From Calculated Risk:
Case-Shiller Prices Fall in May Seasonally Adjusted
Case-Shiller has released the Seasonally Adjusted house price index.
Prices fell slightly in May (compared to April) for the Composite 10 and Composite 20 indexes.
Seasonally adjusted, prices fell in 12 of the 20 Case Shiller cities.
There is a strong seasonal pattern to house prices, and it is important to use the SA data. Unfortunately Case-Shiller did not release the SA data earlier this morning. This has lead to numerous incorrect headlines about prices increasing from April to May. That is correct, if they mention the data is Not Seasonally Adjusted.
From Marketwatch:
U.S. Case-Shiller index down 17.1% in past year
U.S. May Case-Shiller home prices up 0.5%
U.S. home prices up month to month for first time in nearly three years: Case-Shiller
From Standard and Poor’s:
Home Price Declines Continue to Abate According to the S&P/Case-Shiller Home Price Indices
Data through May 2009, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that, although still negative, the annual rate of decline of the 10-City and 20-City Composites improved for the fourth consecutive month in 2009.
…
“The pace of descent in home price values appears to be slowing” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “There is a clear inflection point in the year-over-year data, due to four consecutive months of improved rates of return, after the steep decline that began in the fall of 2005. In addition to the 10-City and 20-City Composites, 17 of the 20 metro areas also saw improvement in their annual returns compared to those of April. Looking at the monthly data, 13 of the 20 metro areas reported positive returns; and the 10-City and 20-City Composites reported positive returns for the first time since the summer of 2006. To put it in perspective, these are the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilizing”.“While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17% on average across all metro areas, so we likely do have a way to go before we see sustained home price appreciation.” Mr. Blitzer added.”
From the AP:
Index shows home prices increase from April to May
A widely watched index shows home prices posted their first monthly increase since the summer of 2006, indicating prices are finally stabilizing.
The Standard & Poor’s/Case-Shiller home price index of 20 major cities released Tuesday rose 0.5 percent from April, but was still 17.1 percent below May a year ago.
From CNN/Money:
Home price index up for 1st time in 3 years
The value of U.S. homes grew on a monthly basis in May for the first time in nearly three years, according to 20-city index released Tuesday.
The month-over-month increase was 0.5%, according to the report from financial data company Standard & Poor’s and economists Case-Shiller. It was the first increase in the monthly index since July 2006.
On an annual basis, home prices in the 20 cities fell 17.1%, but it was the fourth straight month that the year-over-year decline lessened.
From Bloomberg:
Home Prices in 20 U.S. Cities Fell 17.1% in May From Year Ago
Home values in 20 major U.S. cities fell less than forecast in May, reinforcing evidence that the market is stabilizing.
The S&P/Case-Shiller home-price index dropped 17.1 percent from a year earlier, the smallest drop in nine months, following an 18.1 percent drop in April, the group said today in New York. The gauge rose from the prior month for the first time in almost three years.
Price declines may keep moderating as demand steadies and distressed properties account for a smaller share of transactions. Even so, rising unemployment, stagnant confidence and the loss of wealth caused in part by the drop in property values mean a rebound may be slow to take hold.
“Lower home prices and improved affordability should start to stimulate home sales somewhat during 2009 despite higher unemployment,” James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, said before the report.
Economists forecast the index would drop 17.9 percent from a year earlier, according to the median of 32 projections in a Bloomberg News survey. Estimates ranged from declines of 17.5 percent to 18.3 percent.
Compared with a month earlier, home prices climbed 0.5 percent in May, the first gain since July 2006 and biggest since May of that year, today’s report showed. Just six of the cities showed a decline in prices from April to May.
The price figures aren’t adjusted for seasonal effects, so economists prefer to focus on year-over-year changes.
From the Record:
Corzine signs economic stimulus bill
New Jersey businesses and developers are getting more incentives to combat the bad economy under a stimulus bill that was signed into law by Governor Corzine on Monday.
The wide-ranging measure seeks to encourage job creation as well as urban and commercial development, and advance college campus improvements, among other goals.
“Without a doubt, the current global economic crisis has presented us with of one our greatest challenges, but it is also one of our greatest opportunities,” Corzine said during an afternoon bill-signing ceremony in Newark.
“This smart-growth legislation will be the catalyst for an increase in jobs, construction projects and investment opportunities that will not only benefit Newark’s residents, but all of New Jersey,” said state Sen. Ray Lesniak, D-Union, a sponsor of the bill.
But the stimulus measure also allows some towns to establish new consumer taxes in the middle of a recession. And it comes at a time when taxpayers, thanks to state budget cuts, are carrying the weight of cutbacks to many state programs, including property tax relief.
“At a time when people are losing their jobs and struggling to pay their bills and important services are being cut, giving massive subsidies that won’t really create jobs is unconscionable,” said Jeff Tittel, director of the New Jersey Sierra Club.
The bill is also fueling concerns about accountability after last week’s widespread corruption arrests by the U.S. Attorney’s Office. Unlike the federal stimulus initiative, the state effort doesn’t require recipients of the tax breaks and other incentives to meet any new standards on transparency in exchange for government help.
“What’s worse is that no one knows how much we might lose, meaning no one knows the kind of cuts to programs and staff that might be necessary as a result of this law,” said Naomi Mueller Bressler, policy analyst for New Jersey Policy Perspective, a liberal Trenton think tank.
well grim, seems to me they are just
pounding the table wanting us to believe
the bad times are behind us.
jeff, and the rest of the crowd all
saying home buying on an uptick. at the bottom .
They have “think tanks” in Trenton? Who knew?
From the Courier Post:
‘Extreme Makeover’ house in Camco to be sold
Urban Promise Ministries has agreed to purchase the home built almost two years ago in Pennsauken on the popular television show “Extreme Makeover: Home Edition.”
The home was built in August 2007 for the family of Victor Marrero.
Urban Promise will use the home as a residence for volunteers and staff members, according to a news release. The purchase price is $275,000.
Marrero needed to downsize and relocate due to personal and economic circumstances, according to the release.
Re 4: Wasn’t that house appraised much higher when built? Believed the family tried to put in on the market for ca. 400k but it caused such an uproar they took it off the market.
Overcapacity in banking? Say it ain’t so.
From CNBC:
Bank of America to Cut Number of Branches: Report
Bank of America is planning to reduce its 6,100-branch network by about 10 percent, the Wall Street Journal cited the bank’s chief executive Kenneth Lewis as telling investors.
but then how would they have a BAC at every corner of the world?
From the WSJ:
U.S. Effort to Modify Mortgages Falters
An Obama administration effort to reduce home foreclosures by lowering the mortgage payments of struggling borrowers before they fall behind is failing to help as many people as expected.
Among the problems: Some homeowners are being told they must be behind on their payments to receive help, which runs counter to the aim of the program. In other cases, delays are so long that borrowers who are current on their payments when they ask for a loan modification are delinquent by the time they receive one. There is also confusion about who qualifies.
…
Some borrowers say they are being told to stop making loan payments and seek a modification later. Alisha Gorder of Bridgeport, Conn., was referred to Auriton Solutions, a federally approved housing counselor, after she called a mortgage industry hotline because she wasn’t getting anywhere with her mortgage company. Ms. Gorder has been struggling to make ends meet because sales have slid at her children’s boutique and her husband, Christoph, who runs disaster-relief programs for the nonprofit AmeriCares, had to take a 21% cut in compensation.
“Stop paying on the mortgage since you don’t have the resources to cover all your expenses,” an Auriton employee said in a letter to Ms. Gorder in mid-July. The letter advised Ms. Gorder to focus on basic living expenses and to follow up with the lender after she had increased her income.
Ms. Gorder said she was stunned. “To be told I should do something to put my family in this risky position doesn’t make sense,” she said. “I had a lot of faith in the system. For me, it’s really shocking and jarring to see that the system doesn’t work.”
Auriton President Tiff Worley called the letter “poorly worded.” But he added that the letter “correctly recognizes that this person has an upside-down budget situation and is still shorting things to her family every month.”
From the AP:
Testimony: Sens. Conrad, Dodd told of VIP loans
Two influential Senate committee chairmen were told they were getting special VIP deals when they applied for mortgages, an official who handled their loans told Congress in closed-door testimony. Democratic Sens. Christopher Dodd and Kent Conrad had denied knowing they were getting discounts when they negotiated their loan terms.
Robert Feinberg, who worked in the VIP section of Countrywide Financial Corp., testified about the loan terms before the Senate Ethics Committee, and provided the same information in an interview with Republican investigators of the House Oversight and Government Reform Committee. He could be prosecuted for making false statements.
Both senators have said that at the time the mortgages were being written they didn’t know they were getting unique deals from Countrywide, a company that lost billions of dollars on bad loans and since has been purchased by Bank of America.
Dodd, D-Conn., who is chairman of the Senate Banking Committee, still maintains that he got no preferential treatment. Conrad, D-N.D., who leads the Senate Budget Committee, took that position initially, but later acknowledged he did get a special deal.
Dodd got two Countrywide mortgages in 2003, refinancing his home in Connecticut and another residence in Washington. Conrad’s two Countrywide mortgages in 2004 were for a beach house in Delaware and an eight-unit apartment building in Bismarck.
Strategist: GDP Will Be Triple Estimates
Thursday, July 23, 2009 5:17 PM
By: Dan Weil Article Font Size
While gurus such as Bill Gross say the economy is in a phase with a “new normal” growth capacity of 1 to 2 percent, Jim Paulsen disagrees.
The chief investment strategist for Wells Capital Management says we still have 3 to 3.5 percent growth in store.
“Corporations are expecting slack growth in coming years, and have hunkered down,” Paulsen says.
“We’re really spring-loaded for upside surprise rather than nuclear winter.”
What’s going to fuel this growth? Rising exports, he tells Barron’s.
Real net exports already added 0.5 percent to 1.5 percent to GDP since 2007, despite standing in negative territory, Barron’s points out.
That contribution is a result of the trade gap shrinking from $650 billion, or almost 6 percent of GDP, to under 3 percent.
“The phenomenon is one of addition by subtraction, as the negative trade balance detracts less from GDP growth over time, compared to past periods,” Paulsen says.
“Over the next decade, GDP should get a big boost from U.S. trade moving into rough balance between exports and imports.”
Paulsen provides quite a contrast to economist Nouriel Roubini, who wrote in a recent research note that the global economy may fall back into recession thanks to huge government debt, high oil prices, and joblessness.
Who’s buying our exports? Only reason im/ex will become more balanced is because the consumer is broke. We won’t be exporting to Europe anytime soon. What markets are expected to grow?
We could always start a war to destroy the productive capacity of the rest of the world. That one has a good track record.
July 27 (Bloomberg) — Wells Fargo & Co., the bank that boosted its U.S. property-related holdings by acquiring rival Wachovia Corp., is adding to those investments with purchases of mortgage-backed bonds, even as Federal Reserve Chairman Ben S. Bernanke warns of another wave of defaults.
The bank reported its portfolio of real-estate securities, excluding those backed by the U.S. government, rose 6.6 percent last quarter to $41.2 billion. San Francisco-based Wells Fargo has been buying commercial-mortgage bonds because the debt has been available at “good” prices, said Tim Sloan, an executive vice president.
(snip)
Yikes,
from yesterday:
i wish there was a navy seals training class, just for people who wanted to be in tip-top shape and proficient in weaponry. id take it
there are, just not in NJ. they arent official seal classes, but there are a number of tactical training courses round the nation that teach that general skill set. google is your friend
Bill O’Neil: This Is a Bull Market
Wednesday, July 22, 2009 4:37 PM
By: Dan Weil Article Font Size
William O’Neil, founder of Investor’s Business Daily (IBD), says stocks are in the midst of a bull market that began in March.
“The market went through a 17-month devastation period, which probably was the third-worst bear market we’ve had in the last 100 years,” O’Neil told Moneynews.com’s Dan Mangru.
“On March 12, I think it turned, and that was the beginning of a new bull market.”
The Standard & Poor’s 500 Index has gained 41 percent since then.
“Markets are always perceptive. They’re looking ahead,” O’Neil says.
“And it usually occurs right at a time when the news is absolutely horrible. People are worried about the dollar, about inflation, about the government, about Iran.”
He says an IBD study of the worst 20 bear markets in the last 100 years shows they averaged 19 months in duration.
“We’re now way past that,” O’Neil says.
“You take such a battering that finally you have to start coming out of it, because things are really cheap. A lot of the value people have done very well. Some of the high technology cyclical stocks are coming back.”
What most people don’t understand is that business cycles “are always led by innovators, entrepreneurs, new inventions, and they’re still out there,” he says.
The bottom line is that “the bear market is over,” O’Neil says.
“We started the bull market in March. It won’t be a normal bull market because there was so much devastation, and some of the government proposals aren’t necessarily designed to create a lot of jobs.”
He adds that some of those proposals “can create some huge debt and then that may affect things and make recovery a little shorter.”
The government needs to cut back or slow down on some of these things they’re doing, and the economy will start recovering, he advises.
O’Neil offers several tips on stock investing.
First, “stocks are speculative, and you’re going to make mistakes,” he says.
“We say cut every single loss when a stock goes down 8 percent below the price you paid for it. It’s like taking a little insurance policy.”
Second, “learn to read charts,” O’Neil says.
“There are patterns that are repeated cycle after cycle after cycle. That has helped us a lot to be able to recognize that this stock is under accumulation. Something big is going on, and then you buy the ones with the best products, best sales, best earnings.”
Finally, “forget about the PE (price-earnings) ratio,” he says.
“Everything sells for what it’s worth. The better stock is going to sell at a higher PE, the poorer stock is going to sell at a lower PE.”
I am so glad this crisis is over now and prices will start to, how did he word it, show “some kind of gradual improvement.” I’m thinking the gradual improvement will be something like virtually flat for about the next ten years.
Grim, et al –
http://www.nytimes.com/2009/07/27/technology/start-ups/27attributor.html?ref=business
Probably a better idea to just put one paragraph of a story in the comments/as a header … and then link to the story.
The newspapers are going to start coming after websites that print entire stories.
This is what brings me back to this blog site.There is no bias.Put up an article the thread breaks it into pieces.At the end you make your own analysis.
http://www.bloomberg.com/apps/news?pid=20601039&sid=a2X3hNaWcbeg
Commentary – Michael Lewis – Bloomberg
“Bashing Goldman Sachs Is Simply a Game for Fools”
“American stands at a crossroads, and Goldman Sachs owns both of them.”
And….”rounding to zero…..”
(snip)
It’s the balance in trade,it’s what going make GDP higher,though exports still in negative.
http://www.doctorhousingbubble.com/977000-mortgages-in-california-are-toxic-waste-the-misleading-headline-numbers-and-new-home-sales-increase-because-of-a-13000-price-cut/
“977,000 Mortgages in California are Toxic Waste: The Misleading Headline Numbers and How Home Sales Increase Because of a $13,000 price Cut.”
Dr. Housing Bubble.
“With any more spinning we would be on a financial carousel. New home sales data was released on Monday and showed a “whopping” increase in sales. This is the primary headline on all mainstream reports. Little is mentioned that the median price of a new home fell to $206,200 in June from $219,000in May (small caveat.) A drop of over $13,000 in one month apparently is not important enough to discuss.”
The end is nigh…..
http://www.nypost.com/seven/07282009/news/regionalnews/great_balls_afire__181758.htm
19.Cindy says:
July 28, 2009 at 7:19 am
Commentary – Michael Lewis – Bloomberg
“Bashing Goldman Sachs Is Simply a Game for Fools”
C: thx for that
grim (8)-
From day 1 of this crisis, my first piece of advice to anyone in this position is to stop paying the mortgage. Sadly, no company out there will talk short sale, modification or cramdown until they see the incoming money stream cut off.
All gubmint programs to modify mortgages will fail.
You simply can’t refinance negative equity.
I think I miss the fun here. I should visit more often.
how about the modification of the principle
Welcome back, Randi!
From the Record:
6 linked to $1M mortgage swindle
Six people linked to a Hasbrouck Heights mortgage company have been charged by federal authorities with fleecing distressed homeowners out of a total of $1 million in a foreclosure rescue scheme.
The FBI said Monday that in 2005, mortgage broker Daniel Verdia, who formerly owned Challenge Mortgage Services in Hasbrouck Heights, promised to help five financially ailing homeowners by either selling or refinancing their homes.
In several cases, authorities said, Challenge arranged for a “straw buyer” to purchase the homes, and promised to sell the homes back to the original owners after they recovered financially. The straw buyer was promised $5,000 for participating, authorities said.
But all five transactions ended with the defendants taking the proceeds of the mortgage loans and the homeowners defaulting, authorities said.
“To swindle people out of the roofs over their heads is just deplorable,” said Weysan Dun, the FBI’s special agent in charge of the Newark office.
Challenge Mortgage and several associated companies allegedly falsified information on the homeowners’ loan applications. Attorney Philip Blanch of West Caldwell allegedly closed the loans, and his employee, Crystal Paling, allegedly recruited buyers and wrote some of the documents.
“In the end, three of the victim homeowners received no compensation whatsoever for the sale of their homes,” the FBI said in a statement. “The other two victims received a fraction of the money they were owed.”
I should visit more often.
What an odd coincidence, was wondering where you went yesterday afternoon.
Lost!
Where were you?
greedy (27)-
GS modifies their principles on an almost daily basis. Works great for them.
28 Gator
Thanks hun!
Are you guys going to DM at MSG? I emailed you a while back about tix.
30 Grim
Awww Gimmy! :)
Come to think of it, I emailed you a while back. I guess you didn’t get it.
31 Clot
I get sick of some of the bs around here sometimes so I took a break. Why the name change?
From WaPo:
Foreclosures Are Often In Lenders’ Best Interest
By Renae Merle
Tuesday, July 28, 2009
Government initiatives to stem the country’s mounting foreclosures are hampered because banks and other lenders in many cases have more financial incentive to let borrowers lose their homes than to work out settlements, some economists have concluded.
lost (35)-
I got renamed by plume after making some sort of Pol Pot joke. I use the new handle from time to time.
Agreed, there are a couple of real chuckleheads who troll here. I take solace in the fact that there is no internet in the tent cities they’ll soon be inhabiting.
#12 grim –
This time it would truly need to be a World War – it was enough to take out Europe and Japan in the 40s, but now all of Asia would have to be bombed too. :-(
Lost 33 – Not going. The only tickets I currently possess are for the Fall Broadway eye candy spectacular – Hugh Jackman and Daniel Craig in “A Steady Rain”.
For all you depressing former goth kids who couldn’t score depeche mode tickets. Pinfield was hocking a contest on 101.9 this morning. You get tickets and a chance to meet and greet the band. Maybe you can score some heroin off of Gahan, then they give you a gold record. My wife has been dialing feverishly since yesterday.
Yahoo Finance:
China’s New ‘Great Wall’ Built on Easy Money, Speculation and Toxic Debt
http://finance.yahoo.com/tech-ticker/article/291000/China's-New-'Great-Wall'-Built-on-Easy-Money-Speculation-and-Toxic-Debt
“Meanwhile, the murder of a steel executive and rioting in various parts of the world’s most populous nation suggest internal tensions that belie China’s external projections of strength.”
they got depeche mode on craigs list at not that much.
The end is nigh….
http://www.time.com/time/business/article/0,8599,1912981,00.html
40 Pain
That’s brilliant. Thanks so much for posting that.
39 Gator
Sounds like fun. Enjoy!
grim (36)-
A chilling part of that little article:
“But the experience of a separate program run by the Federal Deposit Insurance Corp. could be instructive. After taking over the failed bank IndyMac last year, the FDIC began modifying troubled mortgages held or serviced by the company. Richard Brown, the FDIC’s chief economist, said the agency expects up to 40 percent of those borrowers to re-default.”
41# stu, seriously want to hear from ultrashorts guru like you on FXP and SRS. do you think your beloved that particular etf will be back to $300 as another bsd hoped?
Love the part about what the Jersey flower guy says.
Is it a Mustang without that V8 growl?
EcoBoost technology is set to become a centerpiece in Ford’s fuel economy strategy, but Mustang drivers want none of it.
By Peter Valdes-Dapena, CNNMoney.com senior writer
July 28, 2009: 4:45 AM ET
2010 Ford Mustang
NEW YORK (CNNMoney.com) — Drivers looking for fuel efficiency and performance may cheer Ford’s efforts, but for Mustang fans who demand a burbling V8, fuel economy takes a back seat to tradition.
“Some people just love the sound of a V8,” said Bob Fascetti, head of V8 and V6 engine development at Ford, “They want that exhaust growl that only a V8 can provide.”
For this reason Ford has bowed to Mustang fans’ demands that it stick with V8 power in the Mustang “for the foreseeable future,” in the words of a Ford spokesman, even though the new EcoBoost V6 engine, just introduced the rest of its fleet, already provides more power and fuel economy than the current Mustang V8.
In a recent long-term test drive of the Ford Taurus SHO with the EcoBoost V6, the engine delivered a surprisingly lively impersonation of a V8. That included a respectable rumble during hard acceleration thanks to a simple device that amplifies the proper engine sounds, piping the burbling note back into the cabin.
The 3.5-liter V6 in the Taurus SHO produces 365 horsepower and 350 foot-pounds of torque. Compare that to the 315 horsepower and 240 foot-pounds produced by the 4.6-liter V8 offered in today’s Mustang. Plus, the Taurus is a roomy full-size family sedan and it gets better fuel economy than the Mustang, a much smaller two-door car.
EcoBoost uses turbocharging and sophisticated fuel injection technology to get more power from a gallon of gasoline.
Given all that, the EcoBoost V6 would seem like a good choice for future versions of the Mustang GT. In fact, Ford says, smaller EcoBoost engines may be offered for the economy-minded, but for now the V8 will remain king of the Mustang hill.
To many, a V8 engine remains an important part of the automotive experience, even if something smaller offers largely the same punch when they step on the gas.
Selling flowers at the intersections in Jersey City, NJ, street vendor Herve Gnatsum sees a lot of different mustangs and their drivers over the course of a typical business day. “Usually the ladies like the V6 automatic while the men go for the V8”, observes Herve. “When I see a man driving by in the V6 I always offer them a free flower, like a pansy, because I know they’re probably the sensitive types; you know the type that like to snuggle up with a glass of wine and watch Pretty Woman or the Sisterhood of the Traveling Pants.”
“If you’ve got a retro car with a retro design, that shouldn’t be too surprising,” said Todd Lassa, Motor Trend’s Detroit editor.
WSJ
OPINION: MAIN STREET
JULY 28, 2009, 4:34 A.M. ET.
New Jersey’s ‘Italian’ Problem
Corruption and big government go together.
By WILLIAM MCGURN
For the American innocent abroad, learning what our sophisticated European cousins consider scandalous can be instructive. So in the thick of an uproar involving Italy’s prime minister, a blonde call girl and lurid sex tapes, it was illuminating to flip on the TV and watch what had made the evening news: footage of a large group of politicians being carted off in handcuffs.
These were not Italian politicians, however. These were from New Jersey.
Here in Italy, Prime Minister Silvio Berlusconi has responded to his latest scandal by saying that “Italians want me this way.” Thus far in New Jersey, no elected official has been that blatant. Yet this November’s race between incumbent Democratic Gov. Jon Corzine and Republican challenger Chris Christie will test whether New Jersey voters are fed up with the way their state has become a synonym for corruption.
Much depends on Mr. Christie. As a U.S. Attorney, Mr. Christie put scores of dirty New Jersey officials behind bars. And his lead in the polls—one of them puts it at 12 points—is bound to widen with the indictment of so many officials from his opponent’s political party in an investigation he initiated.
But even harder than winning an election will be transforming the New Jersey political culture. If he is to succeed as governor, he will need to use the remaining time in the campaign to build public support for a radical reform agenda. Primarily this requires bringing home to Garden State voters something he does not yet seem to recognize himself: the link between his program to fight corruption and his program to revive the state’s economy.
That link has to do with reducing Big Government. Big Government is why New Jersey created only 6,800 private sector jobs from 2000 to 2007—while public sector jobs grew by more than 55,800. Big Government is the reason New Jersey ranks as the worst of 50 states on the Small Business Survival Index. And Big Government is a leading reason New Jersey has a “corruption problem” that an FBI agent at Friday’s press conference characterized as “one of the worst, if not the worst, in the nation.”
Sandy McClure, co-author of the book “The Soprano State: New Jersey’s Culture of Corruption,” agrees that big government is a big reason behind the state’s corruption problem. “You have all these little authorities that everyone has to go to for permission,” she says. “Too much government means too many opportunities for officials looking to cash in. And there’s no way that the press can keep track of it all.”
Ms. McClure is right: The more extensive government’s reach, the more opportunities the governing class has to steal from and shake down the productive class. Perhaps the best way to understand this is to look at what the federal prosecutors say New Jersey’s mayors, representatives and officials were allegedly selling when they were busted.
Take Daniel Van Pelt, a state assemblyman and administrator for Lumberton Township as well as the sole Republican snared. Mr. Pelt is accused of accepting a $10,000 bribe in exchange for pushing through approval for a development project in Ocean Township. As the Department of Justice press release reports, “Van Pelt particularly offered his influence in obtaining the necessary permits from the state Department of Environmental Protection.”
Or look at former Democratic state Sen. Wayne Bryant, who on Friday was sentenced in a separate case. Mr. Bryant was found guilty of getting himself on the School of Osteopathic Medicine payroll at the University of Medicine and Dentistry of New Jersey (essentially a made-up job that also fattened his pension) in exchange for steering millions in taxpayer money the school’s way.
The point is that politicians and officials have more to sell in an environment of high taxes, big spending and overregulation—the same things that help explain New Jersey’s anemic economic growth and job creation. When government gets too big and complicated for businesses to get their permits and approvals and funding honestly, the dishonest prosper. And the honest get fed up and flee.
One week ago in the Italian parliament, Mr. Berlusconi’s opponents introduced a resolution complaining that the scandals around him had “objectively weakened the image and authority of the Italian government.” There the Italians have an advantage, because it is hard to imagine anything that could drive the “image and authority” of the New Jersey government any lower than it is today.
That’s an opening for Mr. Christie. His image and authority have only been enhanced by the recent mass arrests. And he would do both the Republican Party and the citizens of New Jersey a favor by reminding them that the freer the economy and more limited the government, the more ethical and productive both will be.
From the comments section attached to the article on WSJ
Petrarch Italo wrote:
Before I start, excuse the rant. I can’t help myself! To the dirty, drunken irish pig who wrote the article. Never forget what I am about to write because there is nothing that is closer to the truth. When Italy was creating western civilization, you barbarians in the rest of europe were eating with your feet. The failed british empire merely acted as the conduit through which Italy’s cultural, artistic, scientific, philosophical, and literary achievements have been disseminated to the world. The Etruscans, Greeks/Romans, Venetians, Florentines, Renaissance, and Scientific Revolution were all based in the world’s most beautiful, historic, and accomplished country in world history. What the f*** have the drunken irish ever done except fill the world with prostitutes, welfare cases, and made running an AA a profitable venture. Italy has unrivalled art, culture, history, literature, inventions, classical/opera music, food, cars, motorcycles, boats, etc. What the f*** does disease infested ireland have???
#49,
“New Jersey’s ‘Italian’ Problem”
Being Italian, I am offended by this article.
Newswires are slow with the S&P CS headlines this morning. I bet a number of regular reporters had already penned stories about further declines. The positive bump likely caught many off guard.
NY prices are flat from May to April, buy now before they go up just like in 2005.
responses
.Gawd, I just love an Irish prostitute. I hate a loud Italian. Where exactly is Italy?
.Bada Bing Bada Boom Petrarch!
Cooper replied:
.You need to do some more reading, Mr. Italo.
The Celts and the Irish had a vibrant culture while your ancestors were still scratching flees on the hillsides that would later become Rome. That they were nearly wiped out by an invasion of mercenaries fronting for the later Roman empire does not make up for the fact that Rome stole most of its own culture from Greece, even up to and including its gods. And let us not forget that we are talking about a city and a culture founded on murder and rape, where human slaughter was considered good entertainment and political differences were settled with daggers.
As for your claims about the Renaissance and the Enlightenment; they are tripe. Isaac Newton was not Italian. Nor was Copernicus, nor Kepler. It was Portugal that opened up the world, and the Spanish who stood behind Columbus. And it was that uniquely Italian institution, the Catholic Church, which did everything in its power to stop the march of science from going forward.
Yours is a fabled history, but a lot of it is just that, fables.
Gene Insogna replied:
.Paul, *do* read your history, which I will not go into since it has little to do with the subject and speaks for itself……….Your comments and those of Italo are based on ignorance and hate which have no place here………..
ago..Charles Smith replied:
.at the risk of inflaming the bull…how about this. What have you done for me lately?
Steven Weisbrod replied:
.The invention of double entry bookkeepiing is a great enough achievement to offset all the rest of the carping here.
51#, you are right. is any italian in recently arrested 44?
Off topic, can anyone recommend a beach on the shore that they like? We’re looking for a weeks vacation at the beach for the extended family (kids ages between 7 and 14 years) and have no idea which beaches will fit the bill.
Thanks in advance
http://hoboken411.com/wp-content/uploads/2009/07/peter-cammarano-the-soprano-hoboken-nj.jpg
I told you all we only have another 10% drop to go, max.
http://hoboken411.com/wp-content/uploads/2009/07/malibu-peter-cammarano-hoboken-nj.jpg
Off topic, can anyone recommend a beach on the shore that they like?
Kids? Rent a house in Beach Haven on LBI.
yep,, beach haven LBI, great for the kids
#49,
“New Jersey’s ‘Italian’ Problem”
70 year old Italian Premier is banging 18 year old model, in NJ the governor is hitting on a 70 year old woman, a major difference here.
Definition of a small-town politico? One going to jail over 10k. The Italians taught the French how to cook when Catherine Medici arrived at the court of Louis XIV and brought her cooks with her.
Bi:
300 is now unlikely, but then again, it was almost just as unlikely when SRS was at 60. Honestly, we have witnessed tons of government intervention that have delayed the inevitable IMO. The real question is, for how long? Consumer spending is dead in the water and makes up a huge portion of our GDP. At some point the commercial REITs are going to have to refinance and consumer spending does not return by then, their rates are going up. I haven’t bought another share since the 30s, but might double down at some point, but not until we see the inevitable deterioration of our markets. Chi put it best. Sometimes the markets disconnect from fundamentals. This is clearly one of those times. Eventually, the reality that 1/6th of our workforce is seeking employment and spending is not returning to housing bubble levels anytime soon will bring us back down a leg or two. We’ll see. Those toxic assets have not disappeared.
“The S&P/Case-Shiller home-price index dropped 17.1 percent from a year earlier, the smallest drop in nine months, following an 18.1 percent drop in April, the group said today in New York. The gauge rose from the prior month for the first time in almost three years.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aubrgv4TH7tE
Recession over.
#64,
SRS will hit 60+ after 1 for 4 reverse stock split, just like FAZ.
Stu 64 – Why do you even bother?
http://www.marketwatch.com/story/treasurys-gain-after-home-price-data-2009-07-28
Treasurys Gain After Home Price Data
WASHINGTON (MarketWatch) – U.S. home prices rose on a monthly basis for the first time since July 2006, according to the national Case-Shiller home price index released Tuesday. “This could be an indication that home price declines are finally stabilizing,” said David Blitzer, chairman of the index committee for Standard & Poor’s, which compiles the Case-Shiller index. Sales slipped 0.9% in April. On a year-to-year basis, prices in 20 selected cities fell 17.1%. This is a slower pace of decline than the 18.1% drop in April.
Thanks Freedy,Grim,
Not very many Beach Haven rentals available in our budget for the dates we want. How are Point Pleasant, Seaside Heights, Wildwood? Ive never been to the shore- just moved here last year.
Thanks in advance again
Updated Veto and Kettle Case Shiller Charts attached here:
http://tinyurl.com/mwlab5
Our predicted light blue dotted line changed from a peak to trough crash of 50% to 43% ending in 2015 in light of the recent green shoots.
But please take that prediction with a grain of salt. Its just a guess.
re #56 tostayornottostay – go to Spring Lake we don’t allow the Italians there.
forget seaside hqts. take life in your hands.
OMG, one good month on the CS index and all the trolls are saying the recession is over.
How about we wait and see how it goes for the next 3 months. If the index continues up then I would be in the camp that the recession is near the end. But after 36 months of declines, one up month is not a trend.
today’s C/S index confirmed my prediction last december: house price will increase by june.
70
For kids I would go with Point Pleasant, but I’ve never been to Wildwood. Point’s boarwalk is smaller, but has enough rides and games to keep kids busy.
Stay away from Seaside unless you’ve had all your shots and own a Camaro.
Hey, That $8000 may actually have accomplished something. A one month bump in prices.
LBI would be my call, followed by Wildwood and then Point Pleasant.
It really depends on the desires of the family. Beach Haven is great if you want a traditional Jersey Shore experience. We prefer the quiet of north LBI where the beach is almost your own and you don’t take your life into your own hands trying to cross the boulevard.
Wildwood is better for the rides and the proximity to AC if one wants an occasional escape.
Point Pleasant gets quite busy but has a much lower fist punch quota as many other shore resorts.
Then there is Cape May if you are the bed & breakfast type.
Did I say fist punch? I meant fist pump.
http://www.guidofistpump.com
can anyone recommend a beach on the shore that they like?
Wildwood always works for kids that age (7&14). Stay in the Crest, it’s a bit nicer and quieter. Lots of condos still available for rent, many with pools (since the water in Jersey can be hit or miss…pollution, cold, jellyfish etc.). The kids will like the Boardwalk.
One piece of advice if you go to Wildwood, go food shopping at home. The supermarkets have not kept up with the condos (people cooking for themselves) and con get very crowded.
OMG, one good month on the CS index and all the trolls are saying the recession is over.
Read the CR piece.
Media is reporting a month over month change without using the seasonally adjusted numbers, a big no no.
Prices, like volume are seasonal. If you don’t use the SA numbers, the only comparisons you can reasonably make are year over year.
The S&P CS SA numbers, which were released later than usual (which is likely the reason for the misreporting), were negative for the most recent month.
Consumer confidence well below consensus.
Consumer Confidence – Level
Prior: 49.3
Consensus: 50.0
Consensus Range: 47.0 to 54.0
Actual: 46.6
I personally think this has a lot to do with the ‘real’ economy and not the economy that is being reported by the MSM. I’m sure if they interviewed only employees from any of the bailed out Wall Street firms, their consumer confidence would be significantly higher.
NY Metro Area Commutable was down month over month, using the SA data. It was also down, year over year, using the NSA data.
Shoot, look at Kettle/Veto’s last chart to see the giant CS uptick. Whoop de friggin’ doo.
tostayornottostay…try Cape May, we love it. You can opt to go to the boardwalk at Wildwood one night if you can stand it.
this morning on bloomberg radio, one gold guru was so blunt saying gold would go to 850 short-term.
The true trolls are the people who wish for further economic malaise, who wish to see people out on the streets, who seek solace in the financial destruction of their betters. They are the trolls.
Wow.
Barton Biggs says to get yourself a Nompound.
http://www.foxbusiness.com/story/investing-rules-end-civilization/
Consumer Confidence commentary according to Bloomberg. How strange, with one report they have gone from bull market rally to double-dip recession. Perhaps Bi’s black box is still in working order?
Highlights
Right when investors are gaining confidence, consumer confidence is eroding. The Conference Board’s consumer confidence index fell a sizable 2.7 points to 46.6 in July, making the hope of May’s 54.8 peak a dim memory. The assessment of the current jobs market is the central weakness, with 48.1 percent of consumers saying jobs are hard to get, up from 44.8 percent in June and 43.9 percent in May. The outlook for jobs isn’t any better with fewer, 15.0 percent vs. June’s 17.5 percent, seeing more jobs six months out. This is spilling over into expectations for income where only 9.5 percent see an improvement six months from now, down from June’s 10.1 percent. More also see a decrease in their income, at 18.8 percent for a 6 tenth increase.
Housing data has been on the mend but readings in this report don’t point to any further improvement as only 2.1 percent say they plan to buy a house, down 5 tenths from June. Fewer also expect to buy a car and fewer expect to buy any major appliances. Inflation expectations are declining, reflecting the drop in pump prices and also the weak business conditions. Twelve-month inflation expectations are at 5.5 percent, down 4 tenths from June.
This report, together with the Reuters/University of Michigan consumer sentiment report, are pointing unfortunately to a double-dip recession, at least they are raising that risk. Job losses may be easing but workers, many of whom are now falling off the dole, are having a hard time finding jobs. Stocks and commodities fell in immediate reaction to the report while the dollar gained — all evidence of risk aversion.
[88] beater
How does one become a “better”? I used to be one of the downtrodden (I think), but now I think that I would be a pretty good better.
Is that something I can take a test for, or does one have to be born into it?
Bi,
I heard the Kitco guy on Bloomberg as well. He actually said that gold would trade in a range from 850 to 1050 for the next 12 months. You choose to hear what you want to hear. A lot like my 4-year old.
“one gold guru was so blunt saying gold would go to 850 short-term.”
bi,
I hope.
The Captain has just announced great news that the plane is no longer crashing at 1,000 ft per minute, we have slowed our rate of decent and have almost leveled off at 9,999 ft. You can now take your oxygen mask off.
However the Fight Attendants won’t
be serving beverages anytime soon and the Captain says from the flight deck to keep seat belts fastened.
Although the plane is now somewhat level we are still in the middle of a Category 5 Hurricane with a slow fuel leak miles from any runway for a safe landing.
Sean,
We know you have a lot of choices, but thank you for flying with Colgan Air.
Sean [93],
Spot on.
Shelley re: Chatham
Two UCs yesterday, both short DOMs but opposite ends of the spectrum.
50 Rolling Hill, OLP $1.5m, DOM 20. Assess (2005) $1.134m, c. 30% up.
8 Whitman, OLP $530k, DOM 13.
Assess (2005) $685k, c. 20% down.
Don’t know either seller’s situation personally but I suspect this is the volume one is going to see in town. A price insensitive buyer hitting above value to get a ‘premier’ home or a forced seller sucking it up and hitting the market bid.
No way Linden, Highland, or Chandler should have sold at their recent prices but they did. Chandler was particularly crazy, a bidding war at 4$2.0m…..
Ocean city got good review on money magazine
Hey, Kids! Here’s some green shoot material: AZ lenders bringing back recourse mortgages. Now, not only can you FK, you can become a debt slave for life.
Good times.
http://housingdoom.com/2009/07/26/arizona-set-to-implement-recourse-mortgages/
Why will the state of AZ protect the bank when the bank is holding 20% of the value plus collateral.
If the bank made the wrong bet they can sell the mortgage to a collector and harass the borrower for life.
yo’me (99)-
I think the statute of limitations on collecting a mortgage deficiency is six years.
Attorneys, am I right?
Somebody spin this positive:
http://www.zerohedge.com/article/cmbs-delinquency-yoy-change-585
This is a good piece on the great recession from this morning’s ws journal.
It makes the point that recent recessions have recovered without employment increases because of our diminished manufacturing sector.
http://online.wsj.com/article/SB124874235091485463.html
Re 102, sometimes you have to prune a green shoot to grow a red wood.
John (103)-
Sometimes, when you spill 24DT everywhere, all the green shoots die and never come back.
Tostay…
Wildwood is day trip worthy for the Boardwalk, but if you stay, be prepared for lots of beach bling, tats and metallic bikini’s on chemically stained Dirty Jerz Moms.
If you can find a last minute deal on VRBO/Home Away, try for Avalon or Stone Harbor. Avalon is my personal fave; best beach in NJ with wooded dunes and a completely safe Mayberry-like atmosphere. As bizarre as it may sound to some, 10 year old kids travel between the beach and your house unescorted in Avalon…it’s been that way since I was a kid in the 70’s.
I’ve done LBI and PP (cousins have a place in Beach Haven); nice towns but nothing like Avalon…
Clot (101):
I’m positive this story will be ignored by the MSM.
tostayornottostay says:
July 28, 2009 at 9:40 am
Thanks Freedy,Grim,
Not very many Beach Haven rentals available in our budget for the dates we want. How are Point Pleasant, Seaside Heights, Wildwood? Ive never been to the shore- just moved here last year. Thanks in advance again
TSONTS: Many of the comments I hear from people that stay north of Exit 63 (LBI) is that they didn’t drive far enough south. Note, for a beach rental not someone’s home. Also note that LBI and everything south of AC is actually much closer to Philly.
I think that you really need to find something in LBI or Wildwood. Just find something decent on LBI is probably your best bet. NJCOAST? Where are you?
“I’m positive this story will be ignored by the MSM.”
Stu, Clot,
i agree media and corporations and gov all colluding to generate profit, hide flaws and exaderate the positives. Its alot of bologna. Its deception.
But isn’t this a reason to be extremely bullish? Its almost like our economy can’t lose because we make up the rules as we go.
“Its almost like our economy can’t lose because we make up the rules as we go.”
A lot like China?
Pol Clot says:
July 28, 2009 at 10:56 am
Somebody spin this positive:
http://www.zerohedge.com/article/cmbs-delinquency-yoy-change-585
DONE
A good amount of this effect is on the books of companies that have already reported 2Q09 results. As a result, it is already priced into the stocks and bonds of these entities and reflected in pricing data. The market rallied in the face of this information.
You can argue that the March lows priced in people’s expectations of what was to be seen in June 2009 and later, and these numbers are better than expectations.
Good enough?
Re: Jersey beaches
Ocean City has a nice boardwalk for the kids and (I think still) is a dry town, so more family-oriented and nicer than Point Pleasant. Beaches can be a little crowded as I remember, but not as bad as Point Pleasant.
Wildwood beaches are huge and the boardwalk is good, but overall I remember it as less nice than Ocean City.
Cape May is a really nice, pretty town.
Years ago we used to stay in Avalon or Stone Harbor and we’d just drive to the Ocean City or Wildwood boardwalk at night with the kids.
A lot like China?
Stu, as the incumbants, we certainly have the upper hand in that relationship. China is a long term threat mo doubt but all their talk about tanking the dollar is garbage. Even after Britain lost world superpower status, it still took 50+ yrs to convert reserve currency from pounds to dollars.
chi (110)-
Sorry; not buying that for a second. Loss is loss.
And, accelerating losses are nowhere near being baked into the cake.
Chi (110)-
Not to say that that’s not a good spin.
ChiFi:
That’s a good example of the positive spin, but the whole terminology of any information being priced into the current value of the equity is really just restating the obvious. In actuality, everything is always priced into the current value of a stock.
The only thing I care about with equities is earnings. And in the REIT sector, the earnings are either non-existent or illusory.
Anybody care to invest in this ticking time bomb of a mortgage REIT?:
http://www.google.com/finance?client=ob&q=NYSE:NLY
Look at the last couple quarters’ performance here. How do the fundamentals justify any number in the green?
Stu (115) –
In actuality, everything is always priced into the current value of a stock.
Isn’t that the cornerstone of the Efficient Market Hypothesis? If that was the case, then no one would ever be able to beat the market. The market was making its all time high in the Oct 2007, IIRC. I did not see any evidence of the market even beginning to price in a recession which officially has now been deemed to begin in Dec 2007.
[14] kettle
“i wish there was a navy seals training class, just for people who wanted to be in tip-top shape and proficient in weaponry. id take it”
“there are, just not in NJ. they arent official seal classes, but there are a number of tactical training courses round the nation that teach that general skill set.”
It occurs to me that if we generate enough interest in our little nompound militia, we can probably get a group discount!!!
But correct me if I am wrong; isn’t SEAL training mostly underwater ops??? Being able to mount a scuba insertion is hardly relevant for special ops on terrain or in an urban setting.
Seems to me that any special forces training would be sufficient, and I would also suggest that it focus on defensive tactics, security, and SERE.
Oh, man. Now some of the idiots I know are going to see these headlines and be on my back about the need to “buy now or be priced out because the market is back.” How annoying.
Victorian (118):
Yes it is. But people only use the excuse that the impact is already priced into the stock when it is to their advantage. I was surprised that this was the positive spin that ChiFi used. I think if he was asked not to spin it and provide justification, he would come up with something more original. With that said, I don’t think he would share his honest opinion on the matter as it is not smart for him to do so.
“buy now or be priced out because the market is back.”
I dont think that type of hype is coming back.
Housing crash is like dot com crash. Housing will not be an exciting topic anymore for buyers or sellers or renters or investors. it will just fade away from limelight as the years pass.
Victorian says:
July 28, 2009 at 11:31 am
Stu (115) –
In actuality, everything is always priced into the current value of a stock.
Isn’t that the cornerstone of the Efficient Market Hypothesis?
STRONG FORM
I did not see any evidence of the market even beginning to price in a recession which officially has now been deemed to begin in Dec 2007.
WHAT WAS ON BANKS BOOKS WAS NOT PUBLICLY AVAILABLE
Veto,
Thanks for the comment, but you don’t know the people I know! A friend of mine is buying a two bedroom townhouse for 300K and she thinks she’ll be able to get rid of it in three years…
Robert Shiller, the Yale economist who co-founded the index and who’s famous for warning that the housing boom was, in fact, a bubble, said the decrease in foreclosure sales does show up in the index statistics as a plus for home prices. That’s one reason he did not want to sound too optimistic; foreclosures could take off again.
“And we could get more economic bad news, but it does look encouraging,” he said.
He added that he thought that Washington’s efforts have boosted the nation’s spirits, an important factor for the housing market.
“The government has done a lot to support the housing market,” he said. “Confidence has improved. People are talking about ‘green shoots.’ People are thinking it’s time the recession came to an end. The stock market is up
Stu says:
July 28, 2009 at 11:40 am
Victorian (118): I think if he was asked not to spin it and provide justification, he would come up with something more original. With that said, I don’t think he would share his honest opinion on the matter as it is not smart for him to do so.
Stu: My opinion is what I wrote yesterday relative to Rosenberg. We have retraced an overreaction, but I think we will melt up.
[14] kettle,
Actually, it reminds me of an idea I had that would help with the deficit: Allow the military to permit civilians to enroll in special session of boot camp on a paying basis.
Set aside parts of the year for civilian-only sessions. The civilians go through basic and graduate but because they aren’t inductees, and were not paid for or received compensation, they aren’t in the military. They get a nice certificate and go home.
The DIs probably won’t like it much at first, but it is job security when the military cuts back, and in reality, the quality of vacationers will probably be as good as the regular inductees. Certainly, they’d be motivated. The only downside would be that PT would probably have to be scaled back some.
Upside is that these individuals could later have the option of being in the reserves or guard, and they would have paid for their own traning.
“I did not see any evidence of the market even beginning to price in a recession which officially has now been deemed to begin in Dec 2007. WHAT WAS ON BANKS BOOKS WAS NOT PUBLICLY AVAILABLE”
Dow crashed over 50%. i would say the crisis was priced in and the banks books could have been priced into that. But guvt rescue spending also got priced in to offset the crash.
We’ll soon see if the worst is behind us or in front of us, but at the very least they are buying time.
One possible scenario, according to Shiller, is that home price declines end and then nothing happens for several years, the “L-shaped” recovery.
“Then, we can stop talking about home prices and get onto more interesting topics,” he said
“and she thinks she’ll be able to get rid of it in three years…”
Ewelli, you cant know for sure if she wont be able to. Ive got to believe the place already took a 10-25% hit from peak. A 40-50% real estate crash is not guaranteed.
Depending on int rates, inflation, unemployment. Anything could happen, including a stabilization from here.
i make no predictions. and if i did, they’d probably be wrong.
One of the most positive things the government has done, according to Shiller, was to take control of the failing mortgage companies Fannie Mae and Freddie Mac.
These were government sponsored enterprises that guaranteed a flow of mortgage lending by buying or backing mortgages in the secondary market. Without government backing up these companies, mortgage lending would have dried up, which would have devastated home sales.
Chifi:
I can not accept your line where you write “WHAT WAS ON BANKS BOOKS WAS NOT PUBLICLY AVAILABLE”
Has this changed in any way? We still can not see what is on the banks books, so how can what we still don’t know be priced in?
Someone please remove this nail from my shoe, because I can’t stop running in circles with this.
John says:
July 28, 2009 at 8:44 am
they got depeche mode on craigs list at not that much.
JJ: I unloaded $950 worth of Depeche Mode tix for $1500, so I am going to MSG and the Borgata effectively for free.
Stu says:
July 28, 2009 at 11:52 am
Chifi: I can not accept your line where you write “WHAT WAS ON BANKS BOOKS WAS NOT PUBLICLY AVAILABLE” Has this changed in any way? We still can not see what is on the banks books, so how can what we still don’t know be priced in?
Ask Ken Lewis his opinion….we don’t know, but we have to assume kitchen sink for calendar 4Q08 and 1Q09 results.
When Shiller starts hedging his negative outlook, thats a sign that stabilization and stagnation is a possibilty.
He is no hack in my book.
ChiFi:
“JJ: I unloaded $950 worth of Depeche Mode tix for $1500, so I am going to MSG and the Borgata effectively for free.”
You are too funny. Now make sure you report this extra income or else Clot might report you like he did the apple mortgage cake lady.
134: why assume kitchen sink?
133: When Craigslist posts start paying to take tickets, let me know.
Tostay,
I grew up in and around Seaside. If you like sleezy (and what teenager looking to get laid doesn’t) it is great. For a family day trip, especially one that involves time at Island Beach State Park, it is also fun (with great ride deals during the dat). As a place to rent a house or room and stay for a few days? Fuggedaboutit! LBI and points south are better for families. The exception to that rule is Ocean Grove. It is WONDERFUL for families, although parking can be a royal pain. also, do not try going on the beach Sunday mornings without a copy of the AG’s Public Trust Doctrine decisions, and your lawyer in tow as the religious police will call the secular police to eject you (I actually did both and they had to relent but wanted to see me boiled in oil).
That aside, OG is a gem and a throwback to years past. It is also the prettiest town along the Shore.
Chifi- I’m at the beach!
TSONTS-
I can’t comment too much on Ocean County beaches. My grandparents lived on LBI (bay side) when I was a kid and I loved visiting there. But that was the 60’s and I understand it has changed alot. I still go every October to the Chowder Fest!
Wildwood is where my kids had their after-prom parties. Twenty kids piled into a rental for a weekend rite of passage where things went on that they still a won’t tell me about- 10 years later.
Judging from the comments coming from the story of the American Idol hit and run in Seaside it sounds like the place has become pretty run down.
As far as Monmouth County goes.
Belmar- lots of visitors-not family friendly- but probably has the most weekly rentals.
Avon- right next to Belmar. Great family friendly beach. Weekly rentals are scarce. Maybe one of the summer rentals still sitting on the MLS would consider a weekly.
Bradley Beach- same as Belmar- but tamer. Weekly rentals available.
Ocean Grove- try the B&B’s there. Some are very reasonable and are kid friendly. Nice beach. Near Asbury restaurants. Quaint town- the 14 year old will be bored and hate you for bringing him/her there.
Asbury Park- Stay away except to go to the boardwalk and Cookman Ave restaurants. Although the beach there is beautiful- the town is not for tourists who don’t know their way around.
Spring Lake, Loch Arbour, Allenhurst, Deal, Elberon, Monmouth Beach- never mind.
Long Branch- caters to lots of visitors although I think mostly day trippers. Mostly whole summer season rentals.
Sea Bright has some weekly rentals. Nice shore town. Close to Sandy Hook.
“WHAT WAS ON BANKS BOOKS WAS NOT PUBLICLY AVAILABLE”
Chi,
Nor was/is the crap not on banks books.
Ocean Grove…. Quaint town- the 14 year old will be bored
I’d second that. We used to call it Ocean Grave, home of the newly wed and the nearly dead.
#130
Veto,
I think it was less than 10%. She has no problem (actually, it’s her husband) has no problem giving back what people owe the bank. There’s no way this place is worth what they’re paying (I should say borrowing) with only 3.5 down and closing costs rolled into the loan. It’s nuts.
Diana Olick was the only one to mention that a wave of ALT-A and Option ARMs were coming and to keep that in mind when attemtpting to predict the direction of the housing market. All the upscale academic yahoos were stating that the bottom is in and the resession is waning.
EWellie,
Well overpaying for a home is different than betting on price appreciation.
She should find her own comps on zillow, not the ones the realtor provides and lowball the hell out of it. Of course she would do this unless she is stupid and blind.
The 3.5% downpayment is the bank’s risk, not hers so i see no problem there.
You need to help her calculate the PITI/Income ratio and make sure she and her husban are below 35%. If not, then she needs to be 110% sure of employment for at least 5 years. and if not, then she really is stupid and you should bite your tongue without getting involved.
No need to worry. After all, Facebook is valued at 6.5B.
“U.S. factory output at its lowest point in 60 years, and even massive job cuts haven’t produced profits.”
http://www.charlotteobserver.com/business/story/856594.html
Option ARMs: Good News, Bad News
by CalculatedRisk on 7/27/2009 04:04:00 PM
The good news, according to a Barclays Capital report, is not as many Option ARMs will recast in 2011 as forecast earlier by Credit Suisse.
The bad news is borrowers are defaulting en masse before the recast.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aZKwTlyVwvxo
July 27 (Bloomberg) — Wells Fargo & Co., the bank that boosted its U.S. property-related holdings by acquiring rival Wachovia Corp., is adding to those investments with purchases of mortgage-backed bonds, even as Federal Reserve Chairman Ben S. Bernanke warns of another wave of defaults.
The bank reported its portfolio of real-estate securities, excluding those backed by the U.S. government, rose 6.6 percent last quarter to $41.2 billion. San Francisco-based Wells Fargo has been buying commercial-mortgage bonds because the debt has been available at “good” prices, said Tim Sloan, an executive vice president.
“We believe that there are good opportunities in investing in those securities,” Sloan said in a telephone interview on July 23. “There are good opportunities across the board today if you get the right people who can underwrite credit and can look into the deals and make sure you really understand what you’re investing in.”
Wells Fargo is betting it can pick up discount-priced assets amid the recession that began in December 2007. It runs the risk of getting caught in a new round of defaults as more commercial mortgages turn sour. Properties valued at more than $108 billion are now in default, foreclosure or bankruptcy, almost double the figure at the start of the year, Real Capital Analytics Inc. said earlier this month.
“It runs the risk of getting caught in a new round of defaults as more commercial mortgages turn sour.”
They need not worry. The potential of default is already priced in.
And besides, when all else fails, the Choosen One has promised us hope and change:
http://finance.yahoo.com/insurance/article/107408/5-freedoms-you-would-lose-in-health-care-reform.html?mod=insurance-health
148: Prospective bailout is priced in.
There was an article last week how MS benefited from the last turn of CRE paying 70 cents to the dollar of current value and making tons of money at the turn around.Banks don’t want to miss this boat.
From the article, # 146;
“About 40 percent of borrowers with option ARMs are already delinquent, and “many” of the others will start missing payments before their obligations change, the Barclays mortgage- bond analysts wrote in a July 24 report.”
Bottom? Alt-A, option arm’s, pick a payment, neg amort, etc.., will make subprime appear to be a walk in the park. If anybody thinks that years of fraud, lies, leverage, credit/debt explosion and manipulation will unwind in 2-3 years time, you are sadly mistaken. We will continue to slide down the slope of hope for years to come.
MS=GS
NJC,
Wiggle your toes in the sand for me. I am trapped at the computer for several more days, without any chance of getting beach time until this current project is out the door.
About your comment that, “Judging from the comments coming from the story of the American Idol hit and run in Seaside it sounds like the place has become pretty run down.” The sad thing is that Seaside is a lot cleaner and “in repair” than it used to be. Many of the most run-down properties have been bulldozed and rebuilt in one form or another. Nevertheless, it is a place for a day trip, not an overnight, unless one is focuded on intoxication and fornication — think a municipal D’Jais that just goes on for block after block. As a teenager and in college, it was very appealing.
BC,
Get with the program and become assimilated, will ya? Up. Up! Everything is moving upward because B.O. has brought us “Hope.” No lowercase “h”s for him. Nosiree Bob.
Debt doesn’t matter. Loss of manufacturing doesn’t matter. Alt-A does not matter. Hope, is all that matters.
So, roll another one. Just like the other one. You’ve been holding onto it, and we sure would like a hit of Hopium.
Shore [155],
Yes, stupid me. Brain cramp.
BC (145) –
After all, Facebook is valued at 6.5B
Party like it is 1999!! How the hell Facebook can make money is beyond me. Maybe that is why I am a bitter renter.
As the Rolling Stones might have sung:
Here comes the 19th missed-called bottom
Oh, whose to bla-a- me, the prices are still insane
EWellie (124)-
So, take the other side of your idiot pal’s trade.
Check the CME for ways to short residential RE.
Vic [157],
A snapshot of the American economy. F-Book valued at $6.5M, GM, the heart and soul of America, valued at $300M.
What is good for GM is good for the country?
yo’me (131)-
From where I sit, mortgage lending in many categories HAS dried up.
Phony/Fraudy are zombie bankruptcy/bailout vehicles, soon to be joined in the ether by FHA, which has been primed and spring-loaded for thermobaric detonation.
Why is it that every month, we get this “fantastic news” in the housing market from the MSM? It’s been going on for 2 years now. The housing bulls have still not been actively eliminated. No bottom…no chance at all. They are like a coach in the 9th inning with 2 outs and a full count down by 11 runs screaming “there’s no time in baseball”. Actually, that’s a bad analogy, unless the government decides to permanently postpone foreclosures.
Bi
With no bad news for the rest of the day,Dow will be flat by 4.
Libor, the key London interest rate that determines many mortgage loan reset rates, dropped to below 0.50 percent for the first time.
The work by the central banks to end the two-year recession appears to have been positive, Bloomberg
http://moneynews.newsmax.com/markets/libor_record_low/2009/07/28/240852.html
hey Ben, what are your thoughts on the golden crest neighorhood in hamilton? I thought you were familiar with that area?
Shore (155)-
Would’ve figured you to be the last guy quoting Lowell George.
This definitely DQs you from Congress.
an interesting take on the likely duration of the supposed stabilization of the housing market:
“Sell Your House Now”
http://www.businessinsider.com/sell-your-house-now-2009-7
Expect Housing Prices to Continue to Rise
http://seekingalpha.com/article/151822-expect-housing-prices-to-continue-to-rise
“Robert Shiller on why house prices will continue to decline”
http://christopherfountain.wordpress.com/2009/06/06/robert-shiller-on-why-house-prices-will-continue-to-decline/
“if interest rates double, then the house would have to fall roughly in half to be affordable to buyers”
Skep, 167 – i can appreciate the focus on long term secular int rate trends in that article but they are igoring a huge piece of the equation.
If int rates double, its most likely because of inflationary pressures, which will push upward on the price of houses.
off topic but is Tony Bernazard going to join the UFC now?
Beaches in NJ, as someone who has spent a whole lot of time on the Jersey shore as well as in DE/MD. I can list it out. Wildwood has nice beaches but is crowded and honky tonk, The Crest or North Wildwood is the only areas I would recommend staying in as wildwood itself is kind of run down, the board walk is the nice area of Wildwood, not great, don’t want to be close to the boardwalk. Cape may is one of my favorites not much else like it in NJ or on the eastern seaboard for that matter. Ocean City I’d lump in a wildwood crest like category, nice clean beaches, the boardwalk isn’t so honky but it is crowded. Stone Harbor and Avalon are very nice as well, with avalon being nicer as the beach is less crowded. Longport and parts of Margate are really nice, beaches are good and has good proximity to AC. Brigantine is a mixed bag, it’s nice but isolated and kind of quiet, beaches can be crowded. In my mind at the Jersey Shore your best bet is Cape May or around AC(Longport, Brigantine, OC), the roads are better, getting out to LBI while it has nice beaches takes longer than getting to Longport and is relatively isolated. Food hands down is really only good in Cape May and AC, don’t attempt a nice meal elsewhere it doesn’t end well. Your cheapest deal is a condo in Wildwood crest, but it is crowded and to eat out in Cape May you need to go over a bad toll bridge, where traffic backs up.
Nom 127
Allow the military to permit civilians to enroll in special session of boot camp on a paying basis.
Interesting but i have serious doubts about this ever working. If you want to understand basic training better, then take a look at a book called On Killing by Dave Grossman. Basic training is both mental and physical conditioning. The combination is used to mentally condition certain responses and behaviors. Very few people who were paying would willingly stay for any period of time. That is unless they like discomfort/pain, both mentally and physically.
The two main principles that are taught/conditioned are “group before individual” and “dehumanization of Targets“. The average human will generally hesitate to kill another human if they are not an immediate direct threat to their own well being. By conditioning someone to see an enemy soldier as a “target” or “objective” you bypass the mental blocks that normally cause people to avoid killing. At the subconscious level, killing a target or objective is no more bothersome then stepping on an ant or shooting a deer. The problem is our military never figured out how to mitigate the physiological damage that results for this conditioning.
From my personal experience in basic training you have 3 main types of people who go through.
1) those who embrace the conditioning whole heatedly and replace their core behavior ideals with what they learn in training. these people tend to be the average to below average intelligence individuals (i.e. your drones).
2) Those who fight it and grudgingly follow the rules in order to avoid punishment (the person of average intelligence to slightly above average who has an independent streak)
3) Those who are above average intelligence and essentially segment themselves mentally. They adsorb the training but pick and choose what parts they want to adopt and are able to fit in by “playing along” when needed. These are often the guys that to end up in the seals or other various SF.
From my experience a good Drill Instructor can pickout which of the 3 types a particular recruit may be in a fairly short period of time. You will be trested somewhat differently depending on t he type. From what i know some version of recognizing and managing different mental types is taught.
on a side note NEVER, piss off a female DI. The males are mean. the women are Vindictive. There is a very big difference. The male DI will punish you once for stepping out of line, the female DI will not forget it and you will pay for the mistake for a very long time.
Does anyone have an opinion on living (not vacationing) in Monmouth Beach?
Veto 170,
Long term trends show that interest rates tend to be the driving factor not prices. prices tend to move in the opposite direction of interest rates.
I dont have my data with me now, but will try and toss it up later
kettle1,
I believe you have just described all females.
—
…the female DI will not forget it and you will pay for the mistake for a very long time.
Historical Census of Housing Tables
Home Values
http://www.census.gov/hhes/www/housing/census/historic/values.html
Adjusted to 2000 dollars
United States $119,600 $101,100 $93,400 $65,300 $58,600 $44,600 $30,600
Unadjusted
United States $119,600 $79,100 $47,200 $17,000 $11,900 $7,354 $2,938
kettle,
I’m familiar with the general concept.
its all right here.
http://www.businessinsider.com/sell-your-house-now-2009-7
but there is no way the relationship is that severe to say that prices get cut in half when rates double.
[177],
Piss poor performance when you consider the cost to carry. Why don’t you compare this laggard to stocks, over the same time frame.
By the way, are you trying to break the record for most repeated posts ever?
Inflation can’t push up housing prices if nobody can afford the houses. Housing is still largely unaffordable in NJ. Good luck finding qualified buyers if it gets worse.
Veto, IMO, if one puts down 3.5%, one cannot afford a house. Pushing their monthly limit, which they are, is insane, and I can’t believe FHA is insuring these loans. As far as employment, she has a new job–it’s only been 3 months. He’s been in his a bit longer. Not a good idea–especially since their salaries are equal.
It’s situations like this that are keeping prices around here much higher than they should be. I’m beginning to think NJ should rename itself “the thick-headed state.”
Veto, don’t really know much. I think it’s got a homeowners association, which my fiancee and I are hell bent on avoiding. I view them as the antichrist. As far as the area, it’s pretty safe. I don’t think it’s in the Steinert school district, which is a negative. You are next to those parks, which is nice. Easy access to all those stores along 130. Haven’t looked at any prices from that area recently but I’m sure they are still asking too much.
#175,
Kettle, with a few rare exceptions, you are right–interest rates go up, prices come down. I don’t need to beat the dead horse again, but it’s much better to have a lower price and a higher interest rate than the other way around…
BTW, even some realtors I know acknowledge when rates go up, prices come down.
Nom
But correct me if I am wrong; isn’t SEAL training mostly underwater ops??? Being able to mount a scuba insertion is hardly relevant for special ops on terrain or in an urban setting.
Seems to me that any special forces training would be sufficient, and I would also suggest that it focus on defensive tactics, security, and SERE.
yes, SEAL training has a significant amphibious component. I woulds suggest that many types of civilian SF training are less then optimal unless you want to set up a real militia and train regularly.
A more functional training might be a mixture of hand-to-hand combat training that includes full contact, basic personal security such as situational awareness and basic conflict psychology, as well as basic marksmanship.
In short, yes SERE elements, defensive tactics and basic security are what you want.
Back to mopping the floors ;)
BC Bob says:
July 28, 2009 at 1:23 pm
Vic [157],
A snapshot of the American economy. F-Book valued at $6.5M, GM, the heart and soul of America, valued at $300M.
What is good for GM is good for the country?
—————-
I would disagree with this. At worst, GM cannot compete on cost or quality with major Japanese manufacturers. At best, GM is learning to be cost and quality competitive. But this firm is not the soul of America in its current incarnation; the soul of America in my mind has always been the creativity of its people and the ability of its economic system to turn this creativity into something valuable. Ford didn’t invent the car; he pioneered the efficient assembly line — what Americans bought was the car, but what made Ford big was the idea behind the line. Same thing with Apple — which is more valuable, the firm that assembles Apple’s products, or Apple, which designs them? It’s not the physical thing that defines American strength, but the ability to transform an idea into an economic concept. That is what makes America strong.
In an environment where interest rate double, the prices of everything will be skyrocketing and you’ll be sure to see housing go through the roof in nominal terms. There is a currency crisis that awaits us and anyone looking to buy with the bank’s money should surely make their purchase before that spike happens. It could be over a year away…so not much to panic about. Put your down payment in better inflationary hedges, and even if you miss the opportunity to buy at a low rate, chances are, your down payment will pay for the entire house anyway at that point.
If Janet is Yellen, you’d best be sellin’:
Presentation to the Oregon Bankers Association Annual Convention with
the Idaho Bankers Association
Coeur d’Alene, Idaho
By Janet L. Yellen, President and CEO, Federal Reserve Bank of San Francisco
For delivery on Tuesday, July 28, 2009, 9:35 AM Pacific time, 12:35 PM Eastern
On CRE exposure:
“The next area of significant vulnerability for the banking system, particularly for community and regional banks with real estate concentrations, is income-producing office, warehouse, and retail commercial property. Market fundamentals in most western states are deteriorating. Vacancy rates are rising and rent pressures are hurting property cash flows. Office vacancy rates in both Boise and Portland are expected to reach or exceed 20 percent over the next year or two, the highest rates these cities have seen in many years. Retail shopping centers are struggling with falling occupancy rates and pressures to grant rent concessions. Property values are falling sharply across wide areas of the country, including the Pacific Northwest. Some analysts forecast that commercial property values could experience falls similar to housing of 30 to 40 percent.”
On reconciling facts with hope:
“I know this sounds woeful, but my advice is to hope for the best and plan for the worst. That means anticipating a range of bad and worst-case scenarios that reflect local economic conditions and a bank’s particular risk profile. It can be helpful to perform stress tests based on these scenarios to assess potential effects on earnings and capital, and to develop appropriate contingency plans. The commercial real estate guidance that I mentioned earlier emphasizes the importance of stress tests. The testing that the largest 19 banks recently conducted offers examples of techniques that community banks can adopt, such as two-year portfolio loss estimates and methods of estimating revenue. Appropriately designed stress tests can help bank managements and boards make decisions about loan-loss provisioning, capital planning, and strategic initiatives.”
I hope rates go to 10%. This market will be decimated.
In 2000 and 2005 interest rates and home prices went up so it is not an exact science.
EWellie says:
July 28, 2009 at 2:20 pm
#175,
Kettle, with a few rare exceptions, you are right–interest rates go up, prices come down. I don’t need to beat the dead horse again, but it’s much better to have a lower price and a higher interest rate than the other way around…
BTW, even some realtors I know acknowledge when rates go up, prices come down.
Re 185, GM in 2009 sold the most cars and Ford sold the second most cars. Toyota is number 3 in sales in 2009.
duck (184)-
Too bad that we now have so little of this, it’s not enough to either turn things around or sustain what shambles of a broad economy we have left. The sheeple-ization of America has reached the tipping point at which the critical mass of TV-drugged drones overwhelm the thinking, creative few.
We do, however, have millions of undereducated, overcredentialed people who can generate massive amounts of both paperwork and debt.
“It’s not the physical thing that defines American strength, but the ability to transform an idea into an economic concept.”
“if one puts down 3.5%, one cannot afford a house”
the only thing a low downpayment does is increase the monthly payments. Some people may choose to do this.
If they can afford the monthly payments, there is nothing wrong with putting down 3.5%.
Especially if the monthly payments are less than what it would cost to rent a similar place.
Veto,
<i.but there is no way the relationship is that severe to say that prices get cut in half when rates double.
I agree, my point is that rates are the driving force, and price follows them. it is not a 1:1 relation, it is a non linear relation
John [188],
Throw 2005 out the window. The majority was shadow banking financing, teasers.
BC (187)-
Somehow, I keep having the feeling that this bust cycle will not full be past us until we see two things:
1. A massive capitulation event in the equity markets.
2. A prime rate over 20%.
Jim,
I actually laughed a time or 2 while getting “smoked” by a DI due to the humor involved.
(Smoked is along the lines of being forced to exercise until you puke)
Get smoked by a female DI and the male DI’s laugh at you as they walk away from the carnage.
BO is currently on TV trying to sell his health care plan to the unknowing masses. Hopefully the plan will die a swift death.
John (188)-
In both those examples (2000 and 2005), neither phenomenon lasted long.
I don’t think that will be the case this time around.
191–Veto, I stand by my statement. People put down those low down payments for one reason–THEY DON’T HAVE A PENNY MORE TO PUT DOWN!!!
BTW,renting would be much cheaper–and they already rent a large place whose yearly rent is about equal to the taxes, insurance, PMI and association fees on this place. It doesn’t take a brilliant mind to see this doesn’t add up–for some reason, they have the bubble mentality.
Like I’ve said before I do not see how the government creates demand for municipal, state and federal debt and keep the cost of such borrowing reasonable without tanking the stock market.
[184],
Another example. A giant hedge fund, masquerading as a bank holding co, reports huge profits while speculating with taxpayers $. On the flip side, Caterpillar comes in way below estimates. Which is a better indicator of the US economy?
Jim (196)-
Seems like a lot of special interests (including Big Pharma) are getting tossed a bone to get on board with O.
Will be interesting to see Pharma pitted against insurance companies in a sort of ultimate death match.
At this point, I’d have to put my money on insurance companies.
EWellie (198)-
You either have 20% down or go FHA. For most buyers, there is no middle road, because the PMI payments on a conventional loan with less than a 20% DP is a deal-killer.
BC & Clot, -> We will be lucky if the rates are ONLY 10% next year.
Fed is supposed to stop buying MBS via TALF at the end of the year. Fannie and Freddie have to wind down their books asrequired by law to reduce their portfolios 10% per annum of MBS starting in 2010.
Read all about it here.
http://www.housingwire.com/2009/07/24/viewpoint-do-new-accounting-rules-force-banks-to-use-new-playbook/
Clotpoll,
I’d love to know what backroom deals are being offered to try and get votes for this. Interesting that BO is putting so much political capital into trying to get this done. Of course his popularity is going down so maybe the administration believes it is now or never…
But again, I don’t think FHA should be insuring people taking out 300K in dodgy circumstances.
The 3.5% mortgage is a future disaster waiting to happen. I know two couples that tried doing it. Given their lifestyles, that have about 2 days living expenses sitting in their bank account and they literally rely on their paycheck to get by. The second they get fired or demoted, it’s over Johnny…IT’S OVER!!!!
“BC & Clot, -> We will be lucky if the rates are ONLY 10% next year.”
Sean,
If you are correct there will be a bloodbath.
FHA should be requiring 40% down payments in case the 20% wasn’t enough to prevent a family from being in “negative equity” in a year. 3.5% is a complete joke. I have more equity in my guitar collection than these people do in their homes they buy through FHA.
Clot (202)
I’m still of the impression that PMI rates have not changed/gone up…assuming 10% down, clean credit(700+), conforming loan with DU Approve/Eligible.
What’s your experience?
I’m on the Genworth rate calculator.
http://mortgageinsurance.genworth.com/RatesAndGuidelines/RateFinder.aspx
[195] kettle,
Didn’t you post a while back about the male v. female DI thing? I am having some deja vu over this post.
Also on female DIs: My great aunt, who went to the big Camp Lejeune in the Sky a few years back, had the distinction of being the first female USMC DI. She was all of 5 foot nothing, and was (in retirement anyway) the nicest person you ever wanted to meet. She married a marine and family rumor was that it was the first USMC marriage where the wife outranked the husband. Both her sons also wore the blood stripe (and they were incredibly funny dudes, nothing like stereotypical jarheads).
As for civvies in boot camp, I seriously doubt it could happen, and certainly never on a large scale. The occasional reporter does it but that is it. But if there was ever a test program, I’d up in a NY minute if it meant getting handed a globe and anchor at the end.
Hoorah!
The NJ cake lady was just on MSNBC. She should be in jail. Her house doesn’t look too bad, but I don’t think selling cakes is going to allow her to keep it. She is in over her head.
Anyone see this?
These are not zero sum as many have claimed. The actual amount at risk is probably next to impossible to calculate given the complexity and interdependence involved. But even a 20% exposure would likely be beyond the ability of the the US government to cover without causing a market dislocation.
I wonder how many of those model have assumed a turnaround in the market in the next few quarters without accounting for the failure of such an event
Five Firms Hold 80% of Derivatives Risk, Fitch Report Finds
About 80% of the derivative assets and liabilities carried on the balance sheets of 100 companies reviewed by Fitch were held by five banks: JP Morgan Chase, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley.
The Fitch analysts also found that just 22 companies disclosed the use of equity derivatives…. The companies also recorded a total notional amount of derivative positions of more than $296 trillion.
In particular, users of financial statements need added information about the sensitivity of companies’ derivative valuations to major assumptions, according to the ratings agency. Since risk analysts often base their derivative valuations on quantitative models, changes in significant valuation assumptions are particularly important, says Fitch.
http://www.cfo.com/article.cfm/14113089/?f=rsspage
image of the day?
http://4.bp.blogspot.com/_9ZzZquaXrR8/Sm5rDnalD5I/AAAAAAAAEZ8/JOjSJEnZSSk/s640/socialsecurity.jpg
211. Jailed for baking cakes? Lighten up francis.
Nom,
dont know maybe i did.?.?.?.?
I wasnt saying DI’s cant be nice outside or their job. just describing being on the receiving end.
“People put down those low down payments for one reason”
EWellie,
I dont know anything about those fha borrowers but if they are subprime or alt-a, they probably cant afford to rent either.
You should tell your friends to move under a bridge for a few months, save some more for downpayment.
Not for baking cakes, for not paying her taxes, etc.
NJ Shore destinations? Cape May. Everything else is gross.
Nom,
dont know maybe i did.?.?.?.?
I wasnt saying DI’s cant be nice outside of their job. just describing being on the receiving end.
217. Oh….then I guess Timmy Geithner should attend too.
Essex [220],
Don’t be too harsh on Timmy. Just an innocent mistake.
Timmy could occupy the cell next to her. Maybe she could bake him a cake. They could both get free health care.
Herein lies a huge problem:
i came to join this group of saber rattlers in 2005 and wanted nothing but to see home prices crash so that i could buy one for a reasonable price.
Now that prices have crashed and are still correcting, there are all these theories and predications coming out of the woodwork that home prices will fall for another ten or twenty years.
wtf.
I was hoping for a year or two housing correction and then we can all go about our business. My daughter is 2. According to these predictions we will be renting until she goes to college and then our first home we buy will be a two bedroom townhome because my wife and i will be retired by then.
veto [223],
Are you turning Japanese?
veto,
it appears you have been priced out forever.
re #208 – BC- as you are well aware the Fed is only stalling the inevitable crash landing with their trillion dollar purchase of MBS from the GSEs via TALF which is supposed to end this year.
So the argument now is should the FED then extends TALF another year, and before you know it another year goes by and it is extended again (most like through Obama’s term) and before you know the markets become dependent on TALF and its bottomless liquidity courtesy of the printing press.
Does it ever end? Can we really print our way out of this mess?
x (209)-
Depends on the situation, loan package and borrower. 10% DP and great credit is enough to avoid killer PMI in most, but not all, circumstances.
sx (214)-
I bet the real clincher is that the cakes suck.
“It appears you have been priced out forever.”
Ha, it appears so.
I guess contrary to the Association of Realtors mantra, Its never a good time to buy.
x (209)-
In addition, the 5% “declining markets” markdown on bank appraisals often renders a 10% DP insufficient for PMI purposes.
Only a couple of lenders have removed NJ from their “declining markets” list.
OT Alert: What will likely be the last word on the dustup in my hometown of 02138:
“With a man’s loud voice in the background, Crowley reported that “a gentleman who says he resides here’’ is being “uncooperative,’’ and, referring to other cruisers on the way to the scene, said to “keep the cars coming.’’ In a terse, matter-of-fact tone, he radioed that the man had identified himself as “a Henry Louis Gates.’’ Again, a man’s assertive voice is in the background of Crowley’s transmission. . . .
. . . The tapes fail to establish whether blame for escalating the encounter falls at the feet of Gates, who Crowley said called him a racist cop, or of Crowley, whom Gates later labeled a “rogue cop.’’ They leave unreconciled sharply divergent accounts of the incident offered by the two men. . . . .
. . . Brief snippets of a man’s voice can be heard in the background in three separate radio transmissions. What he says is difficult to make out, but he is speaking loudly and emphatically. At one point he appears to say, “I’m outraged.’’
Neither police nor Gates’s lawyer would confirm that the voice belongs to the Harvard professor. . . .”
And that is from the Boston Globe, which no one would ever confuse as a right wing rag.
To the end, the Globe cannot bring itself to say the professor was wrong (and never will), but it had to report the facts, and the facts conflict with Gates’ account that he wasn’t shouting because he was suffering from a condition that prevented him from doing so.
And it will be the last word: The One commands it; the liberals, seeing that they lost this round now want to “move on”; and the Cambridge Mayor and Governor of Mass. are saying nothing since they left the cops under the bus.
tell me if fha sounds good now:
my buddy paid 400k for his townhouse w/ 20% down (80k). his neighbor – same unit just sold for 300k. would you rather lose 80k or 14k?
i’d say an ideal situation is fha down payment at pre bubble price. you can keep your money in the bank and afford a small mortgage while you’re at it.
Is Gates a castrati?
“…facts conflict with Gates’ account that he wasn’t shouting because he was suffering from a condition that prevented him from doing so.”
If I couldn’t shout at people, I’d kill myself.
Comrade,
BO has invited both of them for a beer at the White House on Thursday. They will be sipping their beer at a picnic table. BO has offered no apology, nor will he. He stepped on it but is too arrogant to admit he made a mistake and got involved in a situation he should have never commented on. He doesn’t want to lose face and have his popularity go any lower.
That cop should give O a mouthful of Chiclets.
Well since he is half black and half white he can take both sides of issue, wonder if the beer will be a black and tan.
Jim says:
July 28, 2009 at 3:33 pm
Comrade,
BO has invited both of them for a beer at the White House on Thursday. They will be sipping their beer at a picnic table. BO has offered no apology, nor will he. He stepped on it but is too arrogant to admit he made a mistake and got involved in a situation he should have never commented on. He doesn’t want to lose face and have his popularity go any lower.
Sean[226],
Print or die. The printing press is the only game in town. In an environment of increasing foreclosures and falling prices, who else will buy this crap?
However, we can’t print our way out of this mess. We will just be digging a deeper hole. We will eventually be confronted with bigger problems. That said, if warranted/even if not, these programs will be extended. Bergabe has dreams about 1936, doesn’t want the same to occur on his watch.
“BO has invited both of them for a beer at the White House on Thursday.”
This could be a disaster.
As if his ratings havent dropped far enough, now he will risk a racial rumble in the white house living room for some love from the washington post.
veto,
They’ll be at a picnic table on the South Lawn I think. I guess BO doesn’t want to risk damaging the White House furniture if they start going at it again.
Clotpoll says:
In addition, the 5% “declining markets” markdown on bank appraisals often renders a 10% DP insufficient for PMI purposes.
Lender’s aren’t adjusting the appraised value, are they? I just assume that they will whack 5% off of the max they can lend for that loan program
Here is a good joke “ice breaker”for the picnic, since Obama loves his gallows humor and all.
What is the LAPD’s idea of a good poker hand?
4 clubs and a King.
BC Bob are you a Jehova Witness or something, so much doom and gloom.
Any speculation as to what brand of beer the White House
will serve up??
What’s for dessert? Foreclosure cakes??
r says:
July 28, 2009 at 2:09 pm
Does anyone have an opinion on living (not vacationing) in Monmouth Beach?
Isolated and short on services. Surrounded by water, and Long Branch with only 2 or 3 ways out. It is 15 minutes too far from everything except Pier Village and Sea Bright. Also, you may get a warped market for sales/rental merely due to the expectations of the location between Memorial Day and Labor Day. Some really nice houses though….
244
Based upon the individuals involved, I’m going with this one:
http://tinurl.us/944008
J [243],
Actually I’m bullish, short term.
[235] jim,
Your analysis is dead on The fact that it agrees with what I posted last week is proof of that. ;-)
The idea is to preserve the “teaching moment” and it accomplishes three things:
1. Announces an end to further discussion
2. Permits O to cater to his base w/o pizzing off the law-n-order crowd
3. Makes him appear to be the peacemaker (fact that dust has settled is immaterial–it is a photo op)
Basically he had to get out in front and this is his way of doing it. Getting out in front of a bus that has stopped is a bit silly, optically, but he will take what he can get here.
J,
That’s bullish other countries.
[245] chifi
I have a partner who lives in Little Silver. Ridiculous commute into Newark. Forget NYC
I think the biggest sign of recession is then Giants did not sell out their season tickets. The Jets have around 3,000 or 5,000 seats left but they have a rookie QB and with an 80K stadium and tickets the same price as giants I can see who wants a seat at face value when 75K people have a better view. The Jets fans are Islander fans a fickly fair weather bunch. I am shocked at Giant fans, they have a great QB and have a shot at another superbowl. If I did not have my Jets tickets I would be all over it.
Don’t know if this is news, but here it is . .
“Dennis Elwell, the Democratic mayor of Secaucus, N.J., has resigned following his arrest last week as part of a corruption probe that netted 44 people, his lawyer said Tuesday.
The resignation is effective immediately, said Jeffrey Garrigan of Jersey City law firm Cammarata, Nulty & Garrigan.
Elwell is the first elected New Jersey official to resign after federal investigators on July 23 announced the arrests of public officials, including two mayors, two state legislators and a group of prominent rabbis. . . . “
[251] John
Today a friend of mine, who is a Giants fan, made his Superbowl prediction:
Patriots v. Cowboys.
Boy, wouldn’t that cause some angst in the swamps of Rutherford.
too bad I can’t see the Pats game, I as a fairweather jet fan scalped it to cover the preseason tickets. the whole stands will be filled with pats fans.
x (241)-
Yes. PMI outfits use the adjusted appraised value for their own underwriting purposes.
BC (247)-
I’m bullish…through tomorrow.
#223
“Herein lies a huge problem:
i came to join this group of saber rattlers in 2005 and wanted nothing but to see home prices crash so that i could buy one for a reasonable price.
Now that prices have crashed and are still correcting, there are all these theories and predications coming out of the woodwork that home prices will fall for another ten or twenty years.
wtf.”
simple solution. keep renting until buying makes sense, or until you save enough to buy in cash and forget about it.
Comrade Nom Deplume says:
July 28, 2009 at 4:27 pm
[245] chifi I have a partner who lives in Little Silver. Ridiculous commute into Newark. Forget NYC
By train? It should be cake….
Serenity,
I heard it on the radio this AM:
Cop: Blue Moon
Gates: Red Stripe or something else (can’t remember)
BO: Bud
Clot [256],
Insiders selling at fastest clip since the fall of 07′
Doyle,
Maybe Gates or the cop can show O how to throw a pitch?
skep, yeah but renting blows. and if inflation rages, were stuck in a lease and we have to watch our downpayment turn into bubble gum.
Not to mention if you do the rent to own on a three bedroom house, you are paying more to rent each month plus you cant put in hardwoods and paint and make the place comfortable the way you can if you buy.
BC,
Yup, that wasn’t pretty… FYI: Rutherford kid started at Yanks last Thursday, on the hill tonight at Fenway.
“and if inflation rages’
veto,
On the other hand, suppose the fed is unsuccessful in inducing inflation? How about deflation hanging around much longer than most expect?
Doyle [263],
Yes, I watched him against the Yanks. Hope he has it tonight.
BC: he looked great for a while, just couldn’t hold on against that lineup. Here’s to him blanking the Sawx.
Veto (262)
I’m in the same boat. I’ve been waiting for 5 years now. I have a baby on the way, and I can’t wait any longer. I’m about to throw in the towel, and buy a house. I give up.
“How about deflation hanging around much longer than most expect?”
bc, in thats case i get scewed until they eventually ignite inflation but nobody can say for sure and im not willing to risk my downpayment on deflation, which is anyone’s guess.
Subprime, when your wife is nesting and the baby comes and you are still living in rentors squalor and overpaying for it at the same time and you and your wife havent slept for a year and then the baby gets old enough to climb up the walls, i want to know how your wife is going to react when you tell her that you need to wait another year to buy a real home until the alt-a option arms blow-up and prices will finally collapse to zero, I wonder if you will get the same look of disappointment and disgrace that i get from my wife.
veto,
Don’t bang your head around. If the purchase #’s make sense, rent/purchase, and you plan on staying put for 10 years, then take the plunge. You can’t try to figure out how every possible fed induced scenario will play out in the future. Look at buying as a lifestyle, what you are willing to pay over and beyond rent for this.
Believe me, I would rather own than rent, never had any intention of selling. Unfortunately, when a market that has appreciated at/near the rate of inflation for 100 years turned into the soybean pit, I had to make a move. Otherwise, I would still be an owner.
The house topic comes up every week. Now with the baby coming, both of our parents are pushing us to buy. So I have to hear it from every where. I can’t keep fighting. I’m tired telling them why its not a good idea to buy now.
I’m tired telling them why its not a good idea to buy now.
You have the good fortune to be able to buy as well as afford a home. Given the economic situation, I’d feel blessed to be in that position.
It is a much better time to buy than a few years ago, both from a rates perspective as well as a price perspective.
Really, you are in a much less “terrible” position than you were a few years back. Add in the fact that, as a buyer with few contingencies, you have significantly more negotiating advantage than in recent history. Way better than in 2005, where you’d need to beg and plead that you’d feed the squirrels.
The deal either makes sense, or it doesn’t. I don’t understand the “fighting” part. If you feel that prices will continue to fall, and that is an educated decision, so be it. That isn’t fighting, it’s a deal that doesn’t make sense, given your outlook.
BC, Clot,
I was bullish until about 10 minutes ago.
#271 Subprime Man
It is a good time to buy if you can find the right place. You just have to know your market and what inventory is available. After a while you will unearth the nugget of gold.
If you are really concerned about inflation destroying your down-payment, then drop a good portion of it into an inflation indexed fund. Don’t let inflation scare you into buying a house if you aren’t ready. There are many more liquid investments that will increase in value during an inflationary period. Buy a fund that you can buy/sell in an instant. Don’t buy a home that could take a life-time to sell.
VIPSX or TCILX. Both invest in TIPS and have a decent expense ratio.
272: He’s talking to his wife, man, and she’s pregnant no less. Do not attempt to use logic and/or rationale in such circumstances is futile.
In english, that should read soemthing like: To attempt to use logic and/or rationale in such circumstances is futile.
Actually I’s bearish, short term for all coutries.
>BC Bob says:
July 28, 2009 at 4:23 pm
J [243],
Actually I’m bullish, short term.
or something. thinking/off
[271] subman
One thing to consider is the baby bump that some towns see right about now. There is a bump in offers as parents with preschoolers want to get out of their Hoboken condos and into a blue ribbon town so Ellery and Graydon can go to decent schools. Waiting until August or even Sept. when demand subsides may be wise, and any houses that missed the selling season will be cheaper still.
I don’t know that it holds for all towns, and the Esteemed Grim has forgotten more about this than I know, but that is my $0.02.
[265,66] BC and Doyle.
I hope he goes down in flames. Flames, I tell ya.
“when your wife is nesting and the baby comes and you are still living in rentors squalor and overpaying for it at the same time and you and your wife havent slept for a year and then the baby gets old enough to climb up the walls, i want to know how your wife is going to react when you tell her that you need to wait another year to buy a real home until the alt-a option arms blow-up and prices will finally collapse to zero, I wonder if you will get the same look of disappointment and disgrace that i get from my wife.”
seriously not meant to offend, but maybe you are looking for an excuse to buy and the wife is convenient reason. believe me, I am massively whipped, but there are ways around this if you really do not want to buy. For example, you could lock yourself into a mutli-year rental, that way you can say to your wife, gee, I would like to buy too but we signed a contract. Or you can say we will move to your choice of rental, much nicer than the one we are in now, as long as it is a rental. Put it in terms of that you are trying to do what is best for your family for the long run. That is, if you really don’t want to buy.
RE: “our first home we buy will be a two bedroom townhome because my wife and i will be retired by then”
One word, Veto: relocation.
Sawx reportedly offered Bucholz and prospects for Halliday. Sox deny it. Stay tuned.
Logic is good. But how much longer do I wait. How long do I put my life on hold. I have waited 5 years, people tellling me on this blog to wait for the crash. The crash is here. Now I have to wait a year for something else to happen. I Know I’m better of buying now then 2 years ago, but i don’t think it was worth waiting 5 years to get 10 percent off of 2006 prices. I’m typing on the iPhone so if you see errors, sorry.
Subprime Man, would your level of savings (and retirement security) be at the same level had you bought at bubble peak?
Today you’re at 5 years savings + XX% off peak, not only XX% off peak.
Geez….put your life on hold for five years? That sounds kind of sad.
Some people who have bought did so to avoid some major issues with taxes on fairly high income. Just saying.
sub (267)-
I’m a Realtor and all, but what about the idea of just renting a bigger place?
sub (285)-
Again, I’m a Realtor; and I’m here to tell you that the crash ain’t here yet.
Then, again, the basic staple of my diet is Knob Creek.
bi,
LMAO. You have zero clue regarding my bullish bias. Hint: It does not include Dow or Spu’s. Actually, hoping the talent can pump up this market another 10%. Then, time to hit the garage. It’s loaded to the rafters with Roundup.
Essex,
Why do you assume that renting will put your life on hold? I know many that rent, never owned. They don’t want to be tied down. They travel the world and are not a prisoner to a house. If they want to relocate for a job, they are not burdened with a sinking black hole.
To each his own.
How is renting putting your life on hold. Rent a nice place that you like in a town you like.
If it costs the same as owning every month and the declines continue, great. If it costs less every month, even better.
You don’t have to live in squalor as a renter or act like you do. Most houses cost a heck of a lot less to rent each month than to own.
Hi subprime
People did not put their life on hold by reading this blog. They in fact saved money and heart ache. I went in 2006 and looked for house in parsippany. At the same time I found this blog. I am still renting and I dond’t feel a moment that I am missing something in life. I too had friend and family telling everytime that I am missing a lot. Now they are telling me that I made a wise decision of not buying a home.
If you have lot of money and job flexibility, i guess it does not matter that you buy now. If not…
IK
271.Subprime Man says:
July 28, 2009 at 5:17 pm
The house topic comes up every week. Now with the baby coming, both of our parents are pushing us to buy. So I have to hear it from every where. I can’t keep fighting. I’m tired telling them why its not a good idea to buy now
Don’t try to change their mind, you won’t because it belies their (past) experience – it worked for them, must work for everybody!
Steer the coversation like this:
Mom: “So there’s a nice house up for sale on Haughty Street.”
You: “That’s nice.” (you tried to end it there.)
M: Are you still looking?
Y: No.
M: Why not?
Y: Becuase I’m not yet rich enough to spend over half a million dollars I’ll never see again.
M: You know, buying the houe you grew up in was the best financial move your father and I ever made.
Y: Your mortgage payment was 25% of Dad’s salary alone… [Spouse] and I both have to work full time and spend 50% of our pay to buy the same house – 40 years later. We can pay the rent just fine on my salary – with money left over.
M: We’ll we’d really like to see you settle down.
Y: Fine. When and how much can I count on you to donate to my house fund?
*conversation over*
Subprime Man says:
July 28, 2009 at 5:17 pm
The house topic comes up every week. Now with the baby coming, both of our parents are pushing us to buy. So I have to hear it from every where. I can’t keep fighting. I’m tired telling them why its not a good idea to buy now.
——————————
It really is difficult; you have a baby and honestly, you don’t need to buy — yet — if that’s what’s driving your decision. School age is the more important time, because a) you want a good school and b) setting down roots was one of the best things for me as a kid; as I never had to move and grew up withe same friends and walked in the same streets well into adulthood.
Honestly, buy when you have the house that you want when you can afford it. Don’t try to time the market, you’re buying a place to live in, not an investment.
If you can’t afford it (and when I say afford it means all payments + savings for retirement and college + decent expenses) then walk away; if you can and you’ve found the right house then whether it’s a good or bad investment shouldn’t be a factor. People treating their houses as investments is what got us into all this trouble in the first place. If your financial situation allows you to buy the house you like, then do so.
“i don’t think it was worth waiting 5 years to get 10 percent off of 2006 prices.”
subprime man, I feel your pain. i do.
and we are in very similar boats. But we differ slightly since im really grateful for waiting 4 years as prices have come down much more than 10% from what i see.
I have no doubt that the miserable doom and gloomers all huddled together here are calling it correctly. My big problem is trying to figure out ‘When’ the next leg down will occur. Waiting another 4 or 5 years for a 10% decline just aint happening for me.
I would suggest that you and your wife make a house purchase with the expectation that prices come down another 20% over the next 5 years. If you are still ok with the purchase, then go for it.
Thats what im going to do.
Of course when the wives find out how much the house subtracted from our family’s net worth over the course of five years, they will be just as upset with us as they were for not buying in the first place.
but that’s why you love her so much.
good luck.
Not sure if this has been posted before, but an awesome article about GS. No tin foil hat.
Tenacious G
Inside Goldman Sachs, America’s most successful, cynical, envied, despised, and (in its view, anyway) misunderstood engine of capitalism.
Of the $52 billion paid to AIG’s counterparties, Goldman Sachs was the biggest recipient: $13 billion, the entire balance of its claim. The amount was surprising: Banks like Merrill Lynch that had bought credit-default swaps from failed insurers other than AIG were paid 13 cents on the dollar in deals moderated by New York’s insurance regulator. Eric Dinallo, the former New York State insurance commissioner, who was at the AIG meetings, characterizes the decision this way: AIG’s counterparties, Goldman being the most prominent, “got to collect on an insurance policy without having the loss.”
But the most glaring argument against Goldman is Goldman’s own: If AIG’s biggest and most important bank customer was hedged against losses in AIG, as it claims, why did the government need to pay Goldman Sachs the full $13 billion?
Salvation came on November 25, a few days after Goldman’s stock price plunged to $52 a share, down from the year’s high of $200 and the lowest price the company had seen since it went public. Again, the white knight was the government. It turned out that Goldman’s conversion to a garden-variety bank-holding company offered an amazing advantage: Goldman now had access to incredibly cheap money. Exploiting its new status, Goldman became the first financial institution to sell $5 billion in government-backed bonds through the Federal Deposit Insurance Corporation, which allowed Goldman to start doing deals when the markets were at a near standstill. “Goldman was desperate for it,” says a prominent Goldman alumnus. “Everybody knows it. Those FDIC notes they got were lifesaving because they couldn’t issue any debt. If it had gone on another week or two, Goldman would have failed, they would have gone the way of Lehman, and you’d be talking about Lloyd the way you talk about [Lehman CEO] Dick Fuld.”
http://nymag.com/news/business/58094/index1.html
“Theyll be at a picnic table on the South Lawn I think”
I doubt it. I suspect that, after they each get a tour of the ground floor and first floor, B.O. will greet them in the Oval Office. The room tends to disarm people. He then invites them to the Residence. This will knock their socks off. Then, the topper, they go upstairs to the solarium and have a beer, maybe cook a burger, on the little pattio up on the souteast side of the third floor, overlooking the sunset and the Washington Monument. From this vantage point, they will be overlooking the area where the crowds massed for the March on Washington and King’s speech.
THAT, will have them eating out of the palm of his hands.
Sarah Palin Farewell Speech –
And getting up here I say it is the best road trip in America soaring through nature’s finest show. Denali, the great one, soaring under the midnight sun. And then the extremes. In the winter time it’s the frozen road that is competing with the view of ice fogged frigid beauty, the cold though, doesn’t it split the Cheechakos from the Sourdoughs?
And then in the summertime such extreme summertime about a hundred and fifty degrees hotter than just some months ago, than just some months from now, with fireweed blooming along the frost heaves and merciless rivers that are rushing and carving and reminding us that here, Mother Nature wins. It is as throughout all Alaska that big wild good life teeming along the road that is north to the future.
For more comedy –
http://www.ibtimes.com/articles/20090727/palins-farewell-speech-transcript.htm
Up!