From the Record:
Home foreclosures and late payments reach new record highs
Home loan delinquencies and foreclosures again reached record highs in the latest quarter as lingering defaults on loans made even to more credit-worthy borrowers rose sharply in many states, including New Jersey.
A Mortgage Bankers Association survey showed 5.4 million American homeowners with mortgages, or nearly 12 percent, were at least one month late on their payments or in foreclosure at the end of last year, up from 10 percent at the end of the third quarter. Among those with subprime adjustable rate loans, nearly half are behind. Loans in foreclosure around the country climbed to a record 3.3 percent.
At the same time, the causes of rising delinquencies are shifting from poor underwriting, mortgage fraud and spikes in monthly payments — particularly on adjustable-rate subprime loans — to rising unemployment, according to Jay Brinkman, the trade group’s chief economist. “Subprime ARMS are still a problem but that problem may be diminishing,” he said a conference call.
Prime borrowers increasingly are falling behind, he said.
The survey found that prime loans in New Jersey on which payments are 90 days late or more shot up to 1.36 percent of the total in the fourth quarter from 0.92 percent in the third quarter and 0.53 percent in the fourth quarter of 2007. Meanwhile, the rate of seriously delinquent subprime loans rose to 8.73 percent, up from 6.33 percent in the third quarter and from 5.18 percent a year earlier.
The quarterly delinquency report released today provides further evidence that the housing market continues to deteriorate. Standard & Poor’s Case-Shiller index reported last month that home prices in the New York metropolitan area, which includes Bergen and Passaic counties, slid a record 9.2 percent last year while home prices in an index of 20 large cities plummeted 18.5 percent, also a record drop.
More than 8.3 million U.S. mortgage holders are “under water,” that is, they owed more on their loans in the fourth quarter than their property was worth, according to Santa Ana, Calif.-based First American CoreLogic. An additional 2.2 million borrowers will be underwater if home prices decline another 5 percent, the data firm said.
California-based foreclosure listing service RealtyTrac recently said about 62,500 properties in New Jersey faced foreclosure filings in 2008 — twice the number in 2007. Foreclosures rose about 180 percent in Bergen and Passaic counties. Nationally, 2.3 million properties were in some state of the foreclosure process in 2008, an 81 percent increase from 2007.
First!
From HousingWire:
MBA: Delinquencies Hit Record 7.88% in Q4
Mortgage delinquencies piled up at record pace in the fourth quarter of 2008, hitting an all-time, seasonally-adjusted high of 7.88 percent of loans outstanding, the Mortgage Bankers Association said Thursday.
The delinquency rate, which includes loans that are at least one payment past due but not yet in foreclosure, was up from 6.99 percent in the third quarter and 5.82 percent a year ago. The volume of loans in the foreclosure stage jumped 3.30 percent, also reaching a new record high, according to the MBA’s report.
“Unfortunately, the mortgage sector continues to experience increases in the delinquency rate due to worsening economic conditions in both the labor and financial markets,” said Keith Carson, a senior consultant in TransUnion’s financial services group.
“When it’s a loan structure issue, you can deal with that, but when it’s an unemployment issue, unless you go out and find them a job there’s not much you can do,” Jay Brinkmann, American CoreLogic’s chief economist told Bloomberg. “Eventually that loan will go into foreclosure.”
The combined percentage of loans in foreclosure and loans past due in the fourth quarter was 11.18 percent, the highest since the MBA began tracking delinquencies in 1972. The percentage of loans 60 days past due and 90 days or more past due, also broke records set last quarter.
From Bloomberg:
Mortgage ‘Cram-Down’ Bankruptcy Bill Passes U.S. House 234-191
Legislation letting judges reduce the mortgage payments of borrowers in bankruptcy passed the House of Representatives, overcoming opposition from industry groups and Republicans who say the bill may further destabilize lending.
The so-called cram-down bill, approved 234-191, also permanently increases the Federal Deposit Insurance Corp.’s coverage of bank deposits to $250,000. The legislation now goes to the U.S. Senate where Democrats may vote on a companion bill as early as next week, said Jim Manley, a spokesman for Majority Leader Harry Reid of Nevada.
The rapid deterioration of the primes is surprising.
It’s not that I was expecting them to be fine, I wasn’t. I wasn’t expecting them to fall apart so fast.
“NJ Homeowners Falling Behind”
yeah no kidding. what did you expect?
you have an upside down pyramid:
The dumb sap from the real economy, supporting the bubbled:
a)fraudulent inducement
b)mortgage pooling
c)derivatives
and CNBC is calling a bottom, ha.
how long before the upside down pyrimid breaks the poor saps back? and the whole thing goes CRASH!
sap = you & me
SAS
and you think little Sue is going to tell you that? your elementary CNBC?
your wee college & MBA?
ha ha ha
brother, you better go back “working hard” to “get ahead”, or take your kid to that “good school”
ha ha ha, their ain’t no much thing.
SAS
ha ha total chump
SAS
Jon Stewart disgusts me. Someone needs to take him down a peg or two.
NJ homeowners don’t need equity, they have… bailout.
next, someone will tell me they invested in the “emerging markets”
paying for your own back to break.
ha ha
SAS
Question, for a home purchased at what I am assuming for this question was a fair market value in 1999, what would one suggest I use as a multiplier factor for guestimating the current fair market value? The bubble distorted things so badly I am ignoring the run-up and bust, for the moment, as well as the “comp” sales, at least for the moment. I have a number in my head generated by a gut-level assessment (and, please, no jokes about where my head must be for that to be possible) but I want to see if the suggested “multiplier” seems to bring me to the same basic number.
#3. B@$tards. Clueless F’ckn b@$tards. ANy banker who does not require 30% down and several up-front points from now on is a fool.
#4 toshiro
I wonder how many of those prime delinquencies are for owners effectively walking away because their loss of equity has them in the red with little hope for near-term recovery (as opposed to outright job loss or resetting ARMs slamming them)?
It’s a long hard hit on the credit score but maybe they see it better than pouring tens of thousands into a sinkhole?
I wonder if the cram-down bill will spark lending changes such as provisions restricting the amount of available dent mortgage borrowers may have, regardless of whether they use it, and calls on loans once one’s debt starts to mount?
and you all know “diversification” means nothing?
I think that lesson is becoming obvious by now, or it should be.
SAS
#12 shoreguy: Like I say bid 50% off!!!
A question about GM:
Did we not give them 13 (or was it 17 Billion dollars a few weeks ago to PREVENT BK? Now, they need more, a total of $30B to stave-off BK? Did the company make that much during its entire history?
The initial rescue was supposidly better than forcing it to BK where it might quickly restructure its various contractual obligations, such as those with dealers. Now, despite throwing BILLIONS at this company it is likely to end up in BK anyway? Why do we insist on delaying pain?
If the company fails, and its assets have any value, someone will buy the assets and put them back to work. If the assets lack such value, why would we throw billions more at the problem?
Are our elected officials THAT poor?
“and you all know “diversification” means nothing?”
let me break it down:
almost all corporations or municipalities depend on govt contracts, purchases, & finances. which in turn depends on the Federal budget.
The Federal budget depends on borrowed money (& taxes and printing machine) to finance all its activity.
Financial activity depends on a very centralized source. A source that is fragile.
Hence, it pays to have big bombs.
Finance us or this will fall on you.
yes, you can fill in some of the gaps.
but, thats it in a nutshell.
SAS
The current owners purchased the house in January of 1999 at $X. they are currently looking for 2.184 times that amount. Now, I recognize that ten years have gone by and one might expect some appreciation, but: the house and its mechanicals are ten years older and the past several years have been a declining market.
We were thinking it might (if we put all rational thinking aside)be worth perhaps $X times 1.4 to us, and we would start the discussion at perhaps 1.26X — being fully prepared to be told to do things to ourselves that we might prefer to do to others.
“Finance us or this will fall on you”
THAT is just what the USG is telling the $250k crowd, SAS.
#17 Shore Guy
Are our elected officials THAT poor?
YES. they are poor mentally, so we can all be poor fiscally.
But what do I know? I’m just a guy wo went to Long Branch skools.
http://img231.imageshack.us/img231/393/newteesh.jpg
Safe,
It could have been worse like: Neptune, Asbury, Toms River, Camden… lol.
#13 – I know that the “jingle mail” phenomena gets a lot of play in the press but I just don’t think it happens that often. I think a lot of these people are going down with the ship. They would be better off, in many cases for both the long and short term, turning the keys in. I don’t think they do that though.
I spent a few years as a mortgage processor. I can’t tell you how many times we’d get applications for refis from people desperately trying to dig themselves out of debt that they just couldn’t. The most the refi would do is delay the inevitable. These were the sort of people in exactly the situation bankruptcy was for desperately (and with futility) trying to keep the walls from caving in on that hole.
sas any opinion on where the daisycutters are going to fall next?
Well, it looks like we are about to either fall off a cliff and go splat or have one heck of a bear rally. I am hearing all kinds of noise about currency markets showing concerning behavior.
Not a call on my part, just a random observation. ANd that was before reading dennigers post
From the AP:
Mortgage woes break records again in 4Q
Foreclosures are spreading by epidemic proportions, expanding beyond a handful of problem states and now affecting almost 1 in every 8 American homeowners.
It’s an economic role-reversal: The economy, driven down by the collapse of the housing bubble, is causing the housing crisis to spread.
Figures released Thursday show that nearly 12 percent of all Americans with a mortgage — a record 5.4 million homeowners — were at least one month late or in foreclosure at the end of last year.
That’s up from 10 percent at the end of the third quarter, and up from 8 percent at the end of 2007. In addition, the numbers now include many once-qualified borrowers who took out fixed-rate loans.
Data from the Mortgage Bankers Association also showed that a stunning 48 percent of homeowners who have subprime, adjustable-rate mortgages are behind on their payments or in foreclosure.
The reckless lending and borrowing practices in states like Florida, California and Nevada that were the epicenter of the problem are no longer driving up the nation’s delinquency rate.
Instead, foreclosures are being fueled by a spike in defaults in places such as Louisiana, New York, Georgia and Texas, where the economy is rapidly deteriorating and unemployment is climbing.
“It’s jobs. People are losing their jobs left and right,” said Houston real estate agent Michael Weaster.
Kettle1 – There was some forced redemptions recently in Asia. We might see the DOW fall to 5000, while inflation rises into double digits like what occurred between 1975 to 1980 it could happen soon or 2012 but that’s just a guess of course.
GE is at 6.66, the mark of the beast
probably aslready mentioned, but worth another look
Laughable Rating Agencies Still Say GE Is AAA
Things have gotten so bad for GE that the Wall Street Journal is openly contemplating what will happen if GE Capital is bankrupt. GE’s stock is now below $7, with the company having shed $300 billion of market cap since the peak. GE’s CEO is explaining that the company didn’t anticipate a global financial meltdown. And yet our rating agencies, Moody’s and Standard & Poors, still rate GE AAA.
http://www.businessinsider.com/henry-blodget-laughable-rating-agencies-still-say-ge-is-aaa-2009-3
Shore (30)-
I thought banking had already cornered the market on fools.
“Any banker who does not require 30% down and several up-front points from now on is a fool.”
sean,
i just dont see the inflation apest happening for a while. There is till way to much debt that has to be wiped out first, trillions.
31 was to #13.
sas (15)-
diversification = pointing multiple guns at your own head
smart investing = load up 2x and 3x short :)
“Question, for a home purchased at what I am assuming for this question was a fair market value in 1999, what would one suggest I use as a multiplier factor for guestimating the current fair market value?”
ShoreGuy,
You might try pulling the NJAR price stats for your area, and build your own index. But they only go back to ~2001…
http://www.njar.com/research_statistics/housing.html
does anyone actually believe this stuff anymore?
China eyes 8% growth despite grim economic tide
Premier Wen Jiabao assured on Thursday that China will achieve 8 percent growth this year despite a deepening financial crisis, setting out export support and spending programmes to shore up the economy. In the text of his annual work report to the National People’s Congress, the nation’s largely ceremonial parliament, Wen said the 8 percent goal was a realistic one. “It needs to be stressed that in projecting the GDP growth target at 8 percent, we have taken into consideration both our need and ability to sustain development in China,” he said. “As long as we adopt the right policies and appropriate measures and implement them effectively, we will be able to achieve this target.”
http://www.reuters.com/article/bondsNews/idUSPEK3999920090305?sp=true
vodka (26)-
We all know, deep down, that currency will be the trigger.
Or a sovereign default.
Or one of about five other possible fails.
Ben (29)-
Don’t mess with Beelzebub.
Kettle1 – current path points towards inflation, the printing press is all we have left besides confiscation of pensions and cash accounts.
“does anyone actually believe this stuff anymore?
China eyes 8% growth despite grim economic tide”
answer is no. When I pointed out this article in the conference room today, and the Chinese started to laugh out loud. They said its total BS.
however, China is still a force to be taken serious.
SAS
Kettle1 – current path points towards inflation, the printing press is all we have left.
vodka (36)-
Sounds nuts, until you realize 8% growth in China barely keeps employment flat. I keep hearing calls for 4-6% growth there, which is the equivalent of four Dust Bowls here.
Sean (40)-
Down boy. Let us enjoy the next 2-3 years of slow, grinding deflation we still have coming. We’ve earned it.
Sean,
we would have to print about 2 trillion $ just to break even with current debt destruction. bernanke has printed 800 billion to date, doubling the money supply (M0. If they try that, the bond market collapses.
They will print and we will see inflation/hyperinflation, but not until AFTER the bond market collapses
“the printing press is all we have left”
and having world’s strongest military.
always helps. Obviously, you can see where this road will lead in the future.
SAS
clot 41
China will be lucky to hit 5% this year. anything below 6 means depression level conditions for a large segement of the population.
Oh and their wheat harvest looks like it could be a bust. wheat is one of their primary staples.
Not to burst the deflation bubble boys, but the current Overlords are hell bent printing our way out, between now and 2012. Current printing target is 5 dollars per 1 dollar of increased GDP.
““the printing press is all we have left”
and having world’s strongest military.
always helps. Obviously, you can see where this road will lead in the future.”
SAS,
That’s the trump card/end game and the odds keep increasing with each passing week.
SaS – as I asked earlier are we going to drop some daisy cutters on either the Sudan or the Pakis, or are we going to continue the war on goat herders?
kettle1 – TALF will be 1 Trillon per year, the pusedo-nuevo Fed backed securitized market will be coming to a town near with with those wonderful signs of taking a vacation on the house.
You should be asking me this damn question rather than sas. All he’s gonna do is say something that will scare everyone shltless. I’ll give you the real deal.
Iran has been talking a lot of shlt lately and we need to take them down and take them down hard. The Project for the New American Century needs to stay right in place. We must maintain primacy on all matters militarily. so I say bomb the hell out of Iran. I seriously doubt “That One” is going to do that at all because he wants to “talk”. I say to hell with that. Talking is a pantywaist move. We need to get out the damn daisycutters.
We need to also keep an eye on those commies in China. I don’t trust them one damn bit and I’m not crazy about them having a damn surplus and holding that over our heads. We need something on them and that something is Taiwan. China gets bellicose the minute Taiwan wants to do anything and that’s a bunch of bullspit. We should use a relationship with Taiwan to bring China to heel just in case they if they get any bright ideas about not giving back some of that damn money we gave them.
Finally, the damn commie Ruskies are right where we want them with oil prices down and their economy in collapse. Bet they won’t try to pull off another stunt in Georgia again. It wouldn’t hurt if we expanded our relationship with Georgia and the Ukraine.
As you can see, I favor a robust foreign policy agenda. We need to let everyone know who’s still the damn boss.
Sean says:
March 5, 2009 at 9:25 pm
sas any opinion on where the daisycutters are going to fall next?
“drop some daisy cutters on either the Sudan or the Pakis, or are we going to continue the war on goat herders?”
everything is delicate right now.
I do not know. but I do know, when I see/hear next terrorist attack, first thought is false flag. i.e create another enemy to serve as justification & to rally people to make them forget that their pensions & 401k are going dry.
about the goat herders, I had to do that back in the early 80s..an offline story, but after they beat the sh*t out of those paper tiger Russians, they went back to goats & opium.
and we know opium makes more money than goats.
SAS
Deflation Redux
http://www.minyanville.com/articles/markets-money-risk-debt-government-assets/index/a/21473
Money Quote:
“There’s constant talk about “all that cash in money markets, the highest percentage in several decades.” This isn’t savings. Do you remember how the pundits were saying years ago that “debt doesn’t matter because consumers’ balance sheets were so good, and that’s what matters”? Well, we’re seeing the flip side now.
If someone had a $500,000 mortgage, $5,000 in the bank, and $100,000 in stocks a few years ago, what do they have today? Suppose they sold all their stocks 6 months ago. They’d have $65,000 in a money-market, but still have a $500,000 mortgage. But the value of their house is much lower, as well.
So, money-market assets have climbed, but that “money” is there as a result of the debt of the mortgage. That money isn’t coming back into stocks anytime soon. “
reinvestor101 – even GWB didn’t have the nuts to attack Iran, did you ever wonder why? Heck, I would take more of what you have to offer if you at least called for a draft.
Sean,
talf is being funded through treasury offerings not printing. If we start to print any significant amount before the bond market collapses, then we will initiate that collapse ourselves due to rates on treasuries jumping up and the US having to cut substantial amounts of its spending just to service the treasuries.
Language Warning! Link from Daily Bail
Laughing all the way from the bank
http://www.youtube.com/watch?v=Tulo_K3absQ
I could see the Russians, Chinese and US starting a war against “them Muslims” in central Asia. All three are going to have problems with their natives getting restless as their economies go down the sh*tter. I wouldn’t be surprised if some sort of terrorist act is trumped up just to get things going.
Pakistan would be the likely target. You have nukes and a weak government. A situation that can be easily manipulated by foreign intelligence services. Create a crisis of nukes falling into terrorist hands and poof you got an expansion of the current war. After that you role some sh*t into Iran. Russia and China do some resource land grabs into some of the other “stan” countries. Just a theory.
“O” seems to be following the same misguided path as Bush, probably because neither ever held a real job or had real world experience. It’s a shame that the majority of Government today are Lawyers, who have no worthwhile background or experience. If Congress actually had experience, representing a cross section of the Country, maybe it wouldn’t matter so much that the President lacks practical experience. But delegating important issues, to other people who don’t have a clue, isn’t very effective.
ShoreGuy:
Ignore my post.. Just realized you wanted a “should be” based on long term trend, and not a “what it is today” based on recent data.
Yours is a great question, and I have the same problem. A big rise, followed by a big fall — where SHOULD prices be? ’03, ’04? ’99 x historical apprec.?
I try to find nearby addresses with a sale in the late 90’s and again in ’03/’04. Then I assume it’s currently worth the ’03/’04 price, and calculate the annual appreciation since the late 90’s sale. It’s usually around 3 to 6%, which makes me think we should be at ’03/’04 prices, but some are way off. Maybe b/c the time frame is so long it screws up same-adress comparisons (knockdown/rebuilds, renovations, subdivisions, or alternatively, lack of maintenance, etc).
I’d love to see someone come up with a universal rule of thumb for NJ market.
Kettle1 – TALF is an offshore Hedge Fund started by the Fed and backed about 10% by the Treasury. I posted this a week or so ago, it is going to be a SPV in the Caymans. 200 Billion means 2 Trillion with leverage and a gift to the Hedge Funds who only need to keep their cash investment for about a year before the taxpayer (not the banks) takes the loss.
Chicago and Ben – Well, it made me laugh. I don’t know about the distortions – I don’t watch those shows unless they hit the internet which is where I now get my news.
I thought Santelli blew it when he said “subsidize LOSER mortgages.”
That opened him up for ridicule for not having the empathy to “get it” that not everyone caught up in this mess is a “loser.”
I didn’t even catch that the first time through. I thought it was cool that he spoke up. But Jon Stewart sure did and used it to clump him in with the others on CNBC.
Kettel1 – in the legislative pipeline is a new form of treasuries that is not included in the Congressional Deficit Cap, if it passes the presses will be legally allowed to run all the time.
Symbol = ∞
SAS
Do you ever go running in Riverside Park in the morning? There’s this 60-70ish guy named James dressed in green track jacket/pants who asks passers-by if they want to wrestle with him on the grass, at around 87-88th street. At first I thought he was crazy, but then I saw normal people in Oberlin sweatshirts, etc, wrestling with him and he seemed nice/instructive. I’ve wrestled with him a few times and he’s in fact pretty nice, normal. You’d probably get a kick out of it and/or make a new friend.
HeeHaw,
I like this. Those damn “stan” countries need to be slapped around a little bit anyway. The only problem is that we need to be sitting on central asia. We don’t need to be sharing shlt with the damn commies.
Dissident HEHEHE says:
March 5, 2009 at 10:30 pm
I could see the Russians, Chinese and US starting a war against “them Muslims” in central Asia. All three are going to have problems with their natives getting restless as their economies go down the sh*tter. I wouldn’t be surprised if some sort of terrorist act is trumped up just to get things going.
Pakistan would be the likely target. You have nukes and a weak government. A situation that can be easily manipulated by foreign intelligence services. Create a crisis of nukes falling into terrorist hands and poof you got an expansion of the current war. After that you role some sh*t into Iran. Russia and China do some resource land grabs into some of the other “stan” countries. Just a theory.
Let me tell you something, I’m tired of waiting on some damn contrived reason to kick Iran’s ass. We have the reason, they’re breathing.
Real men do what they need to do.
reinvestor101 – go ahead if you are so gung ho on Iran, it’s not that hard to sign on the dotted line, there is a place near your town to swear in, and plus you get the honor of singing the hymn.
From the Halls of Montezuma
To the shores of Tripoli
We fight our country’s battles
In the air, on land and sea
First to fight for right and freedom
And to keep our honor clean;
We are proud to claim the title
Of United States Marine.
Our flag’s unfurled to every breeze
From dawn to setting sun;
We have fought in every clime and place
Where we could take a gun.
In the snow of far-off Northern lands
And in sunny tropic scenes;
You will find us always on the job —
The United States Marines.
Here’s health to you and to our Corps
Which we are proud to serve;
In many a strife we’ve fought for life
And never lost our nerve.
If the Army and the Navy
Ever look on Heaven’s scenes,
They will find the streets are guarded
By United States Marines.
Tard (50)-
Somebody should archive your post. It sounds like a recipe for starting WWIII. There’s robust foreign policy…then there’s setting things up so that the only life form left on Earth are paramecia.
“As you can see, I favor a robust foreign policy agenda. We need to let everyone know who’s still the damn boss.”
Sean (61)-
Cool. If that comes to pass, then they can print these “new” Treasuries at Marcal.
123 (62)-
That may be the most disturbing post I’ve ever read here.
And, nobody normal wears an Oberlin sweatshirt.
re#70 Clot – find out if Knob Creek does bulk deliveries, their ain’t enough to go around as we transition to a French like existence, sans the five week mandated vacations ofcourse.
re:Santelli
The thing I found disingenuous about the whole Santelli rant was the fact that him and all his floor buddies were probably first in line for their 4.5% mortgages when the FED started buying mortgages.
Clot, it’s really not that crazy, he’s like the king of riverside park. He’s friendly with all types of people, kinda like the dude in Wash Sq Park (before it closed) (who I think bathed in the fountain occasionally) whowalked around shirtless and without shoes (just a grass skirt-type thing) who always seemed to be talking to white guys dressed in suits.
Herring, it was the wrestling part that froze my attention.
Does he get any takers in suits?
Women?
Do you have to toss a fiver in a violin case?
Pat – No, but I put on a suit after I go running (and occasionally wrestling) in the morning.
denninger is starting to scare me.
re Russian lit – I read the Bros. Karamazov (and a lot of the others) when I was a teenager, and loved it but found it a bit of a slog. but there’s a new (well, 1990) translation! a husband-wife team – Richard Pevear and Larissa Volokhonsky. she reads the original text and translates it into literal english, and then he returns it to literary form. and now they’ve done War and Peace and Madame Bovary, too. they’ve gotten loads of awards and they deserve them; I’m reading their TBK now and and it actually reads like a NOVEL (yes, I know it is meant to be one); I’m even going to spend real money and get the others.
Bruno Schultz is the best, in some other category that I can’t think readily. Isaac Babel would be next, but he’s too horrifying.
re the guys on the site listing their heights and weights yesterday: the reason we women didn’t is because (within reason) those aren’t the relevant measurements:) and we’re not going to *post* the relevant measurements!:)
Hi,
It is such a useful article and I found a lot of information with the help of this article. Thank you so much for sharing.
Stella
Real Estate Search
The guys posting their heights and weights was for either ‘internet toughness’ or a truck stop gathering at a secure location.
Sean,
I agree that the we will print like mad men. i only differ on the timing.
Fire 66
organic charcoal?!?!?!?!
#81 kettle1
What is organic water? I have no clue why it’s called organic.
Is the Future Going Down the Drain? Baby Boomers Going Bust
BoE to print 75b pounds
http://business.smh.com.au/business/world-business/bank-of-englands-licence-to-print-money–75b-pounds-20090306-8q8y.html
Thye are going to buy government debt from the banks with the money so the banks can use the cash to lend again.
That worked so well over here I can see why they want to try. / off sarcasm
Barien,
UK banks are more hosed then ours. The money being handed to the banks is being advertised as (money for new loans) but is meant to try and keep the banks from collapsing by helping them to build capital. The UK banks foreign liabilities is greater then the UK governments foreign reserves.
Oh, and where did “safeashouses” come from?
Herring (74)-
A lady at The Vault offered to wrestle me once. But she said I had to let her win.
Jon Stewart Humiliates and Exposes CNBC and their so called “Experts” AKA Fraudsters
Jon Stewart video is really cool, if you haven’t seen it. The part after first few minutes gets really fun.
SG,
The MSM is a propoganda machine with a few flakes of real info added for fun.
97…hi fiveeee
#86 kettle
It’s an Aussie phrase to show how low risk something is.
Clotpoll says:
March 5, 2009 at 11:09 pm
123 (62)- That may be the most disturbing post I’ve ever read here.
clot: yeah…people from Oberlin are NOT normal…
Herring123 says:
March 5, 2009 at 11:23 pm
Clot:
kinda like the dude in Wash Sq Park (before it closed) (who I think bathed in the fountain occasionally) whowalked around shirtless and without shoes (just a grass skirt-type thing) who always seemed to be talking to white guys dressed in suits.
123: I thought that was the guy who sold smack to the Wall Street guys
SG says:
March 6, 2009 at 7:01 am
Jon Stewart video is really cool, if you haven’t seen it. The part after first few minutes gets really fun.
Shail: no, it really isn’t
I don’t know if this has already been posted…
http://www.newsday.com/news/local/wire/newjersey/ny-bc-nj–njbudget0305mar05,0,7208050.story
NJ gov says he’s prepared to lay off state workers [7000]
The new orthodoxy:
The Congressional Research Service has released a report on capital gains rates. In the report, they maintain that a capital gains rate cut would likely lower growth.
Yes, you read that right.
Why am I envisioning Winston Smith, down in the Ministry of Love, altering documents for the government?
Its a brave new world, and we had better learn to love Big Brother.
See you tomorrow if Barney doesn’t ship me off to Gitmo before then.
651K and 8.1% ouch…
From MarketWatch:
U.S. Feb. nonfarm payrolls down 651,000 vs 650,000 expected
U.S. Feb. unemployment rate 8.1% vs 7.6% in Jan.
U.S. Feb unemployment rate highest since Dec. ’83
U.S. nonfarm payrolls for Jan., Dec. revised down by 161,000
U.S. job losses total 4.4 mln since recession began in 12/07
Rally on!
812,000 jobs lost when you include the downward revisions of the prior 2 months.
fellow real estate freedom fighters (or should we be called the “real estate liberation front?):
does anyone have any information on MLS # 2606882? It is no longer on the GSMLS. Is it under contract? I have a hard time believing that someone bought it since the mortgage was close to the list price.
morpheoous,
we are now the RELF ?
8.1% unemployment? That means that 91.9% of people are still employed. What recession!
/frank
morph,
Still active on the mls.
As far as unemployment, wait till the revisions come out. We will have 9% unemployment by June.
93
I grew up a couple of miles from Oberlin. I would imagine the Oberlin grads one comes in contact with around NJ are perhaps the most “normal” ones Oberlin produces.
Oberlin is a strange place. A world class small college in a very small ghetto surrounded by farmland.
From Bloomberg:
Employers in U.S. Cut 651,000 Jobs; Unemployment Rose to 8.1%
The U.S. unemployment rate surged in February to the highest level in more than 25 years and the economy lost more than 600,000 jobs for a third consecutive month, pointing to further reductions in spending.
Payrolls fell by 651,000 and revisions for the prior two months lopped off an additional 161,000 jobs, the Labor Department said today in Washington. The jobless rate surged to 8.1 percent, more than forecast and the highest since December 1983.
…
“There is not a single sign that points to a bottom yet,” Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “It is the worst recession in the postwar era.”
The payroll drop in January was revised up to 655,000 from 598,000 and December now shows a 681,000 drop, up from the 577,000 previously estimated. The December decline was the biggest since October 1949.
The U.S. economy has now lost almost 4.4 million jobs since the recession began in December 2007, the biggest employment slump of any economic downturn in the postwar period.
No housing bottom in 2009.
Sorry guys.
Good thing that subprime is contained.
9000 government jobs created. Thank goodness the Annointed One got elected. I expect my wishes for hope and change in the form of a phone call to be answered any moment now.
Good thing that subprime is contained.
Soft landing?
Goldilocks?
Hobokenite [110],
LOL!!
#108 grim:It is the worst recession in the postwar era.”
And yet ee have so many ion our area who are stilling looking tos ell their houses at peak levels.
BARF!
Heard a real douche bag from Blackrock on Bloomberg this morning, Peter Fisher practically begging for more TARP money, says Pelosi won’t put it up for a vote in the House, and calling for the PPP of the top 10 or so banks instead of an RTC type of nationalization.
I guess having hundreds of banking lobbyists per congressman isn’t working right now, seems some in Congress are doing the ethical and honorable thing and returning the PAC money from the banks as well.
http://thehill.com/business–lobby/troubled-banks-still-donate-to-campaigns-2009-03-03.html
Could it be that Congress is actually listening to its constituents instead of the banking lobbyists?
And yet ee have so many ion our area who are stilling looking tos ell their houses at peak levels.
Yeah, well, JDSU was a screaming buy at $500 a share too. Didn’t stop it from going down to pocket-change levels a year later.
Chi, actually, half the guys in Wash Sq Park “selling smack” are undercover cops and/or decoys. Undercover cops often hang out on the roof/balcony of NYU Law and subsequently arrest (and for 20-yr old NYU students, give a slap on the wrist) people trying to buy drugs. But maybe the dude with the grass skirt and walking stick is for real.
Could it be that Congress is actually listening to its constituents instead of the banking lobbyists?
Bank money is tainted now.
Taking massive campaign donations from Wall Street? That’ll go over as well as an insurance junket to Vegas.
Why bother pandering to them if the payola is off-limits?
Enough with the Oberlin bashing. It was actually Carleton College, but I wanted to say a small liberal arts school people have actually heard of.
Sean,
That Doll guy from Blackrock is my all time favorite stock pumper. He always looks like he tossed back about twelve double scotches the night before and remembered at the last minute he had a Bloomberg interview.
Anyone ever wake up in the morning and think “I’m tired.”
…and the futures go.. green?
In hopes for what? Massive bailouts? Intervention? Inflation-based recovery? Increasing productivity through the jettisoning of workers? Gotta be the bottom ‘cuz it can’t possibly get any worse?
How about our VP being down in Miami Fla right now meeting with the UAW bigwigs to discuss the auto bailout. That’s correct, Miami Fla, the center of the automotive universe;)
#104,
“What means that 91.9% of people are still employed. What recession!”
Exactly, as long as the 15 million of illegals are fully employed, there are plenty of jobs to go around.
109 – What do you mean! Sue said! And she had a graph to back it up.
Graph > Your Opinion
Grim,
Don’t worry, this month is going to continue its slow motion market collapse.
Spitzer Is Back in D.C. — in Real Estate
The Spitzers are paying $180 million to buy 1615 L St. NW, a 13-story dark-glass building whose tenants include the public-relations firm Fleishman-Hillard, the Washington outpost of the Nixon Presidential Library and the Institute of Scrap Recycling Industries
http://online.wsj.com/article/SB123630701016248327.html
$180 mil, that coulda bought alot of h00kers
http://www.businessinsider.com/henry-blodget-tim-geithner-what-part-of-this-chart-dont-you-understand-2009-3
Henry Blodget –
“Tim Geithner: What Part of This Chart
Don’t You Understand?
“Tim Geithner and Ben Bernanke are still parroting Wall Street’s take on the meltdown – that it’s a “liquidity crisis” no a “solvency crisis.”
(He proceeds to post “A History of Home Values)
#3 Grim –
Oh, OK, if we’re passing laws now to break contracts – how about an IRS “cram-down” law which allows courts to reduce our tax bills when we say “don’t wanna pay!”
http://www.iht.com/articles/2009/03/06/opinion/edkrugman.php
Payl Krugman: The big dither – parts…
“So why has this zombie idea – it keeps getting killed but it keeps coming back – taken such a powerful grip?
The answer, I fear, is that officials still aren’t willing to face the facts. They don’t want to face up to the dire state of major financial institutions because it’s very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over. And temporary nationalization is still, apparently, considered unthinkable.
But this refusal to face the facts means, in practice, an absence of action. And I share the president’s fears: inaction could result in an economy that sputters along, not for months or years, but for a decade or more.”
So, two more Treasury picks have decided to saty unpicked after all.
Grim – I think that some down in DC are having a catharsis on this never ending bailout, just watching the hearings this week and the the line of questioning makes me think that Congress is finally getting it, perhaps even do to blogs like these?
http://1.bp.blogspot.com/_pMscxxELHEg/SbBiutEMTvI/AAAAAAAAEts/B8th8T3WLjg/s1600-h/PercentMortgagedNegativeEquity.jpg
Calculated Risk –
Percentage of Mortgaged Properties with Negative Equity – (by state)
Former KB Home CEO indicted on fraud charges
http://news.yahoo.com/s/ap/20090306/ap_on_bi_ge/kb_home_backdating
Alap,
Since Silda may well have his b@lls in a jar over the mantle, those days must be over. He couldn’t be THAT stupid, could he?
Organic water? Isn’t that just another name for urine?
Xanadu: Can This Mall Make It?
Larry Siegel say his huge mall in New Jersey’s Meadowlands will open and will dazzle shoppers. But this retail environment feels like paradise lost
Shore Guy – once a philanderer always a philanderer, what makes you think his wife has any say on what he does?
RE 122:
Every day.
bi,
You can make all the predictions you’d like, but you are hereby banned from posting them here.
SG,
Come on, once you’ve had girls that look like Ashley, Silda just doesn’t cut it anymore. A guy has needs.
Grim – Don’t send away bi there won’t be anyone to kick around and no contrary indicator to our picks. If anything bi has made me a ton of money. How much do you want to keep him?
Ok, hereby unbanned.
Needs? Sure, Spitzer may have “needs.” The question is, does he still have genitals? In my humble opinion, if he does it could be because every sharp item was removed from the house and the Mrs. was physically restrained from ripping them off his body. Or, maybe, Silda is just a forgiving person.
bear (96)-
Methinks NJ Gov better brace himself for another “accident” on the Parkway.
“NJ gov says he’s prepared to lay off state workers [7000]”
More on the TALF Hedge Fund in the Cayumans and leverage to bring back securitzation at ALL COSTS be dammed any risk.
Quote//
Here’s how a typical TALF deal would work: A hedge fund uses $1 million of its own money and gets a $9 million loan from the Fed, payable after three years, to buy a $10 million asset-backed security, which finances consumer loans. Hoping that the market for these assets recovers, the hedge fund would hold the asset for three years.
If the security rises in value to $11 million, the investor would keep the profit, essentially doubling the initial investment. The government, meanwhile, would consider the deal a success because consumer lending was spurred.
If the value fell below $9 million, the hedge fund would lose its down payment but nothing more. The Treasury, using bailout funds approved by Congress, would cover the next set of losses, with the Fed ultimately on the hook for anything more. //Unquote
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/05/AR2009030503762_pf.html
Grim #146 in Mod re: TALF
plume (97)-
The brave new world cannot allow people to build actual wealth. The overriding idea is to disempower everyone, except for wards of the state and bureaucrats.
145
My brothers-in-law are both troopers. One says he is hearing they are looking at mandatory one day a month furloughs, and taking away their cars to get to and from work.
How are $125k+ per year state troopers supposed to afford to buy their own gas?
“The overriding idea is to disempower everyone, except for wards of the state ”
Which, since we are close to the start of an open discussion anyway, reminds me of the most memorable line from 1950s TV: Ward, don’t you think you were a little hard on the beaver last night?”
RE: kettle1
Yes, organic charcoal :) And organic tee-shirts are coming. Crazy
MIA v. DET? Hummmm. I wonder why they chose meeting in MIA in March. DET has such, um, shall we say, charm this time of year.
actually, i think it was “rough” not “hard.”
Congressman Barney Frank Wants to Prosecute the People Who Caused the Meltdown – Has No Specific Targets in Mind
Frank doesn’t. But his fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that “these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis.” When the White House warned of “systemic risk for our financial system” unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.
Now that the bubble has burst and the “systemic risk” is apparent to all, Frank blithely declares: “The private sector got us into this mess.” Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he can find one suspect in the nearest mirror
Sean (148)-
That, to me, is the very definition of insanity.
However, it would kick the whole problem down the road several years. Probably enough to allow O to get through the next election cycle and get himself another four years to work on sending us back to the Stone Age.
It must go with all the organic manure coming at us from Wall Street and DC.
Of course, in an economy that is 70% consumer spending, and a prerequisite to spend is usually employment, a jobs report that shows us shedding 800k jobs can only lead to one result:a spike in share prices as the market opens.
The TALF explanation also sounds close to the argument for a “temporary” suspension of mark-to-market:
Create some time and breathing room so that TPTB can fashion a time-release royal screw job on the public.
At least the crew in DC fully understands they’re dealing with a public that has the attention span of bi.
SG (156)-
Can’t send Barney Frank to prison. The idea of prison is for the prisoner not to enjoy it.
Clot re#157- this policy of avoidance is very dangerous. They are messing with our currency in ways that is making China very unhappy. China is really run by a bunch of boy scouts and they will not put up with our printing press activities for too long.
//Quote//In a survey of major Chinese economists, more than two-thirds are reportedly bearish on the prospect of China increasing its holdings of US government bonds, and believe instead the nation should putting more of its hard-earned into gold. //Un-Quote//
According to a China Business News survey of 70 Chinese economists (including one foreign economist), the exact figure is 71.4% anti-bonds and pro-gold.
http://jessescrossroadscafe.blogspot.com/2009/03/leading-chinese-economists-favor-gold.html
The Democrats have until January to fix ths mess. After that, we get into the mid-term election cycle and the opportunities to take real action diminish. Deduct from those 10 months, the summer recess and the end-of-year recess and the D’s have very little time to do something or at leas t APPEAR to have done something. If their policies do not show results, they could lose enough seats in each house to make things tougher on B.O., and his stink’n policies.
Martin Wolf, Financial Times
The BoE is on thin ice
The UK government has to make a decision. If it believes that costly bail-out must be piled upon ever more costly bail-out, then the banking system can never be treated as a commercial activity again: it is a regulated utility – end of story. If the government does want it to be a commercial activity, then defaults are necessary, as some now argue. Take your pick. But do not believe you can have both. The UK cannot afford it.
Clot (161) –
“The idea of prison is for the prisoner not to enjoy it.”
– LOL! This is Jon Stewart material.
Grim #162 in Mod
SRS in bust-out mode. I am rich. I am afraid.
Stu, switching over to day-trading mode. Pray for me.
srs explodes above 100
Neat chart making the rounds on S&P Bear Market.
http://dshort.com/charts/bear-recoveries.html?bears-since-1950
will resistance become support?
KareninCA says:
March 6, 2009 at 4:18 am
denninger is starting to scare me.
re Russian lit – I read the Bros. Karamazov (and a lot of the others) when I was a teenager, and loved it but found it a bit of a slog. but there’s a new (well, 1990) translation! a husband-wife team – Richard Pevear and Larissa Volokhonsky. she reads the original text and translates it into literal English, and then he returns it to literary form. and now they’ve done War and Peace and Madame Bovary, too. they’ve gotten loads of awards and they deserve them; I’m reading their TBK now and and it actually reads like a NOVEL (yes, I know it is meant to be one); I’m even going to spend real money and get the others.
Wow they must be great!!!
Because Bros. Karamazov book does not read like a novel in original Russian language…
Believe me.
It is the heaviest, cumbersome and at a times sometimes erratic writing by semi-crazy , very talented writer.
I had to write 40 pages critical essay on this novel in school.
safeashouses says:
March 6, 2009 at 6:23 am
#81 kettle1
What is organic water? I have no clue why it’s called organic.
I thik it is because it has a lot of VOC in it :)
Resistance is futile, just accept what B.0. says and does and you will be happier. Poor, perhaps, but happy.
from Bloomberg:
Minnesota Bank Asks Why It Pays for Wall Street Greed (Update1)
By Linda Shen
March 6 (Bloomberg) — TCF Financial Corp., the Wayzata, Minnesota-based bank that never made a subprime loan and hasn’t lost money since 1995, is asking why it should help clean up the mess made by Wall Street.
“I’m kind of bitter,” said William Cooper, chief executive officer of the 448-branch bank, adding that over the years TCF has invested about $1 billion in the Federal Deposit Insurance Corp.’s fund that guarantees bank deposits. “We pay for the excesses of our competitor over and over again.”
TCF is among more than 8,300 banks and lenders insured by the FDIC facing increased fees and a one-time “emergency” charge designed to raise $27 billion this year for the agency’s depleted coffers. Community banks may take a 10 percent to 20 percent hit to 2009 earnings even if the FDIC halves that charge, said Camden Fine, president of the Independent Community Bankers of America.
The ICBA and its 5,000 mostly locally owned member banks are rebelling against the costs, as well as curbs on pay and business practices imposed on recipients of U.S. capital after public outrage over bonuses and perks at the biggest lenders. Community banks rely more heavily on deposit funding, so they suffer a “much heavier burden” as a result of deposit insurance proportionate to size than peers such as New York-based Citigroup Inc. and Wells Fargo & Co., with its headquarters in San Francisco, Fine said.
‘Incompetence and Greed’
Community lenders “are feeling like they are paying for the incompetence and greed of Wall Street,” Fine said this week in an interview.
The ICBA encouraged its members to flood the FDIC with letters protesting the emergency fee. Fine said he’s received more than 1,000 e-mails and telephone messages from angry bankers since the FDIC approved the fee on Feb. 27.
http://www.bloomberg.com/apps/news?pid=20601109&sid=adfq4I9V1W6k&refer=home
grim says:
March 6, 2009 at 8:32 am
Rally on!
Some rally. huh…
Anyways I think we should not kick Bi, Re, or Frank.
despite all of our ridicule of them they do provide contrary view. Sometimes very contrary.
I believe we adjusted to RE101 posts pretty well (learner to ignore ) and Frank and Bi are more to the point and realted to real issues.
Banning them would be unfair and bring this blog to Sue Adler’s level.
I think we can all benefit from limiting number of everyone’s predictions to lets say 1/week.
Or to do something like Grim did – in the year end collect predictions from everybody for 3month, 6 month, adn 12 month time period. Post them as separate post with link to it and see who was the closest.
After all bi DID GET HIS 40$ OIL which I predicted would never go below 100$.
More importantly he was consistantly predicting it for a longest time – might be too long but we all have being predicting housing crush for 4 years… and it is still not full force in NJ :)
re: clot & disempowerment – I agree
no use trying to succeed, just sit back and let the powers that be take care of you
I have a question – at what unemployment level do we scream and run for the hills? (or nompounds)??
Or even with 25% unemployment we will be just fine??
It is rising a bit too fast for confort…
re# 176 Ricky are you saying Vive La France!
More like Viva la Vida.
Rut ro, Dow is now down to being up 10. Could we see 6,400?
http://www.cnbc.com/id/29528155
It seems the bankers don’t enjoy working for pelosi and co for no bonus and 500K salary.
Why is anyone suprised?
packing to move = sucks really, really bad
unpacking and setting up shop in the place you expect to call home for the next 30 years = really, really fun
hope to never have to do it again.
in the last … 5 years … 3 moves. i saw a few comments about people considering the idea of getting an FHA loan and buying a place, and if you have to walk, you walk … for the sheer stress of moving (assuming it’s a 2-3 week process of finding a new place, packing, unpacking) i could never try something like that.
Bernards Township Assessor: Home values
are ‘holding their own’
Trend defies collapse in the national
… homeowners can appeal an assessment until May 1, and so far, “we are getting a lot of inquiries.”
… commercial property owners were offering short-term leases of three to five years instead of the normal 10, and that some were even providing free rent, which is “something we have not seen since the early 1990s.”
#175 Al:and it is still not full force in NJ :)
I think this years Spring market will take care of that fact.
Took half off at $109.50. Nice ride from $67:) Personal one finger salute to Bergabe, Hanky Panky, Timmay, Bushybush and O’bama!
B.O. on th tube talking up his water into wine plan.
Merrill Lynch investigates ‘$120m rogue trader’
#3
“Legislation letting judges reduce the mortgage payments of borrowers in bankruptcy passed the House of Representatives, overcoming opposition from industry groups and Republicans who say the bill may further destabilize lending”
************
of all the plans out there, I think this one actually makes sense. Bankruptcy is an individualized process and it is much better suited to this than wholesale modifications/bailouts, which will inevitably benefit large numbers of people who don’t need/deserve help
#11
“Question, for a home purchased at what I am assuming for this question was a fair market value in 1999, what would one suggest I use as a multiplier factor for guestimating the current fair market value?”
1:1
#176
Al,
No one really knows as true mass hysteria due to rampant unemployment is not something that we have seen in modern times here in the US on a national level. Basically unemployment will grow and grow and societal norms will of course hold back the tide of discourse. There is a breaking point but it depends on many factors. There will be a time when it will be clear that all that will be needed is a match stick to ignite the flames. Look at France’s troubles a few years ago. At this point with no end in sight it is best to be prepared. I think we are still a year away from anything massive happening but it will take a year to prepare as well. They just arrested a couple of guys stocking up on a boat load of ammo in Arizona. They were arrested because they had Mexican plates. In a year that will be Clot with his Jersey plates. If he has not already done so.
Hence, it pays to have big bombs.
Finance us or this will fall on you.
SAS,
Didn’t work very well for Russia… It was more like, “We’ll default and you’ll like it!”.
Tishman Speyer may be forced to pay Stuy Town/PCV residents $200mil for improper rent increases on 3000 apartments.
The collapse of both this deal and 20 Pine really feed the worst schadenfreude in me.
Jon Stewart may prod a laugh here or there, but is generally an unfunny, know-nothing partisan hack.
If you think Michael Moore creates a good “documentary,” Stewart is probably your cup of tea.
Any chance anyone is interested in a March gtg?
#188 skeptic. Sorry, but I think it is wrong, plain and simple.
Story on Maplewood on WNYC 93.9 NPR.
Tosh 192
Great point. Adding fuel to the fire!
Questions, answers on bankruptcy mortgage rewrites
3b (195) –
BK cramdowns on primary residences were allowed prior to 1993.
If you think filing for BK to cram down your mortgage is fun, think again.
I wish the cramdown legislation wasn’t closed-ended.
Cramdowns would force mortgage investors to seriously consider repayment potential of newly written loans. Would basically put an immediate end to any funny money loans.
#199 victorain: Never said it was fun, I just believe it is wrong.
If you cannot afford the hosue, than you should not be in it.
Plea Deal Said To Be In Works For Bernie Madoff (Story developing)
Friking SEC can’t even close a case like Maddoff? Why do they exist again?
Surprise! It’s a Bailout for Vacation Homes, Too
I’m shocked that people aren’t jumping all over the revelation that the no-equity mortgage refinance program unveiled yesterday is going to be available for vacation homes and one-to-four unit rental properties as well as for owner-occupied homes. The Post’s Renae Merle reported this detail, which she found in the program rules published by Fannie Mae and Freddie Mac.
Homes in NJ start at 20K. They can’t get anymore affordable.
http://www.realtor.com/realestateandhomes-search/Irvington_NJ/07111?sby=1&pgsz=3
SG # 203
I was under the impression that cramdowns are currently available on second homes and investment properties, are they not?
#195 – Sorry, but I think it is wrong, plain and simple.
It should force much tighter underwriting standards, at the least.
Before this whole thing started to unravel we knew there would be over-shoot on the down side, both in terms of pricing and regulation. We haven’t seen the pricing over-shoot this may be the start of the regulatory over-shoot though.
Grim 205# You are right.
204 – and you get a bullet in the face with that. bargain!
Whole Foods in pact to sell 31 Wilds Oats stores
http://tinyurl.com/create.php
3206 toshiro: And the pricing over shoot (downside) I would think should be right behind it.
You knew it was only time before someone came up with this. I’m
shocked it took so long.
O.B.A.M.A
Our
Budget
Annihilates
Markets
Altogether
#200 – Would basically put an immediate end to any funny money loans.
I don’t think we’ll see SISA, NINA, and the like go away. They are actually useful and serve a purpose. There used to be a risk premium associated with them though, that should return.
Having said that, seeing these loan products used as “affordability vehicles” needs to die, and should as well.
Plea Deal Said To Be In Works For Bernie Madoff (Story developing)
Friking SEC can’t even close a case like Maddoff? Why do they exist again?
He must be holding one big ace up his sleeve.
You knew it was only time before someone came up with this. I’m
shocked it took so long.
O.B.A.M.A
Our
Budget
Annihilates
Markets
Altogether
B.U.S.H.
Big
Underachieving
Stupid
Hick
Didn’t whole foods just buy wild oats recently? I wonder if the same law firm doing the purchase is also doing the sale, wouldnt that be a hoot
“Never said it was fun, I just believe it is wrong.”
I suggest that you read this article –
http://www.calculatedriskblog.com/2007/10/just-say-yes-to-cram-downs.html
Anyone have a guess when the Bond market will pop? When hyper-inflation begins?
NYT
Ever Closer to 1982
By DAVID LEONHARDT 21 minutes ago
Using a broad measure of unemployment and underemployment, the rate is now 14.8 percent.
“grim says:
March 6, 2009 at 11:39 am
I wish the cramdown legislation wasn’t closed-ended.
Cramdowns would force mortgage investors to seriously consider repayment potential of newly written loans. Would basically put an immediate end to any funny money loans.”
You’re right going forward but it causes as many problems as it solves. 30 mortgage rates through the roof. Banks with CMBS on their books with further writedowns etc
I’d like to ask you all on this blog a financial question given that I don’t trust the mainstream financial advisors.
My partner and I are currently employed, making a good salary. Jobs can go at any time, though, and we’re not living with our heads in the sand on this.
We own a house (it’s not where we live permanently, it’s a “vacation home” that we use for vacation; we plan on retiring there). Our “primary” home (where we live for purposes of our jobs) is a rental.
We’ve both lost a good 50% out of our 401K’s to date. We have good savings, and our only debt is about $60K on the house we own (at 5.5% rate). No credit card debt, car debt, etc.
I’m of the mindset that we should borrow $60K out of our 401K’s and use that to pay off the mortgage. Then pay ourselves back the $60K into the 401K. The twist is that we are confident we will not not be working at our current employer within the next year (if we are not laid off, we have concrete plans to leave by year end to go back to school. At that time, we would take cash out of our bank, repay the 401K “loan” and then roll that 401K out of the current investment to an IRA (with a safe, FDIC CD, something I cannot do today since I am still employed with this company).
My question for the board – does it make sense to do this, borrow on the 401K? I feel certain that even though I have the remaining 401K money in a “stable fund” account, that this “stable fund” will start decreasing, and I’d rather have my home paid off and leverage the money I have in my 401K while I still HAVE some money in my 401K.
Thoughts?
I’m not convinced of the argument that cramdowns will create mortgage rates that go through the roof.
Even if you were to convince me of the fact that mortgage rates would be higher I still think that lending would be better off if more diligence were provided on the loan’s front end.
lena, how would this transaction differ from paying off the house from your good savings?
I’m going to assume that you do not have the 60k in after-tax savings.
I’m also going to assume that neither your (k) nor your savings will depreciate or appreciate over the next year.
I’m also going to assume you lose your job within the next year.
You’re thinking of taking the 60k pre-tax, and paying off the house, then repaying it from… where.. within the next year?
@220
Borrowing from your 401k to pay off your mortgage is a tough decision. Essentially what you don’t want is to be house rich but cash poor in your retirement. Nothing is worse then seening an old person in a wonderful house but eating catfood.
If you feel that the amount remaining in your 401k is more then sufficient to fund your retirement years then I would suggest that you borrow from your 401k to pay off your mortgage. If you don’t feel comfortable then continue as normal.
An alternate scenario…Your financial advisor should be able to help you determine what you need in your retirement accounts. After you fully fund your retirement then use any budget excess to pay down your mortgage. This way you don’t borrow from your 401k at a time when the market is at its lowest.
#219 – 30 mortgage rates through the roof.
I suppose this will depend on what point we define as ‘through the roof’; %7, %9, %15 for a 30 yr fixed?
However, shouldn’t they be much higher given both what we know about historical patterns of repayment in down markets and potential for default via job loss?
The bank’s cheap access to cheap capital to make loans with is only on part of where the rates should be.
Or am I looking at it differently than a bank would?
Lena, my assumptions were ‘all else equal’ assumptions to get to a base issue…whether or not you could repay the loan.
I don’t see cramdowns driving mortgage rates through the roof. You still have to file for bankruptcy which is a major disincentive. Compare this to the bozo who is going to get a bailout without any penalty whatsoever.
At the end of the day, I do not see tens of millions of people opting to go through bankruptcy. My guess is a small percentage who have a reasonable shot of paying most of their debts over 5 yrs will do it and the lenders won’t be substantially worse off than if they had done an out of court workout.
3b says:
March 6, 2009 at 10:57 am
#175 Al:and it is still not full force in NJ :)
I think this years Spring market will take care of that fact.
Well lets hope so also I am skeptical.
IN NJ most sellers are just fishing for high price on their home They do not have to sell yet.
So sky high prices on most homes make few that Priced right, in my assessment, stand out like real Bargains, which they are not.
SO people come in and snatch them right away at or very close to listing price in days.
We need massive Foreclosures to drive prices down. But for some reason California scenario just not playing out here.
So we just going to have very slow bleed (-3-5%/year)over 3-7 years, and than inflation will take care of taxes and high prices…
(97) Sorry, but low capital gains rates lead to bubbles/crashes. If the Great Depression and the current economic crisis haven’t taught you that, then you are drinking too much right-wing kool aid. The seet spot for capital gains rates seems to be 25%, like we had in the ’50’s and 60’s.
156 SG “Frank doesn’t. But his fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape.”
Frank’s boyfriend was a high-level Fannie Mae exec (this is different boyfriend from the one who run gay prostitution ring from Franks’ basement)
http://www.foxnews.com/story/0,2933,432501,00.html
Lawmaker Accused of Fannie Mae Conflict of Interest
“”It’s absolutely a conflict,” said Dan Gainor, vice president of the Business & Media Institute. “He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane?”
If he were a republican involved with Enron/Fannie Mae exec while voting on them, this would be a front-page scandal and source of endless congressional hearings.
Lena,
my worthless 2 cents is that in this market its better to be cash rich if its an either/or situation.
Re: Pat’s questions:
how would this transaction differ from paying off the house from your good savings?
I do have the $60 in cash available savings, but my rationale is that at least the money in my savings (CD’s) is not LOSING money. I am losing money every day (over $2K alone just in the past month… and we’re not talking allot of money in my 401K)…. so why not take it out so it doesn’t continue to sink and then pay it back with the money that I do have in my savings, but at a later point in time, when I am no longer employed with the company? At that time, I can repay it and also roll it out to a “safer” retirement fund that may not ultimately yield as much, but is not as volatile.
Basically, 11 years of saving in my 401K has been for naught. I will never be able to make that money in any way substantial enough to keep me during my retirement years.
I’m just sick over how much has been lost, and feel like at least if I own my own house outright, when the time comes that we’re back in school, unemployed, etc, we have a place to live without the expense of a mortgage over our heads.
#228
“low capital gains rates lead to bubbles/crashes.”
does this apply to all taxes? e.g., do low sales taxes lead to volitile prices of goods? do low income taxes lead to volitile prices for labor?
Frank says:
March 6, 2009 at 11:40 am
Homes in NJ start at 20K. They can’t get anymore affordable.
http://www.realtor.com/realestateandhomes-search/Irvington_NJ/07111?sby=1&pgsz=3
That is not a house. It is 20,000$ liablity costs in tear down and site clean up fees.
After that you are left with 24’/by may be 40′ patch of empty land which nobody will want as building a house there will cost way to much that the whole block!!!
So, really costs are 40K for 0 value. or negative value if you have to pay RE taxes on it.
232
People don’t speculate on goods or labor.
Basically, 11 years of saving in my 401K has been for naught. I will never be able to make that money in any way substantial enough to keep me during my retirement years.
Are you planning to retire next year??? or in the next 2 years??
untill you retired and started withdrawing money at that new base you are not losing anything. You still have the same amount of stocks.
I’m just sick over how much has been lost, and feel like at least if I own my own house outright, when the time comes that we’re back in school, unemployed, etc, we have a place to live without the expense of a mortgage over our heads.
There is no RE taxes ???
Can you tell me where is it? is it in USA?
Lena– if your advisor is suggesting that borrowing from 401k is bad idea, he is probably not trying to scam you. consider, for example, that if you lose your job, your 401k loan may come due immediately. do your own research on this, but I think most would say borrowing from 401k is to be avoided
lena says:
March 6, 2009 at 12:10 pm
I’m of the mindset that we should borrow $60K out of our 401K’s and use that to pay off the mortgage. Then pay ourselves back the $60K into the 401K. I’d rather have my home paid off and leverage the money I have in my 401K while I still HAVE some money in my 401K. Thoughts?
l: You are twisting yourself into a pretzel for what would be at best mild to no benefit. Just e-mail me chicagofinance at yahoo.com – I’ll answer any detailed questions. I will expect you to disclose your employer.
BTW – 401(k) loans…max is $50K or 50% of vested balance, so $60K is verboten
some might argue that continuous changing of tax rates/rules is what distorts the market rather than the rates/rules themselves
I’m of the mindset that we should borrow $60K out of our 401K’s and use that to pay off the mortgage. Then pay ourselves back the $60K into the 401K. The twist is that we are confident we will not not be working at our current employer within the next year (if we are not laid off, we have concrete plans to leave by year end to go back to school. At that time, we would take cash out of our bank, repay the 401K “loan” and then roll that 401K out of the current investment to an IRA (with a safe, FDIC CD, something I cannot do today since I am still employed with this company).
My question for the board – does it make sense to do this, borrow on the 401K? I feel certain that even though I have the remaining 401K money in a “stable fund” account, that this “stable fund” will start decreasing, and I’d rather have my home paid off and leverage the money I have in my 401K while I still HAVE some money in my 401K.
Thoughts?
———————————–
It reads like you already know what you want to do. Do it. At this point it’s futile to fuss over what everyone else is doing-it’s that type of “lemmings to the sea” mentality that brought much of this on. Sometimes you have to go with you “gut” feelings and be happy with the individual decision you make for YOURSELF (noone is going to take better care you than you, baby)
Fun thought of the day.
I am not a religious fellow, but for those who are, do you remember who the 4 horsemen are? the 4 horses are violence, hunger, disease and death
I am calling out hunger, clot is calling out violence…. we should start a horseman count.
I’ve managed to find a way to combine the interests of many on this board into a single link Stu/Clot rejoice…Mr. Frugal meet Mr. Mossberg…
http://www.fatwallet.com/forums/hot-deals/908620/
233 – Al, you are forgetting that Irvington is Maplewood Adjacent. so this looks like a good buying opportunity to me.
Yes, there are taxes of course, which I’m calculating into the picture as a cost (along with maintenance, utilities, etc…)… the property is upstate NY; annual taxes are $2400.
And while I know I have the same amount of SHARES in my 401K, do you all really think the prices of any of these investments will grow to where they were in the past? I mean, are these financial institutions, for example, ever going to be truly worth what they were valued at in 2007?? Doubtful, imo.
I am not retiring anytime soon, and have a career transition plan in place, which is also what is prompting me to seek paying off my house, since that is where I will live while in school for my new degree. Better to only have to pay $200/month than $1000/month, and with the mortgage paid off, we’re saving (at minimum, based on how we pay today which assumes we have jobs) over $30K in interest.
I appreciate the other views you are giving me on this……
#232 skep
There was tireless and exhaustive research put into post 228. Didn’t you read it?
/sarc off
DeweyCheatem&Howe says:
March 6, 2009 at 12:42 pm
Sometimes you have to go with you “gut” feelings and be happy with the individual decision you make for YOURSELF
DCH: A blueprint of how to run your life into the ground. Humans are hard wired to destroy themselves on a visceral level. Only conquering their emotions can lead (on average) to optimal outcomes.
The Four Horsemen: Barney, Timmay, Ben and B@r@ck?
247. DCH: A blueprint of how to run your life into the ground. Humans are hard wired to destroy themselves on a visceral level. Only conquering their emotions can lead (on average) to optimal outcomes.
xxxxxxxxx
chicagofinance- having made quite a few emotional decisions that had bad outcomes I fully agree with you.
#216 vicorian: Interesting, and I agree in part with it.
However, my concern is how does a prospctive buyer make a reasonable determination as to what to bid on a house, if the exact same house next door lets say, gets 50K or more knocked off their mtg amount.
I would want to know that when determing a bid.
Jerusalem Post: “Israel is seriously considering taking unilateral military action to stop Iran from acquiring nuclear weapons, according to a report by top US political figures and experts released Wednesday.”
Now that it is clear that O will sacrifice Israel and has appointed rapid Saudi-funded nutcase Freeman (who celebrated Tiananmen massacre) to lead the National Intelligence Council, the probability of major war in coming months is 100%. That should do wonders to stock markets. Yeah, we have now pissed off Canada, UK, Eastern Europe, EU, but otherwise, this new smart diplomacy is going on well.
Zimbabwe’s PM car gets hit by large truck.
Just read the article on CNN.
Zieba
Post of the day!!!
#250
“my concern is how does a prospctive buyer make a reasonable determination as to what to bid on a house, if the exact same house next door lets say, gets 50K or more knocked off their mtg amount.”
go with the cramdown number.
unless I am missing something about this plan, it is not a fundamental change in bankruptcy philosophy. that is, bakruptcy operates under the assumption that creditors will be at least as well off via the bankruptcy process with respect to their claims as they would be outside of bankruptcy. If this were not the case, then bankruptcy would represent a “taking” without just compensation, which would be a violation of the 5th amendment.
I am assuming that this new cramdown provision will only allow judges to write down the mortgage to the level of the actual market value of the collateral. If this is the case, then there is your bid. If they can write down mortgages to below the market value of the collateral (without providing some other form of compensation to the creditor), then this is a new development in bankruptcy and all bets are off
#227 Al:So we just going to have very slow bleed (-3-5%/year)over 3-7 years, and than inflation will take care of taxes and high prices…
Not with this economyy we are not.
To think it happened in California but will not ahppen here, IMO makes no sense. Just look at how far prices have fallen in the California bay area alone?
Wall St just really blew up last Fall,and Bloomberg reported earlier this week that coop and condo prices have dropped significantly since last summer.
We are not going to have NYC prices fall,and yet have prices remain ator slightly below 500k for a POS in NNJ with 10k a year in taxes.
Prices in NNJ dropped dramatically in the ealy 90’s ( I remember it well), during that ugly recession.
This current reccession is making that one look like just a blip on the screen.
In past I think someone mentioned about using huge number of empty shipping containers at ports for some good use,
Would You Live In A Shipping Container?
Grim (117) –
I love the JDSU reference. Rode that sucker most of the way up and all the way down. Because I didn’t recognize a bubble and listened to “professional” investment advisors.
I was scarred for years, now I view that as the best learning experience I ever had, paid off in spades because I recognized this real estate and credit bubble, rented, and got myself and my family out of equities in 2006.
Everything in life is a learning experience. We all just have to hope to live long enough to apply those lessons the next time.
Have a good weekend all
And while I know I have the same amount of SHARES in my 401K, do you all really think the prices of any of these investments will grow to where they were in the past?
If you have mutual fund the answer is YES it will come back to the same nominal number. I am also 100% confident that within 20-25 years we will have another stock/RE bubbles which will overcome last bubble in real terms as well.
I mean, are these financial institutions, for example, ever going to be truly worth what they were valued at in 2007?? Doubtful, imo.
Some bank will fail. Some will come back. If you were not diversified in your 401 you risking to lose it all.
Better to only have to pay $200/month than $1000/month, and with the mortgage paid off, we’re saving (at minimum, based on how we pay today which assumes we have jobs) over $30K in interest.
As somebody said that is up to you to decide, whats better.
Consider different scenarious on you repayment of the loan to 401K – stocks stay flat, go down more or shoot back up to 10K. Nobody can predict it.
So it is up to you to decide.
I think since you are not retiring anytime soon right now is a good time to cost-average and increase your contributon to 401K.
Heck, I started contributing when DJIA was at 11,000. it went all the way up to 14000 I constributed minimal amount to get employee match. Half of it is gone now. But every contribution also buying me twice as many shares. I am happy.
PA bound (228)-
That is one of the five most idiotic things I’ve ever read here.
Please provide the correlation/causation between low cap gains rates and asset bubbles.
There is no “sweet spot” for deliberate suppression of development of wealth via the institution of an illegal tax (taxation of money upon which taxes have already been paid) that punishes industry and hard work.
We are not going to have NYC prices fall, and yet have prices remain at or slightly below 500k for a POS in NNJ with 10k a year in taxes.
Well I am not looking for 500K cape cod. I am not exactly Alpine or Westfield (tremble in awe) material.
I am looking at cranford/ metuchen/ scotch plains / watchung and surrounding areas.
Starter homes are right at 300-350K mark there.
Holding very stable. Nothing sells though. Some houses are listed for over 2 years now. Some for almost 3 years.
Job losses might accelerate it, but with government screaming of help for homeowners in trouble, people will stall as long as they can – and banks are not in a harry to foreclose either.
And yes I hate those taxes too.
“The capital gains tax isn’t a tax on the rich. It’s a tax on people who are trying to get rich.”
-Bill Clinton
vodka (230)-
I like the fact that lena has her own internal “good bank” and “bad bank”.
Plato? The four horsemen of the apocalpse? There is no other RE board on the web with this kind of audience.
vodka (42)-
I think we should expand the list to allow for 7-8 horsemen.
“I am calling out hunger, clot is calling out violence…. we should start a horseman count.”
Can we have a horseman for “just plain fcuked”?
264 is for 242.
zieba (243)-
As long as you can get guns in the mail, there’s still hope for America.
3b (250)-
In that situation, no offer is appropriate. The asset cannot be valued at all, and when market participants begin to attempt valuation after all the new “rules” are known, it’s best to let some other sucker be the one to achieve price discovery.
safe (252)-
Was it jammed to the point of overload with currency?
“Zimbabwe’s PM car gets hit by large truck.”
#254 skeptic I am assuming that this new cramdown provision will only allow judges to write down the mortgage to the level of the actual market value of the collateral.
And who determines that market value?
implode (257)-
JDSU? OMG…Cramer was flogging that dead dog again about a year ago. I remember he did a show plugging JDSU, FNSR, AVNX and a bunch of other tech disasters and thinking to myself that he’d gone way off the ranch.
At the rate the Dow is falling, we are looking at Dow 875 by middle of this year.
“And who determines that market value?”
the judge– but he/she doesn’t just pull a number out of a hat. they would use market comps
#267 clot: Thanks clot, exactly my point. And so just how is this going to stabalize/help the real estate market?
As I have been screaming since last summer, this could very well end up destroying the real estate market.
DL (263)-
I thought these were the Four Horsemen:
http://www.geocities.com/Colosseum/Field/7411/horsemen_3.jpg
Clot 264,
you can mix and match the 4 horse men to achieve the desired effect. Maybe we should have some trading cards printed.
all 4 horseman means “your F’ed”, death disease and hunger gives you a genocide….
a new craze for the 10 yr olds
#272 skeptic: Not to be diffficult, but what market comp, from how long ago, lets say I am the market for that one house.
I want to determine what to bid but cannot make a reasonable determination as the potential cram down and its amount is unknown to me.
we should expand the list to allow for 7-8 horsemen
But I thought Things Not Working Properly Even After You’ve Given them A Really Good Thumping and Foreigners, Especially the French.
never made it that far?
/too obscure?
3b (273)-
In case you haven’t noticed, the RE market is already destroyed.
vodka (275)-
Apocalypse Pokemon.
.vix at 51.17. The feeling is really getting to be Fall ’08 deja vu.
3b– Obviously I don’t know the exact standard they would use to do the cramdown. If it is not too diff’t from existing bankruptcy rules, the judge would have some discretion, but he/she couldn’t just make up a number– it would have to be supported. If it was too far off from what the creditor believes to be market, they could appeal.
Above all, I think this process would actually accelerate price declines. Right now, there is a huge logjam because people are underwater. If you eliminate the need to take cash to closing by the seller, it would facilitate transactions and lower comps across the board.
As of noon today, 24% (120) of the S&P 500 stocks traded for less than $10 a share…….
Clot
quick we need to trademark/copywrite that. we can add it to our aruba portfolio!
Oh, and the DOW? 20% of the Dow is trading under $10
re: cops from the other post …
Got my first ticket in 4 years Sunday. Went to church. Went to stop at hardware store after to get a couple items. then decide, might as well get a drink at starbucks two doors down.
we’re parked on a 2-lane street. it’s the middle of towntown and i decide to hang a u-turn (there’s a double yellow line in the middle, but i’ve done this move a million times everywhere, never got in trouble).
i look to make sure no cars are coming, and do the u-turn. about 5 seconds later, a Ford Explorer (white) that was driving in my direction turns on its lights.
it had no cop markings/wires/anything.
i ask him what happened and he’s a complete di*k. He said it’s a moving violation and i’ll get points for making a u-turn.
I’m probably going to go to court and argue, claiming that it’s my first ticket in awhile and i really dont need my insurance going up for something like this.
Kudlow would call that a buying opportunity.
From another blog
“(CNN) — Calling it a mission that may fundamentally change humanity’s view of itself, NASA on Friday prepared to launch a telescope that will search our corner of the Milky Way galaxy for Earth-like planets.”
I never understood why so many space missions had this subtext: “we’re looking for alien life” – yeah? why? Curiosity is fine, but why so urgent?
Obviously; they urgently need someone to buy US Treasuries, now that the Chinese have got us figured out…
The Four Horsemen? You’re kidding right?
Outlined against a blue-gray October sky, the Four Horsemen rode again. In dramatic lore they are known as famine, pestilence, destruction and death. These are only aliases. Their real names are: Stuhldreher, Miller, Crowley and Layden. They formed the crest of the South Bend cyclone before which another fighting Army team was swept over the precipice at the Polo Grounds this afternoon as 55,000 spectators peered down upon the bewildering panorama spread out upon the green plain below.
— Grantland Rice, New York Herald Tribune, October 18, 1924
Clot,
if TSHTF for real, what do you think happens to the 7.5 million people in prison? 1 /30th of the US population is incarcerated.
BC,
just enjoying a little black humor
wow clot, this is hysterical
Clotpoll says:
March 5, 2009 at 6:48 pm
ben (351)-
Who cares? Rutgers’ students might as well be a herd of 30,000 alpacas. In fact, 30,000 alpacas would probably demonstrate more independence of thought, as they haven’t been exposed to a lifetime of hovering parents, indolent and scheming educators and bumbling apparatchiks of a crumbling, low-level soci@list bureaucracy.
Been busy as hell ya’all. A few late responses.
On the Sue Adler thread. Qwerty said, “There is nothing dishonest about selling any product or service into a declining market. What’s dishonest is using cooked statistics to create or justify the sale.”
It is a common practice among most realtors and is pushed by NAR. I don’t justify the behavior and find it deplorable, but Sue is no different than the rest of the 99% of realtors. Attack the industry, not the one individual who happened to post here. That is why I said her mistake was to post here! Clot/Grim…you guys are clearly not part of that 99%, but I bet neither of you drive a hummer.
Is what the real estate business does that different than how most American’s cheat on their taxes? (See USB article on hidden American bank accounts in Switzerland posted recently).
Clot…on the SRS tip, don’t change your strategy due to stock price. Change it based on fundamentals. Sold out 1/6th of position at 100 and will sell the next 1/6th at 115. Will have 2/3rds left going forward. It’s gonna be a good year. Damn shiny is moving up again. Gimme a pullback already so I can take a golden shower (ewww)!
BC (288)-
And the Dow that day was higher than it is now. :)
vodka (289)-
Like a very large, real life version of Escape From New York.
Clot (270) – You know it’s bad if Cramer is going back to the JDSU well. I stopped paying attention to JDSU after their 1 for 10 reverse split. But JDSU sure brings back memories. Remember CMGI and how they paid for stadium naming rights in Foxboro? Enron and their stadium? CMGI/Enron 2001 = Citi 2009? (Yes, I am thinking about shorting every company that pays for stadium naming rights going forward.)
Nice call on your SRS doubledown BTW.
#278 clot:In case you haven’t noticed, the RE market is already destroyed.
Yeah, but cramdowns will destroy it forever IMO.
Stu (292)-
I actually don’t day-trade SRS based on price. I use .vix and trading volume as my tells.
The volume off the open was good today, but I’d like to see the .vix higher before I start cancelling client appointments and staring at my computer screen.
I hope I was not too early on all of this…
“Stu says:
December 22, 2008 at 8:53 am
2009 Predictions:
For the most part, it will be a complete repeat of 2008.
Massive consolidation/liquidation of department stores. Goodbye Kmart/Sears. The Big 3 automakers will become the Big 2 with Chrysler merging with GM. GE will be the AIG of 2009 eating up the majority of TARP III. Commercial REITs will crumble further and will be kept on life support through O’s infrastructure plan that is originally earmarked for bridges and tunnels, but ends up being used to bail out REITs. Discover Card…discovers bankruptcy and there will be no bail out for them. Massive violent uprisings will break out across China as displaced farmers turned factory workers will be out of work with no farms to return to. No riots in the US as ‘O’ will provide enough crumbs to the despots to keep them sedated. Banks will still not be lending and mortgages will be available at 5%, but few will be buying as fear of depression will continue. As mid-year approaches, expect all forecasts to change from slight recovery in economy in 3rd and 4th quarter of 2009 to the 2nd quarter of 2010. Hedge fund industry will be destroyed as people use CD’s as their primary means of capital preservation. Brazil will be only major economy to do well in the world. India’s economy collapses as outsourcing gets destroyed due to protectionism. Russian economy sinks further as oil remains cheap. Largest amount of deflation will be visible in auto prices as manufactures domestic and import cut prices to reduce inventory. ‘Green’ unfortunately will be put on the backburner for a while.
Oil: $55/barrel
Gold: $1200/oz.
DJIA: 6500
SRS: $150
Frank: Unemployed and in foreclosure”
stu (292)-
Probably not a good idea to put the words “Sue Adler” and “hummer” in the same post.
Just saying.
implode (295)-
That call made itself. I just wish I had access to more margin to double down with when it was in the 50’s.
#289 – ket – the 7.5 million people in prison
Good lord, is it that much? I thought the number was something like 2.1 – 2.2 mil.
Or is it 2.1 – 2.2 mil physically in prison with the rest on parole/house arrest or something like that?
That’s depressing either way.
I just got an e-mail from bi. He’s joined the Sue Adler Team as chief quant.
Clot: that picture looks like a group I used to drink with on LBI in the 70s.
I could leverage my house 105%. Why can’t I get those terms on my brokerage account?
That’s funny Clot. I thought SRS was imploding due to overcapacity and underutilization of commercial real estate. Also, the fact that a REIT can’t remain a REIT if it can’t pay dividends. I suppose these mall and warehouse and office space owners are going to have to continue selling their properties to maintain their REIT statuses. But who’s gonna buy these ghost spaces? Certainly not other REITs. Can Google buy them all? Just sayin.
Now if these ETFs worked properly, then we both could quit our day jobs. Of course, I’m not really complaining. My goal was to hedge against the losses on my home and salary cut. That’s covered for a while ;)
DL (303)-
Arn Anderson was always my favorite.
One mean sumbitch.
23 Shore Guy,
You would put Asbury and Camden schools in same boat as Toms River?
Tosh
2.3 million In prison/jail
7.5 million is the total # in the justice system according to the justice department.
#308 – 7.5 million is the total
It’s just staggering isn’t it?
I’d assume the majority are in for drug related crimes.
Really depressing….
Grim:
Thanks.
Wife could not find it again on the list. Like the property: it has some potential.
Got to get back to work. will try to read all the posts later.
For Timmay, Bergabe, Klink, especially Jim Cramer etc, enjoy:
01/13/2009 Buy 760.0000 SRS PROSHS ULTRASHORT REAL REAL ESTATE [Details] $67.23000 -$51103.75 $8.95
03/06/2009 Sell 200.0000 SRS PROSHS ULTRASHORT REAL REAL ESTATE [Details] $109.49900 $21895.20 *
03/06/2009 Sell 100.0000 SRS PROSHS ULTRASHORT REAL REAL ESTATE [Details] $109.49900 $10947.59 *
03/06/2009 Sell 100.0000 SRS PROSHS ULTRASHORT REAL REAL ESTATE [Details]
Tosh,
disturbing. the majority is non violent / non violent drug offenses.
HEHEHE (311) –
Nice! Congratulations!
Yes, the war on drugs, complete waste of money and lives.
Vic,
I lost enough last year that this almost puts me even.
Is this possibly to do ? rent a condo/home in Fla claim residency .transfer your driver license .rent out four house in N.J .while living in Fla roll over your over (1 million)Ira to a Roth pay fed tax but no state tax …move back to n.j the next year .start withdrawing money tax free Fed&State .the whole purpose of the move would be to circumvent state tax of 11%….
aahhh memories…
http://www.youtube.com/watch?v=KiIP_KDQmXs&feature=related
Have you seen the Put/Call ratio? – 0.89
Unfcukinbelievable!
6492. Humm, time toclaw back or to continue the slide? It’s Friday, I guess slide.
Dow down 107 points..
Nice..
HeHeHe: You should have been indexing!
Veto,
Last year (maybe NJ Monthly or the Star Ledger) ranking NJ high schools. Toms River was well below lots of what one would think of as dregs high schools and way down near Camden and Newark. I always figured they were better than that but way worse than Monmouth county. I seem to recall they ranked worse than Neptune, but, even if better, it was not much.
RE: “On the Sue Adler thread. Qwerty said”
Actually, Clot wrote that.
My post on that harpy shyster is here:
https://njrereport.com/index.php/2009/03/05/federal-reserve-real-estate-conditions-in-the-second-district/#comment-276554
Many crimes are “common practice” but that doesn’t make them defensible.
I have no idea why one would choose to serve as apologist for a verifiable liar and scam artist.
“The Big 3 automakers will become the Big 2 with Chrysler merging with GM.”
Merge into what? A black hole?
HEHEHE says:
March 6, 2009 at 2:46 pm
Dude…look, fine, good for you…but that is a little more than just unseemly – ‘nkay?
It also needs to be linked with this post…
HEHEHE says:
March 6, 2009 at 2:51 pm
FYI – as a general comment; if people have the need to do this type of posting on a regular basis, I cannot participate here. If you don’t like me, please, it would be an effective way to push me out.
I’ll never post that again so Chi can continue to play.
BTW, I can post plenty of losses from last year.
Sorry Qwerty…she has been extremely helpful to me and off the record, has been much more realistic about the economy in person than her website reveals. You are just too dense to understand this or you are simply not reading what I am posting. Why don’t you become a realtor and urge your customers not to buy. I’m sure your friends at the homeless shelter will really find you admirable.
“Oh, and the DOW? 20% of the Dow is trading under $10”
The NYSE is becoming like Big Lots and the Dollar Store.
328
The NYSE is becoming like Big Lots and the Dollar Store
A place to buy cheap, useless crap?
“The NYSE is becoming like Big Lots and the Dollar Store.”
Nah, those are growth stocks.
Geithner: B, can we put the treasure in the treasury?
Obama: Yes we can, but we’ll spend it because we’ll get more back. Every dollar we mail out in food stamps returns $1.73.
ETF Nerds…..beware….this is the kind of shite that worries me in general. However, this particular issue is quite specific to this situation.
WSJ
BUSINESS MARCH 6, 2009
U.S. Oil Fund Finds Itself at the Mercy of Traders
By GREGORY MEYER and CAROLYN CUI
A large participant has emerged in the oil market in recent months, controlling nearly a fifth of the most-active oil-futures contracts, and roiling trading in the market.
The exchange-traded fund U.S. Oil Fund LP has expanded from a $7 million ETF just three years ago to $3.8 billion, drawing the attention of regulators and making it harder for the fund to keep up with oil prices.
U.S. Oil’s size has prevented it from tracking the price of oil. While crude has lost 2.2% in 2009, the fund has declined 20%. The fund is designed to track oil’s daily percentage move.
Since the fund is so big, it is unable to switch in and out of contracts, a process known as “rolling,” without moving markets and giving speculators an opportunity to make bets on those moves. It is adding to the costs of U.S. Oil’s roll and raising concerns among regulators that traders may be manipulating prices.
“It’s like taking candy from a baby,” said Nauman Barakat, senior vice president at Macquarie Futures USA in New York.
That candy comes out of the returns of investors in the fund. Take Feb. 6, when U.S. Oil moved its 80,000 contracts from March to April at the end of the trading day, selling the March contract and buying April. Because U.S. Oil publishes the dates of its roll in advance, traders knew the switch was coming.
At 2 p.m., 30 minutes before closing, trading in New York Mercantile Exchange oil contracts soared, and the price of the April contract narrowed to $4 more than the March contract. Within minutes, that gap had widened and closed at $5.98, according to trading records.
As the fund’s managers were about to roll their contracts, “suddenly came the awfully extreme move,” said one manager. Some said the move is a sign that big trades were placed ahead of U.S. Oil’s roll.
The price move instantly made it more expensive for U.S. Oil to roll into the April contract and cost the fund about $120 million more than it would have a day earlier. At the same time, a trader could have pocketed $1,390 on each spread trade, which costs $810 to place.
U.S. Oil complained to Nymex the following week, according to one person familiar with the situation. A Nymex spokeswoman said the exchange contacted the fund about the size of its position before the roll, but wouldn’t comment on any complaint. Last week the Commodity Futures Trading Commission said it is investigating the trading. A CFTC representative declined to comment.
“In the futures market, you’re not supposed to know others’ holdings. They are asking to be robbed,” said Olivier Jakob, managing director of Petromatrix, an energy-research firm.
Unlike other ETFs that invest in gold bullion or stocks, U.S. Oil must keep moving from one contract to the next to avoid taking actual delivery of the oil. U.S. Oil also is designed to track the closest-month’s futures contract so it is forced to move into new contracts each month. The trade made by investors getting ahead of U.S. Oil is the same as buying shares of a stock before it joins a major index, expecting the shares to rise when index funds buy the stock.
The fund last month decided to roll contracts over a four-day period instead of a single day. The test of whether that helps reduce the impact on the market will come Friday, the first day of the next roll.
The founder of the fund, Nicholas Gerber, said he can’t explain the fund’s popularity and declined to comment on the trading probe. Five managers run U.S. Oil out of the Alameda, Calif., offices of U.S. Commodity Funds LLC.
Investors have taken money out of U.S. Oil in the past few days, reversing inflows that reached $3.7 billion in three months, according to Morningstar Inc. The fund has suffered $545 million in withdrawals since Feb. 24, according to National Stock Exchange, a fund-data tracker.
—Brian Baskin contributed to this article.
6.89 ounces of Shiny buys me Dow Jones.
We are moving fast..too fast.
just read the article in the WSJ about the difficulty the O team is having filling second level spots in the big agencies, esp treasury. seems obvious to me they are f’g up right and left at this point and if you are otherwise prominent in your field you could easily flush it all by being associated with this trainwreck in progress
Chi,
Article raises a valid point. I am actually surprised these 2x and 3x ultra short etf’s haven’t bubbled up given the desperation out there. I am probably speaking too soon as it probably WILL happen soon enough.
re#334 Skep would you want to join the crew of the titanic after it already hit the iceberg?
Oil is one of those tricky ETFs due to delivery, same kind manipulation for paper gold as well, no way of knowing if they take delivery at all.
316-Maryjane
No tax deduction in NJ for contributing to an IRA, therefore no tax upon distribution of IRA funds.
DOW 6400!!!
It’s begging for a bear market rally, It needs just one good news that it believes and off to the moon we go.
Problems:
Timmay blew it, can’t put a team together and doesn’t have a plan.
Ben ran out of bullets FFR is at ZERO, he expanded the balance sheet to many trillions. TALF has now failed.
FDIC is afraid to take over a failed big bank cause they have no idea of what to do with it.
Where is this good news gonna come from?
#339
Mark 2 Market will be suspended next week and that will be your bear market rally!!
If we let Citi fail but back all deposits up to 250K.
Everyone will take thir money out and put it in other banks.
That will be over a trillion in deposits and re-capitalize the banks for free.
Citi needs to be a casualty of war otherwise we are going to loose BAC, WFC, Suntrust, USB and many more.
Stu, you apparently can’t reply as an adult, and instead turn to insults.
Shyster Bernard Madoff helped many people, too, but few defend him once revealed as a scammer. Adler’s need for income is not relevant. Her level of niceness is not relevant. Her helpfulness is not relevant. She is willfully and deliberately misleading consumers, and it’s inexcusable.
Additionally, a study of Logical Fallacies would serve you well, since you utilize them so regularly.
Start with the following:
– Ad Hominem
– Argumentum ad Populum
– Straw Man
– Non Sequitur
339
Mark 2 Market will be suspended next week and that will be your bear market rally
You’re the man. Are you taking a position. Are you ultra long financials?
#39 Zack – re: Mark to Market rule suspension- not likely next week.
The House The subcommittee on capital markets has tentatively scheduled the hearing for March 12 to investigate mark to market.
We should be hearing from the SEC, the Public Company Accounting Oversight Board and FASB before any kind of additional determination is made by anyone.
Well I’m all out of the SRS. No more gambling for me. Too many nights when I went home pissed off with a sick stomach.
The Rahway Rising blog reported that Skyview (centerpiece of Rahway is the next Hoboken mindset) has reneged on payments due to the city as part of the redevelopment agreement and is renting unsold units on craigslist. Another example of towns planning redevelopment based on property prices going up 20% each year from 2001 until the end of time.
http://www.rahwayrising.com/2009/03/carriage-city-declared-in-default-of.html
Sell SRS while you can, going down to 20.
Hahaha, Frank is the new Bi.
Frank – one tall house coffee and leave room for milk plz.
From Reuters:
.
“HONEYMOON OVER?
‘At least on Wall Street, the honeymoon is over for President Barack Obama,’ a Business Week magazine column declared”
#343,
I have taken a position in GE from couple of days ago. I might consider DRYS for a high beta play.
No financials for me..
Did the Dow actually finish up at the last minute?
Short squeeze
This is cool site. It shows all house rent/sell craiglist ads on Google map.
http://www.housingmaps.com/
HeHe (353) –
no PPT?? :)
Vic,
You convinced me, no more PPT.
Its either PPT or Short Squeeze depending on whether one is short or long :)
Well I’m all out of the SRS. No more gambling for me. Too many nights when I went home pissed off with a sick stomach
After selling today you can laugh on your way to the bank.
It sure beats having a sick stomach and a brokerage account on life support.
“It sure beats having a sick stomach and a brokerage account on life support.”
That was me in December when I was short during that auto bailout.
Investors Step In To Buy “Toxic” Mortgages
Typically, they pay 40 to 45 percent of the current value of the house.
They show a picture of a stately New Jersey home. The borrowers still owe more than $400,000. But Behin and Bhatia expect to buy it for less than $200,000.
Buying at fire sale prices allows them to offer a break to struggling homeowners.
“A lot of times we go around and offer them 30 to 40 percent below what they’re used to paying right now,” Behin says.
Behin and Bhatia make their money when they take those stabilized mortgages and later sell them at a profit when the market improves.
make
FDIC is afraid to take over a failed big bank cause they have no idea of what to do with it.
They dont have the money to do it. They would have to get money from the treasury before they even attempt it. The FDCI has 20 or 30 billion in cash. Citi would cost them a few hundred billion.
http://allonhill.com/
Gator,
What is with Florida State? Your heart must be breaking, knowing the goodwill between FSU and FU.
“They dont have the money to do it. They would have to get money from the treasury before they even attempt it. The FDCI has 20 or 30 billion in cash. Citi would cost them a few hundred billion.”
Which makes me ask the question wouldn’t the 700B have been better going to the FDIC and letting these banks go bankrupt.
Dow and S&P at twelve year low. Do reverse splits on each stock going back twelve years and share price will increase.
no need for stock splits:
NYSE Relaxes Listing Rules Until June as Stocks Slump (Update1)
http://www.bloomberg.com/apps/news?pid=20601103&sid=aEErPHtEstzE&refer=news
Stu or Gator,
Do you know of any good veterinarians in the Montclair area?
#354 SG
Padmapper puts Craigslist apartment listings on a map.
http://padmapper.com/
Roubini
“Even correcting for the effect of the Chinese New Year, exports and imports are sharply down in China, with imports falling (-40%) more than exports. This is a scary signal, as Chinese imports are mostly raw materials and intermediate inputs. So while Chinese exports have fallen so far less than in the rest of Asia, they may fall much more sharply in the months ahead, as signaled by the free fall in imports.”
http://www.forbes.com/2009/03/04/global-recession-insolvent-opinions-columnists-roubini-economy.html
New thread, move it up.
Tags:
At a bottom in any market it is usual for the hands to change and to have capitulation. In real estate declines, this would be a sudden unexpected large group of sales at considerably lower prices that the last sales. It is the final, I can’t take it, I am getting out. The main problem with this developing is that most people at that point are under water and a bank or banks must ok the sale. I think you are going to see this shortly, as the banks see the funds from the fed, which will let them mark these loans down and get rid of the property. It always happens. It will happen again. Real Estate is a commodity and there is loads of emotion or lack of in the case of people who decide to walk, involved. The only difference as I say here is the mortgage holders, who need to be involve to move this along.
Once you see this quick run, the market will get its’ sea legs and level out.
Richard
I think this blog would make many of you twitch uncontrollably…
http://positiveeconomicnews.com/