From the Ledger:
Real Estate May Begin to Come to Life in 2012
The housing market — staggering under a slow economy and still paying for the excesses of the boom years — may start to stir to life in 2012.
But experts warn that a real rebound is still several years away.
“Our outlook is that things (in 2012) will be a little bit better than 2011,” said Patrick Newport, an economist with IHS Global Insight. “But that’s not saying much.”
Blame the economy, with unemployment topping 8 percent. If economic and job growth pick up in 2012, housing is likely to get a boost. But that’s a big “if.” IHS expects the U.S. economy to grow at an anemic 1.6 percent — or possibly even tip into recession as a result of Europe’s debt problems.
“Our view is that the economy isn’t going to grow fast enough to bring down the unemployment rate,” said Newport. “That’s one of the reasons that it will take the housing market another 1 ½ to two years to get back on track and start growing again.”
“People are not going to come out and make the most expensive purchase of their lives if there’s any uncertainty about their jobs,” said Robert Denk, an economist with the National Association of Home Builders, who predicts that home construction won’t return to normal levels until 2015.
And the housing market is still suffering a hangover from the wild times of 2004 and 2005, when questionable mortgage practices inflated prices to unsustainable levels, and allowed unqualified buyers to get into homes they couldn’t afford.
…
Newport expects prices nationwide to slide another 5 or 10 percent in 2012, as the foreclosure pipeline gets moving again, dumping distressed properties on the market. Foreclosed properties tend to sell at a discount of 20 to 30 percent, according to several studies.Lower prices have left many homeowners (especially those who paid high prices at the market peak) owing more on their homes than the properties are worth.
Of course, the lower prices have also made it easier for buyers to afford homes. And once the foreclosure bottleneck is cleared, many low-priced properties will come onto the market, said Patrick O’Keefe, an economist with J.H. Cohn in Roseland, N.J.
“There will be a lot of opportunities for purchasers to get steeply discounted properties,” he said. He predicted prices will stabilize by the end of 2012.
…
During the 2007-09 recession, about 2 million fewer new households than expected were created, according to Denk, the economist with the National Association of Home Builders. And household formation has continued to be depressed since the recession ended, Denk said.After losing their jobs (or their homes to foreclosure), millions of people doubled up with friends or relatives. At the same time, young adults stayed in their parents’ homes longer while they searched for good jobs.
But sooner or later, most of these people will create their own households, ratcheting up demand for apartments and homes.
From HousingWire:
Freddie cuts some refi credit score requirements
Freddie Mac eliminated the minimum credit score requirement for borrowers seeking a mortgage refinance from their existing servicer, as long as they have at least 20% equity in their home, according to guidance released Thursday.
The change goes into effect for any refinances with a settlement date on or after Jan. 5. Previously, Freddie required at least a 620 credit score before allowing such a high-equity refinance to take place.
In October, the Federal Housing Finance Agency instructed Fannie Mae and Freddie to remove barriers to allow more borrowers to take advantage of historically low interest rates through the Home Affordable Refinance Program.
Rates on most mortgage products began 2012 still below 4%. The government-sponsored enterprises removed upfront fees, limits on loan-to-value ratios and certain representation and warranty risk on the old loan file.
The GSEs took other steps since to fuel even more refis. In December, Fannie eliminated the requirement on lenders to determine the borrower’s ability to repay. The reasoning behind the new policy changes was to help more underwater borrowers stay current on their loans. With the latest adjustment Thursday, Freddie is targeting borrowers with high levels of equity as well.
Morning Mike
From Bloomberg:
Hiring in U.S. Probably Accelerated in December
Hiring in the U.S. probably accelerated in December for a second month, pointing to a strengthening labor market heading into 2012, economists said before a report this week.
Payrolls climbed by 155,000 workers after rising 120,000 the previous month, according to the median forecast of 84 economists surveyed by Bloomberg News. The unemployment rate rose after dropping in November to the lowest level in more than two years, the report may also show.
Sustained payroll gains are needed to chip away at joblessness and support household spending, which accounts for about 70 percent of the world’s largest economy. At the same time, the financial crisis in Europe and political stalemate over ways to pare the U.S. budget deficit may be prompting companies to hold back amid concern the expansion will slow.
“It’s still moderate employment growth at a respectable pace,” said Sean Incremona, a senior economist at 4cast Inc. in New York. “We still do see a lot of uncertainty in the background that will probably be restraining hiring.”
The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from increases of 80,000 to 220,000. The U.S. jobless rate climbed to 8.7 percent in December from 8.6 percent the prior month, which was the lowest since March 2009, according to the survey median.
Good Morning New Jersey
From CNBC:
Mortgage Refinancing Plan Would Harm Banks: Dick Bove
Speculation that a new mortgage refinancing plan may be introduced drove bank stocks higher Thursday, but noted banking analyst Dick Bove believes investors actually got it wrong. He told Larry Kudlow that a program like that would actually “harm” banks.
“It’s bad for banks, it doesn’t help them in any way, shape or form,” Bove said.
The speculation was fueled by reports that suggested the White House may be preparing a new trillion-dollar plan to refinance home loans. However, administration officials told CNBC’s Dana Olick that they are not considering a $1 trillion refinancing program.
The fact that bank stocks went up on the possibility of such a program makes no sense whatsoever, Bove said. In fact, he thinks a mortgage refinancing plan would cause banks to lose money.
“If you add up all the sources of profit or loss,” he said, “they lose more than they gain.”
…
“It harms the banking industry,” he said. “All it is, is taking a lot money from one class of people and giving it to another class of people under the theory that the second class of people would spend the money more than the first class.”
And banks aren’t the only ones which could be hurt, Bove said. Only 21 percent of the mortgages in the U.S. are held by the banks. 55 percent held by Fannie Mae, Freddie Mac and mortgage pools, and the remainder are held by investors, he said.
“So the net affect is the people you are taking the money away from are the taxpayers and the investors.”
Who’s going to invest in a home when the state has this kind of debt, Forget about caps local gov’ts are going to get this money from property taxes to pay these exhorbitant public pension obligations, I’ll say it again NJ housing is a losing proposition, Rent here,,,, buy somewhere else. Couple more years My daughter graduates college and I’ll “have to” look for greener pastures. Got no choice as I haven’t accumulated the million plus needed to survive here. Here’s some interesting articles
New Jersey
Christie’s overhaul may not save N.J. pension system. The pension system will again lose ground because the state still isn’t chipping in enough money – and won’t until at least 2018 – the administration recently told Wall Street. The result: By 2018, state taxpayers will begin paying more than $5 billion a year for pensions, roughly 10 times higher than the partial payment being made in this year’s budget. The tab for local taxpayers will rise by about $600 million by 2020, estimates show. Experts say taxpayers could be hit with much higher pension bills if the state doesn’t pay what it promises – or if it doesn’t make as much as the 8.25 percent it expects to earn each year on investments. NJ.com. October 23, 2011.
Unions sue New Jersey over pension reform. Globalpensions.com. September 2, 2011.
N.J. Teachers union denies Democrats endorsements. humanevents.com. August 15, 2011.
Governor Christie signed into law the measure to require public employees and retirees to pay more towards health care and pensions. LATImes. June 28, 2011.
Tasty weekend treat? Balthazar Bakery
Now if only Pat LaFrieda over in North Bergen would throw me a chop once in a while.
Christie’s “solution” on pensions is disappointing….even Gov. Cuomo knows that all future state employees will need to go into a DC plan if you have any hope to save the DB plan. On the other hand, given the “low” NJ tax rate, you can probably defer the crisis a few more years by ending the Whitman 30% reduction implemented in the 1990’s and funneling that money to the pension funds.
Good morning Mike!
Now get out before Mark gets back.
Here’s some more predictions from Economic Populist which I found interesting. I don’t think this guy is actually an economist but he follows the economic news that affects the average person like a hawk. Unlike most of us, he seems to have the math background to understand and even argue with government reports and academic studies.
“The Obligatory Economic Predictions for 2012
A new year, a new day and a flurry of economic and financial predictions. Who are we to buck the trend? Yet, buck the trend we shall. While many news articles claim jobs will appear in 2012 and the economy is on the mend, uh, we don’t think so. What we have is America stuck in a Labrea tar pit of bad policy and a never ending middle class head shrink.
…
Jobs
We believe there is a statistical shocker coming in February. The BLS will incorporate the 2010 Census data in their population controls and all hell will break lose on the unemployment statistics. This will be the January 2012 unemployment report and Census data is used for the household survey. …
… A couple of points. Clearly there is no shortage in engineers and computer scientists. Articles about Google interview questions generate massive web traffic. This is astounding considering Google is a tech company and the process is a glorified hazing ritual. If there was a shortage of technical people, no way could a company reject 99.95% of the people who apply.
…
The Long Slow Dribble to 3rd World Status
Expect the United States to lose further in global economic competitiveness and world economic domination. With a Congress who can only pass policy and bills written by corporate lobbyists and a group of multinational corporations not giving a rats ass about America, the windows of opportunities for Asia to economically supplant the United States are in full force. While America pours trillions into being the world’s cop, our government seems to have no qualms about giving away large chucks of our economic prosperity as token gifts, all at the slightest hint of some desired foreign policy agenda which never really materializes.”
http://www.economicpopulist.org/content/obligatory-economic-predictions-2012
Funnel 6 Unfortunately the only way out is for the state to claim bankruptcy which will probably never happen, then all these golden pensions would have to be renegotiated
Kate 9 Who’s Mark?
#7 grim
I thought you didn’t like Englewood? I think I’ll drive past today for Breakfast, I usually stop once a month to pick up some treats for the office. It beats Dunkin.
#6
Did they not passed a law of 2%max increase in property tax?Anything above must be voted by the residents?I am sure they will get it somewhere else,property tax is capped.
If there is loop holes to get through this.is a different story
Chritie’s cap was as leaky as a Halliburton deep see oil well. The 2% cap does not include increases for pension payments, health insurance increases and towns can apply to be exempt anyway. Christie wanted a 2.5% cap with no exceptions. The Democratic assembly suggested 2% with the exemptions. So pretty much, what the cap does is limit raises to 2% but does not impact changes to benefits which we all know are the leading driver to the increases. There are a lot of things I don’t like about the fat man, but you can’t blame him for the leaky cap. I’m also glad he pulled the plug on the rail tunnel due to the unfair funding requirements (NJ would have to pay for all overruns), but not happy about what he did with the extra money (more to the roads). Like so many promising politicians, he has opted to follow the party line to obtain greener personal pastures. Unfortunately, at the demise of everyone else. On the bright side, he saved us from 4 more years of Corslime.
Unemployment numbers look pretty peachy. Here comes Obama!
Employment Situation
Released on 1/6/2012 8:30:00 AM For Dec, 2011
Prior Consensus Consensus Range
Nonfarm Payrolls – M/M change 120,000 150,000 110,000 to 200,000
Unemployment Rate – Level 8.6 % 8.7 % 8.5 % to 8.8 %
Average Hourly Earnings – M/M change -0.1 % 0.2 % 0.1 % to 0.3 %
Av Workweek – All Employees 34.3 hrs 34.3 hrs 34.3 hrs to 34.3 hrs
Private Payrolls – M/M change 140,000 160,000 130,000 to 210,000
There’s approximately 47000 malls in the US multiply that by four Santas at each one and there’s your answer
I am playing around with form 1040
A couple retiring at age 62 that has an income from SS of $2200 a month and draws $1000 a month on 401k a total of $38,400 in annual income will have no Fed tax liability.
And A couple retiring at age 62 that has an income from SS of $2200 a month and draws $2000 a month on 401k a total of $50,400 in annual income will have a $753.00 in Fed tax liability.
This numbers are do able living in a low tax state
Can you imagine what this amount can do living in Mexico?
#16 Lib
I forgot about those provisions
A couple of good sushi places in Englewood.
Average hourly nearnings -.1 to .2
Average workweek 34.3 to 34.4
Workweek is an indicator for pick up on demand
Chairman O wants a 1.5 billion teen summer jobs program to create 180,000 summer jobs. Assuming it works, and full time for 10 weeks, that’s about $22 per hour.
6. Funnel,
Couldn’t agree more. Stay mobile.
we went from losing 800K jobs to gaining 200k. there has been a slow but steady positive trend in jobs since the Recovery Act was implemented. that is hard for some to swallow and the reasons for it can be argued but if you went long jobs at -800K you’d be a happy guy now.
TrimTabs only sees 38k jobs growth based on tax data.
http://trimtabs.com/blog/2012/01/05/u-s-economy-adds-only-38000-jobs-in-december-reports-trimtabs-investment-research-real-wage-and-salary-growth-turns-negative-net-of-inflation-in-december/
Draw 1k a month will be very hard to do in a 401k. For estate purposes you want 100% of your money out of 401K by time of death via roll overs into IRAs and withrawls.
You want to draw down taxable savings first then move to min withdrawls from tax free savings.
If you are in good health and have good genes you would be nuts to touch SS at 62. At best I would say one spouse collects and other spouse holds off to 67.
A couple retiring at 62 most likely would be spending their non interest bearing cash first, then selling non income producting stocks, then selling low yielding bonds, then moving onto to higher yeilding stocks and bonds then moving to 401K money then putting in for ss at 67 then moving to mandatory withdrawls form IRA.
But bottom line the whole retire at 62 is a pipe dream. A 62 year old male most likely has a 57 to 61 year old spouse who is not eligible for SS. That plus demographically people are having children later in life. The norm has become for college educated moms to push off babies till their late 30s or even early 40s
Most 62 year old males today will have kids in college or hs when then turn 62. My friend for instance who got married at around 44 to a 34 year old wife will be 52 when his his oldest starts kindergarten and he has a stay at home wife. My cousin got married at 40 and had a kid at 41, 43 and 45. She is currently 53. Her husband is currently 62. When the youngest one graduates from college her husband will be 76. My cousins mother and father who are both in their mid 80s are healthy as an ox. She will easily live to 100. Retire at 62 is insane. Those days are over.
yo says:
January 6, 2012 at 9:18 am
I am playing around with form 1040
A couple retiring at age 62 that has an income from SS of $2200 a month and draws $1000 a month on 401k a total of $38,400 in annual income will have no Fed tax liability.
And A couple retiring at age 62 that has an income from SS of $2200 a month and draws $2000 a month on 401k a total of $50,400 in annual income will have a $753.00 in Fed tax liability.
This numbers are do able living in a low tax state
Can you imagine what this amount can do living in Mexico?
seif [24];
has been a slow but steady positive trend in jobs since the Recovery Act was implemented.
You just keep telling yourself that. Only problem is that the data doesn’t agree. http://pjmedia.com/instapundit/wp-content/uploads/2011/12/romerbernstein1.jpg
One more thing as you crow about 8.5% unemployment: the denominator excludes people who have ‘left the workforce’ for whatever imagined reason. If the number of people who have ‘left the workforce’ since January 2009 were to return in the current economy, unemployment would be above 11%.
You’re entitled to your own opinion, just not your own reality.
Wow. The Boston Globe has endorsed Huntsman. it will be interesting to see if he can pull off a surprise upset of Romney. Huntsman v. Satan-torum would be an interesting SC race.
“home construction won’t return to normal levels until 2015.”
Whenever I see references to a “return to normal,” I wonder what they mean by that. Do they mean a return to the long-term normal that spans decades or do they mean the normalcy of the last bubble, which was not at all normal.
#26 JJ
No difference between 401k and IRA.Both need a benificiary.Drawing large amount will trigger a tax.Waiting for SS at 67 with a lifespan of 68 don’t make sense.I will draw SS first, the rest I can name a beneficiary in time of death.
(24) seif
Post hoc ergo propter hoc? I’d like to see the supporting data.
(28) shore,
The Globe writers hated Romney. And it was a given that they’d endorse the most liberal candidate who wasn’t Romney.
27 – you are projecting (in the psychological sense); “the data doesn’t agree?”
that is a made up chart…the “jobs without stimulus” numbers is “your own reality.”
like i said…hard for some to swallow.
Lending standards are just so strict now. Lending institutions make it so hard just to get a little walking around money.
http://www.nj.com/news/index.ssf/2012/01/nj_woman_who_fraudulently_obta.html
31 – i did not say that it was BECAUSE of the stimulus. i used that as a time frame reference to look at the trend from that point.
Seif [32];
That graph (including the “Without Recovery Plan” line) was from Obama’s administration as they projected the future horrors without his stimulus plan. The only data added to it were the red dots, the subsequent reality with the stimulus plan, which was far worse than they predicted it would be had we done nothing at all.
There was no stimulus plan. The dolts needed to hear something akin to the monkey pulling the lever for a peanut, so they called it middle-class blah, blah muckity muck. The $1,000,000,000,000 was a gift to the public sector for assisting in the ruse.
For the record, I agree with Gary.
JJ Drawing over $32,000 a year in SS will trigger a tax.This can be substantial if total income including investments are included.
My intentions is, find away to draw the max and not pay any federal income tax
Base Amounts
The following base amounts are used in figuring your taxable Social Security:
Filing Status Base Additional
Single $25,000 $34,000
Head of Household $25,000 $34,000
Married Filing Jointly $32,000 $44,000
Married Filing Separately $0*
Qualifying Widow(er) $25,000 $34,000
Taxable Social Security Benefits
If your provisional income is below the base amounts for your filing status, then your Social Security benefits are completely non-taxable.
If you provisional income is between the base amount and the additional amount, then half of your Social Security benefits over the base amount are taxable.
If your provisional income is over the additional amount, then $4,500 (or $6,000 if Married Filing Jointly) plus 85% of your Social Security benefits over the additional amount are taxable.
The taxable portion of your Social Security benefits cannot exceed 85% of your total benefits.
To phrase this differently, Social Security benefits below the base amount are not taxed. Half the benefits between the base and additional amounts are taxed. And 85% of the benefits above the additional amount are taxed.
Yo,
Do what I plan on doing. Move to a 3rd world country like Belize. Rent a crap shack, fish, garden and you only need about a fifth of what you typically need to retire comfortably here. Honestly, get far, far away from the city and there’s nothing to spend money on anyway. If you can manage to put away about 500K, you’ll never have a worry in your golden years in the 3rd world. Retire in India and you’ll only need about 100K. I love bananas!
The markets are pretty much ignoring the jobs numbers today for two reasons, Europe of course. and they know much of the December increase was seasonal hiring for Christmas. 50k to 75k of that 200K was retail, bar/restaurants/Fed Ex-UPS etc. Most of those positions will be gone by the end of January, and we will be back to just another year of slogging, 100-150k a month increases.
re #62 – Retire at 62 is insane. Those days are over.
Not if you work for the government.
“That graph was from Obama’s administration”
http://pjmedia.com/instapundit/wp-content/uploads/2011/12/romerbernstein1.jpg
Ouch, Seif takes a hard landing — more like crash and burn.
#39 LIb
That is exactly the reason I am playing around with the numbers.At $36,000 a year will give me a good life in a third world without trigerring a Fedderal tax at $56,000 a year,I will be a king trigerring a $750.00 Fed tax.
This will equal to a person working his butt earning $75,000 before tax.I am there making equal amount doing nothing and it is sunny 365days.
Nice to be a dual citizen
I think if it is out of the 401k and into a IRA at the time of your death you can instead of liquidating put the IRAs in each of your grandkids names and do the distributions over their life time. You could stretch out your IRA to 150 years or so this way, compound interest.
I am not actually planning on spending much of my 401K in retirement. I am not yet 50 and already have 650K in my 401k. Even if I stopped putting in now and started drawing down at 67 my planned retirement age would be hard to use it up. But since I plan on putting in 24k a year from 50 to 67 it should be even bigger.
yo says:
January 6, 2012 at 10:03 am
#26 JJ
No difference between 401k and IRA.Both need a benificiary.Drawing large amount will trigger a tax.Waiting for SS at 67 with a lifespan of 68 don’t make sense.I will draw SS first, the rest I can name a beneficiary in time of death.
I bet it was fun going back to their house after this interesting dustup:
http://sports.yahoo.com/blogs/highschool-prep-rally/top-recruit-mother-upstages-commitment-national-tv-140949747.html
39. My old buddy retired to India. He loves it. Single man divorced. Ex-IBMer with a pension. One of the brighter people I had the pleasure of working with. Said he is never coming back to the United States.
My Uncle always claimed he beat the system. He immigrated here after a stint in London laying bricks and became an MTA bus driver. He then basically drove a bus up and down Broadway on the same daytime route for 20 years and then back home on the Subway (free if you worked for MTA) to his 3 br, 1ba apartment across from the golf course in the Bronx. After his 20 years were up and he hit 50 years old he packed it up and moved back to Ireland in the early 1980s with a nice pension and tons of savings since he and his wife both worked even with 4 kids and saved every nickel and never bought a house in the NY suburbs. Heck he was cheap he drove the same beat up Volkswagen Beetle he bought in the early 1960s for 20 + years, car was stolen a dozen times while parked in the Bronx and each time it was found even more beat up and he never fixed it, just drove it with dents, missing floor, ripped seats, and broken AM radio etc. Instead of spending his money here to live it up he built a big house in his hometown back in Ireland for what would have been peanuts perhaps $30k in Ireland for the lot and house. When he finally turned 62 he then started collecting social security too. He spent 27 years retired in his big house with no property taxes, little income taxes, enjoying life, golfing, traveling around the world and coaching young kids all thanks to the MTA Pension + Social Security and he was also covered by Ireland’s universal heath care.
Those days are long gone. None of us get pensions unless we work for a few private companies that still have them or the government, we have to save every nickle and invest it wisely and if we are lucky we can retire around 67 years old (pehaps moved back soon to 69) so we can perhaps enjoy a few good years before we kick the bucket.
Con’t [35];
You wouldn’t believe what a hard time I had finding an original copy of that graph. :-P Down the memory hole at recovery.gov, I guess. Fortunately, Zandi kept a copy of the Romer and Bernstein report on his website. (http://www.economy.com/mark-zandi/documents/The_Job_Impact_of_the_American_Recovery_and_Reinvestment_Plan.pdf) Fig. 1, p. 4 if anyone is interested.
36 – Gary
Other than the public sector, temporarily, who in the middle class was helped by any stimulus package dreamed up in recent years?
I’m one of the dopey middle class suckers that bought a house in 2006. So I heard about Obama’s Making Home affordable program. Thought maybe somehow that would help me reduce my payments so that I could get my head above water and pay down some of the principle and stay in the house. I was not eligible though. The Credit union never sold my loan to Fannie or Freddie so it was up to me to negotiate with the CU. I called the government hotline and they said any aid was going to people in danger of foreclosure. Crazy. They actually told me I had saved too much money and that I would have to stop making payments on my mortgage to be eligible for aid. So whatever, I didn’t have much faith they would help me anyway. What a waste of time. I just had to refinance traditionally and thankfully the CU let me refinance my principle even with negative equity. It took months of calling them day after day after day to convince them. I wouldn’t take no for an answer.
I don’t know anyone else in my situation that their program helped. It was my own stubborn detirmination.
Brian [50],
There’s no such thing as a stimulus package, aid package, assistance package or lifeline. It’s every man and woman for themselves. The American way is “I got mine and f&ck you.” If you don’t fight for your piece of existence, absolutely no one else will do so for you. You have to carve your path with fury and determination in the manner you described. Everyone, and I mean everyone has their own agenda suited specifically to their wants – not needs, but wants. There was a time in this country when assistance was available for those that truly needed it out of compassion; now, it’s based on posturing and personal gain.
Most govt and state retirees do not have pensions tied to COLA. Their pension are fixed. My nieghbor who was a cop retired for instance at 44 on a 70K a year pension and moved down south five years ago. Already we heard from his wife, rising RE taxes, rising gas prices, rising food prices etc. already have put a small dent in their lifestyle in retirement. 30 years from now 70K will be nothing. They are not putting into SS as they are not working so it is all that cop pension and free medical.
They have HUGE inflation risk being on a fixed pension. What is inflation heats up and we go back to days of 8% raises at work. People currently working will see salaries rise to match inflation raise, he will be fixed. With so many years out of workfore at 55 how can he look for a job. He will be driving a cap. However, if we have deflation he will be a king. But delation is usually short lived, inflation is the real killer.
Juice Box says:
January 6, 2012 at 10:38 am
re #62 – Retire at 62 is insane. Those days are over.
Not if you work for the government.
Change we can believe in….
http://www.flickr.com/photos/matins/2189463280/
Is he Indian? Otherwise I don’t see attraction of India.
SX says:
January 6, 2012 at 10:59 am
39. My old buddy retired to India. He loves it. Single man divorced. Ex-IBMer with a pension. One of the brighter people I had the pleasure of working with. Said he is never coming back to the United States.
Shore Guy says:
January 5, 2012 at 8:17 pm
At $.40 a share, I think the company is worth something like $115mm. Why someone has not swooped in to buy the place, shut it down, and sell off the pieces amazes me.
shore: basic corporate finance; at this juncture (subject to bankruptcy proceedings) the bondholders effectively own the assets of the company, as a result, the $0.40 is almost assuredly worthless, without any power ownership
power of ownership
Mike #11
I just know one thing,,,,, I’m not going to be the one paying those pensions,
I’ve accumulated enough to live comfortably outside of Jersey but not in NJ. What will last me 20 years somewhere else will get me by for about 10 here in Jersey. So like many of the other so called “middle class” I will be taking what I have and looking elsewhere. My sisters left this state years ago, We have our friends here but their future here is uncertain also, So other than my present job & grave tending, I have no real reason to stay. Get my kid through college (couple more years), and maybe it will be time to search other opportunities. I’m sure I’ll work the rest of my life but after 24 years in the same company, I starting to think about what I want to be when I grow up.
39,
Libtard,
Being a Gringo in Latin America isn’t working out for many American expats. Look at Lake Guadalajara in Mexico. The innocents are getting slaughtered with the guilty. Might as well tatoo a dollar sign to your forehead.
51,
Gary,
You are developing into quite the orator.
“If you don’t fight for your piece of existence, absolutely no one else will do so for you”
Quote of the day.
“#39 LIb
That is exactly the reason I am playing around with the numbers.At $36,000 a year will give me a good life in a third world without trigerring a Fedderal tax at $56,000 a year,I will be a king trigerring a $750.00 Fed tax. This will equal to a person working his butt earning $75,000 before tax.I am there making equal amount doing nothing and it is sunny 365days.”
Yup. I have a couple of friends who live in Asia. And they tell me that unless you aim for the expat life, $36,000 gets you a good deal. Works out like this, about $700 – $800 a month for rent (house in the burbs or 1-2 bedroom apartment more central) about $300 – $400 for food assuming you eat out every single night (and you will not), another $300 – $400 for all utilities (cellphone, water, electricity) and a maid/cleaner. Put aside $300 for health care every month. (Insurance is bad so you self insure, but many procedures are a fraction of US costs). Then a thousand bucks on stuff you can move around (buy a car-$400/month amort? clothes-$200? vacation). Then a couple hundred bucks or more on stuff – movies, electronics, etc.
JJ #52
I have to comment on your poor 44 year old retired cop friend, If he were in the real world he would still be working and hoping that he could scrape enough together to have 50k a year from 65 to 85. I have no sympathy for these guys that are bitching that the 3 million their guarantee’s in pension and med ins. if they live to 80 is not going to be enough to live. Poor F**cker’s.
I know some people in Thailand and in Malaysia. Both pretty much retired in their early 40s. Both are from the UK.
Mexico is scary. I don’t plan to live anywhere near a city nor do I plan to live in a community designed to steal money from expats. I would rent there a while first, make friends with the locals who can share with me how the system works down there. I do not plan to live extravagantly nor spend a lot of money. I am not your typical gringo. Heck, maybe I’ll drive my 95 Civic there to really fit in.
WASHINGTON (AP) — One in eight people earning at least $1 million annually was audited by the Internal Revenue Service last year, making them far likelier to be examined than those making below $200,000, according to IRS data released Thursday.
Just 1 in 100 individuals earning less than $200,000 had their income tax returns examined, the IRS said.
In recent weeks, President Barack Obama and congressional Democrats have sought to boost taxes on the wealthy as a way to pay for jobs programs, a theme they are expected to continue in this presidential and congressional election year. IRS spokeswoman Michelle Eldridge said the growing portion of millionaire earners’ returns audited is not related to politics.
Sure. And if Auntie Em had b@lls, she’d be uncle Henry. And how does one go about paying for a “jobs” program? What jobs are they talking about? How do you force a small business owner that’s crushed by taxes and regulations to create a job?
[62] “Mexico is scary.”
Cue the retort that “Mexico is a beautiful and vibrant country . . .”
If we are talking Kodak, bondholders and retiree obligations will eat up everything in a BK. Me thinks payout may be good on bonds. I see bond traders buying from retail getting out at 10-15 cents on dollar and selling at 25-50 cents on a dollar. Half of purchased went into inventory and not offer for resale. Which means funds are predicting at least a 25 cent pay out if they refuse to sell bonds they bought at ten cents for less than 25 cents.
chicagofinance says:
January 6, 2012 at 11:37 am
Shore Guy says:
January 5, 2012 at 8:17 pm
At $.40 a share, I think the company is worth something like $115mm. Why someone has not swooped in to buy the place, shut it down, and sell off the pieces amazes me.
shore: basic corporate finance; at this juncture (subject to bankruptcy proceedings) the bondholders effectively own the assets of the company, as a result, the $0.40 is almost assuredly worthless, without any power ownership
How is this much of a cost savings? A dirt cheap two bedroom REO in AZ, Florida or Vegas and tax advantage income stream is about same thing.
For instance I could buy a nice two bedroom place in a warm climate in a state with lots of distress properties for like 40K cash. If I live there 51% of time no state income tax. I could then even keep my current home and live there too.
At some point we will have obama care, lots of retirees have munis, Ibonds, treasuries, dividends or cap gains at 15% as primary source of income, all save taxes. That mixed with SS and a no tax state really leaves no reason to go abroad unless you want to.
unless you aim for the expat life, $36,000 gets you a good deal. Works out like this, about $700 – $800 a month for rent (house in the burbs or 1-2 bedroom apartment more central) about $300 – $400 for food assuming you eat out every single night (and you will not), another $300 – $400 for all utilities (cellphone, water, electricity) and a maid/cleaner. Put aside $300 for health care every month. (Insurance is bad so you self insure, but many procedures are a fraction of US costs). Then a thousand bucks on stuff you can move around (buy a car-$400/month amort? clothes-$200? vacation). Then a couple hundred bucks or more on stuff – movies, electronics
#60
That is where I am going,Asia.An executive makes $2000/month before tax and I am bringing in $4000 a month tax free doing nothing.Why stay here?
Ok.$750 fed tax on the $4000 per month
Gary – 51
“I got mine and f&ck you.” If you don’t fight for your piece of existence, absolutely no one else will do so for you.
Yeah that is a good quote. But I mean the point of my post was to say that, if I’m in good health, I shouldn’t expect anyone else to take care of me. Especially the government. I don’t have a lot leftover when I’m done paying bills and taking care of my wife and kids but, people should still feel a moral duty to help the needy. When I came out of the public school system with my brain full of the anti-business, pro environmental bleeding heart crap they filled my head with I was angry at every injustice in the world. But as time went on I realized, I’m in no position to donate my time, money or anything else to charity unless I was able to take care of myself first. And so that’s what I teach my kids. You have to learn to take care of yourself. I won’t always be there to help. It’s my job as a father to teach them how to do that. I tell my son, if that big kid on the playground took your toy dump truck, then what are you coming to me for? Go get it back.
Don’t get so pissed off about stupid crap the government does. Most of it is sh1t we have no control over anyway. The anger is just energy wasted. And save your energy, you’re gonna need it to take care of yourself.
Pittsburgh Steelers running backs coach Kirby Wilson was “severely burned” in a fire at his townhouse, according to authorities in the suburb where he lives.
The fire began at about 2:40 a.m. local time, according to a Cranberry Township, Pennsylvania, statement. Wilson, 50, was taken to University of Pittsburgh Medical Center Cranberry and then flown to UPMC’s Mercy Hospital in Pittsburgh. The cause of the fire is being investigated, according to the statement.
The Steelers, who went 12-4 during the regular season, play at the Denver Broncos in the first round of the National Football League playoffs on Jan. 8.
69
Brian,
I believe the reason the government, at all levels, is so out of control now is because not enough people have been paying attention or caring. To just let it continue to happen is guarantee ruin for the and next generations. The individual people have plenty of control; all they have to do is assert themselves.
Gary, you have been on fire lately. Your posts have been spot on. Keep them coming!
Brian,
But I mean the point of my post was to say that, if I’m in good health, I shouldn’t expect anyone else to take care of me. Especially the government.
I understood your premise. I agree. There was a time, however, when there was balance and common sense. That’s gone and I don’t know if we can turn the ship around.
[34] seif,
Thanks for clarifying, but you must admit that the reference to the poorly-named Recovery Act was misleading.
But the question remains—to what do you attribute the recovery (such as it is) thus far? More to the point, has this administration done anything to improve things or has all the effort been for naught, such that we’d be in this same position (or better) had Obama done nothing?
As an aside, Sen. Corker was on this morning and was asked if he would give O credit for the downtick in U3. He smirked, and said no, that no one (and he meant no one, not O, not Congress, no one) in DC deserved any credit for it.
Well, off to Philly again today for an evening at the Kimmel Center, a dinner party at the consulate, then overnight at the Union League.
So this is how the one percent lives. I like it.
All Hype,
I’ve been living on chicken, fish, fruits and veggies while biking 15 miles per week for weeks now. I think the two brain cells I have remaining stopped fighting for a while! LOL!
42 – i know whose chart it is – it says roemer/bernstein on the link…it is still hypothetical projections as to where they thought we would be without the stimulus. no one knows where we would be…their estimates were wrong. the reality is jobless claims down, job creation up.
http://wamo.info/pa/120105_jobs.jpg
4k a month? I would assume in good parts of jersey most households make 4k a week.
yo says:
January 6, 2012 at 12:45 pm
#60
That is where I am going,Asia.An executive makes $2000/month before tax and I am bringing in $4000 a month tax free doing nothing.Why stay here?
“How is this much of a cost savings? A dirt cheap two bedroom REO in AZ, Florida or Vegas and tax advantage income stream is about same thing.”
It’s difficult to capture everything in a few numbers but there are noticeable differences (some bad, some good) between living in a dirt cheap two bedroom in Florida and living in a reasonably priced two bedroom in the middle of Bangkok (or Manila). A $5 lunch in Bangkok is much better than a $5 lunch anywhere here. A haircut is $5. Then you can hop on a decent airline for a $100 to take a two hour plane trip to the beach of your choice.
Many of the pluses have to do with the fact that the fixed cost of living in these places really comes down to about $1700-$2000 a month (rent, own car, utilities, food, clothes, maid) and the rest you can play with depending on how good you want your life to be.
Seif,
Quit kidding yourself. The more you open the mouth the sillier you sound.
JJ [66],
Bingo.
@ Lib, Duck, yo
Pretty low expectations if you’re planning on a $36k/year retirement simply to avoid paying US federal income tax. If that’s what you want though, it can be done without bugging out to Belize or India or Thailand.
A little “rule of law” is worth paying some taxes. Do you honestly think a farang doesn’t pay “taxes” of a different kind?
74 – I don’t care to make a guess as to what the “recovery” is attributed to. I don’t even know if I would call it a recovery but it is a slow drift in the right direction. I saw Corker. I don’t expect him to give O credit (if any is due) in an election year but Corker is part of the problem but was talking as if he was just an observer.
Duck [79],
A $5 lunch in Bangkok is much better than a $5 lunch anywhere here.
Post-retirement your time is worth squat. Learn to cook. You can make yourself a better lunch for $2 than the $5 you spend in Bangkok.
I plan to retire in 3 yrs when I turn 62. We’re vested with 3 small private sector pension plans plus IRAs and 401k. Nothing like being a well prepared locust right Moose?
JJ, have you been to florida? The good parts are not that cheap, and the cheap parts….lets just say it’s like you died and were not a good person. Rednecks, crime, visually unappealing, old people, McDonalds is the finest dining option around, hurricanes, flash flooding, high insurance rates, no thank you. If it’s 40k, it’s 40k for a reason, palm beach county properties not in the hood are still trading for a good price if you want to be either by the beach or gated club community you’re looking at the minimum 250k. I assume this is still true for Lauderdale, naples, etc. What you can do is a buy a formerly million+ dollar home for 600k, on the low end demand is still there.
Nom [75],
Well, off to Philly again … So this is how the one percent lives. I like it.
1%ers have to go to Philly? Count me out. ;-)
Nice one Punch. It could be worse, he might have had to go to Boston.
Funnel 57 Where did your sisters wind up going?
JCer since I’m currently in fort myers for work and drove from miramar yesterday I can confirm that florida statement is true
Me I’m either doing rural colorado, pacific northwest or utah. Depends on how much I’ll miss the ocean
Fing meetings. All people want to do is meet around here. How am I supposed to do all of my social networking if I am meetings all day?
Punch
Did my time paying taxes.That is why some pay loads of money to financial advisers to save loads in retirement.I just gave you a tip for free.As per $36,000 tax free is equivalent to $45,000 on workers salary before tax.And what it can buy outside the US is a huge difference.As I exampled a executive gets paid $2000 a month before tax and lives a very decent life,with a driver and a live in maid.You will not be driving a BMW but have to live driving a Tercel.The houses are made of concrete,better than the sticks here.Even Jim Rodgers lives in Singapore and will not come back to the states.
$36,000 tax free is equivalent to $45,000 on workers salary before tax that is federal tax,Add state and the rest equals to $50,000 hard work.
This one is in the Hartung section of Wyckoff. I was in it a little over a month ago. The realtor was very nice so I gutted him quickly as to not prolong the agony. It’s a snapshot of 1965 inside and has a septic. It’s one block from Franklin Lakes. Price just dropped to 739K and counting. It needs work but we’re sniffing a “6” handle in the land of the 1% ers.
http://www.priv.njmls.xmlsweb.com/Reports.asp?CMAID=13193746&Date=1/6/2012&Time=12:06&ReportID=c_full
Tick… tick… tick… tick…
Just think of the wealth of stories a JJ retirement to Bangkok would create.
The argument that this employment level can sustain a support level for housing prices is ridiculous. As this graph shows unemployment is 50% more than 1992 and 100% more than 1998, the range of years that stabilized housing prices.
http://1.bp.blogspot.com/-8W0Yxa_IArM/TwcsTmkEX1I/AAAAAAAAL0U/7TgSXMAIfKw/s1600/EducationUnemploymentDec2011.jpg
Notice that this is true for all educational levels, in case you believe the higher educational level in NJ will work wonders.
You have to remember,this is retirement.Where you need to be able to afford someone to take care of you without throwing you into a nursing home at a middleclass income in the states.I know JJ will be able to afford a one on one nurse 24 hours a day.Most of us will not.
libtard from yesterday
hold your horses buddy-it’s not personal. I am sure your decisions are justified by some priority formula you are using.
Before arguing about schools, prices etc you need to know that Mcnair is magnet not charter and therefore it cannot be the best charter in NJ. By the way it is not the best magnet either–actually is one of the worst–although better than Glen ridge.
——————————————–
PG tips – What’s your beef? Name me some other towns with better schools, shorter commutes and better pricing. Towns where my child would not have to wear kevlar to walk to school safely. Or do you suggest I move back to Jersey City where my neighbor’s derelict 4-year old named Bebo nearly burnt my brownstone down when he lit his mattress on fire when he should have been in the free head-start program. Who cares if McNair, the best Charter School in New Jersey is there. It doesn’t mean krap to me if my child is raised in a town where 70% of the population don’t even attend school frequently enough to graduate. I’m all ears buddy.
Mike #88
One lives in PA, Still cheaper than here , The other moved to Spain,,, she’s lived there for the last 20 years. Lives right in the center of Madrid, Been there a couple times Very nice
isn’t it odd that some people here believe that prices stabilized when everyone plans retirement everywhere but NJ? who is going to buy the overpriced high taxed TLCs of the retiring boomer hordes?
Tick… tick… tick… tick… (thx garry)
Must people don’t end up in a nursing home they just die. My uncle died at 78 after a one month vacation partying night and day with a much younger women of a massive heart attack. Smoke, Drank, Partied. Heck I spent a few days with him in 1996 when he was already 72 and said he was cutting back, first day he and me split a dozen eggs, pound of bacon and a pound of sausauge breakfast he called a fry, all in one pan with the grease and a two litter bottle of soda. I said I thought you were cutting back, he said I am, no more alchol at breakfast anymore. I only drink beer at lunch and no more than 12 pints and at dinner I allow myself all I can drink hard alchol and beer and food. Never sick a day in his life. Had such a massive heart attack out of blue, dead when he hit sidewalk. Was right in front of doctors office where he parked his car, Doctor saw whole thing and just called hearse. yes he could have lived to 90 if he took care of himself. But he moved out of home at 14, and drank and smoked and ran around with women for 64 years.
yo says:
January 6, 2012 at 2:31 pm
You have to remember,this is retirement.Where you need to be able to afford someone to take care of you without throwing you into a nursing home at a middleclass income in the states.I know JJ will be able to afford a one on one nurse 24 hours a day.Most of us will not.
When someone is underwater or has no equity in house at retirement hard to sell and move. Better to pay one thousand to a lawer and hire a home appaiser and grieve your taxes, raise your insurance deductables, insulate house and get a wood burning oven.
The pipe dream of moving to Florida was based on 200K mortgage left on a 800K house, sell house pay off mortgage buy 200K house in florida cash and put the remaining 400K in tbills and munis at 6% is over.
PGtips says:
January 6, 2012 at 2:58 pm
isn’t it odd that some people here believe that prices stabilized when everyone plans retirement everywhere but NJ? who is going to buy the overpriced high taxed TLCs of the retiring boomer hordes?
Tick… tick… tick… tick… (thx garry)
funnel, madrid is a great city but it’s expensive!
CNN Article Brutal losses of local and public jobs
In NJ We have 7 state workers doing 1 mans job so we can afford the cuts. Let the remaining guys do more with less just like the private sector has been doing for years now. Last night there was an article on fox news that police stations would be closed 16 hours a day, to save money. I say lay abunch of those bums off too. All I see police do today is write tickets for offenses like seat belts and broken lights (I call this legalized extortion) and sleep on the side of the highway at construction sites for overtime. Oh yea they do protect the scumbag politicians that pay there salaries from the general public, You ever see Corzines inauguration photo He was guarded by several state troopers as he walked down the isle, Funny thing is there is a photo out there that has Hitler at some ceremony and the SS guards were in the same formation around their leader. Wish I could find to two photos to post.
PGtips & JJ,
Exactly. Who’s left? And at what price? Better question is, why bother? A 500K plus mortgage with 12k in property taxes, playing Russian Roulette with job prospects. Not even Forrest Gump would be suckered into that deal.
The best care my father ever received was when he went on hospice. Nursing homes and hospitals are where you go to die. Could still remember that fat ugly witch at the nurses station ignoring me while she was looking at a menu.
Better Than Treasuries
New York’s personal-income tax bonds are rated AAA by Standard & Poor’s, its top grade and higher than U.S. Treasuries. The bonds make up about 40 percent of the state’s outstanding securities. Only $3.5 billion are general obligations.
Legislation enacted in 2001 authorized five state agencies, including the Thruway Authority and the Dormitory Authority, to issue revenue bonds backed by state income taxes.
Jcer 103
Real estate Yes, But thats because all the illegal black market money needed a place to go when they switched from peseta’s to euro’s… Still Not as bad as NY but very expensive, Parking spots are bought and sold like real estate also, so are storage bins,,, Rents not bad though, and general cost of living is reasonable if you have a place to lay your head, You can still buy a beer for under a euro and in many of the places you even get little plates of free tapas, Entertainment is MUCH cheaper than in NY city, Food Drink, Not as many store’s or choices for goods because people there are not accumulators or collectors They can’t be because they all live in small apartments.
JJ
even this is hard to do. Te best appraiser won’t be able to shave off 10-20% without sale. So instead of 20K you now pay 16K. And did you just ask old people to spend on improvements when we are counting pennies to live on SS in Manila?? Plus you will find out wood ovens can’t warm old bodies.
Just a few of questions/comments about the retirement debate – Are we calculating tomorrow’s retirement with today’s dollars? Are you certain that Belize or Thailand or Singapore will be affordable to an American retiree in next 15 to 30 years? Won’t the currency exchange rates change? Won’t industrialization and development in the aforementioned nations lead to an improved standard of living (ergo higher cost of living)? Okay, perhaps not so much in Belize but certainly in Thailand and Singapore. The wealth and development of these nations will accelerate so we might expect a fair amount of inflation over the next decade or two which might work in favor of the dollar but that’s assuming that inflation remains steady here and the dollar maintains its worldwide strength and dominant trade position. I’m not suggesting that there won’t be somewhere in the world to live the expat/retiree lifestyle but unless you are retiring today isn’t it likely that the global landscape will be dramatically different by the time you are ready to retire.
Please feel free to comment and/or rip me to shreds. I’m sure that I’ve got it wrong on some level.
SGM
you are completely right. Nothing worse than being stuck in Thailand with an inadequate SS check–better practice your pimp skills for that side income.
95 – During the recovery from the last bubble, home prices rose in NJ, from 1991 onward (albeit slightly initially), even though unemployment rose from 6% in 1991 to over 9% in 1992. Prices continued to rise even though unemployment remained over 7% well into 1994.
I think kettle tore into the linkage between home prices and unemployment a few years back, but I can’t for the life of me find it.
I’ll paraphrase, at the risk of being completely wrong, but the correlation between the steady state unemployment rate and prices was low compared to the change in unemployment rate (second derivative) and change in home prices. Which, after all, is more intuitive anyway. Increasing unemployment has a negative impact on the change in house prices, decreasing unemployment has a positive impact on the change of house prices.
Flat unemployment?
Now, I realize this contradicts the 91-94 conundrum.
Friend came to me today . owns a home in a run of the mill NJ town , which is on the decline. owes 400 k to the banks. appraised at 260k. ranch that needs work. 10k taxes.
and on top all this 100 k credit card debt, what a country
And now he is eligible to live rent and mortgage free for the next three years.
What a country indeed!
In Great Neck the rich folk would take in old aunts and uncles for their SS checks and then when they died just bury them in the back yard and keep collecting checks.
PGtips says:
January 6, 2012 at 3:22 pm
JJ
even this is hard to do. Te best appraiser won’t be able to shave off 10-20% without sale. So instead of 20K you now pay 16K. And did you just ask old people to spend on improvements when we are counting pennies to live on SS in Manila?? Plus you will find out wood ovens can’t warm old bodies.
Except good companies now do credit checks so he is screwed job hunting and the IRS will want taxes on the forgiven debt. Nobody rides for free.
grim says:
January 6, 2012 at 3:44 pm
And now he is eligible to live rent and mortgage free for the next three years.
What a country indeed
Not 100% true. Houses bottomed in 1996 adjusted for inflation. Homes did rise in value in 1991 to 1995 however, inflation ws greater.
If for example inflation is 3% homes would have to rise 3% to break even. Years like 2000, 2001, 2002, 2003 with low inflation and rapid home increases were golden years of real estate.
Many cities are back at 1991 pricing right now adjusted for inflation.
grim says:
January 6, 2012 at 3:34 pm
95 – During the recovery from the last bubble, home prices rose in NJ, from 1991 onward (albeit slightly initially), even though unemployment rose from 6% in 1991 to over 9% in 1992. Prices continued to rise even though unemployment remained over 7% well into 1994.
I think kettle tore into the linkage between home prices and unemployment a few years back, but I can’t for the life of me find it.
111 – Also, don’t forget that NJ unemployment rose from 3.6% in March of 2000 to 6% in April of 2003, right in the damn middle of the bubble.
Impact? Home prices went through the roof. Didn’t so much as blink.
NY Metro HPI was 101.27 in March ’00
By April ’03, it was up to 149.53, just about 50% higher.
111
Umm no. I would not say that a 10% appreciation over 6+ years as “prices rising”. In fact, prices fell inflation adjusted. But you realtors have a way with words.
At the end of this “stabilization” and before prices appreciating unemployment was half (4%) of what it is today. Come back when unemployment returns to those levels.
So young so innocent. Unemployment only appreared to be 6%. My neighbor for instance who got canned in Junuary 2002 was collecteting unemployment while flipping houses full time. Was he unemployed, he was working 40 hours a week buying and selling house but that did not count in DC>
grim says:
January 6, 2012 at 3:51 pm
111 – Also, don’t forget that NJ unemployment rose from 3.6% in March of 2000 to 6% in April of 2003, right in the damn middle of the bubble.
Impact? Home prices went through the roof. Didn’t so much as blink.
116 – Nominal bottom in the NY Metro HPI was 72.29 in April of 91.
Quoting nominal because I’m not looking at real appreciation, I’m looking at the sticker price during purchase, as most buyers would here today.
I agree that 96 was the “real” low, however by that time nominal prices had already began a clear upward move.
117
Now you confuse me. You say that between 2000 and 2003 there was an employment – house prices disconnect. I thought that you believed that employment rising had a positive effect on house prices and for this reason you post these articles.
Hoyoh!
WSJ
NY CULTURE
JANUARY 5, 2012
Finally, a Haven for the ‘Beeroisseur’ .
By MELANIE GRAYCE WEST
Ramsay de Give for The Wall Street Journal
Wine has long enjoyed the spotlight in New York, with specialty shops and restaurants designed for choosy oenophiles. Now, a traditionally more humble beverage has begun to get similar attention.
Over the past year, a host of shops have emerged catering to “beeroisseurs”—devotees who can debate hops content with the fervor of a political contest and spend hours tracking down an obscure Trappist ale.
To be sure, there have been stores and bars throughout the five boroughs for years that offer rare and sometimes very expensive brews.
But this new breed of beer shop more closely follows the model of a boutique retailer, where beer buffs can often sample before buying and drink a pint at the bar with paired bites. Customers can take home a mixed six-pack and fill a growler—a refillable jug container—straight from the tap. Some stores even host book-signings and lectures.
Unlike the corner bodega, the shops offer enormous selections of craft or specialty beers—small production beers from around the world made from premium ingredients—that can range in price from roughly $1.25 for a single bottle to $25 for a 750-milliliter bottle (about 25 ounces), and up.
At the new City Swiggers on the Upper East Side, customers can plunk down $41.99 for Drie Fonteinen Oude Kriek, a sour cherry Belgian beer aged in oak. Or for $25.89, they can take home Nebraska Brewing Co.’s Apricot au Poivre Saison beer brewed with, of course, apricots and pepper.
The rise of specialty beer shops is reflected in growing numbers of state-issued tavern wine licenses, which allow holders to serve wine and beer—but not hard liquor—and to sell beer to-go. Since 2005, the number of tavern wine licenses issued in the city has nearly doubled, to 157 from 82, according to data from the New York State Liquor Authority.
The marketplace for beer in New York is now at a “tipping point,” said Garrett Oliver, the brewmaster at the Brooklyn Brewery and editor of “The Oxford Companion to Beer.”
“What’s really happening is that craft beer is not a trend or a fad,” according to Mr. Oliver. “It’s a return to normality.”
Historically, it’s abnormal to “have three [kinds of] beers for 300 million people,” Mr. Oliver said. Now, “people are looking at beer for what it is: which is food.”
But at the same time, those getting into the specialist beer business have a much higher threshold to succeed because the average New York bar now has a pretty wide selection of specialty brews, Mr. Oliver said.
To be unique, he said, a store now has to stock “sufficiently obscure” beers.
“Everybody’s got great beer now,” Mr. Oliver said, but “there’s an arms race on the geeky end of things.”
Major grocery stores and first-time business owners alike are now opening up shops to cater to beer devotees.
In November, the Whole Foods Market at Columbus Circle opened a tavern-like space within its store, replacing what had at one time been a wine shop and later an area for personal-hygiene products.
It’s a first-of-its-kind tap room and café for the Northeast region, with 10 beers and eight wines on tap and another 150 bottled beers. The location was the “perfect space,” said Michael Sinatra, a spokesman for Whole Foods Markets in the Northeast region, for capturing “the enthusiasm that’s out there among shoppers in trying different beers and trying local beers.”
This month, Ted Kenny, a former Wall Street trader, will open Top Hops on the Lower East Side. The store and tasting room will sell some 700 to 800 beers in bottles and offer 20 beers on tap, with a stock evenly split between domestic and imported brews.
Mr. Kenny, 42 years old, has worked in the beer industry and began his plans for a specialty beer store a few years ago. Seeing others successfully get into the retail business encouraged him to open Top Hops with his cousin and business partner, Bryan Weadock, co-head of global fixed-income commodities for Bank of America Merrill Lynch.
“I wanted to do a place that really celebrates beer,” said Mr. Kenny, who is planning to make education and proper pouring a cornerstone of his store. “I feel very fortunate that I’ve found a way to hopefully make a living at something that I’m very passionate about.”
Also new to the beer shop industry are Alan and Pamela Rice, who spent three years brewing up the idea for City Swiggers, their two-month-old shop and tasting room.
So far, the neighborhood response has been “overwhelming,” Ms. Rice said. “We’re trying our best to keep up.”
Mr. Rice, 48, previously worked in the financial-services industry, and City Swiggers is his first retail store. Beer has long been his passion and he’d been active in the city’s beer community as president of Brooklyn’s Malted Barley Appreciation Society.
City Swiggers carries some 500 beers hand-picked by Mr. Rice. The couple designed the store to be approachable to people just learning about beer and those coming in with strollers. Still, Mr. Rice said, a fair number of customers are serious connoisseurs willing to travel for something unusual. He said beer blogs and online forums have fueled the local “craze” for exotic beers.
“I hope this isn’t just a fad and that this is a true trend,” he said.
120
do you really believe that a 2% year increase in nominal prices is perceptible by the buyers? what are you arguing here?
We need to see a sustained improvement on unemployment down to 5% or so before arguing that this may have a positive effect on housing prices. Not only there won’t be such an improvement but unemployment should be seen in relation to income. That is, who cares if there are new jobs if those pay less and benefits are unsustainable? Everything else is fishing for nuggets to talk about “buy now or priced out”
123 – As opposed to real prices, which are completely imperceptible by the buyers until years later?
Who is talking about an increase in home prices? Are you saying I am?
Buy now or priced out? Huh? I’m talking about home prices bottoming, that’s worlds apart from appreciation, let alone appreciation that would price anyone out.
124
No but you are talking about “buy now” :)
But seriously, your input is much needed and appreciated.
Chi-fi, NY has culture? Wow now that’s crazy. I’d rather be in Philadelphia.
I’m working with someone who has sat out the bubble and saved like crazy. They are looking to buy, they’ve got a huge big down payment and only need a 15-year fixed (sub 3% by the way) as a result (which they’ll probably pay off early).
They can have the house they drooled over in 2005 (completely unobtainable), for not only less money, but with a significantly smaller mortgage, and a monthly payment (PITI) that is significantly lower than renting anything similar available. (They can finally get their kids into the school system that they’ve been wanting to, dare I bring this up, risking being labeled a heretic).
Did I mention they’ve been waiting for 6 years now?
They’ve got good jobs, good savings, zero debt, and good income. A couple percent decline in prices is irrelevant to them, and they are in for the long-haul.
What would you propose they do? Maybe move to Singapore? Canned food, guns and gold?
For you beer geeks here, if you’re ever in Vermont check out this place
http://hillfarmstead.com/wpblog/about/retail-shop/
It’s winning all kinds of awards. My daughter’s boyfriend is a brewer there.
Speaking of VT, Hen of the Wood in Stowe is one of my favorites.
Why buy when prices are still falling? I have been saving for my trade up house since 2007, now that I have the cash why should I waste it on a house. Good schools are overrated. Gotta have some street cred to get ahead.
We got at least another 20% down. We need one last selling capitulation when everyone throws in towel like we had in stocks in March 2009. I have not seen that yet in real estate. We need a blow off sell off like those days of 1,000 point falls in the dow.
grim says:
January 6, 2012 at 4:43 pm
I’m working with someone who has sat out the bubble and saved like crazy. They are looking to buy, they’ve got a huge big down payment and only need a 15-year fixed (sub 3% by the way) as a result (which they’ll probably pay off early).
They can have the house they drooled over in 2005 (completely unobtainable), for not only less money, but with a significantly smaller mortgage, and a monthly payment (PITI) that is significantly lower than renting anything similar available. (They can finally get their kids into the school system that they’ve been wanting to, dare I bring this up, risking being labeled a heretic).
Did I mention they’ve been waiting for 6 years now?
They’ve got good jobs, good savings, zero debt, and good income. A couple percent decline in prices is irrelevant to them, and they are in for the long-haul.
What would you propose they do? Maybe move to Singapore? Canned food, guns and gold
#93 gary 6 handle? i think yo are being kind, more like a 5 handle. But than again from the pictures it looks like they added a stainless steel dish washer to the country pine kitchen, so maybe a 6 handle is in order.
[127] “They’ve got good jobs, good savings, zero debt, and good income. A couple percent decline in prices is irrelevant to them, and they are in for the long-haul.
What would you propose they do? Maybe move to Singapore? Canned food, guns and gold?”
Not enough information to answer.
Will they have 12 months of living expenses saved up in liquid FDIC-insured accounts after they plunk their cash down into the new house?
What are their ages and the balances in their retirement accounts? (not sure what “good savings” means)
Kids? Ditto on the savings question, for college.
Long-term plans to be in the area? Industry that they work in?
And with all due respect (and I mean that sincerely since I think you know your stuff and merit respect) I’m skeptical of the “a monthly payment (PITI) that is significantly lower than renting anything similar available” premise. Maybe I’m just lucky, but I haven’t found that to be the case, not by a long shot, and I’m talking about in unicorny towns too. I suspect they could rent a similar house for the same (or less) once you factor in anticipated annual repairs.
Nonetheless, the answers to all of the above may turn out to favor their jumping in and buying a house right now, and if so, good for them. I wish EVERYONE who bought a house was in that position. But they are the tiny, tiny fraction of people out there buying a house right now, and you and everyone here knows that. Most people continue to put themselves on the financial edge of a cliff just because buying a house is “what everybody does,” and then when their stupidity catches up with them (e.g. one of them loses a job) then all of their problems were so … unexpected.
127
Why should we blow out our hard-earned cash to depreciating assets? If we were the spending kind and a few percent here and there would not matter, we would not have saved and had already bought. We also believe that the downside is more than a couple per cent.
That’s what your clients are probably thinking
Coast…..there VT and then there is Canada VT….and that is way up there….whoa….does the boyfriend speak English or French?
127. Canned food, guns and gold!
Re: 127 – Grim you described me but left out the good looks. Markets always overcorrect, and I am with JJ which is another decline more than a few points. I am patient and can wait, because like JJ I am not emotionally attached to the decision.
I wouldn’t retire overseas until we see how the new currency plays out. Whats so wrong with staying mobile and being able to bounce from crisis to crisis?
Forget about wood burning stoves. Get yourself a large snow shovel to scrape the corpses off your driveway.
109: Sterling,
In addition to the prospective changes you mention, US (esp. Estate) and global tax regimes may well look very different than today for planning purposes. Agree with AG about maintaining mobility and Nom re: dual citizenship, etc. as two of few constants. Me, I’m planning on having to work until I drop no matter how much we are able to accumulate in the interim.
Is there a name for the kind(s) of bias HTJ exhibits when he extrapolates the experiences of his few co-workers and neighbors on the balance of the nation?
As much as I like the idea of leaving the US and experiencing another country, I also love this place way too much to throw in the towel. Sure I aint gonna retire here, but there are plenty of place in the states that would be perfect. New Mexico, the Gulf Coast of Texas, baja Cali — to name a few.
127. They sounds like a very disciplined couple. Good for them. There are some great places to live when you have that type of approach.
139
sorry to nitpick but isn’t Baja California part of Mexico?
joyce says:
January 6, 2012 at 11:10 pm
139
sorry to nitpick but isn’t Baja California part of Mexico?
j: it’s ok; essex isnt part of the human race…..
>
> Mary had a little pig,
> She kept it fat and plastered;
> And when the price of pork went up,
> She shot the little bastard.
> ********************
>
>
> Mary had a little lamb.
> Her father shot it dead.
> Now it goes to school with her,
> Between two hunks of bread.
> ********************
>
>
>
> Humpty Dumpty sat on a wall,
> Humpty Dumpty had a great fall.
> All the kings’ horses,
> And all the kings’ men.
> Had scrambled eggs,
> For breakfast again.
> ********************
>
>
> Hey diddle, diddle, the cat took a piddle,
> All over the bedside clock.
> The little dog laughed to see such fun.
> Then died of electric shock.
> ********************
>
>
>
> There was a little girl who had a little curl
> Right in the middle of her forehead.
> When she was good, she was very, very good.
> But when she was bad…….
> She got a fur coat, jewels, a waterfront condo, and a sports car.
I’m still trying to figure out how people can pay average $700K for a fully attached two family in 11232 zip in Brooklyn? All railroad rooms, basically railroad kitchen/bathroom/bedroom/parlor with tiny 2nd bedroom off kitchen or parlor. Those houses were old when I moved in 1976 and selling for $14K. Streets were basically 1/3 commercial & 2/3 residential. Alternate street parking. My rent in 1976 was $85 per month. What must they be now?
Iran may be the start of the Great Equalization. At least I won’t have to worry about a 2013 IRS audit. They drove me crazy this year on a 2009 audit of my HSA account. Took me 2 months to train the Fulton Bank expert on proper HSA reporting to IRS.
142. I like to talk to guys like you, and then head butt them in the face. It makes me happy. Go figure.
Birds out chirping today they think it is spring already.
What is MLS.com? MLS.com is a free MLS search to find real estate MLS listings for sale by Realtors® and other realty professionals that are members of your local MLS Multiple Listing Service. MLS.com also features real estate news, common real estate questions and answers, real estate classes, mortgage information and a mortgage calculator. Find homes for sale, new homes and resale homes, new construction, acreage, lots, land, commercial property and investment property.
What is MLS.com? MLS.com is a free MLS search to find real estate MLS listings for sale by Realtors® and other realty professionals that are members of your local MLS Multiple Listing Service. MLS.com also features real estate news, common real estate questions and answers, real estate classes, mortgage information and a mortgage calculator. Find homes for sale, new homes and resale homes, new construction, acreage, lots, land, commercial property and investment property.
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