“everyone else was crossing the finish line while I was still putting on my sneakers.”

From the WSJ:

Confessions of an Underwater Homeowner

One in four Americans is underwater on a mortgage.

Count me among them.

My family’s modest, suburban New Jersey house is now worth about $30,000 less than our current balance. We never dreamed of walking away, but the idea of “strategically defaulting,” is something we had to at least consider. Many others have, too, as my colleague Mark Whitehouse reported in Thursday’s Journal (See American Dream 2: Default, Then Rent.)

We’re not home flippers or boom-era borrowers who opted for an exotic loan with no documentation. In buying our house, we believed we were making a life decision.

We started thinking about buying in 2004, when my wife and I found out that we were having a baby. We were thrilled. Shortly after that, we learned we were having multiple babies, we were equally thrilled–and terrified. We’re going to need a bigger place, we thought.

We probably could have held out a few years in our sizable apartment in Metuchen, N.J., a bedroom community about 35 miles outside of New York City. But we knew interest rates were hovering at historic lows. It was impossible, working at The Wall Street Journal, to not read those headlines every day. At the same time, people all around me were buying homes and refinancing their mortgages to capture these relatively inexpensive home loans. It was like a race, and everyone else was crossing the finish line while I was still putting on my sneakers.

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141 Responses to “everyone else was crossing the finish line while I was still putting on my sneakers.”

  1. grim says:


    From the FDIC:

    Bank Closing Information – December 11, 2009

    SolutionsBank, Overland Park, KS
    Valley Capital Bank, NA, Mesa, AZ
    Republic Federal Bank, NA, Miami, FL

  2. yikes says:

    Al Gore says:
    December 10, 2009 at 8:27 pm

    Here are my top 3 places in the US (East Coast) that I dont want to be when it crashes down and the depression starts.

    1. North Philadelphia
    2. Anywhere in NYC
    3. Camden

    I can imagine a scenario like this. Wake up one morning and a bank holiday has been declared, martial law enacted as riots break out in urban areas and around banks. Stock market drops 2000 points and riots end up in rolling blackouts through some urban areas.

    Newark will be worse than Camden. and you’re being very NY-NJ-PA centric, buddy.

    Pittsburgh is a dump. DC will be on fire. How much bedlam will there be in Miami?

    And i believe Baltimore is the most murderous city (or top 3) in the US.

  3. yikes says:

    had lunch with a guy who is in the midst of some hiring at the Federal Reserve (IT dept).

    he said they had 7 positions open, and 400 applicants who had been weeded out by the first level of HR.

    he was expected to get someone in their late 20s with an advanced degree from a good school who was smart.

    he said the bulk of the resumes were from guys in their late 40s/early 50s who were laid off from middle mgmt jobs. during interviews, he said that many of them had been making double of what this job was offering.

    pay was in the 80s (but remember, there’s a pension)

  4. yikes says:

    you guys were talking about robbing banks?


    the mother of all bank robberies – 2 brazen dudes rob a bank of american in northern cali and come out with assault weapons and covered head to toe in chain link armor. i wont spoil it for you, but it was all caught on tape

  5. grim says:

    From the Record:

    Saddle River man pleads guilty in Ponzi scheme

    James Nicholson of Saddle River pleaded guilty Friday to charges he defrauded investors through his hedge fund Westgate Capital Management LLC.

    He admitted that the statements he sent to investors were false and that he lied about the total number of assets under management. Westgate operated for a decade, taking in about $294 million from investors, many of them in North Jersey, Rockland County in New York, Connecticut and other states.

    Over the 10 years, Westgate paid out $134 million to investors who withdrew funds. The rest of the funds were apparently lost in bad securities trades or used to buy real estate. There will be a hearing before the sentencing to determine the actual losses from Westgate. Judge Richard Sullivan set Nicholson’s sentencing for April 30.

    (from the chronology)


    Moves to Saddle River, paying $5.75 million for mansion on Oak Road.

  6. chicagofinance says:

    No personal offense should be taken by the guy that wrote the WSJ article that leads this thread, BUT fcuk you. Shut up idiot. Luddite? ….obviously yes you fcukface!

  7. chicagofinance says:

    171.A.West says:
    December 11, 2009 at 6:32 pm
    Schumpeter (134),
    How many of those conversations in Warren, Basking Ridge, Skillman. I want to know how many more fancy houses are about to be forced on market.

    West: As strumpet can attest, all I care is that Califon is swallowed up by eternal hades….

  8. grim says:

    And if I knew in 2006 that in 2009 I’d be able to get the same home for a 20% discount AND still get a low rate, I never would have pulled the trigger.

    Weren’t we all screaming that in 2005?

  9. Pat says:

    I dunno. All the cheap wine is clouding my memory.

    Did I beg Clot to let me buy?

  10. chicagofinance says:

    OK….I knew something caught my ear on this song…..some reviews….

    Lady Gaga – Bad Romance

    “if melodies could be time-stamped, [this] would have ’80s branded on [its a55].”

    “The Independent felt that the chorus has influences of the music of Boney M while The Guardian wrote that it recalled the music of Depeche Mode’s fifth studio album Black Celebration (1986).”

  11. Pat says:

    So whaaat. She always wanted to be Boy George. Let her be Boy.

  12. PGC says:

    #6 Chi

    I still say that the seconds will roar back to bite the shorts and defaults.

    Once the Sh1tS0rm of firsts and REO’s are dealt with, I think you will see the banks start to focus on the non recourse seconds that did not get fully discharged.

  13. PGC says:

    Sorry non recourse” should be just “recourse”

  14. Qwerty says:

    RE: “when it crashes down and the depression starts”

    That scene of the burning commuter train racing past in Spielberg’s “War of the Worlds” often comes to mind.

  15. safeashouses says:

    #6 chifi,

    I like how he knew interest rates were at historic lows and thought housing was so expensive, yet goes ahead and buys a cape at the peak in a blue collar town. Nice one! And he works as an editor for a financial journal. We are all buggered. Wonder if he has a nice view of the industrial part of Middlesex.

  16. ruggles says:

    #6 chifi and 15 safe – I like how he’s referencing zillow as a benchmark to his home’s value today. perhaps he should consult the tooth fairy.

    I’m all for strategic default as a business decision or to F with the banks. but this guy doesn’t really seem to be suffering at all. maybe he should wait til the squatters have burned down the neighbors houses before he starts complaining.

    and chi#7 – I can assure you that it already is hell. But with very pretty views.

  17. scribe says:

    It fit our checklist of must-haves: a kitchen island, a roomy basement for laundry facilities, a backyard with grass.

    I’ve never understood the fascination with kitchen islands.

    Roomy basement – why not a ranch, then?

    If you’re not getting a backyard with grass, why would you buy a house?

    Meanwhile, maybe it’s the pic, but doesn’t the siding look old and stained?

  18. ruggles says:

    “tony Metuchen” hahahahahahahahaha…hahahahaha…

  19. Schumpeter says:

    yikes (4)-

    That’s how you rob a bank. Well done!

  20. Schumpeter says:

    scribe (17)-

    This guy got killed. LIKES the school system in Middlesex? Oy vey.

    When push comes to shove, this is the kind of guy who will default in a second.

    Then again, so would I.

  21. Schumpeter says:

    BTW, subprime has already destroyed values in Middlesex. Did some of my first short sale work there.

  22. scribe says:


    What do you think that house in Middlesex is worth, really, in the current market?

    No mention of square footage, but it looks small.

    I’d say low 200’s, easy.

  23. scribe says:

    I don’t know the town of Middlesex, but that kind of cheesy cape in Iselin – with proximity to Metropark – wouldn’t do that well.

  24. Schumpeter says:

    This is why it will take all-out armed revolution to make things right again. Although I’m becoming increasingly convinced there will be no “right again”…just a trip back to the 16th century for anyone unlucky enough to survive the revolution.

    “The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.


    Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession’s first 18 months — and that’s before overtime pay and bonuses are counted.

    Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.

    Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.

    When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.

    The growth in six-figure salaries has pushed the average federal worker’s pay to $71,206, compared with $40,331 in the private sector.”

  25. Schumpeter says:

    scribe (22)-

    Clinging to just over 200K. By Summer ’10, a 199K ask will be difficult on a dump like that.

    I’m figuring this guy packs it in when he finds out what wretched schools Middlesex has. If he makes it that long. Of course, his taxes could hit 8-9K well in advance of those kids’ getting to school age. That’d be enough to do me in.

  26. safeashouses says:

    #25 schumpeter

    Not to mention if the guy was commuting to NYC, by moving to Middlesex he added at least 1 hour a day to his commute.

  27. Schumpeter says:

    Keep in mind that two events in 2010 (one likely, one a certainty) will destroy what shred of entry-level housing market still exists:

    1. Tax credit expires (5/1/10)

    2. FHA goes bust

  28. Schumpeter says:

    safe (26)-

    I’d rather be a flesh-eating zombie, like in I Am Legend, than be this guy.

  29. Outofstater says:

    He’ll walk. It will become more and more acceptable. So, if half of the underwater homeowners walk, what happens then?

  30. Veto That says:

    Will the Gold Rush Become a Gold Bust?

    Fox News host Glenn Beck has been advising his audience to buy gold ahead of a total collapse in the US dollar. Beck has also told his audience to construct fruit cellars and to rely on a ‘three-G system’ of ‘God, Gold and Guns.’ Beck has a relationship with gold vendor, Goldline International, that presumably involves receiving lots of paper money (the kind of ‘money’ that will soon become worthless) to talk up gold.


  31. Schumpeter says:

    stater (29)-

    The underlying MBS collapse, then the banks collapse, and then we can start over again.

    If we had taken the losses last year, we’d be well on the way to recovery by now. Doing it this way will make the pain 10x worse.

  32. gary says:

    Did anyone see the cancer cluster story in Pompton Lakes? OMG, what a horrible story.

  33. 3b says:

    Gee back in the old days of the early 90’s after the 80’s real estate boom. Many myself included, were underwater as they say now ;way underwater. But there was no talk of strategice default. We stayed and paid or sold and took the hit.

    And pity those at the time who owned co-ops/condos that were down 50 to 60%. They had it even worse.

    I guess the difference this time is the banks got bailed out, while the homeowner sits on a declining house. So if the banks get a pass, than why not the homeowners. This is the definition of moral hazard Mr. Bernanke, this is what you helped create.

  34. still_looking says:

    I don’t think we are near out of the woods yet… appears so by MSM standards, no wild market fluctuations, no MSM focus on bank failures or our upwards spiralling debt.

    Now they want to pass a debt ceiling increase of 1.8 TRILLION dollars?

    Sure, all is okay with the world. Or maybe I’m just not sold on it yet.


  35. 3b says:

    The guy is an editor at the WSJ, and he did not know he had a balloon mtg, until the day of closing??

    Seriously we are going to have to lighten up on others with no financial background who claim they did not know.

  36. Shore Guy says:

    “1. Tax credit expires (5/1/10)”

    Yea, right. That is like saying the loss of one’s virginity wears off after a certain date. Our legislative leaders lack the spine (and other parts) to do the right thing and kill the credit.

  37. d2b says:

    Yes we may be fcuked. It’s frustrating because this could go on forever. We never really fix anything anymore. We just kick the can down the road.
    I don’t think that we will ever collapse. The only way that we would see a collapse is if the banking system collapsed. That will not happen in a country that only worships finance.

  38. 3b says:

    #38 You can only keep the charade going so long. And there are forces outsode of Bernanke/Geithner’s hands that they cannot control.

  39. 3b says:

    #188 PGC: From yesterday’s post.

    As a long time Wall St’er, please tell me exactly how the “street” makes money for the country, you don’t really believe that do you?

  40. Shore Guy says:

    “Now they want to pass a debt ceiling increase of 1.8 TRILLION dollars?”

    Does anyone bieve there is a real ceiling? If we reach the limit and don’t pass an increase, we cannot operate the government. There is no ceiling. What started out as a one floor ranch is now a skyscraper with a construction crane anchored to the roof — just keep feeding it steel until the foundation collapses.

  41. BC Bob says:

    “It was like a race, and everyone else was crossing the finish line while I was still putting on my sneakers.”

    What a F-Ing idiot. Crossing the finish line. Yeah, except the finish line was at the edge of the cliff. The dolt should have been taking off his boots.

  42. still_looking says:

    Shore, 41

    Exactly my point… it’s all just fiat money… jes keep’n on printin’ and printin’ how it’s not just worthless is beyond me.

    No inflation? Simple things…. price of sugar. I buy 25 lb bags used to be 42c up to 45c per lb.

    Hadn’t been to BJs in a while… up to 57c per lb.

    What inflation?


  43. yikes says:

    the author and his wifed saved $20,000 and that’s “a king’s ransom.”

    i want to know more – like their spending habits. i understand it can be tough to save when paying off college loans … but the No. 1 thing you need to do is stop spending.

    i have told everyone i know that you can’t buy a place unless AFTER the purchase you have 50k in the bank. and not 50k to spend on re-doing the kitchen or bathroom … 50k in safe cash.

  44. still_looking says:

    BC, 43

    hear hear!

    Were we not entrenched here, on this blog, we would have been one of those cliff jumpers.

    My coworker, not so lucky. $70K loss, from buy in ’05 sell ’09.


  45. 3b says:

    #43 BC Hey come on!!! He is an editor for the WSJ.

  46. Schumpeter says:

    None of this matters. Smart, dumb…all of us will be crushed in the end.

  47. Schumpeter says:

    Only people left standing will be gubmint employees and banksters.

  48. sas says:

    “That’s how you rob a bank. Well done!”

    little rookies and wee tikes.

    if you really want to rob a bank, you don’t need guns.
    A tie, pressed shirt, and short haircut is all you need.


  49. ruggles says:

    36 – 3B. I think about 3 months ago, I came to the conclusion that people are absolutely powerless to resist government and business. The manipulation of human nature by our betters is pretty much total. I no longer blame the bubble buyers for any of this mess.

  50. still_looking says:

    WASHINGTON – The Democratic-controlled Senate on Saturday cleared away a Republican filibuster of a huge end-of-year spending bill that rewards most federal agencies with generous budget boosts.

    The $1.1 trillion measure combines much of the year’s unfinished budget work — only a $626 billion Pentagon spending measure would remain — into a 1,000-plus-page spending bill that would give the Education Department, the State Department, the Department of Health and Human Services and others increases far exceeding inflation.

    Clot, you are right… we are doomed. WHY WORK? To pay taxes to support everyone else.

    Link here… in case you missed it.



  51. still_looking says:

    SAS 50

    You don’t even need that.

    You just need to be the government. Complete license to steal. Then thumb your noses at taxpayers at the same time… “go ahead, try to stop me…”

    Bloated government, grows and grows… supported on the backs of everyone else…


  52. pgl says:

    So by government do you all mean teachers, fireman, policeman, park rangers, mental health workers, judges, court personel? Because those people actually make very little, but help create our functioning society.

    WTF are you all talking about government workers getting rich on the back of everyone else? I don’t know any government workers getting rich, they are mostly public servants that can barely scape by in NJ.

    You seize on the handful of examples of superintendents or something that the APP runs stories about and assume everyone in government is abusing the system. Get a grip! There are countries without government employees and very low taxes. For example, Somalia or Afghanistan. You must think living there is wonderful given the dearth of public employees!

  53. jamil says:

    52: Incidentally, those useless agencies have been filled with Cuba-loving lefties. No Dem Left Behind bill.

  54. jamil says:

    Guess turning into a Marxist agitator did not work out that well.

    “Rasmussen: Harry Reid trails all three GOP candidates and has 49% very unfavorable view,..”

  55. House Whine says:

    54- My guess is that those employed by the private sector are feeling kind of resentful because: 1) they aren’t getting raises, or if they are, they are minimal, 2)their pensions are paltry or non-existent,3)they don’t have any job security anymore. There may well be other reasons for the sentiment right now, but I think these are the main ones. Can you blame them?

  56. Barbara says:

    went to see 4 houses yesterday. Out the the 4 only one was worth while, but the street was sketchy with two eyesores to either side. Priced at about 35% over what I or I think anyone would even consider. Another house was across the street from a house I made an offer on in 2005. That house sold for 20% under what the current house was asking AND IT WAS TWICE AS BIG. No sanity, NONE in this market and the realtors are pimping this illusion still – two were her listing, her price. 2 friggin hours of telling me all about the owners hobbies and interests. Really? Why would you think I give a *&^%? (They inherited the mansion and HELOCED it to death, now their broke asses have to move out and rent) Oh, and please don’t keep pointing out the non-fuctioning butlers pantry with doors so banged up and swollen from age that they can’t be opened and closed without pulling out your shoulder.

  57. BC Bob says:


    SL may have been alluding to this?

    Policeman make very little? Many police chiefs in little sh*t towns in Bergen County make more than the Police Commissioner of NYC. In addition to this, many of these same towns are paying 2-3 salaries for the same position, pensions. Most pay nothing/little for their health care. Yet, they go ballastic when there’s any talk of a $25 co-pay.



  58. Barbara says:

    BTW a “diverse neighborhood” is realtorese for “sketchy”

  59. Barbara says:

    oh, and 5k Ikea kitchens = 80,000 uptick in asking price.fyi.

  60. grim says:

    Ikea kitchen? Oh bother, that should have a hugely positive LOI.

  61. grim says:

    From the Record:

    Ridgewood merchants hope to spur downtown traffic

    Business owners are hoping to see green rather than white this holiday season in the face of a deep recession and more than three dozen storefront vacancies in the shopping district.

    “There are almost 40 vacancies and that will continue to rise,” said Ed Sullivan, a longtime building owner in the district and the former president of the Chamber of Commerce. “We’ll see a significant jump after Jan. 1, 2010. The economy in Ridgewood currently doesn’t look strong … with no signs of recovery.”

    Ridgewood is heavily dependent on Wall Street, Sullivan said.

    “Main Street will not feel better until the woes of Wall Street have passed,” he said. “Even then, there will be a time lag.”

  62. confused in NJ says:

    My Berkeley Heights teacher friends pension is $88K with free medical. I’m envious. She did get some BS supervisor job before she retired which upped the ante. I can remember when a principal was all the administration needed for an elementary school. Like it or not, teachers and police in NJ laugh all the way to the bank while still peddling 1950’s “woe is me” rhetoric.

  63. Barbara says:


    we have zoning officers who cut a nice salary and benefits while moonlighting the next town over DURING THE SAME HOURS, adding to their bloated pensions not to mention the sweet bribe money and the 3 hour lunches comped at the local restaurants, wink wink. All this and they cut out for the day at 4pm to beat traffic.

  64. Barbara says:

    oh, and Bloomfield Ave looks like crap. Loads of vacancies. Hope the Montclarians enjoy the nail salons and check cashing joints that are sure to come.

  65. still_looking says:

    confused, 64

    yup. that’s only one (of many.)


  66. BC Bob says:


    I’m confused. The stock market is roaring, the unemployment rate is declining and avg net worth is soaring. Yet, a significant jump in vacancies, after 1/01, and zero signs of a recovery in Ridgewood? Who is this clown? Doesn’t he know R-Wood is tied to the hip of WS? Dismiss him, just another perma-bear.

  67. confused in NJ says:

    In New Jersey, a retired teacher, police officer or firefighter typically makes more in pension payments than the typical worker earns in regular wages each year.

    And the state government that has liberalized pension benefits and local governments that regularly approve pay raises have failed to pay what is owed to pension funds. Taxpayers are liable for about $34 billion that has gone unfunded.

    The public employee pension system in New Jersey needs fixing at a time when property taxpayers are looking for relief and the state budget is $8 billion in the red.

    “Basically, we’re on track to have a pension train wreck,” said James Hughes, dean of the Bloustein School of Planning and Public Policy at Rutgers University.

    Contending that the pension system is the “No. 1 reason property taxes are skyrocketing,” Bill Dressel, director of the New Jersey League of Municipalities, said the systems “are broken and they have got to be fixed.”

    An analysis of the state pension programs and federal and state labor data by The Press of Atlantic City shows:

    The median pension payment for teachers in 2008 was $43,200. Police and fire fund retirees were paid a median $61,800, with State Police getting $81,700. Those retirees were paid far more than many workers in New Jersey, where the median annual wage in 2008 was $37,900, according to state and U.S. Bureau of Labor Statistics data.
    Some annual pension payments go well into the six figures. In September, 428 New Jersey government retirees from all levels were receiving pensions of $100,000 or more. Their ranks are growing. Nearly half of those pensioners — 46 percent — have only retired since Jan. 1, 2008.
    The tab for government pensions in New Jersey paid out this year is $5.7 billion and growing, state data show. The Consumer Price Index, a measure of inflation, was up 30 percent in the past 10 years. But the average government pension in the state increased by 43 percent.

  68. still_looking says:

    confused, 69

    No problems there.

    Til the checks start bouncing.


  69. still_looking says:

    Barbara 65

    Pshaw, aw c’mon, you *know* that’s all just rumor.

    /wink. wink/


  70. still_looking says:

    BC 68

    Stop scaring the bulls… they get….you know….edgy.


  71. BC Bob says:

    Many of my buddies[police] typical workday, in a small BC town.

    Stop off at DD on the way to headquarters at 6:00 AM, get my free coffee and pick up some for the overnight desk. Compare notes, who was a winner/loser in last night’s NBA action. Damn point spread. Head off to the diner, keep my walkie-talkie on, at least it sounds busy. Oh sh*t spillled some coffee on my pants. That’s OK, the town pays for my dry cleaning.

    Go out for a spin on the Main St, head for the nearby park, read the Daily News. Study the point spread for tonight’s action. Wow, almost lunch time. Spend 45 minutes on main drag, fu*k those speedsters. Too cold to get out of the car. However, they don’t know that.

    Off to lunch, damn a call comes in, a fender bender. F-Ing ruin my lunch. Pull up, an 85 yr old woman brushed a parked car at a stop sign. Better call for 1-2 backups, she may be armed.

    Oh well, it’s 2:30, time to check out. Might as well stop off at the Elks, hell cops get fee drinks. Also, the b*tch gets home at 5:30. If I have to hear her crap, might as well have half a load on.

    Come to think of it. We better get that 4% retrocative raise. I only make $130K and the nerve of the town, they are proposing we contribute $100/month to our medical and, on top of that, a $10 office and $20 prescription co-pay.

    This damn town/state is falling apart. F-them, after 5 more years, I’m taking my pension and getting out of state. I hope I can survive 5 more years.

  72. gary says:

    Barbara [58],

    Don’t you just love it? Aren’t they so full of sh1t all of them that it’s hilarious?

  73. gary says:


    I had a government job for 4 years. It’s the biggest waste of time and money on the planet. 9 to 4 with an hour for lunch. In fact, the whole f*cking day was lunch.

  74. still_looking says:

    gary, 74

    stop propagating lies! [er, hush, I mean, giving away the secret!]


  75. still_looking says:

    gary, — 76 is for your 75.


  76. gary says:

    The president also told CBS’ “60 Minutes” that “the people on Wall Street still don’t get it. …

    Except for Ridgewood, because they’re insulated and bleeding wealth. :o


  77. Schumpeter says:

    I think I pretty much completely hate this country now.

    We are a giant gang of losers and idiots.

  78. Al Gore says:

    In order to get real news you have to get outside the box of mainstream media.

    Australia politicians know the US is going to default on their debt.

    treasurer accuses Barnaby Joyce of disloyalty Federal Opposition Leader Tony Abbott has signalled the Opposition’s finance spokesman, Barnaby Joyce, will have to restrict his comments now that he is in shadow cabinet.

    The Government has attacked Senator Joyce for saying the United States might default on its loans, sparking an economic Armageddon, and that Queensland might also be unable to pay back its debts.

    Financial Services Minister Chris Bowen labelled Senator Joyce an extremist and Prime Minister Kevin Rudd said his comments could have serious implications.

  79. Al Gore says:

    THE OPPOSITION finance spokesman, Barnaby Joyce, believes the United States government could default on its debt, triggering an ”economic Armageddon” which will make the recent global financial crisis pale into insignificance.

    Senator Joyce said yesterday he did not mean to alarm the public but there needed to be a debate about Australia’s ”contingency plan” for a sovereign debt default by the US or even by a local state government.

    ”A default by the US means complete economic collapse around the world and the question we have got to ask ourselves is where are we in that,” Senator Joyce said.

    His warning came as the Rudd Government ramped up its attack on Senator Joyce as an economic extremist by highlighting his strong opposition to Chinese sovereign investment in Australia.

    The Treasurer, Wayne Swan, said it was a cause for concern that Senator Joyce had been elevated ”from the reactionary fringe of our economic debate to the second-most senior economic policymaking job in the alternative government”.

    The scrutiny of foreign investment bids was adequate and ”if we were to follow the advice of some of the extremists on foreign investment, it could cost something like 20,000 jobs right across Australia”.

    Senator Joyce said the chances of a US debt default were distant but real and politicians were not doing the electorate a favour by refusing to acknowledge the risk.

    He said the Federal Government’s debt would push up interest rates and predicted that some state Labor governments would not be able to repay their borrowings.

    ”The Federal Government has $115.7 billion in debt, Australian government securities, notes and bonds on issue, and the states have another $170 billion in debt.

    ”We have to ask whether the states have the capacity to repay that. I would say in some instances they do not, particularly Queensland.”

    Senator Joyce said that if the US recovered, global funds would flow back into North America. ”There will be only one way Australia will be able to keep funds here and that is by putting up interest rates, which will therefore bring real costs back to households,” he said.

    ”That is the first scenario, which is extremely bad for Australia. The worse scenario is where the US doesn’t repay its debt – the $2 trillion in debt it owes to the Chinese, the $1 trillion in debt it has to the Japanese and the $US1 trillion in debt to others – and then we are really nailed.

    ”The outcome is a shift away from the US dollar as the international trading currency and a shift to the Chinese yuan, and China becomes an immensely powerful player overnight.

    ”It’s the real financial crisis, and the real financial crisis will mean this preamble we have just had pales into insignificance.”

    Asked what sort of contingency plan he would advocate, Senator Joyce said it was like trying to prepare for a tidal wave but the local economy should have more self-reliance.

    ”Things you look for in that economic Armageddon are the capacity to feed ourselves, the capacity to provide the fundamentals in medicines and basic fundamental requirements for our nation.”

  80. Schumpeter says:

    At this rate, I won’t make it in NJ another five years.

  81. Schumpeter says:

    gary (78)-

    Too bad O gave them the signal that the party’s on by hiring the very worst among them to steer our ship of state right into the rocks.

  82. Schumpeter says:

    I want Larry Summers executed for Christmas.

    Can’t a guy get a little love here?

  83. Al Gore says:

    Evil triumphs when good men do nothing. Get prepared. Time is short.

  84. Ben says:


    as per gold…you ain’t seen nothin yet.

  85. Safeashouses says:

    #81 al

    Queensland can suck it. It’s Florida with coal mines.

  86. Safeashouses says:

    I hope they can kick the can down the road a bit more. I want to get a facial next weekend.

  87. gary says:

    Want to know what it feels like to slam your body against a slab of granite after a 165 foot free fall? Sign on the dotted line for this bargain:


  88. Safeashouses says:

    #78 Gary

    If the fed had taken away the punchbowl
    in the summer/fall of 2002 this mess wouldn’t have been so big. I hope the new regs pass. So what if it limits financial innovation. Financial innovation brought us credit default swaps, negative amoritization arms, and liar loans. How did those work out?

  89. d2b says:

    IKEA furniture- I see it as disposable furniture. A finished IKEA kitchen it actually a negative in my book because it equals money wasted and has absolutely no value. My sister’s IKEA cabinets were terrible.

    I have some stuff at IKEA and I will buy more in the future because it’s adequate, cheap stuff. You get what you pay for when you shop at IKEA. Perfect for the extra bedroom or shore living room, but not for a kitchen that will be used every day.

  90. Veto That says:

    The real inconvenient truth:
    The whole world needs to adopt China’s one-child policy

    The “inconvenient truth” overhanging the UN’s Copenhagen conference is not that the climate is warming or cooling, but that humans are overpopulating the world.

    A planetary law, such as China’s one-child policy, is the only way to reverse the disastrous global birthrate currently, which is one million births every four days.

    Read more: http://www.financialpost.com/story.html?id=2314438#ixzz0ZW2EKuSu

  91. d2b says:

    gary 78-
    Obama’s pandering to the masses. Wall Street regulation will be useless.

  92. Safeashouses says:

    #78 Gary

    He should know better than anyone that wall at doesn’t get it. He surrounded himself with guys from the fed and citi.

  93. still_looking says:

    Holyf*ckingshit! I just figured it out!

    We know we are gonna default and now gubmint is just maxing out the credit card to make the most of it ’til we do!

    Now I get it!


  94. Veto That says:

    Besides the fact that inventory is horrible, does realtor.com really have to be the slowest, heaviest, spyware infected, pop-up attacking website out there?

    Not only are they complicit in helping to jam rediculously overpriced albatrosses around half of the country’s neck over the last 7 years but now they are intent on crashing the computer of every potential buyer in america.

    That really is some business model they have there.

  95. ricky_nu says:

    gary #78 –

    yes – wall street doesn’t get it, but neither does anyone else that was involved in this tragic comedy. Remember, it took two (actually many more) to tango, including idiots who overpaid for houses, dirtbags who strategically defaulted, scumbag politicians who promoted looser lending practices (to the poor dirty unwashed masses who wanted to partake in the ownership society), schuyster mortgage originators to write those loans, and retarded institutions who insured the mortgages. This was about far more than just greedy wall street turds, I am getting sick of our leaders trying to conveniently deflect all responsibility to wall street (although, this may be a convenient device by which to repair the American psyche).

    Burn the witch! (and then we can move on?)

  96. jamil says:

    54 pgl “So by government do you all mean teachers, fireman, policeman, park rangers, mental health workers, judges, court personel? Because those people actually make very little, but help create our functioning society.”

    Earlier comments were about federal employees and I doubt there are too many teachers, fireman or mental health workers there. (Oh, I forgot the army major who had that sudden mental health care worker syndrome).

    In anycase, both the federal government and every state government (with the possible exception of Alaska) is broke.

    Both congress and state legislatures should pass a law freezing all salaries and benefit increases until the debt has been erased, and also setting and absolute hiring freeze. Then, get some retired WallMart executive to streamline federal government and getting rid of all those useless agencies set up in the 1930’s. The fact that government position was once set up does not mean that the the position should be kept forever.

    Also, NJ should pass a law that caps public pensions at average private sector salaries (ie max pension around 35k).

  97. Al Gore says:

    89. “I hope they can kick the can down the road a bit more. I want to get a facial next weekend.”

    LMFAO. I hope you arent serious.

  98. Al Gore says:


    The 3 FDIC bank closures had assets for a total of 1 billion. The rough total is 13 billion for the first 2 weeks in December. Chump change.

  99. Kettle1 says:

    Veto 93

    but wouldnt that hurt global corporate returns???? I mean really now, lets be serious. DO we really want to talk about DECREASING the global consumer market. Jus image what that would do to GDP and tax collections around the world.

    Decreasing the population by 2 – 3 billion means everyone, from governments to corporations have to shrink. Of course it follows that it will be much harder to be super wealthy as the 2 billion people who die off are going to be debt slaves who work day and night to make sure i live a lifestyle that would made kings of old blush

  100. Kettle1 says:


    if you liked my gas powered calculator, then you should see my (RTG) powered PC setup!!!

  101. cobbler says:

    Back in the Fall of 2005 I tried my best to talk my co-worker out of buying a house; didn’t succeed (it had been long before I found this blog, so probably my arguments were more emotional than scientific). She still hates me.

  102. Kettle1 says:


    emotional over logical was to your benefit. As i ma sure clot and grim can attest to, the large majority of home buyers are making an emotional decision/purchase, not a logical one.

    Why would She listen to you when the federal government was swearing there was no bubble, banks were giving away a free mortgage with every toaster, and she probably already knew 10 other people who were swearing they got rich by flipping (rich in debt anyway)

  103. still_looking says:

    Cobbler, 104

    This graph and this blog saved our asses from making that mistake.

    I printed it and handed it out to anyone who’d listen.

    No words really needed. The graph says it all.


  104. Al Gore says:

    As you know bankers believe they are doing God’s work in looting the public and they are protected in this endeavor by a supplicant government. These parasites live off the host – the American citizen.

  105. Al Gore says:

    Our new President promised change. In the financial sphere we got none. JPMorgan Chase runs the Fed and Goldman Sachs runs the Treasury. The looting of the financial system goes on unabated. The dollar remains under pressure as credit derivatives are used to keep the system running. In gold and silver, not as easily controllable, massive short positions attempt to control the market. The dollar is being deliberately destroyed in order to replace it with an international trading unit made up of G-20 countries. In order to make this acceptable a 10% to 15% gold banking will be part of the package. The Western governments will continue to not only destroy the dollar as a world reserve currency, but also their own currencies in order to transfer strength to currencies of the second and third world, as a method of transferring wealth. This political, social, economic and financial destruction is calculated to bring the economies of the first world down to the level of the second and third world, forcing America and Europe in particular to accept world government. This will eventually bring about a military coup controlled by the Pentagon in which the banks believe they will solidify power by force. That we believe will be unsuccessful and will finally begin the fall of the international banksters. It will fail because our military knows what these people are up too and they won’t allow it to happen. As this attempt is made the financial system will unravel, as a mercenary force of a few hundred thousand attempts to protect the power of the elitists.

  106. d2b says:

    It’s always been cheaper to rent. It’s been that way for the 20 years that I have been a renter/homeowner. That does not mean that buying a house is not a logical decision.

  107. Al Gore says:

    Wells Fargo & Co., the bank that gained a portfolio of option adjustable-rate mortgages when it bought Wachovia Corp. last year, cut the principal for delinquent borrowers in some loans by as much as 30 percent.

    Wells Fargo has forgiven an average of $46,000 in principal, or 15 percent, for the 43,500 option-ARM loans it has modified this year through September, said Franklin Codel, chief financial officer at the bank’s home-lending unit. The San Francisco-based lender has cut as much as 30 percent off the loan principal in a few “rare exceptions,” with the ceiling typically capped at 20 percent, Codel said.

    “Right away we decided we wanted to go after the highest- risk borrowers,” Codel said in an interview yesterday from Des Moines, Iowa, where Wells Fargo Home Mortgage is based. “Principal forgiveness is one of the arrows in the quiver.”

    Im am seriously considering going into strategic default. First I have to tap the equity in my home which currently is 40%.

    I would love to have a play by play for how to do this. The play by play would have to be tailored to well funded responsible taxpayers. Any thoughts?

  108. Kettle1 says:


    not saying that buying a home cant be a logical one, but for the average joe, i tends to be an emotional herd mentality decision.

  109. Schumpeter says:

    Al (108)-

    Sounds like as plausible a short scenario as I’ve heard in the past couple of years.

    IMO, it all ends with a trip back to the 16th century.

  110. Schumpeter says:

    Al (110)-

    Do what the dumb schmucks did: strip all the equity out of your house, then stop paying.

    The rest will fall into place with little to no effort on your part.

    Whenever you hit a snag, whine, cry and assert victimhood. That will get the ball rolling again.

  111. Al Gore says:


    Its not natural for me thats why I need a play by play handbook. Once the equity is tapped where the heck do you put it? Im not confident enough to go all precious metal.

  112. Schumpeter says:

    12-12-09 (AP)-

    Detroit police have twice mistaken film crews shooting scenes involving weapons with criminals in recent months.

    The Detroit News reports Saturday that in both cases the moviemakers hadn’t obtained the proper permits from the city.

    Four crew members from Detroit-based B.U.P. Films were in court Thursday after receiving tickets for possession and brandishing facsimile weapons during filming Nov. 5. A hearing was set for Feb. 18.

    B.U.P. Films production assistant DeAndre King says the crew didn’t think it needed a permit to film at a private home.

    A Detroit police spokesman didn’t immediately return a phone message from The Associated Press on Saturday. There was no listing for B.U.P. Films, and it didn’t immediately return a message sent through the social networking Web site MySpace.com.

  113. Schumpeter says:

    Al (114)-

    Malt liquor, ammo, canned meat, blow and hookers (in no particular order).

    “Its not natural for me thats why I need a play by play handbook. Once the equity is tapped where the heck do you put it?”

  114. smathers says:

    Gary, that hsithole is worth $180k if it’s worth a penny.

  115. Al Gore says:



    My Christmas gifts to my family this year are unusual. Silver coins for the women, Mossbergs for the able, and multitools to the kids.

  116. cobbler says:

    Al – you should have been proactive and tapped equity before the bubble burst. The only way you could put your mortgage underwater today (unless the value drops another 40%) is by not paying long enough for the penalties to build up to this 40%. The bank will take it sooner; they will be quite excited about foreclosing something NOT under water.

  117. Al Gore says:

    The term revolution is defined as sudden change. Sometimes it is subtle and sometimes it is violent. It can manifest itself through unrelenting political tyranny, military and police oppression of the populace, or as a result of the government’s failure to govern as the people have expected and demanded. Although the reasons can be many and the results can vary, the result is usually the same. The people are forced into moving against their rulers. Not because they got up that day and decided to revolt, but because they simply could not face another day of torment, turmoil, and defeat at the hands or their tormentors. Leaders–who consistently and continually sacrifice good government, sound politics, real justice, common sense writing of the law for a “greater good for the world” mentality, and outlaw the sense of openness of the process and the ultimate rightness of government for the American people–have abdicated any legal authority they might have once held, and have forced the remaining option for real change upon their people, impending revolution.

  118. Outofstater says:

    #93 Oh cheer up! Nature has a way of taking care of overpopulation – it’s called the Four Horsemen of the Apocalypse. Take your pick: Pestilence, War, Famine and Death. Although the first three sorta have the whole death thing covered.

  119. lisoosh says:

    They’re called Revolutions ’cause they keep coming round.

  120. Outofstater says:

    #108 “The Western governments will continue to not only destroy the dollar as a world reserve currency, but also their own currencies in order to transfer strength to currencies of the second and third world, as a method of transferring wealth. This political, social, economic and financial destruction is calculated to bring the economies of the first world down to the level of the second and third world, forcing America and Europe in particular to accept world government.”

    Now why would western gov’ts want to do that? And I must say, I’ve known a lot of people who were stationed at the Pentagon and not once did I ever hear anyone say, “No, sorry, can’t do lunch. I got this whole world financial hegemony thing to deal with.” And as far as a coup goes, I think the inter-service rivalry would send that right down the cr@pper. They only pretend to like each other.

  121. Al Gore says:


    Well maybe thats why the Russians are predicting Civil War.

  122. Outofstater says:

    #124 Civil war here?? I don’t think so. Even if the entire financial system collapses, I think we’ll find a way to get along. We may get to the brink of complete breakdown but I think we will peer into the abyss and decide to step back. We as individuals and as a nation will find ways to make it through. It’s what we’ve always done and what we will continue to do.

  123. Shore Guy says:

    ” Civil war here?? ”

    Not if will cause anyone to miss American Idol, or interrupt anyone’s Wii playing.

  124. chicagofinance says:

    “grim says:
    December 11, 2009 at 11:00 pm
    And if I knew in 2006 that in 2009 I’d be able to get the same home for a 20% discount AND still get a low rate, I never would have pulled the trigger.

    Weren’t we all screaming that in 2005?”

    J-bed: No, we were screaming 40%.

  125. Shore Guy says:

    “We as individuals and as a nation will find ways to make it through.”

    I don’t know that we still have the energy or passion to engage in armed internicine conflict. I also know pleanty of people who would gladly give up certain other states.

  126. Shore Guy says:


    A problem ist that at any given moment people seem to believe that the way things are is the way they should be and will be. Lessons of the past, especially if they go against what people want to believe, get mocked and ignored.

  127. Al Gore says:


    Thats a good point. 10th amendment still stands. A return to states rights will allow a peaceful solution. Those that choose to live free can move. Those that want communism can stay here. I for one, will no longer be supporting the parasites that want it all without paying for it.

    Think Im bullsh#tting? You should have been at my house during Thanksgiving. I got a lecture on the benefits of Marxism from a Seton Hall student. I threw all the motherf#ckers out of my house. In laws of course.

  128. yikes says:

    Schumpeter says:
    December 12, 2009 at 3:42 pm

    O = house nigg@

    awww, clot, you had to go there? i know, BO looks like a stooge, a liar, a fraud … they all do.

    if it were johnny mac, it’s not like we’d be in better shape.

  129. chicagofinance says:

    127.chicagofinance says:
    December 12, 2009 at 11:13 pm

    “grim says:
    December 11, 2009 at 11:00 pm
    And if I knew in 2006 that in 2009 I’d be able to get the same home for a 20% discount AND still get a low rate, I never would have pulled the trigger.

    Weren’t we all screaming that in 2005?”

    J-bed: No, we were screaming 40%.

  130. Revelations says:

    If complete financial system collapse:
    Maybe not civil war, but I’d say significant civil unrest. Our society is crosscut into so many fragments (political, religious, racial, economic, etc.), I don’t see everyone “getting along” or “stepping back”. Too much mistrust.
    I imagine marshal law and a national version of New Orleans, LA, Newark..

  131. Revelations says:

    Then I will be able to afford a house.

  132. Al Gore says:


    Martial law will lead to Civil War trust me. The infrastructure will be targeted first.

  133. Barbara says:

    its already happening, not a civil war, but a steady beat of “isolated” incidences…..the guy who kills his whole extended family, and the other guy, and the other guy. The unemployed creep who shoots up the office, the “radicalized” serviceman who shoots up his base. All dismissed as isolated psychotic breaks…when does it become a pattern, when does it become a form of self destructive civil unrest. Is it just a matter of numbers? Does it have to have a political slogan? I don’t think so.

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