From CNBC:
Home Prices Will Decline for Years: Zuckerman
Home prices will continue to decline for several years, Mort Zuckerman, the chairman and CEO of Boston Properties, told CNBC Monday.
“I’m pessimistic about residential real estate,” said Zuckerman, whose firm specializes in high-end commercial real estate and last week bought the iconic John Hancock Tower in Boston’s Back Bay for $930 million.
Zuckerman, who is also the chairman and editor in chief of the weekly news magazine U.S. News & World Reports and publisher of the New York Daily News, blamed the continuing price decline on the so-called shadow inventory of foreclosed homes that’s yet to come on the market.
“That’s what’s going to put downward pressure on residential prices,” Zuckerman added, “And in my judgment, that’s going to continue for several years.”
“We’ve seen home prices go down now for four months in a row, according to the Case-Shiller Index , by 1.3 percent in the last month,” Zuckerman went on to say. “So it’s an accelerating downtrend in those prices. This is on top of three to four years of declines.”
Growing pressure on unions – good read
http://www.nytimes.com/2011/01/04/business/04labor.html?_r=1&hp
From the Record:
Fewer employers expected at Rutgers job fair
Job seekers at Thursday’s Rutgers University annual job fair, thought to be the biggest college-organized fair in the state, will find the pickings slimmer than last year.
Even as the economy shows signs of improving, about 15 percent fewer employers will be at the fair than a year ago, the organizers said Monday.
The college had hoped to see more than the low of 163 employers who attended a year ago, said Richard White, director of career services at Rutgers University New Brunswick. White expects about 135 to 140 employers this year.
“I think it suggests that the economy is still trying to grow, but really things are not booming,” he said. “We thought we had turned the corner. … We were hoping to be above 163.”
New Jersey has lost 245,000 jobs since the recession began in December 2007, and 16,800 jobs in 2009. Unemployment, at 9.2 percent, is lower than the 9.8 national rate, and the state added 14,000 jobs in October and November.
…
White said he is “perplexed” at the decline.
“This event is not demonstrating the same trends that we were seeing nationally and in the fall, and that’s a projected increase in hiring needs,” he said. “We really don’t have an explanation. We think it’s just an aberration.”
From Bloomberg:
Manhattan Apartment Sales Fall 7.2% After Tax-Credit Boost Ends
Manhattan apartment sales dropped 7.2 percent in the fourth quarter, returning to historically normal levels after government tax credits helped push transactions to a two-decade high for the period a year earlier.
The number of completed sales fell to 2,295 from 2,473 in the fourth quarter of 2009, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. They declined from 2,661 in the previous three months.
The city’s property market is “flat” after homebuyer tax credits and pent-up demand following the financial crisis skewed sales in the past year, according to Miller Samuel President Jonathan Miller. Transactions in the final three months of 2010 were close to the 10-year average of 2,323 per quarter, he said.
“Flat is the new black,” Miller said. “Recovery used to mean ‘getting better.’ Now it means it’s not getting worse.”
The median price of co-ops and condos that changed hands in the quarter increased 4.3 percent from a year earlier to $845,000 as people bought larger apartments. Properties stayed on the market an average of 125 days, in line with the 10-year average of 133 days, Miller said. Apartments spent 204 days on the market in the fourth quarter of 2009.
“A lot of the metrics are falling into some sort of level that we’re more accustomed to,” Miller said.
Hmmmm who to believe Zuckerman or Otteau?
Grim make up your mind.
From CNN/Money:
Bankruptcies top 1.5 million in 2010
The number of Americans filing for bankruptcy in 2010 ticked up 9% over the previous year to more than 1.53 million, industry groups said Monday.
The number of consumers filing for bankruptcy has increased each year since 2005, when bankruptcy laws were revamped, according to the American Bankruptcy Institute and the National Bankruptcy Research Center.
The 2010 figure far outpaces the 1,407,788 total consumer filings that were recorded during 2009, a trend that the American Bankruptcy Institute attributes to high debt and a stagnant economy.
“The steady climb of consumer filings notwithstanding the 2005 bankruptcy law restrictions demonstrate that families continue to turn to bankruptcy as a result of high debt burdens and stagnant income growth,” ABI Executive Director Samuel Gerdano said in a statement.
December was a particularly bad month for consumers, with 118,146 total filings, an increase of 3% over November’s level. That increase may become typical.
Embrace it?
This dude is my kind of commander.
http://abcnews.go.com/Politics/sailors-defend-uss-enterprise-captain-owen-honors-debate/story?id=12530595&tqkw=&tqshow=WN
serenity 4 Was thinking same thing, who’s call you going to go with. Saw Mort on TV last night, like what he had to say. Zuckerman hands down.
Essex 7 Witch hunt , PC bullshit.
Futures green across the board, our fed at work.
sn (4)-
I wouldn’t believe Zuckerman or Otteau. Keep in mind that Zuckerman is an enemy.
mikey (9)-
It all makes sense when you look at it in the context of a gubmint that is both trying to perpetuate the war as long as possible, while at the same time funding the enemy in an attempt to eventually lose the war.
The purposes of our current war are:
1. to use it to assist in impoverishing the middle class
2. to use it to frighten and demoralize US citizens
3. to kill off as many productive, young US soldiers as possible
4. to stim as many terror attacks as possible, in order to further institute martial law and denial of basic freedoms
Clot 11 Last night he sounded like he was on this board, wolf in sheep’s clothing, maybe.
12 I hope you are wrong, fear you are right.
Think banks don’t own your ass? Think again. The TBTFs have bought off all 50 state AGs, thus ending the fraudclosure thingy.
“To all those who penned lengthy essays and activist missives to various law enforcement and judicial organizations in 2010 over the fraudclosure fiasco, we have one word: condolences. According to Bloomberg, which cited Iowa Attorney General Tom Miller, “The five largest mortgage loan servicers, including Bank of America Corp and JPMorgan Chase & Co may be the first to settle with 50 state attorneys general who are investigating foreclosure practices.” It appears these attorneys general were all sequestered and advised of the now-traditional M.A.D. apocalypse that would follow if this latest iteration of Wall Street’s corner cutting was pursued by the full extent of the law. In other words what many have claimed is the biggest fraud in MBS history is about to be swept under the rug in exchange for 30 pieces of silver wrtistslaps. In the meantime, disclosure such as that revealed by Allstate, which virtually proves that Bank of America was lying outright to investors about its portfolio quality, will be made irrelevant, and yet one more aspect of TBTF fraud will be institutionalized.”
http://www.zerohedge.com/article/fraudclosure-settlement-imminent
Zuckerman is believable on residential real estate just don’t ask him about commercial real estate or how he got duped by Madoff
Otteau, Yun and the whole RE industry remind me of a modern day version of Tokyo Rose.
HE (15)-
Zuckerman being bullish on commercial RE and down on residential RE is basically his admission of knowing that the fix is in.
Which it is. And he’s one of the fixers.
12. Well said. Might I add demoralization of the military via multiple deployments and now g_ys in the military.
“European nations begin seizing private pensions”
If you don’t think this can happen here, you have your head in the sand.
http://www.csmonitor.com/Business/The-Adam-Smith-Institute-Blog/2011/0102/European-nations-begin-seizing-private-pensions?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+feeds/csm+%28Christian+Science+Monitor+|+All+Stories%29
Obummer going to number one on the charts. This girl has a nice voice http://www.youtube.com/watch?v=aiGg8D4hFLc)
Wantan, I’ve been talking about that for months now. What they did in Hungary is absurd. Bloomberg radio was talking about it this am. Something to watch closely.
re #14 – Just the BAR association protecting it’s own. How many sworn officers of the court knowingly presented false affidavits in foreclosure proceedings?
[19] wantan
The same result can be achieved through means-testing SS. And it is coming; no knowledgeable commentator disputes this.
OT Alert:
For the record, the HTC Incredible smartphone has a battery lifespan no better than a stick of chewing gum. My batt ran down overnight while the phone was off!
Also for the record, I believe Zuckerman, and I did before he did that interview yesterday.
[7] essex
you are confusing me. This is completely at odds with your recent MSNBC-style postings.
Unless you are being sarcastic. If so, welcome back.
Dipping back into shiny this morning. Not a lot, but the 2 day retrace is tempting so the toe is back in the water. Given the market volatility, I hope for a brief spike tomorrow, then I can put a stop floor under it.
re # 19- So you think they are going to go after 401k and IRA money and leave the individual investment accounts, Hedge Fund accounts etc alone? If anything the State run and many times insolvent State pension funds would be ripe for government takeover. After all most state & government employees do not pay into Social Security. The States offer an IRS approved retirement plan to these employees in lieu of Social Security participation.
Sate and Local government employees about 17 + million workers do not contribute 6.2% of payroll to Social Security as do private sector employers.
Rahway New Construction Condo Fire
http://www.myfoxny.com/dpp/news/local_news/new_jersey/fire-rages-in-rahway-20110104-KC
29.250k says:
January 4, 2011 at 10:28 am
Rahway New Construction Condo Fire
Jewish lightning?
Nom 23-
I’ve always said that Social Security and the pension systems are very easy to fix. The problem is that the solutions are painful and unpopular. These issues came up 18 years ago when I was an undergrad.
Im happy U did it. Thanks for writing so informative post. Im lookin’ forward to c and read ur next post. Cheers
Juice-
I would be curious to know how many of those 17 million never collect a dime of Social Security considering one can collect through a spouse or qualify through part-time work.
Look at the way all the roof tops are burning simultaneously, yet the lower floors do not look like they are on fire. The Firefighters are letting it burn out.
http://www.cbsnews.com/stories/2011/01/04/national/main7211828.shtml
Today I read some very interesting article. Its Ur article. Thanks
Mike [7];
At that level, the military is politics. Don’t discount this issue is a result of ‘friendly fire’. The “Willy Horton” issue which hurt Michael Dukakis was not launched by a Republican — it was Al Gore in the primary fight. Maybe this commander was in line for some position that another wanted. This issue may not derail an otherwise impressive career, but if it makes it hard to promote him right now, then he’ll be passed over and have to bide his time until the next opportunity, and/or next administration. He can also retire and get filthy rich.
Michael Luttig was considered a young rising star of the federal judiciary, and a short list candidate for the Supreme Court. GWB nominated Samuel Alito to the second vacancy during Bush’s tenure, the second consecutive white young (relatively) white male nominated. Even if the R’s held the White house, with Alito replacing O’Connor at least one diversity pick was next in line. Luttig’s best hope was for the second pick down the line, and that was only if his party held power.
Luttig resigned from his lifetime apointment on the bench in 2009, and took a general counsel position at Boeing. As a Circuit Court Judge, Luttig made about $170k. A Supreme Court justice makes just over $200k a year. Lutting made $2.0 MM total comp last year.
Juice, that’s because the units are connected at the roof. The block firewall doesn’t prevent fire from spreading up there.
Juice [34];
letting it burn out
Would it look suspicious if the developer were on scene handing out $100 bills to all the firefighters and saying “Don’t take any chances, I’d hate to see one of you get hurt.”
These buildings are designed to prevent the spread of fire from unit to unit long enough to evacuate. Nothing more. There probably are no cinderblock firewalls.
Anyone have the address and sales info for MLS #2817273.
Upperhaughtyville.
Thanks.
Stan
@40 Stan:
Is this it? According to Zillow, the asking price was slashed by 19% in Nov.
http://www.zillow.com/homedetails/717-Harding-St-Westfield-NJ-07090/2131744794_zpid/
Stan…looks like an overpriced dump.
Shades of the 1970s in NYC.
http://www.nytimes.com/2011/01/03/nyregion/03bronx.html?_r=1&src=me&ref=nyregion
Hood- thanks yeah that’s it.
No listing on tax records however. Odd. Wanted to see what it previously sold for.
Stu- it will go for sub 500K I imagine, which is, still too high, but 200K off of where they used to trade. Needs some work.
Taxes killer as well.
Non,
The batteries on these things are a joke. When using this as a wifi hotspot, I am not sure that keeping it teathered to the power supply keeps it from draining the battery. In short, thease MUST be hooked to a power supply.
The end is nigh….(Hughes Edition):
http://www.nypost.com/p/sports/soccer/giants_and_jets_looking_roma_buy_o9mY8SY7g271c8Wz9r57JN
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
Barack H. Obama
3/16/2006.
senate.gov
Hard working snow removing municipal employees caught on tape:
http://newyork.cbslocal.com/2011/01/03/video-of-apparent-blizzard-clean-up-slow-down-surfaces/
Barack H. Obama
3/16/2006.
Link
http://origin.www.gpo.gov/fdsys/pkg/CREC-2006-03-16/pdf/CREC-2006-03-16-pt1-PgS2236.pdf#page=2
http://mobile.nytimes.com/2010/12/26/us/26spill.xml
More from our fearless leader: Barack H. Obama
3/16/2006.
http://origin.www.gpo.gov/fdsys/pkg/CREC-2006-03-16/pdf/CREC-2006-03-16-pt1-PgS2236.pdf#page=2
Jets buying a soccer team!! What next? I wonder if I automatically get seats.
Come on Cat…
We all know that the housing bubble popped shortly after these pronouncements and shortly before the false messiah took office. But did you realize that? And I’m far from being a fan of Obama.
Essex, what do you think of the unions now?
JJ (52):
“I wonder if I automatically get seats?”
Sure…right after you automatically pay through the nose for them.
Team owners have money to throw around to pay for sh1t soccer teams, yet they couldn’t pay for the infrastructure upgrades around their new stadium (these cost us taxpayers close to a billion) nor for the bonds to pay off the old one. The middle class should be renamed the sucker class.
Libtard,
yes i do realize that. I dont care for either party. If national debt was so incredibly onerous then why not let the banks fail, let the system cleanse and then move on? It would have been painful and taken a politician with a big brass set. Oh well, It’s still a fun contrast given the presidents current actions.
chi (46)-
Roma needs some fresh blood (and $$$). New owners would give it to them. They are a quality side, and Rainieri is one of the best managers in the business.
Would also make a nice excuse for Woody to get Ms. Ryan out of town. Everybody knows the best shoes are in Italy.
I thought Rex’ wife was more into bare feet?
jj (52)-
Down, boy. They will probably hold your Jets’ season tickets hostage unless you agree to pay face for four tickets to watch Roma play some dog outfit like the Dead Bulls or Phila. Union on some Saturday afternoon in the middle of August.
Stu (57)-
Gotta think some expensive leather stilettos figure into that equation at some point.
stann 44 – No way that address can be right. It doesn’t exist in the tax database and if you look at the map on Zillow, 719 Harding is the first house on that block on the corner. The zillow listing for 717 shows an icon in the street in front of 731 on the map view. Fishy, fishy, fishy.
http://www.zillow.com/homes/2131744794_zpid/
Most middle class don’t pay any taxes. Why do they care?
Libtard in New York says:
January 4, 2011 at 1:12 pm
JJ (52):
“I wonder if I automatically get seats?”
Sure…right after you automatically pay through the nose for them.
Team owners have money to throw around to pay for sh1t soccer teams, yet they couldn’t pay for the infrastructure upgrades around their new stadium (these cost us taxpayers close to a billion) nor for the bonds to pay off the old one. The middle class should be renamed the sucker class.
“Most middle class don’t pay any taxes. Why do they care?”
Yes and tax cuts spur growth…in the number of food stamps needed.
I may pay for a PSL to see this kid;
http://www.komonews.com/home/video/111892554.html
44 stan and 60 NJ Gator
The homes tax records can be found if you look up 345 Benson. Owners have been there since 1955.
It is a wacky lot because I believe the Width is 156 while the Depth is the 60.
Great read.
http://www.bloomberg.com/news/2011-01-03/snowplow-slowdowns-might-become-american-way-commentary-by-kevin-hassett.html
This isn’t news to policy wonks who remember prior generations of similar tactics, but this time there is a difference:
“So, here’s one vision for 2011 in the U.S.: subways slower, lines at airports longer, trash and snow piling up in the streets, visas and other government documents processed less quickly. But no Europe-style riots in the streets — unless fed- up taxpayers are the ones who start them. ”
Finally, I see an immediately beneficial use for Lamar and the TEA Party groups. Perhaps we start by organizing a torchlight and pitchfork protest outside of Sweeney’s house. Al, you in?
Zuckerman is very clearly wrong, for RE only goes up.
re # 65- My prediction for 2011 includes wildcat strikes including slowdowns for 2011.
However there is no 700 Billion Stimulus to fill the State and Local gaps for the 2011 budgets this time. Unless there is another Federal Stimulus targets at the cops, teachers, and heck the people who work in corrections the layoffs at the State and Local Levels will accelerate, we could see allot of anger directed towards Christie in the coming months down in Trenton.
#41 When you buy a house like that in Westfield, people from out of state come visit, thinking wow, I want to see this new half-million dollar house. Then they show up and see it’s a crapshack with no land, and they have to share the little bathtub with your kids. Then you have to explain that NJ is special, and your little kid’s new friends in your fancy and progressive school are really smart. And all your friends who read NJ Monthly really envy you because you moved up the school status rankings. And you can get to NYC in an hour, well maybe an hour and a half depending on where you’re going. And your town’s municipal employees are all organic and sustainably grown, with a humane pension system that allows them to retire with dignity out of state. All of which gives you a feeling of pride of ownership that overwhelms the natural urge to gag at the sight of a half million dollar POS crapshack.
Shore – a bit of nostalgia –
RE only goes up! Suzanne researched it!
http://www.youtube.com/watch?v=Ubsd-tWYmZw&feature=player_embedded
Nom,
Over the past hour, my phone has been charging and I have been using a Web browser and e-mail and my charge has gone from 60% to 40%
65, I think Lamar would be a natural tea party leader if only he had more hope for his fellow man. Especially if riots/strikes are involved. But I fear he’s given up on them.
Where’s the genius who posted the other day claiming that the 100 year trend line is irrelevant? Homes appreciated at the rate of inflation since the beginning of time but now it’s “different” here. Correct? What anlysis are you using to justify your new model of 7x median income for a house? We’re to take your opinion as fact and dismiss 100 years of data. How much are you underwater?
A West 68
NICE!!! That is one of the best summaries of NJ housing that I have ever read.
Eddie,
That would be Neanderthal Economist who made that comment.
Cat,
Someone with a different name posted it.
Homes rise 3.5% a year on average in the tri-state area. Just take December 1999 prices and multiply it by 1.385 which is 3.5% by 11 years and you get the most likely landing place for RE after bubble froth is blown off, might overshoot on downside, but pretty much if you are paying around 38% more than December 1999 most of your downside is protected
Fast Eddie says:
January 4, 2011 at 3:29 pm
Where’s the genius who posted the other day claiming that the 100 year trend line is irrelevant? Homes appreciated at the rate of inflation since the beginning of time but now it’s “different” here. Correct? What anlysis are you using to justify your new model of 7x median income for a house? We’re to take your opinion as fact and dismiss 100 years of data. How much are you underwater?
Shore,
The Iphone can have a similar problem. If you look around you can probably find an after market charger that charges with a slightly higher voltage which can allow you to do the sort of multitasking you speak of without constantly draining the battery. At least it seems to work for the iphone.
You could also look at something like the following, but keep in mind there are a hundred clones of this out their so look around
http://www.amazon.com/New-Trent-ultra-pack-IMP880-Blackberry/dp/B002YFDRHW
Eddie
Here you go:
Sorry Neanderthal, it wasnt you.
re: # 71 – re: “But I fear he’s given up on them” . Nah, Lamar has been living in Joisey too long that’s all. However what might drive him over the edge would be if his daughter starts acting like the new MTV cast member or the Jersey Shore Deena Nicole Cortese. That chick is the real deal Joisey Girl not some poser like Snooki.
JJ [76],
Exactly. Try telling that to these numbskull sellers:
http://www.realtor.com/realestateandhomes-detail/374-West-Grand-Avenue_Montvale-Boro_NJ_07645_M61443-79932
They need to cut the asking price in half. IN HALF!! Oh my G0d, can you believe the asking price for this f*cking double wide on a main road?
68. AWest,
well done.
Eddie,
700K?!?!?!?!?!?!?! ROFLMFAO.
#41 “… your town’s municipal employees are all organic and sustainably grown …”
Good stuff.
I mean #68
I liked the mention of NJ Monthly the best. Well done.
Cat [78];
That post caught my eye as well – mostly because its author was still clearly intoxicated almost 36 hours after the ball dropped.
Moose,
Perhaps it was clot in a drunken stupor as one of his long repressed multiple personalities slipped loose.
ChiFi loves his TRUPs, eat them up boy, eat them up!!
U.S. Treasury plans sale of Ally securities-report
NEW YORK | Tue Jan 4, 2011 2:13pm EST
NEW YORK Jan 4 (Reuters) – The U.S. Treasury Department is planning to sell up to $2.5 billion of Ally Financial Inc trust-preferred securities as soon as this month, Bloomberg reported on Tuesday, citing a person with direct knowledge of the plan.
JJ
(61)
Sorry to break it to you… but rich people consider you middle class too
True but I pay taxes at least. My W-2 is at zero dependents even though I have a stay at home wife and a bunch of kids and I still have to make estimated tax payments every quarter. Govt is going to get a boat load of taxes from everyone if this stock rally keeps up.
joyce says:
January 4, 2011 at 4:19 pm
JJ
(61)
Sorry to break it to you… but rich people consider you middle class too
“Govt is going to get a boat load of taxes from everyone if this stock rally keeps up.” [even from middle class people]
That is a good thing, isn’t it? At least till the bubble bursts again.
“My W-2 is at zero dependents even though I have a stay at home wife and a bunch of kids”
JJ,
An accountant not taking standard deductions? Moronic.
Wantan, he said “W-2″… does not have any impact on what he finally pays in taxes.
sas3,
Good point, I missed that. So he allows the govt to borrow $ from him tax free. What a deal.
he meant W-4
baller got that one wrong
93 – correct, but for such a bond genius it seems odd that he would boast about giving interest free loans to the govt.
re #93- Right either a flub or JJ isn’t an accountant. How about we ask JJ a question only an accountant/playa would know.
JJ If you claim your girlfriend as a dependent if she dances three nights a week at Scores? This is a real trick question so think about it.
The party’s over for the parasites:
http://news.yahoo.com/s/yblog_thelookout/20110104/ts_yblog_thelookout/states-congress-ready-assault-on-labor
JJ: Only Basel deflowered Tier 1 bank TruPS!
88.JJ says:
January 4, 2011 at 4:13 pm
ChiFi loves his TRUPs, eat them up boy, eat them up!!
RIP Gerry Rafferty,
Where would LiteFM be without Baker’s Street?
http://www.youtube.com/watch?v=DohRa9lsx0Q
Someone is pissed…
New York Snow Removal Delay Is Said to Be Probed by U.S. Attorney’s Office
By Thom Weidlich – Jan 4, 2011 4:57 PM ET
Delays in the removal of snow from New York City streets are being investigated by U.S. Attorney Loretta Lynch in Brooklyn, New York, a person familiar with the matter said.
100.Barbara says:
January 4, 2011 at 5:08 pm
RIP Gerry Rafferty,
Where would LiteFM be without Baker’s Street?
sorry…the correct video….
http://www.youtube.com/watch?v=jrJQDnAHrRY
97: Et Al,
If HTJ is making estimated payments on top, taking zero w/h exemptions is not necessarily an interest free loan.
Gary I agree with a lot of that posts reasoning. I know your logic is that prices must crash another 30% but if that’s true then why didn’t it happen yet? This is the question we are all trying to understand.
Truth is that trend lines can change and shift or just break for 10 or 20 or 30 years due to various law, policy, or demographic changes. According to your logic gold needs to be sold immediately because it broke historic trend and can’t ever go up anymore.
Not sure if this was posted previously.
http://online.wsj.com/article/SB10001424052748704610904576031632838153532.html?mod=WSJ_RealEstate_LeftTopNews
westy (71)-
The only thing my “fellow man” can do is get his fat, lazy ass in my way. When I go all Streetfighting Man, it’s game on…so unless any sheeple around me wants to become collateral damage, I suggest they go pick their own damn parasites to shoot.
Like they say, hope is not a strategy.
“I think Lamar would be a natural tea party leader if only he had more hope for his fellow man.”
cat (87)-
I wish I had multiple personalities. It would give me some respite from the one in which I’m trapped for life.
From now on, my handle will be Debt Supernova.
Thought you guys would like this one…..
WSJ
THE GAME
JANUARY 4, 2011
When States Default: 2011, Meet 1841
Land values soared. States splurged on new programs. Then it all went bust, bringing down banks and state governments with them. This wasn’t America in 2011, it was America in 1841, when a now-forgotten depression pushed eight states and a desolate territory called Florida into the unthinkable: They defaulted on debts.
This was an incredible step, even then. Fledgling U.S. states like Indiana and Illinois were still building credibility on global debt markets. They rightly feared “a prejudice so deep and wide” that they could never sell bonds in Europe again, said one banker.
Their paranoia would be familiar to the shell-shocked California and Illinois of 2011. Each is beset by budget problems so great that some have begun debating default or bankruptcy. These worriers may draw comfort from the state crises that raged and retreated long ago. Most of the states eventually paid off their debts, and changed their laws to safeguard their finances, helping make U.S. states some of the world’s best credits.
Congress, meanwhile, helped set a precedent that still holds: In 1843, it rejected an elaborate plan for a bailout, with one critic later observing it would “cause recklessness and extravagance” among the states. Surely, someone will dust off those ideas in 2011.
Yet for all their similarities, there was an ominous difference from now: Leaders and citizens of the 1840s were more willing to accept new taxes to pay for the infrastructure and to defend, in the earnest words of the time, their “moral duty” of meeting debts. In Indiana and Ohio, property taxes went up eightfold in the early 1840s. New York, Pennsylvania, Maryland, and Massachusetts all installed state property taxes, the first in 40 years for Pennsylvania.
“People didn’t want to raise taxes but they did,” says John J. Wallis, a University of Maryland economic historian. He traces our current states crises back to those defaults in 1841, after which legislators amended constitutions to clamp down on new borrowing. Over time, these rules have been perverted by politicians, meaning that “constitutional rules have made it harder to raise taxes than to raise expenditures,” he says.
There were differences between today and 19th century. Then, expensive state programs weren’t for government pensions or Medicaid. They were for roads and canals. And in today’s slow-growth economy, raising taxes won’t solve all of the states’ fiscal woes. Any real solution will require wholesale cuts in government programs and spending, too.
When the defaults began in January 1841, investors dumped state bonds, pushing yields above 12% in early 1841, and to nearly 30% by 1842. The consequences of those defaults would last for decades: Among historians, the rule of thumb is that U.S. states would pay interest rates one percentage point higher than Canadian issuers the rest of the 19th century. To this day, Mississippi hasn’t paid back some of those bonds, even after a 100-year English bid to collect.
The defaults weren’t crippling. U.S. states went back into the public markets in the railroad boom of the 1850s, most of them armed with stronger safeguards for creditors and new constitutions.
Could states default today without causing another 1841? Randall Kroszner, a former Fed governor and University of Chicago professor, calls it as a long shot. “Only if there were a clear legal framework, and a clear way in which people would be treated, and not interminable delays through the courts,” he says. “States should be very averse to defaulting.”
For Mr. Wallis, the lessons of the 1840s are bracingly clear. Taxpayers and politicians have lost the connection between borrowing and costs. So taxpayers must be willing to approve tax rises as a direct part of new borrowing plans.
“There is nothing wrong with raising taxes to support government services that voters want and are willing to pay for,” he says. But government needs to be set up “so that both voters and legislatures are forced to make decisions about taxing, spending, and borrowing simultaneously.”
Write to Dennis K. Berman at dennis.berman@wsj.com
Veto 104 “but if that’s true then why didn’t it happen yet?” Were we not all bemoaning all the gov programs to stop foreclosures ,2 first time buyer tax credit deals. There is your 20-30 %. Patience, tick tick tick.
250, Gator thx for the info
Clot 108 another one, exasperated. Catchy though.
Chi 109
“There is nothing wrong with raising taxes to support government services that voters want and are willing to pay for,” he says. But government needs to be set up “so that both voters and legislatures are forced to make decisions about taxing, spending, and borrowing simultaneously.”
Yea like that is going to happen.
I know I missed you for the day, but if you see this, J***, some folks down here need light shined on the pocket depth of the segment with the upcoming resets.
Comparisons of expected spending over the 22 mos. w/o mortgage pmts vs. subsistence spending of subprime group. Maybe age related and socio stuff. Historical and in-depth convincing. There’s got to be somebody you owe, like somebody who gave you a really good submission idea that ended up a prime segment.
Re: Phones
When you charge it using USB port of your PC, the maximum current is only 100 milliamper. It’s suitable for charging the phone slowly, but your phone might use more.
My Droid X wall charger is rated for 850 milliamper. To prevent it to suck up energy during the night, go to the Battery Manager and set the battery mode to “Nighttime saver”. Also if you have a corporate Exchange server account setup, enable “data push” mode.
I have no problem with the battery, using the phone for ~2hrs on the train. Lasts till the next morning if I foget to put it in the charging dock.
Long time reader looking for a referral. Need a solid mortgage broker that can handle refi’s on small investment property loans, typically $40-75k. 60% equity, 800 credit, looking for 20-25 year payouts. Any direction is appreciated. Read this blog everyday and can’t get enough.
Lamar,
The latest from Martin Armstrong and his Roman era historical references should calm your nerves for now.
May I present the legend from Ft Dix.
http://www.martinarmstrong.org/files/A%20Total%20Eclipse%20of%20the%20Economy%20and%20Good%20Old%20Fashion%20US%20Witch%20Hunt%2012-22-2010.pdf
Wantan,
Nice raid today. What are your thoughts on the CFTC statement on position limits and rumors that JP Morgan is offshoring its shorting duties to Barclays?
Heres there comment.
http://www.zerohedge.com/article/bart-chilton-suddenly-board-cftcs-position-limit-plan-now-go
Clot has mentioned time and again that you can only get one of the holy trinity – price, location OR house.
I choose the latter. While I don’t mind my current neighbors being within arm reach, I won’t be able to see them in my next house. Not that I don’t like them, I just don’t want to SEE them. I’d rather have the extra cash to pay for tutoring, if necessary, as well.
Am I concerned with the school system? My desired location is times better than the one I attended. No, sad to say that my school didn’t even make the top 100. Oh and I didn’t break 1000 on my SATs. That was a b1tch as my bro nailed 1400+. But I’m doing just fine.
Clot – I knot it’s time to buy when your handle change to Eternal Optimist…
[2] grim
“The college had hoped to see more than the low of 163 employers who attended a year ago, said Richard White, director of career services at Rutgers University New Brunswick. White expects about 135 to 140 employers this year.
“I think it suggests that the economy is still trying to grow, but really things are not booming,” he said. “We thought we had turned the corner. … We were hoping to be above 163.”
New Jersey has lost 245,000 jobs since the recession began in December 2007, and 16,800 jobs in 2009. Unemployment, at 9.2 percent, is lower than the 9.8 national rate, and the state added 14,000 jobs in October and November.
…
White said he is “perplexed” at the decline.”
Tells me everything I need to know about how this guy got his job.
Learned that Reform Jersey Now is being disbanded because, quel surprise, they were really a lobby shop guised as a Tea party.
Some of the attorneys at my former firm were getting involved in this with the hopes of steering state business to the firm. Another (can’t say who) left the firm to take a very high position with the administration. I overheard him saying that he would “hold the door open” for the firm, and one of my friends was “placed” in a position close to the governor.
BTW, I seriously doubt that Christie is aware of this sort of low-grade graft, and in a place like NJ, you really cannot avoid it.
NJ: It’s different here.
#65 Nom et al.
This is getting old. Work to rule may be a pain, but at least you get some work done and people showing up. When the private sector gets involved, accountabilty goes out the window in the pursuit of profit. Got and issue, the company shuts up shop, declares bankruptcy and moves on on opens up under a different name.
Here is a nice little nugget from the DOT.
“The DOT has 427 state trucks, down from the 642 it had last winter, and another 1,331 private vehicles under contract that can be deployed to clear 12,953 lane miles of interstate and state highways. The number of private-contractor vehicles is down from the 1,489 the state said it could deploy last winter, but remains the second-highest level on record. About 1,500 DOT employees and volunteers are assigned to 76 crews.”
So private trucks outnumer state trucks 3-1 but its the public workers fault the snow doesn’t get cleared. I have a few friends that are on private plows that cover a big section of 1/9 around Newark. They say that the firms contracted to clear 280 never showed and those that did, didn’t clear the ramps. 280 was closed for two days. I think the private crews were off plowing South Orange driveways and worked out they could get to the DOT contract last, because no matter what they would get paid as long as they get the road open at some point.
#122 Nom
“BTW, I seriously doubt that Christie is aware of this sort of low-grade graft, and in a place like NJ, you really cannot avoid it.”
Are you serious, he was headline speaker at the events. Do we need to roll tape?
http://www.nj.com/news/index.ssf/2010/07/gov_chris_christie_defends_tie.html
http://batteryuniversity.com/
About batteries:
http://batteryuniversity.com/
No words………..
Tom
Ravenshoe Real Estate
http://www.ravenshoerealestate.com.au
http://hiramfstrong.adalsteinn.info/uncategorized/the-best-way-to-get-free-of-charge-baby-samples-baby-freebies/ Thanks for that awesome posting. It saved MUCH time :-)