Kicking the can, prolonging the pain, delaying the inevitable, the new American Way

From CNN Money:

Foreclosures plunge in first half of 2011

Foreclosure filings fell dramatically during the first half of the year as processing delays at the banks, which are strapped with excess inventory of repossessed homes, continued to skew the numbers — and falsely raise hopes that the housing market is staging a recovery.

Foreclosure filings plunged 29% compared with the same period a year ago and were down 25% from the last six months of 2010, according to the latest report from RealyTrac, an online marketer of foreclosed properties.

Through June 30, 1.2 million U.S. homeowners — or one in every 111 households — received a foreclosure filing, according to RealtyTrac.

The deceleration in defaults continued as the year wore on with second quarter filings — at 608,235 households — marking the lowest quarterly total since the end of 2007, when the mortgage meltdown was still in its youth.

RealtyTrac’s CEO, James Saccacio, sounded a sour note, however, contending that the drop-off in filings can be traced not to economic improvement or a pick-up in the housing market, but to processing delays brought on by the robo-signing scandal in which it was discovered that bank employees were signing foreclosure documents without following proper protocols.

“[That’s what is] pushing foreclosures further and further out — we estimate that as many as 1 million foreclosure actions that should have taken place in 2011 will now happen in 2012, or perhaps even later,” Saccacio said.

As a result, it will only prolong the housing slump, he said.

“This casts an ominous shadow over the housing market where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number,” said Saccacio.

The average time to process a foreclosure — from the initial notice to the final sheriff’s or trustee’s sale — rose to 318 days in the second quarter, up nearly 7% from 298 in the first quarter and 15% year-over-year, according to RealtyTrac.

In New York, the process now takes an average of 966 days — or more than two and half years. In New Jersey, it’s 944; and in Florida, 676. Texas is quickest out the door with a scant 92 days, followed by Virginia at 106.

Ultimately, the artificial foreclosure delays are prolonging the housing market’s ills, said Arnold Kling, an economist with the Mercatus Center at George Mason University and formerly with Freddie Mac.

“The government should be trying to speed foreclosures, not stop them,” he said. “Postponing foreclosures may simply be putting off the inevitable market bottom. We need to remove barriers to foreclosures.”

“Instead of housing returning to somewhat normal condition by 2014, we’re looking at 2015 or even 2016,” he said. To top of page.

This entry was posted in Economics, Foreclosures, Housing Bubble, National Real Estate. Bookmark the permalink.

190 Responses to Kicking the can, prolonging the pain, delaying the inevitable, the new American Way

  1. Mike says:

    Good Morning New Jersey

  2. grim says:

    From Bloomberg:

    Bank Delays Push 1 Million U.S. Foreclosures Into 2012 in ‘Ominous Shadow’

    Lender delays in processing home- loan defaults will push as many as 1 million U.S. foreclosure filings from this year to 2012 or beyond, casting an “ominous shadow” on the housing market, according to RealtyTrac Inc.

    The number of properties receiving a notice of default, auction or repossession plunged 29 percent in the first half of 2011 from the same period last year, the Irvine, California- based data seller said today in a report. About 1.17 million homes got a filing, or one out of every 111 households.

    Procedural delays caused by a probe into bank documentation errors, combined with weak consumer sentiment and a jobless rate above 9 percent, are weighing on a property recovery by adding to a backlog of distressed homes, RealtyTrac said. A clogged foreclosure pipeline may prevent real estate prices from finding a bottom as the housing slump enters its sixth year.

    “If you accept the premise that foreclosures are the black cloud hanging over the market, we’re not going to get price stability and people won’t leave the sidelines until that cloud is cleared away,” Nicolas Retsinas, professor of real estate at Harvard Business School in Cambridge, Massachusetts, said in a telephone interview.

    U.S. home prices fell 33 percent from a July 2006 peak through April, according to the S&P/Case-Shiller index of 20 cities. Federal Reserve Chairman Ben S. Bernanke said in testimony to Congress yesterday that ongoing weakness in home values is reducing household wealth and limiting consumer confidence.

  3. Step outside, and breathe deeply. The stench of death has never been better.

    Foreclosures stalled out in NJ at the end of last October. There is no attorney (other than for portfolio lenders) who will swear an affidavit that he’s read every single page of the filing and attest that there are no forgeries or other fraudulent contents.

    Until there is a universal settlement of the fraudclosure issue, this trickle of sheriff sales will continue, and the bomb of shadow inventory will grow ever larger. In Somerset County, there have been 14 completed sheriff sales from 1/1/11 thru 6/30/11. 13 of the 14 plaintiffs were portfolio lenders.

    I don’t expect the fraudclosure settlement to come anytime soon, either. The attorneys general are asking in the 20bn range for penalties, and the banksters are dug in at 5bn.

  4. I spent many years helping Fred and Ethel buy and sell houses.

    I then spent a couple of years helping Fred and Ethel short sell their houses and avoid FK.

    Then, fraudclosure happened, and Fred and Ethel realized they can stiff the bank and not have to do anything for at least 3-4 years (of payment-free bliss).

    Now, there is no more real estate business to be done.

    And people ask why I’m going back into food & wine.

  5. Does China own Italy now?

  6. Moody’s:

    “The review of the US government’s bond rating is prompted by the possibility that the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes. As such, there is a small but rising risk of a short-lived default. Moody’s considers the probability of a default on interest payments to be low but no longer to be de minimis. An actual default, regardless of duration, would fundamentally alter Moody’s assessment of the timeliness of future payments, and a Aaa rating would likely no longer be appropriate. However, because this type of default is expected to be short-lived, and the expected loss to holders of Treasury bonds would be minimal or non-existent, the rating would most likely be downgraded to somewhere in the Aa range.”

  7. More from Moody’s:

    “Moody’s Investors Service placed 7,000 municipal ratings on review for possible downgrade after it warned the U.S. may lose its Aaa investment grade.”

    Got Whitney?

  8. Was I just dreaming when I heard that about 70% of the entire planetary derivatives market is interest rate bets?

    What would be the effect of a 1% rise in those rates?

    Of course, we already know what a 1% rise in rates does to the Fed and UST.

  9. seif (8)-

    Shiller is far too bullish.

    Still standing by my call for 50-100 years in the wilderness.

  10. AG says:

    Couldn’t sleep last night. I woke up from a dream where Ron Paul was asking Bernanke if gold was money.

    The financial future of the western world is in the hands of a scared sh_tless mad man and I find that terrifying.

  11. Neanderthal Economist says:

    Not shiller, shilling.

  12. Dissident HEHEHE says:

    Yet Another Example Of Your Banking Overlords- From Huffington Pots

    “Financial Crisis Panel Commissioners Leaked Confidential Information To Lobbyists, Report Alleges”

  13. veets (12)-

    Shills, all shills.

  14. gary says:

    I met with a technical recruiter yesterday and asked her if any company is offering full time opportunities. She looked at me like a guilty 7 year old. She told me everything…. everything from accounting to technology is either outsourced or open ended temp work. Try getting a loan or making any kind of move with that type of security. I think we’re all generally optimistic on this forum and most of what we say is satirical in nature but if you don’t see that ominous bank of dark clouds forming on the horizon, then you’re blind.

  15. gary says:

    Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that as temporary factors such as high gas prices fade, the economy should grow at a faster pace in the second half of this year. But if not, he said the central bank is prepared to do more to stimulate growth.

    These are the people that will be etched in history instrumental in sealing our fate.

  16. Fabius Maximus says:

    It is easy to look at the level of hyperventilating and posturing on the part of the Tea Party and conclude that once again Engels was right: History repeats itself, but the second time as farce, not tragedy. But when a large enough fraction of a nation’s political leadership determines that playing at Gotterdammerung is harmless “short-term volatility,” they could end up ruining an otherwise perfectly good country. We are not quite Argentina in the 1930s — not yet. But the American Tea Party seems more and more like a version of right-wing Peronism.

  17. gary (15)-

    Time for you to shift careers into the fast-paced world of the most honored of Amerikan businesses: selling and buying hamburgers.

  18. We are so fcuking fuct.

  19. Fabius Maximus says:

    #5 Clot

    I think Lybia hold the Italian note. Now might be a good time for Berlesconi to go for the “Produce the note MF!” play.

  20. Shore Guy says:

    From the wee hours:

    1) “the broader implication that somehow the teabaggers that want to secede from the US are more patriotic that someone like the POTS because their ancestors fought in wars (btw, which side?)

    2) “OT about patriotism++… The reality is that the baby boomer generation have only their ancestors to rely on because the boomers earned their freedom to never having to serve the country by getting rid of the draft. ”


    If your level of analysis here is representative of your critical thinking skills, God save you. I have no issue with anyone having different views than my own, although acceptance that others think differently than I does not mean acceptance of the validity of those views. You make such over generalizations that it diminishes from what ever point you want to make on policy grounds. Also, you tend to jump to the “racist card” with so little thought, and it seems, effort, that thoughtful people may be excused for discounting what you say.

    As for excerpt 1, above: You never heard me say I was more patriotic than the Empty Suit in Chief. I did say that given the Shore family’s long history here, fighting on the winning side in every conflict (excluding Vietnam where flesh and bones lie to this day) in which ancestors took up arms ,it disgusts me to no end how cavalierly elected officials, with the Empty Suit in Chief at the top rung, are treating our finances and encouraging/adpoting policies that run the risk of doing to this nation what a host of external threats from the British in 1812 through the USSR were unable to do. Exprerssing disgust with a president does not constitute racism, even if the complainer and the one about whom the complainer ir criticizing happen to be of different races — which, by the way, I believe you are making certain assumptions, since we have not met face to face and I do not recall ever stating either my race or what people percieve as my race.

    As for 2) who the fcuk do you think fought in Vietnam? It was a Boomer-blood war. Are you that freaking ignorant or just trolling? As for the post-draft military, in your view, is it less patriotic to enlist rather than be drafted? Do you think that Desert Storm was devoid of Boomers? What about the 1980’s military that sat face to face, spear to spear, as it were, with the Warsaw Pact troops, that played cat-and-mouse with Soviet Boomers 1,000 feet below the surface, and the Directorate of Operations folks at the Agency who, with no official cover, quite literally laid their lives on the line in myriad operations every year?

    Hey, if you think I am a cold-hearted SOB for not wanting my pocket picked to support people who fail to take advantage of the opportunities this nation offers them to help themselves out of poverty, so be it. I don’t really care what most people think about me. I treat people respectfully, until they give me a reason not to. I work hard. I make contributions to my family, my community, and the nation. And I respect people who hold views different than my own, as long as they are well reasoned.

    Time and time again you offer pablum and such off-the-cuff comments that are so devoid of reason, and, to reiterate, you throw the race card down to an extent that it diminishes what you are trying to offer.

    I do not intend this to be an attack on you personally, so please do no take it that way; however, before you attack me and people like me, I suggest that you choose your words more carefully and think about what you are saying before you say it.

  21. seif says:

    yes, Shilling…sorry. although I think Shiller said the same thing a few weeks ago.

  22. Shore Guy says:

    “Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that as temporary factors such as high gas prices fade, the economy should grow at a faster pace in the second half of this year. ”

    I don’t know what is worse, thinking that our financial policy makers are lying to our face or thinking that they actually believe what they are saying, thus demonstrating how disconnected they are from the reality of the situation. There was a time when economics was less mathematical and more connected to the human experience. I wonder to what extent the reliance on complex math and the numbers that fall out of various mathematical models has squeezed reality out of economics. It seems like there is too much focus on the numbers on either side of an equality symbol than there is on the quality of jobs, inputs, and outputs that those numbers represent.

  23. grim says:

    Jobless claims down, retail sales up, happy days are here again!

  24. gary says:

    Did the Choosen One take his little red bally and go home in a huff yesterday? What an arrogant, leaderless, rudderless d0uchebag.

  25. 3b says:

    #15 gary Optimistic???? NAAAAAAAAAAAH!!!

  26. Shore Guy says:


    Is there any data to which you have easy access that shows the relationship between new job claims and the size of the workforce? At the beginning of a recession, a given number of job losses may represent a smaller percentage of jobs lost from the work force than a smaller number of job losses later on in a recession after the workforce has already contracted due to prior job losses.

  27. Shore Guy says:

    “What an arrogant, leaderless, rudderless d0uchebag.”

    This guy is doing what I thought could never be done, he is making the Shrub look better and better every day. I never thought anyone would be able to do that.

  28. Shore Guy says:

    Finally, recognition that to fix our financial problems the president has to be willing to destroy his own chances for re-election:

    Source: Obama says he’ll risk job for debt deal

  29. seif says:

    #28 Yeah..what a loser! Old Man McCain and Palin would have had this all sorted out by now!! If we only had those two beacons of intelligence, poise and forward thinking working on the worst economy since the great depression it would be way back in our rear view mirrors by now! Or maybe only abortion would be illegal in all 50 states. One or the other.

  30. Dissident HEHEHE says:

    Perhaps I am missing something re this fraudclosure settlement with the AG’s. The settlement seems to only stop lawsuits by the state AG’s offices against the banks over past behavior. Foreclosure law is governed by statute (the legislative branch) or common law (the judiciary). The AG is the head of an executive branch agency; they have no legislative or judicial power other than to set regulations and to render administrative decisions. How can any settlement between the AG’s and the banks change the fact that every foreclosure attempt that does not conform with foreclosure law can still be contested?

  31. Shore Guy says:

    Well, duh!,0,1695947.story


    A green card to the U.S. is one of the most valuable pieces of paper in the history of the world. So why would we want to give roughly 5% of them each year to people who, for all we know, have nothing more to offer America than a high school education, a winning ticket and (in many cases) an agent they paid to help them game the lottery system?

    No sensible public policy would do such a foolish thing. Instead, like other immigrant-receiving nations, we should handpick our immigrants (refugees aside) with a view to our national interests and the individual attributes that they bring to the table. In contrast, the diversity lottery, like most wasteful programs, reflects four dubious characteristics: powerful friends in Congress, a superficially appealing but spurious rationale, a supposed free ride for taxpayers and status quo inertia.

    The program was created in the late 1980s by Sen. Edward M. Kennedy (D-Mass.) and some other members of Congress to gain legal status mainly for people from Ireland who had overstayed their visas and were here illegally.

    This program imposes a cost — an opportunity cost: These visas would otherwise have gone to applicants who met more demanding, individually applied criteria. Finally, the program, like so many other bad policies, proved easier to create than to dislodge; it has remained on the books for more than 20 years. The fact that some of the 50,000 lottery winners will turn out to be desirable immigrants is an accident, not a policy.

    The solution is straightforward: Abolish the program and use those 50,000 visas (or more) to promote carefully defined national interests, particularly in more high-skilled immigrants who, many studies show, produce jobs, innovation and new businesses. After all, these visas are permanent, not temporary, as with the H1-B visas.


  32. Fabius Maximus says:

    #25 Gary

    I think this is closer to the truth
    “Cantor’s account of tonight’s meeting is completely overblown. For someone who knows how to walk out of a meeting, you’d think he’d know it when he saw it,” a Democratic aide said. “Cantor rudely interrupted the president three times to advocate for short-term debt ceiling increases while the president was wrapping the meeting. This is just more juvenile behavior from him and Boehner needs to rein him in, and let the grown-ups get to work.”

  33. Shore Guy says:

    “Old Man McCain and Palin would have had this all sorted out by now!”

    While Palin is a pathetic excuse for a thinker, I do in fact believe that McCain would have been better at handling the financial mess in which we find ourselves. I do not belive that he would have tossed the money at the system the way that BO has and I believe he would have allowed us to suffer some deeper pain, quicker, in order to right the economy.

  34. 3b says:

    334 Shore: Sorry I cannto forgive Mc Cain for Palin.

  35. gary says:

    #28 Yeah..what a loser! Old Man McCain and Palin would have had this all sorted out by now!! If we only had those two beacons of intelligence, poise and forward thinking working on the worst economy since the great depression it would be way back in our rear view mirrors by now! Or maybe only abortion would be illegal in all 50 states. One or the other.

    And if my aunt had b@lls, she’d be my f*cking uncle.

  36. he (31)-

    It is anticipated that part of the fraudclosure settlement will be some sort of provision that the banksters can pay their fines then restart the FK grinder with impunity. They will essentially be indemnified for their acts, both past and future.

    The other premise is that the 20bn “fine” will be put toward principal reduction for at-risk borrowers. We have discussed here before the paltry reductions that would actually happen (probably less than 10K per borrower, on average).

  37. seif says:

    #36 – I have seen your aunt naked…and she does have balls.

  38. Shore Guy says:

    One last thing before going to feed the tax beast:

    The Disappearing Recovery What if the weak recovery is all the recovery we are going to get?

    Barack Obama, John Boehner and Mitch McConnell have been performing an intricate scorpion dance over spending, taxes and the debt ceiling, premised on the belief that this is the deal that would ignite the recovery.

    But what if it’s too late? What if that first-quarter growth rate of 1.8% is a portent of the U.S.’s long-term future? What if below-normal U.S. GDP is, as the Obama folks like to say, the new normal?

    Robert Lucas, the 1995 Nobel laureate in economics, has spent his career thinking about why economies grow, and in particular about the effect of policy making on growth. From his office at the University of Chicago, Prof. Lucas has been wondering, like the rest of us, why, if the recession officially ended in the first half of 2009, there hasn’t been more growth in the U.S. economy. He’s also been wondering why this delayed recovery resembles the long non-recovery years of the 1930s. And he has been thinking about the U.S. and Europe.

    In May, Bob Lucas pulled his thoughts together and delivered them as the Milliman Lecture at the University of Washington, an exercise he described to me this week as “intelligent speculation.”

    Here is the lecture’s provocative final thought: “Is it possible that by imitating European policies on labor markets, welfare and taxes, the U.S. has chosen a new, lower GDP trend? If so, it may be that the weak recovery we have had so far is all the recovery we will get.”

    The Obama-will-turn-us-into-Europe argument is a staple of the administration’s critics. Prof. Lucas’s intelligent speculation, however, carries the case beyond dinner-party carping.


    The Obama economists like to argue that this recession was the greatest meltdown since the Depression. Prof. Lucas agrees. Most recessions, he says, are not very important events. This one, though, has taken U.S. GDP almost 10% off its long-term growth trend. The only downturn comparable to this in the past century is the more than 30% decline during the Depression.

    What discomfits him is the similarities in the policy choices that accompanied both delayed recoveries.


  39. gary says:


    Please… gimme a break. The guy was elected as the messiah and he was going to save the world. I don’t want to hear how it’s everyone elses fault that he’s a failure. Democrat of republican, he currently has a 30 game lead heading into August as the worst president ever.

  40. seif says:

    #35 exactly! the same guy who made the executive decision that palin was the way to go in that spot is the guy who would lead us out of the financial doldrums?

  41. 3b says:

    #32 Shore: I know some one very well who got one of those green cards. College educated worked at whatever jobs he could until he got his green card. Twenty years later he is a millionaire many times over, and employs over 200 hundred people.

  42. Bojangles’ policies aren’t turning us into Europe. They’re turning us into Argentina.

    Watch it happen.

  43. sas3 says:

    Shore, you pulled the patriotism card in response to my more or less boring comment (with an unintened implication that I should shut up and listen to you — I very well may, on many occassions but there wasn’t even any major disagreement we had).

    Given the narrative that is going on around — Faux said that the 1500 calorie meal of that FLOTUS had was equal to a “live racoon”, and there is kenyan and sotero cr@p posted here every day by oil sheik worshippers… you need to give some leeway when there are similar posts from the other side.

    May be I react to vocal public display of patriotism just like one would react to vocally anti-gay politicians. Many of them tend to turn out to be fake.

    All said, it warrants my apologies, so please accept them.

  44. JJ - AKA Two Hands says:

    second recession is just another buying opportunity. in fact it would be a very good thing long term, one more round of loading up on cheap stocks, bonds and real estate is just what I need to be able to retire one day. Lets lock and load.

    Pied a tier in Manhattan 100K, Hampton house 150K, North Shore LI Mansion 300K, Used Rolls Royce 5k. IBM stock $5 bucks, Junk Bond 150% interest!!!! Maybe I can even pick up some front row Giants PSLs for like $100 bucks each and a nice carribean vacation for $99 a night. Hey Ho lets go. Time to put those buying hats on.

    Someone who is turning 50 and has a working spouse can sock away almost 70K a year with company match into half priced stocks in 2012 and 2013, sweets, sets them up for early retirement when stocks soar back 200%.

  45. Shore Guy says:

    “Sorry I cannto forgive Mc Cain for Palin.”

    Fair enough. When she made her first speech after being named the running mate (not the one at the convention, although that one was good) I thought “Oh good.” After she started opening her mouth I started thinking “Oh, no!” I would trust any number of people I deal with day-to-day to act as veep before her. In fact, her muddled analysis and muddled knowledge of history remind me of our own Sastry. I believe that she believes what she says. I just cannot believe that so many fellow citizens believe what she says. It is a sad commentary on the state of things.

  46. Shore Guy says:

    “Pied a tier in Manhattan 100K, Hampton house 150K, North Shore LI Mansion 300K, Used Rolls Royce 5k. IBM stock $5 bucks”

    Dollar .000001 GBP

  47. Shore Guy says:

    Happy blogging folks. NJC have a painkiller for me.

  48. 3b says:

    #33 While you are generally much more to the left.I have from time to time acknowledged that you do have valid points, and that those on the left in general do have some valid points. (just FYI,I despise both parties as well as the left and the right). But come on now it is over 2 years and it is still Bush’s fault in the minds of O supporters. He claimed when running that he could and would fix it all, and do it with a smile. Well it is not turning out that way. He is no different than the rest; the problem is he said he was.

  49. JJ - AKA Two Hands says:

    I never served in a US war. My family however, started a few wars back in the day.

    I am the worse combination a chicken with an itchy trigger finger. Guy I knew was just like me, he was in some BS war in Grenada or something after a few months in Marines, heard some bullets and emptied his magazine which prompted every other marine to start shooting, next thing you know machine guns are blaring full trottle. Friend goes I am scared of snipers or people sneaking up on me so when in doubt I just shoot like crazy where I heard noise. He was honorable discharged a week later. Apparantely the Marines feel it is inappropriate to kill everyone in the host country.

  50. JJ - AKA Two Hands says:

    Say what you like about McCain, but damm that guy makes some good frozen french fries.

  51. 3b says:

    #24 Stripping out gas and auto sales, retail sales remain low.

  52. gary says:

    Hillary Clinton would’ve been infinitely better and I’m not a fan. This guy currently smoking up the Oval Office is just a f*cking mess… plain and simple.

  53. Dink says:


    I now you said BOH’s taxes are excessive, but its much worse than you ever lead on!

  54. exit82 says:

    Lurker stumbling out of the shadows to ask a real estate question … do high efficiency furnaces and air conditioners help to sell houses? Ancient AC died last week, furnace is even older, so I am replacing both. With rebates included, cost of high efficiency is about the same as regular, but only if installer vents furnace (high efficiency = horizontal vent) out the front of the house, close to the front door which IMHO would make potential buyer say “yikes!” (Correct me if I am wrong, please.) Installing in non-mickey mouse way means tearing out ceilings, more cost etc. I would dearly love to sell house within the year but of course we all know how realistic that is. Thanks for any replies.

  55. 3b says:

    #54 Dink: The listings indicates that the taxes are 4k or so a year. Must be some kind of typo. As the taxes on that one are just under 12k. Also the list price is 419K, prior sales price in 2002 was 372K. If it sells at 400k after commission etc, the owner makes nothing after 9 years. Me personally I believe it sells for no more than 375 on the high side. Ranches like that have been selling in the low threes, that none is nicely done, so they may get more.

  56. Simply Ravishing HEHEHE says:


    “California Weighs Contingency Loan as Debt-Limit Turmoil Looms”

  57. shore (46)-

    Politics is entertainment. And, it is an entertainment directed toward idiots.

  58. Simply Ravishing HEHEHE says:

    “It is anticipated that part of the fraudclosure settlement will be some sort of provision that the banksters can pay their fines then restart the FK grinder with impunity. They will essentially be indemnified for their acts, both past and future.”

    I could be mistaken but does an executive agency have the power to even do such a thing?

  59. hughesrep says:


    I don’t think it helps sell the house.

    Be careful about where they vent it as well. Typically furnaces have to be vented at least 24″ from any window, I would think a door would be similar. Check the installation instructions on whatever model they are selling you. I would in no way want to vent it near a door, let alone out the front of my house.

    If it was me I would just put in an 80% furnace and vent it up the chimney. I assume this is how your current furnace is vented?

  60. yo'me says:

    What would Mc Cain have done differently than BO,when BO just continued the Republican Parties policies under GWB.Keynesian Economics under the Republicans. BO was voted in the promise of change.Kept the same policies,kept Bernank running the show.They are all the same,wearing different suit.

  61. he (60)-

    Banksters have the authority to do anything they want. And banksters own all three branches of gubmint…federal and state.

  62. Fabius Maximus says:

    #35 Shore

    ” I do in fact believe that McCain would have been better at handling the financial mess in which we find ourselves”

    Is that John “The fudementals of our economy are strong” McCain or John “I am suspending my campaign to return to Washington” McCain.

  63. House Whine says:

    Don’t kid yourselves. As much as many Democrats don’t really like Obama so much anymore, they will never, ever vote Republican. And if the Republicans put up a real right-winger then even the disgruntled Democrats will go to the polls and vote back Obama. Regardless of party affiliation, we really do need to get the heck out of these Middle Eastern wars. Enough is enough. I am tired of hearing how that $$ spent wouldn’t solve our debt problem. Maybe not, but if you add it all up through all these years it was a really big part of the problem.

  64. Comrade Nom Deplume says:

    Shiny within spitting distance of 1,600.

    Hope and Change.

  65. Comrade Nom Deplume says:

    (39) shore,

    That economist must be taken to the woodshed for suggesting that the Great FDR and the Chosen One were inept, not the economic megageniuses that history has made (and will make) them out to be.

    After all, they are sooooo much smarter than the rest of us. We should all shut up and submit.

  66. sas3 says:

    Shore, #46 mean insult… Palin is dumb as a rock wrt to everything other than making money from celibrity fame, but that is not her worst quality. She is probably one of the most cruel and vindictive women around — as scary as an evil character from a Stephen King’s novel.

    Re your draft vs enlisting point — a draft would have most likely prevented Iraq war, because the boomer GOP chicken hawks would have had skin in the game.


  67. sas3 says:

    HouseWhine, only if the anti-O groups stop using outrageous slurs about O and point out the real faults (there are way too many), there will be some progress. It looks almost that O and the GOP are playing a perverse version of good cop, bad cop routine on the public and doing the bidding for the corporations.

    If O is being accused of being a commie when he is following W’s policies, there is no common ground.

  68. 3b says:

    Jobless claims fall to 405k, last weeks revised up from 418k to 427K

  69. Comrade Nom Deplume says:

    Great video on Fox of Chrysler union employees toking up on lunch break.

    Another reason (not that I needed another) that I will never buy Chrysler or GM. I’ve driven both and owned GM—-once burned, twice shy. Now you risk that the guy connecting your brakes was stoned.

  70. JJ - AKA Two Hands says:

    looking at some 2006 listings that popped up recently at 150K off. does not sound much but when you think about it, 20k to close, with commission and lawyers and moving 60k to sell, plus I am sure in 2006 they put at least 20k in house just on painting and stuff.

    That is a total of 250 loss. Or 50K a year.But wait the house has 12K in taxes, another 50K gone. And then around another 150 in mortgage interest gone. These are not even short sales or BKs,

    But here is the question, just cause guy is selling does not make it the bottom as obviously these are not forced sales. Owner is betting home is falling further so is cutting losses. Or maybe getting out on his house priced now at 999K before new loan rules and winter or higher rates come. All will hurt resales.

    I started putting around 5k a month in my house downpayment account fiver years ago and it is really adding up. Imagine putting 5k a month into a sinking house for 5 years you never got back?

  71. JJ - AKA Two Hands says:

    My BMW had more repairs than my GMC and both were built the same year and month. . The difference was BMW paid for the repairs under warranty, gave me breakfast and treated me like a king.

    Tale of the tape
    My BMW had a defect in the airbag passenger side, passenger window stopped working, cup holder broke, battery died and the front end had a noise they fixed.

    My GMC, check engine light, gas guage and horn was fixed. I think todays cars are so complicated they all have a few things that go wrong.

    I enjoy the BMW more but to be honest they are both equally reliable. A ford taurus and a 7 series will both drive equally reliable. the question of which is going to float your boat.

    Both run 100% perfect.

  72. 3b says:

    I am looking for a used car for one of my kids. Very little inventory 2006 and before, in many cases nothing. I guess alto of people rushed in for the cash for clunkers program. I wonder what he dealers did with all of these trade ins.

    Anyhow I found a CRV with 100K miles on it. I am old school and 100k seems like alot. People tell me it is a Honda so i should not worry. Still 7k for a 10 year old car with 100k miles on it seems pricey.

  73. Mad xer says:

    Regarding th Greenspan article, I hope that wrinkly old f*ck meets der faust creator soon. Alan, go walk into any IB FA dept. They are ghost towns because all accounting functions are moving to Pune. I worked at a small mtg. risk auditor who refused to pay American underwriters $20/hr so hired Indian workers to review closed loan tapes. That is the Gen X reality, you f*ck.

  74. Simply Ravishing HEHEHE says:


    Layoffs Watch ’11: UBS, Credit Suisse

  75. exit82 says:

    #61 hughesrep

    Thanks! Going with 80% furnace/13 SEER A.C. is my instinct as well. They will still yield a big efficiency improvement over my ancient ones.

  76. Anon E. Moose says:


    You haven’t thrown the word “teabagger” yet today — the day is still young, I guess. Twice yesterday you accused more than half of America of being racist (per you: policy disagreements with the “O” == racist; per Rasmussen: more than half of likely voters disapprove of O).

    I can’t believe Nom ever thought you a worth adversary to argue with.

  77. Nicholas says:

    The reality is that 100k miles was a death sentence for 1980’s era cars. The reason is because of the poor tolerances on engine manufacturing that caused oil to leak past the seals in the engine. Small amounts of water would make it into the engine, the seals would degrade due to poor plastics manufacturing, and eventually you would be burning 1 quart every 3000 miles. If you didn’t lose the oil you would find it black as midnight when you took it out of the engine due to the amount of dirt and metal wear comming off the engine. You pretty much had to replace the rings and seals on the engine at 100k miles even if you did replace the oil every 3000 miles.

    Engines made in 2000’s had much better manufacturing processes and robots are now doing the precision milling work in your engine block. You replace your oil every 10k miles and it comes out looking like it did when you put it in. The only reason why you replace the oil is because of “viscosity breakdown” where the oil loses its properties due to heat treatment inside the engine. That means engines are lasting much, much longer. I’m in a 2006 honda civic and it has 115k miles and not a single problem. It is likely that it will make 200 or 300k miles easily before the engine needs major overhaul.

    In the 2000 model cars you really should be looking at other mechanical things to fail specifically the environmental controls. These will be your biggest repair cost item. O2 sensors, catalytic converters, etc. Many states require these things to be in tip-top operational state to pass emissions checks. Look to see if the vehicle has a history of breakdown of these components.

    For example, 2004 Kia Spectra has an exhaust manifold design flaw. There is an “upper” catalytic converter that is attached to the exhaust manifold with seal and bolts. For some reason, it was designed poorly and the temperature of gasses making it to the upper catalytic converter are too hot, turn the pellets in the catalytic converter to glass, and eventually burn out the O2 sensor just afterwards. Replacing the failing O2 sensor just causes it to burn out some weeks later, a near total waste. The real fix would be to replace the exhaust manifold with a newer, better design, that would keep the upper catalytic converter from glassing out.

    Thats the stuff you should be paying attention too because it will eventually hit your wallet. Since your engine now has lifetime parity with many of the other mechanical systems in your car then your focus becomes all around design/lifespan of the working components.

  78. Simply Ravishing HEHEHE says:

    “Great video on Fox of Chrysler union employees toking up on lunch break.”

    Where’s Jimmy Cayne when you need him?

  79. Fabius Maximus says:

    #40 Gary,

    The GOP handed him the brass ring in 2008 and are like the keystone cops trying to get it back. For all those who would like to see O out of office, take a long look at these poll numbers.

    The big number in here is the 25% unfavorable for Romney. The only realistic GOP hope, won’t make it though the primarys. So, get yourself ready for “The unifying choice to beat Obama.” that is where your real anger should be directed.

  80. Fabius Maximus says:

    #65 House whine,

    You need to add independents into that mix.

    Gary “Any Questions?”

  81. 3b says:

    #80 Nicholas: Thanks for the information. I will end up having a mechanic check it out. I will bid the seller down somewhere from 7K, and see what happens.

  82. Fabius Maximus says:

    #79 Anon

    The Quinnipiac University survey, released Wednesday, indicates Obama hitting 50 percent or above when pitted against every Republican candidate except former Massachusetts Governor Mitt Romney. But President Obama still tops Romney, 47 to 41 percent.

    Any Questions?

  83. JJ - AKA Two Hands says:

    Many Many years ago I bought a German car with 100K miles on it under the theory German cars are different from American Cars, at 106K the tranny went. I go to my mechanic who actually was honest and he said JJ, the Germans make great cars but the laws of physics still apply. When metal rubs against metal at high temps pretty much between 100k and 140K you are going to get something that breaks.

    My neighbor just bought a used Ford Taurus for his kid off a little old lady in the newspaper, a 1999 Taurus with 27K miles for $2,500 bucks. To me that seems a good deal.

    Honda hold their value very well in resale market. Japanese cars are very good. But remember pretty much a used 2006 american car with 50k miles in price is about same price as a used 2004 Japanese care with 90K in miles. On ebay in NJ you can get a 2001 Taurus with 47K miles for around $4,700 bucks.

    3b says:
    July 14, 2011 at 10:31 am

    I am looking for a used car for one of my kids. Very little inventory 2006 and before, in many cases nothing. I guess alto of people rushed in for the cash for clunkers program. I wonder what he dealers did with all of these trade ins.

    Anyhow I found a CRV with 100K miles on it. I am old school and 100k seems like alot. People tell me it is a Honda so i should not worry. Still 7k for a 10 year old car with 100k miles on it seems pricey.

  84. ObserverQuestion says:

    Once I demonstrate having my ducks in a row and meeting all the conditions of the mortgage commitment, and am deemed, “clear to close”, how many business days should it take before I can close (in NJ)?

  85. sas3 says:

    Moose… only the guys that throw around things like kenyan, raccoon, etc. Disapproval is not same as blind hate. There are quite a few that think O is becoming W lite, and are disappointed in him so far, but you won’t see them throw slurs at him.

    Teabaggers are the same ones that in 2003-2006 said that if someone criticized the pres in time of war (of choice) they are unpatriotic. Now, not a day goes by without them throwing slurs at the POTUS or FLOTUS.

    At the end, they have to face themselves in the mirror, or have to contend with very polite but uncomfortable nods from their kids. If you feel that you are included when someone is criticizing the “TX teabaggers for secession that claim that the POTUS is not patriotic”, then may be time to adjust your compass?

  86. sas3 says:

    #87… assuming that the bank already had the appraisal done, you got the inspection reports, have most of the attorney review done, etc., a week or less. Otherwise, start adding a few days each for individual steps — and add a lot of days if you get a particularly pesky attorney that wants to “protect you”.

  87. Shore Guy says:

    If congress doesn’t have the b@lls to cut things like this nonsense, then, perhaps, we need a commission like the BRAC to bring a slew of cuts that get made with a single up or down vote. We are sinking and nobody is willing to throw dense objects overboard.

    JOHNSTOWN, Pa. — It is called the airport to nowhere and for years taxpayers have footed the bill.

    On the outskirts of this faded steel town, the John Murtha Johnstown-Cambria County Airport boasts a modern runway, a high-tech security area even a trendy restaurant. It lacks one thing: passengers.

    Each year, Washington’s Essential Air Service program pays about $1.6 million for three daily flights between here and Dulles International Airport outside of Washington. Most flights have 10 or fewer people on board and the airport is virtually deserted. Many travelers drive two hours to Pittsburgh, Pa., where fares are often lower and flights are plentiful.

    Governments have long financed wasteful or even unnecessary programs, but at a moment when both parties seem to agree that spending is out of control, the durability of small-town airport subsidies, which have outlasted four presidents who opposed them, underscores the political difficulties of cutting even the smallest projects.

    Subsidies for little-used airports and roads, special interests like peanut and cotton farmers and a plethora of other programs have survived thanks to powerful interest groups and strong bipartisan support in Congress. The Johnstown airport’s name honors the late congressman who made sure his hometown got its fair share of Washington money.

    The subsidy programs are as varied as warehouses that allow farmers to store cotton and peanuts at government expense until prices rise and an estimated $100 million tax break for owners of Nascar racetracks.

    Various private and government studies show that nearly $1.8 trillion over the next five years could be saved by eliminating or reducing spending on some of the subsidies.


    The peanut and cotton storage program, which costs $1 million a year, has repeatedly survived cuts thanks to bipartisan support. Under the program, the government picks up storage costs for cotton and peanut farmers when they defer selling crops until prices rise. The peanut storage credits have been around since 2002. The cotton subsidy dates to the 1990s.


    The program’s biggest champion has been Representative Sanford D. Bishop Jr., Democrat of Georgia, whose district has many of the state’s nearly 3,000 peanut farmers. Mr. Bishop, a member of the Appropriations Committee, has for five years blocked efforts to cut the program, taking to the floor last month to denounce amendments to eliminate the credits.

    “I’m in favor of making the necessary cuts needed to reduce our debt,” he said in an interview. “But it shouldn’t be made off the backs of farmers, the people who produce our food.”

  88. ObserverQuestion says:

    89, yes, all work done except one item, waiting on the title work to be finished by my atty. thanks!

  89. What to do.... says:

    Here’s the situation: after years of waiting and then searching for at least a year my wife and I found a home that will fit our needs for now and for years to come. Our plan is to be in the home until we eventually decide to retire (20-25 years). The home itself has been on the market 200 days and has dropped in price $215k from its original asking price.

    We are currently under contract however the septic inspection has failed. Both the distribution box and absorption field need to be replaced. Initial estimates are between 12-25k.

    At this point, we’re going to ask the owners to fix and have the Septic certified at their expense. I would assume the owners are on the hook for this repair since they will be unable to sell the home with a bad septic system; I’ve heard this is a health issue at this point and the town will not issue a C of A without a properly functioning Septic system.

    My question is what has been your experience in the past? I would assume they would fix the Septic and sell us the house…however I guess they still have the option of fixing the Septic and re-listing, no?

  90. sas3 says:

    Moose, seems like you are taking exception to even a mundane suggestion that the GOP should tone down the rhetoric and focus on real problems with O, collaboratively fix things that most public would support (e.g. hedge fund tax loop holes, getting Liz Warren appointed as the head of CFPB, raise the ceiling like it was always done, cut subsidies for oil and wealthy farmers), and negotiate in good faith on spending cuts (looks like O is open to screwing the poor more eagerly than W did and is willing to concede almost every GOP demand).

    If the GOP can reach an agreement with O on most common sense items with the pres and not make every small thing a 2012 election play, there is some hope for fixing the big ticket items. Otherwise, the mega corps and sovereign wealth funds will win and US loses.

    Got a problem with that?

  91. Anon E. Moose says:

    Shore [90];

    Its a goal of mine to see the Johnstown airport renamed (at least informally) “Pork Barrel Int’l”.

  92. Shore Guy says:


    I did not see your apology until just now. Accepted. Also, 46 was not intended to me mean. It is just that, your vilification of others often strikes me as Plainesque/Bachmanesque and fairly often seems to come without adequate forethought or an anchoring in facts.

    Are some ot the teaparty folks nuts? I have no doubt there are many a few leaves short of a teabag. That said, people who resent being overtaxed and who believe that government has gone off the rails and is becoming an oppressive force should not be dismissed as racist kooks. Given the distribution of wealth in this country and the demographis of those earning $200,000/year, one should not be surprised to find a disproportionate number of white faces at tea party gatherings; this does not in and of itself prove that the tea party is a collection of racist kooks — even though there are , I suspect, any number of racist kooks in the Tea Party — just like in congress.

  93. Simply Ravishing HEHEHE says:

    Bridges to nowhere, airlines to nowhere, – you need to show your campaign donors you’re a playa

  94. Shore Guy says:

    What to do,

    We once had a deal fall through because of items found in an inspection report. We insisted the seller fix them. The seller refused and we walked away. The house had been sitting for a long time in an area where houses do not sit. In the end, the seller contacted us a few months later and said, “lets talk.” Bottom line, he fixed everything and we got a more favorable deal to boot.

    With prices falling over time, if it were I, I would walk if the seller will not fix the issue. At this point, I suspect that the defect must be disclosed to potential buyers and it is just going to cause the seller to take a bigger hit than if the seller just fixes the problem.

  95. Fabius Maximus says:

    This Quinnipiac poll is a great view of where we are.

    July 14, 2011 – President Is Best Of The Worst On Economy, U.S. Voters Tell Quinnipiac University National Poll; Voters Blame Bush Over Obama 2-1 For Financial Mess
    American voters disapprove 56 – 38 percent of the way President Barack Obama is handling the economy, but by 45 – 38 percent they trust the president more than congressional Republicans to handle the economy, according to a Quinnipiac University poll released today.

    The country is in a recession, 71 percent of American voters say, but by 54 – 27 percent they blame former President George W. Bush more than President Obama.

    The president gets a 47 – 46 percent job approval rating, unchanged from the June 9 survey by the independent Quinnipiac (KWIN-uh-pe-ack) University. That tops a 64 – 28 percent disapproval for Democrats in Congress and a 65 – 26 percent disapproval for Republicans. Obama outscores congressional Republicans on several points in the deficit reduction battle:
    •Voters will blame Republicans over Obama 48 – 34 percent if the debt limit is not raised;
    •Voters say 67 – 25 percent that an agreement to raise the debt ceiling should include tax hikes for the wealthy and corporations, not just spending cuts;
    •Voters say 45 – 37 percent that Obama’s proposals to raise revenues are “closing loopholes,” rather than “tax hikes”;
    •But voters say 57 – 30 percent that Obama’s proposals will impact the middle class, not just the wealthy.

    “The American people aren’t very happy about their leaders, but President Barack Obama is viewed as the best of the worst, especially when it comes to the economy,” said Peter A. Brown, assistant director of the Quinnipiac University Polling institute.

  96. Shore Guy says:

    Michelle Bachman makes Palin look like a kind, sweet, caring person. I don’t usually agree with Cohen but….

    My grandmother was illiterate. She was cossetted in an impregnable ignorance that made her confident in her judgment and unassailable in her opinions. She died many years ago, but I fear she has come back . . . as Michele Bachmann.

    Bachmann, too, is certain about most of her views. She is particularly certain about what would happen if the debt ceiling were not raised: nothing. The United State would not go into default and the full faith and credit of the government would not be affected. Anyone who suggests otherwise is simply wrong, she says.

    How does she know? Barring the possibility that she has once again heard from God, the answer is that she does not. Important members of the Republican Party either strongly disagree with her or confess that they don’t know what will happen — maybe nothing, maybe a catastrophe. In either case, prudence requires that the ceiling be raised. Who wants to roll the dice on the American economy?

    Bachmann is an American nihilist. She is not in any sense a 19th-century Russian-style bomb thrower — she is much too conservative for that — but she is so virulently and mindlessly anti-elitist that she will almost reflexively reject what the elites want or propose.

    Bachmann, for her part, backs her position mostly by simply asserting it. For support, she doesn’t cite facts, but rather her critics, the elites who predict disaster. This strikes a chord with many Americans, especially now. They were told to buy homes and work hard, and now their jobs are gone and their house has a padlock on it. As always, the villains are the (Eastern) bankers, who had taken over the role of railroads as bloodsuckers. Never mind that many of the bankers are no longer in the East, they still wear suits and graduated from elite colleges and often know which fork to use.

  97. Shore Guy says:

    “the best of the worst”

    It is not as catchy on a bumper sticker as “Yes We Can,” but it could be enough to get elected given the field my party is putting forth.

  98. homeboken says:

    RE: Used Cars – My first two cars were purchased from local widows in the neighborhood. 17 years old paid $150 for a Chevy S-10 pickup (total junk but cool for me at the time) from a lady down the street whose husband passed away. Car lasted until I was 20 years old, that’s a deal. The insurance for a 17 year old, male drive in NJ was soul crushing however.

  99. Anon E. Moose says:

    Sas [93];

    Yesterday, you wrote
    #148… the discussion isn’t about culture, right. It is about a 3% change in tax rate and its effect on future economy. The main thing that the teabaggers have in common with their ancestors is their belief that O is not fit to be their leader because of his race.
    Read as: ‘Don’t bother me with the merits; everyone knows that protesters against Obama are all racists.’

    You also wrote:
    if a white man were president, this blackmail would not have occurred! Your guys are running the show on the blackmail.
    So the GOP congressional leadership are racists too.

    Besides which, IMHE, once you start throwing the word ‘teabagger’ you remove yourself from the circle of serious discussion. For example, I disagree with the efforts to legislatively change the definition of “marriage”, but I don’t use rude terms like ‘pillow-biter’, ‘b*tt pirate’, or ‘scissor sisters’ to describe people on the other side of the issue (or with notable exceptions such as this discussion, ever). I’d like to think if you want to be respected, it helps to conduct yourself respectably.

  100. What to do.... says:

    Shore Guy,

    That’s exactly what we’re thinking. While we love the home, we don’t see why we or any other buyer would pay for the Septic system. One other question:

    Let’s say the estimate comes back at $20k… it legal / feasible for them to say they will drop the price of the home by this much? I’m not sure the Bank would want to give us a loan for a dwelling w/ a bad Septic? In addition…while we are putting down a good chunk of change we don’t have $20k budgeted for a bad Septic. Not sure the bank will allow us to put that in the mortgage?

  101. 3b says:

    #98 Well he sure has dropped al ong way from yes we can,and hope and change to the best of a bad lot.

  102. sas3 says:

    Shore, most of the tea party folks have never expressed any concerns about debt or deficit till O became the president. Other than the stimulus, there wasn’t a major difference in O’s first year budget and what W had. The stimulus itself had a big tax cut component. They appear to be driven more by a rage against O, or appear to be driven on a corporation funded bus tour and rally combo (many in those rallies don’t look like 250k+ income after expenses and deductions).

    If even a small subset of them can demonstrate some fundamental consistency in their core principles with respect to government, I can concede. Too much hypocrisy on their side to take them seriously. On top of it, add their support for letting government into bedrooms, while wearing a “don’t tread on me” T-shirt… Tea party is way too homogeneous even on contradictory positions — impossible for something that is not manufactured under tightly controlled conditions.

  103. Shore Guy says:

    What to do,

    I think they can offer you just about anything short of s-ex or drugs. While there are some here who would take the discount and accept the offer ,I would not. When one takes on a project like this, there is an issue beyond the cost itself. Things are torn up, people need to set schedules around when things are done, who will need access to the house, etc. Plus, things always seem to run into problems and costs rise.

    One needs to make one’s own cost benefit analysis, note Grim doing assorted things to his new place, but, I for one would not buy in a declining market with this cost looking me in the face, especially when you will not even be able to move in right away because of the lack of CO.

  104. nj escapee says:

    sas3, tea party was hijacked by the republican party. just to remind you the initial tea party rage was directed at spending, not social issues. remember rick santelli’s rant that gave it national attention.

  105. JJ - AKA Two Hands says:

    “New York Boosts Sale 14%, Cuts Yield as Investors Seek Safety”

    Investors are one crazy lot. January 14 2011 Investors flee NY Muni Bonds for fear of default and July 14 2011 investors flock to them for safety.

  106. Shore Guy says:

    REad these numbers and weep for your children and grandchildren:

    “The Congressional Budget Office estimates federal spending at $46.1 trillion over the next 10 years”

    Hummmmmm. And the Empty Suit in Chief believes that even $4T cut over that period is enough. It is insanity.

    Now, back to work.

  107. A.West says:

    Here’s a primer on gold from a JP Morgan currency analyst today:

    * GOLD – The most interesting comments from policymakers usually come when answering an unexpected question. That happened on Wednesday when Fed Chairman Bernanke testified in Congress. Revealing nothing are softball and conventional questions such as “Mr. Bernanke, do you think it is important that we should control our fiscal deficit?” Answer, “yes, Congressman, I think that would be important.”

    It is the unexpected or the unconventional question that brings forth real information. For this, we should thank Texas Representative Ron Paul who asked a seemingly simple question of Bernanke: “Do you think gold is money?” The Chairman’s answer revealed much and increased my conviction that the price of gold will go much higher and that inflation will worsen.

    First, here is the transcript of the Q&A between Paul and Bernanke:

    MR. PAUL: But very quickly, if you could answer another question, because I’m curious about this – you know, the price of gold today is $1,580 [U.S.]. The dollar during these last three years was devalued almost 50 per cent. When you wake up in the morning, do you care about the price of gold?

    MR. BERNANKE: Well, I pay attention to the price of gold, but I think it reflects a lot of things. It reflects global uncertainties. I think people are – the reason people hold gold is as a protection against what we call tail risk, really, really bad outcomes. And to the extent that the last few years have made people more worried about potential of a major crisis, then they have gold as a protection.

    MR. PAUL: Do you think gold is money?

    MR. BERNANKE: No. It’s not money, it’s a precious metal…

    MR. PAUL: Even if it has been money for 6,000 years, somebody reversed that and eliminated that economic law?

    MR. BERNANKE: Well, it’s – you know, it’s an asset. I mean, it’s the same – would you say Treasury bills are money? I don’t think they’re money either, but they’re a financial asset.

    MR. PAUL: Well, why do – why do – why do central banks hold it if it’s not –

    MR. BERNANKE: Well, it’s a form of reserves. It’s a form –

    MR. PAUL: Why don’t they hold diamonds?

    MR. BERNANKE: Well, it’s tradition, long-term tradition.

    MR. PAUL: (Chuckles.) Well, some people still think it’s money. I yield back. My time is up.

    Most people give the benefit of the doubt to whomever is the Chairman of the Fed when they do not understand the underlying issue. After all, the person elevated to that position is supposedly savvy about economic issues and particularly about monetary economics. Nevertheless, as two different Fed Chairman the same question and you will likely get diametrically opposed answers.

    For example, during Congressional testimony on May 20, 1999, former Fed Chairman Greenspan clearly stated that “Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted.”

    It is Greenspan who understands the role of gold. No, T-bills are not similar to gold as Bernanke claims. T-bills are a liability of the U.S. government that are redeemable into fiat paper currency. Gold is an asset, but not a liability at the same time. Gold is limited in quantity, which can only be increased with considerable investment of labor and capital required to mine it out of the ground. As we have seen in recent years, T-bills and fiat paper currency can be manufactured at the whim of political policymakers whose agenda is not to preserve the value of their newly-created liabilities, but to fund their welfare state.

    * Let’s take a look at some of Chairman Bernanke’s comments:

    1) Bernanke: “I pay attention to the price of gold, but I think it reflects a lot of things. It reflects global uncertainties. I think people are – the reason people hold gold is as a protection against what we call tail risk, really, really bad outcomes. And to the extent that the last few years have made people more worried about potential of a major crisis, then they have gold as a protection.”

    As Mr. Greenspan said, “Fiat money in extremis is accepted by nobody. Gold is always accepted.” Mr. Bernanke is correct that the price of gold can be driven up by “global” uncertainties, but that begs the question of why do people choose to buy gold in that circumstance and not U.S. dollars? The answer is that the so-called “uncertainties” cause people to expect the Fed and other central banks to expand their balance sheets (i.e., print up money out of thin air and buy government debt) to assist governments in funding counter-measures to deal with whatever crisis they may face.

    Meanwhile, metaphysics preclude the possibility that some entity will flick a switch and produce unlimited amounts of gold. The supply curve of gold is strictly limited over a relatively long period of time. Historically, new mining of gold adds a minor 1 1/2% to already-existing above-ground stocks of gold.

    The supply of base money, which central banks have absolute control over, can be increased ad infinitum. For example, monetary base more than doubled by early-2009 when the Fed implemented “QE1.” As of the end of June 2011, monetary base is up 32% yoy, which reflects the monetization of debt implemented during “QE2.” And that 32% increase comes on top of an already huge base.

    2) MR. PAUL: Do you think gold is money?

    MR. BERNANKE: No. It’s not money, it’s a precious metal…

    In essence, money is a medium of exchange. In a market-driven economy, people will gravitate toward an asset that maintains its purchasing power over long periods of time (i.e., has a stable store of value), among other qualities such as being divisible, durable, etc. Because of its desirability that is widely recognized, money — by definition — becomes the most liquid of assets. It is accepted by everybody.

    Again, as Greenspan stated in 1999, “fiat money in extremis is accepted by NOBODY. Gold is always accepted.” If in extreme times fiat money can become worthless (e.g., Germany in 1923) and gold maintains its value, then how is it that gold is not money just because it is no longer legal tender? It is a mistake to confuse legal tender with money. Legal tender forces people by law to accept the proscribed asset (e.g., today’s dollar) “for all debts, public and private” (those are the words printed on every dollar issued in the U.S.). There is no law that forces people to accept gold. They accept it because it is desirable. It’s value does not depend on coercive law.

    3) MR. PAUL: Well, why do – why do – why do central banks hold it if it’s not –

    MR. BERNANKE: Well, it’s a form of reserves. It’s a form –

    MR. PAUL: Why don’t they hold diamonds?

    MR. BERNANKE: Well, it’s tradition, long-term tradition.

    Interesting. If anything, the most recent “tradition” of central banking is opposed to gold. After all, central banks are the issuers of fiat paper money, which is diametrically opposed to a gold-backed currency that constrains the actions of policymakers. Furthermore, anyone alive today was schooled in the Keynesian “tradition” of viewing gold as a “barbarous relic” that has no place in the monetary system. Why, then, do central banks choose to hold gold? In the 1990s, they were selling gold. Why? Partly, it was because inflation was steady for many years and reserve managers wanted to earn higher rates of return by owning government debt. For example, they sold their gold and bought USTs.

    All of this radically changed as of, literally, March 2009. As attached chart GOLD_OFFICIAL.gif shows, central banks ended a three-decade sell-off of gold and added to their holdings of the precious metal in the very month that the Fed started to aggressively monetize debt (i.e., March 2009). Why did those central banks do that? Why did their accumulation of gold coincide with the Fed’s implementation of QE1?

    For a hint, let’s turn to Russia for a moment. Russian Prime Minister Putin had this to say about the Fed’s debt monetization and QE2:

    “Thank God, or unfortunately, we do not print a reserve currency but what are they doing? They are behaving like hooligans, switching on the printing press and tossing them around the whole world, forgetting their main obligations.”


    Just after Chairman Bernanke floated the idea of QE2 in August 2010, Brazilian Finance Minister Mantega famously said, “We’re in the midst of an international currency war. This threatens us because it takes away our competitiveness.”

    Consider the words of Chairman Bernanke himself. In one of his most famous speeches about monetary policy, Bernanke has this to say about gold and the U.S. dollar:

    “Deflation is always reversible under a fiat money system follows from basic economic reasoning. A little parable may prove useful: Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject’s oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.

    What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”


    Why do central banks hold gold? Because, “in extremis,” they do not trust the dollar that is issued by the Fed. The same applies to private holders of gold. When people choose to sell dollars and buy gold for whatever reason, the demand for dollars goes down. As we know, when demand for a thing goes down, assuming steady supply, then its value goes down. When the value of US paper money goes down, things priced in that money go up, which is another way of saying that inflation increases.

    * I’ve bothered to go into detail about Mr. Bernanke’s comment about gold because it reveals much and gives an important clue about the future direction of the USD vs. other currencies and the likely course of inflation.

    Understanding the importance of gold, I was shocked to hear Chairman Bernanke downplay the role of gold. By saying that “gold reflects global uncertainties” ignores the fact that what people are selling is U.S. dollars and buying Gold. Again, they are selling dollars because they do not trust it. They are buying gold because they do. The selling of dollars causes an excess of U.S. money relative to demand, which is another way of saying that inflation is rising. Despite this fact, Mr. Bernanke downplayed the rise in gold to an historic high and disassociated any of the actions of the Fed in causing that move.

    Despite the Chairman’s protestations to the contrary, gold is telling us something very important. It’s surge to all-time highs and quick approach of $1600 is telling us that the world, including domestic US investors, is progressively losing confidence in Fed policy. Even the Fed’s fellow central bankers are accumulating gold to avoid what they believe is monetary policy set on a course that will undermine the purchasing power of the USD.

    The dollar likely will remain on a major downtrend with only occasional bouts of improvement over the coming year. Those who earn their wealth through smart thinking and hard work are not likely to expose themselves to the likes of the Fed that, to use Bernankes own words, can “produce as many U.S. dollars as it wishes at essentially no cost.” Yes, they can. And, yes, they have.

    This all makes me not only bearish toward the dollar especially against credible currencies like CHF and many Asian currencies, but also bullish commodities and those currencies associated with them.

  108. Juice Box says:

    re # 92- Most likely on the high side $22k +. Buddy of mine paid 20k for just the leach field recently, many times it is the cheap fill used that messes up the field.

  109. sas3 says:

    Moose, you are quoting small segments — one is a response to a post by gary that was an anti-O slur, and the other was a response to someone that compared my view on taxes and objection to Shore invoking his ancestry (I did cross a couple of lines and apologized to Shore…) to him going to India and telling people there what to eat…

    Cliches like patriotism, freedom, and kenyan attract cliches retorts like fake-patriot/loyalist and teabagger. If you dish it out, you should also take it in stride.

  110. Confused In NJ says:

    WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke warned Congress on Thursday that overzealous cuts to government spending could derail an already fragile recovery and said a U.S. debt default could wreak financial havoc.

    “I only ask … as Congress looks at the timing and composition of its changes to the budget, that it does take into account that in the very near term the recovery is still rather fragile, and that sharp and excessive cuts in the very short term would be potentially damaging to that recovery,” Bernanke told members of the Senate Banking Committee

    Ben is the Emperor of “Kicking The Can Down The Road”. He can’t possibly that “Stupid”, so he must be an “Economic Sleeper Terrorist”.

  111. chicagofinance says:

    Jeff Macke here is really fun…particularly form 1:15 to 2:30

  112. 3b says:

    Below is a listing that in a small way demonstrates the madness that was the housing bubble, ans should give pause to those who say no body saw it coming. The listing is in a nice Bergen Co town, but not one of the so called more affluent, upscale blue ribbony towns.
    Here is the sales history:
    07/14/03 Sells for 348K
    09/13/04 Sells for 450k a 102k increase in a little over 2 years, or over 42% higher than its previous sales price 2 years prior.
    08/19/06 Sells for 580K a 130k increase again in a little more than 2 years or over 22% higher than its previous sales price 2 years prior.
    So in 4 years the price increased 66%, absolute madness!!!!

    The house was foreclosed on surprising in that the bank actually foreclosed, not surprising given what the last buyer paid for it.

    House is being offered for sale today asking price of 279K, having been just reduced from 299K. Of course not surprisingly it needs work, but the taxes are low for Bergen at around $7,200.00.

    Now I wonder to myself how many in and around that neighborhood with similar houses or better houses may have made financial decisions for themselves and family based on the fact that the house I mention sold for 580k back in 2006.

  113. 3b says:

    Looks like Bernanke is backing off from his pledge of potentially more stimulus from yesterday. He appears to be all over the place, not very reassuring for the guys who is supposed to know what he is doing.

  114. JC says:

    What #92: Sounds like you are madly in love with this house — always a bad thing. If seller refuses to fix, walk. If seller fixes and re-lists, go back and bid again — at a lower price than your first one. They probably won’t sell to you but you’ll have a chuckle.

    (See, I have learned well here, Obi-Wans.)

  115. JC says:

    3b #115: I drive by that house every night on the way home as I skirt the Pascack Road/Washington Ave. debacle. Not a bad location; Crest Place there is a steep hill but the house is on a flatter part between Jackson Ave. and Pascack Road. It might not be a bad deal if you are up to all the work it requires.

    If you’re still thinking of moving to WT, come to the Knights of Columbus hall on Pascack Road at 7 PM tonight (Thursday) — big meeting about how to stop Jimmy Kourgelos of Seasons fame from making the Pascack/Washington intersection worse by building a CVS with a drive-thru and making the Town Center even emptier by putting in a Dunkin’ Donuts and hair salon with inadequate parking.

    If you’re even considering this house, this meeting is of interest to you, as Jimmy K’s plan will cause a lot more people to cut down Jackson and Crest to get to Pascack Road.

  116. A.West says:

    exit82 (55)
    I doubt that the HE HVAC system would be worth much more to buyers than a new decent quality standard system. Especially if it meant 2 pvc pipes sticking out the front. Only way it makes sense to you is if you get big tax breaks and rebates that beat the costs.

    I replaced a 20-yo system ( 2 ac/ 2 heat units) with a top of the line HE system. Cost me many tens of thousands even after rebates, tax benefits. I plan to live in the house for many years, but I doubt I’ll get a return on investment for the premium over standard. It’s hard to tell. Mostly I like the units because they’re quiet and are variable speed which keeps the perceived temp very stable.

  117. Orion says:

    We’re closing on a beach house (2 blocks from ocean) this afternoon. Purchased at 60% off 2008 asking price and below what owner paid in 2002. House was on the market for three years.

    I’m tempted to follow the trend and stop making payments in two months then, live mortgage-free for 3-4 years.

    First stop, Wegman’s liquor.

  118. BC Bob says:

    AW [110],

    Bernank is simply a WS hack.

    Gold is the world’s ultimate BS meter; no contagion, temporary, soft landing, transitory, ex food & energy, birth/death, stress tests, fasb, etc.. Gold has broken out and will make a big move from here till X-Mas.. Don’t forget about little bro, silver. Any pullbacks, close your eyes and buy. The next 5-6 years, these markets will make dot com and RE bubble appear to be a walk in the park.

  119. 3b says:

    #18 JC: I am not considering the house, do not want to get involved in that kind of work. I referenced it just to demonstrate the madness of the housing bubble.

    I understand that near by residents may be concerned regarding traffic issues. But I think at the end of the day WT officials say yes as it will be more rateables, ;especially in this economic environment. Also that area looks to be run down, and I guess the question becomes is it better to leave it as is or develop it. I do not see the potential for houisng being built there. I also don’t see the need for another DD as there is already one in the Town Center. Do you know if the A&P is going to remain open in light of the company’s bankruptcy?

    We are still definitely considering WT. Just have not been able to focus at the moment, other things going on. But the come the Fall we will.

  120. JC says:

    3B: The area is run-down because Jimmy K. has been quietly buying up the houses on the northwest side of Pascack Road for years and letting them deteriorate. He has been holding the town hostage, saying he will not improve these houses and he will not tear them down unless the town lets him build the CVS that he wants. Given the many ordinances there are in town regarding property maintenance, it’s clear that there is a fair amount of gladhanding going on because all of the town’s catered events are held at Seasons.

  121. A.West says:

    What to do,
    Unless $20k doesn’t make much difference to you, you tell them to fix it, or you walk. They might walk, or they might offer half, or they might just concede to your request. If your mortgage fails without it, that improves your bargaining power.
    Only an idiot would walk away from a sale over $20k given current conditions, unless you were the winner of a tie in a “best and final”.

  122. Juice Box says:

    re #120 – congrats Orion send us the details when you get a chance.

  123. Shore Guy says:


    Congrats. Can you provide any broad-brush details? I ask because we have largely stopped looking for another place in the OG to Spring lake stretch based on crazy asking prices and also a bit gun shy over potential tax increases. We are anout to embark on a couple week house-hunting expedition to the Carolinas to see if we like anything there. if not, we will be giving a second look to Coastal Monmouth.

  124. Confused In NJ says:

    • And in a harrowing detail that evokes the hardships of an earlier time, M.C. wrote: “My family is eating stir-fried dandelions out of yards to keep from starving.”

    Sure sounds like the Great Depression to me?

  125. Shore Guy says:


    When you start seeing people going all Roger and Me on neighborhood rabbits, THEN it is safe to call this a depression (If you have never seen this, it is graphic and not good to watch until an hour after lunch):

  126. Juice Box says:

    JC – I pass thru that intersection all the time. I don’t really think that a small strip mall is going to make traffic any worse on Pascack or Washington during the rush hours since both are one lane anyway. The light there is poorly timed and there they could use to widen the entire intersection, get rid of that dumpy gas station and the run down boarded up house.

    The map on Bing shows the traffic backed up southbound on Pascack. They could probably add a left and a right turn lane there to smooth out the traffic flow as well.

  127. Juice Box says:

    re: # 128 – how about a more modern reference say that Urban Hunter in Detroit?

  128. 3b says:

    #23 JC Did not know that. But I imagine with the size of Seasons,and the taxes they pay, he will get what he wants. I won’t consider any house in WT without driving by the area first,a nd running it by you for your opinion. I really do appreciate your comments, info and insights.

  129. yo'me says:

    Basic to Free Trade policy is the undeniable fact that its trade deficit is responsible for much of the U.S. national debt due to tax losses that have been called a reverse tariff debt effect [1]. Yet no economist to date has estimated how much of the national debt is caused by the trade deficit or even discussed this fact. Free trade advocates are either naive or apathetic to this serious massive liability. With reasonably simple math it is easily shown that yearly trade deficits are strongly tied to national debt increases. The results also indicate that when the trade deficit is reduced, its effect on the national debt is reduced.

  130. 3b says:

    #20 Congrats!!!!

  131. yo'me says:

    The foreign companies love to sell us their junk (anything that depreciates or is consumable – oil, automobiles, television sets, etc.) for our dollars – non-interest bearing U.S. Government backed IOUs. These non-interest bearing dollars are quickly traded for interest bearing bonds to the delight of our economists who think that this is helping to finance our national deficit. (It would cost us less if they just kept the non-interest bearing dollars.) Or they buy our assets (real estate, companies, stocks, art, raw material, etc.). They prefer to buy the store rather then the merchandise within it. – An ever larger percentage of our wealth is now being paid to these foreign bond holders. It will continue to grow until we adopt a strong trade policy.

    The fastest growing percentage of our trade deficit with these countries is the interest we are paying to them as owners of US treasury bonds. Due to this chronic foreign trade deficit imbalance – every year more then one hundred billion dollars of our nation’s wealth is transferred to foreign countries. In one hundred years at least ten trillion dollars of our nation’s wealth will be held by foreigners.

    When the strength of the yen increased relative to the dollar, the Japanese manufacturing companies found it harder and harder to export their products. Their government solved this problem by creating a mild recession. The current recession in Japan is a deliberate policy to restrict their citizens purchasing power and created a recession. To do this they passed a value added tax. They also lowered their interest rates. This action brought down the value of the yen against the U.S. dollar and prevented the ordinary citizen from buying too much imported merchandise. These policies along with their restrictive trade barriers increased Japanese trade surpluses tremendously

  132. JC says:

    #129: That Bing photo can’t have been taken at rush hour. Sometimes it backs up eastbound all the way to Exit 168 on the Parkway.

    Funny you mention the dumpy gas station. The people who own that want to take that undersized property and turn that into a Wawa-sized 24-hour convenience store with 8 gas pumps, including diesel. It’s gonna be fun, fun, fun watching 18-wheelers trying to get in there as they head up to Hillsdale to the trash transfer station.

  133. plume (71)-

    Rattner basically trampled all over decades of bankruptcy law to save the jobs of these stoners. If we have a Tom Joad moment, these retards should be the first to start wandering the country in pickups and jalopies.

    I’ve never owned an Amerikan car. Now, I am certain never to buy one in my lifetime.

  134. Comrade Nom Deplume says:

    [136] meat,

    From what I have driven of Fords, they aren’t bad. I am leasing a Fusion now, and aside from some size issues (definitely a chick car), it handles like a NASCAR stock car.

    And yes, I have driven a stock car (Full disclosure–not nearly as fast as real racers)

  135. sastry (88)-

    I think Bojangles is an Uncle Tom bankster shoeshine boy who is a self-loathing black man…until he senses he can play the race card against an opponent. This guy will sell out anyone (including his base constituency) in order to please his masters.

    I would immediately move my family to any state that seceded from the US.

    I think Bojangles is the worst Amerikan president of all time…which is a dishonor for which, honestly, I didn’t think anyone could top (?) GWB. And yes, I include Warren Harding in the running for worst POTUS ever.

  136. Nicholas says:

    In regards to the house that has septic system problems…

    I’m not a real big fan of sellers repairing the house just before they sell it to someone else. This is just a chance for them to use the cheapest contractor, the crappiest building materials, and the most expensive landscaping to cover it up.

    If you need to insist that the seller repair something before a sale can occur, or you won’t have enough money set aside to do the repairs yourself, you should think of some alternatives that put control of the repair in your hands but the cost to the seller.

    I would immediately negotiate a lower purchase price that discounts the cost of the repairs and perform them myself after I move in. That would include getting sound professional estimates from reputable contractors who are going to do the repair right, with the best building materials. This gives you the option of doing the repairs with cheaper labor and parts if you so wish and pocketing the extra cash. Your choice.

    If you don’t have the money for the repair then ask the seller to put aside in an escrow account money for performing the repair, get your estimates from your trusted contractor and have them put aside what is required plus some extra for anything unseen that may come up. Bind them to spending the money on the repair of the house, any extra gets transferred to you in cash at the end of a one year period.

    I have only seen the first executed properly, I have only heard of the second method but don’t know anyone who has gone through the process. The reason the seller isn’t repairing the house is because his cash it probably tied up in the house anyway. He will be flush with cash when he can sell the house and that makes a good time to do a concession. This puts the repairs in your hands, which you can make sure are done to your standards instead of in the seller who is going to take the cheapest, fastest method to a house sale.

    If you are going to buy it, then you should “own” it, including the repairs.

  137. Comrade Nom Deplume says:


    ““I’m in favor of making the necessary cuts needed to reduce our debt,” [the congresscritter] said in an interview. “But it shouldn’t be made off the backs of [the people who keep me in office].”

    That is a Beltway cliche. A standard throwaway line.

    If Obama was really serious, including being serious about doing what is right at the expense of his own job, he’d cut across the board, stinging all of their constituencies equally, call for an end to ALL of the Bush tax cuts, and then call out Congress publicly for not being willing to risk their jobs like him.

    I would respect that, and heck, may actually even vote for him if he were to do that. Course, I don’t expect it to actually happen, so it is a safe position for me.

  138. Simply Ravishing HEHEHE says:

    Do you think the toy arrow industry will get another big tax cut with this debt ceiling thing like they did with TARP?

  139. 3b says:

    #35 JC: For what it is worth. I understand residents concerns about that too, but again in this environment the fact that WT is getting new rateabales at all is amazing to me.

    Meanwhile in the land of Unicorns, we have empty store fronts up and down KKR.

  140. Comrade Nom Deplume says:

    [108] JJ

    How much muni buying do you think is tied to the notion that the truly wealthy see that they will get stung in the future, and possibly the near future, so they are shifting their assets into tax-free returns while those returns are still favorable?

    I personally think that HNW folks are moving into munis for two reasons: first, the coming tax hits, and second, to lock in preferable returns versus an increasingly sketchy-looking stock market.

    WRT to the safety of the investment, I think that they are banking on the fact that the same folks who will want to rip more taxes from their hides will also bail out states and major munis, especially in democratic areas.

    What say you? Do my theories have any traction or am I a pot-smoking Chrysler employee?

  141. 3b says:

    #41 That is whay I believe the President’s term should be on 6 year term period. Once you are in, your good for 6 years, and not focusing on re-election shortly after winning.

  142. JJ - AKA Two Hands says:

    Ultimately, the artificial foreclosure delays are prolonging the housing market’s ills, said Arnold Kling, an economist with the Mercatus Center at George Mason University and formerly with Freddie Mac.

    “The government should be trying to speed foreclosures, not stop them,” he said. “Postponing foreclosures may simply be putting off the inevitable market bottom. We need to remove barriers to foreclosures.”

    In fact, he believes the litany of government foreclosure prevention programs are doing more harm than good.

    “Instead of housing returning to somewhat normal condition by 2014, we’re looking at 2015 or even 2016,” he said.

  143. I think everybody piling into munis is just like what happens when everybody piles into stocks…the guys rigging the game suck in all the late, dumb, hot money then pull the rug out from under everyone.

    Moody’s has put 7,000 municipal issues on downgrade watch as of today. Let jj and all the bulls tell you this is no big deal.

  144. 3b (145)-

    Then, the six-year term should include two years where POTUS is fair game for assassins.

  145. Anon E. Moose says:

    Nom [71];

    As much as I have a libertarian streak in me, you hit the last good reason to oppose drug legalization/decriminalization. Instead of ‘look for the union label’ it’ll be ‘look for the pi$$ cup test label’. When I worked at a NJ power plant, the guys who drove the heavy equipment pushing the coal pile around regularly had a six-pack each for lunch. Any time I had business in the yard, I took care of it before lunch, unless the plant was on shut down.

    You know, I’d love to buy a Ford just on principle, but I can’t bring myself to actually like the damn cars they make. *Shrug*

  146. 3b says:

    #46 Instead of housing returning to somewhat normal condition by 2014, we’re looking at 2015 or even 2016,” he said.

    Change 15 and 16 to 25 and 26.

  147. JJ - AKA Two Hands says:

    HNW individuals are buying individual munis lately. Tax rates are going up, they want to eliminate the 15% rate on dividends and charge medicare tax on interest income. That plus they may up and say lets get rid of muni tax break on future muni bonds. They can’t stop it on existing bonds so the phase out would be as bonds mature.

    That combined with inventory being limited and treasuries near zero and defaults being very low made this investment as close as a sure thing as you can get these last few months. I bought around 150K munis in the panic that are yielding 6% with an average maturity of 20 years and average call of five years . I would need 10% taxable to match that plus that 150K alone is throwing off 9k a year tax free income. In the panic what a deal. Back in January best five year cds were paying 2% taxable, or 1.2% after taxes. Munis were paying 4x taxable.

    Munis don’t need bailing out.For instance stuff like Harvard, Yankee Stadium, MTA,Port Authority, Water Company bonds are all munis and most non GO munis are insured. So you have a sold revenue source to pay off bond, state most likely will step in, bond is insured and bond is collateralized. For instance you could literally sieze the yankee stadium parking lots on that bond and sell them in a default.

    Dirt bonds (bonds for things not built yet), las vegas monorails, bonds to support housing in bubble areas, stadium bonds in small towns, firetruck bonds etc. are the real shaky stuff. Something like NYC Water Bonds are triple AAA, don’t pay your water bill and see what happens, companies like Pepsi and Coke the first bill they pay is water, imagine siezing that collateral and controlling the water supply.

    Imagine a Harvard muni bond defaulting. They run through their whole endowment, all students stop paying tuition, bond insurer fails and the property and buildings harvard owns turn out to be worthless.

    Imagining a Las Vegas monorail defaulting is real easy.

    Comrade Nom Deplume says:
    July 14, 2011 at 2:45 pm

    [108] JJ

    How much muni buying do you think is tied to the notion that the truly wealthy see that they will get stung in the future, and possibly the near future, so they are shifting their assets into tax-free returns while those returns are still favorable?

    I personally think that HNW folks are moving into munis for two reasons: first, the coming tax hits, and second, to lock in preferable returns versus an increasingly sketchy-looking stock market.

    WRT to the safety of the investment, I think that they are banking on the fact that the same folks who will want to rip more taxes from their hides will also bail out states and major munis, especially in democratic areas.

    What say you? Do my theories have any traction or am I a pot-smoking Chrysler employee?

  148. What to do.... says:

    Nicolas #140:

    Sellers are original owners and have been in the home for ~25-years. From what I understand the house is paid off and they’ve already bought another place down South. I don’t think $25k will make or break them. I keep trying to put myself in the situation – if I were them and had a qualified buyers – I’d bit the bullet, fix it and get out ASAP.

    The future at this point isn’t looking up……with the Gov about to default, jobs report in the crapper and housing still in the decline, I’ d be shocked if they didn’t do what was needed to just get out. I’d like to ‘control’ what gets done and how it gets done however I haven’t budgeted $20-25k for this.

  149. JJ - AKA Two Hands says:

    The best fruit has been picked. Invidual muni bond buyers are smarter than muni fund buyers. they were in there buying from Jan to June. Now they have stopped and muni fund buyers are buying.

    There Went Meat says:
    July 14, 2011 at 2:49 pm

    I think everybody piling into munis is just like what happens when everybody piles into stocks…the guys rigging the game suck in all the late, dumb, hot money then pull the rug out from under everyone.

    Moody’s has put 7,000 municipal issues on downgrade watch as of today. Let jj and all the bulls tell you this is no big deal.

  150. Simply Ravishing HEHEHE says:

    Interesting Minyanville Piece:

    “Does the Eurozone have its own American International Group (AIG), or worse, its own Lehman Brothers when it comes to Greece?

    I believe it does.

    Why else would the European Union have bent over backwards to “save” a member nation that: A) accounts for 2.01% of the EU by trade volume; and B) would essentially be like letting Montana go out of business (no offense to the state and its residents).”

  151. 250k says:

    Heard a “news” report on CBS 880 that the former residence of Charles Addams was for sale in Brigadoon. I saw this house at an open house a month ago. What a dump, and you only have to pay $839,000 for the privilege? Who did that Realtor have to bl*w to get radio coverage for this gem?

  152. BC Bob says:

    He [154],

    Take that to the bank (if you can find one that is solvent).

    Take it one step further; how about if the institution with the most exposure, writer of cds, is not a Eurozone bank? Why are the feds swap lines, with ECB, on fire? What’s AIG been up to lately?

  153. Greg L says:

    “Tea party is way too homogeneous even on contradictory positions — impossible for something that is not manufactured under tightly controlled conditions.”

    This is exactly correct. The T-party represents manufactured dissent shaped largely by the same forces who are responsible for the mess that’s on our hands right now. What gets me is the ridiculousness over hollering about no tax increases while the stealth tax that’s been imposed by the fed goes unacknowledged and undiscussed with the notable exception of Ron Paul. On that basis, their “taxes” have been raised several fold even in the last year.

    For the most part, Obama has been far more accommodating to Wall Street interests and the war machine than I’d like, hence the claim that his administration is an extension of the Bush administration has much merit and in that, there’s been much disappointment. Given that, the partisan rancor over “liberal and socialist” policies and Obama attacking this and that is a bunch of diversionary bull designed to cover up the fact that we’ve arrived at a one-party state and the definition of liberal is so much further to the right so as to render it virtually indistinguishable from the normal republican right. Of course, the T-party’s purpose is to be so extreme such that consensus winds up further on the right than it would be otherwise. But it’s not the T-party alone that’s responsible for this as you’ve got an entire right wing media complex (represented by Rupert Murdoch, Limbaugh and others) that would even make Goebbels envious.

    If the issues that face the nation could be discussed in a reasoned fashion, without the “lines drawn in the sand” and the various other hysterics, then we might be able to arrive at a reasoned and reasonable consensus. That’s the last thing that those who are behind this want as the consensus would be left of where we’re at now and that would have far reaching implications for the budget, taxes and everything else.

  154. Simply Ravishing HEHEHE says:


    Things could get worse than 2008 in the next few months.

  155. Simply Ravishing HEHEHE says:

    I am no crazy liberal but I do think it is a bit much to be cutting social security benefits at the same time your Central Bank is artificially keeping interest rates so low that its killing people on fixed incomes.

  156. JJ - AKA Two Hands says:

    That is BS about people on fixed incomes. 2006, 2007 and most of 2008 5% CDs, 2009 20% junk bonds, 2010 8% Investment grade, 2011 6% tax free munis.

    Unless people just let it sit in bank in a money market this is not an issue.

  157. Simply Ravishing HEHEHE says:


    You’re the voice of reason.

  158. Juice Box says:

    Let’s toss some fuel

    GOP Debt Ceiling Ace in the Hole: Obama’s Birthday Bash

    by Keith Koffler on July 14, 2011, 12:09 pm

    Oh boy, this is going to look bad.

    The Republicans may not realize it, but they have an extra point of leverage in the debt ceiling talks: Barack Obama’s birthday.

    It’s on Aug. 4. The president is turning 50. He’s decided to have a quiet celebration with family and a few close friends.


    Instead, the president is planning an extravagant fundraising bash Aug. 3 at the Aragon Ballroom in Chicago, including a birthday concert teeming with celebrities and – for couples contributing $35,800 – a private dinner with the president. All this just one day after the government is scheduled to run out of cash!

    Undoubtably, the sight of so much money getting thrown around and dissolute stars crooning to Obama will make a stirring contrast with a federal government bankruptcy featuring unpaid government workers, seniors and soldiers wondering how they’ll afford the groceries, shuttered national parks, and angry investors trying to cash out their Treasury Bills.

    If the government defaults, you can be sure the birthday bacchanal will do much more to harm Obama’s reelection prospects than help them. Maybe House GOP Majority Leader Eric Cantor, who has been refusing to back down while needling Obama to the extent that the president stomped out of a White House meeting yesterday, already knows this.

    The excitement kicks off at 4 pm with a concert that may feature singer Jennifer Hudson and other A-List stars, according to the Chicago Sun-Times.

    To show that hope and change is for everyone, a pauper section will be included for those contributing a measly $50. But the general admission ticket is $200, and the more you give, the more you get.

    For $1,000, you can sit in the rich people’s area with easy access to alcohol. And for $10,000 you not only get a great seat, but a photo with The Birthday Boy.

    Perhaps Timothy Geithner will be doing stand up comedy at a smaller room elsewhere in Chicago the same night, with all proceeds going to fund the federal government.

  159. Simply Ravishing HEHEHE says:

    $35,800 a couple- unreal

  160. Anon E. Moose says:

    You have no idea how depressing it is to search for sold comps, find them in your price range, only to have further searching reveal a new listing on the same address as the prior sale for new construction at 3x time the last sale price. The market just told you that your price range buys a push-down.

    Million dollar houses for everyone!

  161. sas3 says:

    Nom, “call for an end to ALL of the Bush tax cuts”…

    I wonder why O didn’t choose that option. Breaking a campaign promise? He broke quite a few. Wants to not have a tag as a “tax raiser”? He has it even after cutting taxes. Ego? Doesn’t seem to be type of a guy. Thinks it makes a difference to struggling families? Minor for many, and none for those that lost jobs.

    Really smart people are the ones that make really stupid mistakes…

  162. sas3 says:

    #157… Can’t rule out the possibility that O is a willing accomplice.

  163. Al Mossberg says:



    Im taking a trip down to Charleston in September to snoop around. From what I see online though it isnt promising enough to make a move. Property taxes are half. House prices are much less but not dirt cheap.

    Other downsides for me.

    1. Lack of deep water docks
    2. Commutes to the beach due to traffic
    3. Better fishing in NJ.

  164. greg (157)-

    Welcome to the fray. Nice to see a well-reasoned post by a newcomer.

  165. box (162)-

    Treasonous. Just gut-wrenching and horrible…whether GWB or Bojangles does it.

    We are well and truly fuct.

  166. Al (167)-

    I have tons of family there, lived there myself and did business there for close to three years.

    Don’t do it. Quality of life is great, the beaches are great, the food is great…but this is a place that’s in love with DeMint, the ghost of Thurmond and various jackbooted wingnuts of one stripe or another.

    Oh, and the whole state has a Detroit-like UE rate and collective IQ well below 100.

  167. Al Mossberg says:



    Would never buy anyway. Just curious. Thanks for the input.

    Re: tea party etc,

    The tea party was subverted by the Neocon Republicans
    a) Palin. A money hungry, brain dead idiot.
    b) Bachmann. Zionist neocon wh_re bought and paid for by the AIPAC lobby. She wants to make internet porn illegal which is just a front for clamping down on alternative media.

    I disagree with the slanders to the people who made up the original tea party. They are not racist for calling Barry Soetoro a Kenyan. He is what he is.

    Look. Its all over except the crying now. Fortunes will be made and lost within the next 3 years. Hopefully we can avoid war but thats unlikely. All the chips are in place. Once Quadaffi falls then Syria, Yemen, Bahrain, and eventually Saudi Arabia will as well. The skyrocketing oil prices will marginalize the environmentalists who oppose drilling in Alaska and thus we will begin producing domestically again. This will not benefit the consumer who will be paying 5 bucks or more per gallon but it will make massive profits for the oil companies.

    Nothing will get better until private central banks are eliminated from the world. This is where the conspirators for world g_v get their power. Eventually freedom will prevail but it may not be in our lifetimes. It’s better to lay the seeds of individual liberty in the minds of the youth now but unfortunately Americans generally can see past the next election.

  168. Greg L says:

    #166 sas
    “Can’t rule out the possibility that O is a willing accomplice.”

    I think you’re correct and no, I don’t rule that out. As I’ve said, I think we’ve arrived at one party rule and all the extreme right stuff is a mask to make us believe otherwise. The only purpose is to ensure “consensus” is pushed rightward. Why else would O seriously entertain some of the nonsense that we’re hearing?

  169. Greg L says:

    # 168 There Went Meal

    “Welcome to the fray. Nice to see a well-reasoned post by a newcomer.”

    Thanks and I’ve been lurking for awhile and just decided to post.

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