From the Star Ledger:
Fawn Hill Farm sold for bargain price
You know the luxury property market is struggling when one of New Jersey’s most lavish estates sells for barely one-quarter of its original listing price.
Fawn Hill Farm, the storied Harding Township landmark that hit the auction block last October, sold for just $6.4 million — a fraction of its original listing price of $22.5 million — according to a recent update on the auction company’s website.
The 34-acre property, located in the affluent New Vernon section of the township, languished on the market for five years before owners Herb and Gloria Glatt hired an auction company as a final resort. By that time, they had marked down the price to $15.3 million, but with no luck.
…
Mary Horn, the listing agent for Fawn Hill for four years, estimates the estate was worth double its auction price. In the year leading up to the auction, she received an $8 million offer for the house alone, but the owners hoped to get even more with an auction, she said.“It’s worth a lot more than $6 million,” said Horn, who specializes in luxury homes at Weichert Realtors. “I was there at the auction—I was numb.”
To be sure, New Jersey’s high-end property market has been hit hard by the recession, she said. Horn recently sold two homes in Far Hills—one for $4.3 million, less than half of its original asking price, and the other for $3.9 million, about $1 million less than the owner paid for it.
Still, for owners who are realistic about their selling prices, there’s still a market, she said.
A spokeswoman for Concierge said the auction was “very successful,” with 11 bidders participating after more than 200 showings of the home.
“The challenge today is that buyers and sellers aren’t certain what the true value of property is,” said Laura Brady, vice president of Concierge in Manhattan. “A property is worth what a buyer is willing to pay.”
From CNN/Money:
Foreclosures plunge 27% – biggest drop on record
Is our long national foreclosure nightmare ending?
The number of foreclosure notices filed in February dropped 14% compared with a month earlier and 27% compared with a year earlier, according to RealtyTrac.
“Allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets,” he said. “The industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures.”
Another contributing factor was the harsh winter weather that covered much of the country during the month. That delayed some of the paperwork processing and the serving of notices of default, notices of auction sales and other filings.
There were still more than 225,000 filings during the month, or one for every 577 homes. The banks repossessed 64,643 homes from delinquent borrowers, down significantly from the peak of about 102,000 last September.
The foreclosure fall flew in the face of other housing market reports that made it clear that housing is far from being out of the woods. S&P/Case-Shiller reported that prices are going down, and Zillow, the real estate website, said nearly 30% of borrowers with mortgages owe more than their homes are worth.
From Inman:
Forecast: Housing will continue to lag recovery
The U.S. economy is growing and employment should soon pick up steam, but housing will continue to lag behind other sectors, economists at the UCLA Anderson Forecast said in their latest report.
“Housing continues to wallow in its modern-day depression as low interest rates are being more than canceled by the glut of new product created during the bubble years of 2004-2007, the tidal wave of foreclosures, and increased credit standards being imposed by lenders,” said UCLA Anderson Forecast Senior Economist David Shulman in his forecast.
Although housing prices are down 30 percent, that would-be incentive to buyers has been offset by increased down-payment requirements, Shulman said.
Fears of “a further ratcheting down in prices, along with the shock of witnessing an unprecedented collapse in price structure, has kept buyers out of the market. Put simply, the investment value of homeownership has declined. Furthermore, the usual factors associated with housing weakness … tepid job growth and high unemployment, are suppressing demand.”
Good Morning New Jersey
From the AP, courtesy of the Daily Record:
You can live large in a small house
Tiny houses are going mainstream.
Just look at the Katrina Cottage, originally designed by architects Andres Duany and Marianne Cusato as a dignified alternative to the FEMA trailer for flood-ravaged New Orleans. The tiny charmers with pitched roofs, nostalgic front porches and 300 to 1,800 square feet are becoming popular elsewhere; Lowe’s home stores sell the blueprints and materials.
The cottages are being used as affordable housing, guesthouses and vacation cottages.
It’s part of a larger trend toward living small.
The average size of the American home expanded from 983 square feet in 1950 to 2,340 square feet in 2004, up 140 percent. This boom was largely driven by a belief that living big meant living well, and that real estate was a great investment, so the bigger the house the better the investment.
The recession is one factor killing that notion. Millions of foreclosures have meant “people have lost a ton of equity,” said Boyce Thompson, editorial director of Builder magazine. Add in high unemployment and energy costs, and no wonder small might seem better.
According to the American Institute of Architects in 2010, 57 percent of architecture firms reported a decrease in the square footage of homes they designed.
Another factor is people’s desire to live more ecologically, less wastefully.
And there are demographic changes. Thompson points out that one-third of American home buyers are now single; people are marrying later, and many don’t want to wait until marriage to invest in a house. Moreover, as Americans live longer, many widows and widowers are downsizing to small homes.
From HousingWire:
House committee votes to end HAMP and NSP
The House Financial Services Committee voted Wednesday in favor of two bills that would terminate both the Home Affordable Modification Program and the Neighborhood Stabilization Program.
Since the government’s loan modification program known as HAMP launched in March 2009, servicers offered 600,000 permanent modifications and placed 1.4 million borrowers at risk of foreclosure into a three-month trial. But critics on both sides of the aisle criticized HAMP for being too lax on servicers who have underperformed, and not meeting the original goal of reaching between 3 million and 4 million borrowers. The program was originally set to expire at the end of 2012.
The committee voted 31-24 to end NSP and 32-23 to end HAMP.
The bill does preserve the permanent and trial modifications under way, but Republicans shot down an amendment that would have protected borrowers who requested to be considered for HAMP.
Lawmakers differ along party lines over whether to continue the program, which has spent $1 billion of the $29 billion the Treasury set aside.
“In an era of record-breaking deficits, it’s time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners,” said Rep. Spencer Bachus (R-Ala.), chairman of the committee. “These programs may have been well-intentioned but they’re not working and, in reality, are making things worse.”
From the Record:
Foreclosure activity declines as lenders review legal procedures
Foreclosure activity has dropped to its lowest level in three years, as mortgage servicers continue to work on problems with their legal procedures, RealtyTrac reported Wednesday.
“The industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures,” said James J. Saccacio, chief executive officer of RealtyTrac, a California company that tracks the foreclosure market. “We expect to see the numbers bounce back, but that will likely take several months.”
Foreclosure activity was down 50 percent in New Jersey, and 27 percent nationally in February compared with a year ago. Foreclosures have been held up while lenders deal with the fallout from allegations of “robo-signing” — when bank employees sign affidavits and other legal documents without verifying them.
In December, New Jersey Chief Justice Stuart Rabner ordered six large lenders to show why their foreclosure actions should not be frozen in light of the robo-signing allegations. The six lenders — Ally Financial, Bank of America, JP Morgan Chase, Wells Fargo, Onewest Bank and Citibank — are due in court in Trenton later this month in the case.
re #4
My daughter is in love with tiny houses. She first showed them to me a couple of years ago. The smallest are like camping all the time. They build on trailers to avoid zoning regs while adding victorian detail to enhance the illusion of the building’s solidity. My guess is that the romantic appeal fades rather fast in the face of the realities of daily life.
Tiny house trend would be a lot like a “tiny dick” fixation. I’m sure it would fade once the ladies realized how much they are missing.
“A property is worth what a buyer is willing to pay.”
Since the creation of this blog, I’ve been saying that the buyer dictates the price and not the seller. So, if you think you recently got a bargain at 5% below the asking price, in actuality, you got fleeced and are now under water.
Most people are underwater for a time as a homeowner. It is simple math. Add the interest and fees along with whatever improvements you make and there you go. If you bought at the peak though and overpaid you are really underwater.
Yo JJ You Better Check Your Muni Self Before You Wreck Your Muni Self:
” Wonder What they Are Saying Now
Remember when municipal finance specialists, politicians, fixed-income fund managers, credit analysts, municipal finance columnists, municipal finance executives, bond analysts, business reporters, and sundry other “experts” pooh-poohed the warning Meredith Whitney’s gave in December on CBS’s “60 Minutes” about a coming meltdown in the muni market, with some suggesting the banking analyst was well out of her depth?
Well, I wonder what they are saying now that Jeff Gundlach, one of the most successful fixed-income investors of modern times, has voiced similar concerns about the outlook for what has been a very popular investment class:”
“Jeffrey Gundlach: Munis Are The New Subprime”
http://www.financialarmageddon.com/2011/03/i-wonder-what-they-are-saying-now.html
“It’s worth a lot more than $6 million,” said Horn, who specializes in luxury homes at Weichert Realtors. “I was there at the auction—I was numb.”
Stop the dramatics and control your addiction sweetheart. Seek help. There’s only so many suckers to hoodwink.
“It’s worth a lot more than $6 million,” said Horn, who specializes in luxury homes at Weichert Realtors. “I was there at the auction—I was numb.”
If so then why didn’t you get a higher bid for it. It sold for 6 mil it is worth 6 mil end of story.
Initial claims 397k.
This transcends real estate. People really do not accept this simple truth when it applies directly to their circumstances in all areas of life, including employment.
Asking price is currently $749,000. It sold for $635,000 at the peak of the market. Again… someone needs to take the seller by the hand, console them gently, offer them sympathy, wipe the tears from their cheek and brush their tangled hair. The offer on this house should be $485,000.
http://www.trulia.com/property/3042668232-90-Woodvale-Rd-Glen-Rock-NJ-07452
That article is crazy. Guy claims that muni bond holders are individual buy and hold investors who are irrational, he fears they will follow herd mentality and panic and cause a sell of of 15-20% at the first few hick-up. But unlike sub-prime there will be no massive defaults. So he is basing it on investors response to events that might be perceived as negative but are not really negative. Short term investors this is important. Not really for me. Howver, a muni fund with huge withdrawl demands may end up selling portfolio at worst time. However, a person who has a ten year 5% New York muni bond that is paying the equivilent of 8.2% taxable who just holds to maturity if bond moves from 101 to 81 and matures at par 100 and along the way he collects 5k in interest payments it really means nothing. Also in the individual bond remember he can just choose to reinvest his interest outside of munis, wait for calls and maturities and slowly diversify away. Muni bond funds are much riskier than people think. Also if I did subscribe to their theory I would just short a ETF Muni fund capture the downfall there and just wait for my bonds to mature. The bid/ask is still thin in muni land. The bond you bought at par, listed at par may only sell for 97. I have a few munis with 6 coupons I could only get par for if I sold. I would need to find a corporate paying 10% to replace it, that would be only CCC bonds and below, high risk junk with low recoveries. Not worth it.
Dissident HEHEHE says:
March 10, 2011 at 7:39 am
Yo JJ You Better Check Your Muni Self Before You Wreck Your Muni Self:
Dissedent, other thing article is forgetting is that really old people often hold muni bonds, they are being sold either after they are dead or executor could even put bonds directly in childrens names. Also unlike subprime bonds that burst onto scene in 2003 and 2004 only to crash in 2007. Munis some people are way way up.
For example take this muni below. Still not called still paying interest. Lets say Grandma retired in 1990 bought this bond for 100K with her retirement money and decided to collect interest checks. That is $7,750 a year tax free for 21 years so far. Or $162, 750. By maturity 33 years she would have collected $255,750 in interest payments. Some of these old ladies 80 and over. Trust me I worked in a bank. Have not bought a muni in a good 10-20 years. They went to some place like David Learner back in 1987-2001 when rates were high put their whole 100-500K retirement money into munis or maybe treasuries or long term CDs. David Learner rips off people on the bid ask but back when you could get 13% treasuries what a bargain even if they screwed you on bid ask and you only got 12. 9%. These people get an annual paper statement and still get paper checks in mail monthly for interest payments. The panic will be among Muni purchasers from 2003-2010 in search for yield bought 30 year bonds at 4% or muni fund purchasers. Grandma sitting on a 1990 30 year muni paying 8% coupon maturing in 2020 is clipping coupons and laughing regardless of her bond price. That is her kids problem.
NEW YORK N Y G.O. SERIAL BDS SER. 1990 7.75000% 08/15/2023I
CUSIP 649660RD1
Pay Frequency SEMI-ANNUALLY
Coupon 7.750
Maturity Date 08/15/2023
What is the cliche? If I wanted to hear from an asshole, then I would have farted. If I wanted to hear from a motherfuking blowhard hick piece of shit, then I would have read your post.
Essex says:
March 10, 2011 at 7:07 am
Tiny house trend would be a lot like a “tiny dick” fixation. I’m sure it would fade once the ladies realized how much they are missing.
JJ,
We agree: 1) The breadth of muni universe is such that there’s plenty of gems out there that won’t be affected by this; 2)There’s plenty of junk munis out there posing as AAA the fear of which likely is going to continue to smack muni funds due to the breadth of their holdings.
How do you think it will impact new issuances going forward? Higher yields?
Thank You Meredith Whitney
“municipal bond funds have yet to lure back investors after sixteen relentless weeks of net outflows.”
http://blogs.forbes.com/investor/2011/03/09/thank-you-meredith-whitney/
Is it rubber bullet time yet?
AP Thousands of protesters pushed past security, climbed through windows and flooded the Wisconsin Capitol on Wednesday night after Senate Republicans pushed through a plan to strip most public workers of their collective bargaining rights.
22, nothing to see here. Just like after OC, republicothugs stormed Capitol Hill, attacked dem lawmakers and prevented US House and US Senate sessions. New York Times applauded this as a great act of democracy by Tea Party. Preventing US congress to work and causing physical intimation, death threats and occupation of Congress were deemed perfectly fine. /sarc
19. Neat. You seem special.
In Charlotte, NC today. Speaking of hicks.
I figure I am 1/4 redneck on my dad’s side.
New Issuance is not the predictor it used to be for 3 reasons
1) Mad Mad rush to issue BABs in late 2010 pulled forward first quarter funding needs like cash for clunkers did for car sales.
2) Places like California are cutting budgets like crazy. Jerry Brown is not even issuing Munis till late 2011 as he is cutting costs.
3) Banks need to lend. Chase for instance has a new big push to lend directly to municipals. Small issuers comes to Chase to do bond issue, market not friendly, yields high but two has good credit. Chase will just lend them the money directly. This is a new development. But not transparent. It may appear fund needs to do a new bond issue, but in reality it is just getting a loan.
Nation of Wussies HEHEHE says:
March 10, 2011 at 9:50 am
JJ,
We agree: 1) The breadth of muni universe is such that there’s plenty of gems out there that won’t be affected by this; 2)There’s plenty of junk munis out there posing as AAA the fear of which likely is going to continue to smack muni funds due to the breadth of their holdings.
How do you think it will impact new issuances going forward? Higher yields?
Smaller living should be the trend moving forward because it gives people more money experience life. I’m not interested in moving to a house on wheels with a compost toilet. I’m also not interested in moving into a large, new CHC that costs an arm and a leg to heat and air condition. My increases were modest going from apartment to house. I can’t say the same for my brother and he pays double our taxes and utilities. Those increased costs never go away.
Fascinated by Montclair btw. I checked out the patch website and comments, and Stu/gator thank god you are out of there.
200 million in debt? My favorite was the person asking “does anyone have evidence that high property taxes have affected sales”
Schmucks.
28:
Bears repeating: “Those increased costs never go away.”
Like asking pigs at a trough to take it easy.
Clot, it’s 10:30 where the f*ck are my ominous one liners?
Smaller living should be the trend moving forward
There’s been a noticeable movement in favor of smaller housing for a while now. apartmenttherapy.com, as well as a few other places, have done a lot of coverage of the topic. While the 400 sq ft homes attract most of the attention there’s plenty of family housing 1k – 1500 sq ft range.
Dissident Number 11 I do agree there are some muni’s out there that you need to be careful with but comparing them with subprimes is ridiculous. It’s not like they’re giving a 400K loan to maid making $8.00 an hour.
change.
“Number of U.S. Expatriates Doubled in 2010
..number of individuals renouncing their U.S. citizenship (or terminating their long-term U.S. permanent residency) and expatriating from the U.S. more than doubled in 2010:”
http://taxprof.typepad.com/taxprof_blog/2011/03/number-of-us-.html
jj: have you bought any floaters at all?
These 20 something year old recruiters are amusing. They try so hard to please but I really have to surpress the laughter by some of the checklist questions they ask. They’re like puppy dogs. I really love the confused pause after you give an indepth, detailed description of your background and experience. I could just picture the doe-eyed glazed appearance over the phone! Then the get real confused and forget where they were. lol! Then, they say they need to get their relationship manager to speak with me. It’s like when a little kid answers the phone and has to get mommy. lol!
JJ,
“3) Banks need to lend. Chase for instance has a new big push to lend directly to municipals. Small issuers comes to Chase to do bond issue, market not friendly, yields high but two has good credit. Chase will just lend them the money directly. This is a new development. But not transparent. It may appear fund needs to do a new bond issue, but in reality it is just getting a loan.”
They are doing the same with corps. Going the bank loan route rather than bond issuances as they are higher priority if there’s a bankruptcy.
Waaaaaaaa, Rutgers lost and the officials screwed up badly
http://is.gd/SCH54Z
Waaaaaaa, I’m Chris Christie, I’m going to pop off about it!
http://tinyurl.com/4bjagd3
So when will Barry O chime in?
RE [33];
[Renunciations double]
*Comrade, call your office. Comrade Nom DePlume, please call your office.*
(37) Meh… St John’s got some serious home cooking from the refs in that game.
WI breaking news
“Protesters have trapped GOP lawmakers in their offices shutting down the vote at 11 AM and have threatened violence and are trying to enter their offices.”
Remember, this is an example of democrary applauded by White House, NYT and other State Media (unlike those awful teabaggers who held demonstration showing opposition (!) to the policies of the Chosen One – now that’s obviously racist and terrorism).
Precedence has been set. Elections are for suckers.
There was a show on TV called Small Place, Big Style that toured peoples really little apartments. I liked it because it showed how useful people could be with space, many of the segments were shot in NYC. Less space equals less stuff. At this point in my life I want higher quality stuff rather that an abundance of cheap crap.
Oh, and I want an Ipad2. Ordering one tomorrow.
Auctions of a single parcel of residential real estate are unlikely to bring market value IMHO. Unlike a auction of many parcels by a financial institution where there are many people and a carnival like atmosphere, a single property does not bring a huge turnout. More likely to get a better price with a properly priced listing in MLS. People attending an auction have a bargain mindset.
One of the agents in my office came to me about a seller who wanted to withdraw a listing on an overpriced POS so he could sell via an auctioneer. His thought process was; if I keep dropping the price the offers can only go down, but at an auction the offers can only go up. Beside laughing about the guy’s twisted logic, I told the agent to give him a release and the name of an auctioneer. I told the agent to be as helpful as possible because the seller was likely to set a reserve price that would not be met and may require her services again.
jamil [40],
They were just showing some footage on the news. For a moment, I thought it was coverage from Libya.
For what it is worth:
http://www.insidehighered.com/news/2011/03/10/wisconsin_senate_passes_bill_to_take_away_most_union_rights_of_public_employees
We have over 3,000 square feet in our primary residence and four people living in it, 2 in high school, and at times it is not enough said. That said, once the little Shores are out on their own, I would be more than happy to have 1,500
http://blogs.wsj.com/hong-kong/2011/03/10/red-white-and-through/
1,500 sq.ft. as long as it is configured properly.
Nom,
You writing for the WSJ now?
I used to love step-up bonds years ago, but can’t seem to find much of them. Floaters I also don’t see many that are liquid and traded regularly. Sticking with high coupon bonds at par callable in next 1-5 years. Almost tempted at one point soon to buy some puts on the ETF JNK.
It is tough, lately I search secondary, all type bonds 0-3 years even with that nothing comes up of much interest. Do I really want to take on a ton of default risk for 2.5%? One thing that looks interesting is GMAC bonds 8% coupon callable already that trades at PAR. I see a few 2017-2020 ones floating around. I bet those guys don’t get called till at least one or two years after IPO at par. But once again, my max tollerance is not high.
chicagofinance says:
March 10, 2011 at 10:47 am
jj: have you bought any floaters at all?
Why do you need such a huge house? I have 1,450 square feet for five people. Less than 300 square feet per person. You must be roaming the hallways at night in that mcmansion.
All kidding aside, a good neighborhood on LI with a 3,000 house you need to be pulling down like a min of a 500K a year salary to afford it. Oddly, the people with 4 kids generally are blue collar and live in little capes while the big 5,000 square foot houses are owned by dinks or people with only one or two kids.
Shore Guy says:
March 10, 2011 at 11:42 am
We have over 3,000 square feet in our primary residence and four people living in it, 2 in high school, and at times it is not enough said. That said, once the little Shores are out on their own, I would be more than happy to have 1,500
Michele Rhee
CAM: Is there a larger social problem with the American style of parenting?
MR: I think in this country we have lost our competitive spirit. We want to make kids feel good about themselves, so we are always praising and coddling them when they don’t always deserve it. My kids play soccer. They suck at soccer, but they have all these medals and ribbons and trophies because we don’t want them to feel bad about themselves. I juxtapose it with Korea, which is at the top of the charts in all the academic stuff. In Korea, when you start in kindergarten you get a rank in your class, one to forty. You know where you are, and you know how far you have to go to be Number One.
http://cornellalumnimagazine.com/index.php?option=com_content&task=view&id=1011
I have three desks scouring for floaters…I hope to hear back in the next 3-4 hours.
I have a great step-up from a bank that I put in portfolios as a new issue last summer. I am really please with it, because through all this crap in the last 7 months, it is still marked at almost 99. It is a 5% due 2025, but callable on the one year anniverssary and there-after. It stays at 5% for 3, and then steps all the way up too 10% by the end, so there is real protection.
49.JJ says:
March 10, 2011 at 11:51 am
I used to love step-up bonds years ago, but can’t seem to find much of them. Floaters I also don’t see many that are liquid and traded regularly. Sticking with high coupon bonds at par callable in next 1-5 years. Almost tempted at one point soon to buy some puts on the ETF JNK.
JJ: bottom line, the TruPS have been the shit. This Basel Tier 1 thing was my saving grace, because there was no way I was leaving cash to earn zero, and I was not going to go out the curve without some backstop….
I was willing to pay for a 1,500 sq.ft. house near the beach. But, after inspection last week, I discovered the pretty little thing had termites, electrical, roof, structural and oil tank issues. Pretty home, ugly bones. Inspection dollars down the toilet, but, my summer beach/frolic money just grew by thousands (not to mention sanity).
JJ – what’s a dink?
Re small living:
Who are all of the boomers with their 3000-5000 sqft mcmansions and POS capes going to sell to? Carrying costs are increasing rapidly, RE supply side is growing while demand side is dropping. No falling knife here!!!
Don’t worry the boomers can still fund their retirement with the 10% annual appreciation on their POS and then move to a low cost state with their state pension.
#54 Orion said – “Pretty home, ugly bones. Inspection dollars down the toilet…”
Correction, the best inspection money you ever spent. When they find nothing it feels like a waste!
Surprisingly this Sheen thing has value…
http://www.funnyordie.com/videos/bfb12aea47/charlie-sheen-s-winning-recipes?rel=player
Classy. Looks like the Montclair Schools are inserting the kids into the Union/BOE dispute on outsourcing of teacher’s aides. Must have been some school assignment. The last letter even states that a teaching assistant helped the child write the letter.
Letters to the editor: Fourth-graders are for their teaching assistants
Thursday, March 10, 2011
Last updated: Thursday March 10, 2011, 1:19 AM
The Montclair Times
The Montclair Times has received scores of letters written by Watchung School’s 4th grade students. The theme of all the letters is preserving the public employment of teaching assistants in the Montclair School District.
In today’s issue, The Times is publishing several essays. All of the students’ letters are comparable in focus and in quality, which is to say well-written and thoughtful.
http://www.northjersey.com/news/opinions/117715608_It_s_affirmative__4th-graders_are_for_their_teaching_assistants.html?page=all
Inspection prevented us from making a big mistake years ago.
Pretty good description.
Alan Simpson, co-chief of President Barack Obama’s debt-reduction commission, called the U.S. fiscal position “unconscionable.” “People just sit out there and blink like a frog in a hailstorm,” he said. “They don’t have any idea what the hell’s going on.”
http://www.bloomberg.com/news/2011-03-09/bowles-says-he-kept-morgan-stanley-job-u-s-debt-plan-separate.html
DINK
Dual
Income
No
Kid
I have known Simpson for a number of years and he is among the most honest and dedicated public servants this nation has ever produced. One can agree with him or not but one will never have reason to doubt the man’s honesty. We would do well to listen to him on this front.
Sister Dominica in the Bronx used to sit us in the order of our test grades from previous week. Every week the same smart kids sat in the front seat on left and us dumb kids sat in the last seats on the right. Then one day we had an IQ test and tables were turned and most of us dumb kid scored the highest. Except for one dumb kid who was really dumb. Sister Domincia put his desk in hall way that day as he was even to dumb to sit on last seat on right. He was double dumb.
chicagofinance says:
March 10, 2011 at 11:58 am
Michele Rhee
CAM: Is there a larger social problem with the American style of parenting?
MR: I think in this country we have lost our competitive spirit. We want to make kids feel good about themselves, so we are always praising and coddling them when they don’t always deserve it. My kids play soccer. They suck at soccer, but they have all these medals and ribbons and trophies because we don’t want them to feel bad about themselves. I juxtapose it with Korea, which is at the top of the charts in all the academic stuff. In Korea, when you start in kindergarten you get a rank in your class, one to forty. You know where you are, and you know how far you have to go to be Number One.
re – # 63 shore – You know, Reagan proved deficits don’t matter, or so was told to Former Treasury Secretary Paul O’Neill as he was walked out the door. Here we are nearly 10 years later and the blinking frogs think the hailstones are green shoots.
http://www.fisn.com/index.php/Medium-Term-Notes/Freddie-Mac-Freddie-Notes-Step-Up-Bonus-Rate-Notes
chifi what do you think?
chifi [52],
Stepups are a rape of the holder just waiting to happen. Putting this crap in a retail portfolio should be a felony.
JJ doesn’t understand negative convexity. You do. Just because you’ll never be caught doesn’t make it right.
Jesse Jackson was asked why he finds the vote in Wisconsin a vote against the middle class but the vote for healthcare as fair and necessary. His response? “Because the rich are getting richer and the poor are getting poorer.” Is that anything like “stay out the Bushes?”
Madison = Tripoli
The Democrats are appalled that this vote took place in Wisconsin. I say we find the 14 missing state senators and ask their opinion.
Interesting…..what the hell are you talking about? It was a new issue and there was no markup…..explain please…..callable at par…..given my background, what you say here is a serious charge. I might make references to people for intellectual infractions, but you are calling me some combination of dishonest/incompetent…..watch it please, you are way out of line, and even more mistaken than that…..
67.Punch My Ticket says:
March 10, 2011 at 1:27 pm
chifi [52], Stepups are a rape of the holder just waiting to happen. Putting this crap in a retail portfolio should be a felony. JJ doesn’t understand negative convexity. You do. Just because you’ll never be caught doesn’t make it right.
punch: to be clear…it is a buy and hold account; marks are irrelevant; and a step-up is by definition retail, so you are a clown….I’m not rapid firing the bitches….
you want a felony? How about putting people in a bond fund in a rising interest rate environment?
Final comment: prima facie evidence that your theoretical rant strains credulity, the daily marks at mid-market and matrix, and further the specific marks after the bonds were free to trade…..
67.Punch My Ticket says:
March 10, 2011 at 1:27 pm
chifi [52], Stepups are a rape of the holder just waiting to happen. Putting this crap in a retail portfolio should be a felony.
Callable bonds are negatively convex at lower yields than the yield at which the bond is likely to be called. If I think rates are rising but not right away and I don’t want to park my money in near zero or go long on a non-callable bond step ups makes sense.
BTW most step ups to retail investors are in FDIC CDs, Back when they were popular I recall buying them for my Mom in 1993 and 1998 as rates were low those years I thought they were rising and she need interest income. Steps are only bad if rates drop like a brick they get called and you got to reinvest at a much lower rate. They are also bad as they tend to be less liquid.
I have callable, non callable, Trups, Seniors, Junk, Investment grade, Munis, step ups short, medium and long term bonds. I go all over the place, it is not like I buy 30 year non callable investment grade bonds in one business sector. My diversification appears half hazzard as I buy whats cheap, autos late 2008, banking insurance early 2009, munis Jan 2011, bank cds 2007., european bonds during their melt down, BP bonds during gulf incident. Heck I even have some in the Total Return Fund in case Bill Gross beats me. I know as much about bonds as the average bond trader. I don’t know as much as a good bond trader. However, I doubt if I went to arbitration I could ever win if I got screwed on a bond as I trade way too much.
What makes you an expert? I am an amateur, Chifi is the pro.
Punch My Ticket says:
March 10, 2011 at 1:27 pm
chifi [52],
Stepups are a rape of the holder just waiting to happen. Putting this crap in a retail portfolio should be a felony.
JJ doesn’t understand negative convexity. You do. Just because you’ll never be caught doesn’t make it right.
cnbc breaking news ticker mentions that shots fired, grenades hurled in violent demonstrations.
I’m almost curious if it was in Wisconsin, Libya or Saudi-Arabia.
Party On!
AP reports that the Saudi police open fire at protesters in Qatif after government warns demonstrators it will not tolerate protests. “A witness in the eastern city of Qatif says gunfire and stun grenades were fired at several hundred protesters marching in the city streets Thursday. The witness, speaking on condition of anonymity because he feared government reprisal, said police in the area opened fire. The witness saw at least one protester injured.” In other words, the shootings will continue until morale is restored.
video:
http://www.zerohedge.com/article/video-footage-qatif-protests
from ZH
“Season one of ‘It’s always Sunni in Saudi Arabia'”
Punch My Ticket so if grandma asks you for some fixed income advice and says I can’t live off 1%, I need more income what do you tell her?
Jamil
I have seen reports that 80 – 90% of households in Saudi one a firearm ( Ak 47’s mostly). If Saudi ignites, then it wont be another Egypt. How long until we start seeing the oil infrastructure sabotaged?
“WASHINGTON (AP) — The federal government’s budget deficit grew by $222.5 billion in February, the largest one-month increase in history. Economists are forecasting the deficit for the year will be the biggest imbalance on record. The Treasury Department says the February deficit surpassed the old record for any month, a $220.9 billion imbalance set in February 2010.”
Remember, the 60B spending cuts would mean “return to slavery”, “totally unacceptable” and “destroy economy”.
When do we institute a no-fly zone over Aaudi Arabia?
WASHINGTON, March 7 (Reuters) – Saudis have a right to protest peacefully, the United States said on Monday after Saudi Arabia reminded its citizens that demonstrations were banned in the kingdom, the world’s largest oil exporter.
Inspired by protests in other Arab countries, there have been Shi’ite marches in the past few days in the east of Saudi Arabia as well as Facebook calls for two more protests this month, the first on Friday.
“The United States supports a set of universal rights, including the right to peaceful assembly and to freedom of expression,” State Department spokesman P.J. Crowley told reporters at his daily briefing.
shore,
Think we will fund the Saudi rebels in order to support “freedom”?
….. We all know the answer to that question.
re # 81 – I bet the Saudis accuse us of Bullying.
Oblammy totally MIA. He’s buried someone on the bottom of page 38. Not a peep out of the Annointed One.
Juice,
Think the Saudi royal family has started shipping its gold bars offshore yet?
64.JJ says:
March 10, 2011 at 1:18 pm
Sister Dominica in the Bronx used to sit us in the order of our test grades from previous week. Every week the same smart kids sat in the front seat on left and us dumb kids sat in the last seats on the right. Then one day we had an IQ test and tables were turned and most of us dumb kid scored the highest. Except for one dumb kid who was really dumb. Sister Domincia put his desk in hall way that day as he was even to dumb to sit on last seat on right. He was double dumb.
chicagofinance says:
March 10, 2011 at 11:58 am
Michele Rhee
CAM: Is there a larger social problem with the American style of parenting?
MR: I think in this country we have lost our competitive spirit. We want to make kids feel good about themselves, so we are always praising and coddling them when they don’t always deserve it. My kids play soccer. They suck at soccer, but they have all these medals and ribbons and trophies because we don’t want them to feel bad about themselves. I juxtapose it with Korea, which is at the top of the charts in all the academic stuff. In Korea, when you start in kindergarten you get a rank in your class, one to forty. You know where you are, and you know how far you have to go to be Number One.
Interesting, I was seat grouped by achievement in PS-172 in Brooklyn (Elementary School (K-6)), but not at Saint John Evangelist (7 & 8 th grade), also in Brooklyn.
I puke whenever I see one of these crap boxes with a 6 handle in the middle of nowhere reduced by 10k, like that will make me jump to make an offer. If anything, since I’ve been reading this blog, I’m seriously considering if I even want to return to the States let alone buy a house. We have finally reached the critical mass of collective stupidity necessary to insure the doom of the republic. We are economic retards who think it is more important to know who is sporting silicone boobs than how to keep our treasury from being plundered by a political class that feels it is entitled to get rich off the honest labor of others. Your regularly scheduled Hollywood Minute will resume shortly.
I cant wait to see what the summer heat does to all of these little skirmishes, from Wisconsin to Saudi Arabia.
#74 Except for one dumb kid who was really dumb. Sister Domincia put his desk in hall way that day as he was even to dumb to sit on last seat on right.
It must have been so lonely for you out in that hall jj.
In my school they did this really wierd matching system where they would take a smart kid, a challenged kid, and two average kids and put them into a working groups to see if grades improved.
Initially it worked, because in my group I was the smart kid and the challenged kid would always cheat off my work right before the homework was to be turned in. “What did you get for number 1, what did you get for number 2” type action. I wisened up to this after about two weeks and then started feeding him incorrect answers on a steady stream further bringing down his grade.
I guess I was TOO smart for that type of setup to work as intended. I’m certain that there was a “Woo Hoo! This is working” shortly followed by a “WTF? This clearly was a mistake his grades are getting much much worse.”
Got rental property? If so, the IRS is measuring you for a proctological procedure.
http://www.treasury.gov/tigta/auditreports/2011reports/201130005fr.html
[48] shore,
No, but its funny. I was thinking about that very issue yesterday, in the context of the increasing number of americans going overseas for work. Odds are good that a lot who put down roots overseas won’t come back.
And I question how many will actually disclose under the VDP first as some horror stories are coming out about the IRS raping folks who come forward. That will chill disclosures, a point I asked Shulman about in December.
[92] redux
And FWIW, I think we have seen nothing yet. If the USG ever focuses on this issue, and starts talking about new taxes or restrictions, you will see a race to the exits that will rival Cocoanut Grove.
[33] jamil
Saw that. I was on Mitchel’s site last night. His and Hodgen’s sites are on my favorites list
Nom 91 – Don’t make me read this whole thing. Are they targeting all of us, or just those of us who are claiming losses?
Gator, looks like they are going to ask for the usual back up for various deductions for the property, repairs, renos, maintenance.
” I was thinking about that very issue yesterday, in the context of the increasing number of americans going overseas for work”
In the past, people defected from North Korea and Soviet Empire, but now we are seeing people starting to defect from the US..Change!
I was second to last a few times and that was too close for me. I had a rather disfunctional family, the show shameless is like my childhood, except my mother was good. In elementary school I could get away with out even bringing books home for weeks at a time. I recall one time in ninth grade I was doing particularly bad. The guidance counselor calls my Mom to school to give her an earful, instead he got, “he is my problem at home and he is your problem at school and if you can’t do your job it is not my problem”. He just shut up with jaw dropped and my Mom pulled me out of there. My job as a student is too do as little as possible and the job of a teacher is to make me do it. Nowdays teachers have pushed their work off to mommy and daddy. Only class I ever studied for was last class of graduate degree, damm guy Mockler was up my butt like a 12 foot long dilldoe. Went to dean to complain and guy said I looked like I have been skating whole way with easy teachers and stuff for my whole degree so I am not helping you, I said I will do the drop and graduate later, damm Mockler would not process drop form and said I will give you something worse than an F, I will give you an incomplete, you can’t retake class without me switching it. Then damm Mockler said I only accept an A, you are going to get an A or an Incomplete, this is your last MBA class and you are going to earn it the hard way. Damm SOB worked me like 40 hours a week for the next 12 weeks. I got my A and my damm MBA. Why anyone would want to work that hard from 1st grade to graduate school is beyond me. Bad enough ten weeks of it. I do respect Mockler, he once said I used to teach at Harvard but those spoiled kids could not take it, now I am tenured and old I have free rein!! After this class is done and you pass any class you every take at Harvard will feel like a joke. Now back to my SJU game.
toshiro_mifune says:
March 10, 2011 at 2:28 pm
#74 Except for one dumb kid who was really dumb. Sister Domincia put his desk in hall way that day as he was even to dumb to sit on last seat on right.
It must have been so lonely for you out in that hall jj.
[95] gator
Claiming losses. Those are the whales that surface, and its the whale that surfaces that gets harpooned.
Fact is, a certain number of small landlords that are not in a position to claim losses are probably not declaring anything.
Step one: Overthrow the Saudi Royals.
Step two: Appoint a new leader for Saudi Arabia. Mr. Charlie Sheen.
Step three: WINNING!
re: #98 JJ – add your review here.
http://www.ratemyprofessors.com/ShowRatings.jsp?tid=22483
some reviews.
For those of you who are planning on taking this course or the Entrepreneurship class (MGT 4310), make sure that you write up your paper every week and make an appointment to see him in order to ensure you get your A. His grading system is A or an F. No gray area. No point in going to class since he discusses other people’s papers. Not an Easy A.
Prof. Mockler’s class is a boot camp for MBA students. If you have the mindset to do the 80 page paper and survive, you have my respect. If you work a tough 50 hour a week job, and want to avoid a nervous breakdown take Dr.Angelides. 7 people do what 1 pe
DL [87],
Couldn’t agree more. What a retarded f*cking nation we’ve become. The capacity of orderly thought and common sense by people I came across on a daily basis has become a vacuous pit.
http://www.nytimes.com/2009/02/13/nyregion/13jerome.html?_r=1
NY Muni bond issued 135 years ago with a 7 coupon still paying interest. 135 years of making interest payments. The 38 other bondholders have notes that will mature sometime between now and 2147, a mere 138 years away.
Don’t know why, but this strikes me as hilarious:
“The president of a French village team has been suspended by the French Football Federation (FFF) after he launched a transfer bid for Barcelona superstar Lionel Messi. Messi is a two-time FIFA World Player of the Year.
Cedric Enjolras, president of FC Borne, has been hit with a six-month ban, three of which are suspended, after he attempted to lodge the joke bid with the Catalan giants.
Borne, a village of 400 people, play in the second division of the Haute-Loire league and their transfer offer was blocked by the player registration office of the FFF.
“To submit bids among small clubs, you need to fill out forms on the internet,” Enjolras is reported as saying by The Guardian. “I decided to register a bid so I typed the name Lionel Messi, his date of birth and his parent club into the system. Then the league transmitted the request to the federation.
“They were shocked by it and refused to send it to their Spanish counterparts. I have been suspended for six months, of which three are suspended. It was just a joke, to amuse friends.”
The FFF failed to see the funny side of the audacious bid and described the club’s behaviour as unacceptable.
“One cannot accept such behaviour,” said Yves Begon of the player registration office. “It is perhaps a joke but we are here to judge the facts.”
http://soccernet.espn.go.com/news/story/_/id/892251/president-suspended-over-bid-for-barcelona's-lionel-messi?cc=5901
gary (12)-
What dumb bitch wastes her time going to the auction of a property she couldn’t price right and sell…when she HAD THE LISTING FOR FOUR FCUKING YEARS????
juice (22)-
Wake me up when it gets to the point that Northcom has to step in to control the Wisconsin situation.
I’ll make the popcorn, if you bring the fruity drinks and a couple of chaise loungers.
stan (29)-
It’s indeed special to see a town of that size that features an entire population walking around in a permanent stupor.
Debt [105],
Of course. She already had a figure in her head that was gonna be part of her heist. She became “numb” when her winnings turned to dust.
Went on a showing yesterday. 4 houses, 3 were newer listings. The first already had a low ball offer being considered. This was a handsome house, very tasteful but did not meet our needs. I rarely say this but these sellers deserve a price close to ask, the ask was fair….however, my husband observed some trashy neighbor action in the form of 20 something mom with ciggy hanging out of mouth and dirty kid with nookie in mouth, grabbing a case of budweiser from SUV after just pulling up in the drive. It was 10am :<. Maybe this is what is dragging the offers down.
Next house, a fixer disaster, I would not want it at any price – its a tear down.
Next two houses, one was a bank owned and the story of its demise was written all over it. House is about 70 years old, good lines but the renoed kitchen was tacky with overpriced cherry (ick) ish cabinets and a stupid configuration with granite that belongs in a jersey shore condo, not an older home. The bathrooms were redone with bloody awful ornate "Rococo By Way Of Renovator's Showroom" and a jacuzzi crammed into a tight space. Awful. The story? We bought a housey house and refied in 06 to over spend on some made in China tacky crap that will make your eyes hurt! The list is 400,000 (in South Jersey) and no one is touching it. And the last was a super cute cottage, too small for us and again, a bit over done but nothing that couldn't be reversed. Still, awkward stairs (dangerous) going to attic rooms, ugly kitchen, busy street, limited parking and of course, over priced – however in the ballpark. I'm seeing a little softening on asks but the houses for the most part have some big problems that would be hard to fix or just live with. Actually, these houses are fine for a couple, no kids. Not so great for families. Still, the MLS is filled with overpriced houses that have been up 180 plus. I had my realtor call on one and ask the listing agent if the sellers are serious. Listing said that they won't lower on the mls but to "make an offer!" Been there, done that. Passed.
zieba (30)-
Sorry. Had to be out early this AM to grift. Wine company I’ve been doing sales/staffing for is beginning to death spiral. We’ve been selling the wine well, but the importer isn’t paying the wineries.
In the wine business, this is not a plan of action that ends in success.
Anyway, here’s what I would’ve said this AM:
“We are truly and properly fcuked.”
There.
gary (35)-
Too bad you can’t shoot people through the telephone.
Debt 106
Don’t forget the big foam fingers to cheer on the snake as it consumes its own tail.
Oh, and it is now being reported that death threats have been e-mailed to the state republican senators in Wisconsin. It could get interesting if someone actually tries to follow through,.
Gorgeous day in Charlotte today. Nice areas here put NJ to shame. Plus not bookended by Newark and Camden. NJ sux. Sorry.
30 Yr. (42)-
Just another variation on the “you can’t polish a turd” theme.
vodka (76)-
Looks like the Day of Rage is gonna be must-see TV tomorrow.
Breaking News:
Wisconsin Assembly approves bill curbing public sector union rights
jj (78)-
If Billy G has exited the building, and the vigilantes are at the gates drooling for yield, I’d tell Grandma her odds are better at the dog track than in the fixed income market.
“Punch My Ticket so if grandma asks you for some fixed income advice and says I can’t live off 1%, I need more income what do you tell her?”
Nick (90)-
Rule #1 of schools: you can’t fix stupid.
“Breaking News:
Wisconsin Assembly approves bill curbing public sector union rights”
Hope NJ follows soon. Parasites will not give up the fight easily, though.
Police in WI had to arrest several dem activists who were approaching Governor’s family home door in the middle of the night and there have been hundreds of death threats. Was AZ shooting ancient memory when violent political rhetoric was supposed to be bad, according to State Media?
jj (98)-
Chevreuil a l’aneth?
“dilldoe”
Barb-
I like cherry cabinets. I like the darker look with brush finished chrome handles.
chifi [72],
That crap like stepups can only be sold to retail tells you everything you need to know. Retail knows f-all. Retail thinks fixed income analytics are vaguely related to Freudian analysis. Retail relies on advisers who just so happen to be paid good money to stuff this garbage into mom-and-pop portfolios. What retail does not understand is that, at a minimum, if an institution won’t touch what you’re being offered, then stay away. No step-up has ever been sold to an institution with half a brain and access to a Bloomberg, not at par anyway.
JJ [73],
Yes, you’re an amateur. Entertaining but definitely out of your depth. Willing to take high risks and, when rewarded, say “See, no risk at all.” Middle name Pollyanna.
Chifi knows better but IMHO he is hopelessly conflicted. It’s an eat what you kill business. There is always fresh meat in retail.
Me, I’m just a run of the mill CFA. It’s been a really long time since I was a sell-side product flogger.
Talking about bonds is infinitely more interesting than talking about houses.
JJ [78],
If Grandma wants more than 1%, she needs to stop voting herself free stuff. No sympathy from me. She can start eating the seed corn. Hell, I’ll send her to chifi so he can sell her an annuity.
Am I losing my mind, or:
1. is jamil making sense?
2. both?
3. neither?
Clot [123],
Houses? I thought you said houses were dead. Why would we talk about them?
Pretty soon, bonds will be dead, too. But they’re still fun to discuss.
Debt [111],
I can’t shoot them over the phone but I could send them a letter filled with white powdery substance!
122.Punch My Ticket says:
March 10, 2011 at 5:00 pm
Chifi knows better but IMHO he is hopelessly conflicted. It’s an eat what you kill business. There is always fresh meat in retail.
Me, I’m just a run of the mill CFA. It’s been a really long time since I was a sell-side product flogger.
Punch: Maybe you think you know better, but honestly your comments amount to nothing more than being a troll. I am using these solutions PRECISELY because I am acting in the best interest of my clients. I have not bought any conventional taxable fixed income since early 2010 because it represents poor forecasted value. Do you think I want to be milling through crap such as lame duck TruPS?
What makes you a “run of the mill CFA” is that you appear not to have any field recent experience……sure you can price an American call with dividends…but do you actually go out there a deal with the traders? The skill you have is the ability to look at an ASK and know it is a yield burn. If summarily dismiss options because your finance professor told you, then you have serious balls ranking on me.
Your convexity argument is theoretically correct, but practically ridiculous…..and it was the same way when I was issuing securities for a Fortune 5 firm…you look at the market and your options, and use your knowledge to sort it all out……so I agree to disagree with you, and then as a side comment Fcuk you…..
79.
Kettle,
I’m reading you. I am not worried about the individual Saudi. I am worried about the opportunists behind them who will exploit those people to make a buck and advance an agenda.
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