From Reuters:
US apartment vacancy rate hits 23-year high-report
The U.S. apartment market in the third quarter turned in one of its weakest performances ever as the national vacancy rate hit a 23-year high despite being propped up by landlords willing to take lower rent to keep tenants, according to real estate research firm Reis Inc.
The U.S. apartment vacancy rate rose to 7.8 percent in the third quarter, its highest since 1986, according to the report released on Tuesday. Vacancies have been rising since the third quarter of 2007, according to Reis.
The U.S. apartment market has been reeling for more than a year as its main demand driver, job growth, disappeared in the U.S. recession.
…
Reis still expects the U.S. apartment vacancy rate to pass the 8 percent mark by perhaps next quarter but certainly by next year, Calanog said. That would make it the highest vacancy rate since Reis began tracking the market in 1980.In the third quarter, the U.S. apartment asking rental rate fell 0.5 percent to $1,035 per month, the fourth consecutive declining quarter. Factoring in months of free rent and other perks landlords have been using to lure or keep tenants, effective rent fell 0.3 percent to $972, also the fourth consecutive quarter of declining rent.
“We have not seen that before,” Calanog said.
“Vacancy could be worse if landlords didn’t realize fairly early on that this end game was not going to end well and lowered rents really quickly,” he said.
Reis does not foresee a turnaround in the apartment market until at least the second quarter of 2010 at the earliest.
“That turnaround may be very tepid,” he said. “It might just be that vacancies are flat.”
…
In New York, the largest U.S. apartment market, the vacancy rate fell 0.10 percentage points to 2.9 percent. Effective rent fell 0.9 percent to $2,657 per month.“With job markets still being lost at the national level and with New York being relatively more dependent on the still-embattled financial services sector, it may take a few more quarters before we see rents bottoming out in the Big Apple,” Calanog cautioned.
Brennan Huff: Did we just become best friends?
Dale Doback: Yep!
[they high five each other]
Brennan Huff: Do you wanna do karate in the garage?
Dale Doback: Yep!
Next up…the return of the SUV!!! Great for snow and sleeps four.
From the APP:
A 20 point plan for tax relief in New Jersey
…
1. Require all public employees to make contributions to health insurance premiums in line with those in the private-sector.
…
2. Establish uniform “use-it-or-lose it” rules for unused sick and vacation time.
…
3. Enact measures to control growth of public employee salaries.
From Crains:
Condé Nast closes Gourmet, 3 other titles
High-end magazine giant Condé Nast rocked the media world when it shut down four glossy titles Monday morning.
…
About 180 people will be affected by the closings. Though the company usually tries to find new jobs for laid-off employees, that will be complicated by the budget reductions being planned across Condé Nast for 2010.
Got an introductory email from our C21 buyer reps (two ladies). Went to their web site: their current listings are either 200k condos or 500k McMansions. I plan to conduct a phone interview this week. Stay tuned.
From the Brooklyn Rail:
Burning Down the House
When I moved down to South Texas in 2005, I quickly learned the newly minted gospel of Rio Grande Valley real estate. One, the McAllen metropolitan area was an indisputable boomtown, its growth fueled by NAFTA and ample sunshine. Two, you could live the good life here on the cheap; spacious, tile-roofed houses were continually springing up, generous loans were easy to get, and property values were certain to rise. The region’s most powerful political players were developers, and local boosters never tired of citing a statistic that the region ranked among the five fastest-growing metropolitan areas. I never did figure out where the statistic came from.
McAllen doesn’t appear in Alyssa Katz’s book, Our Lot: How Real Estate Came to Own Us, but it might as well have. Like the sprawling suburbs and exurbs around Sacramento, Fort Myers, and Atlanta that Our Lot examines, McAllen has the key elements for a house-building binge: year-round warm temperatures and sunshine for continuous construction, cheap, flat farmland easily converted into subdivisions, and seemingly unstoppable population growth. Like people all over America, its inhabitants not only bought into the manufactured ideal of homeownership, but were strivers excited by the prospect of owning ever bigger and more elaborate emblems of their success. The mantra, as Katz puts it, “buy a home, refinance, trade up, repeat.”
Essex, might be a good idea for retirement..
From Ski Rebel:
US ski resort is faced with foreclosure worries
The second of three ski areas in Montana that are, unique to North America, connected by ski lifts and runs, probably creating the largest ski area on the continent, is facing serious financial problems according to local media reports.
Moonlight Basin, one of the newest resorts in the US opening only five years ago, is lift linked to long established Big Sky and to the ‘millionaires-only’ resort of the Yellowstone Club, which itself ran into financial problems last year and had to be bought from bankruptcy at a knockdown price in order to continue trading.
…
According to local website newest.com which noted that Moonlight founder and owner Lee Poole has written to resort property owners saying that Lehman had made the decision to begin foreclosure proceedings,although the actual paperwork had not yet been received.
“In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.”
Yep were fucked. Better hold off on house buying and start looking at farm land. A boat might be a better option. Atlantic Menhaden can be caught with a net and the oil used for cooking and fertilizer. That BMW 5 series is gonna look awfully foolish unless you have a gun rack in the back of it. LOL
DL (5)-
Just keep in mind that C21 is the bastard stepchild of a company conceived by felons (Cendant), taken private by a human carrion bird (Leon Black) and now held by the cousin of Satan (Carl Icahn). Their current parent company (Realogy) was days away from oblivion a few weeks ago when Icahn agreed to pump in another 150mm or so in exchange for some used Marcal…er, bonds.
They also used to think that wearing the ugliest yellow blazers in the world was a great sales tool.
More important, if your agent(s) don’t have a CRS, GRI or some sort of reasonably demonstrable extra skill or knowledge, stay away!!! There are a few good ones in every area, and you probably won’t get to them through third-party referral networks, as good agents don’t need them and aren’t about to pay the exorbitant fees.
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
Isnt this the real reason Bush invaded Iraq? The dollar is toast. Ill be bartering Atlantic Menhaden for vegetables when the SHTF. If you dont like the taste it makes for an excellent fertilizer.
More good news. A letter from Dist 4 Chris Smith regarding the TARP. “TARP has evolved into a program of unprecedented scope, scale, and complexity and that the total potential federal government support could reach up to $23.7 trillion.”
James,
Got a problem with this country?? Move out. I hear Iran is a lovely place.
Frank, want to live in a broke communist country? find your own and leave mine alone.
Clot (8): In other words: “Other than that Mrs. Lincoln, how did you like the play?” That’s one of the reasons I want to conduct a phone interview. I’ve looked at recent sales (not many of them) for the area we’re considering and 4br/2ba are asking 399-424k and selling for 360-370k. If they start out with NAR talking points I’ll probably hang up the phone. I may end up calling friends we have in the area and asking for a recommendation.
Now that the massive two week market correction is over I see S&P 1500 in our sights
I just read the first 10 of those 20 points. They are all common sense measures to limit taxes. None will be initiated in NJ. A shame really
Bye bye Creme Brulee :(
http://www.nytimes.com/2009/10/06/business/media/06gourmet.html?th&emc=th
James [9],
For the first time a totally different tone. Now France and Japan are involved. Legit? Well, this morning capital is flowing everywhere else, out of US.
The levers were pushed when rule of law was abandoned, O and GM. Foreign investors were stunned by the action taken by this administration, screwing senior bondholders in favor of the unions.
Aussie raises rates. Go AD. Good night yen carry, welcome dollar carry.
Anybody out there willing to do fix-up work on my house in exchange for gold?
BC (17)-
Somehow, I still think we’ll find a way to draw Australia into the muck. Our disease is very, very contagious.
It’s gonna being a long, long, walk home.
Clot [19],
No. They said FU in the 1st quarter of this charade. They believe in a strong currency. History indicates a first raise there leads to a series of raises. They raised from 3.00 to 3.25. More are coming.
Money flows to where it is treated the best, or at least perceived to be. The AD will continue to rise while the dollar evaporates.
Clot [18],
I’ll take the gold. However, can’t guarantee the work.
BC,
Gold just broke 1030.
Bob, in your opinion do you think a precipitous drop in the dollar is likely or are we more likely to see a continued steady decline?
Stu,
Yep. Old ceilings become new floors.
Clot: this may be fun. I’ve asked for some supplemental information about their qualifications. All in very diplomatic language. Hope they’re not thin skinned.
re# 9 – James. If it’s such a secret move, why does everyone know about it?
There are allot of stories coming out from all of those countries named, disavowing any discussions to convert the oil trade from dollars.
First of all it is difficult for the Arabs to agree on anything. A single Gulf State currency? Without the participation of the region’s large economic players Iraq, Iran, UAE etc is not likely to happen.
Go back a few months Forbes covered this story.
http://www.forbes.com/2009/05/20/uae-gulf-currency-markets-economy-saudi.html
You also need to remember we (our armed forces) are the only thing from keeping that region from exploding.
Clot (18):
What type of work do you need completed? I may have someone for you. He’ll take the shiny stuff for payment.
re #24 – James easy answer, about 70% of the US currency is held in reserve by central banks around the world.
IMF COFER Data below.
At the present, 33 advanced economies report to COFER and 107 emerging and developing economies report to COFER.
http://www.imf.org/external/np/sta/cofer/eng/cofer.pdf
James [24],
The engineers want a slow, steady drop. No CB wants to see a currency crash. The hope is to slowly depreciate the dollar. [forget about any jawboning from Timmy, he speaks and the markets sell off]
They realize that the old model is busted and there is zero chance of it coming back, in the near future. The game plan is to get the emerging markets to consume and hopefully our exports will benefit. Like magic the yen carry is laid to rest and the dollar carry is born.
One caveat; their hope is a steady decline. The markets, at some point, may have a different agenda.
Clot,
http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&divd=Y&org=stk&sym=A6Z9&data=A&code=BSTK&evnt=adv
A friendly reminder From Mish.
Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.
#27 – Sean – IDK, Both China and Russia have certainly made no bones about investigating alternatives to the USD as a reserve currency.
Szarkozy (along with the ECB’s Trichet) have also been vocal in their pronouncements that the US needs to keep the dollar strong. IIRC, back in Jan/Feb Szarkozy mentioned that alternatives to the USD might be considered and that it wasn’t the only currency in the world anymore.
I’ll give you, agreement on the gulf state currency would be a sticky issue; but money is always a motivator and there’s more than one way around the issue.
There’s nothing in Fisk’s article in the Independent that doesn’t jibe with various stories we’ve been hearing in the currency markets for quite some time now.
As the Franc passed so did the pound sterling, as will the dollar.
Where’s the recession?? Buy a home now, before the prices go up.
Hamptons Home Prices Climb 12% as Luxury Sales Rise
http://www.bloomberg.com/apps/news?pid=20603037&sid=a1UiZ2ePT7qI
Not as impressive as there is a large amount of stocks up 1,000% since March 9th. I know BC says it is a hedge against inflation, but gold would have to hit $10,000 an oz to hit that same increase.
Stu says:
October 6, 2009 at 8:34 am
BC,
Gold just broke 1030.
The engineers want a slow, steady drop. No CB wants to see a currency crash.
That’s the tricky part isn’t it? No easy way to do that without hurting everyone.
Also, what is the substitute?
Surely China and the ECB are pushing their respective currencies as the next likely candidate (along with everyone else). But that would only be a like-for-like exchange, perhaps buying more time but not really solving anything. Probably why we’re hearing the discussion of a basket option.
John [35],
It is obvious to me that you have no clue what you are talking about. Just look at the Dow/Gold ratio over the last 10 years.
One other item, I don’t own because of inflation.
Do your math again, you’re a damn accountant, no? Gold futures are 100X’s the physical.
BTW Recession is old news. Remember we are in the lightening fast internet age, news is almost irrelevant by the time it hits the newspapers. Last night was the night they announce first holy comminon in my town. They give the dates out all at once in a meeting held at 7pm. 200 kids and 200 places to be booked. I called my wife on cell whispered the date while meeting was on, she started dialing places we know we found on on my list still left, last one and I ran over and booked it. People spend 2-3k for the restaurant. Plus dress, gift flowers etc. Yea, back in my day you got to wear your brothers used suit and maybe some cold cuts and an enteman cake afterwards back at the house. Some recession this is.
DL :5
Re: Phone Interview with C21 Ladies Tag Team –
After the polite introductions are out of the way, your first question should be….”Ladies, what is your plan for submitting fully qualified offers that are substantially below the current asking price ??”
The course of the interview will become clear based on their answer.
Do your math, I was comparing physical gold to stock.
If you are talking gold futures, then I am talking options, so I would rather be doing 100x’s the underlying on a stock that went up 1,000% than gold that went up 10%.
Do your math again, you’re a damn accountant, no? Gold futures are 100X’s the physical.
Frank is right, we better hurry, and fast. This lovely charmer listed below was at the unbelieveable asking price of $249K, at the end of the summer. And fools like me and others did not jump on it. Well now, now it is back on the market at 428K. Thats right an opportunity of a lifetime at 249k and I missed it. I assume these savvy sellers realize that the homebuyer tax credit is going to be exteded, and increased to 15k, and they have acted accordingly. They should probably increase the price to 600k. So please people listen to frank,and go out an buy now!!
http://www.njmls.com/cf/details.cfm?mls_number=2920986&id=999999
Come on John,
How many people are holding the stocks that went up 1000%? Now how many people are holding gold?
Of all the stocks in the S&P500, only one is up 1000%, Genworth Financial. Were you a holder?
Of all the stocks in the DJIA, Caterpillar is up 350%. Were you a holder?
Haven’t found the best performers in the Nasdaq, but to say a large amount of stocks up 1,000% is complete bullsh1t. Bet the number is probably around 3 out of around 6400.
“BTW Recession is old news.”
John,
Exactly. That’s why this is not your ordinary recession and very troubling. It is now zeroing in on 24 months. In times past this was termed a depression.
Stu [42],
Look at the source.
I have no idea what John looks like. The man of a million stories never shows up to GTGs.
http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_of_our_own_decisions.html#
none of us are in control of our decisions.
“If you are talking gold futures, then I am talking options, so I would rather be doing 100x’s the underlying on a stock that went up 1,000% than gold that went up 10%.”
J,
One problem. You’re not in that trade.
Better trade; options on gold futures. Check your leverage.
Why don’t you step up and sell gold calls, premium is rich.
Stu, all I have to say I am very lucky I was not discriminated in my career on wall street as sometimes us extremely handsome men are not taken seriously.
Stu says:
October 6, 2009 at 9:13 am
I have no idea what John looks like. The man of a million stories never shows up to GTGs.
“If it’s such a secret move, why does everyone know about it?”
I don’t know the specifics of what is going on with respect to this particular issue but I do have a good understanding of such things in general, so, here is my take, in general.
Governments can take “official actions,” those which have been fully vetted and which the policymakers stand behind. When they do, they are often communicated clearly to the world so every other nation knows where they stand. An exception, of course, is a covert action, which one would be a complete dunderhead to spill, but, from time to time, does occur.
Next Are the official actions tht one nation shares quietly amongst other nations and certain non-state actors. Again, these bear the full weight of offficial policy and are meant to clearly convey a nation’s policies.
Next, and where the Gulf action seems t fit, are those actions which are official, and which a nation, or group of nations, uses to communicate policy, displeasure, etc., to another nation or nations but which the communicating country does not feel it can come out in the light of day and communicate. Sometimes this is because the nation communicating the policy or displeasure wants the option of walking back from the brink. Sometimes te communicating nation has no intention of actually carrying out the communicated policy but it wants to fire a warning shot, as it were, across the bow of another country.
I have long thought the rest of the world would tire of allowing the price of oil to be based on dollars, thus immunizing us somewhat from poor fiscal management. We missed an opportunity with the so-called stimulus. Had we used the money to build and install windmills, solar-power roof-top devices everywhere possible, we would have created 21st-century manufacturing capability, installation and service jobs, and reduced the demand for non-Western-Hemisphere oil supplies, perhaps even non-North Americn Oil supplies. I trust the Canadians and we can take the Mexicans, if push comes to shove. Spending the stimulus to repave roads was a longterm mistake. We ate the seed corn.
[45] stu
John resembles a greek god, is hung like a mule, and has the staying power of Peter North.
Ask him, he’ll tell you.
I would short gold right now. But to me gold is worthless, its value is based on the bomb shelter doom and gloom crowd. I kinda hang with the lets party like it is 1999 crowd.
re #33 Tosh – they can squawk all they want about Dollar Hedgemony but right now there is no plan to do anything, like I said they are all holding dollars in reserve and Europe is way move leveraged than the US.
FYI, Szarkozy has bigger problems at home, in France social unrest has often led to the downfall of the country’s rulers. He is using populism to retain disaffected voters, having his wife run a PR campaign online about their private life and every time he is on TV he has twenty short stand behind to make him look taller. He is also about to be eclipsed by Tony Blair who is about to become the first “president” of the EU.
Fun times in Europe, declining North Sea Oil and Gas, massive unemployment, looming enormous DEBT, GDP decline greater than 5% etc.
John,
“Stu, all I have to say I am very lucky I was not discriminated in my career on wall street as sometimes us extremely handsome men are not taken seriously.”
Don’t worry, you are never taken seriously, regardless of your most-likely homely appearance.
Is ChiFi on vacation? I feel like he hasn’t been on in a while. Or maybe I just missed his posts?
Tax news of the day (for Nicholas):
Coming soon to an employer near you?
“ANNAPOLIS, Md.—Maryland employers are bracing for a steep increase in unemployment taxes this January after a mandatory annual review of the state’s unemployment insurance trust fund showed the balance greatly depleted by increasing claims caused by recession-driven layoffs.
As of Sept. 30, the fund balance was roughly $304 million, down from $897 million a year earlier, Maryland Department of Labor, Licensing and Regulation spokeswoman Elizabeth Williams told BNA.
Under state law, the shrinking trust fund balance triggers an automatic increase in unemployment insurance tax rates—in some cases more than three times higher than 2009 rates.
At present, the annual minimum paid by employers is $51 per employee and the maximum is $765, said Williams. In 2010, the minimum will increase to $187 per employee and the maximum will hit $1,147.50, she said. . . .”
Now that is how you stimulate hiring!!!!! Let the good times roll!!!
Now, where are the resident board liberals to tell me that this will have no effect on hiring or employee retention?
“I would short gold right now.”
J,
Then STFU and go short.
Could you EVER see Timmy saying anything like this?
http://www.guardian.co.uk/politics/2009/oct/06/toryconference-georgeosborne
What George Osborne announced todayPolicy pledges made by the shadow chancellor in his speech today
1. A pay freeze for public sector workers earning more than £18,000 in 2011. This will affect about 4 million public servants, or 80% of them. The Tories say this would save the government £3.2bn a year from 2011.
2. Reversing Labour’s tax “raid” on pension funds. The Tories do not have exact costings for this, but they expect it to cost about £5bn a year, which is what the tax increase raised when it was introduced. George Osborne said he would reverse “the effects” of the increase, because tax law has changed in such a way as to make it difficult to simply reverse it. Osborne said it might take more than a parliament to achieve this.
3. Saving £3bn a year, by the end of the parliament, by cutting the costs of Whitehall bureaucracy. The Tories want to save £7bn over the lifetime of a parliament.
4. Capping public sector pensions at £50,000 a year. In practice, this means the Tories would “prevent any taxpayer-funded increase” in pensions already worth more than £50,000 a year and stop all taxpayer-funded pensions in future paying more than that.
5. The 50p top rate of tax to stay while the pay freeze is still in force.
6. Bankers warned that they will face a tax increase if they don’t curb bonus payments.
7. Child trust funds to be abolished for better-off families. Families with disabled children and the poorest third of families would continue to get the money. This would save £300m a year.
8. Families with a household income of more than £50,000 to stop getting child tax credit. This would save £400m a year
snip
“go short”
BC,
Some men are Big Men, and others are born “short.”
[48] John,
So true. Stu and I know exactly how you feel.
Those power women just treat us like gorgeous hunks of well-hung meat, not the Nobel Laureates that we really are.
Sad really; good to see it hasn’t affected you.
Nom,
Do I even want to know who this North cat is?
Nom,
I thought you had two Nobels? Have you been misleading us all this time?
Come on Shore Guy. Did you grow up in a cave?
“But to me gold is worthless”
John,
That’s funny. The market does not give a sheet what you think.
http://www.ritholtz.com/blog/2009/09/10-year-asset-class-returns/
[60,61] shore
Peter North — based on something I read once, he is a p0rn star. Don’t want to verify that at work though.
Two Nobels? Some women thought I had three ;-)
“We missed an opportunity with the so-called stimulus. Had we used the money to build and install windmills, solar-power roof-top devices everywhere possible, we would have created 21st-century manufacturing capability, installation and service jobs, and reduced the demand for non-Western-Hemisphere oil supplies”
Shore, i agree with this. Global Warming is a hoax, but clean environment, energy efficiency and national security are still really good reasons to pursue alternative energy.
I like black gold. Its doing well this AM too.
I was saying this since Gold was in the low 800’s. Forget deflation. We are looking at a Hyperiflationary Depression unless we nuke the productive capacity of the east.
It’s not too late to short(borrow) USD and own physical shiny or miners. The only problem with the miners is that you have to trust the gov’t won’t take over in the name of national security.
This is precisely why an average Joe (who can’t trade like BC Bob) should buy a home with 3% down and take the 15K tax credit. Keep his DP in physical shiny and/or silver.
I 5yrs you’ll be able to pay off your mortage with a fraction of your shiny holdings. If you fall behind on your pamnts the gov’t has proven to backstop your losses.
Where is the risk?
[65] veto
Agreed, but then that was never the goal of the so-called stimulus anyway.
Had you used the stimulus to actually stimulate, then some of that money would have found its way to republicans and businesspeople, who are the new enemies of the Republic. Rather, look at where stimulus money is flowing—straight to traditional democratic constituencies, or to the labor groups that they have to shore up, lest they revert to Reagan democrats (trades, mostly).
I don’t expect this to change, and I believe that, politically at least, we are in a very low-intensity civil war, where the fighting is done in politics and the courts, and the borders are no longer contained, but have spread to arenas once considered off limits to political power grabbing.
Fiddy (39): Thanks. I’ll work that into the conversation. I definitely do not plan on offering anywhere near asking price and if they push back about how Montgomery County is different, or that prices have been stable, bidding wars etc., I will change agents.
Stu,
So it seems.
Nom,
Thos multiple Nobels must have been during your years as a Student Prince (We will have to see if BC hops on that one).
Clot (8): Just got my response, no CRS or GRI but 20 years in the business, multi million $$ producer, quality service award winner. I still plan on calling tonight (after 1200 east coast time) but will back out of the referral program if they repeat one NAR lie.
Nom [68],
http://4.bp.blogspot.com/_9ZzZquaXrR8/SsqVv8owT6I/AAAAAAAAE7s/5FgvJFKwaq0/s1600-h/ClownsBig.jpg
I like black gold. Its doing well this AM too.
Yellow, White or Black it’s all good. Just stay away from Green. It’s backed by toxic and worthless paper, AIG, C,AIG,GM,BAC,15 trillion deficits and lack of leadership. clot is right, next time Omama calls for a special joint session send in the CIA operatives and offer them the choice of public assasination or a private bullet to the head.
I think I stumbled upon John’s linkedin profile with his picture. Based on his details disclosed here, it was not difficult to find. This was last year, I don’t recollect his last name or employer anymore, but if I recollect, he is bald…ok balding.
[70] shore
Not sure if he hopped on it or not.
My recollection is that the Student Prince is a bar/restaurant in Springfield, MA, where I got propositioned by hookers. Can’t remember much about the bar.
John- where is the communion dinner. Are we invited?
Main Maid INN? Milleredge? Those are communion factories
If one boorows short term and lends long term isn’t that the formula for disaster.
Washington is borrowing short term and holding 30yr mortgages.
Can someone describe one positive scenerio that comes out of this. One way we can get out of this mess. is it possible for teh lucky stars to align somehow where USA and it’s stock USD can come out on top.
Nom,
That may well be but I was thinking of something closer to Kingsley and other Shore Points of interest to Mr. BC.
Herb Brooks speech
http://www.youtube.com/watch?v=2CdJTfGiRCI
We,
Is this John’s picture?
http://tinyurl.com/JohnsLinkedInProfilePicture
#52 – they can squawk all they want
Sean, it appears they are doing more than talking. Even if it’s only meeting and those meetings are nothing more than to signal to the U.S. (Fed/Treas) they are serious CBs.
…they are all holding dollars in reserve and Europe is way move leveraged than the US.
More reason to be concerned if they believe the Fed/Treas is planning to devalue the crap out of their holdings.
3b: That house kind of looks like my detached garage.
#80 – John and his “friend“.
lostinny says:
October 6, 2009 at 9:22 am
Is ChiFi on vacation? I feel like he hasn’t been on in a while. Or maybe I just missed his posts?
lost: I was up at Montefiore in the Bronx. It is near Eastchester Road and Pelham Pkwy cross. It is walking distance to the Middletown Rd stop on the 6. The gynecological oncologist cut up my mom pretty good. She’s home now.
#80, can’t get to your site from work. Have a better link?
Chi,
Sorry to hear it. Good luck to her.
#82 Sits on the hill overlooking the train tracks. Sorry like myself you lost this once in a life time opportunity.
Chi,
Hope is all well with your mom. All the best.
Actually picked one of the trendy places in rockville centre in town near train.
Main Maid went out of business, a bunch of indians bought it and “pretended” it was still american food. Pot Roast and Turkey with Stuffing made be vegitarians who don’t eat meat and think you will be turned into a bug if you take a bite was not the wisest business choice, drove a 200 year old restaurant out of business in less than three yeasrs.
stan says:
October 6, 2009 at 10:06 am
John- where is the communion dinner. Are we invited?
Main Maid INN? Milleredge? Those are communion factories
Chifi hope your Mom has a speedy recovery this type of thing is tough on both the patient and caregiver
Albani,
Hope all is well with your mom.
Main Maid out of business?
Wow I did not know that. Many family events held there over the years
John,
Those guys moved onto Cotillion Caterers now.
84 ChiFi
I’m emailing you.
http://www.antonnews.com/syossetjerichotribune/2009/02/20/news/maine.html
here is the story about maine maid
Everyone be sure to wish Stu a happy, happy birthday. By our esteemed former president’s standards, he only has one more year to be fun and irresponsible! He better live it up now.
Happy birthday Stu!!!!
“John resembles a greek god, is hung like a mule, and has the staying power of Peter North.”
Funny, when he made his handsome comment, I had visions of the 300 lb, teeth missing, rollers in hair, toenail picking trailer mom on the other end of the p0rn lines advertised as an 18 year old hottie….
A while back we discussed having a family friendly GTG at Wightman’s Farms for hayrides and apple picking. Anyone still up for that? If so, I propose Sunday 10/24. Does that work for anyone?
49 shore…I think alternative energy may be last great hope for us…the ony “producing thing” we have left.
Probably just shoddy reporting, but this article says rents are at 1994 levels. I remember looking for my first apartment back around then. No way are rents anywhere near 1994 levels, even on an inflation adjusted basis.
http://www.nydailynews.com/real_estate/2009/10/06/2009-10-06_manhattan_rents_plunge_to_levels_not_seen_since_1994.html
Happy B day Stu…and Gator, sorry about your friend’s losing jobs…
John, which place did you pick, I know some banquet halls in rockville center, curious if you picked one I know.
Stu,
Happy B-Day. Hope you are celebrating right now.
[78] shore,
Sorry, that is beyond me, geographically.
Gold and the miners going batshit crazy. Did Geithner speak somewhere about a “strong” dollar again?
Happy B-Day Stu! Buy some shiny to celebrate it :)
no movement in GBGD
Hey BC,
Help out Nom with the Kingsley and Student Prince references. Are you planning to park in the same basic area on Friday? If so, I will try to do the same.
Stu,
Time to do a few hundred Cariocas and some wind sprints. Breakdown — oh wait, at this ag you might :)
GBGD is that an alternativ to the now-closed CBGB?
age
GBGD: The Company is engaged in exploration for, development, and mining of gold, silver and other minerals in Armenia, Canada and Chile.
Fairy tale soon turned grim…..
http://www.azcentral.com/style/hfe/decor/articles/2009/10/03/20091003extremehome.html
‘Extreme Makeover’ left Gilbert family with unforeseen expenses
The task used 1,600 contractors and volunteers and captured the attention of the state. An estimated 4,000 people stood in the winter rain and cold for the unveiling of the home. Cameras captured the Okvaths crying and smiling, giving the show a happy ending.
But the fairy tale soon turned grim.
The next chapters had the family straining under the weight of unexpected utility and tax bills. The story would include dead dogs, vandalism and a foreclosure proceeding that brought the dream home within hours of being auctioned off on the steps of the Maricopa County Courthouse.
Four years later, the Okvaths find themselves scrambling for cash. Some months, they pick which bills to pay. Their cellular phones and cable television have been turned off at various times this year.
Stu, happy b-day!
Chi, best to mom.
BC, Congrats on your foretold prophecy coming to pass. Even i accumulated more au on this mornings breakout.
http://www.azcentral.com/style/hfe/decor/articles/2009/10/03/20091003extremehome.html
The sheer size of the home – 5,300 square feet – was one of the initial causes of trouble for the Okvaths.
“If your house is quadrupled in size, they say your bills quadruple, too,” Nichol said. “But Bryan’s paycheck did not quadruple in size.”
Routine bills ate up most of the family’s monthly income, Nichol said. Although they no longer had rent or a house payment, utility bills soared past the $500 that the homebuilder paid each month for the first year. The first few bills were about $800, she said. By the summer, they were reaching $1,200.
The home has three air-conditioners. On a sweltering day last summer, two were set to the mid-80s, while the thermostat that controls the upstairs bedrooms – which get warmer – was set at 79.
The property taxes on the home quintupled. For the first-time homeowners, it was an unexpected expense.
So was the landscaping. Crews with the TV show replaced the front-yard grass with a desert landscape.
“You can’t mow rocks,” Nichol said. “You can’t mow weeds in the rocks.”
To prevent complaints from neighbors, the family pays a landscaping crew $300 a month to take care of the yard, she said.
The Okvaths used their house as collateral for a loan. In 2006, Nichol took out a $405,000 loan. It was an adjustable-rate mortgage, and the payments became too much for the family to handle.
The home went into foreclosure in July 2008 and was scheduled to be sold at auction. But the sale was canceled after the Okvaths sold a pair of vehicles and made a $14,000 payment, Nichol said.
The cash from the home-equity loan has all been spent, she said.
The Okvaths put the house on the market in 2007. They listed it at $1.8 million, then dropped it to $1.4 million before taking it off the market.
The Okvaths put the home up for sale again last August, asking $1.3 million. They lowered the price Friday to $800,000. That figure still allows them to pay back their loan and buy another home free and clear. They also might rent, Nichol said.
Ahhhhhh. The real problem:
“The Okvaths used their house as collateral for a loan. In 2006, Nichol took out a $405,000 loan. It was an adjustable-rate mortgage, and the payments became too much for the family… The cash from the home-equity loan has all been spent….
“
I am at work now, but I’ll be degenerating in Vegas in less hours than my current age. Things are not looking too bad.
I think this Aussie move is being misunderstood. Their raising the interest rate has more to do with the silly commodities bubble of the past six months than anything else. Their economy is completely dominated by commodity exports. As a consequence they’ve experienced an “artificial” inflation. The world, and the US in particular, will continue its deflationary debt sprial.
Chi,
I hope yo momma is OK!
Deflationary DEATH spiral. sp
This is the big 50, Stu?
“This is the big 50, Stu?”
Very funny Shore. Although my body is likely to feel that way after this weekend of nonstop debauchery.
I’m a spree 39 years young.
Querty -re: “You can’t mow weeds in the rocks.” With 7 kids the guy could have put them to work. Also knuckelhead tried to convert the garage into a playroom? He already had 5,300 sq ft house.
His facebook page.
http://www.facebook.com/people/Bryan-Okvath/1630352225
Guy is an unemployed “trucker”, seems like he was too busy playing bejeweled eating donuts and watching FOX news.
not signing an apartment lease agreement yet
still waiting for rent 1 get 1 free
39? Yer just a lad. Heck, I can barely remember 39.
“still waiting for rent 1 get 1 free”
The Charles Rangle plan.
“weekend of nonstop debauchery”
Enjoy. Mrs. Shore is far less accomodating of debauchery.
BC,
Any thoughts on tin?
http://www.telegraph.co.uk/finance/markets/6259436/The-mystery-investor-who-is-turning-the-tin-market-on-its-head.html?utm_source=Telegraph.co.uk&utm_medium=Invest&utm_campaign=Finance0510#
A student of George Soros?
“still waiting for rent 1 get 1 free”
Although, the Rangel plan would not be complete without the, ‘order now and we’ll wave your taxes’ clause.
Shore 117,
To prevent complaints from neighbors, the family pays a landscaping crew $300 a month to take care of the yard, she said.
Problem number 2.
They don’t have money for electric but they have money for landscaping.
Why isn’t the journalist focusing on these things?
#116 They need a good swift kick in the arse.
Egads. One more reason I am glad we have not had the TV on in 6 months, besides watching DVDs:
http://tv.msn.com/fleshiest-reality-shows/story/feature/?GT1=28103&silentchk=1&
My debauchery might involve strip bars and and the consumption of large amounts of Absinthe, but I really have no interest in the champagne room. I’m too cheap for that, plus who wants a stripper with another mans splooge on her hands touching your junk. Much cheaper to just DIY or just wait until I get home :)
#114 Sorry did not realize the cancer issue. But how are utilities and tax bills unexpected?
“Why isn’t the journalist focusing on these things?”
I can say with some authority that there are too many people in journalism who are not very deep thinkers and too many editors who don’t push for higher standards.
“‘order now and we’ll wave your taxes’ clause.”
The cheat should be sharing a cell with Bernie Madoff, in my opinion.
Please tell me that the fleshiest reality shows list does not include the ‘Biggest Loser!”
Relo [129],
Don’t follow it. Maybe a huge fund/commercial is short and GS knows their book?
Shore,
They should be locked up with every other member of congress who took a Mozillo loan with free points. Just twenty years ago, these actions would be cause for resignation. Today, it appears not paying your taxes or taking obvious conflict of interest benefits is more of a prerequisite for the job. Just look at Geithner for example or Paulson. They’re all a bunch of hypocritical putz’ that pander to the reality TV masses. Meanwhile, they’re picking your pockets for personal gain as JoJo gets voted off the island.
Stu,
You are just reaching the age where you will find that women throw themselves at you with great regularity. I was simply amazed at turning 40. I have a funny in-person story that illustrates this point. If we can get together around the 20th/21st, I can tell you. Heck, the other night after Springsteen I was being persued by a 20ish woman I would have jumped through fire to have, um, ahhh, spent quality time with 20 odd years ago.
For a host of reasons, including microbiological and spouses with kitchen cleavers, DIY may be the wisest course.
I like the physical gold play, but the paper chits have (potentially) the same problem as fractional reserves. Unless you trust the caretakers, of course.
In this day and age I trust absolutely nobody when it comes to telling me not to worry and that my investments are “safe.”
“They should be locked up with every other member of congress who took a Mozillo loan with free points.”
It works for me. Perhaps a few of them can be shot attempting to avoid capture.
meter [143],
I agree.
Gold 1040. Way to go US dollar!
“In this day and age I trust absolutely nobody when it comes to telling me not to worry and that my investments are “safe.””
Come on now get out your wallet and buy some CIT shares like Jim Cramer told you to! Time’s a wastin!
One of the many places in the George Martin Empire
we says:
October 6, 2009 at 11:09 am
John, which place did you pick, I know some banquet halls in rockville center, curious if you picked one I know.
Don’t know which place is part George Martin Empire, but I know the owner of a good place in RC, across from LIRR.
John says:
October 6, 2009 at 1:17 pm
One of the many places in the George Martin Empire
we says:
October 6, 2009 at 11:09 am
John, which place did you pick, I know some banquet halls in rockville center, curious if you picked one I know.
we what is the name of the place?
149-150,
Rockwells?
John, email sent to grim with my email. hate to make things searchable on the interwebs for eternity.
we how about first three letters
There are litterally a hundred places walking distance to trai RVC is like Hoboken.
Lol. inside the BW. email me if need more info.
please email me if you have any comments about the place instead of posting here.
The BW is where all the stewardess and pilots stay on sunrise. God if those walls could talk.
Gov. Motors and Cry-sler can’t be happy with Allan Sloan’s diatribe on CNN:
“. . . .When someone like me, who’s bought U.S.-brand cars all his life (except for one Renault), won’t even consider a GM product, the company’s got a serious problem.
It’s not a problem that can be solved by TV commercials featuring GM’s government-appointed auto industry newbie chairman, former AT&T CEO Ed Whitacre, telling us how much he loves GM. The company has got to earn back our trust, and I’m not sure it can. I hope GM succeeds, but it will have to do it without me as a customer anytime soon.
Given my U.S. preferences, why did I buy an Asian brand rather than a Chrysler or a Ford (F, Fortune 500)? Because I don’t want to be orphaned by Chrysler, which is even less financially viable than GM, and because my wife had a horrible experience with a Ford, her first car. . . .”
Even got in a dig at Ford. He wouldn’t name the asian company, but Toyo, Honda, and Hyundai all must be telling him thanks.
[142] shore
“You are just reaching the age where you will find that women throw themselves at you with great regularity.”
News to me! Women are throwing things at me, but not themselves.
Anyone have any negative insight to Caldwell/West Caldwell? Looking at expansion possibility for a couple of homes in those towns.
Lehman And Meritocracy
Bubble burst time. When I was 20ish I used to go out of my way to talk with 40 yr old men too…. because they were nice and reminded me of my Dad and uncles. Never had any intention of dating them.
“You are just reaching the age where you will find that women throw themselves at you with great regularity.”
No 162…..
Ouch!!!!
barbara,
you’re mean. that’s just not nice.
Barbara – my older brother who is 42 is dating a 25 year old, a co-worker who is around that age is dating a 21 year old. I won’t even tell you how old my wife was when I met her….
Disclaimer to prevent flying knives. Neither men are married, rich or excessively good looking.
165.
Sean
The lack of money does not surprise me, young 20 somethings generally arent cynical enough yet to make that play.
Babs last night, pulled up in my BMW to a thing at church. I was around 200 feet from door hot lady pushing 50 waited for me and when she opened door sweater opened just enough for a glimpse of her still smokin hot body.
The cougars were hungry last night!!!!!!!!!
I’m not sure I have a real email for John.
167.
John,
you need to start posting on the IMDB boards so someone can get you a reality show, I’ve gotta see.
grim, I sent an email to your gmail account.
grim, I have a mystery email as I died three years ago. Anyhow I booked my RVC place, more capital gains down the drain.
John
You can email me at rvc@mailinator.com
My wife and I are looking at a house Thursday after work. If the inside looks as good as the outside we’ll make an offer. The area seems very quiet and it is towards the end of dead end street. There is also a wooded area with a paved biking/walking trail at the end of the street. All in all it would meet our requirements although the price isn’t the lowest around.
Barbara,
I can’t speak to any given woman’s motivation, but, when someone grabs your bottom and says something to the effect of come with me now I want to &*+#$ you, it is not anything resembling a father-daughter interaction.
The combination of my aging reasonably well and a brazenness in current culture has caused me to shake my head more than a few times at the propositions I have received over the past decade. I have never accepted one, nor plan to, but they are there nonetheless.
John (51)-
When the clock strikes 12, does that mean it’s time for Timmay to bend you over and bugger you?
“I kinda hang with the lets party like it is 1999 crowd.”
boy, Gold keeps soaring. (1,045 an oz)
thanks to Clot, BC and the rest of the gold bugs who were advising this as far back as late 06 and 07.
good times.
“come with me now I want to &*+#$ you”
Shore,
Was that before or after Cover Me?
Jim,
Good for you. Just make sure you get the best price possible and that the seller is not locked in la-la land of 2006/2007 prices. Don’t trust a broker with the pricing. Do your due diligence to see what has sold around the area and give them a price reflective of the current environment. Stick to your guns, you’re leading the show. Even moreso if you are a fully qualified buyer. Go get em!
Shore Guy,
This is incredible. I can’t imagine ever acting like that, especially at 20 or so.
Would anyone venture to guess at what level in years prices are at the shore Spring Lake or Avon .I do see some lower prices but only about 5% from the top . I thought vacation homes were supposed to decline faster ?
this should read that
Raul
I grew up in Caldwell and lived their with my kids up to a couple of years ago. I think it is a great town. They put in a Community Center since I was a kid and there is a nice little movie theater up town. The schools are above average. They have a good number of parks, decent town pools, and an above average recreation department. I had to move since the family was growing and a decent size home was out of our $ range. Drawback would be higher than average re taxes. And a little too much Jersey ‘tude for us.
BC,
That one was actually a coed — a knockout in this slinky thing that looked really, really, good on her (jawdroping good) — at a college reunion a few weeks back. When I told her I was flattered but I am married and that was not possible she replied something to the effect of “Oh, I respect that. How about just a bl0w job, then, no sex.”
Hard Place,
We have cash to cover about 40% of the asking price and are already approved for a loan. We’ll see how it goes. Location in this case has made the price a bit higher than the surrounding area.
honk if i pay your mortgage
http://patriotshop.us/product_info.php?cPath=52&products_id=938
(re: yesterday)
shore (183)-
What are you doing? Using ocelot piss as after-sahve?
db – I’ve been wondering that for 2 years now. Bradley Beach seems to be tumbling but don’t know the stats from peak.
A friend of mine explained that she and her husband kept their house in Princeton at a very high list because, while they would consider an offer well below, they didn’t want it on record in case the market “bounced back”. Their company finally bought them out as part of their relocation package.
So I say low ball offers all the way!
um…is JJ posting as Shore?
Finished speaking with my buyer’s agent. I thought she was honest about the market (weak); prices (heading south) and willing to go in aggressive (offer 350 when asking is 399). Told me after we’re done looking in Oct that Jan after Superbowl will see a bunch of new listings and we should consider returning then for another look.
Thx all for well wishes..
[183] shore
“That one was actually a coed — a knockout in this slinky thing that looked really, really, good on her (jawdroping good) — at a college reunion a few weeks back”
Can I just live vicariously through you for awhile?
John,
The cougars were hungry last night!!!!!!!!!
Where were these cougars when I was 18? One of my best friends had the hottest mothers. She was voted best looking in HS back in the day. She was still hot when we were in HS. On top of that she was a college professor. She always wanted to hook me up w/ her students. Looking back, what was I thinking in not saying “Hell yeah!”.
dl,
Avon and spring lake (add the rest of the shore towns from Sea Bright to Point Pleasant) have such a high number of yearround residents there are not as many seasonal homes as one might think.
I too have seen some drops in both Avon and Spring Lake, Belmar too, but most people are still not rational in their asking prices. Whether they will be with respect to fielding offers is anybody’s guess. I looked at a few places where 20% off would have made them reasonable, but did not make offers because they had HELOCed to the point where the deal could not happen.
188.
Chifi
No, John has cornered the cougar market, Shore is handling the coeds, try to keep up.
All my best for you and your Mom, I’ve been through it.
The Wall Street Journal
HEARD ON THE STREET
OCTOBER 6, 2009
Flight Risk in the Corporate-Bond Market
By RICHARD BARLEY
This year’s recovery in risk appetites began in the corporate-bond market. Could it end there, too? Last week’s disappointing U.S. economic data sent a shudder through a market that has delivered 14% to 15% returns in the U.S., U.K. and Europe this year. This may be just a hiccup. But there are signs of investors starting to reduce their bets.
One possible red flag: A sudden rise in corporate-bond purchases under the Bank of England’s quantitative-easing program. On Friday, the BOE spent £113 million ($179.8 million) buying corporate bonds, the most in any single operation since the program started in March. In July and August, its purchases were close to zero. Even more telling, market makers offered to sell the BOE more than £330 million of bonds, another record, according to Evolution Securities.
That may simply reflect banks’ awareness that facilities like the BOE program have a limited life, and they have to take advantage while they can. Similarly, this may explain some recent government-guaranteed bond sales by banks, such as Citigroup, even as other funding sources have become more accessible.
Alternatively, investors may want to lock in profits after a great run. In particular, those new to credit may prove flightier than traditional managers. If that happens, there is a risk that traditionally illiquid corporate-bond markets find prices forced down by limited new buyers.
At the least, there could be a shift toward sectors seen as havens. ING on Monday advised European credit investors to switch out of cyclical bonds that have rallied hardest and move into safer noncyclical credits such as telecoms, summing up their view snappily as: “Take the money and run.”
Clotpoll says:
October 5, 2009 at 8:37 pm
coast (226)-
Just give ‘em all red, red meat. And season it with plenty of Veruca Salt.
Veruca Salt – good band many moons ago.
Clot, what’d you think of GG last night? Another great episode, right?
Shore is shore, my favorite line was on a business trip from a triple divorcee who was only 35, it is not my job to watch out for other people’s husbands.
[192] hard place
True dat.
More than a few times, I either misread the signals or just thought “fatal attraction” when I shoulda said “hell, yeah.”
Nom,
Nothing to live through with me. I say no. Still, it is nice to be asked. There seems to be something to this “growing distinguished” thing.
Yikes that sticker is way better when the ‘O’ in honk is written as the bo campaign style ‘O’.
Please help me….this describes who?
Barbara says:
October 6, 2009 at 3:22 pm
188. Chifi No, John has cornered the cougar market, Shore is handling the coeds, try to keep up.
http://www.youtube.com/watch?v=nVJmwYKy7eM
Jim
We have cash to cover about 40% of the asking price and are already approved for a loan. We’ll see how it goes. Location in this case has made the price a bit higher than the surrounding area.
Sounds like you are definitely in the drivers seat. Don’t get fooled by the highest & best offer charade & don’t emotionally invest in your offer. A home is probably most people’s largest purchase, be prepared to walk and don’t overpay.
“Shore is handling the coeds”
Barbara,
Correction, I am not handling anyone, Mrs. Shore excepted.
NJC cann attest to the fact that,beyond not being overweight, I am nothing special. so I attribute the attention to a cultural thing.
183: Danm, Shore, you really should run for office.
201.
chifi,
interesting, this could go to either John OR Shore, since Stacy’s mom was clearly a young mother, so she’s probably about 35 here. Cougarish because she’s mackin on 14 yr old boys, but not old enough to be a cougar. Almost young enough for Shore, but pushing it.
Tricky.
frank says:
October 6, 2009 at 7:38 am
James,
Got a problem with this country?? Move out. I hear Iran is a lovely place.
or, you know … THIS country could change some things. but that’s thinking a knuckle-dragging racist isn’t capable of.
Bi is a clueless rube; you’re just an imbecile.
203. Shore
Just kidding, your reputation as steadfastly faithful remains intact despite these trollops.
Honestly at 41 years old, I looking younger than my age. Not because I am a particularly young looking 41 or in good shape. Instead, most people between 20-40 are heavier than they should be. I look the same age as a lot of people in their early 30’s. This health issue is going to be a disaster in about 15 years as these slobs begin to hit the healthcare system full force.
Comrade
True dat.
More than a few times, I either misread the signals or just thought “fatal attraction” when I shoulda said “hell, yeah.”
One thing I will teach my kids is when it comes to woman, take the risk. You have an ability to recover from the downside a lot quicker. When it comes to money, keep an eye on the risks. It will take a lot longer to recover from a bad mistake.
What happens when people look for shortcuts in answering difficult questions….
WSJ
OCTOBER 6, 2009
Bond ETFs Are Popular but Pricing Is a Problem
by ELEANOR LAISE
As billions of dollars pour into bond exchange-traded funds, cracks are starting to show.
Share prices of many bond ETFs are drifting far from the value of their underlying holdings, which can create big trading costs for investors. Some of the funds are straying from their benchmarks, meaning investors aren’t getting the returns they expected.
State Street’s SPDR Barclays Capital High Yield Bond ETF fell in the 12 months ending Aug. 31 even as its benchmark gained 6%.
None of this has stopped investors from jumping into bond ETFs. The category has snagged over half the new cash flowing into ETFs this year through August. Bond ETFs held $86 billion at the end of August, up 52% from the end of 2008.
ETFs, typically cheap, straightforward products designed to act like index funds, generally track the performance of a benchmark for stocks, bonds or commodities. But they differ from traditional mutual funds because they trade throughout the day on an exchange.
Keeping ETF returns in line with the indexes has proven to be tough in the murky bond market. For most bonds, there is no centralized exchange matching bond buyers and sellers, and different market players can assign very different prices to the same bonds. Many bonds don’t trade for days at a time, and when they do, they can be costly to buy and sell.
Index drift is a growing problem. State Street Corp.’s SPDR Barclays Capital High Yield Bond ETF fell nearly 1% in the 12 months ending Aug. 31, even while its benchmark gained 6%. Part of the problem: The index contained some lower-quality bonds that the ETF couldn’t get, and when those bonds rallied, the fund got left behind, says Jim Ross, senior managing director at State Street.
Rick Ferri, a financial adviser and author of “The ETF Book,” stopped using bond ETFs a couple of years ago when he noticed their market prices moving away from the value of their underlying holdings. But in the more-volatile markets lately, “it got a lot worse than I would have ever expected,” he says. “I don’t see the benefit for a buy-and-hold investor.”
The worst problems for bond ETFs may be still to come. Currently, many trade at a premium to their net asset value. Suppose investors sour on investment-grade and high-yield corporate-bond ETFs and stampede out of these holdings as fast as they have stampeded in. Given the pricing problems, experts say, massive selling could turn rich ETF premiums into discounts and take a serious bite out of investors’ returns.
That scenario is “a pretty big what-if,” State Street’s Mr. Ross says. “We’ve seen assets pretty much go one way in these funds.”
Though the first few bond ETFs in the U.S. were launched in 2002, the products floundered for years. But with bigger players getting in on the action, the number of bond ETFs ballooned in recent years from a handful to nearly 70 at the end of August.
Bond giant Pacific Investment Management Co., a subsidiary of Allianz SE, plowed into the market this year, and BlackRock Inc., also known for its bond expertise, in June reached a deal to buy Barclays Global Investors, the largest provider of bond ETFs.
Though pricing troubles came to the fore amid market mayhem last fall, calmer markets of late haven’t resolved the problem.
The iShares iBoxx $ High Yield Corporate Bond ETF, for example, traded at a 7% premium at one point in April, and traded within 0.5% of its NAV on only five days in the third quarter. In a stock ETF, if there was premium over 0.5%, “you wouldn’t touch it with a 10-foot pole,” says Matt Hougan, director of ETF analysis for IndexUniverse.com. While investors can allow bond ETFs more leeway, a premium over 1% “would definitely set off warning signs,” he says.
Such wide gaps aren’t generally supposed to appear in ETFs. Big investors can typically buy up the fund’s underlying holdings and swap them for ETF shares, arbitraging away any significant gaps between the ETF share price and NAV.
But bonds can be so tough to trade that large investors become reluctant to perform this function for fixed-income ETFs. Even when they do make the trades, they incur big trading costs that get factored into the price of the ETF shares.
Lately, investors have been piling into shorter-term corporate bonds, creating more problems for bond ETFs. The massive demand for these bonds is outstripping supply, making them hard to trade, market participants say. The iShares Barclays 1-3 Year Credit Bond ETF this year has regularly traded at premiums of 2% or more, and it didn’t trade within 0.5% of NAV on any day in the third quarter.
At the same time, government intervention designed to stabilize the financial system is also creating challenges for bond ETFs. The Federal Reserve, which has been buying agency bonds and mortgage-backed securities, now holds 11% of the investment-grade taxable bond market.
Vanguard Group recently announced that its bond index funds and ETFs will switch to benchmarks that exclude those securities held by the Fed. Failure to make the adjustment could lead to higher transaction costs and more trouble tracking the market, says Ken Volpert, head of Vanguard’s taxable bond group.
BGI isn’t making the switch for its ETFs, arguing that the benefit isn’t great enough to justify the cost.
I give you pedicab v. cabbie road rage!
http://gothamist.com/2009/10/06/video_cabbie_vs_pedicab_driver_in_m.php
tip: garbage can toss at 3:30
To quote Eddie Murphy from 1983.
“Herpes…you keep that sh!t forever like luggage. But AIDS…it kills motherf—s!”
Hard Place says:
October 6, 2009 at 3:34 pm
Comrade
True dat.
More than a few times, I either misread the signals or just thought “fatal attraction” when I shoulda said “hell, yeah.”
One thing I will teach my kids is when it comes to woman, take the risk. You have an ability to recover from the downside a lot quicker. When it comes to money, keep an eye on the risks. It will take a lot longer to recover from a bad mistake.
Anyone read what Sorkin penned on last year’s calamity?
Wall Street’s Near-Death Experience
http://www.vanityfair.com/business/features/2009/11/too-big-to-fail-excerpt-200911?printable=true
wimmen
chifi,
hahaha…
To quote Eddie Murphy from 1983.
“Herpes…you keep that sh!t forever like luggage. But AIDS…it kills motherf—s!”
While I say take the risk. I’m not telling my kids to jump into a crack infested ho-house w/out a raincoat. I’m just saying taking a chance on the girl, you always think about the ones that got away.
I am cougar hunting in florida next week, heading to Naples. Maybe I get some hot RE agents to do a little show and blow with me.
chi fi, lot of words to say pricing thinly traded bonds in an ETF daily is hard to do.
already got spam in a temp email addr, spammers are good.
I have never accepted one, nor plan to, but they are there nonetheless.
Shore,
A New Yorker would have never said No to a poor young women looking to put something in her mouth. Who are you to say that she can’t have a C0CK in her mouth.
Bond ETFs remind me of what Joe Pesci once said you always get screwed in the drivethrough.
BTW had a big debate with a Jersey guy today. On LI I say 99% of people have baptisms and Comminuns in restaurants they book a nice party room decorate and have a bar etc. Everyone wears suits, almost like a mini wedding.
He told me out by him most people have it at house maybe call a good delli get a few trays etc. Then I say well what if people have long commutes and can’t make it to every party. If it is not a close family member they are going to skip the house parties and just send a check. He was like what?
Is NJ really that different?
216: Let me know if you are interested in incorporating into your real estate activities some “lightening” from the old neighborhood on a few rentals we have down that way.
yikes (196)-
Ditched it. I hate Tyra Banks. Like an even-dumber Oprah.
216: staying at the Ritz or Naples Grande?
What’s older than a cougar? Though you’re a bit early for season you’ll find out at both. Go to Noodles in town on Thurday night. Close as it gets to hunting season w. of MIA & so. of Tampa. At least it used to be.
This thread is making my skin crawl.
“This thread is making my skin crawl.”
Clot,
I don’t think this was JB’s game plan, when this site was started.
I plan on going to Hooters for Monday Night football in Naples. Jets vs. Dolphins. I am going to let some lucky lady get a first down on me.
relo says:
October 6, 2009 at 4:24 pm
216: staying at the Ritz or Naples Grande?
What’s older than a cougar? Though you’re a bit early for season you’ll find out at both. Go to Noodles in town on Thurday night. Close as it gets to hunting season w. of MIA & so. of Tampa. At least it used to be.
“A New Yorker would have never said No”
Good thing I was born and reared in Jersey.
In the end, I am sure she found something. No straight unmarried man would have said no to her.
John,
I assume the game is in MIA? Why watch on the other side of thr state instead of going to MIA to watch? I assume tickets are available from someone.
Can we get a little RE and economics discussion in between?
“Is NJ really that different?”
It is in so many respects.
re: skin crawl – Used to know what could be described as a “strange” co-worker who used to hang out at the oldies nights. He was in his late 20s but for some reason only wanted to hang out at the Holiday Inn type of dances on a Saturday night, where there would be an Oldies Dance. Very strange dude, never quite got around to asking him what he saw in the golden girls other than perhaps some kind of weird fetish involving the removal of dentures.
224 & 229: Well, I did ask John to burn down a number of units. What, not anarchistic enough?
Gary,
You missed the discussion of pricing in Avon and Spring lake earlier.
Where’s my buddy 50.5?
Shore, who “reared you”.
Good thing I was born and reared in Jersey.
Well when I am cougar hunting in Florida I will ask them about the RE market and report back. Hope when I bang their head on the headboard their dentures don’t fall out.
Crush videos?
http://m.usatoday.com/809036/news/;.wap2
Ewwwwwwwwww. This is one sick world. I would not want these prople as neighbors, although they might make good buyer’s agents.
wait! Stacy’s mom is neither coed OR cougar. She is MILF. Phew. My world now makes sense again.
buyers’
Stu,
Are you going to check out any property in Vegas when you are there?
Stu,
Are you going to check out any property in Vegas when you are there?
since when is sand property?
Shore Guy says:
October 6, 2009 at 4:52 pm
Stu,
Are you going to check out any property in Vegas when you are there?
#178 With FHA 3% down, everyone is a qualified buyer!!
From the WSJ -Green Shoots:
Sunoco Inc. (SUN) cut its dividend in half and said it would shut a New Jersey refinery indefinitely, shifting its production to two nearby sites.
Both actions, taken because “the operating environment continues to be very poor,” are expected to save the big oil refiner a total of $320 million a year.
Sunoco, the second-largest U.S. independent oil refiner by volume after Valero Energy Corp. (VLO), has been cutting costs and is trying to sell its chemicals operations as the recession cuts demand.
About 400 workers will be furloughed while the Eagle Point refinery in Westville is closed, but they may return to work if it reopens and Sunoco will continue to pay its contribution to medical benefits as well as offer job placement assistance and retraining.
Breaking news..
US govt is considering doing a 1 for 5 reverse $$ split.
That should take care of entire freakin mess we are in..
Shore,
Unless Gator and I both get canned, living in Vegas is out of the question. The foreclosures out there are mind boggling.
245: John will be saying the same when he returns from FL. Then again, he may say how the Ritz was packed – what recession (overlooking the discounted rooms and the fact that everyone is 100, wealthy and retired).
Stu says:
October 6, 2009 at 10:11 am
We,
Is this John’s picture?
http://tinyurl.com/JohnsLinkedInProfilePicture
Lol, I found his linkedin profile, but no reason to disclose it here. It is his prerogative.
thanks guy 20% off would be doable for the 3 places I looked at .The best thing SL has going for it is reasonable taxes ..for the assessed value (low rate )
db,
I agree about the SL taxes. I suspect it is because the school district is Manasquan. A nice place but not in the league of SL, so, the levy is not onerous I saw nicer houses in Spring Lake than some other places with higher assessed values and much lower taxes.
Chi,
Your observation about th 20-40 year olds being out of shape is likely a prtof the equation. Also, consider where you are fiscally and intellectually in your 40s compared to where you were at 25. The level of discourse possible is far better than it was then. As women mature far earlier than men and that gap does not seem to close (some women would say it never does) until guys are in their 30s, I suspect that women appreciate being able to have a mature conversation.
SAS,
Does this sound at all familiar? It makes one wonder how much we will need to spend, in lives and borrowed cash, to achieve peace with honor.
http://edition.cnn.com/2009/WORLD/asiapcf/10/06/afghanistan.us.deadly.fight/
WASHINGTON (CNN) — The battle Saturday in which eight U.S. troops were killed was so fierce that, at one point, U.S. forces had to fall back as attackers breached the perimeter of their base, a U.S. military official with knowledge of the latest intelligence reports on the incident said.
The new revelations about the battle that engulfed Forward Operating Base Keating in Kamdesh District are a further indication of how pinned down and outmanned the troops were at the remote outpost. The base, in an eastern Afghanistan valley, was surrounded by ridge lines where the insurgents were able to fire down at U.S. and Afghan troops.
snip
SAS,
Does this sound at all familiar? It makes one wonder how much we will need to spend, in lives and borrowed cash, to achieve peace with honor.
http://edition.cnn.com/2009/WORLD/asiapcf/10/06/afghanistan.us.deadly.fight/
WASHINGTON (CNN) — The battle Saturday in which eight U.S. troops were killed was so fierce that, at one point, U.S. forces had to fall back as attackers breached the perimeter of their base, a U.S. military official with knowledge of the latest intelligence reports on the incident said.
The new revelations about the battle that engulfed Forward Operating Base Keating in Kamdesh District are a further indication of how pinned down and outmanned the troops were at the remote outpost. The base, in an eastern Afghanistan valley, was surrounded by ridge lines where the insurgents were able to fire down at U.S. and Afghan troops.
snip
Stupid is the new normal. Toss in a dose of mean and you have a sure fire recipe for success.
BC,
You have some pert e-mail.
HEy BC, wake up and check your e-mail. I have some tips for you.
OMG it just never ends:
Coming Soon: $500 for Every Newborn?
Imagine a world where every baby received a trust fund at birth. It might sound like a fairy tale, but being born into money–or at least into a $500 savings account–could soon become reality for all children born in the United States. Lawmakers are considering a bill that would give each newborn just that, with the goal of promoting savings that would later be used for education, a first home, or retirement. Here’s what you should know about the ASPIRE (“America Saving for Personal Investment, Retirement, and Education”) Act:
http://finance.yahoo.com/news/Coming-Soon-500-for-Every-usnews-3217986354.html?x=0&.v=1
BC-
Got your e-mail. But, your hotmail is down. Tried to respond & it kicks back.
lost (256)-
Never too early to get a US citizen sucking on the gubmint teat.
Welcome to Argentina.
“Does this sound at all familiar? It makes one wonder how much we will need to spend, in lives and borrowed cash, to achieve peace with honor”
I’ve been taken news stories out of Afgan with a grain of salt cause they want to increase troops.
reminds me of Nam & southeast asia. They always wanted to increase troops, using the same rhetoric.
Then they pull Gulf of Tonkin, come to find out, it never happened.
Thousands of US boys (and vietnamese too)slaughtered. for what? the domino effect? if one will fall they all will?
what a crock of god damn sh*t.
just like this so called war on terrorism.
you wanna end terrorism, easy… don’t engage in it.
now, I’m hot under the collar.
I need a glass of wine.
SAS
SAS
“Then they pull Gulf of Tonkin, come to find out, it never happened.”
I collect stuff.
I have the ship-to-shore communication between the USS Maddox and NCS Phillipnes. Signed by the radio operators the printouts cover about three hours of action on Aug 4.
Included are torpedo attack (1449), ramming of a pt boat (1507), multiple torpedos fired (1525), returning fire (1528), evasion of up to ten torpedos in water (1538), two torpedo craft sunk (1547), and on….
The final entry on p.3 at 1724, quoting directly:
“Review of action makes many reported contacts and torpedoes fired appear doubtful. Freak weather effects on radar and over eager sonarmen may have accounted for many reports.”
F*ing amazing.
The US should declare World Peace, disband its military, allocate all resources to health care and social programs, as we join hands coast-to-coast singing kumbaya.
Peace In Our Time, and all that.
ASPIRE,
More ways for those who actually pay the taxed to give money to those who don’t. Lovely.
ASPIRE,
More ways for those who actually pay the taxes to give money to those who don’t. Lovely.