“Few bright spots”

From the Star Ledger:

Home prices, sales decline

There are a few bright spots but by and large Somerset and Hunterdon counties — much like the rest of the state — were not spared from falling home prices and decreasing home sales from 2008 to 2009.

Home sale data show that Somerset County saw a drop-off in the median selling price of a home of about 8.4 percent, falling from an median sale price of $360,000 to $329,750. The number of homes sold slipped about 30 percent, from 1,066 homes sold from January to June in 2008 to just 749 sold in the first six months of 2009.

Hunterdon County fared slightly better in sale prices, but saw an even more substantial decline in the number of homes sold. The median sale price fell from $382,750 to $365,000, a drop of about 4.7 percent. But the number of homes sold slid by more than 40 percent, from 426 in 2008 to just 253 in 2009.

The data are based on an analysis of state information on home sales comparing the first six months of 2008 to the first six months of 2009.

State data show the median sale price of a home in Green Brook fell by 36 percent, from $475,000 to $300,000. In Bernards, home sale prices fell just under 28 percent from $573,000 to $410,000 while Bound Brook saw a drop of just under 20 percent, from $324,900 to $260,000.

Some of the larger municipalities in Hunterdon, like Clinton and Union, also registered drops in sale prices. Clinton Township saw its median home sale price fall from $425,000 to $371,500, about 12.6 percent, while Union’s sale prices fell from $211,500 to $176,000, or about 16.8 percent.

There were some municipalities that bucked the trend in Somerset County, however. The data show Branchburg and Raritan each posted gains in the median home sale price, while nearby Hillsborough held steady. Branchburg recorded the highest of these gains, jumping by more than 16 percent with the median home sale increasing from $372,000 to $432,500.

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223 Responses to “Few bright spots”

  1. grim says:

    Hat tip to renter for the link

  2. grim says:

    From the NYT:

    In Jersey City, Not Your Run-of-the-Mill Condo

    “I KNOW there is something I would rather be doing than trying to sell another 104 condos in this market,” George Filopoulos recalled saying to himself drearily last winter, as work on the third tower at the immense Beacon complex approached the halfway point.

    Then, suddenly, he saw it: There was something radically different that could be done, and it might be worth the gamble; the project instantly changed shape in his mind.

    It is now 10 months later and that third tower is on the market, but offering just 25 units — really huge live-work loft units, all with panoramic views and private or semiprivate elevators.

    The lofts went on the market in late October at the top of the price range for New Jersey’s Hudson riverfront area. A half-floor loft is priced at $880,000; a whole floor is $1.76 million.

    With the condo market still generally considered to be limping along, are there buyers out there for these soaring spaces at sky-high prices?

    “It’s a gamble,” Mr. Filopoulos said. “But we wanted to do something fresh and exciting. And compared to Manhattan, this pricing is an amazing bargain. If you could even find something like this in Manhattan, and that is certainly problematic, the cost would be double, or maybe more.”

  3. grim says:

    From the Star Ledger:

    N.J. real estate bust hits urban home sales the hardest

    Back when the real estate market was booming, Servio Montero was selling houses in Newark as quickly as they were built.

    “Even before they were built,” said Montero, who has been selling real estate for two decades. “We would have a listing that the house was going up, and we’d have the client right there.”

    These days, however, his phone at Exit Realty seldom rings. From January to June, he said he did not make a single sale.

    “It was dead,” said Montero, who depleted his savings this year to survive a 70 percent drop in his income. “It was so bad you cannot imagine.”

    As the real estate boom turned to bust this year, New Jersey’s urban areas, where prices had risen to record levels before the recession, took the greatest tumble, according to a Star-Ledger analysis of home sales data. During the first six months of 2009, the number of residential sales in cities fell 42 percent compared to the same period in 2008, according to the figures.

    The urban homes sales bust is in sharp contrast to rural and suburban communities, where the number of transactions fell by more than a third but median sales prices only saw single-digit percentage drops. Experts say that tightened credit and foreclosures — many due to fallout from the subprime loan mess — have helped fuel the downward spiral in urban areas. Newark, for example, saw a 56 percent drop in sales volume during the first six months of 2009, East Orange a 76 percent decrease, Plainfield 40 percent and Irvington 54 percent.

    The results reinforce a harsh economic reality: inner cities are often the last to benefit in a boom real estate market and the first to feel the effects of a bust.

    “In a deteriorating market declines appear first and are greatest in urban areas,” said Jeffrey Otteau of the Otteau Valuation Group in New Brunswick. “Those homeowners or potential home buyers are disproportionately affected by the downturn and so that creates higher rates of mortgage delinquency and lower purchase prices.”

    Statewide, the median sales price for homes in the first six months of the year was $308,000, or 5.8 percent below 2008.

    Hudson County saw the largest drop in median prices, falling 13.5 percent, while rural Sussex County saw the least decline among northern New Jersey counties at less than 1 percent.

  4. grim says:

    From the Daily Record:

    Homes move fast in Morris if priced to sell

    The Vitzs’ sale of his house in Butler last month after two months on the market is typical of the experience many in Morris County are having in trying to sell a home.

    Christopher Vitz said he and his wife originally listed the three-bedroom, 1.5-bath house for $339,000, but dropped that to $319,000 — even less than the real estate agent had recommended — and they had an offer within days. They settled on $310,000.

    “I think the price was fair based on other current sales in the area,” said Vitz, who is looking for a larger home for his family of five. But, it’s less than he could have gotten a few years ago.

    “The house would have sold for approximately $350,000 to $360,000, as other comparable houses around us sold that high,” he said. “However, we could not have afforded a larger home, due to the inflated prices.”

    According to an analysis of New Jersey Treasury home sales data, just 757 houses sold for at least $10,000 in all of Morris County between Jan. 1 and June 30. That’s 28 fewer homes, or 3.6 percent, than sold during the same period in 2008 and only 18 percent of the 4,261 houses sold during the first half of 2005. Statewide, the declines were slightly larger: 4 percent over one year and 85 percent since 2005.

    The median price of houses sold is also lower for the third year in a row. During the first half of 2009, the median price of a home sold in Morris was $383,000, more than 10 percent less than 2008’s $427,500 median for the same time period. The median residential price for a home in Morris peaked at $450,000 in 2006. Statewide, the drop was worse: $280,000 was the New Jersey median sale price in the beginning of 2009, almost 15 percent less than a year earlier.

  5. frank says:

    I agree with this article, homes in Newark, Irvington and Paterson are worth $0.0.

    N.J. real estate bust hits urban home sales the hardest

    http://www.nj.com/news/index.ssf/2009/12/nj_urban_home_sales_rocked_har.html

  6. canadphlprcs says:

    Canadian Pharmacy – Canadian Quality Medications at Affordable Price
    http://www.astrobio.net/includes/store/

  7. Shore Guy says:

    In some of our northern cities, itseems like ths bright spots are intense flames.

  8. Shore Guy says:

    In some of our northern cities, itseems like the bright spots are intense flames.

  9. frank says:

    Weeeeeeee, I am homeless from Chatham, NJ
    I wish I could feel the pain, homeless in Newark I understand but Chatham???

    http://www.nj.com/news/index.ssf/2009/12/morris_county_sees_growing_num.html

  10. Shore Guy says:

    I guess this points to a difference between a failure to pay apartment rentand failure to pay a mortgage. It looks like the renters have far less ability to hang on without paying. Clot?

  11. Shore Guy says:

    The UK appears ready to impose a windfall profits tax on UK banks and the nankers receiving outsized bonuses:

    http://news.bbc.co.uk/nolpda/ukfs_news/hi/newsid_8398000/8398189.stm?

  12. Shore Guy says:

    nankers, bankers, wankers, whatever.

  13. 3b says:

    Dont miss your opportunity to buy this POS. Property sold in as is condititon, with yearly property taxes of $12,100 per year!!! All yours at an asking price of $425,000.

    http://www.njmls.com/cf/details.cfm?mls_number=2950147&id=999999

  14. BC Bob says:

    Rain Man [9],

    What recession?

  15. Veto That says:

    This variation from town to town is incredible. Some towns are down 36% while others are up 16%. Now i dont feel so bad about my town not tanking as much as id hoped for. I guess i should be happy prices arent up.

    “State data show the median sale price of a home in Green Brook fell by 36 percent, from $475,000 to $300,000. In Bernards, home sale prices fell just under 28 percent from $573,000 to $410,000 while Bound Brook saw a drop of just under 20 percent, from $324,900 to $260,000.
    Clinton Township saw its median home sale price fall from $425,000 to $371,500, about 12.6 percent, while Union’s sale prices fell from $211,500 to $176,000, or about 16.8 percent.
    There were some municipalities that bucked the trend in Somerset County, however. The data show Branchburg and Raritan each posted gains in the median home sale price, while nearby Hillsborough held steady. Branchburg recorded the highest of these gains, jumping by more than 16 percent with the median home sale increasing from $372,000 to $432,500.”

  16. yo'me says:

    Economists Who Foresaw U.S. Payroll Surprise Now See Job Gains

    The drawdown in inventories and rising corporate profits are the most compelling reasons for payrolls to begin showing sustainable increases as soon as this month, these economists said. What’s more, the recent trend of upward revisions will probably continue, signaling the worst employment slump in the postwar era may have already ended.

    “We could see a positive number for November next month,” said Stefane Marion, chief economist at National Bank Financial Inc. in Montreal, whose forecast of a 30,000 payroll drop was the closest. “Firms now are beginning to redeploy some of their cash flows” by hiring new workers, he said.

  17. cobbler says:

    veto [15]
    The differences you are looking at (I am not talking Newark, etc.) are mostly due to the sales distribution change v. no change. The bigger the “bimodality” of the housing in a given town the jumpier the median gets. I am sure that comparable houses in say Raritan and Bound Brook dropped about the same.

  18. cobbler says:

    Dec. 7 (Bloomberg) — Japan may ban manufacturers from hiring temporary workers, Health and Labor Minister Akira Nagatsuma said, as Prime Minister Yukio Hatoyama seeks to fulfill a campaign pledge to shift more employment to full time.

    The government is preparing legislation “that will stop manufacturing firms from employing temps and encourage them to hire full-timers,” Nagatsuma said yesterday on a business program broadcast by public network NHK.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aXgmqVOATlbk&pos=7

  19. Schumpeter says:

    Shore (10)-

    I’d imagine eviction is a breeze in a place like Warren Co. Landlord/Tenant Special Civil Part is probably not inundated with cases. Show proof of non-payment, get the writ, get a marshal…and that tenant is out.

  20. Barbara says:

    ok, so I’m going to see a bank owned listing. I’m going through the listing agent/broker. She says that the list is the bank approved price, so, does that mean its firm? She seemed to indicate so. Without seeing it in person I would say its a little overpriced still, but close.
    Advice? Will the bank negotiate?

  21. Veto That says:

    cobbler – id have to see the data to believe it explains all of the variation.
    im sure ‘bimodaility’ can explain some variation between similar towns but i do not believe it can explain a 16% yoy price increase vs a 36% increase.

  22. Veto That says:

    I meant
    a 16% yoy price increase vs a 36% DEcrease.

  23. still_looking says:

    BC, 14

    That’s not rain, it’s piss.

    sl

  24. cobbler says:

    veto [23]
    assume you have a town with two distinct halves: one with 300K homes, another with 600K homes. Both are trending down at say 15% a year. Very few houses are in between these 2 groups (say, 10% of the sales). The year-to-year shift in sales distribution between the 2 main groups from 60/40 to 40/60 (which is totally feasible because the sales volume is lousy) will give you +/- 30% jumps in the median price. And this is totally independent of the price trend down for any given house.

  25. still_looking says:

    frank, 9

    “I wish I could feel the pain,”

    Come to the next GTG so we can help you.

    sl

  26. Veto That says:

    13 – 3b.
    that house in river edge is a pretty good price compared to 3 years ago when i was looking there.
    How much do you think prices dipped from 2006 peak in that town?

  27. confused in NJ says:

    9.frank says:
    December 6, 2009 at 12:27 pm
    Weeeeeeee, I am homeless from Chatham, NJ
    I wish I could feel the pain, homeless in Newark I understand but Chatham???

    http://www.nj.com/news/index.ssf/2009/12/morris_county_sees_growing_num.html

    Amazing how Washington’s Cost of Living is so out of sync with Main Street’s Cost of Living.

  28. Veto That says:

    cobbler, thats a possibility. I would think more of the homes that are moving right now are the lower half – because of the 8k credit and also because of move down buyers – but thats just a guess.

    Another reason for my skepticism though is because i live (and have been looking to buy) in one of those towns that are defying trend and i study every comp under a microscope and come to the same conculsion that economies differ big time from town to town. Some are holding fire sales with 2 yrs inventory and others are selling within 60 days at early 2005 prices – and the demographics and socioeconomics dont necessarily have to be extremely different but it seems to me that lower socioeconomic towns are more distressed and taking bigger hits – another guess.

    The problem with median that you suggest is probably happening to a degree too. I never really looked at that closely. I guess it wouldnt be impossible to pull up some same sale comps in branchburg and green brook right to see but that would prob take lots of time.

    It would be interesting to hear what shumpty thinks about this varioation – i think those towns are his area.

  29. Veto That says:

    Here is an interesting comp for Greenbrook

    306 Top Ave, Green Brook, NJ
    4 Beds, 3.5 Baths 2,364 sqft
    Previous Sales
    12/29/2008 – 670,000
    09/27/2005 – 291,000
    03/16/2005 – 259,000
    09/29/2000 – 152,000

    Clearly bought in 2005 and rebuilt from ground up but i wonder how this is handled in the median price comps.

  30. Veto That says:

    Here are a few more in green brook.
    I cant see anything out of the ordinary. Everything looks like 2004 prices to me, which tracks CS Metro NY – except for the higher priced home which seems to have taken a bigger hit into the 2002-03 price range.

    32 Fairway Dr, Green Brook, NJ
    6 Beds 5.5 Baths 6,274 sqft
    Previous Sales
    11/10/2009 – $1,080,000
    06/3/2004 – $1,295,000

    1120 N Washington Ave, Green Brook, NJ
    4 Beds, 2.5 Baths 2,424 sqft
    7/21/2009 – $445,000
    5/29/2003 – $332,500

    24 Swanson Ln, Green Brook NJ 08812
    4 beds, 3.0 baths, 1,350 sq ft
    09/15/2009 – $415,000
    07/10/2003 – $385,000

    2 Greenway Ln Green Brook NJ 08812
    4 beds, 2.0 baths, 1,724 sq ft
    09/9/2009 – $359,900
    6/24/2005 – $429,900
    4/19/2005 – $340,000

  31. syncmaster says:

    This is an anecdote only, but townhouse/condos in the section of P-way I live in (on Birch Run) are selling only marginally above 2003 prices, well below 2004.

  32. 3b says:

    #27 veto: Not the price, but the taxes over $12,000!!! For a simple S/L, that needs work. Over $1000 a month before you even touch prin, int, and ins IMO is outrageous.

  33. 3b says:

    #16 Lets see how the Christmas shopping season goes, before we talk about increased hiring. So far the reatil #’s are pretty dismal.

  34. Schumpeter says:

    veto (29)-

    I’m sure there are plenty of sales that skewed the numbers, since the overriding factor is too few sales in many of these townships to allow a “noiseless” number to be calculated.

    Anybody who thinks that their town is immune, based on some slop that the Star-Ledger (itself an insolvent, slime-dipped rag) regurgitates in print deserves whatever they have coming.

    And, what’s coming in virtually every instance, is a generational butt-plunging, no Vas.

  35. Schumpeter says:

    Another day closer to oblivion…and oblivion is just ahead, as viewed through the windshield of my time machine.

  36. jamil says:

    damn, this post-traumatic stress disorder (aka rapid health-care/graduate student worker syndrome) is getting out of hand.

    “A Binghamton University professor is dead tonight after being stabbed by an anthropology student.”

    Another way of putting it:
    “Abdulsalam Al-Zahrani killed Richard T Antoun, author of Understanding Fundamentalism: Christian, Islamic and Jewish Movements.”

  37. yikes says:

    anyone here have any teaching experience at Princeton University?

    I looked online but can’t find anything about whether or not you need an advanced degree to teach there.

  38. bi says:

    37#, you may be right this time.

    http://www.cmegroup.com/popup/mdq2.html?code=GCGLOBEXZ9&title=December_2009_Gold&type=p#link=daily

    >Another day closer to oblivion…and oblivion is just ahead, as viewed through the windshield of my time machine.

  39. bi says:

    39#, if you don’t have ph.d degree, just forget it.

  40. Veto That says:

    “oblivion is just ahead”

    Shumpts, by obvlivion i hope you mean more affordable home prices.

  41. still_looking says:

    Veto, 31

    I know the last house listed’s owner personally.

    They are renting now with no desire to buy in NJ that I know of.

    sl

  42. Veto That says:

    “Lis pendens at about 1999 price”

    Now we are talking.
    i wonder if these distressed sales get included in the medians.

  43. Veto That says:

    “They are renting now with no desire to buy in NJ that I know of.”

    SL, seems like they took a decent hit there. $70K ouch.
    I guess they fell for the old stainless granite upgrade flip back in 05. that one will get you every time.

  44. Morpheus says:

    My god!
    In between work, I fulfilled a promise to my wife: went to see three houses in denville.

    They were not POS—They were crap shacks. When these homes actually make my shitty apartment look good, it is very depressing.

    One had a deck that even the realtor would not venture on to.

    One had the oldest furnance I have ever seen: must have been at least 50-60 years old. It was also very close to route 80. Very loud.

    The last one would be a tear down. I felt the need to shower after entering it. Major work needed.

    Oh well, the hunt continues.

    oh. .the last house we bid on: apparently there was a in ground oil tank that was removed. Massive soil contamination that had to be removed. So much that the house need supports for the foundation. Seller did not disclose the soil remediation. Our realtor believes that they should have. It was not in the seller disclosure statement. wonder what else is wrong with that house.

  45. Morpheus says:

    isn’t real estate fun?

  46. still_looking says:

    Morph, 47

    I just wanna take my ball and go home (and rent.)

    sl

  47. still_looking says:

    Veto, 45

    UC in 10 days at ask, but obviously w/ loss.

    sl

  48. Schumpeter says:

    Take a look at any house on the market in NJ right now. In every case, something is wrong with:

    1. The house.

    2. The seller.

    3. Both.

    4. You…for looking at it.

  49. Schumpeter says:

    When either bubonic plague or smallpox get a good foothold in the general population, that would be a good time to get in your car and check out some houses.

  50. Schumpeter says:

    Of course, don’t leave home without a reliable flamethrower.

  51. PGC says:

    #21 Barbara.

    There is wiggle room. It mainly comes down to the strength of your offer. If you are showing up with a boat load of cash and solid credit you can put yor number up an see if they go for it. The big problem is turn around time for the offer. Thebank will have a set number they can go with. IF you arebelowthey have to send it back to the audit department to get sign off on the nw floor. That is were short sales can grind to a halt.

    When I went through it, I was close to the list, (it had just dropped another 50K) We got the attorney to drop the as is clause and got them to split the cost of repairs through a credit at closing. The REO comapnay had painted the basement and shut off the water, that had covered up issues that we could not hve foreseen at the offer stage.

  52. Schumpeter says:

    Tomorrow we will all wake up, get back on the treadmill…and human cancers like this will continue to ruin us all:

    “Bernanke is trapped in academic wonderland. He is immune to both logic and real world practical experience and instead relies on beliefs and formulas already proven to have failed at every chance.

    The problem then is the same as the problem now: monetary printing and too cheap money. The only regulation that makes any sense as a cure is to get rid of the Fed and its bubble blowing tactics.”

    http://globaleconomicanalysis.blogspot.com/2009/12/bernanke-rethinks-bubbles-but-still.html

  53. Schumpeter says:

    I look at any piece of news these days and just wish I had no family ties, no progeny, a large arsenal and a desire to set things right.

  54. PGC says:

    Gator/Stu

    Was this the place you ookd at a few weeks back that needed the total gutting. Its a nice 5/2 multi in Montclair, built in 1852. The 15K taxes are a pain, but I’m sure the $229K list price could give you wiggle room in the tax appeal.

    Bid 190, take it down to the studs 80-90K, subs and IKEA and you have a nice little rental.
    http://www.sellstatepropertysolutions.com/idx.cfm?action=dsp.info&listingSystem=gsmls&mlsnum=2702081

    Remember, where there’s mold theres’ gold.

  55. Barbara says:

    54.
    PGC,
    I have cash, but will be financing. My approach is to keep as much cash as my qualification will allow. IMO the house is about 8% over what I would be willing to pay. We can wait, so that may work in our favor, however from what I read here, I feel like it will just go into a forgotten pile.

  56. Schumpeter says:

    Barb (57)-

    You want the best deal from a bank?

    All cash, or go home.

  57. PGC says:

    Grim,

    Looks like my friends at NJREO are doing well.

    http://www.sellstatenews.com/feature_article_04-2009.htm

  58. NJGator says:

    PGC – this is a different house…I think it’s on Orange Road. We’re not looking for another Montclair multi to buy. My only interest in the multi-family market in town at this point is for comparables for our 2010 tax appeal :)

    The one I might have mentioned on the board is this one. GSMLS 2683951. The town actually submitted it as a comp to defend our $580k assessment. Someone paid $550k for in in 12/07. It’s now listed short for $144,900.

    http://imagehost.gsmls.com/pubhigh/51/2683951_0.jpg

  59. Schumpeter says:

    Sleep tight. All’s well in Venezuela:

    CARACAS (Dow Jones)–One of President Hugo Chavez’s top collaborators will resign from his post following the arrest of his brother as part of a brewing banking scandal.

    Jesse Chacon, who currently serves as Science and Technology Minister, offered his resignation after his brother, Arne Chacon, turned himself in to the Venezuelan secret police on Saturday as part of a widening probe by prosecutors into the financial system.

    Chavez moved Sunday to distance himself from the scandal and said that he had spoken directly with the government’s top prosecutor, Luisa Ortega, and requested that she move quickly to punish the people responsible with the failed banks.

    Chavez also said that he told the Venezuelan secret police to swiftly imprison Arne Chacon, the president of Banco Real and Baninvest, which were seized by the government Friday.

    Jesse Chacon will resign from his post because of the scandal, Chavez said during his weekly televised program.

    “I’m very sorry that he is the brother of a minister, but we’re showing that no one here is untouchable,” he said.

    Chavez said that he called the Venezuela secret police and told them that Arne Chacon “is the first one that I want to have arrested.”

    Three executives from Banco Real CA, which was seized by the government Friday, are now behind bars, including Chacon, who headed the bank.

    “How is it that Arne Chacon, who was born without anything, is now the president of a bank?,” Chavez said. “Our radars are failing,” he said.

    “I spoke with Jesse yesterday (Saturday) and I know he understands,” Chavez said. The president said that he only met once with Arne Chacon, a former lieutenant in the Navy.

    The Chacon brothers helped Chavez stage a failed coup attempt in 1992 that led to their imprisonment but helped Chavez achieve national fame and allowed him to win the presidency seven years later.

    In the past, Arne Chacon served in the tax collection agency and the office of the vice presidency and headed Banco Industrial de Venezuela, a troubled state-run bank.

    The Chacon brothers were not reachable for comment. Before his recent problems, Arne appeared in the local press as the owner of racing horses, including a race horse named Il Divo.

    He is now linked to the failure of Banco Real CA, which the government seized, along with Central Banco CA and Baninvest CA, bringing to seven the number of intervened banks in the past week.

    The seven banks account for about 8% of deposits in the banking system. Government officials say they are being taken over to protect depositors from the banks’ owners, who are being accused of using the banks for self-lending, among other charges.

    On Sunday Moody’s Investors Service downgraded the unsupported bank financial strength ratings of Banco Mercantil CA and Banco de Venezuela (Banvenez) to E+, from D-, which translates to a baseline credit assessment of B1.

    Moody’s also downgraded both banks’ local currency deposit ratings to B1, from Mercantil’s Ba3 and Banvenez’s Ba2, and assigned a negative outlook on these ratings.

    The two banks are among the biggest in the country. In a press release, the agency said the downgrade was in “response to the heightened degree of uncertainty for credit and business conditions that the Venezuelan banking system now faces.”

  60. PGC says:

    Anyone up for a njrereport Section 8 SIV

    http://www.sellstatepropertysolutions.com/idx.cfm?action=dsp.info&listingSystem=gsmls&mlsnum=2700872

    Clot, is the amount of paperwork/ hassle worth the effort for an agent on a $40K short sale?

  61. Schumpeter says:

    PGC (62)-

    What the hell else is there for us agents to do?

    Sure, it’s worth it. Probably quite an education to be derived from disposing of that property.

  62. NJGator says:

    Montclair Tax Outrage of the Week –

    In addition to our $35M school currently under construction, which our appointed BOE has yet to determine how it should be used and how much additional funds will be needed for salaries and the operating budget, our town council is about to spend $3.5M to purchase a building to possibly be used as a rec center. I say possibly because the town is not entirely sure what we will use the building for, but it’s available and a “good opportunity”. The Township of Montclair currently has about $200M of debt and the current council was of course elected on a platform to reign in municipal spending to get our taxes under control. Clot what would you do if you lived here?

    A Resolution Authorizing Negotiations for the $3.5MM purchase of the Senior Center is on the Agenda for this coming Tuesday (Resolution #25).

    Council members have received a “rough” overview of the justification, but only the beginnings of financial cost and programming information.

    This Resolution is likely to pass, as only Councilor Baskerville and myself have indicated opposition.

    It is interesting that in the introduction to the report, it is pointed out that there are many facilities the township already has but really doesn’t need, such as:

    “Clary Anderson Arena, the Presby Iris Gardens, three swimming pools, public tennis courts, an extra library branch, etc.”

    I find it ironic that Presby is mentioned. Presby is not owned or run by the Town. Indeed the County “rescued” Presby when the Town refused to support it at any level. Presby costs the Town nothing.

    Cary Africk
    2nd Ward Councilor

  63. PGC says:

    #63 Clot

    Fair point, but at that level its a coin flip between selling RE and selling cars. The cars have less up front outlay.

  64. fly-over says:

    My fiancee has a possible management position for which domicile near Tom’s River would be desirable. I would need to commute to mid-town or possibly Princeton a few days a week.

    Any suggested areas to consider/avoid?

    Thanks from fly-over country.

  65. Barbara says:

    58. Schump,
    I’m sure that I would get the best deal all cash, and no, I won’t be going home. I also wont be forking over 600,000 in cash to said bank, nor will anyone else, I am quite confident. Besides, if I’m prequalified and get the loan, what will the bank care, its all cash to them, debt to only me and the other bank.

  66. Shore Guy says:

    Near TR but easy to get to Manhattan? Point Pleasant, perhaps. Brick sucks, as do Jackson and Lakewood, and just about anyplace else in Ocean County (with the exception of a few places on the coast – eg. Bay Head, Mantaloaking, LBI. A possibility is the Cream Ridge/Allentown area. It is west of TR, but has access (with a bit of a drive) to the train, or one can head up the Tpk to NY. The back roads to TR are not bad, and beat the Parkway.

  67. Mantalooker says:

    Hi 67 Toms River…
    OK live in TR, commute to NYC or Princeton variables… drive to Princeton 45 min via 70 to 495… to NYC take express bus from TR… or drive to Bay Head for train, or drive to Long Branch for non local train… check schedules different times of year.

    Not a joke… largest military tanker base/ refill on eastern seabord in Lakehurst area. In and out traffice at all hiurs of day and night…As far as fly overs… Tanker planes come and go into McGuire AFB near Lakewood, Ft. Dix … Usually fly over Seaside Heights, Brick, sometimes circle patterns usually straight in at higher altitude over TR… no real noise concerns to my memory. They stayed at higher altitudes even on descent… oubound a little different… striaght out ( full load ) to Atlantic via Seaside Heights.. I lived in Mantolk. rarely made it up here except for pattern stack durung weather…
    Good towns… well… Bay Head, Pt. Beach, Pt. Borough, Brick ( on the bay area ), Lavalette, Seaside PArk.. depends how far the NYC comm. wants to dash… I was in that Area for years… it has changed… Lots of blather… hope I helped… Mantolooker

  68. Schumpeter says:

    gator (64)-

    Sharpen my aim.

    “Clot what would you do if you lived here?”

  69. Schumpeter says:

    flyover (67)-

    New Jersey.

    “Any suggested areas to consider/avoid?”

  70. Schumpeter says:

    Barb (68)-

    Cash deals- as is, where is- take down REO at the best price.

    Every other price is the wrong price.

    Pardon me for not writing a novel here, but you ain’t gonna rewrite the rules of the game.

  71. Barbara says:

    73,
    again, I’m sure that would get me my “best price” so I will settle for a price less than “best price” knowing full well that nobody’s coming in with 600,000 cash for this house.

  72. NJGator says:

    Barbara – Buyer Beware if it’s in Montclair. My 4 year old could run this place better than the current crew.

    Good luck!

  73. Barbara says:

    Gator,
    I just read you post above. Truth be told, its not unique to Montclair. I live in a town that’s even worse.

  74. yo'me says:

    Gold Can’t Beat Checking-With-Interest 30 Years After Last Peak

    Dec. 7 (Bloomberg) — Gold’s best year in three decades has yet to match the returns of an interest-bearing checking account for anyone who bought the most malleable of metals coveted for at least 5,000 years during the last peak in January, 1980.

    Investors who paid $850 an ounce back then earned 44 percent as gold reached a record $1,226.56 on Dec. 3 in London. The Standard & Poor’s 500 stock index produced a 22-fold return with dividends reinvested, Treasuries rose 11-fold and cash in the average U.S. checking account rose at least 92 percent. On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back.

    “You give up a lot of return for the privilege of sleeping well at night,” said James Paulsen, who oversees about $375 billion as chief investment

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aK_9rHEF2irA&pos=3

  75. Newbie here. I wanna to join this one day. Its looks like fun. I wanna to see you all next time if you allow me.

  76. Schumpeter says:

    It’s all going down in flames.

  77. Schumpeter says:

    I wish seppuku would take hold in the US. If it did, this is the first person I’d like to see go:

    “Neel Kashkari could only handle working for the Treasury Department for eight months before he had to move to a cabin in the woods.

    The Washington Post reports: He wears no coat though it’s freezing, shines no light though it’s near midnight, carries no shotgun though he’s tramping on the pine-needled tracks of black bears.

    A little weight gain and life in charge of $700 billion drove him crazy.

    Soon he became addicted to Doritos and gained twenty pounds.

    “I’m a stress eater,” the former bailout chief explains.

    Eight months of munching later, the 5’10” bailout czar weighed-in at over 200 pounds. Hank Paulson told him he was fat. Kashkari says his “biceps felt like bags of jello.”

    After a self-intervention, things are going well. In six months of “detoxing,” he has lost almost twenty pounds, by trading bags of chips for chopping wood all day, going to the gym and taking 45-mile bike rides.

    He’s happier too – reporter Laura Blumenfeld doesn’t mention Kashkari boring any of his signature “death stares” into her.”

    –snip–

    “Seven hundred billion was a number out of the air,” Kashkari recalls, wheeling toward the hex nuts and the bolts. “It was a political calculus. I said, ‘We don’t know how much is enough. We need as much as we can get [from Congress]. What about a trillion?’ ‘No way,’ Hank shook his head. I said, ‘Okay, what about 700 billion?’ We didn’t know if it would work. We had to project confidence, hold up the world. We couldn’t admit how scared we were, or how uncertain.”

    http://www.washingtonpost.com/wp-dyn/content/article/2009/12/04/AR2009120402016_3.html?hpid=artslot&sid=ST2009120402037

  78. Dissident HEHEHE says:

    Anybody here a citizen of Hopenhagen?

  79. still_looking says:

    yo’me 78

    What about the folks who bought during the not at the peak ie: dips?

    I wonder if you frame shift the data, the numbers are as favorable…

    It’s like saying that folks who bought houses at the peak of the last housing bubble are still losers (they may well be just that…)

    Just wondering…

    sl

  80. bi says:

    gold futures down 3% on top of 4% friday. stay or wash out?

  81. Shore Guy says:

    “We couldn’t admit how scared we were, or how uncertain.”

    I remember speaking to people in the WH around that time and their “fear” was clearly evident during those conversations. I may have posted something about it at the time.

  82. still_looking says:

    I just looked at the chart.

    If you bought one year earlier (1979) gold was at $200 per oz.

    How does that calculation work out for those folks?

    sl

  83. still_looking says:

    Shore, 85

    Nice to see that they don’t fear the now or the near future.

    It’s like being on a cruise ship with a giant hole in the side, a failed engine and brain dead captain. So long as food keeps arriving, the band keeps playing and appearances are kept up. No one worries.

    None of this is a problem, til it is.

    sl

  84. lostinny says:

    87 SL

    Perfect example. My parents are going on a cruise Friday. :)

  85. still_looking says:

    Lost, 88

    Thanks! How’s the ankle doing?

    sl

  86. lostinny says:

    89 SL
    Same. Emailing you now.

  87. BC Bob says:

    “gold futures down 3% on top of 4% friday. stay or wash out?”

    [84],

    Further confirmation that BI is a complete ignoramus. He/she/it states that gold is demonstrating a bearish head and shoulders formation, back in Aug. Just a total idiot, it was a bullish inverse head and shoulders.

    Since Bi’s bearish call, gold rallied over $300. Funny, didn’t hear a peep out if him/her/it. Now it retraces and it’s back to Mr Roger’s neighborhood.

    Why are you asking this question now? I addressed this back on 11/25. Go hunt for my post. While you’re hunting get short all the way down to 1K.

    Can we hire Elin for the day. Bring Tiger’s driver and say hello to Bi.

  88. d2b says:

    Interesting time for Kuwait to sell their Citi stake with the recovery just starting?

    Either they think it’s at the top or they need the money. Maybe they have exposure because of Dubai.

  89. Schumpeter says:

    BC (91)-

    What a waste of a perfectly good golf club that would be.

  90. Schumpeter says:

    I say bi should get clocked with a bar of tungsten.

  91. Schumpeter says:

    Methinks the dump cycle has begun on C.

  92. gary says:

    Schump,

    Why do you think C is in dump cycle? Are they going to get chopped up?

  93. still_looking says:

    does anyone have a quick link to the list of most close to bankrupt US states?

    Thanks in advance.

    sl

  94. Schumpeter says:

    “The scale of lending across the world – with an estimated £3,000bn ($4,940bn, €3,300bn) of property debt outstanding in the US and Europe – and the ferocity of the crash has meant institutions have not been able to afford action such as in the early 1990s, when panicked banks dumped distressed property in spite of more moderate market declines.

    HSBC estimates that 85 per cent of UK loans made in the past five years are in breach of lending agreements. But banks are ignoring such problems. Instead they are rolling over loans as these near maturity, in the hope that capital values and loan-to-value (LTV) ratios will rise once again to refinanceable levels.

    Analysts fear banks are storing up losses, particularly for lesser quality property. CB Richard Ellis, a consultancy, estimates that there are about £80bn ($132bn, €88bn) of poor quality property loans in the UK alone, or 27 per cent of all the British sector’s debt. More than £30bn worth are in breach of debt agreements or in default, according to De Montfort University – a tally that has doubled in just six months.

    MORTGAGEBACKED SECURITIES

    ‘A recovery may not come in time to absorb the wave of bullets falling’

    Credit rating agencies have raised fears that billions of dollars worth of bonds secured against commercial property in the boom years could default because of the crash in real estate values.

    Some $3,500bn (€2,355bn, £2,125bn) of commercial property debt is outstanding in the US alone. Of that, about one-quarter was securitised, where groups of loans are packaged and sold to investors in tranches offering different levels of risk and profit.

    Moody’s has warned that commercial mortgage-backed securities (CMBS) issued during the boom are set to incur significant default rates, given an average fall in values of 43 per cent since the peak in the US. The holders of certain riskier bonds are already expected to have had their investments wiped out.

    Troubles will grow as maturities approach on bonds issued at the peak of the market, according to Moody’s. It is estimated that up to $153bn of CMBS will come to maturity by the end of 2012 and $100bn will face refinancing difficulties. The US government has already been forced in effect to underwrite the CMBS market.

    Fitch, another rating agency, has warned of similar pressures in Europe, where CMBS worth as much as €66bn ($98bn, £59bn) are due for maturity before 2014. About 40 per cent of the instruments issued between 2004 and 2008 were in the UK or Germany.

    Fitch predicts a bottleneck in Germany, with €13.5bn of loans due in 2013, twice the UK’s predicted peak of €6.6bn in 2012.

    A property recovery may yield only limited benefits. “It is questionable whether a recovery will be in time and in sufficient magnitude to absorb the wave of bullets falling from 2011 onwards,” says Euan Gatfield, analyst at Fitch.

    Although CMBS can be extended, securitisation rules are not simple and most of the products have a legally finite life.

    “We have never been at this point before. We don’t know how litigious it might get,” says Ian Marcus of Credit Suisse. “It all comes down to who bought the bonds. In Europe, it was primarily hedge funds and special investment vehicles, rather than a stable base of institutions as in the US.”

    The UK and the US have better restructuring processes than other European markets, and work has already begun on some problem loans. Most notably, the White Tower loan that backed a portfolio of London offices once valued at £1.8bn is swiftly heading for disposal.

    “Let me not pretend that it is not something that we are looking at closely. It represents a risk. We recognise that loans with LTVs of over 100 per cent will not be refinanced,” says Andrew Haldane, director for financial stability at the Bank of England. “The hope would be that new sources of finance will come to the market before the refinancing dates.”

    The problem becomes acute as borrowers face repayment calls on loans in negative equity that they cannot meet and the financial market cannot afford to replace. Dubai is just the start of refinancing problems.”

    http://www.ft.com/cms/s/0/70cd9474-e29b-11de-b028-00144feab49a.html?nclick_check=1

  95. Schumpeter says:

    gary (96)-

    Just guessing that a lot of folks (like Kuwait) think it’s run up as far as it can…and some of those folks may be needing cash.

    Also think- contrary to his public bleatings- that Eraserhead will stick the shiv into C- at precisely the worst possible time- to satisfy his masters, Dimon and Blankfein.

  96. jamil says:

    Nice summary, but what does he knows about the economy or creating jobs…/sarc

    Emerson’s Farr Says U.S. Is Destroying Manufacturing

    “Washington is doing everything in their manpower, capability, to destroy U.S. manufacturing,”

    http://www.bloomberg.com/apps/news?pid=20601103&sid=a_EbBQyskKl0

    Some excerpts from the actual op-ed:

    Emerson provides health coverage to employees and their families in the United States — more than 100,000 people. We would like to continue to do so. However, the bill that passed the House of Representatives, and the proposed Senate bill, would raise costs on private sector plans. Basic economics could force many businesses, like Emerson, to seriously consider exiting employer-sponsored plans, requiring employees to shop for coverage or move to the government-based plan. That’s not progress. We should look instead to many targeted, bipartisan proposals to help the uninsured, such as giving small businesses and individuals access to interstate insurance pools or investing in federally supported Community Health Centers that are effective in providing care for the uninsured.
    • Tax policy: Major competitors in the European Union and Asia are taxed at lower rates than U.S. companies. That may be hard to believe but it’s true, and it gives them a significant competitive advantage. Emerson pays a substantial tax bill every year, as we should. But America needs a tax policy that is fair to all in this country – individuals and corporations – and that creates a level playing field against European Union and Asian nations. We are a nation of varied beliefs and perspectives, and there is room for honest disagreement on all of these issues. But none of us wants to see our country weakened to no longer be the global economic leader.

  97. Herring123 says:

    I don’t think states are legally allowed to declare bankruptcy under Chapter 9 of the Bankruptcy Code – I think only municipalities (with state authorization) can do so, ie, Vallejo CA.

  98. Comrade Nom Deplume says:

    [101] herring

    That’s my understanding, though I have only a passing knowledge of Chp. 11.

    That said, a state can still default, and there is the small problem of collection. GO bonds are backed by, essentially, tax receipts, and if the taxpayers say hell no, you need a court, some court, to declare a lien on them and force a lockbox. Problem is (and this is worthy of examination), which court (state or federal) would a creditor turn to, and is there a sovereign immunity issue?

    The latter is important, and I can’t imagine that somewhere in authorizing legislation the state had to waive sovereign immunity else the bond u/ws would not float their bonds, nor the agencies rate them.

    After all, wouldn’t you demand a premium if the state could simply default and declare you had no recourse?

    I don’t have the answers, just noting some of the issues I spotted.

  99. Comrade Nom Deplume says:

    [100] jamil

    This guy has been pretty outspoken over the last few months on tax policy.

    If memory serves, also made some veiled threats to move more mfg offshore.

    Water seeks and finds its own level. When one changes the tax code, one changes commerce, and this area is rife with unexpected consequences.

    Farr is at least saying reform the code lest we repeat our mistakes. Yet there are those on the left who will, I am sure, attack him for being outspoken on policy, not seeing the fact that he is being patriotic by pointing out where we are vulnerable. If he weren’t, he would simply shut up and make whatever moves he needs to in order to mimimize taxes.

  100. Comrade Nom Deplume says:

    [92] d2b

    Kuwait’s move gives me significant pause. They are making money on the deal, and one thinks that they think there is no more upside.

    I also have no doubt that Timmay and The One want to see Citi broken up but I have a different perspective—political payback. This admin has shown themselves to be amenable to exacting payback for their supporters in the comm. group comm.

    I remember that fight. I was in the trenches. These groups have a special hatred for Citi (no other bank raised the kind of ire with this group that Citi did during the 1999-2005 dealmaking years) so it would be completely within character, given other moves made by this admin, to break up Citi as symbolic payback for getting big in the face of the comm group oppo, IMHO

  101. Fiddy Cents on the Dollar says:

    Barbara :68

    Do you know how long the place has been on the market at that price ??

    If you got the patience to grind it out with the bank…..make ’em an offer with 20% down. That ought to get their attention. They can even hold the mortgage for the rest, if that helps them come to a decision.

    20% DP keeps your stash of cash intact, and keeps you out of PMI.

  102. PGC says:

    #100 Jamil

    The funny thing about Farr is that throughout the GWB business friendly tax years.Emerson funneled jobs and profits out the door. So give them a tax cut, they’ll bring the jobs back, they promise.

    As a self insured company, there should be no impact to the Emerson health plan, unless the health plan is unaffordable to their lower paid staff.

  103. fly-over says:

    A friend has a 7% zero zero 5yr arm, but could refinance to 225000 4.4% 15y fixed for $1600 by putting in 25K. It appears that they will pay for the costs in just a few months with reduced pti, plus be putting an extra $600 to principal.
    On the other hand they may want to sell sometime next year. They may have nearly zero equity. Employment is stable.

    Opinions? I will not consider any response to constitute financial advice.

    Thanks,

  104. Fiddy Cents on the Dollar says:

    fly-over —

    I think the decision to be made is whether they are staying in the house, or selling next year.

    Once they answer that question…the choice is clear.

  105. fly-over says:

    Thanks, at a basic level, I agree, but if they can put away a grand while waiting for the information they need to decide on selling while protecting against int rate bumps, I thought it might be a good low risk roi.

  106. PGC says:

    #105 Nom,

    With Citi, I suspect the gvmt is holding them back from either a split, or a spin off of the bad parts. That would probably hit the FDIC with a fatal blow.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=afWhpAueTl4g&pos=1#

    But it could be that the gvmt have to wait to turn the 6 Billion profit into a loss as they can seem to be seen making money on the deal … :*)

  107. BC Bob says:

    Let’s give credit where it’s due. Citi outfoxed Abu Dhabi. Kudos to Citi.

    “The terms of the Citigroup deal looked lucrative for Abu Dhabi back in November 2007, when it raced to Citi’s rescue as the New York bank crumbled under soaring investment losses tied to the depressed US mortgage and housing markets. Abu Dhabi wrote a check for $US7.5 billion in exchange for an 11 per cent annual dividend.”

    “The bad news for Abu Dhabi is it only demanded such dividend payments for a little more than two years — until March 15, 2010. Afterwards, Abu Dhabi would in essence exchange its original investment in four instalments for Citigroup common stock, which was then worth nearly $US31.”

    http://www.theaustralian.com.au/business/news/abu-dhabis-citigroup-investment-turns-costly/story-e6frg90x-1225806857894

  108. meter says:

    @67:

    “…domicile near Tom’s River would be desirable.”

    ‘Tom’s River’ and ‘desirable’ don’t belong in the same sentence.

  109. meter says:

    Problem is:

    …even though I have the cash to buy a house in NJ
    …even though I can handle the 1-1.5k+ per month property tax
    …even if I could stomach living in a town with a government run in the manner that Gator describes Montclair

    the overwhelming majority of homes in NJ are craptastically devoid of any interesting design – exterior or interior, and I can’t bring myself to pay 600k or more for these soulless colonials.

  110. Comrade Nom Deplume says:

    [111] pgc

    Oh, I agree with that, and had always thought that the bailout was a means to facilitate an orderly liquidation of large chunks of the system. Citi is on life-support and the feds may be waiting for an optimal time to pull the plug, or simply playing wait-and-see on its health.

    One thing is certain; feds got themselves a tar-baby with that buy as whatever they do, they will roil the markets, either if they break up Citi or if they start to unwind their position. Only a pre-scheduled, orderly period of regular sales will suffice as that will have the least impact (I hope).

  111. still_looking says:

    Why would Bloomberg post about gold’s peak in 1980 as a start point rather than it’s pre-peak in 1978 when it was $200/oz for it’s comparison article?

    Anyone? Bueller?

    sl

  112. still_looking says:

    Next question.

    Is it legal to have a case of liquor sent to a friend in NY (as NJ doesn’t allow outside states to ship liquor in?)

    Just wondering.

    sl

  113. BC Bob says:

    SL [117],

    Who cares what gold did back in the 80’s? It was in a 20 year bear market starting in 1980. Funny, I as chasing tail in D’Jais at that time.

  114. BC Bob says:

    I was.

  115. Shore wish I had Tiger's energy Guy says:

    Speaking of chasing tail, now for another bread and circus break.

    I am amazed the guy had time for golf. Oh, and John, ther is spanking in the story for you:

    http://www.nypost.com/p/news/national/woods_is_cat_of_tails_za2vPhR7stRpXYxoRaMAUN

  116. Comrade Nom Deplume says:

    [107] PGC

    “As a self insured company, there should be no impact to the Emerson health plan, unless the health plan is unaffordable to their lower paid staff.”

    I think that is similar to my prior analysis where I theorized that lower wage employees have a higher benefit cost relative to wages so they would be vulnerable. E.g., in low-paid service industries, with a wider based comp pyramid, that may be true (contrast to a law firm with an inverted pyramid, or with a narrower base where dumping would cost too much). ATEOTD, the co. runs the numbers, and that may not be right (in fact, the 8% excise tax number was likely picked in order to prevent just that, which makes me wonder why it isn’t higher).

    I see one thing that could cause dumping and one thing that could prevent it. Causing it would be an increase in medical costs or insurance premiums. A co. that is under the 8% now may be over it in 2012. Preventing it would be antidiscrimination provisions in current law that prevent companies from giving benefits disproportionately to highly compensated employees. Problem, however, is that the prohibition may be limited in scope, therefore a creative benefits attorney (not me, I said “creative”) could come up with a way to arrange plan coverage outside of that prohibition that would almost assuredly benefit HCEs disproportionately.

  117. Comrade Nom Deplume says:

    [118] still

    Probably not, but the seller will tell you that if you are arranging shipping through them.

    If you bought it yourself and arranged your own shipping, can’t say, but a lot less likely that it would be a problem.

  118. bi says:

    please face it. gold is bubble. 1228 is top for the next 5 years.

  119. bi says:

    dollar will strengthen against all other major currencies, euro in particular. god bress america.

  120. bi says:

    srs under $8. what a crap.

  121. BC Bob says:

    “1228 is top for the next 5 years.”

    Bi,

    Further confirmation that gold will go to the moon. Wait until you witness this bubble.

    Once again, this is about the 10th top you have called in this bull run. Stop picking tops. STFU and get short.

    Please wake me up when you establish a short position.

  122. BC Bob says:

    “god bress america.”

    Bi,

    God bress you.

  123. BC Bob says:

    Bi,

    By the way, didn’t you get short at 750, 850 and 950?

  124. still_looking says:

    Nom 123,

    Thanks!

    sl

  125. bi says:

    129#, no. but i am planning to do it now.

  126. 3b says:

    #125 And why will that happen??

  127. 3b says:

    #125 bi: And why will that happen??

  128. BC Bob says:

    “129#, no. but i am planning to do it now.”

    Bi,

    Fantastic. Sell the Feb futures.

  129. jamil says:

    pgc 107 who claimed corporate taxes were low during gwb? They were not, thats the problem (in addition to current O’s anti-business crusade)

  130. PGC says:

    #122 Nom

    If the likes of Emerson throw their employees over the wall into the Public Plan, they take a double hit to their bottom line. They lose the current double deduction of exempting the income from the employer side of payroll and also being able to deduct the expense of running their own plans. They would also have to boost wages to all associates (not just those in plan) to allow them to buy outside the company plan. That again costs them more on the payroll side.

    The break even point is going to be a fun number to calculate.

  131. PGC says:

    #135 Jamil

    Start with the dividend tax cut by that great fiscal conservative.

  132. meter says:

    @136:

    “If the likes of Emerson throw their employees over the wall into the Public Plan, they take a double hit to their bottom line. They lose the current double deduction of exempting the income from the employer side of payroll and also being able to deduct the expense of running their own plans. They would also have to boost wages to all associates (not just those in plan) to allow them to buy outside the company plan.”

    The problem is, I’m not sure they would ‘have to’ do what you say they would.

    You come into work one day and your employer says “Guess what – we’re dropping your medical plan.” Then what? In this environment of high unemployment, you’re telling me you’re heading out the door?

  133. Mocha says:

    anyone watching these REITs on the slg news?

  134. PGC says:

    #138 meter

    I think that’s why you are hearing so much noise on “mandatory” requirements for companies.

    But surly the companies will do “the right thing”, that’s how trickle down economics works … :*)

  135. confused in NJ says:

    Interesting that “O’s” Healtcare Plan doesn’t impact Public Employees at all?

  136. still_looking says:

    126

    the contraindicator.

    sl

  137. Schumpeter says:

    In case anyone missed it, #131 is your screaming buy signal.

    Disclaimer: my brain is permeated with liquor.

  138. Schumpeter says:

    Maybe stock up on a little hi-ho for the whiplash effect…

  139. PGC says:

    Gary,

    When I said to someone that Wyckoff was selling around 2000 levels, I was only half joking.

    322 Newtown Road
    Wyckoff
    Sold 09/2003
    $310,000

    Sold 12/2009
    $245,000

  140. Comrade Nom Deplume says:

    [136] pgc

    “They lose the current double deduction of exempting the income from the employer side of payroll and also being able to deduct the expense of running their own plans.”

    I gather by double deduction you mean either that payroll expense attributable to a plan is a deduction to the employer and not recognized by the employee. As for actual payroll deduction for wages, that remains unchanged except for employees who no longer have salary deferral for the plan premium. They undoubtedly pay more in taxes because they have more income (if they paid a premium, natch).

    Also, yes, you lose the deduction, but it is because you no longer incur the expense. That’s a net save.

    “They would also have to boost wages to all associates (not just those in plan) to allow them to buy outside the company plan. That again costs them more on the payroll side.”

    Yes, but that assumes a company will want to do that, and if they want to maintain goodwill for the move, a gross-up would certainly be beneficial, although it could put the employee in a somewhat worse position if the gross up isn’t a true gross up that compensates not only for the additional cost but the added tax burden. Depends on the industry too, and may be an unlikely scenario in this economy for wide swaths. At the margins, it could induce certain people (e.g., dual earner households where one earner is marginally employed) to exit the workforce or find other employment, but that is, as I said, at the margins and would have a negligible macro effect.

    “The break even point is going to be a fun number to calculate.”

    Actually, should not be that hard. Just have to know your inputs. Any decent accountant should be able to do that. Not saying I could do that, but it certainly can be done.

    As an aside, I would find it curious that a self-insured company would go that route before a fully-insured company. A fully-insured company is ditching a known cost, but a self-insured company should, on average, have lower costs so the calculus would favor them staying the course rather than ditching for the public plan.

  141. RayC says:

    It’s always a good time for a Comp Killer

    WESTFIELD
    Address/ Last Sale Price
    556 HIGHLAND AVE 10/05 $900,000

    556 HIGHLAND AVE 12/3/09 $655,000

    Good part of a good town on a good street good g0d what happened to my $245,000?!?!?

  142. PGC says:

    I can’t believe this place sold. It must have a solid gold toilet to make up for the semis on Rt 17 spoiling your view of the Meadowlands.

    http://www.zillow.com/homedetails/284-State-Rt-17-Rutherford-NJ-07070/2137511786_zpid/

  143. Schumpeter says:

    Put these guys on your flashpoint list, with Dubai & Venezuela:

    “Greece was placed on Creditwatch with Negative Implications by S&P, noting that the country’s A- rating may be cut within 2 months. Greece CDS has widened by 11 bps to 194 on the news, and Greece now accounts for 19.7% of all SovX risk currently.”

  144. Schumpeter says:

    Here’s a bullish sign:

    Most Recent Insider Selling to Buying Ratio: 82:1

    “You would think that insiders would finally change their tune after almost a year of straight line gains in the market. Think again. The most recent insider trading data from finviz indicates that insider sellling outpaces buying by a ratio of 82! In the most recent data set, $11.6 million in stock was purchased by insiders, while a whopping $957 million was sold. And somehow pundits are still spinning this mass orchestrated sell into the bid by those in the know as a bull market.”

    http://www.zerohedge.com/article/most-recent-insider-selling-buying-ratio-821

  145. Comrade Nom Deplume says:

    [137] PGC

    I think jamil is right on that one. I don’t recall any change to corporate income tax rates under W (Disclaimer: I can’t say for certain, and if they were lowered under W, I stand corrected).

    As for the dividend rate change, that doesn’t inure to the benefit of the corporation, but to the benefit of the shareholder. The only way it benefits the corporation is to provide an outlet for capital other than through acquistions and spinoffs in order to avoid an accumulated income penalty. In that sense, one could argue that the dividend rate reduction was pro-competitive and pro-investor.

    Finally, it also meant that more income was taxed, not less, since accumulated income paid in dividends was taxed twice, as opposed to accumulated income used to acquire assets or stock that was later spun off to shareholders in order to avoid double taxation.

    End result: Fewer machinations, more taxable revenue.

  146. Schumpeter says:

    Please do not tell jamil that he is right about anything.

  147. Schumpeter says:

    And WTF is up with Bergabe opening his maw and killing my chances to reload shiny at close to $1,000?

    He is a pie-faced mook.

  148. Schumpeter says:

    ZIRP forever!

    Oops…time for my sake break.

  149. Comrade Nom Deplume says:

    [152] clot

    Sorry, but I call ’em like I see ’em. If he is correct, he is correct. And I didn’t say he was since I don’t really know if W lowered corporate tax rates or not (wasn’t a tax lawyer then).

  150. Schumpeter says:

    It’s going to be so interesting when the entire middle class is wiped out…

  151. Shore Guy says:

    (Updates with comments from industry and environmentalists, additional background, and regulatory timeline.)

    By Ian Talley
    Hey! Stop breathing, or you will kill us all:

    http://online.wsj.com/article/BT-CO-20091207-709708.html

    Of DOW JONES NEWSWIRES
    WASHINGTON (Dow Jones)–The head of the U.S. Environmental Protection Agency is expected later Monday to officially declare carbon dioxide a danger to public health and welfare, according to people close to the matter.

  152. Shore Guy says:

    (lets correct that one)

    Hey! Stop breathing, or you will kill us all:

    (Updates with comments from industry and environmentalists, additional background, and regulatory timeline.)

    By Ian Talley

    http://online.wsj.com/article/BT-CO-20091207-709708.html

    Of DOW JONES NEWSWIRES
    WASHINGTON (Dow Jones)–The head of the U.S. Environmental Protection Agency is expected later Monday to officially declare carbon dioxide a danger to public health and welfare, according to people close to the matter.

    snip

  153. Schumpeter says:

    shore (157)-

    Ready to vote with a bullet yet?

  154. Comrade Nom Deplume says:

    [157] shore guy

    Actually, I envisioned EPA agents visiting your house to see how much you breathe, and whether you have farm animals or pets that must be included.

    Wonder if they give you offset credits for houseplants? Shrubbery? Leafy trees? Do you also get credit for children, who consume less O?

  155. Shore Guy says:

    Robotic hampster laced with dangerous metals?

    A dangerous toy made in China? No way. What were the odds?

    http://abcnews.go.com/GMA/ConsumerNews/zhu-zhu-pets-toy-investigated-chemical-danger-claims/story?id=9265633

    The Consumer Product Safety Commission is investigating one of the holiday season’s most sought-after toys, Zhu Zhu Pets Hamsters, after a consumer group reported that one of the hamster types, Mr. Squiggles, contained potentially harmful chemicals.

    Consumer group says Zhu Zhu Pets may be unsafe for children. Consumer advocate group GoodGuide said in an online report that the Mr. Squiggles small life-like toy hamsters had “dangerous” levels of antimony and tin — a claim staunchly refuted by Zhu Zhu Pets producer Cepia Corp

    snip

  156. Shore Guy says:

    How would you like to meet whatever took a bite out of this Great White?

    http://a.abcnews.com/images/International/ht_shark_091027_mn.jpg

  157. Schumpeter says:

    Frank sleeps with Zhu Zhu pets. What’s he gonna do now, beside going in for a little chelation therapy?

  158. Schumpeter says:

    Don’t worry, Frank. These aren’t made in China:

    http://tinyurl.com/yk7lcqb

  159. danzud says:

    #138

    I think the Emerson guy is leading on to the possibility that you jump up our employee costs too much and we’ll ship the jobs overseas. After that, yes, all the jobs go overseas and all the ex-employees are on the public health plan. Mission accomplished!

  160. meter says:

    …and nobody buys cr@ppy Emerson products.

  161. Comrade Nom Deplume says:

    [166] danzud,

    I think he was speaking rhetorically, not saying we are going to do X if you do Y. At least, I would hope he isn’t that tone-deaf politically.

    anyway, time for work.

    Shore, that photo looked shopped to me, until I read that the shark was a small one. Great whites off the Aussie coast do get to 15 feet routinely. When they made jaws, they used a jockey for a stand-in for Dreyfus (everything 5/8 scale) to make the sharks look larger. The mechanical sharks, named “Bruce”, were 24 feet.

  162. Comrade Nom Deplume says:

    [164] clot

    Don’t mention anything to John, but those zhu zhu pets kinda look like onions.

  163. Schumpeter says:

    These Zhu Zhu things were big sellers. More to this than a few giggles.

  164. ruggles says:

    “These Zhu Zhu things were big sellers. More to this than a few giggles.”

    South Park did it-Chinpokomon

    http://www.southparkstudios.com/guide/310/

  165. jamil says:

    pgc:
    “Start with the dividend tax cut by that great fiscal conservative.”

    US tax rates are among the highest in the world, and while other countries are lowering them, Obambi wants to increase them. Yes, the real tax rates after all those credits (e.g. R&D credit) helps a lot, but it requires a lot of resources to be put in tax planning.

    And if you seriously believe that that companies that are forced to drop health plans will raise salaries, I have a bridge to sell you.

    Unfortunately, that’s exactly Obambi’s plan. They don’t officially outlaw private plans but the net effect is that companies like E are forced to drop it (and increasing offshoring) so soon we’ll have governmet controlled health panels micromanaging which groups or diseases are treated.

    Goodbye War On Terror (WOT), welcome War on Business (WOB).

  166. confused in NJ says:

    Jay Leno said the other night, when you look at Obama’s 1. War on Terror, 2. Stimulus Give Away to Wall Street, and 3. Health Care Give Away to Big Pharma, he’s a Bigger Republican then Bush.

  167. scribe says:

    still, #118

    I take deliveries of wine for a neighbor.

    There’s a NYS reg that it has to be shipped via UPS to get an adult signature.

    Some of the guys won’t leave the boxes with me – they want a signature from her only – but most will leave them with me.

    Somebody has to sign.

  168. scribe says:

    #174, yep

    And Bush actually wasn’t as bad as Clinton, who laid the base for the demolition of Glass-Steagall, missed the boat completely on al Quaida …

  169. scribe says:

    #128

    And God bress you all

  170. yikes says:

    BC Bob says:
    December 7, 2009 at 8:57 am

    “gold futures down 3% on top of 4% friday. stay or wash out?”

    [84],

    Further confirmation that BI is a complete ignoramus. He/she/it states that gold is demonstrating a bearish head and shoulders formation, back in Aug. Just a total idiot, it was a bullish inverse head and shoulders.

    Since Bi’s bearish call, gold rallied over $300. Funny, didn’t hear a peep out if him/her/it. Now it retraces and it’s back to Mr Roger’s neighborhood.

    and you’re surprised … why?

    Bi has an IQ lower than my Christmas tree. The stocking on my mantle could take him in jeopardy.

  171. PGC says:

    Jamil.

    Heres a good summary of the GWB gift to the corporates.
    http://www.washingtonpost.com/wp-dyn/articles/A25407-2004Oct11.html

    Note that all the GWB tax cuts were paid for through the deficit. Add in that nice chart you posted from the tax foundation, that shows the number of people who don’t pay tax over the years, you see a nice 5% bounce into the 30% range under GWB.

    I think a lot of the noise over O and taxes is down to the expiration of the Bush tax cuts. Yes it will raise taxes, but those cuts should not have gone through in the first place.

  172. PGC says:

    #176 scribe

    Thats a bit harsh. If you want to lay blame, start with Larry, Moe and Curly AKA Gramm, Leach and Bliley

    I think Clintons silence on the bill was bought with the Communnity Reinvestment Act and the fact the bill passed congress with enough votes to override any veto.

  173. safeashouses says:

    Another way granite can be hazardous. A warehouse worker was crushed to death by granite slabs.

    http://www.nydailynews.com/ny_local/2009/12/07/2009-12-07_warerhouse_worker_.html

  174. Outofstater says:

    #148 “with view of the Meadowlands” Isn’t that kinda like “with view of the cracking towers?”

  175. stan says:

    The only conclusion I get from the anti bush anti obama people that continue to post is that neither have their citizenry’s needs first. Both parties are only in power to keep themselves in power.

  176. This is just what i was looking for, this blog is one of the best

  177. d2b says:

    Stan:
    Being anti-Bush does not make one pro-Obama and vice versa.

  178. sas says:

    “granite”

    u kidding me bloke? I love radon gas in my lungs and electromagnetic radiation on my prostate as I lean up on the counter as K cut the carrots for my chicken noodle soup.

    I can only imagine what it does it kids? not that it matters..

    SAS

  179. sas says:

    i see Russia and the Vatican are doing pillow talk.

    that can’t be good.

    SAS

  180. chicagofinance says:

    The end is nigh….
    WSJ
    LAB JOURNAL
    DECEMBER 7, 2009
    A New Front in War on Cavities

    SHIRLEY S. WANG

    Cavities have made a dismaying comeback in children in recent years, and the search is on among scientists to find new ways to fight tooth decay.

    The prevalence of cavities in children aged 2 to 5 decreased steadily through the 1970s and 1980s, thanks largely to the expansion of water fluoridation and to advances in treatment and prevention, dental experts say. The trend appeared to hit a low around the mid-1990s, when about 24% of young children had cavities, according to data from the Centers for Disease Control and Prevention.

    But tooth decay then began heading higher. A CDC survey found that 28% of small children—a significant increase, according to the agency—had cavities in the five years ended 2004, the latest data available. The reasons for the increase aren’t entirely clear. But dental experts suggest it may be due to children drinking more bottled water that doesn’t contain fluoride, and to changes in dietary habits.

  181. PGC says:

    #188 Chi

    HFCS and phosphoric acid as a pure guess

  182. Cindy says:

    http://online.wsj.com/article/SB126022588878780861.html?mod=WSJ_hpp_MIDDLETopStories

    House Flipping Makes a Comeback – WSJ

    “Now a different breed of flipper is proliferating: one who seeks bargains at foreclosure auctions. Unlike the boom-time flippers, the latest generation needs cold cash, lots of local market knowledge and strong nerves.”

    Yikes!

  183. Schumpeter says:

    relo (171)

    I was hoping he’d get eaten by a bear.

  184. Schumpeter says:

    Jamil veering toward the death panel argument at #173. So utterly tedious and predictable.

  185. Schumpeter says:

    scribe (176)-

    It is amazing that Jamil considers one group of scum more acceptable than another.

    Classic herd identification and behavior.

  186. Pat says:

    http://www.bloomberg.com/apps/news?pid=20601103&sid=aApYN6UhzJ1I

    “Treasury plans to begin releasing data in December on how banks rank in making trial modifications permanent..”

  187. Pat says:

    http://www.bloomberg.com/apps/news?pid=20601103&sid=arfLiOez5X2s

    “At Bank of America, which accounts for almost a third of the loans targeted by the program, 55 percent of borrowers aren’t eligible because they are unemployed, don’t live in the home or their mortgage payment is less than 31 percent of gross monthly income…”

  188. BC Bob says:

    “aren’t eligible because they are unemployed”

    Pat [196],

    Stop that nonsense. Birth/Death says they are employed.

  189. Cindy says:

    http://mortgage.freedomblogging.com/2009/12/08/fdic-may-give-underwater-homeowners-a-break/22339/

    Pat @ 195

    I found this “FDIC may give underwater homeowners a break” Mortgage Insider

  190. Cindy says:

    They take the rate to 2%, extend the loan 40 years – it still doesn’t cut the mustard. When the entire fiasco was predicated on a liar’s income – it just doesn’t work. Move out. Let the price settle – buyers are waiting at the right price.

  191. safeashouses says:

    #186 SAS,

    Maybe we can import some granite from China to go with our drywall? :P

  192. sas says:

    “Maybe we can import some granite from China to go with our drywall?”

    sure, why not…

    they dump incorporate their waste into products (i.e pet food, baby formula, tooth paste, garlic, paint).

    lets add more to the list.

    you think that one inspector watches over these things? hark, no. He is on the dole too.

    SAS

  193. sas says:

    no “Made in China” crap for xmas.

    I will not buy anything over holidays made in China.
    recession xmas.

    SAS

  194. sas says:

    “MTA Revenues Show Shortfall That May Total $343M”
    http://www.1010wins.com/pages/5844022.php?

  195. Pat says:

    http://telegram.com/article/20091206/NEWS/912060546/1002/RSS01&source=rss

    In case you missed it, “The Federal Deposit Insurance Corp. chief, a Republican, will not seek reappointment once her term ends in 18 months..”

  196. BC Bob says:

    “A new foreclosure tactic, whereby lenders or debt collectors holding second mortgages freeze bank accounts or garnish pay checks of already struggling homeowners, is emerging and making it even more difficult for people to hold onto their homes.”

    “Lawyers for troubled Staten Island homeowners say they are beginning to see examples of clients who go to the bank to take out money and find that their accounts have been frozen or wiped out by other banks or debt collectors.”

    http://www.silive.com/news/index.ssf/2009/12/homeowners_are_getting_hit_a_s.html

  197. Cindy says:

    Pat @ 207 – Thanks Pat. I did not know that. I guess she does not play well with others.

  198. Cindy says:

    Sorry about the way the link works. You have to go to December, it is the most recent posting.

  199. #208 – There are some great comments in that link, comments you certainly wouldn’t have seen 1 1/2 or 2 years ago. Especially in SI.
    I’m surprised about the wage garnishment… I was under the impression that the person whose wages are being garnished actually had to be served with notification of the garnishment. Maybe not in NY?

  200. chicagofinance says:

    This website is going into the sh!tter. Our (lack of) moderator is a slacker and wasteoid….

  201. danzud says:

    Covered the AMZN short. Easy pickins and newfound holiday shopping money since I’m done with stocks for the year.

  202. danzud says:

    I never thought of my view of Xanadu from my apartment was a selling point…..

  203. New stimulus programs being announced, largely looking to spurr employment.

  204. Shore Guy says:

    ““A new foreclosure tactic, whereby lenders or debt collectors holding second mortgages freeze bank accounts or garnish pay checks of already struggling homeowners, is emerging and making it even more difficult for people to hold onto their homes.”

    Let me see if I have this straight. There are people who owe lenders money. Those debtors have money but are not paying theie debts so the lenders attach the debtor’s assets in order to recover wht they are owed. Now, we are suposed to think there is something wrong with a lender recovering what is owed?

    Am I missing something here?

  205. confused in NJ says:

    Cindy, very succinct. Also shows the Obama/Summers Team is still carrying the Burn Rome torch.

    Now We’re Talking! Glass-Steagall

    Five House Democrats will call this week for a return to a Depression-era law that separated Wall Street investment banking from Main Street commercial banking.

    If adopted, the measure would give banks one year to choose between being commercial banks or investment banks. The nation’s biggest — those now commonly referred to as “too big to fail” — would be broken up. The Obama administration opposes the measure.

    The amendment’s five co-sponsors — Maurice Hinchey of New York, John Conyers of Michigan, Peter DeFazio of Oregon, Jay Inslee of Washington, and John Tierney of Massachusetts – want to restore the Glass-Steagall Act of 1933, which prohibited commercial banks from underwriting stocks and bonds. The act was repealed in 1999 at the urging of, among others, Larry Summers, now President Barack Obama’s chief economic adviser.

    Gentlemen, you’re on the right side of this.

    You can start reading here, then page back. There’s a lot of reading for you to do….. (this is the search results for all of my Tickers that have mentioned Glass-Steagall, of course.)

    http://market-ticker.org/search/glass-steagall/P12.html

    A FULL re-instatement of Glass-Steagall – not some watered-down piece of legislative trash, but the real deal – will prevent the economic meltdown we are in the middle of from ever happening again.

    The key to such a fundamental re-balancing of our economy would be the restoration of the balance of credit, by making it impossible for those banks with access to the sovereign’s fractional reserve privilege to speculate with it.

    Instead, lending would shift primarily to productive investment.

    Glass-Steagall, in point of fact, was one of the primary reasons post-WWII that we came roaring forward with our economy. Lending went to finance productive assets (e.g. factories, machines, tractors, combines, etc) instead of financial speculation as it had in the 1920s.

    It was that financial speculation that led to the asset bubbles in the 1920s – and that, in turn, resulted in the malinvestment that was responsible for The Great Depression.

    It was that very same financial speculation in the 1990s and 2000s that led to the current bust, and contrary to the claims made by Bernanke, Geithner and others, the pain is not over, nor can it be until and unless the banks’ abuse of sovereign credit for financial speculation is prohibited.

    If this amendment passes it will eviscerate Wall Street’s “profit gravy train”, but it will also usher in a productive explosion in America that we have not seen in the last 50 years.

    You want to see jobs created by the millions and Americans return to work?

    Pass this amendment.

  206. Veto That says:

    “shows the Obama/Summers Team is still carrying the Burn Rome torch.”

    confused in NJ, im just curious. what do you mean by this?

  207. Schumpeter says:

    confused (220)-

    Will never pass. The US gubmint is our sworn enemy & they will not stop until they have trapped us in underwater homes, rendered our children stupid and illiterate and taxed every penny out of us and given it to bankers.

    Banks own the gubmint…lock, stock and barrel. They will not consent to any regulation that impedes their ability to rob the country blind.

  208. Schumpeter says:

    Think Larry Summers is working for you? Think he has your best interests at heart?

    Yeah, right.

Comments are closed.