues to deal with! Why don’t you try?

  125. Pat says:

    cf, you’re doing the reflective, aren’t you?

    three dots.


  126. Clotpoll says:

    seneca (55)-

    What about the gag ball?

    “Someone needs to strap Pelosi to her chair.”

  127. Pat says:

    And we got it all, except the beach. And it sux. The beach was our Summer.

    What we looked forward to, and what we remember. Putting gallons of water in the trunk to heat up, so we could shower the laughing, big belly toddler next to the car as the sun went down. Make everybody smile as they headed back after a long day fishing at Island Beach.

    I even miss the nasty LI b/tch who rented the place below us Septembers down in Brant Beach. I miss the way she yelled up, “Do you HAVE to drag those chairs on the porch at 8 am? Does she have to run down the hall shrieking at 7? Can’t you keep her quiet? I’m sick of this, and I’m calling Carol. Don’t I deserve a vacation even though I don’t have kids? Do I need a REAL vacation, folks?”

    On Saturday, “Bye, Pat. See you next year.”

  128. Clotpoll says:

    cobbler (86)-

    Exactly where on the UWS do you live? Are you a Dem, or is Bernie Sanders more your speed?

    How about a little less leverage/debt across the board? How about we allow assets to find their own market levels, without transfusing more dead patients?

    Ooh, can’t do that. It’s a little too hard. We’d have to stop pandering and patronizing the less-fortunate…stop having to pay them hush money under the table in order to keep them smiling at the benefactors that they (not so) secretly despise.

  129. Clotpoll says:

    We got a black president already. Why is it we still can’t drop the white guilt?

  130. Clotpoll says:

    Stu (107)-

    I’m gonna take abusive and self-loathing for $400, Alex.

  131. Essex says:

    126….if you only knew. Let’s just say that I am a work in progress….and kind of fun in the right environment….usually outside and away from sharp objects.

  132. Stu says:

    Clot… Nice.

  133. Clotpoll says:

    JBJB (111)-

    When I hear “alt energy”, I start surfing and looking for Ren & Stimpy reruns.

    Boone Pickens has quite the alt energy agenda (both for his own enrichment and for the country). Saw him on bloomberg the other day, complaining that even Repugs won’t give him the time of day to pitch it anymore.

  134. Essex says:

    Here are the results of my Dr Phil Facebook Quiz…..”Others see you as someone they should “handle with care.” You’re seen as vain, self-centered, and who is extremely dominant. Others may admire you, wishing they could be more like you, but don’t always trust you, hesitating to become too deeply involved with you.” But hey….nobodys perfect~!

  135. Clotpoll says:

    sx (114)-

    I probably hate more people more intensely than you. You could be a little more cheerful about it, however.

  136. Pat says:

    Alt energy. Is that like hitting the alt shift power buttons?

  137. Clotpoll says:

    Hell, there are three or four people I could probably shoot. And feel good about it afterwards.

  138. Essex says:

    137….You and I would probably get along pretty well….or one of us would limp away bleeding….I dunno.

  139. Clotpoll says:

    sx (140)-

    I’ve always found shared hatred creates a good bond among like thinkers.

  140. safeashouses says:

    Why all the animosity towards Essex? He can be a bit blunt and abrasive, but so what.

  141. Clotpoll says:

    Too many Duke-Carolina games in my past. Probably the same sentiment you could find in people who attended both the Beer Hall Putsch and Nuremberg.

  142. Pat says:

    Essex, you f’n lied like a dirty dog on those questions, and I’ve never even been on Facebook, so I don’t even know squat about those things.

    Nobody wants to be you.

    You get all weird when you smoke dope or drink. You can’t handle it.


  143. Stu says:

    I hate no one! Call me Ghandi if you must. Hey little girl, want a piece of Ghandi?

  144. Essex says:

    144….no way Pat….I kill it on tests like that….I took that really intense sales test….I can’t remember the name….and I am like THE IDEAL SALESMAN….but you know most salesmen are SOCIOPATHS. Duh.

  145. Pat says:

    And one other thing.

    Use periods. I’m ripping my hair out over here with the three dots. I’m gonna call Carol. I can’t take it.

    Period, Capital letter.

    Badabing, badaboom.

    See you tomorrow, Essex.

  146. Essex says:

    oh and Pat….I am a blast to drink or smoke with….where I grew up that shit is like mother’s milk. I actually get more normal.

  147. chicagofinance says:

    Clotpoll says:
    February 24, 2009 at 10:40 pm
    seneca (55)- What about the gag ball?
    “Someone needs to strap Pelosi to her chair.”

    clot: OK…you can turn off the sound; it’s irrelevant anyway. Short film of 3 minutes. You need to watch until the end of don’t bother. The first 90 seconds really nothing happens.


  148. Stu says:

    And futures continue to drop as do world markets. It appears Obama was good for about a 1% drop in markets across the board. I guess world markets won’t get to participate in today’s hot-air driven rally on Wall Street.

  149. Essex says:

    142. Cause they wanna be me. But they hate me. It get’s complicated.

    Seriously though. If you really knew. You might actually want my life. It is pretty damn excellent. Seriously.

  150. Essex says:

    Uh…ChiFi….are you trying to be the ultimate metrosexual music advocate here?

  151. safeashouses says:

    This place is so therapeutic.

  152. Rich says:

    Atlantic County home prices inch up for quarter; Capes jump 5.2%


  153. Barbara says:

    &. Chifi
    It was my 2nd pick

  154. JBJB says:

    He publicly admitted tonight that there will be a TARP II. Said something to the effect that banks will need more money then we have set aside. Perhaps a Wall St rally on that news.

  155. safeashouses says:

    I predict there will be more TARPs then Rocky movies or Cher comebacks.

  156. chicagofinance says:

    Barbara says:
    February 24, 2009 at 11:10 pm
    &. Chifi
    It was my 2nd pick

    Barbara: insane….I keep hearing Julie/Julieta….it is probably my #1 thought at the moment…..other than maybe Essexa..

  157. safeashouses says:


    What about Depechia?

  158. Essex says:

    ChiFi is plotting his revenge.

  159. chicagofinance says:

    SX: ok – more conventional?

  160. chicagofinance says:

    safeashouses says:
    February 24, 2009 at 11:16 pm
    chifi What about Depechia?

    I have DModa….

  161. Stu says:

    Liptessa is not acceptable?

  162. Barbara says:

    157. Chifi
    Jules is serious, smart and glamorous. Do eet!

  163. Essex says:

    ChiFi, my buddy is Indiana was a huge Depeche Mode fan and his dad owned a radio station. He got to meet the dudes on a few occasions. I saw them in concert but never was a huge fan until Johnny Cash covered them I’m weird like that.

  164. chicagofinance says:

    Bloody hell…blowing the mike at min 1:15


  165. Stu says:

    Want to escape?

    Newark, NJ to Cancun, Mexico
    $186+ tax on American Airlines.

    Deflation? Not here.

  166. Essex says:

    When the chips are down, these ‘civilized’ people will eat each other. -The Joker

  167. chicagofinance says:

    Barbara says:
    February 24, 2009 at 11:18 pm
    157. Chifi
    Jules is serious, smart and glamorous. Do eet!

    B: We’ll see, but you are on to something…good pick

  168. Essex says:

    No one hold a candle to this Jersey girl……


  169. chicagofinance says:

    Essex says:
    February 24, 2009 at 11:18 pm
    ChiFi, my buddy is Indiana was a huge Depeche Mode fan

    SX: did you vote Quayle?

    When I lived in Hyde Park, my lament was that I lived only 10 minutes from people who voted Dan Quayle into the senate….

  170. Barbara says:

    The Divinyls were way cooler in the early 80s, Boys In Town


  171. Essex says:

    171. I hunted quail once.

  172. Essex says:

    Man I love that man…..in a purely musical way.

  173. Essex says:

    This about the time I saw them I believe….


  174. yikes says:

    family living in cave forecloses


    (still reading the old thread, sorry if it’s been linked)

  175. Barbara says:

    this is for you, Scarface fan.


  176. cobbler says:

    Clot [130]
    No I don’t live on UWS; actually, I live in Union County… And I don’t support Bernie Sanders; I think he is nuts; I voted for Lance for Congress which I see now as a mistake… But – (a) do you agree that 72% share of consumption in GDP is undesirable and not sustainable; and (b) what do you propose to take say 10% away from this number (your options are exports, productive investment, and government spending for 7%; presumably, we could squeeze 3% from the added savings). Right now exports are dropping like a rock, and your holding of SRS suggest you don’t believe in much private investment anytime soon. So, govt spending is the only one left. Is it productive – large part of it, yes (science, non-pork infrastructure, support of social stability such as enhanced unemployment benefits or non-firing of the police officers). And the money borrowed – well, the 800B stimulus plan is 2x smaller than the subprime borrowing from 2005-2007 which was worse than unproductive…

  177. Victor says:

    Dejavu! Moscov 1978 Leonid Brezhnev addressing Politburo CK CPSS. Standing ovations every five minutes and promise of a better future ( Communism) looks scary.

  178. KareninCA says:

    Oh, I see. Essex is g*y, but in denial. that’s why he’s a misogynist and impugns other men’s sexuality. (not that g*y guys are all misogynists by any means, but all the misogynists I’ve known were g*y guys in denial). either that, or he’s utterly iimpotent.

    he’s also pompous moron, can’t string a sentence together, has added nothing with any content (except a cut and paste) and is hostile. but he only actually *attacks* women (see his postings of Sunday night), because he is a coward.

    he’ll lose his job in this downturn, and spend the rest of his life boring fellow destitute drunks and druggies re the German car and big earnings he had, back in the day (that is, the day when a chimp could earn big bucks on Wall Street). bairen, did you *see* the vile stuff he posted on Sunday evening? it was like being stuck in an alley with a vomiting drunk.

    ugh. hope he is involved in a single car, no passenger, driving fatality. or maybe when his daughter reaches the age of 11, she’ll shoot him.

  179. sas says:

    this thread is dead.
    time for a new one.


  180. me@work says:

    the thread is dead…

    oy. poet.


  181. Clotpoll says:

    cobbler (181)-

    You’re moving the target.

    1. I don’t support consumer spending as 72% of GDP. Never have. How to change it? Consumers quit spending, and save.

    2. I don’t propose any way of “covering” your theoretical 10% hole a decline in consumer spending leaves. I’m a market guy, so I tend to think the market will drive that outcome.

    3. Since you’re a gubmint guy, you propose gubmint spending and command/control be employed to fill that gap. What’s the track record of past economies that had success following this model? What gubmint in world history has spent or printed its way out of economic problems? Why will ours be the first.

    4. My holding of SRS has nothing to do with a non-belief that private investment is not forthcoming. It has everything to do with a very real, very giant oversupply of useless commercial RE, married to a plethora of tenants in occupied commercial RE going belly-up and not paying their rent, glued to an incipient CMBS bust that will make subprime look tame in comparison.

    If you’re going to post here, I’d appreciate your laying off the straw man. Hows about some direct discussion of a topic, rather than trying to start a whack-a-mole game.

  182. Clotpoll says:

    cobbler (181)-

    “And the money borrowed – well, the 800B stimulus plan is 2x smaller than the subprime borrowing from 2005-2007 which was worse than unproductive…”

    The death of your neighbor does not justify a claim of your improved health.

  183. Essex says:

    183…Uh Huh….wow…you must be a therapissst

  184. Essex says:

    183….OK My rebuttal….

    Not gay…Never tempted. Always semi-tolerant….rented a place from an openly gay Prof. in college…and went to dinner with him in public sometimes…much to the chagrin of my fraternity brothers who saw me at the restaurant…at which time I rolled my eyes like….”come on”…conversation over.

    Don’t care for most women….or men for that matter…..but generally like talking to women more than men….for a whole array of reasons….but mostly I find people very tedious.

    Cut and paste? Sometimes…but hey who doesn’t…..

    Losing a job….been there done that…and am well into act II which seems pretty stable….though I make 1/2 of what I did working in TECHNOLOGY for a dozen years and well into (and after the bubble)….not something I would wish on anyone….two IPOs and I still have to make car payment like the average joe.

    Wishing death on a total stranger? You must be a devoted Huffington Post Blogger. That seems to be the norm over there.

  185. lurkerd says:

    Grim – thanks for posting the graphs.

    Am I the only person here who analyzed the data and realized the New York area condo market was the least bad performer (-0.8% decline compared to previous month) out of the 25 house and condo markets tracked by the S&P/Case-Shiller index?

    Condos in this area continue to hold up surprisingly well compared to other housing markets.

    Is there a problem with the data? It doesn’t make sense that homes closest to the epicenter of the financial crisis are outperforming every other housing market, including places like Dallas and Denver.

  186. Pat says:

    lurker, data is data.

    Wanna tell us which condo you’re going out to buy today?

    Maybe one in “strong” NY area? Or maybe one in FL, because they’ve been so weak, they MUST be on the upswing?

    Right now, nobody has a clue what or where the next big hit will be, or which segment in MSA B is going to be impacted by a comet impact in MSA D.

  187. Dissident HEHEHE says:

    Grim unmod 192!

  188. reinvestor101 says:

    Please leave it modded. No one wants to read whatever heehaw has to say. It’s probably subversive now that he considers himself a dissident.


    Dissident HEHEHE says:
    February 25, 2009 at 7:54 am
    Grim unmod 192!

  189. Dissident HEHEHE says:

    Sweet I got called a dirtbag! Awesome!!

    I want to see somebody else top that one!

  190. cooper says:

    I’m feeling a lot of tension and negativity this morning… maybe it’s the mixed signals of the new administration

  191. cooper says:

    just watching obama from last night, such a great speaker. I’m playing classical music in the back round… so relaxing, so calming, so kevorkian. all i’m missing is chianti and some beans

  192. Old Stan says:

    Lurker – the NYC Condo numbers actually went up a tiny fraction of a percent between 11/08 and 12/08 on the seasonally adjusted data.

    I moved back to NYC over the summer and rents were still very high. I didn’t notice the bottom falling out of the rental comps until November. I don’t know how long it would take this devaluation of housing into the Case-Shiller index.

  193. safeashouses says:

    O’s speech reminded me of the end of one of those hollywood blockbuster disaster movies, like Independence Day or that meteor movie. We will come back even stronger, yadda yadda.

  194. ruggles says:

    girls name: Colonia

  195. Dissident HEHEHE says:

    In honor of the Great Emancipator Abe Lincoln Jim Dolan has set STARBURY FREE!!!


    It is truly a great day to be an American. Undoubtedly this event will be noted on Black History Month calendars

  196. comrade nom deplume says:

    [196] cooper

    some nice fava beans, perhaps.

  197. kettle1 says:


    Fava beans, Chianti and sauteed grey matter. UMM

  198. comrade nom deplume says:

    Wow, tough room last night.

    I used to think Essex was pretty balanced, but the ranting and misanthropic disclosures make me wonder if he hasn’t been nipping at the Kool-aid a bit.

    It goes down better with a decent vodka, I hear.

  199. Pat says:

    Hey, c’mon, it’s Ash Wednesday. Staaaap with the protein references.

    I won’t be able to make it.

  200. danzud says:


    How about Ponzia?

  201. comrade nom deplume says:

    [206] pat,

    Gonna go have a bagel with a nice schmear. Howze that work for you?

  202. sas says:

    “Georgia furloughs 25,000 workers”

  203. comrade nom deplume says:

    Actually, I am also trying to pick a girl’s name, and my 5 YO, in an amazing display of coincidence and bad timing (because it will peg me as a liberal kool-aid drinker forevermore), decided that she likes the name Hope for her future little sister.

  204. Pat says:

    I like Terrorissa, pronounced like “Teresa.”

    In fact, Teresa is a beautiful and lately unused name.

  205. cooper says:

    i ate my faga with some fava beans whilst i listened to Antonio Vivaldi-
    excusez moi

  206. Clotpoll says:

    safe (198)-

    This is what it’s come to. When the only way to win an election is by appealing to basic emotions of the sheeple, it follows that governing cannot involve anything more complex or demanding.

    We’ve turned everybody into idiots, and the idiots cannot respond to anything more demanding than the plot line of a Summer blockbuster.

    That’s how the gubmint can keep transfusing cadaver banks without fomenting a revolution. Most people won’t realize how bad things are until they are dining on dirt sandwiches.

  207. Stu says:


    How about Despair to go with Hope. It’ll keep things in balance.

  208. Clotpoll says:

    girl’s name: Lodi

  209. comrade nom deplume says:

    [209] sas,

    Speaking from experience, the really scary thing to the state workers about furloughs is that they are afraid that the voters won’t notice any difference, and wake up to the fact that there is precious little difference, so why not just extend those furloughs, say, indefinitely.

    Decades ago, when Kerry ran for Senate in MA, and vacated the Lt. Gov. seat, Dukakis never filled it. We used to joke that he shouldn’t name a new LtGov as the current one was doing a terrific job.

  210. Clotpoll says:

    plume (205)-

    I suspect vodka and Red Bull.

  211. Stu says:

    Girly names…Whatever you go with, please promise me it will not be another Sophia!

  212. comrade nom deplume says:

    [217] clot,

    I think he went heavy on the vodka.

    Me, I was sipping some Cragganmore, cuz I am gonna enjoy my earnings before the gov. can take it all away.

  213. freedy says:

    will NJ have the guts to cut state workers?

  214. Pat says:

    Nom, I just ate the rest of my daughter’s mushy, soaked up cereal that she left in the bowl.

    John’s lent give-ups got me guilty. So I’m doing a no-food waste thing.

    No eating between meals, no alcohol (we’ll see how that goes), and no food waste.

    By Easter, my freezer will be filled with disgusting slop in baggies.

    Then, we’ll take it to the hog farm.

  215. comrade nom deplume says:

    [218] stu,

    Gawd, no. I swear every other one of my daughters friends is Sophia. And I can’t stomach that name.

    One of our naming rules is that we can’t use the name of any of my ex-girlfriends. That is making it difficult.

  216. Sean says:

    re: last nights speech. Besides the fact that Obama seems to be growing a mustache, I think he is convinced that they can get securitization going again.

  217. Cindy says:


    Chicago – from the link above: Flori, Era (wind), Elira (to be free), Ariana (golden life)

    or “beautiful” in any language:
    Calla – Greek
    Callia – French
    Layla – (I like Eric Clapton.)

    DM inspired

    Modella – “Ella” or “Mo” for nicknames.

  218. comrade nom deplume says:

    [220] freedy

    Reminds me of a list of oxymorons I saw once:

    Somali Government
    Military Intelligence
    Tax Fairness
    State Worker

    I suppose we can also add Free Markets to that list.

  219. comrade nom deplume says:

    [221] pat

    “I just ate the rest of my daughter’s mushy, soaked up cereal that she left in the bowl.”

    That’s more info than I needed.

  220. 3b says:

    #223 sean: I think he is convinced that they can get securitization going again.

    To who I wonder??

  221. kettle1 says:


  222. 3b says:

    Very ugly in here last night, and a little unsettling.

    And on a fun note,what was that outfir/dress that Pelosi had on last night.

  223. kettle1 says:


    girls names, how about ketél

  224. Richie says:

    O’s speech reminded me of the end of one of those hollywood blockbuster disaster movies, like Independence Day or that meteor movie. We will come back even stronger, yadda yadda.

    Makes him sound like a glorified cheerleader.. GO TEAM! BE AGGRESSIVE! B-E AGGRESSIVE! B-E AGG-R-E-SS-I-V-E!

  225. NJGator says:

    No “Kentucky de Plume”? The world will be a much sadder place.

    Speaking of dating, MSNBC/Wash Post on how the recession is affecting the dating scene in DC:

    Romance market goes from bullish to sheepish
    Crash impacts young adults who developed dating skills in better times

    WASHINGTON – See the tall, gregarious young man in the Eighteenth Street Lounge, moving easily toward a group of receptive women as the floor vibrates with reggae music? He’s dressed in a sharp Hugo Boss suit, and he knows that the minimum for a table is $240.

    But he’s not offering to buy the drinks. And the suit? He bought it a year ago, when he had a six-figure salary.

    Dating in the time of the pink slip means feeling the squeeze of the drastically reduced paycheck, the sudden sting of the layoff. From investment bankers to real estate developers to construction workers, no job means no buying rounds of $15 martinis for a pretty woman and her girlfriends. No hosting parties in the bachelor loft. And often, no idea how to present one’s new self on the dating market.

    “It’s been incredibly stressful for me,” said Neil Welsh, 27, the guy in the suit, who until last year was marketing director for a booming real estate company. “I was so used to using my financial situation to leverage my dating.”

    For many affected by the recession, dating is the least of their worries. But the market crash has had a particular impact on young adults who developed their dating skills in fat times, the twentysomethings who spent lavishly to show that they could afford the finer things. Now, with national unemployment rates at 8.8 percent for people 25 to 34, they are looking for more creative ways to attract partners — and reassessing what all that big spending really meant.


  226. 3b says:

    grim/rich Can one of you guys when you get a chance give me the status on mls #2843717. Thanks.

  227. NJGator says:

    What? They couldn’t fidn a sucker to pay $625k to live right on top of Rte 24? But this is MADISON. Isn’t it different here?

    GSMLS 2610806 164 Greenwood Ave Madison
    OLP: $625k
    LP: $450k
    DOM: 89 (pretty sure this is a relist, so I don’t know the true DOM)

  228. Cindy says:

    (229) 3B – Fun! – What WAS she wearing? It was a pea green color – tent top over???? pants? skirt? I’d have to see it again…It stuck me as ill-fitting and the wrong color.

  229. Cindy says:


    Lots to read here.

    “In Geithner We Trust Eludes Treasury as Market Fails to Recover”

  230. Rich says:

    According to graph, we are at 2005 average price levels, not bad.

  231. scribe says:

    From the WSJ:

    BofA Feels Bite of Move Into Mortgage-Backed Securities

    Delinquency Rates Among the Highest in Banking Industry; Pain in California


    As a home-mortgage lender, Bank of America Corp. avoided the excesses of many rivals during the housing boom. But an analysis of mortgage-backed securities sold to investors in 2007 by the Charlotte, N.C., bank shows its performance isn’t nearly as impressive in that area.

    For example, among 17 issuers of securities backed by adjustable-rate jumbo mortgages, Bank of America’s BAFC series has performed the worst, with payments on about 16% of the underlying loans 60 days or more overdue, according to a report from Walter Schmidt and other analysts at FTN Financial Capital Markets. FTN is a unit of First Horizon National Corp., a regional bank based in Memphis, Tenn.

    In comparison, about 7.6% of the underlying loans in similar securities from Wells Fargo & Co. were at least 60 days overdue, and J.P. Morgan Chase & Co.’s Chase unit posted a rate of 4.5%.

    A Bank of America spokesman said that on average about one-third of the loans packaged into BAFC securities in 2007 were originated by Bank of America, with the rest purchased from other lenders.


    The report includes just a small portion of Bank of America’s mortgage business, reflecting mortgage securities that are dubbed “private label,” meaning they aren’t guaranteed by any government-related entity. Bank of America issued about $7 billion of private-label securities in 2007. That compares with $185 billion of home mortgages originated by the bank in 2007. Most of those loans were sold to government-backed investors Fannie Mae and Freddie Mac, or kept by Bank of America.

    The securities are backed either by jumbo loans, which are too large to be purchased by Fannie or Freddie, or Alt-A loans, deemed below prime quality, often because borrowers weren’t required to document their income. Since 2007, few private-label securities have been issued because investors have fled in the face of soaring defaults.

    Among 15 issuers of fixed-rate jumbo-mortgage securities in 2007, Bank of America’s BAFC series had the third-worst record, with a delinquency rate of about 8.6%. Bank of America’s BOAMS series, consisting entirely of loans originated by the bank, had a delinquency rate of 8%. Countrywide Financial Corp., acquired by Bank of America last July, had a 5.3% delinquency rate.

    Among 17 issuers of fixed-rate Alt-A securities in 2007, Bank of America’s BAFC series had the second-worst performance, with a 25% delinquency rate. The worst performer was Citigroup Inc.’s CMLTI series, with 31% of the underlying loans 60 days or more overdue.

    A Citigroup spokeswoman said the rate would be 26.55% if adjustable-rate loans mixed in with those securities were removed.

    For adjustable-rate Alt-A securities in 2007, Bank of America’s BAFC was the second-best performer, with a delinquency rate of about 19%, according to the analysts’ report.

    Bank of America’s mortgage-securities performance was hurt by a heavy concentration of loans in California, where house prices have plunged, leaving many borrowers with no home equity and unable to refinance.

    Another contributing factor likely was looser standards in 2007. For adjustable-rate jumbo loans put into Bank of America’s BAFC series, 98% were made with reduced or no documentation requirements, up from 42% in a similar Bank of America series of bonds in 2003.

    Bank of America exited from the subprime-mortgage business in 2001, and the mortgages kept on its own books have done better than those sold in the form of securities. At the end of the fourth quarter, 3.2% of home mortgages held by the bank were at least 90 days overdue, compared with an average of 4.7% at four other big banks, according to Brady Gailey, an analyst at Keefe, Bruyette & Woods Inc.

    Bank of America’s takeover of Countrywide made it the nation’s largest home-mortgage lender but also exposed the bank to a loan portfolio that could sustain losses of $30 billion, some analysts estimate. In the fourth quarter, Bank of America’s mortgage, home-equity and insurance division posted a loss of $2.5 billion.

    The company had an overall net loss of $1.79 billion, its first quarter in the red since 1991.


  232. 3b says:

    #235 cindy:It stuck me as ill-fitting and the wrong color.

    My wife thought she was going to or coming from the gym.

  233. scribe says:

    Also from the WSJ:

    Renters Lose Edge on Homeowners

    Cost Gap Returns to Historical Norms in Some Markets as House Prices Drop


    The relative cost of owning versus renting is swinging back in favor of homeownership in some U.S. markets, buoyed by several quarters of sharp declines in home prices.

    At the height of the housing boom, as home prices surged, demand for rentals started to rise as the gap between owning and renting widened significantly. Even after the housing market soured, apartment demand grew as former homeowners became renters, allowing landlords to push healthy rent increases.

    Now, after two years of rapid home-price depreciation, the relationship between the cost of rental payments versus after-tax mortgage payments is tilting toward ownership in a number of metropolitan areas.

    Over the past 18 years, after-tax mortgage payments have averaged 26% more than rent payments, according to Green Street Advisors, a real-estate consultancy based in Newport Beach, Calif. In 2006, at the height of the housing bubble, mortgage payments reached as high as 66% more than rent payments. But by the end of 2008, average monthly rent for the largest 50 metropolitan areas was $1,045, compared with after-tax mortgage payments of $1,300, assuming a rate of 5.5% on a 30-year fixed mortgage. That means mortgage payments averaged just 24% more than rent payments, the narrowest gap since 2001.

    A new housing development in Las Vegas, a market like several others in the U.S. where the cost equation has shifted in favor of homeownership.
    A new housing development in Las Vegas, a market like several others in the U.S. where the cost equation has shifted in favor of homeownership.
    A new housing development in Las Vegas, a market like several others in the U.S. where the cost equation has shifted in favor of homeownership.

    In more than half of the top 50 U.S. housing markets — including Los Angeles, northern Virginia and Las Vegas — the ratio is now below its 18-year average. In Los Angeles, for example, mortgage payments averaged 60% more than rent payments between 1990 and 2008. Now, those payments average 30% more than rent.


  234. Sean says:

    re #227 3b To re-inflate the securitzation bubble the Bankers would need investors to buy whatever new form of ABS they can come up with. If you remember Paulson early on during the crisis was taking about European covered bonds. The securtization community is now coming up with a new plan called “Project Restart” and they had their conference two weeks ago in Vegas. Sandra Thompson, director of the division of supervision and consumer protection at the Federal Deposit Insurance Corp gave the keynote speech and talked about aligning incentives, simplifying pooling structures, improving credit analysis and strengthening servicing arrangements.

    They (gov and banks) firmly believe they can re-inflate the securitzation bubble, and you can bet Obama does too.

    U.S. banks are now looking to follow Washington Mutual’s example to issue covered bonds here in the USA. European issuers are now testing placing covered bond issues in the U.S. With credit spreads continuing to tighten more investors are looking for alternatives.

    The only real money to be found today that our Government could control is to be found in Pension funds both public and private. The legislation is already in the pipeline to force this issue, that you can be sure of.

  235. 3b says:

    #241 sean: I do not see it working, just do not see the demand being there, not to mention house prices keep dropping, and will continue to.

    How would you price these things to reflect that ongoing risk?

  236. kettle1 says:

    Stu, BC

    a thought hit me the other day (it hurt a little, but not to bad)

    China will not cut off the US debt addiction nearly as easily as some people have suggested.

    the average income in china is about $2,000 a year according to the world bank.

    The US and Europe are the only ones who can buy enough of china’s stuff to maintain growth. On top of that, by essentially having the US as its debt slave,china can exert tremendous influence over the current superpower without having to use military force.

    The chinese people do not make enough money to pick up the slack in consumption as the US and eurpoe drop off. The best option for china is for them to continue to finance our debt even if it has negative costs for them. Its still a net positive deal when they can exert more influence over the greatest militrary in the world then probably any other nation.

  237. zieba says:

    RE: stress tests

    Am I the only one who doesn’t understand the need for these tests?

    WS is a game of confidence and you can’t test or put a floor under confidence. Bear Stearns has shown us that and JPM is a great example of the other end of the spectrum.

    What are they going to test? Will they attempt to unwind derivative counterparty risk? Who cares about capital ratios when all it takes it a rumor to spark a 40% decline and chaos in the markets.

    What happens if the results of these tests are leaked or made public and what happens to the institution at the bottom of the list?

  238. Sean says:

    re# 242 – 3b – New rating system will use stars *** is the new black. Don’t think for a second they aren’t going to force these new issues on the pensioners. First up will be NJ courtesy of Corzine.

  239. Diane says:

    Stu, Re # 167

    I went to Tulum, Mexico in January. The tour guide told us the largest group of tourists from the past year is no longer from the USA, but from Canada. The second largest group has come from Europe, especially Italy.

  240. neo?????? says:

    so many numbers/so little time to enjoy life

  241. Victorian says:

    zieba (244) –

    The market has already applied its stress test to these banks and the verdict is “insolvent”. The only reason that the stock is not zero is that there is a feeling that the govt will come in and backstop the bank losses (which has been true till this point).

    I am sure that the “results” of these tests are already out. The govt now will test these banks and say that they are not insolvent, but need a little more money to tide over this bump. And the looting of the taxpayer will recommence.

    Yes, we do not have money for universal healthcare, but we do have money to bailout these irresponsible and bankrupt companies.

  242. RentL0rd says:

    #221 Pat,

    Glad to hear I’m not the only one!
    I’m talking about cereal.. Just can’t throw it away.

  243. Shore Guy says:

    “the looting of the taxpayer will recommence”

    Looting is putting it kindly.

  244. Cindy says:


    Transparency options are out there

    Portfolio- Road Map to Financial Recovery

    “We must enable a system in which everyone is a regulator.”

    Have a great day all.

  245. neo?????? says:

    isn/t today the 25th??????? wednesday/ swell

  246. Clotpoll says:

    3b (229)-

    The kind of outfit you wear to a waterboarding.

    When you’re the waterboardee.

  247. Clotpoll says:

    Cindy (236)-

    He’s cooked up a big mess of fail.

  248. kettle1 says:

    fun chart


    compares the dept of various bear markets in % terms

  249. comrade nom deplume says:

    Does anyone else think this is just a bit too vindictive?

    “WASHINGTON (Reuters) — House Democratic leaders have killed the Bush administration’s plan to double the size of the U.S. emergency crude oil reserve, while the Obama administration may create gasoline and diesel fuel stockpiles.”

    First, wouldn’t a larger SPR, gradually filled at reduced prices, help protect the U.S. from oil shocks? Or is this an olive branch to the Middle East? Or is there some plan to get us off oil in one heckuva hurry?

    And I didn’t know you could stockpile gasoline—I thought it would break down fairly quickly, even with stabilizers. Any knowledge on this one, Kettle?

  250. comrade nom deplume says:

    Oooh. Seems Mr. Market no likee being made the whipping boy for decades of profligate government spending.

  251. kettle1 says:

    new US national anthem???

    Rape me
    Rape me, my friend
    Rape me
    Rape me again

    am i the only one .IIIII [3x]
    am i the Only one…

    Hate me
    Do it and do it again
    Waste me
    Rape me, my friend

    am i the only one .IIIII [3x]
    am ithe Only one…

    My favorite inside source
    I’ll kiss your open sores
    I appreciate your concern
    You’re gonna stink and burn

    Rape me
    Rape me, my friend
    Rape me
    Rape me, again

    am i the only one ?, IIIII [3x]
    am i the Only one?…

    Rape me! (Rape me!)[9x]
    Rape me!

  252. zieba says:

    Corzine on the radio:

    Said he left GS in good shape and not the LTCM-esque shape its in now and that he would sign a medical marihuana bill if presented.

  253. comrade nom deplume says:

    [232] gator,

    “Kentucky de Plume”

    I hope that wasn’t a name suggestion.

    And, in deference to Rule No. 2 (no ex-girlfriends), I also cannot select the name of a state that supplied some of those exes (for some reason, Smith College recruited heavily in Kentucky, and probability being what it is . . . )

  254. All Hype says:

    We are having the shortest dead cat bounce of the whole recession.

    You know things are bad when they can only get a 1 day rally off of the BS of Bernanke.

    I doubt Timmah can provide any more of a boost.

  255. Fiddy Cents on the Dollar says:

    King Jon’s approval rating just went sky high!!

    Oooh….bad pun, sorry.

    On the other hand, I feel a little glaucoma coming on. Pass that over here, for some preventive measures.

  256. sas says:

    Daryl Montgomery did a nice little write up over at his blog “The Helicopter Economics”

    “State of the Nation – Denial”

  257. freedy says:

    anybody think jon inhaled with carla?

  258. Seneca says:

    My suggested new mantra: Housing prices will come back to the mean, housing prices will come back to the mean…


  259. kettle1 says:


    what does that imply if the 2 major high income employers of NJ (Finance and Pharma)are leaving/gone and the state is facing a decreased median income?

  260. make money says:

    Peter Schiff talks about the BO and his inagural address last night. Look out below.


  261. Shore Guy says:

    This from the CNBC front page:

    “Sales of existing homes took an unexpected plunge from December to January, falling to the lowest level in nearly 12 years as buyers waited for the government to boost the U.S housing market.”

    First, how does the government boost the housing market?

    Second, I doubt abyone is seriously waiting for such a “boot.” The people who want/need a boot lack the resources to buy and cant; the people with resources don’t want prices propped up, they want them to fall to where they should fall.

  262. Shore Guy says:

    “You know things are bad when they can only get a 1 day rally off of the BS of Bernanke.”

    Not even a presidential address chock full of optimism the same day as Big Ben’s reassuring words can change the fundamentals.

  263. Shore Guy says:

    “First, wouldn’t a larger SPR, gradually filled at reduced prices, help protect the U.S. from oil shocks? Or is this an olive branch to the Middle East? Or is there some plan to get us off oil in one heckuva hurry?

    And I didn’t know you could stockpile gasoline—I thought it would break down fairly quickly, even with stabilizers. Any knowledge on this one, Kettle?

    Perhaps there are concerns about either 1) terrorism at a gas refinery or 2) supplies running low at the start of the season and wanting to act to prevent a spike in gas prices as the summer driving season kicks in.

  264. make money says:

    I went to Tulum, Mexico in January. The tour guide told us the largest group of tourists from the past year is no longer from the USA, but from Canada. The second largest group has come from Europe, especially Italy.

    Yeah the guido’s still make the best stuff on earth. They have a strangle on manufacturing for every industry at the high end luxury level.

    From cars(Masseratti, ferrari, lambo) to leather, furniture, food, fashion, they even export religion.They make crime look good.

  265. ruggles says:

    269 – First, how does the government boost the housing market?

    ultimately the govt can’t. However, hope and promise do more to manipulate markets than actions ever do. And I’d bet many people believe that something will come down the pike that will make their situation better, whatever that is. who knows, maybe we’ll get 1% mortgages like they have in Japan.
    Isn’t that what drives lottery sales?

  266. Happy Daze says:


    I hear that Batman would be interested
    if that cave is near Gotham City

  267. Shore Guy says:

    anyone, even

  268. yikes says:

    anyone here have a personal experience with filing for bankruptcy? want to advise a friend to do this, but we don’t actually know anyone who has done this.

    the quote they got was $1380 to do a chapter 7, and a $299 filing fee.

    just a perfect storm of garbage – CC debt mounted due to two surgeries that kept that out of work a year, and the housing situation and basically, this seems like the best way out.

  269. chicagofinance says:

    Barbara says:
    February 24, 2009 at 11:52 pm
    this is for you, Scarface fan.

    This town man-g

    ….but you got that look….

  270. stan says:


    In Cancun right now. A lot of canadians and europeans here. Bberry worldedition rocks. 85 and sunny…….mimosa in hand. I see things are the same in the real world

  271. 3b says:

    #253 clot: Perhaps it was a fashionable strait jacket.

  272. chicagofinance says:

    cooper says:
    February 25, 2009 at 8:05 am
    I’m feeling a lot of tension and negativity this morning… maybe it’s the mixed signals of the new administration

    Soundtrack of 2009….

    There is a fragile tension,
    that’s keeping us going.
    It may not last forever,
    but always flowing.

    There’s something magical in the air,
    something so tragic we have to care.

    There’s a strange obsession,
    it’s drawing us nearer.
    We don’t understand it,
    it never gets clearer.

    There something mystical in our dreams.
    So simplistic it kicks and screams.

    There’s a dizzying feeling,
    that’s keeping us flying.

    There’s something radical in our hands.
    Nothing logical to our plans.

  273. jcer says:

    Italian products, hmm, all the style and quality engineering with horrible quality of build. Besides Italian shoes everything else Italian I have had has been a great machine when I first get it and then tends to fall apart. Good designs, great style but manufacturing leaves something to be desired.

  274. Outofstater says:

    #209 Yup. And as of Monday, all school field trips have been cancelled in our county because of budget cuts. Daughter is not happy.

  275. chicagofinance says:

    ruggles says:
    February 25, 2009 at 8:40 am
    girls name: Colonia

    rug: yeah… Iselina? Menlo? Metucha? I know…..Brunswertha

  276. chicagofinance says:

    Heast? Mulva?

  277. chicagofinance says:

    danzud says:
    February 25, 2009 at 8:53 am
    Chifi, How about Ponzia?


  278. BC Bob says:

    “In Cancun right now.”


    Where are you staying? I may be there in March.

  279. chicagofinance says:

    Pat says:
    February 25, 2009 at 8:56 am
    I like Terrorissa, pronounced like “Teresa.”
    In fact, Teresa is a beautiful and lately unused name.

    Pat:…I find….that suggestion….rather…thought…provoking….

  280. chicagofinance says:

    kettle1 says:
    February 25, 2009 at 9:15 am
    Chifi girls names, how about ketél

    pronounced Keh-TEL?

  281. kettle1 says:


    “First, wouldn’t a larger SPR, gradually filled at reduced prices, help protect the U.S. from oil shocks? Or is this an olive branch to the Middle East? Or is there some plan to get us off oil in one heckuva hurry?

    Shore i dont see where you got the quote from, havent read all the comments so i will try and answer just the quote.

    From DOE
    # Highest inventory – Prior to Hurricane Gustav coming ashore on September 1, 2008, the SPR had reached 707.4 million barrels,
    # Current storage capacity – 727 million barrels
    # Current days of import protection in SPR – 58 days (Maximum days of import protection in SPR – 118 days in 1985)

    CURRENT SPR INVENTORY AS OF February 24, 2009
    SWEET: 281.0 million bbls
    SOUR: 423.8 million bbls
    TOTAL: 704.8 million bbls

    From EIA
    #U.S. Petroleum Consumption :
    20,680,000 barrels/day

    #U.S. Motor Gasoline Consumption
    9,286,000 barrels/day (390 million gallons/day)


    they could increase the size of the SPR but that takes time to create prep new salt caverns for storage and the subsequent infrastructure. i dont know how fast the could do it.

    The thing you have to consider int his question is refining capacity. 60% of the reserve is sour oil. Sour oil (high sulfur content) is harder to refine. Different refineries are set up for different blends of oil (sweet/crude). A refinery can shift the blend it can process, but this takes time. It also changes the crack fraction, the proportions of various products that are distilled from crude oil.

    What all that means is that the end product out of a refinery and the quantity depend on the type of oil you start with. The end result is that even an increased SPR would have a limited ability to protect us from oil shocks. The real and original purpose of the SPR is to ensure an oil supply for the US military and critical US industries. not to ensure joe sixpack can go on weekend road trips.

    I will go so far as to say that it is impossible for the US to rapidly switch off of oil at this time. I say that based on the fact that we have already spent about 9 trillion on bank bailouts. That money could have possibly paid for a super rapid transition off of oil, that seems to be about the right magnitude of the cost of such a venture. But we have maxed out our credit cards. there are no lines of credit large enough that are still available to us to fund the project.

    The one possibility (and a long shot) would to be to enact war time policies (ala WWII) and have the government run the entire economy for the sole purpose of the transition. This is HIGHLY unlikely for a very long list of reasons, but perhaps not impossible.

    The major oil producers are in their own version of a chinese finger trap. The big producers have spending programs based on a much higher price of oil. many of these nations are unstable without substantial programs funded by the oil revenues. these revenues have dried up recently and the big producers have also taken huge loses in the market like most others have.

    They now have the choice of trying to eat the deficit or increase production to make up for the revenue shortfall. Some nations have already peaked and cannot realistically increase production while others can. However if a few of the big boys increase production to make up for lost revenue so will the others and they will all drive the price of oil even lower.

    there is a lot more to it, but this the meat of it.

  282. kettle1 says:

    288 ChiFi


  283. chicagofinance says:

    comrade nom deplume says:
    February 25, 2009 at 9:00 am
    [217] clot, I think he went heavy on the vodka.
    Me, I was sipping some Cragganmore, cuz I am gonna enjoy my earnings before the gov. can take it all away.

    nom: You are a friggin’ genius!


  284. chicagofinance says:

    Cindy says:
    February 25, 2009 at 9:02 am
    Chicago – from the link above: Flori, Era (wind), Elira (to be free), Ariana (golden life)
    or “beautiful” in any language:
    Calla – Greek
    Callia – French
    Layla – (I like Eric Clapton.)
    DM inspired
    Modella – “Ella” or “Mo” for nicknames.

    Thanks for this LINK!

  285. chicagofinance says:

    Albanian name meaning flower of life, from lule flower and jete live

  286. Shore Guy says:

    ” the crack fraction”

    I thought this was something to do with plumber fashions.

  287. kettle1 says:


    Part II

    here are some numbers on stock and production


    Gasoline can be stored for a very short period but could also be stored as its individual components and then blended at a later date.

    If i read the implication of the quote correctly, someone is worried about US supply. recent data shows that the None OPEC producers appear to have already peaked. This means that things could get interesting over the next decade or so.

    Mexico is in terminal decline and is in a lot of trouble

  288. make money says:

    The next ZERO trade?


    “You’re in good hands when shorting All State”

  289. kettle1 says:


    part 3

    when you hear about gasoline storage, think of a giant pool with an infeed pipe on one side and the outfeed on the other.

    The amount in storage is the volume of the pool, but the actual residency time of any given volume of gasoline in the pool is fairly short.

    the normal production and consumption is the rate of infeed/outfeed

    it doesnt work exactly like that but that’s the general idea.

  290. comrade nom deplume says:

    [291] chi fi

    Why thank you.

    Not everyone agrees, however. Schabadoo thinks I am delusional, and Stu/Essex probably don’t see a place for me in the New World Order.


  291. comrade nom deplume says:


    instead of “South Side”

  292. cooper says:

    i still like franka, clotta, and nouriela is my fav…

    i like saying franka.

  293. comrade nom deplume says:

    [297] kettle

    We get that gasoline isn’t actually stored very long, and it was helpful to note that the cracked components could be stored, then mixed (?) into gasoline. Is that how any sort of LT stockpiling might work? The CNN article said that the dems wanted to stockpile gas and diesel, though isn’t the only reason for doing that (instead of stockpiling oil) to avoid the refinery bottleneck (and does it really avoid it)?

  294. kettle1 says:


    what post is the CNN article at, i missed it. let me read the article before i blindly try to answer again….

  295. NJGator says:

    I like the Utah baby namer for girls names:


  296. Thundaar says:

    Produce the Note
    3 words to save your home.
    Some homeowners are successfully stalling foreclosures by uttering three words in court.

  297. Hulya says:

    Hello Grim,
    Have you considered writing an article about trends rental prices? I am very curious to see if the rents are increasing or decreasing.

  298. ruggles says:

    Girls name for the new economy: ProduciaDanota

  299. jcer says:

    My feeling on oil is stock pile as much as we can, in the future the commodity can only grow in value. Alternative fuels will remain more expensive until oil production drops off tremendously, only then will production get to where it has to be to gain efficiencies.

  300. kettle1 says:


    The CNN article said that the dems wanted to stockpile gas and diesel, though isn’t the only reason for doing that (instead of stockpiling oil) to avoid the refinery bottleneck (and does it really avoid it)?

    that isnt the solution to refinery capacity issues, of which i am not aware of any bottle neck problems at the moment. We are currently seeing noticeable demand destruction.

    you stockpile refined gasoline and diesel because you think your supply is at risk. Or because you want to line someones back pockets.

  301. SG says:

    In third try, Obama names Gary Locke as Commerce Secretary

    WASHINGTON (AFP) — President Barack Obama on Wednesday nominated Gary Locke, the first Chinese-American governor in US history, as Commerce Secretary, in his third attempt to fill the key cabinet post.

  302. schlivo says:

    “Regionally, existing-home sales in the Northeast dropped 14.7 percent to an annual pace of 640,000 in January, and are 23.8 percent lower than January 2008. The median price in the Northeast was $228,200, down 14.7 percent from a year ago.

    Existing-home sales in the Midwest fell 5.7 percent in January to a level of 1.00 million and are 16.7 percent below a year ago. The median price in the Midwest was $138,100, which is 6.8 percent lower than January 2008.

    In the South, existing-home sales declined 5.7 percent to an annual pace of 1.64 million in January, and are 15.9 percent below January 2008. The median price in the South was $152,100, down 7.4 percent from a year earlier.

    Existing-home sales in the West were unchanged at an annual rate of 1.20 million in January and are 29.0 percent stronger than a year ago. The median price in the West was $220,000, which is 25.5 percent below January 2008.”

  303. Shore Guy says:

    “WASHINGTON (AFP) — President Barack Obama on Wednesday nominated Gary Locke, the first Chinese-American governor in US history, as Commerce Secretary, in his third attempt to fill the key cabinet post.”

    This is beginning to take on a comical tone. Another week, another nominee.

  304. Seneca says:

    [304] Thundaar

    Produce the Note

    Why is “Kim” fighting to stay in her home until she can find another job and start paying her mortgage again? She bought a home for $39,000 (no, not dropping zeros) and refi-d her way to a $145,000 mortgage? Its a 2BR. Kim, drop the keys on the kitchen table and go rent a place in Tampa! It will probably cost you less.

    Oh wait, no job, no credit. Nevermind.

    It’s hospice for the foreclosed-upon.

  305. Shore Guy says:

    Once again, a homeowner is losing a home due to LIVING BEYOND HER MEANS. She bought the bloody house for $39,000. Even assuming it needed 50% in repairs, and that she borrowed all of that, she souuld not owe more than $57,000 on the house. Why should anyone want to see her keep the house?

  306. make money says:

    seneca (312),

    why go pay for rent when you can live in a house for free? Since they probably will never find the original note then she becomes the crook. She stole money from a bank and kept her house.

  307. Shore Guy says:

    Make Money,

    Maybe B.O. will name her Commerce Secretary if the new guy implodes.

  308. kettle1 says:


    how about madoff for head of the SEC

  309. confused in nj says:

    Federal Reserve Chairman Ben Bernanke said Wednesday that the embattled housing market has crippled the economy, and at-risk homeowners need a bailout – even if they knew they couldn’t afford their home in the first place.

    “Some borrowers presumably knew what they were getting into,” Bernanke said before the House Financial Services Committee. “But from a public policy point of view, the large amount of foreclosures are detrimental not just to the borrower and lender but to the broader system.”

    “In many of these situations we have to trade off the moral hazard issue against the greater good,” he added.

    This man should be executed and all his past teachers made to watch, before their pensions are recinded for incompetent teaching.

  310. kettle1 says:

    I am honestly surprised that no one has made an attempt on madoff’s life yet. those formerly rich people dont get angry very easily do they?

  311. comrade nom deplume says:


    Sorry, CNN buried it pretty quickly, but I was able to unearth it.


  312. NJGator says:

    Shore 311 – What do we think will wind up disqualifying Gov. Locke?

    This is wildly reminiscent of the early days in the Clinton Administration when that gang couldn’t shoot straight. Multiple disqualified attorney general candidates gave us Janet Reno. And we all know how well that turned out.

  313. schlivo says:

    Where’s Grimster?

  314. kettle1 says:


    thanks, just read it.

    2 guesses.

    1. the oil guys got jealous of the banksters and want their cut….

    2. They really do want the increased refined product reserves as the US imports a large amount of gasoline and would be hard pressed to supply the current demand from US refineries. You would need a number of “large pools” to use my analogy from before. such an operation would be inefficient and potentially result in a decrease in quality and increase in waste that will of course cost money.

    Current data suggests that we may see a sudden decrease in production for 3 or 4 years after 2009, perhaps they are concerned about that.

  315. 3b says:

    #317 NO!!!! The argument can be made that bailing out the banks must be done because of the public good, but bailing out clueless irresponsible homeowners serves no one’s good, even them.

    The Fed wrong, all along!

  316. schabadoo says:

    and that he would sign a medical marihuana bill if presented

    If back pain is covered I’m in fat city.

    I knew those two back surgeries would be good for something.

  317. skep-tic says:


    “You are witnessing a complete shift in this country….banks are culprits. Bottom Line.”

    I don’t disagree that there is a major shift going on, but banks are culprits in people’s minds until they want a loan.

    Just like my dad used to say: everyone hates cops until they need one.

  318. Just me says:

    269 . agreed, let them fall .

  319. 3b says:

    #326 skeptic: I bet many of the red ho angry Americans, who are enraged at the banks, had no problem taking money from them when the banks were handing it out like candy.

  320. skep-tic says:


    ” I bet many of the red ho angry Americans, who are enraged at the banks, had no problem taking money from them when the banks were handing it out like candy.”

    exactly. or use their credit cards daily now. or are now mad because they can’t get auto loans, student loan refi loans on their house. most people want what wall st has to offer in some form or another but want it for free

  321. grim says:

    New thread, move up.

  322. Victorian says:

    (326) and (328) –

    If you are placing more blame on the borrower than the lender for this crisis, then, with all due respect, IMO, you are completely wrong.

    Let us look at what got us here. Loose Monetary Policy (easy money) and lax regulations. Both of which were, of course, demanded by the banks from the govt. Then, the banks discovered securitization and leverage (CDOs, CDO squared, CDO cubed etc.) were easy ways of making profit. All this easy money had to flow somewhere and it went into housing. You had a constant media barrage promoting the idea of home ownership and basically saying everyone can partake of the American dream (Remember NegAm, Pick-A-Pay loans etc.). The banks did not care who they made a loan to because for a large part, it did not hold the loan on its book but securitized it and sold it off to investors. The incentive for the banks was to make as many loans as possible.

    When you see so many people getting rich, the natural tendency of a relatively financially illiterate citizen, is to follow the herd and listen to your friendly Realtor and mortgage processor.

    It was the fiduciary duty of the lender to make sure that there is a high probability that the loan will be paid back. The bank did not do its due diligence. Where is the borrower’s fault in this?

    Why didnt we have this bubble in earlier periods? Do you think people who could not afford the loans were given loans?

    The giant share of the blame lies with the banks. If this means, that the banks should go into receivership, so be it. How it not lemon soc!ialism to bailout banks?

  323. 3b says:

    #332 victorian: I agree with what you are saying, but both cannot be bailed out.

    Let the banks go, fine reorganize them, nurse them back to health get rid of most of management,and than return them to the private sector.

    But bailing out homeowners in my mind accomplishes nothing, the cleansing process has to eb completed.

Comments are closed.