NJ unemployment jumps to 9.6% despite continued jobs growth

From the Star Ledger:

N.J. unemployment hits 9.6 percent in June, its largest jump in 3 years

New Jersey’s unemployment rate climbed to 9.6 percent in June, up from 9.2 percent in May in the sharpest monthly increase since the 2009 recession, according to data released by the state labor department today.

The gap between New Jersey’s unemployment rate and the U.S. average — 8.2 percent — has now grown to its widest level in decades.

Even though 9,900 jobs were added in June — 7,600 by businesses and 2,300 in the public sector — the unemployment rate still rose for the third straight month as more and more residents began searching for work.

“In recent months, New Jersey employers have been adding jobs at rates not seen in years, and at a faster pace than the nation as a whole. If the job count keeps rising at this pace, unemployment will inevitably come down,” said Charles Steindel, chief economist at the state Treasury Department.

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230 Responses to NJ unemployment jumps to 9.6% despite continued jobs growth

  1. gfl=Good Fing Luck says:

    Abandon ship

  2. Essex says:

    Christie and Guadango crushed it on that recruitment of those jobs from Illinois.

  3. Shore Guy says:

    More good news. Thanks. Where are my razor blades?

  4. yo says:

    The AP went on to mention that Rodman’s father currently runs something called Rodman’s Rainbow Obamaburger in the Philippines; which I’m sure is about as tactful and classy an establishment as can be expected by the father of 29 children by 16 women who tried to cram two different famous names into the name of his restaurant while appearing on the restaurant’s website wearing a bootleg Chicago Bulls jersey with the name “Rodman” emblazoned on the front instead of the word “CHICAGO.”


  5. Shore Guy says:

    The end is nigh, tech edition:


    Microsoft in first loss as public company

    By Chris Nuttall in San Francisco

    Microsoft reported its first loss since becoming a public company in 1986 as it wrote down the value of its online business and deferred revenues expected when users upgrade to its forthcoming Windows 8 operating system.


  6. yo says:

    You need to try a Rainbow Obamaburger first

  7. Shore Guy says:


    I hear they cure cancer and give sight to the blind.

  8. Shore Guy says:

    What is the over under on Bashar al-Assad outliving Abe Vigoda? I suspect we might see him hanging from a rope before Hiroshima day.


  9. Shore Guy says:

    al-Assad that is, not Vigoda.

  10. chicagofinance says:

    To be clear, I just found this analysis interesting, but I still think “The Gaffe” could refer to “roads and bridges”…..regardless someone needs to cashier this guy…

    The Obama campaign hotly disputes Romney’s contention that the president meant what he said. A “fact check” from the Obama-Biden “Truth Team” (formerly Attack Watch) claims that Romney “is taking President Obama’s words out of context” to produce “a complete distortion.” Here is the full context, as presented by the Truth Team:

    If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet. The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.

    The Team then explains: “The President’s full remarks show that the ‘that’ in ‘you didn’t build that’ clearly refers to roads and bridges–public infrastructure we count on the government to build and maintain.”

    That’s bunk, and not only because “business” is more proximate to the pronoun “that” and therefore its more likely antecedent. The Truth Team’s interpretation is ungrammatical. “Roads and bridges” is plural; “that” is singular. If the Team is right about Obama’s meaning, he should have said, “You didn’t build those.”

  11. chicagofinance says:

    The president stepped in it this week with his own failure to communicate.

    Mr. Obama, at a campaign appearance at a fire house in Roanoke, Va.: “Look, if you’ve been successful, you didn’t get there on your own.” If you own a store or factory “somebody invested in roads and bridges,” somebody built the infrastructure that allows for commerce. Fair enough. We all built it, with public moneys for public benefit. But it makes as much sense to tell the wealthy businessman, “Feel guilty because the taxes of the poor built that highway,” as it does to tell a mother on public assistance, “Feel guilty because your hardworking neighbors built that road.”

    How about nobody feel guilty?

    The president seemed to me to be confusing a poor argument—he implied we owe our wealth and growth as a nation to government programs—with a good one, that nobody achieves success alone. This is true: Nobody proceeds unhelped through life, everyone who’s achieved something got some encouragement from a neighbor or a teacher or a coach.

    But Mr. Obama makes this point mischievously. He aims his argument at his political opponents—Republicans, Romney supporters. Yet many of them—most, probably—are involved one way or another with churches, synagogues, civic groups and professional organizations whose sole purpose is to provide assistance and encouragement to those who are ignored and disadvantaged. Conservatism doesn’t mean “do it alone.” God made us as social animals and asks us to help each other.

    Mr. Obama was trying to conflate a nice thought—we must help each other—with a partisan and ideological one, that government has and needs more of a role in creating personal success. He did not do it well because his approach was, as it often is, accusatory and vaguely manipulative. Which makes people lean away from him, not toward him.

    It is odd he does not notice this, because communicating is his obsession. He made this clear again in his interview last week with Charlie Rose. “The mistake of my first couple of years was thinking that this job was just about getting the policy right,” he said. “But, you know, the nature of this office is also to tell a story to the American people that gives them a sense of unity and purpose and optimism.”

    I am certain the president has no idea how patronizing he sounds. His job is to tell us a story? And then get our blankie and put us to sleep?

    When he says “a story” he means “the narrative,” but he can’t use that term because every hack in politics and every journalist they spin uses it and believes in it.

    We’ve written of this before but it needs repeating. The American people will not listen to a narrative, they will not sit still for a story. They do not listen passively as seemingly eloquent people in Washington spin tales of their own derring-do.

    The American people tell you the narrative. They look at the facts produced by your leadership, make a judgment and sum it up. The summation is spoken—the story told—at a million barbecues in a million back yards.

    The narrative on the president right now is: He’s not a bad guy, but it hasn’t worked.

    Some people will vote for him anyway, some won’t. But all, actually, know it hasn’t worked. That’s the narrative.

    To get that wrong—that the American summation comes from the bottom up and not the top down—is a big mistake. It means you don’t know you’ve got to change some facts, as opposed to some words.

  12. Mikeinwaiting says:

    Here are the numbers & graphs for a granular look at NJ unemployment;

  13. chicagofinance says:

    Interesting factoid…..
    “Campaign officials have suggested that, in part, the disparity is due to the fact that much of Mr. Romney’s money was raised under rules that limit its use to the general election, once he becomes the nominee. Mr. Obama is bound by the same restriction, but only Mr. Romney faced an expensive primary campaign that ate into money he was raising.”

    July 18, 2012, 11:03 p.m. ET
    Group Comes to Romney’s Defense
    Crossroads Ad for First Time Names the Candidate; GOP Backer Cites ‘Momentum’ of Obama Attacks


    In the exchange of attack ads that is defining the presidential race, Mitt Romney has been hindered by a feature of campaign-finance law. While Mr. Romney is outraising President Barack Obama, much of his money can’t be used until he formally becomes the GOP nominee.

    Now, one of Mr. Romney’s allies in the super PAC world plans to give some direct help. American Crossroads, a GOP-aligned political action committee, will begin an $8.8 million ad buy in nine states on Thursday to defend Mr. Romney from Democratic charges that he helped ship U.S. jobs overseas, said the PAC’s president, Steven Law.

    The Crossroads ad marks a departure for it and most other outside political groups. Until now, they have spent most of their money on such themes as criticizing Mr. Obama for the rising federal deficit. But the new ad is the first from Crossroads to mention Mr. Romney explicitly, and in defending him it serves a role that candidates traditionally have filled themselves.

    The new spot comes as some Republicans acknowledge that Mr. Obama’s attack on Mr. Romney’s career as a private-equity investor, now in its fourth week, has left the Republican candidate on the defensive and made it hard for him to advance his own message. Mr. Obama’s accusations revolve around the idea that Mr. Romney, through his investments, aided companies that outsourced U.S. jobs to other countries, which the Romney campaign has vigorously denied.

    “There are periods of time when you can tell the momentum is clearly with you. You can tell there are other times the message momentum is clearly with the other side,” said Henry Barbour, a Romney fundraiser and Republican National Committeeman from Mississippi. “In the last week or two the momentum has shifted more towards Obama’s attacks.”

    Mr. Barbour added he thinks Mr. Romney still is in a strong spot to win.

    A Romney fundraiser said of the GOP candidate’s campaign: “People would like to see improvement on the agility and speed of the responses.”

    Other Republicans say Mr. Romney in due time will define himself more fully to voters, particularly as the media spotlight turns to him in late August at the Republican National Convention. In addition, Mr. Romney’s planned trip to London next week for the start of the Olympic Games gives him a chance to shift the public discussion to his role in managing the 2002 games in Salt Lake City. That could overtake the recent exchanges with Mr. Obama’s campaign over his business career and questions of whether he should release more than the two years of tax returns he is making public.

    The ad by American Crossroads, which was founded with the help of Bush White House aide Karl Rove, says of Mr. Obama: “The press, and even Democrats, say his attacks on Mitt Romney’s business record are…’misleading, unfair and untrue,’ ” according to a script provided by the group.

    The ad underscores an important feature of how the race is being financed. Outside GOP committees, along with Mr. Romney’s campaign, are raising more money than their opponent, and plan to outspend Democrats this week on TV by about 2.5-to-1, according to figures provided by Democratic and Republican media-tracking sources.

    But in spending by the campaigns themselves, Mr. Obama is putting more money into TV ads currently. Mr. Obama will spend more than $9.4 million on ads in the coming week, compared with $6.6 million by Mr. Romney. Since the unofficial start of the general election in mid-April, Mr. Obama has outspent Mr. Romney by about 3 to 1.

    Campaign officials have suggested that, in part, the disparity is due to the fact that much of Mr. Romney’s money was raised under rules that limit its use to the general election, once he becomes the nominee. Mr. Obama is bound by the same restriction, but only Mr. Romney faced an expensive primary campaign that ate into money he was raising.

    The campaign won’t say what fraction of Mr. Romney’s cash is so encumbered.

    The Romney campaign says the Democrats set a more negative tone when Stephanie Cutter, Mr. Obama’s deputy campaign manager, said last week Mr. Romney may have committed a felony if he inaccurately described his role at Bain Capital in government filings.

    “They’re saying they want a completely negative campaign with no rules, and the facts don’t matter,” said one adviser to the Romney campaign.

    Obama campaign spokesman Ben LaBolt said, “Gov. Romney has pointed to his experience as a corporate buyout specialist as the central basis for his candidacy, yet at the same time tried to declare any examination of that record off-limits.”

    —Sara Murray contributed to this article.

    A version of this article appeared July 19, 2012, on page A4 in the U.S. edition of The Wall Street Journal, with the headline: Group Comes to Romney’s Defense.

  14. Ben says:

    I’m sure Obama thinks the government should take credit for any business built on land zoned commercial by the government. I really wish that our history teachers could teach the children about the industrial revolution properly. You had a bunch of engineers and scientists working to increase productivity of everyone, and they did so, because they saw big bucks in it. They didn’t rely on government funded research and they weren’t working off government funded grants. The same goes for men like Nikola Tesla. Tesla’s patents were estimated to be equivalent to a trillion dollars in todays money. Yet, the man sat in his home, thinking up ideas, and putting them to work. I’m sure some sort of Tesla like mind is out there today given that we have a few billion more people in the world. Unfortunately, he’s probably studying something unproductive and being pushed into some meaningless research because thats where the money is.

  15. Fast Eddie says:

    I’m off to my private sector job now. You know, the one that I didn’t earn on my own.

  16. Greg Stink says:

    So the public sector adds 2300 jobs and thats a good thing?

  17. grim says:

    From Bloomberg:

    New Jersey Jobless Rate Jumps to 9.6% as Work Force Grows

    New Jersey’s unemployment rate jumped to 9.6 percent in June, its highest in almost two years, as more people entered the labor force.

    The jobless rate, up from 9.2 percent in May, climbed even as the state added 9,900 jobs. Employment rose 24,300 in May and June, the largest two-month gain in more than 12 years, according to a statement from the state’s Labor Department.

    Governor Chris Christie, a Republican who has said New Jersey’s economy is in a “comeback,” declined to comment on the figures today at a Trenton news conference before the department’s news release. Kevin Roberts, a Christie spokesman, said that the higher rate is mainly attributable to more people looking for work.

    “New Jerseyans understand the trajectory our state is on and believe in the New Jersey comeback,” Roberts said in an e- mail. “They are confidently re-entering the labor market at a level we haven’t see in well over three years.”

    New Jersey’s so-called labor participation rate is 66.1 percent, above the national rate of 63.8 percent, according to Roberts.

  18. Essex says:

    15. Did you attend public schools are universities? Built by the Country. Did your faggy little buddy Mitt get big bucks from daddy. Two examples.

  19. grim says:

    From the Record:

    Express Scripts lays off 258 in Jersey

    Express Scripts, which reports second-quarter earnings on Aug. 7, laid off 258 employees throughout New Jersey on Thursday, including 244 in Bergen County, the company said. Shedding those jobs represents about a 12 percent reduction in Express Scripts’ workforce in Bergen County, one of the largest single layoff announcements in the county this year.

    Most of the layoffs, 216 people, were at Medco’s campus in Franklin Lakes, which was the company’s headquarters before the acquisition, according to an Express Scripts spokesman, Brian Henry. Another 28 were let go at two former Medco facilities — 17 in Montvale and 11 in Fair Lawn, he added. Express Scripts also idled 14 people at its Willingboro location, Henry said.

    The majority of the laid-off workers were informed on Thursday, and the layoffs were effective immediately, according to Henry. The employees affected were primarily doing business-support functions, he added.

  20. grim says:

    From Reuters:

    Blackstone bets on US housing recovery, buys 2,000-plus homes-for-rent

    Blackstone Group LP has spent more than $300 million to purchase over 2,000 foreclosed homes in order to rent and bet on a recovery of the U.S. housing market, the private equity company’s global head of real estate said Wednesday.

    “Our bet is over time, vacant homes will fill up and markets will begin to recover,” said Jonathan Gray, senior managing director and global head of real estate. “Our exit will be to sell the individual homes to the renters themselves, or there could be a very large market for public housing REITs.”

    Blackstone is one of several hedge fund and private equity firms with plans to raise or those that have raised money to acquire foreclosed homes to rent them out for several years before selling them as the housing recovery takes hold.

  21. Essex says:

    In fact companies that go public and take public investment dollars are not “doing it on their own”, when you are in business you are in fact no living in a vacuum as you rely on others for your success. The Myth of rugged individualism is simple a myth. Society is a series of interdependent alliances and choices.

  22. Fabius Maximus says:

    Nice piece on how they built it.

    While some multimillionaires started in poverty, most did not. A study of the origins of 303 textile, railroad, and steel executives of the 1870s showed that 90 percent came from middle- or upper-class families. The Horatio Alger stories of “rags to riches” were true for a few men, but mostly a myth, and a useful myth for control.

    Most of the fortune building was done legally, with the collaboration of the government and the courts. Sometimes the collaboration had to be paid for. Thomas Edison promised New Jersey politicians $1,000 each in return for favorable legislation. Daniel Drew and Jay Gould spent $1 million to bribe the New York legislature to legalize their issue of $8 million in “watered stock” (stock not representing real value) on the Erie Railroad.

    The first transcontinental railroad was built with blood, sweat, politics and thievery, out of the meeting of the Union Pacific and Central Pacific railroads. The Central Pacific started on the West Coast going east; it spent $200,000 in Washington on bribes to get 9 million acres of free land and $24 million in bonds, and paid $79 million, an overpayment of $36 million, to a construction company which really was its own. The construction was done by three thousand Irish and ten thousand Chinese, over a period of four years, working for one or two dollars a day.

    The Union Pacific started in Nebraska going west. It had been given 12 million acres of free land and $27 million in government bonds. It created the Credit Mobilier company and gave them $94 million for construction when the actual cost was $44 million. Shares were sold cheaply to Congressmen to prevent investigation. This was at the suggestion of Massachusetts Congressman Oakes Ames, a shovel manufacturer and director of Credit Mobilier, who said: “There is no difficulty in getting men to look after their own property.” The Union Pacific used twenty thousand workers-war veterans and Irish immigrants, who laid 5 miles of track a day and died by the hundreds in the heat, the cold, and the battles with Indians opposing the invasion of their territory.

  23. yo says:

    Majority of foreclosed homes will not hit market.They will be sold in bulk.Bring them on

    “Blackstone Group LP has spent more than $300 million to purchase over 2,000 foreclosed homes in order to rent and bet on a recovery of the U.S. housing market, the private equity company’s global head of real estate said Wednesday.”

  24. grim says:

    Chavez would be proud

  25. yo says:

    I told you to stop eating sunshine obamaburger.You start thinking again.

    Essex says:
    July 20, 2012 at 7:36 am
    In fact companies that go public and take public investment dollars are not “doing it on their own”, when you are in business you are in fact no living in a vacuum as you rely on others for your success. The Myth of rugged individualism is simple a myth. Society is a series of interdependent alliances and choices.

  26. 1987 Condo buyer says:

    ChiFi, back to my TIPS question, and I appreciate your previous consideration. Just looking for thoughts from a high level, I purchased TIPS for consumer inflation protection. As a result of the current safety play, the price of the bonds have reason, as have all Treasuries. Assuming that we do see that change, as it has in Europe, we would see rates rise, prices fall, however, does the inflation protection aspect change anything about TIPS pricing? I can see a situation where there is little consumer inflation, but much higher rates, so TIPS are crushed like ordinary Treasuries.

    What is the thinking in your field?


  27. Greg Stink says:

    A nice plague would really throw a monkey wrench into the plans of these companies that are collecting foreclosures for rent as their entire strategy is reliant upon population growth.

  28. freedy says:


    If they let em gamble in the Meadowlands , then its lights out for Atlantic City.

  29. yo says:

    Watch the numbers of people crossing the borders as soon as there is sign of improvement in the economy.Last time I heard they gave those kids with illegal parents rights to stay in the US.All you read on the papers is next gen becoming renters

  30. yo says:

    If they give this kids green cards(I assume they do) from illegal parents,after 5 years they can apply for naturalization and they can sponsor their parents that are here already.Their parents after being naturalized, can sponsor siblings from other countries altough the process will take longer.I think waiting is 10 years.

    “Last time I heard they gave those kids with illegal parents rights to stay in the US.”

  31. Essex says:

    25. I’m not sure what you just said, perhaps use the online translation tool next time to communicate in Engrish.

  32. yo says:

    The AP went on to mention that Rodman’s father currently runs something called Rodman’s Rainbow Obamaburger in the Philippines; which I’m sure is about as tactful and classy an establishment as can be expected by the father of 29 children by 16 women who tried to cram two different famous names into the name of his restaurant while appearing on the restaurant’s website wearing a bootleg Chicago Bulls jersey with the name “Rodman” emblazoned on the front instead of the word “CHICAGO.”

    Essex says:
    July 20, 2012 at 8:29 am
    25. I’m not sure what you just said, perhaps use the online translation tool next time to communicate in Engrish.

  33. yo says:

    If you have a job, good news: A new survey finds that there’s a good likelihood you’re going to keep it.

    Right Management, a division of staffing firm Manpower Group, finds that 69 percent of U.S. companies plan no layoffs through the end of 2012.

    Just 1 percent are planning significant layoffs, the survey found, and the rest were planning some job cuts or didn’t know. It was the first time Right Management conducted the survey, so there’s no data to compare whether it shows an improving trend or not.

    The data is based on a survey of more than 1,100 U.S. companies conducted in the second quarter of this year. The survey asked about companies’ hiring and firing plans for the next six months, through the end of the calendar year.

    The results still put the U.S. below the global average. The complete Manpower survey, which included 14,931 employers in 41 countries, found that 78 percent were planning no layoffs at all

    Although it’s good news that the bleeding has slowed, economists have long been saying that companies need to hire a lot more people for the economy to grow faster. The unemployment rate remains at 8.2 percent with just 80,000 new jobs added in June, according to the latest data from the Bureau of Labor Statistics.

    In addition, some unlucky workers are still losing their jobs. New applications for unemployment benefits jumped again in the latest week, after falling sharply in the prior week in part because of seasonal aspects of the job market.

  34. seif says:

    15 – classic stuff by gary.

    he is on here for months and months complaining about all of the IT jobs being sent to (fill in any number of derogatory terms for people from India). right after he gets a job – congratulations, we are all happy you did – we find out who the “pioneer of sending jobs overseas” is and gary says “f*ck it, we should give him a chance.” classic.

  35. chicagofinance says:

    You are thinking about it correctly. TIPS will be crushed….consider every bond, no matter what it is, as a spread product to the sovereign credit that issues the underlying currency. Everything in USD is a spread to UST. So for instruments that have credit and term profiles similar to UST, the action of UST prices will dominate.
    [I just erased some stuff that is technically correct about high-yield etc…I can’t post it in a public forum – you get the abridged version sorry]. Whatever your opinion of UST assume TIPS in the same bucket because the spreads are so tight (queue JJ).

    However, consider the issue that bonds are a wasting asset. Every day that advances toward maturity reduces your interest rate risk. Any of the TIPS that you own that are gone before 2016-2017…just leave them….no so much that there isn’t strategy to be implemented, but you are not a bond trader, so there is no point in being cute……whatever you do, in terms of swapping into something else, stay inside 7-8 years (only good on July 20, 2012..immediately obsolete)…by the time the explosion happens, you will be effectively safe, NOT withstanding credit risk…

    1987 Condo buyer says:
    July 20, 2012 at 8:07 am
    ChiFi, back to my TIPS question, and I appreciate your previous consideration. Just looking for thoughts from a high level, I purchased TIPS for consumer inflation protection. As a result of the current safety play, the price of the bonds have reason, as have all Treasuries. Assuming that we do see that change, as it has in Europe, we would see rates rise, prices fall, however, does the inflation protection aspect change anything about TIPS pricing? I can see a situation where there is little consumer inflation, but much higher rates, so TIPS are crushed like ordinary Treasuries.

    What is the thinking in your field?


  36. yo says:

    Ireland is opting for bulldozers rather than bankers as it starts to clear the legacy of the housing boom whose collapse brought the economy to its knees.


  37. Brian says:

    Don’t you agree, however, there’s a point at which things go too far? Taxes, redistribution of wealth, and over regulation strangle the WILL AND ABILITY of people to create businesses and innovate. I’ve always thought the role of government was to build and maintain roads and bridges and other infrastructure that allow commerce to take place. They may also interject when commerce crosses a moral line…for example you wouldn’t want to create a market for human kidneys….

    Rugged individualism is not really a myth in my eyes, but definitely a concept that defines the US and is an important part of our culture. I remember reading stories about the actor, John Wayne, who portrayed this attitude of the rugged individual in his movies. Communist leaders like Mao Tse Tung and Joseph Stalin were so threatened by the concept of rugged individualism that they authorized assassination attempts on the actor’s life. A country filled with people who believe in this concept and work their tails off their whole lives believing in a system that gives them a shot at being rich is truly a force to be reckoned with….

    So yes, Obama was talking about roads and bridges during his recent speech in Roanoke. Great. So why the hell did he even bring it up? Does he thing I’m dumb and didn’t know that some local, state or federal government had a hand in the construction of the road I’m driving on or the sidewalk I’m walking on? Of course I didn’t build that…duh?

    Truthfully the quote from the speech that scares me the most is not “you didn’t build that”….it was “we’re all in this together”. It seems harmless at first glance but it gives me insight into his concept of how to govern in a capitalist country and his leadership abilities. If you govern with this attitude, humans will behave as if somebody else is doing the work so, why bother? I’m sure Obama’s intentions are good but, it just isn’t a good way to achieve results. It’s a poor leadership style.

    A good leader of a capitalist country knows she/he should nurture the idea of rugged individualism. A leader must understand how to make a group of “individuals” work together. In order to achieve goals and encourage innovation, he must steer a group of hard working individuals to work toward a goal. This is the way to strengthen the country.

    Essex says:
    July 20, 2012 at 7:36 am
    In fact companies that go public and take public investment dollars are not “doing it on their own”, when you are in business you are in fact no living in a vacuum as you rely on others for your success. The Myth of rugged individualism is simple a myth. Society is a series of interdependent alliances and choices.


  38. Hi my family member! I want to say that this article is awesome, nice written and come with approximately all important infos. I’d like to see more posts like this .

  39. Essex says:

    If you have to quote Hollywood to explain American than we are already in a world of hurt. As much as I love movies, they are fiction my friend. Our image has been burnished over the past decades thanks to Steve McQueen and Elvis. So that means what to whom?

  40. Juice Box says:

    re: #20 – Grim – 15k a home? How can that not be a home run?

  41. Juice Box says:

    re # 37 – Yo, There may never be anyone to fill those empty 250k houses. I have three cousins in their late teens early 20s who have had to leave Ireland to find work One is the Netherlands,one in New Zealand, and another going to Boston soon (His mother born here so he is a citizen). All of their friends are leaving too, unless you have a farm or a successful business there is no work.

  42. raging bull jj says:

    Bank of America Corp. ‘s record $53 billion reduction of long-term debt in the second quarter will help the lender go three years without needing to tap the bond market , the biggest cushion in its history. Bank of America said this week its long-term debt fell to $302 billion as improving loan performance led to a $2.46 billion quarterly profit after a record loss a year earlier.

  43. Brian says:

    It seems trivial and unbelieveable but it is true and proves how powerful the concept of the rugged individual is. John Wayne was just an actor right? Well, it was threatening enough of a concept for Joseph Stalin to authorize his assasination. You would agree that Joseph Stalin was a powerful would leader wouldn’t you?


    40.Essex says:
    July 20, 2012 at 10:05 am
    If you have to quote Hollywood to explain American than we are already in a world of hurt. As much as I love movies, they are fiction my friend. Our image has been burnished over the past decades thanks to Steve McQueen and Elvis. So that means what to whom?

  44. raging bull jj says:

    chifi there is really really nothing to buy at all. I had a lousy 15K bond mature on 7-15 and it took me several days just to find a replacement bond for 15k. I almost feel sorry for someone who get a large lump sum cash payment, what do you do with it?

    I have my 7-25 Trup Payout to deal with and 8-1 interest payment. We shall see. Looking at 3 short sales this weekend as I need to put cash to work. No way will I be able to reinvest 150K cash next week when I barely could find a place to put 15K cash this week.

    Mortgages are going to be obsolete soon. What is point of borrowing at 3.75% just to leave your money sitting in cash at .001% or take on huge market or credit risk to earn 7%

  45. Brian says:

    Grim, can you unmod 44 please? What word caused it to be moderated?

  46. Juice Box says:

    We should start up the NJREREPORT distressed property fund that will buy up local forclosures @ 15k a pop and rent them. If firms like Blackstone can do it there is no reason why we can’t either.

  47. Brian says:


    Joseph Stal1n tried to k1ll John Wayne. That is not fiction and it demonstrates how Stal1n feared the concept of the rugged individual.


    40.Essex says:
    July 20, 2012 at 10:05 am
    If you have to quote Hollywood to explain American than we are already in a world of hurt. As much as I love movies, they are fiction my friend. Our image has been burnished over the past decades thanks to Steve McQueen and Elvis. So that means what to whom?

  48. Anon E. Moose says:

    What have we learned from Obama’s sycohpants this week:

    1) Conclusive and undisputed (at least as to the words uttered and their order) video and transcript evidence notwithstanding, “He didn’t say that”…

    2) Lefty statists tried to change the subject ponting feigned outrage at the latest ‘Shiny Object’, this time Ann Romney supposedly calling media ‘you people’… except that she didn’t actually utter those words.

    >Our ruling after reviewing the original audio is that she did not include the “you.”

    Judge for yourself – http://abcn.ws/PnqXZPABC News linky)

    Well, if Obama can not say something even thought he said it, I guess Ann Romney can say something despite never having said it. Its model year 1984 Newspeak. Leave it to Obama to bring it almost 30 years late — kind of like the summer of recovery he’s been promising for three years.

  49. Anon E. Moose says:

    Re: Ann Romney & “You People”

    “The trouble with our liberal friends is not that they’re ignorant; it’s just that they know so much that isn’t so.” -R. Reagan


  50. Anon E. Moose says:

    Con’t [50];

    I especially like the teacup tempest of lefty outrage directed at CNN & HuffPo for actually bothering to get the quote right.


  51. Pete says:

    The irony of complaining about people’s fauxrage and shiny object fixation the day after perpetuating such behavior is not lost on me. Just wanted to make that clear.

  52. raging bull jj says:

    I am still amazed to see where Ben pushed rates to in just four short years.

    U.S. Treasury Yields
    Maturity Yield
    3 Month 0.08%
    2 Year 0.07%
    5 Year 0.58%
    10 Year 1.46%
    30 Year 2.54%

  53. yo says:

    Few Economic facts have been changing

    Economists have long taught this history to their undergraduates as an illustration of the growth theory for which Robert Solow won his Nobel Prize in economics: Poor places are short on the capital that would make local labor more productive. Investors move capital to those poor places, hoping to capture some of the increased productivity as higher returns. Productivity gradually equalizes across the country, and wages follow. When capital can move freely, the poorer a place is to start with, the faster it grows.
    “That’s one of the central relationships in macroeconomics,” says Daniel Shoag, an economist at Harvard University’s Kennedy School of Government. “It’s an extremely strong one, and we teach it in introductory macro because it’s one of the few macro facts that are predicted by a model that isn’t a tautology and that holds extremely well.”

    Or at least it used to. Over the past 30 years, the convergence has largely stopped. Incomes in the poorer states are no longer catching up to incomes in rich states.


  54. Libtard in Union says:

    Morning peeps.

  55. Actually, one of the nasty consequences of the 2009 bailout is that it killed the concept of rugged individualism. All risk (as long as you’re a large, politically-connected industry) is offloaded onto the taxpayer. Of course, you can still be a rugged individualist if you’re a little guy, trying to start or operate a small business…although in those cases, your reward is a plunger-handling.

    Heads, I win; tails, you lose.

  56. Ireland would make a nice theme park. And, unlike Disney, you’d be able to drink.

  57. The Original NJ ExPat in NJ says:

    [45] JJ – Agreed. The new formula will be save up 100% of the purchase price and 5 years’ projected property taxes and then buy.

    Mortgages are going to be obsolete soon. What is point of borrowing at 3.75% just to leave your money sitting in cash at .001% or take on huge market or credit risk to earn 7%

  58. yo says:

    any significance a 3 month pays more than a 2 year?
    Maturity Yield
    3 Month 0.08%
    2 Year 0.07%

  59. Potato famine, anyone?

  60. yo says:

    Is it not all relative?When mortgage rates where at 6% savings pays 2% money market and CDs you can get 4.5%,risk pays 10% or more? Unless you have a saved up cash payment,trying to save for cash payment will be as hard.no?

    jj says;

    Mortgages are going to be obsolete soon. What is point of borrowing at 3.75% just to leave your money sitting in cash at .001% or take on huge market or credit risk to earn 7%

  61. Juice Box says:

    “leave your money sitting in cash at .001% or take on huge market or credit risk to earn 7%”

    JJ you seem to be a bit pessimistic since you no longer can push a button to make a quick $10k.

    Why not take your cash and buy some hard assets like land?

  62. Anon E. Moose says:


    Wow, negative yields in German bonds. Vote of no confidence in the US Dollar.

  63. seif says:

    49 – you have changed my mind on ann romney. when she says “he gives 10 percent to the church – does that sound like the kind of person…”

    great point. nobody so close with their church, or in “the church,” would ever do anything to harm anyone! cursed be the person with such a notion! great surrogate job ann. you have won me over!

  64. Take Bojangles and that cult leader, put them against a wall, and shoot them both. They are as useless as rabid dogs.

  65. Anon E. Moose says:

    seif [63];

    I know the idea of giving to charity from one’s own pocket rather than picking the pocket of the guy next to you and taking credit for it is foreign to you, but beleive me it does happen… much more than you think.

  66. seif says:

    65 – but how is that any indication of what she is trying to say? try to stick to topic.

    she literally says “take a look at where Mitt has gone financially” or something to that affect…but YOU CAN”T LOOK AT THE OFFICIAL RECORD OF WHERE HE HAS BEEN FINANCIALLY….which is a person’s taxes.

    forget the left/right drivel…she just doesn’t make any sense.

  67. Fast Eddie says:

    Reporting from work (BlackBerry) during lunch: forgot what it was like to work for smaller firm with root access to systems. Wow! I learned an insane amount in one week! Feels great! Still trying to figure out how guberment created this firm. In fact, in the 27 years that my departed father had a small business, he was endlessly looking for ways to thrive despite bureaucratic land mines. Ultimately, that’s what caused him to sell. Oh well, back to work. Geezus, competition, hard work and the will to succeed really drives these private sector jobs! Who woulda thunk it!

  68. Dissident HEHEHE says:

    I don’t understand TIPS. If the government is determining what the inflation rate is, and they would pay more on TIPS if that rate increases, wouldn’t they purposefully understate the rate of inflation?

  69. Anon E. Moose says:

    seif [66];

    forget the left/right drivel…she just doesn’t make any sense.

    Neither does his O-ness – eveidence what you acknowledge as his inability to express the thought that you divine as building bridges and roads (v. what he actually said — building a business). However, Ann Romney isn’t on the ticket.

  70. 1987 Condo buyer says:

    #68, jeeze, and my older brother would always beat me in monopoly, but I still played the game! (One day we’ll all be wishing for the old days when we could manipulate our own numbers, in the future it may be someone else doing it for us…..)

  71. Shore Guy says:

    Rightly or wrongly, the American people have come to look at those seeking public office, especially the presidency, as a class of suspect characters whom one cannot fully trust. As such, the electorate wants to have some assurance that the person elected is at least reasonably trustworthy. So, we have debates, and the press (sometimes) digs a bit into candidates’ background, and over time the people get the sense of the candidates. With the number of politicians who have lined their own pockets, the People have a reasonable interest in politicians’ finances. For better or worse, releasing tax returns has become a tool to allow the press and interested citizens to get some sense as to the sources of a presidential candidate’s income.

    There is no reason in the world that Mitt Romney should be forced to released his tax forms; likewise, there is no reason for anyone to feel comfortable voting for him. I don’t care how rich or poor a presidential candidate is. I do not believe that wealth is the true measure of a person’s worth/contribution to society. That said, a president appoints people to powerful posts and a president influences legislation and issues executive orders. Because of the power of the office, I think it is reasonable for the public to have a basic understanding of a given presidential candidate’s revenue streams. Whithout such knowledge, the People cannot know whether the person, if elected, is just paying-off those who lined his or her pockets in the past. Failing to release the information also provides ammunition to political opponents who choose to hurl false accusations.

    Mitt will either release his forms or get hammered for it. I am not willing to buy a pig in a poke and I will not vote for him if he does not release more of his returns, or a decent summary that is verified against the originals by a cadre of competent reporters.

  72. seif says:

    71 – well said.

  73. Shore Guy says:

    Ann Romney may be a wonderful woman, I have no idea as I have not met her. But, I get the sense that as First Lady she would bring the worst combination of Nancy Reagan and Rosalynn Carter.

  74. Comrade Nom Deplume says:

    [53] yo,

    The convergence theory still holds, it just holds on an international level.

  75. AG says:

    Spanish bonds anyone? 7.3%

  76. raging bull jj says:

    I like pushing buttons. Much easier. I just lost out on an REO where I was high bidder and some knucklehead out of blue puts bid in 15K above me at 6:30 pm which was accepted as bank REO office was in a time zone that was 4:30pm and never allowed me to counter.

    I put in a full value offer, yet someone was willing to pay above value for a REO. Irrational. Too many amateurs in RE business.

    Due to bond rally my downpayment account is closing in on 1.2 million. Not bad for an account that had a mere 200K in 2007.

    I may shoot instead for upscale homes that have appreciated that owners want to dump by year end. Maybe at year end get one in a cash deal with under 90 days to go in calender year where they are afraid a mortgage would push close to 2012.

    Still looking at a few short sales this weekend, but honestly, it is hard to stay in cash. I lost out on buying Nokia bonds the night before earnings release and BPOP trups that had a big pop just this week.

    Juice Box says:
    July 20, 2012 at 11:50 am

    “leave your money sitting in cash at .001% or take on huge market or credit risk to earn 7%”

    JJ you seem to be a bit pessimistic since you no longer can push a button to make a quick $10k.

    Why not take your cash and buy some hard assets like land?

  77. yo says:

    #71 shore
    Well said! Reason not to vote for Romney just to get O out of office.I will rather write in Sponge Bob if we don’t get another choice by November

  78. Juice Box says:

    JJ – Full tilt all in on a luxury house? Why not an Apartment building that produces an income stream??

  79. Essex says:

    67. The heroic struggle of a man vs. his brain

  80. AG says:

    I am petrified what a 2nd term of the Kenyan will look like. He is doing almost everything by executive order anyway.

    If anyone thinks things are bad now just wait for the next 4 years.

    Best we can hope for is to have Ben to slam his fist on the print button on a scale previously unimagined.

  81. yo says:

    #74 nom,
    Looking it in micro I think you are right.In macro,every country in the world have the same problem at least the developed ones.

  82. seif says:

    81 – “2nd term of the Kenyan”

    stuff like this discredits what follows it…unless you are preaching to the choir

  83. Comrade Nom Deplume says:

    [38] brian

    “So yes, Obama was talking about roads and bridges during his recent speech in Roanoke. Great. So why the hell did he even bring it up? Does he thing I’m dumb and didn’t know that some local, state or federal government had a hand in the construction of the road I’m driving on or the sidewalk I’m walking on? Of course I didn’t build that…duh? ”

    My thinking exactly. When I heard the spin, I went back and looked at the quote. Putting aside the earlier point made that roads and bridges were plural so the oh-so-smart Obama would have said “those”, not “that”, there is a broader point of intepretation to be examined here.

    In statutory analysis, when you look at a phrase that can be interpreted more than one way, you accept the most plausible meaning. To test plausibility, you read it both ways (or more) and deign to figure out which meaning makes the most sense. When I do this with Obama’s quote, the idea that he is talking about roads and bridges, then suddenly points out “you didn’t make [those]” to underscore that private enterprise didn’t make them seems nonsensical. (actually, private enterprise did make them, the customer was the government, and the ultimate customer-payer was the taxpayer, but lets not make Seif’s and yo’s heads explode by going off on this tangent).

    By contrast, the phrase “you didn’t make that”, as applied to businesses, makes grammatical and contextual sense as it fits into the narrative that businesses had help, in the form of government infrastructure, when they created their goods and services.

    So my verdict is that, irrespective of what the Chosen One meant (and since he is so smart and such a good orator, we must presume he meant what he said, another tenet of statutory construction), the idea that he meant to say that small businesses didn’t create roads and bridges makes far less sense grammatically and contextually than the interpretation that most people gave it, i.e., that he was disabusing businesses of the notion that they succeeded on their own without help from others.

    I know I won’t convince seif and yo, who will tell me I’m projecting or something, but I parse statements for meaning for a living and that is how I come out on my read.

    Anyway, that’s my last word on the subject. It’s been beaten to death.

  84. AG says:

    So 13 killed at a Batman movie. More reasons to turn your tv sets off. There are a few things I think the average parent can do to avoid damaging their child. What kind of adult _ss clown is entertained by Batman anyway? Perhaps its the same people that watch day time tv.

    1. Get rid of the tv set.
    2. Get rid of video games
    3. Avoid tax payer funded public indoctrination centers
    4. Avoid medications

  85. seif says:

    84 – “Does he thing I’m dumb”

    if he didn’t, all of US now do.

  86. seif says:

    just kidding. it’s a typo.

  87. AG says:



    I think Sheriff Joe has discredited the communist in chief quite thoroughly.

  88. Comrade Nom Deplume says:

    [87] seif,

    D’oh. Just got that.

  89. Shore Guy says:

    (Wasn’t Al Lewis the grandfather on the Munsters?)

    Why the U.S. Is in an Invisible Depression

    According to Al Lewis on The News Hub, we’re actually in a depression right now, but most people don’t see it. One out of seven Americans are on food stamps – if they weren’t getting cards in the mail every month, you’d see them in soup lines.


  90. seif says:

    88 – damn! you got me again! if “sheriff joe” says so then i have egg all over my face. i apologize.

  91. Juice Box says:

    Shore – It’s not a depression it’s the new normal. Without a massive bubble in “something” there is no way we go back to 1985 or even 2005.

  92. Shore Guy says:

    What? What!?


    Working or Playing Indoors, New Yorkers Face an Unabated Roar


    The restaurant, Lavo in Midtown Manhattan, is not just loud but often dangerously so. On that night, the noise averaged 96 decibels over the course of an hour, as loud as a power mower, and a level to which, by government standards, workers should not be exposed for more than three and a half hours without protection for their hearing.

    Lavo is far from alone. Across New York City, in restaurants and bars, but also in stores and gyms, loud noise has become a fact of life in the very places where people have traditionally sought respite from urban stress. The New York Times measured noise levels at 37 restaurants, bars, stores and gyms across the city and found levels that experts said bordered on dangerous at one-third of them.

    At the Brooklyn Star in Williamsburg, the volume averaged 94 decibels over an hour and a half — as loud as an electric drill. At the Standard Hotel’s Biergarten in the meatpacking district, where workers can log 10-hour shifts, the noise level averaged 96 decibels. No music was playing: the noise was generated by hundreds of voices bouncing off the metal skeleton of the High Line.

    At Beaumarchais, a nightclub-like brasserie on West 13th Street, the music averaged 99 decibels over 20 minutes and reached 102 in its loudest 5 minutes. “It definitely takes a toll,” a waiter said.

    Workers at these places said the sound levels, which were recorded over periods as long as an hour and a half, were typical when they were working.

    One spin class at a Crunch gym on the Upper West Side averaged 100 decibels over 40 minutes and hit 105 in its loudest 5. At a Crunch gym in Park Slope, Brooklyn, the noise level averaged 91 decibels. At the Fifth Avenue flagship store of Abercrombie & Fitch, which has designed many of its stores to resemble nightclubs, pulsating music hit 88 decibels, just shy of the limit at which workers are required to wear protection if exposed to that volume for eight hours.

    By way of comparison, a C train hurtling downtown in Manhattan registered at 84 decibels; normal conversation is from 60 to 65 decibels.

    Some research has shown that people drink more when music is loud; one study found that people chewed faster when tempos were sped up. Armed with this knowledge, some bars, retailers and restaurants are finely tuning sound systems, according to audio engineers and restaurant consultants.

    “Think about places where they’re trying to get you in and out as quickly as possible,” said John Mayberry, an acoustical engineer in San Marino, Calif., who has railed against what he terms the “weaponization” of audio. “It’s real obvious what their intentions are.”

    Some customers like the loudness. Younger people can withstand loud music longer, while older ones may run from it, helping proprietors maintain a youthful clientele and a fresh image.

    But repeated exposure to loud noise often damages hearing and has been linked to higher levels of stress, hypertension and heart disease. Some restaurateurs said they were surprised that their decibel levels were too high, and a few said they were taking remedial measures.

    Indeed, employees at noisy places are often the most affected, yet enforcement of existing noise regulations is almost nonexistent at places like these.


  93. seif says:

    For Joyce:

    Another closed in The Fly

    Last LP: $679,000 ML#: 1217006
    Addr: 24 HOWARD PARK DR
    Twn: TENAFLY Zip: 07670
    Orig LP: $679,000
    Sold: $672,110
    SD: 7/19/2012 UCD: 5/23/2012 DOM: 16

  94. yo says:

    U.S. 10-year 1.448% -0.059

    Treasuries rose, with five-year yields falling to record lows, as Spain said its recession will extend into next year after getting approval for a bank bailout, pushing investors into the safety of government debt.

    The yield on the U.S. 10-year note traded almost at a record low as the region of Valencia in Spain prepared to seek a rescue from the central government as European finance ministers approved a $122 billion bank rescue plan. Yields on Spain’s bonds earlier climbed to record highs over German bunds as Italian bond yields rose to a six-month high over comparable bunds

  95. chicagofinance says:

    My zoned high school where I grew up….

    The meth simply sped up his exit.

    The Queens high-school principal busted with small bags of methamphetamine this week was on his way out for poor performance anyway, Department of Education officials said yesterday.

    Second-year Flushing HS Principal Carl Hudson Jr., was arrested near the school late Tuesday after cops pulled him over for not signaling properly, and allegedly spotted the plastic bags of meth. Hudson got a conditional discharge.

    DOE officials said they had been planning to remove Hudson regardless of his arrest. They said they’re reviewing the matter, but wouldn’t disclose officially whether they’ll try to give him the boot.

    Parents of kids at the school were angry.

    “It’s such a shock to hear that this principal could conduct himself like this. What an embarrassment!” said Contessa Keller. “Kids in here need much better role models.”

  96. yo says:

    The Treasury sold $15 billion in 10- year inflation-indexed notes at a record negative yield as investors sought a hedge against rising consumer prices amid speculation the Federal Reserve will add more stimulus.

    The Treasury Inflation Protected Securities, or TIPS, were sold at a so-called high yield of negative 0.637 percent, the fourth consecutive auction of the securities where investors were willing to pay the U.S. to hold their principal. Five-year TIPS have also been sold at negative yields at the past five auctions of the securities.

  97. yo says:

    10 yr record low of 1.44 percent set on
    June 1

  98. raging bull jj says:

    I want to buy a house to get capital appreciation. Dont really care about income streams and I cant take depreciation as my income is too high, plus too late in the game to let tenants pay off mortgages. I really wont need money in 30 years when I am either dead or one foot in grave. I rather get a vacation home like my buddy does who rents it one month a year, he is funny does a 14 day rental each July but throws in two weeks free, to stay under rule where rental income is tax free. He rents July at his Hampton house, he gets 20K for one month rent, same people each year tax free, writes off mortgage and interest, house where REO fell apart was a beach house. I was going to give 300K cash. and had planned to figured with bank moving so slow with their end, even with cash not closing tiill late Oct early Nov then I would renovate and start showing as a summer rental in Feb/March. Then enjoy house in April and May for myself, not declare it a investment property. Far to difficult to make it a year round tennant and too much headache. Then after a few years sell when market is up and make a profit. I dont want to get involved with section 8, tennants year round, buildings, too much trouble. Plus no status. I dont have the house to use myself. I was only planing to rent the summer house July 1 to Labor Day and maybe get a winter tenant in year two. Not year one.

    Juice Box says:
    July 20, 2012 at 1:10 pm
    JJ – Full tilt all in on a luxury house? Why not an Apartment building that produces an income stream??

  99. Brian says:

    Beer with peaches? Jesus man up.

    If you can drink a 12pack of this and live to tell about it, then I will be impressed:

    Steel Reserve 211 8.10% ABV

    153.New Improved Meat says:
    July 19, 2012 at 5:59 pm
    Scaldis Peche Mel. 9% ABV, so you get both great peach flavor and a world class buzz.

  100. raging bull jj says:

    Sign of a bubble I bought bonds this morning at 9am and I am already up!!

    Could not go into week with cash.

    Not only treasury, Bank of America Bonds, Tobacco Munis and Nokia bonds were on fire this week too. Even MS 30 year issued yesterday way up.

    yo says:
    July 20, 2012 at 1:47 pm
    U.S. 10-year 1.448% -0.059

  101. A.West says:

    I continue to hear that the “rich” need to pay “their fair share”.
    How much is “my fair share”? Apparently 40+% of my income taken by government is not enough to represent a “fair share” of confiscation. Then what is? I have asked this question before, and never receive an answer. By their standards, what can I pay, and then morally say that the rest is all mine? I know what the true, unadmitted answer is in the hearts of these altruistic statists: “everything”. They don’t want my money – they want the moral principal asserted that I am their slave.

  102. ghost of JJ says:

    That reminds me…I loved having beer with Peaches. Peaches, of course, was a Thai hooker that I met down by the Bowery back in the day. She would spend time and favors with me just because I had air conditioning in my apartment and where she comes from that’s a luxury. I would pick up a six pack of Chang and she would be my girlfriend fo long time.

    Brian says:
    July 20, 2012 at 1:59 pm
    Beer with peaches? Jesus man up.

  103. AG says:



    Now if Ben launched QE3 with 500 billion worth of MBS purchases where would we be? Japan territory? Thats why I wont pay off my mortgage in full. It’s too much fun playing the game.

  104. A.West says:

    grim unmod 102

  105. yo says:

    It is my only fund making money do not have a target when to get out.60% cash sitting in money market making 0 interest.
    Second home paid cash,down $40k from when I bought it.Refi primary to 15 year 3%.Retiring at 57 in 5 years outside the US,do not want to jeopardize what I have left.

    raging bull jj says:

    July 20, 2012 at 2:06 pm

    Sign of a bubble I bought bonds this morning at 9am and I am already up!!

  106. Anon E. Moose says:

    jj [101];

    Tobacco Munis

    When do the mortgage settlement muni bonds hit the street? That should be a good snort, no?

  107. AG says:

    These are all temporary gains. Wait until the ultimate bubble starts.

    We all know what that is. Melt it, hide it, give it to your kids. The paper is worth a wipe of the _ss.

  108. yo says:

    We are half way there
    Japan 10-year 0.744% +0.002
    If investors are buying Japans debt at this low, that means they have a full confidence with the government able to pay its debt.Any reason we wll not reach this low and have full confidence from investor?

    AG says:

    July 20, 2012 at 2:20 pm



    Now if Ben launched QE3 with 500 billion worth of MBS purchases where would we be? Japan territory? Thats why I wont pay off my mortgage in full. It’s too much fun playing the game.

  109. AG says:

    Started my 30 year fixed mortgage at 5.87 back in 2008. Refinanced in 2009 to 4.62 30 year fixed conforming with closing costs. Refi’d again in 2012 at 3.125 15 year conforming no closing costs. Now my new goal is 2.5% 15 year no closing cost. At that point I will probably lever up and go metal or other tangibles.

    Japan baby

  110. AG says:



    So long as the sh_t doesnt hit the fan ie loss of confidence then thats exactly where we are headed. Thats a big if though considering the geoplitical climate we are in.

    Dont buy into the next false flag.

  111. Libtard in Union says:

    Steel Reserve is undrinkable. ‘Nuff said. I once tried.

  112. yo says:

    I refi my primary with Wells Fargo 3 step HARP no closing cost.The easiest no close refi I ever did.One phone call,fax me paper to sign,fax it back,got closing paper UPS ,went to Wells 2 min from me,notarized paper,mailed it back done.Even notary and envelope with UPS is free

  113. chicagofinance says:


    Those tools from Califon are back in the news…..did they sell their place yet?

    They bought in a Tiger Woods SC-golf community in 2007 and dropped maybe $500K on a lot…..today according to the WSJ the community is bankrupt and overall construction is not finished, althought the courses are great. Lots are being offered for $10K, with initiation fee, and first year’s dues included…..

    Fcuk those mouthbreathers……OMG I feel bad for them though…I am way too nice a guy…..

  114. AG says:



    I did as well. I agree completely. Easiest ever. Buffet probably has an inside deal with DC.

    My private guy offered me 2.875 with closing costs. He wanted literally 3 boxes worth of documentation because I am self employed. This is after showing him that my checking account could pay it off in full.

    Told him to f_ck off.

    Took myself off the mortgage and just put my wife on because she is employed. Easy as could be.

    I think you got an 1/8 better than me. Congrats. Im not a patient man.

  115. The Original NJ ExPat in NJ says:

    [90] Shore – Most Americans don’t see it for two very good reasons:

    1. Bread lines have been replaced with electronic transfer payments, which is good (it keeps the disenfranchised from gathering and -gasp- conversing).
    2. When you look outside it’s still in color, nothing has changed to black and white. Depressions are always in black and white.

    Why the U.S. Is in an Invisible Depression

  116. jcer says:

    111. Lib, steel reserve is far from the worst, in college we used to drink camo malt liquor, choice of hobos, and crackheads in detroit, $0.99 for a 40. That stuff was like poison, still drank it anyway.

  117. Anon E. Moose says:

    The more I see of the mortgage industry the less suprized I am that they single-handedly tanked the US economy. I wouldn’t trust this bunch with milk money.

  118. Shore Guy says:

    I will see your steel reserve and camo and raise you a Buckhorn — a twelve pack was less expensive than a six pack of coke, somewhere around $3. Blatz sucked too.

  119. chicagofinance says:

    JJ: is that you in the back?

  120. Anon E. Moose says:

    Seriously, we bailed out these a$$ clowns?

  121. Comrade Nom Deplume says:

    [118] shore,

    I’ll see you and raise you a case of Weidemans. $3.99 a case. And lets not forget “Green Death”, a.k.a. Haffenreffer.

  122. Comrade Nom Deplume says:

    [121] redux,

    For some strange reason, Green Death was very popular and available in my town during h.s. I came to find out later, it was brewed in the next town over, a tony suburb of Boston. Must have been on the north side, near the toxic waste-filled wells of Woburn.

  123. chicagofinance says:

    Shore Guy says:
    July 20, 2012 at 4:23 pm
    I will see your steel reserve and camo and raise you a Buckhorn — a twelve pack was less expensive than a six pack of coke, somewhere around $3. Blatz sucked too.

    What about Matt’s? It appears that the next generation expunged it in favor of Saranac micro-brew. I remember going down to Topps in Ithaca (pre-dates Wegman’s) and getting a case for $3.99…so nasty…

  124. chicagofinance says:

    I remember visiting my cousin at SUNY Albany circa-1992 and he has six guys in a five bedroom. There was a six-year senior that was crashing in the clothes closet. He was delivering pizzas and also sold pot on his pizza runs. He was slamming about six or seven of these a day…..I was only there for 4 days, so it was just a slice of time…..

  125. Anon E. Moose says:

    Since there’s no obvious barrier to entry, I think that being a$$holes is how they protect their turf and keep their pay high. You’d have to pay me a hell of a lot of money to deal with these people day in and day out.

  126. WickedOrange says:

    Public Service Announcement: The bodysurfing is going to be ON tomorrow.

  127. Fabius Maximus says:

    For those that don’t have HBO, put this on your DVD wish list. This is a great series and this speech hits the mark.


  128. yo says:

    127 Wow!! Hit the gut

  129. Comrade Nom Deplume says:

    [127] Fab

    So what country is the greatest? How do you define greatness?

    Today, the US still does more of the things he cited than a sizeable portion of our allies combined. Even though they are often unpopular. And for the problems, at whose feet do we lay blame for those?

    And Japan, Belgium, etc. have freedoms. Yes. Hell, even North Korea has some freedoms. Do the western allies have more than us? No, yet it is the freedoms we do have that is a source of irritation to both sides of the aisle (not the same for each, of course).

  130. chicagofinance says:

    really? leave then….I can’t take anything you say seriously……..this diatribe is overly dramatized and a bunch of cliches….I actually had heard positive things about this series….I guess not….

    To be clear, for all intents and purposes, only Canada right now is on better footing than the U.S. from a financial perspective. People can whine all they want, but really all the U.S. needs is to make 70 then SS/Medicare full eligibility age and then have a solid recovery, and for the most part everything else will take care of itself. Sure there is a lot of noise, but the rest of it is window dressing. The problem is O-man doesn’t get us to a recovery and doesn’t roll back entitlements……

    Fabius Maximus says:
    July 20, 2012 at 6:18 pm
    For those that don’t have HBO, put this on your DVD wish list. This is a great series and this speech hits the mark.

  131. yo says:

    “We wage war on poverty not poor people”

  132. Libtard at home says:

    Mad Dog 20/20 was the greatest invention ever for getting smashed quick. Tasted like Hi-C. They don’t make it anymore? Anyone remember Cisco? It was popular with the brothas as was I, which is why I drank it. Loved the grape, again like the brothas.

  133. Wildie says:

    Nice “comeback,” Christie!

  134. Fabius Maximus says:

    #130 Chi

    I really don’t care what you think. My respect for you disappeared with your objectivity.

  135. morpheus says:

    129 & 130: so we don’t have problems as a nation? If we do, do we blame them on the O-man and liberals.

    clot u r right: we are picking up speed! We are So……F**ked.

    well, at least casa d’ morpheus can absorb a few 5.56 rounds before the rest of rounds start flying around the bank’s house.

    things are picking up at the homestead…lots of clearing of brush. Found out that property line was 15 further back than I thought. enjoying home ownership so far. Not enjoying shelling out $15K for 29 new, energy efficient windows for the place.

  136. morpheus says:

    Am i going to have to bitch slap fab and chi? Red team, blue team..it does not matter.

  137. morpheus says:

    need a beer

  138. Juice Box says:

    Old-timers are screwed too.

    “Half of households whose head is between 65 and 74 have no money in retirement accounts, according to the Federal Reserve.”

    Rest of Article is about Foreclosure on seniors.


  139. Morpheus says:

    got the tax bill: assessed value went up, but my taxes went down. very strange for NJ.

  140. Juice Box says:

    re # 130- Chi – Canada? What metric are you using for this?

    Last time I checked Norway has a much better Debt to GDP ratio and better purchasing power.

  141. chicagofinance says:

    morph: I’m no republican! I voted for O-man and I have only ever voted Democrat for President. O is a hack. FabMax is a green card holder taking an American job and opportunities meanwhile badmouthing the place. I have the same attitude toward Essex badmouthing NJ. Basically ….. GTFO if you don’t like it. FabMax is your typical Western European socialist who constantly mocks and denigrates America, but has no problem taking our money…..total hypocrite…and in his case a complete broken record…..that HBO scene has been done over and over throughout history..in this case it is the 2012 version…you can find equivalents in 1880 talking about the end of American greatness……. I like Bloomberg’s quote from this morning on guns, but he should be talking to O-man about his shite…. “You know, soothing words are nice, but maybe it’s time that the two people who want to be President of the United States stand up and tell us what they are going to do about it, because this is obviously a problem across the country.”

    morpheus says:
    July 20, 2012 at 8:17 pm
    Am i going to have to bitch slap fab and chi? Red team, blue team..it does not matter.

  142. chicagofinance says:

    Norway is a bigger Iceland with tremendous natural resources…..it is a closed society…it is essentially a sovereign Alaska….not a good comparison…

    Juice Box says:
    July 20, 2012 at 10:00 pm
    re # 130- Chi – Canada? What metric are you using for this?

    Last time I checked Norway has a much better Debt to GDP ratio and better purchasing power.

  143. cobbler says:

    morpheus [139]
    Town re-valued properties, and the value of your RE went up by less %% wise than the average increase. The difference was large enough to drop the overall number. Someone on the other end of town is hopping mad as his value increase was higher than the average (or he doubled the size of his house 5 years ago, and town only now caught up).

  144. morpheus says:

    142: wow…tell us how u really feel Chi.

    144: thank u for the explanation.

    I like the new home. Still needs a updating, but it was move-in ready. Hopefully, I work on the rain barrels this weekend: they need a couple more coats of paint.

    The german hop plants are growing much better than the english hop plants. The german in me finds that mildly amusing.

    All in all, i like “renting” from the bank and the town. A lot of work, but I enjoy it. It beats practicing law!

  145. Juice Box says:

    Chi -Closed really? I believe there are more expat Iraqis living in Norway than Canada or the US so back to your statement about Canada. Grim said it a few days ago most Canadians live a few hours driving distance to the US border. That could be problematic, history tells us the US has a penchant to annex territories when it needs resources to grow, we might get jealous and start our next war against them. Also since you brought it up does your liberal conscience gets worried when there are no minorities around? Tell us what is the mix down there in Colts Neck? After all Norway has less people than Canada or even New Jersey so if you average it out are there more in your neck of the woods are say the burbs around Oslo?

    I kid of course, the sniping lately here is a turnoff, last thing I want to see this place become is the Huffing Post. I for one find this place a refuge so I for one would appreciate it if we all as the dear departed Rodney King once said “Can we all just get along?”

  146. morpheus says:

    146: “I agree with Howard Johnson!”

  147. Juice Box says:

    Morph – had to google it, Blazing Saddles?

    Thanks for the laugh.

  148. Juice Box says:

    Mad Dog 20/20 – yeah first and last time was a car ride down to Atlantic City. I was late in the game for that one around 21, spent about 1/2 the ride with my head out the window evacuating the contents of my stomach.

  149. brian (100)-

    Your riposte to Peche Mel is ghetto juice?

  150. Juice Box says:

    Meat – tell us about your neighborhood, by the store I mean. Snooki is gone so how are the locals now?

  151. chi (113)-

    They’d be better off dead.

  152. chi (113)-

    BTW, those tools are still on the market. 799.9K…too bad they are staring down the barrel of about 650K, best case.

    I’d love to go into that house and take a dump in their living room.

  153. juice (151)-

    Cool neighborhood. Only douches are the WS types and the transplanted Brooklyn hipsters, and they are a very small minority.

    Best thing about the hipsters is that they’re so stupid, you can insult them to their faces and they keep smiling that vacant pothead grin.

  154. The peeps in my neighborhood also drink heavily, which is good for business and helps me feel good about myself for not being smashed by 4 PM every day.

    Every shred of self-esteem I can grasp is worth the effort.

  155. Anybody notice that most of these moustachioed, tattooed hipsters don’t eat meat?

  156. Juice Box says:

    re# – 154 Meat -“you can insult them to their faces and they keep smiling that vacant pothead grin.”

    Yeah, even if I tried I cannot channel those days much more than a smile.

    Getting old sucks……

  157. Fabius Maximus says:

    #142 Chi

    Just like Eddie Ray back in the day, you keep making assumptions about me that are just wrong. You would be very surprised at my job. Just for the record I was actually sent over here because they couldn’t find an American to do what I do because I have a very specialized skill set. Today there are around 140 people in the world that do what I do.

  158. Fabius Maximus says:

    #148 Juice

    At times the arguments in here against O remind me of Blazing Saddles.


  159. Juice Box says:

    FAB – bring the heat….either tech or neurosurgeon….

  160. Fabius Maximus says:

    #160 Juice

    I am in tech and really don’t want to go into to it. I would rather keep my professional life out of here. Could I be replaced, yes, but I make sure that it would be harder to get rid of me than keep me.

  161. Fabius Maximus says:

    Interesting, on the other side, will this stop parents holding their kids backl?


  162. Juice Box says:

    Fab – appreciate the candor. No worries. So you are worth your salt and will work during any “reset”. Nice drinking with ya….

  163. chicagofinance says:

    To insinuate anything of that nature is so repulsively disgusting and out of line that you expose yourself completely. However, given how closed minded you are, it doesn’t surprise me. Heaven forbid the guy actually just sucks on his own merit…..no it couldn’t compute to your sense of order…..

    Fabius Maximus says:
    July 21, 2012 at 12:01 am
    #148 Juice
    At times the arguments in here against O remind me of Blazing Saddles.

  164. chicagofinance says:

    Recall my comments about clot’s Bush in blackface…..

  165. Juice Box says:

    Chi – be nice if he was from that wasteland of Albania the both of you would be drinking buddies.

  166. I am sorry to the large evaluation, yet Now i’m truly caring the modern Microsoft zune, and also desire this, along with the excellent reviews various other folks have published, will assist you to assess if it does not take right choice for you.

  167. Phoenix says:

    130 chifi
    “People can whine all they want, but really all the U.S. needs is to make 70 then SS/Medicare full eligibility age and then have a solid recovery”

    Instead how about cutting SS/Medicare by 30% tomorrow and leaving the age the same.

  168. yo says:

    Reuters) – When staffers at the National Venture Capital Association see a report that refers to U.S. presidential candidate Mitt Romney’s investments as venture capital, they grimace — and then contact the author to explain politely why it’s wrong.

    The Republican White House hopeful was head of Bain Capital LLC, which does the bulk of its work in private equity and not venture capital, the NVCA would clarify. Venture capital backs companies from their earliest days, and some go on to create thousands of jobs; private equity typically comes in at later stages to turn around underperforming companies, sometimes via job cuts and other unpopular cost-savings moves.

    The distinction has become important as the U.S. election shines a harsh spotlight on the private equity industry, with President Barack Obama’s campaign accusing Romney of slashing U.S. jobs at Bain-owned companies and outsourcing them abroad.

    While Obama does not muddle venture capital and private equity, many journalists and politicians do. Venture capitalists fear those slips could tarnish their public image and lead to unfriendly tax policies and other regulations down the road.

    “People care about what they do and their reputation and what their job is,” said investor Yanev Suissa of venture industry giant NEA, which has $13 billion in committed capital. “When you’re faced with the attitude that what you do is job-destroying, it’s problematic.”

    It is a delicate balancing act for venture capitalists to defend their own industry without disparaging private equity or castigating the career path of the man who might become president next year. Many venture capitalists believe PE firms ultimately help the economy by making lagging companies more competitive, and many PE executives also invest in venture capital funds.

    But with Democrats highlighting companies that went bankrupt or shipped jobs overseas under Bain’s ownership, the VC industry is concerned that negative associations could harm its ability to move an ambitious legislative agenda through Washington.

    That agenda includes preserving preferential tax treatments like the carried-interest tax break, which allows VC and PE investors to pay tax on investment gains at the long-term capital-gains tax rate, which is just 15 percent, compared with a top income-tax rate of 35 percent.

    “In tax policy, you can see the concern there,” said Mark Heesen, president of the National Venture Capital Association, which represents over 400 VC firms.

    Given an increasingly squeezed federal budget, the capital-gains tax break could be drastically scaled back or eliminated altogether, he said.

    While stopping short of saying private equity does not deserve the tax break, Heesen makes it clear he thinks venture capitalists merit special treatment because of the risks they take on investing in start-ups. “We create something from nothing,” he said. “We have a much better story to tell.”

    Venture capitalists are split on which party seems more likely to preserve tax breaks for them. While Republicans are considered the party of business, many Democrats supported the JOBS Act, which makes it easier for young companies to raise money. Heesen said Republicans might feel more pressure to balance the budget and close up anything seen as a loophole.

    The NVCA does not donate to presidential campaigns but it does give to congressional races – about $624,000 so far in the 2011-2012 cycle. About $358,000, or 57 percent, has gone to Republicans, according to a spokeswoman. Individual venture capitalists have given $453,550 to the Romney campaign, compared with $402,915 to the Obama campaign, according to the Center for Responsive Politics’ Opensecrets.org.


  169. chicagofinance says:

    I took the comment as if you were referring to me. I realized later what you meant. There is definitely that element out there, and it is as disgusting as it is transparent. I take real issue with the birthers. It is similar to Ryan Braun getting his PED 50 game suspension lifted on a technicality. People can whine all they want, but even if you think the guy is guilty, it is over, shut up and move on. Similarly, O-man is President. If you do not like his policies, then vote him out of office. The is enough acrimony out there that these type of racist attacks (which is exactly what they are) just crowd out a focus on what really has an impact.

    Fabius Maximus says:
    July 21, 2012 at 12:47 am
    #164 Chi

  170. chicagofinance says:

    Juice Box says:
    July 21, 2012 at 12:38 am
    Chi – be nice if he was from that wasteland of Albania the both of you would be drinking buddies.

    Overshadowed by the legend of Skanderbeg, Dukagjini is most well known for the set of laws ruling the highlands of northern Albania, known as the Kanuni i Lekë Dukagjinit. The set of laws were active in practice for a long time, but it was not gathered and codified until the late 19th century by Shtjefën Gjeçovi.[16][17] The most infamous laws of Kanuni are those regulating blood feuds. Blood feuds have started once again in northern Albania (and have since spread to other parts of Albania, and even to expatriates abroad) after the fall of communism in the early 1990s, having been outlawed for many years during the regime of Enver Hoxha, and contained by the relatively closed borders.

    A blood feud is a feud with a cycle of retaliatory violence, with the relatives of someone who has been killed or otherwise wronged or dishonored seeking vengeance by killing or otherwise physically punishing the culprits or their relatives. Historically, the word vendetta has been used to mean a blood feud. The word is Italian, and originates from the Latin vindicta (vengeance). In modern times, the word is sometimes extended to mean any other long-standing feud, not necessarily involving bloodshed. Sometimes, it is not mutual but a prolonged series of hostile acts waged by one person against another without reciprocation.

  171. chicagofinance says:

    Albanians all want to kill each other…..

    Juice Box says:
    July 21, 2012 at 12:38 am
    Chi – be nice if he was from that wasteland of Albania the both of you would be drinking buddies.

  172. chicagofinance says:

    A friend of mine from high school, who also graduated from Cornell, went to medical school at Mt. Sinai, and now practices in NYC posted this one. I note that he highlighted the following. “Unfortunately, President Obama’s proposal moves us in precisely the opposite direction: poorer-quality care, in which states’ only legal avenue for reduced spending involves further cutting payments to doctors and hospitals, making it even harder for low-income Americans to get the health care they need.”

    Governors’ Worst Nightmare: Obama Proposed Shifting Costs of Obamacare’s Medicaid Expansion to the States

    Last week, I wrote about why states have a significant fiscal incentive to drop out of Obamacare’s expansion of the Medicaid program. States fear, among other things, that the federal government will shift more of the program’s costs to the states over time, leaving states with an unsustainable spending commitment. It turns out that this fear isn’t merely theoretical. During the “supercommittee” deficit-reduction talks last year, President Obama proposed reducing federal funding for the Medicaid expansion by $100 billion over ten years, with states picking up the difference. No wonder governors from both parties are thinking twice about the program.

    “It’s not free,” says Florida Gov. Rick Scott (R.). “You’re still paying it…they’re only going to cover [all of the Medicaid expansion] in the first three years. Then Florida taxpayers are going to be on the hook…Eventually we’ll be on the hook for 50, 45 percent of it. Look. Government health-care programs, everywhere in the world, do three things. They promise you the world, they say ‘Oh, we’re going to cover everything.’ Then what they do is, they run out of money, and they underpay hospitals and doctors, and guess what happens? [Doctors] don’t want to take care of you. There’s fewer of them.”

    As you’ll recall, the federal government and the states share the funding responsibility for Medicaid. The federal government’s portion of the funding is calculated using a formula called the Federal Medical Assistance Percentage, or FMAP. For the pre-Obamacare Medicaid program, the feds paid on average 57 percent of the program’s costs. For the post-Obamacare expansion, the feds are picking up 90-100 percent of the near-term costs, with no firm assurances of what will happen after 2020.

    Obama proposed shifting $100 billion in costs to the states

    During the supercommittee talks, President Obama proposed reducing federal Medicaid spending by $100 billion over ten years. His main idea was to blend the traditional FMAP rate with the more generous Obamacare funding formula, with the end result being a smaller overall federal contribution to the program, and a larger state-based one.

    The New York City public hospital system, which has a big Medicaid population, sounded the alarm. “The President’s original proposal to blend FMAP rates…could cost New York State $11.5 billion ($23 billion gross) over 10 years and New York City $6.5 billion ($13 billion gross) over 10 years,” wrote the NYC Health and Hospitals Corporation in a November 2011 report.

    A 2011 Congressional report, jointly authored by Sen. Orrin Hatch (R., Utah) and Rep. Fred Upton (R., Mich.), estimated that the Medicaid expansion would cost states at least $118 billion through 2023. (Their estimates were largely based on those from the Kaiser Family Foundation.) That figure would likely go up significantly over the following decade, as medical inflation exceeds that of the economy, and federal matching rates decline.

    The President’s official budget for fiscal year 2013 also proposed blending the Medicaid funding rates, though with a much smaller spending reduction of $18 billion over ten years. Nonetheless, “This policy could have a dramatic effect on how much a Medicaid expansion could cost State governments after 2014,” write Hatch and Upton in a letter they sent today to Health and Human Services Secretary Kathleen Sebelius. “We believe the Administration should release all the legislative and policy specifications for its blended rate proposal as governors and State legislatures prepare to make a decision on whether or not to implement the largest expansion of Medicaid in history.”

    Medicaid spending far outpaces revenue growth

    As Dan Diamond notes, a recent report from the State Budget Crisis Task Force makes plain how runaway growth in Medicaid spending is crowding out other essential programs, like education and policing. “Those high costs have backed officials into a corner,” writes Dan:

    “The task force offers a stark assessment: “Medicaid spending growth is crowding out other needs” for states and imperiling their fiscal sustainability.

    The report also found that Medicaid currently represents about one-quarter of states’ general fund spending; the program’s costs to states grew at 7.2% per year across the last decade, far outpacing the 3.9% growth rate for state revenue.

    Those high costs have backed officials into a corner, forcing them to continually come up with new ways to slice health spending. According to the Kaiser Family Foundation’s annual survey, nearly every state has cut Medicaid provider payments in the past two years. (The three that haven’t: Alaska, North Dakota, and West Virginia.) And with states continuing to reel from the economic downturn, those pressures won’t abate anytime soon.

    “It’s hard to blame them for being wary,” Dan concludes.

    Higher costs + less flexibility = raw deal for states

    As former Bush economist Keith Hennessey points out, federal money comes with strings attached. And the strings seem to multiply with time. “What happens…if the Feds want to impose new requirements on the exchanges, and then require states to do the same with their Medicaid programs?” he asks. “The Feds have a history of doing this with Medicaid.”

    According to Politico, last weekend at the National Governors Association meeting in Virginia, five Republican governors proposed an interesting compromise: possibly going along with the Medicaid expansion, if it was paired with block-granting the program. “I’m with those folks who say, if you can block grant us Medicaid, we’d look at it differently,” said Gov. Bill Haslam of Tennessee. He was joined in this sentiment by fellow GOPers Bob McDonnell (Va.), Dave Heineman (Neb.), Gary Herbert (Utah), and Matt Mead (Wyo.).

    But that’s a compromise that would only become relevant if President Obama wins re-election, and/or Democrats retain control of the Senate. Mitt Romney has pledged to repeal Obamacare and institute block grants for Medicaid. “Let states care for their own people in the way they think best. That, in my view, is the best way to care for the uninsured,” said Romney in June.

    At the end of the day, the most humane way to provide health care to the poor is to offer them subsidies to buy private insurance: something that Obamacare offers to those above the poverty line, but not below it, albeit in an overregulated and costly form. Block-granting Medicaid would allow states to provide higher-quality care, at lower cost, to their most vulnerable populations.

    Unfortunately, President Obama’s proposal moves us in precisely the opposite direction: poorer-quality care, in which states’ only legal avenue for reduced spending involves further cutting payments to doctors and hospitals, making it even harder for low-income Americans to get the health care they need.

  173. yo says:

    Couple of months ago I had a colonoscopy.I checked with the doctor and they accept my insurance.Called the insurance they will cover it.Got the procedure done,having everything was perfect.
    Few weeks later I got a bill and a statement from the insurance saying anesthesiologist is not covered “out of network”.The bill is over $2000.
    Giving subsidies to the poor or middleclass does not solve this problem.The problem is the system.Medical cost in this country is to expensive.$2000 for a person that put me to sleep and should have been covered by the insurance in the first place.Why do we have to fight with insurance companies what they should and who they should cover.You think a poor person will not get a heart attack if he got my bill?Getting insurance is expensive enough.It is the high cost we need to solve.

  174. Fabius Maximus says:

    #172 Chi

    A big Whatever.
    I won’t be holding my breath waiting for your ad hominem attacks to stop.

  175. Fabius Maximus says:

    Nice breakdown of the swing states.

  176. yo says:

    This is not mentioning the collection agency.You know how they work

  177. Essex says:

    ChiFi is the new defacto protector of NJ’s reputation. The entire state is in your debt sir. Carry on oh weepy one.

  178. gluteus (158)-

    So you’re a hit man?

    “Just for the record I was actually sent over here because they couldn’t find an American to do what I do because I have a very specialized skill set. Today there are around 140 people in the world that do what I do.”

  179. Too bad Gluteus is not a forward capable of scoring lots of goals in the EPL.

    Because his team suddenly needs one.

  180. cobbler says:

    The argument about state v. federal v. private role in healthcare would make sense if those uninsured were literally dying from the lack/absence of care. While it probably happens to some, it is definitely rare and, using totally crass language, savings to the system are very minor. The rest of the people do get care, through private insurance, VA, Medicare or Medicaid, charity or sometimes cash pay. When states start tweaking Medicaid benefits (block grants allow for this) they first reduce eligibility – that means, pushing more people into the hospital charity care programs – that “someone” still needs to pay for, and at the same time bringing the preventive care for this group to zero which a few years from now will increase the demand for charity care. Second, they start picking at “frivolities” like dental – assuming that if the toothache is bad enough, the patient will go and have his tooth pulled even if he has to use his food money for this. Third, the mental health benefits go; I don’t know what portion of murders, assaults and suicides are committed by those who need a psychiatrist’s help, but I suspect this to be significant. Long-term, all of this just shifts the costs forward.

    I don’t actually like Obamacare much; I think it didn’t go anywhere far in decoupling insurance from employment (and even this is seen as a negative, companies expected to drop coverage is perceived as a huge blemish to the program) – which is absolutely necessary for fairness and competition reasons, and went too far in helping the insurance companies to stay prosperous. I’d make the bulk of care (what is established as necessary and validated) a single-payer program where the costs can be controlled nationwide, and let those that like and can afford it buy a separate private coverage for the electives and cutting-edge treatments. Obviously, we need a total revamp of malpractice system – for stuff covered under the single-payer the doc should be held liable only for the peer-recognized gross negligence (wrong leg amputated…), not for the baby born after 25 weeks gestation not holding head well.
    I haven’t heard from either of the parties about moving in this direction. Obamacare has a potential of gradually shifting there in a few years, mostly as a result of private insurers’ failure. Repubs’ suggestions will simply aggravate the bad situation that we are already in.

  181. yo says:

    You might have the wrong impression that the mortgage companies have brought their guards down.It is easy if you are qualified.
    1.Pre-qualification-you make the call if qualified
    2.They mail you your credit score.Paper to sign giving them permission to get 3 copies of your 1040 from the IRS .Send you a copy of HUD1.Fax the permission for IRS
    They look if you’ve been with the same employer last 3 years ,check your income thru your 1040. Call your employer if you still work there.
    3.They mail you the closing papers and mail it back.

    All mortgage application should be this easy,if qualified

    Anon E. Moose says:
    July 20, 2012 at 4:08 pm
    The more I see of the mortgage industry the less suprized I am that they single-handedly tanked the US economy. I wouldn’t trust this bunch with milk money.

  182. cobbler says:

    Our Ridiculous Approach to Retirement

    Seventy-five percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts. The specter of downward mobility in retirement is a looming reality for both middle- and higher-income workers. Almost half of middle-class workers, 49 percent, will be poor or near poor in retirement, living on a food budget of about $5 a day.

    it is irresponsible for Congress to deny that regardless of how much you throw 401(k) advertising, pension cuts, financial education and tax breaks at Americans, the retirement system simply defies human behavior. Basing a system on people’s voluntarily saving for 40 years and evaluating the relevant information for sound investment choices is like asking the family pet to dance on two legs.

    Not yet convinced that failure is baked into the voluntary, self-directed, commercially run retirement plans system? Consider what would have to happen for it to work for you. First, figure out when you and your spouse will be laid off or be too sick to work. Second, figure out when you will die. Third, understand that you need to save 7 percent of every dollar you earn. (Didn’t start doing that when you were 25 and you are 55 now? Just save 30 percent of every dollar.) Fourth, earn at least 3 percent above inflation on your investments, every year. (Easy. Just find the best funds for the lowest price and have them optimally allocated.) Fifth, do not withdraw any funds when you lose your job, have a health problem, get divorced, buy a house or send a kid to college. Sixth, time your retirement account withdrawals so the last cent is spent the day you die.

    As we all know, these abilities are not common for our species. The current model for retirement savings, which forces individuals to figure out a plan for their retirement years, whether through a “guy” or by individual decision making, will always fall short.

  183. scribe says:

    My neighbor is under contract to buy a house in Putnam. She got a pre-approval from Chase, but now they’re jacking her around somehow.

    Any suggestions for mortgage brokers or banks in NY state?

  184. Comrade Nom Deplume says:

    [182] cobbler,

    So how do you handle doctor strikes, practice freezes, and concierge medicine?

  185. Essex says:

    Something very interesting is happening.

    There’s been so much corruption on Wall Street in recent years, and the federal government has appeared to be so deeply complicit in many of the problems, that many people have experienced something very like despair over the question of what to do about it all.

    But there’s something brewing that looks like it might be a blueprint to effectively take on the financial services industry: a plan to allow local governments to take on the problem of neighborhoods blighted by toxic home loans and foreclosures through the use of eminent domain. I can’t speak for how well the program will work, but it’s certaily been effective in scaring the hell out of Wall Street.

    Under the proposal, towns would essentially be seizing and condemning the man-made mess resulting from the housing bubble. Cooked up by a small group of businessmen and ex-venture capitalists, the audacious idea falls under the category of “That’s so crazy, it just might work!” One of the plan’s originators described it to me as a “four-bank pool shot.”

    Here’s how the New York Times described it in an article from earlier this week entitled, “California County Weighs Drastic Plan to Aid Homeowners”:

    Desperate for a way out of a housing collapse that has crippled the region, officials in San Bernardino County … are exploring a drastic option — using eminent domain to buy up mortgages for homes that are underwater.

    Then, the idea goes, the county could cut the mortgages to the current value of the homes and resell the mortgages to a private investment firm, which would allow homeowners to lower their monthly payments and hang onto their property.

    I’ve been following this story for months now – I was tipped off that this was coming earlier this past spring – and in the time since I’ve become more convinced the idea might actually work, thanks mainly to the extremely lucky accident that the plan doesn’t require the permission of anyone up in the political Olympus.

    Cities and towns won’t need to ask for an act of a bank-subsidized congress to do this, and they won’t need a federal judge to sign off on any settlement. They can just do it. In the Death Star of America’s financial oligarchy, the ability of local governments to use eminent domain to seize toxic debt might be the one structural flaw big enough for the rebel alliance to exploit.

    The plan only makes sense in the context of America’s overall economic paralysis. Right now the economy is stuck in a standstill, largely because of the housing bubble. Five or six or ten years ago, when Wall Street was cranking out trillions of dollars of cheap home loans so that they could later be chopped up, pooled, and sold to unsuspecting investors in the form of high-grade securitized bonds, millions of ordinary people jumped on the housing comet, buying big houses for big money.

    The problem is, if you bought a house for $300,000 then, it might be worth $200,000 now. When you’re $100,000 in debt, you’re not rushing out to buy washing machines, new cars, new DVD players. As Paul Krugman put it in his column today:

    There’s no mystery about the reasons the economic recovery has been so weak. Housing is still depressed in the aftermath of a huge bubble, and consumer demand is being held back by the high levels of household debt that are the legacy of that bubble.

    Then there’s the other problem. Even if you manage to keep making your payments on your house, your neighbor might not. Whoever used to live next door has left after a foreclosure: there are squatters building a meth lab in the basement now. Two more houses are being boarded up down the street. So now the value of your house is getting lower and lower every day. No matter how fast you make your payments, your debt situation is still going to be moving in the wrong direction.

    Instead of letting everyone be slowly ground into dust under the weight of all of that debt, the idea behind the use of eminent domain is to pull the Band-Aid off all at once.

    The plan is being put forward by a company called Mortgage Resolution Partners, run by a venture capitalist named Steven Gluckstern. MRP absolutely has a profit motive in the plan, and much is likely to be made of that in the press as this story develops. But I doubt this ends up being entirely about money.

    “What happened is, a bunch of us got together and asked ourselves what a fix of the housing/foreclosure problem would look like,” Gluckstern. “Then we asked, is there a way to fix it and make money, too. I mean, we’re businessmen. Obviously, if there wasn’t a financial motive for anybody, it wouldn’t happen.”

    Here’s how it works: MRP helps raise the capital a town or a county would need to essentially “buy” seized home loans from the banks and the bondholders (remember, to use eminent domain to seize property, governments must give the owners “reasonable compensation,” often interpreted as fair current market value).

    Once the town or county seizes the loan, it would then be owned by a legal entity set up by the local government – San Bernardino, for instance, has set up a JPA, or Joint Powers Authority, to manage the loans.

    At that point, the JPA is simply the new owner of the loan. It would then approach the homeowner with a choice. If, for some crazy reason, the homeowner likes the current situation, he can simply keep making his same inflated payments to the JPA. Not that this is likely, but the idea here is that nobody would force homeowners to do anything.

    On the other hand, the town can also offer to help the homeowner find new financing. In conjunction with companies like MRP (and the copycat firms like it that would inevitably spring up), the counties and towns would arrange for private lenders to enter the picture, and help homeowners essentially buy back his own house, only at a current market price. Just like that, the homeowner is no longer underwater and threatened with foreclosure.

    In order to make MRP work, Gluckstern and his partners needed to find local officials with enough stones to try the audacious plan. With so many regions in such desperate straits thanks to the housing mess, that turned out to be not as hard as perhaps might have been expected.

    First in line was San Bernardino County in California, not coincidentally located at ground zero of a subprime bubble blown to gigantic proportions by Southern Californian mortgage giants like Countrywide and Long Beach. San Bernardino is more or less a poster child for the mortgage crisis; more than half of its homeowners are underwater on their homes, unemployment is past 12%, and the city of San Bernardino recently had to file for bankruptcy.

    It’s not surprising, then, that local officials like Acquanetta Warren, mayor of the city of Fontana, were receptive to the eminent-domain plan.

    “Sooner or later,” Warren told the New York Times, “all these people who are upside down on their homes are just going to leave the keys out on the door and say forget it. This was supposed to be the promised land, and now we have people waiting in some kind of hellish purgatory.”

    San Bernardino County officials, along with two of its bigger cities (Fontana and Ontario), have set up the legal mechanisms needed to condemn and seize home loans, but the details of the plan haven’t been completely worked out yet. Still, officials say about 20,000 homeowners in San Bernardino would be eligible for the program; how many will get to use it is unknown.

    In the meantime, other counties in other parts of the country are considering the plan. MRP has been courting local officials in Nevada, Florida, and in parts of the Northeast. In New York, officials in Suffolk County on Long Island, where 10% of homes are underwater, are seriously considering the plan.

    The role of MRP and the presence of businessmen like Gluckstern in this whole gambit is going to tempt some reporters to pitch this story as a purely financial story, and certainly it does have interest as a business headline.

    But MRP’s role aside, this is also a compelling political story with potentially revolutionary consequences. If this gambit actually goes forward, it will inevitably force a powerful response both from Wall Street and from its allies in federal government, setting up a cage-match showdown between lower Manhattan and, well, everywhere else in America. In fact, the first salvoes in that battle have already been fired.

    For instance, the Wall Street trade association, SIFMA, this past week issued a denunciation of the eminent domain plan that includes a promise of a legal challenge. “We believe the MRP proposal is unlikely to survive a judicial challenge,” one of SIFMA’s lawyers wrote. Other trade groups are lining up to describe the tactic as illegal or “unconstitutional.”

    More insidiously, however, SIFMA pledged that its members will not allow future home loans originated in counties that use the eminent domain tactic to participate in something called the To-Be-Announced (TBA) markets for mortgage-backed securities. Explaining this would require a sharp detour into a muck of inside-baseball mortgage terminology, but the long and the short of it is that SIFMA is promising to make it difficult for any community that tries this tactic to obtain private mortgage financing in the future.

    Essentially, SIFMA is promising a kind of collusive financial lockout of uncooperative communities. The threat would appear to be a high-handed form of redlining that raises serious antitrust questions, but in a way, that kind of response is to be expected.

    Ultimately, the MRP tactic will be a fascinating test case to see exactly how much local self-determination will be allowed by the centralized financial oligarchy and its allies in the federal government.

    If through boycotts, collusion, federal pressure and other forms of encirclement, local governments can be stripped of their right to condemn blighted property, we’ll know that the guts have been cut out of the very idea of regional self-rule. It will be fascinating to watch. At the very least, this story has the potential to be the first true open, pitched battle between Wall Street and the homeowners and communities who have been the primary victims of financial corruption.

    Tune in for more on this front soon.

    Read more: http://www.rollingstone.com/politics/blogs/taibblog/from-an-unlikely-source-a-serious-challenge-to-wall-street-20120720#ixzz21J0zFvxC

  186. cobbler says:

    nom [186]
    Mind you, I have no desire for the UK’s NHS-type system (VA Healthcare is one, actually – but I don’t believe the majority of the doctors will agree to become salaried staff, or that majority of the people will accept government-run facility as their only choice. We are different from the British of today, and very different from the Brits of the late 1940s when NHS had been set up). I never heard of doctors’ strikes or practice freezes in Canada, Germany or France (despite the French seemingly loving to strike, especially when you need to use their transportation system) where the docs retain their independence. I believe, actually, that single-payer can an should be set up in a way that family docs’ (who are currently the main concierge care candidates) incomes increase at the expense of specialists charges, and are further helped by a huge drop in the office costs.

  187. chicagofinance says:

    Will ALWAYS fall short? WTF does this mean? Not only do many people die with money, they seem to make it a priority to leave money to their kids and parties of interest. Even people of modest means. Only the most vile clowns manage to destroy themselves, unless there are long-term care needs. Even then, they go into a spend down and end up in the dreaded nursing home…..those are the only truly terrible situations.

    cobbler says:
    July 21, 2012 at 4:48 pm
    Our Ridiculous Approach to Retirement
    As we all know, these abilities are not common for our species. The current model for retirement savings, which forces individuals to figure out a plan for their retirement years, whether through a “guy” or by individual decision making, will always fall short.

  188. chicagofinance says:

    As we’re wrapping up the interview, Mr. Wien offers another perspective. “In 2007 I gave a talk in London called, ‘America has peaked.’ I didn’t give it in the U.S. because I thought I’d be stoned. . . . I said I wasn’t really worried about it because I thought it was a gradual process,” and “I thought the standard of living in London peaked in 1912 and life looked like it was still pretty good in London.”

    When Mr. Wien finished his remarks, a member of the audience approached him and said that he had just flown in from Amsterdam “and I just want to tell you one thing: Holland peaked in 1617 and life is still pretty good.”

    On Wall Street, They Call Him an Optimist

    The famed guru from the market glory days says investors are right to be angry but that stocks will make a comeback

    ‘Disaster has a way of not happening,” says Byron Wien. It is perhaps a surprising comment from someone who was born during the Great Depression and then orphaned shortly after World War II.

    But as he sits in his office high above Manhattan’s Park Avenue, the 79-year-old dean of Wall Street forecasters is able to take the long view. And right now he is surveying a troubled world for individual investors. U.S. shareholders, already bruised by more than a decade of disappointing returns, a financial crisis and an anemic recovery, have lately received more reasons for doubt.

    “You don’t have any heroes,” says Mr. Wien, vice chairman of Blackstone Advisory Partners. “You pick up the paper and you read about Peregrine,” a futures brokerage where the CEO allegedly stole millions of dollars from clients.

    Mr. Wien ticks off other scandals, including the effort by bankers—with the knowledge of government officials—to manipulate reported interest rates. “It just seems like the whole system is corrupt. And so that has to have an effect on confidence,” he concludes. “I think this is a real problem and it’s going to linger for a while.”

    Of course, recent financial headlines have not been entirely devoted to scandal. They have also noted the passing of Mr. Wien’s longtime colleague Barton Biggs. Over several decades at Morgan Stanley, Biggs must have sometimes seemed like a hero to investors. He called the coming bull market in U.S. equities in 1982, warned people away from Japanese stocks in the late 1980s—and from Internet stocks in the late 1990s.

    Mr. Wien, for his part, launched an annual report predicting 10 “surprises” likely to come to pass within the year. After nailing a series of calls in the mid-1990s, he landed on the cover of our sister publication Barron’s. “But I never did it to keep score. I did it to stretch my own thinking and other people’s thinking,” he says.

    There were plenty of big blown calls, too. But Biggs and Mr. Wien built a powerful role for market strategists at the big Wall Street houses by offering provocative and entertaining opinions about market trends. Even when their advice wasn’t followed, it was often appreciated by a portfolio manager wrestling with his own investment thesis.

    After the bursting of the dot-com bubble in 2000 and a bear market in stocks, people were less enthralled with market gurus at the giant firms. Also, revelations that some Wall Street research analysts had publicly touted stocks while privately disparaging them resulted in a legal settlement between the major investment banks and former New York Attorney General Eliot Spitzer. Banks subsequently limited spending on in-house research of various kinds, including strategy. The benefits of the settlement have proven elusive, while other issues have come to dominate investor concerns.

    Today, Mr. Wien says that stock trading has replaced investing, with the average holding period for stocks going from eight years in 1960 to seven months today. “I think the public feels that professionals have taken over the market and the playing field isn’t level for them,” he says, adding that as a result many investors in recent years have piled into bond funds where they perceive a better deal. “And the only thing that would change that is if the stock market started to perform very well again. Then they would feel that they’re missing something. Right now they don’t feel they’re missing anything.”

    Yet Mr. Wien believes that they are missing something. He says stocks are likely to outperform bonds, and he thinks that a lot of investors will get over their concerns about the financial system once the market is rising again. Part of his optimism lies in the fact that he isn’t sure the system is as rotten as it may seem.

    Speaking of recent financial scandals, he says, “I don’t think it was any better 50 or 100 years ago. It’s just we seem to know more about it because of you.” So more media coverage is the reason so many scandals are in the news?

    Give Mr. Wien credit for not succumbing to the temptation of an easy answer. Blaming an unmeasurable rise in some sort of greed quotient doesn’t help prevent the next financial crisis or scandal, nor does it necessarily help an investor decide on asset allocation. Since the 2008 crisis, some Wall Street old-timers have loudly yearned for the days when bankers had a selfless devotion to clients, though it’s not clear such days ever existed.

    For his part, Mr. Wien has identified several causes of the 2008 crisis, including “the dumbest idea in the economic history of the United States.” That would be the federal policy that “every American should own their own home.”

    The related problem was too much debt, to fuel a lifestyle beyond our economic capabilities, he continues. “The American people aren’t satisfied with 2% growth, so we provided leverage for them, just the way we at Blackstone sometimes borrow money on the companies we buy. Well, that happened on a national scale and we grew faster than we probably should have been growing. The same thing happened all around the world. That’s part of the explanation for Europe’s problems.”

    But at least on this side of the Atlantic, he now sees reasons to be bullish. “I’m actually kind of positive on the U.S. because I think some good things are happening.” Housing has been a drag on economic growth since the crisis. But now that the bloated inventory created during the bubble years has been reduced, he expects housing to be a contributor to growth in 2013.

    Thanks to fracking, a boom in domestic energy production is enriching states like North Dakota and keeping prices low for consumers nationwide, allowing them to spend more on other goods.

    He expects that whoever is elected, the U.S. economy will largely avoid the “tax cliff” that includes massive federal tax increases scheduled for the end of this year. Short term he doesn’t see bad news from Europe preventing a U.S. rally, because he expects that the Europeans will postpone the inevitable break-up of their currency union at least for a while. Mr. Wien says societies generally find a way to solve their problems.

    Clearly Mr. Wien has found ways to solve his. “My life has turned out so much better than I ever expected in every way,” he says, reflecting on his humble beginnings in inner-city Chicago. When he was nine years old, his father died. His mother passed away five years later. He moved in with an aunt but money was tight, so from the age of 15 he was working after school and on weekends.

    One day in high school he was summoned to the principal’s office and asked whether he owned a suit and tie. When the young Byron Wien replied that he did, the school’s guidance counselor said: “We can send one kid downtown” to meet someone from Harvard’s admissions office. The college was searching for talented kids from modest backgrounds, and “you’re our pick,” said the counselor. “And Wien, when you go down there, don’t make a fool of yourself.”

    “I remember it like it was yesterday. It changed my life,” Mr. Wien recalls. Once on campus, “I wanted to know everything about everything.” He wrote for the school paper and majored in chemistry and physics. He took courses in several of Harvard’s graduate schools as well, and completed an MBA.

    He wanted a business career that involved writing, so after a brief and unenjoyable stint in advertising, he became a securities analyst and then a portfolio manager. In 1984, Biggs recruited him to Morgan Stanley by telling him that the firm’s management had decided he would be the perfect person to lead investment strategy for the U.S.

    “Later on I learned that I was the seventh person that Barton approached with that line,” says Mr. Wien. But he was still happy to have the job. “I was going to be able to write every week and get published.”

    Still, one gets the impression that it wasn’t the world’s easiest assignment. “I was fired 11 times at Morgan Stanley,” reports Mr. Wien.

    The cliche is that Wall Street’s market gurus are permanently bullish stock touts, but to be clear, Mr. Wien is only optimistic relative to many of today’s sour institutional investors.

    “Look, everybody longs for the days from 1982 to 1999, when stocks compounded at 15% or more. Those days are not returning any time soon,” he says.

    The bad news, he adds, is that while America is the best of the developed economies, “we’re a mature country. We should only grow at about 2%” adjusted for inflation. Add in 2% inflation and 1% annual productivity gains and he says corporate earnings should be growing at 5%, down sharply from the annual average of 8.4% since 1945.

    Real GDP growth of 2% is the bull case? “The world is just plain a more competitive place,” explains Mr. Wien. And he thinks it may get much more competitive. He’s bullish on emerging markets and adds that while we may think of China, for example, as a place that simply assembles our inventions like the iPad, that could easily change. “China is filing lots of patents these days. There are a lot of smart Chinese and eventually they’ll become innovators too.”

    He also discusses massive federal debts in the U.S., our persistently high unemployment, and the possibility of “social unrest” as a result. He notes that there are more Americans who have been unemployed for 27 weeks or more than ever before in our history.

    As it becomes difficult for me to remember what the optimistic part of his argument was, Mr. Wien says that in order to achieve robust growth, “this country has to go through almost a convulsive change.” That includes wholesale reform of U.S. education and an overhaul of the U.S. health-care system, so it becomes “oriented toward results instead of services.”

    As we’re wrapping up the interview, Mr. Wien offers another perspective. “In 2007 I gave a talk in London called, ‘America has peaked.’ I didn’t give it in the U.S. because I thought I’d be stoned. . . . I said I wasn’t really worried about it because I thought it was a gradual process,” and “I thought the standard of living in London peaked in 1912 and life looked like it was still pretty good in London.”

    When Mr. Wien finished his remarks, a member of the audience approached him and said that he had just flown in from Amsterdam “and I just want to tell you one thing: Holland peaked in 1617 and life is still pretty good.”

    Maybe, but perhaps Americans still aren’t satisfied with 2% growth. And if the alternative is Holland, they might just opt for convulsive change.

    Mr. Freeman is assistant editor of the Journal’s editorial page.

    A version of this article appeared July 21, 2012, on page A11 in the U.S. edition of The Wall Street Journal, with the headline: On Wall Street, They Call Him an Optimist.

  189. njescapee says:

    Do Business Schools Incubate Criminals?
    By Luigi Zingales Jul 16, 2012 6:30 PM ET
    The recent scandals at Barclays Plc, JPMorgan Chase & Co., Goldman Sachs Group Inc. and other banks might give the impression that the financial sector has some serious morality problems. Unfortunately, it’s worse than that: We are dealing with a drop in ethical standards throughout the business world, and our graduate schools are partly to blame.

    Consider, for example, the revelations about two top executives at the elite consulting firm McKinsey & Co., which has avoided public vilification despite the transgressions of its former employees. McKinsey director Anil Kumar, — a graduate of the University of Pennsylvania’s Wharton School — pleaded guilty to providing insider information to hedge-fund manager and fellow Wharton alumnus Raj Rajaratnam. Rajat Gupta, a graduate of Harvard Business School who served for nine years as McKinsey’s worldwide managing director, was convicted of insider trading in the same case.

    Although Gupta had long left McKinsey when the actions leading to his conviction took place, it would be shortsighted not to take the problem seriously. While every firm can have its bad apples, when these bad apples are at the top, it suggests that a company has either a corrupt culture or a defective selection process, or both. This is particularly troubling at a company like McKinsey, which cites the integrity and quality of its consultants as key advantages. “Keep our client information confidential” is one of its credos, proudly displayed on its website.

    Where did Gupta, Kumar and others get the idea that this kind of behavior might be OK? Most business schools do offer ethics classes. Yet these classes are generally divided into two categories. Some simply illustrate ethical dilemmas without taking a position on how people are expected to act. It is as if students were presented with the pros and cons of racial segregation, leaving them to decide which side they wanted to take.

    Others hide behind the concept of corporate social responsibility, suggesting that social obligations rest on firms, not on individuals. I say “hide” because a firm is nothing but an organized group of individuals. So before we talk about corporate social responsibility, we need to talk about individual social responsibility. If we do not recognize the latter, we cannot talk about the former.

    Economics and Greed
    Oddly, most economists see their subject as divorced from morality. They liken themselves to physicists, who teach how atoms do behave, not how they should behave. But physicists do not teach to atoms, and atoms do not have free will. If they did, physicists would and should be concerned about how the atoms being instructed could change their behavior and affect the universe. Experimental evidence suggests that the teaching of economics does have an effect on students’ behavior: It makes them more selfish and less concerned about the common good. This is not intentional. Most teachers are not aware of what they are doing.

    My colleague Gary Becker pioneered the economic study of crime. Employing a basic utilitarian approach, he compared the benefits of a crime with the expected cost of punishment (that is, the cost of punishment times the probability of receiving that punishment). While very insightful, Becker’s model, which had no intention of telling people how they should behave, had some unintended consequences. A former student of Becker’s told me that he found many of his classmates to be remarkably amoral, a fact he took as a sign that they interpreted Becker’s descriptive model of crime as prescriptive. They perceived any failure to commit a high-benefit crime with a low expected cost as a failure to act rationally, almost a proof of stupidity. The student’s experience is consistent with the experimental findings I mentioned above.

    In other words, if teachers pretend to be agnostic, they subtly encourage amoral behavior without taking any responsibility. True, economists are not moral philosophers, and we have no particular competence to determine what is ethical and what is not. We are, though, able to identify behavior that makes people better off. When a theater catches fire, the individual incentive is to rush to the exit as fast as possible. Yet if everyone in the audience rushed at once, the crowd near the door would allow fewer people to escape — indeed, many could die. Not surprisingly, there are social norms against this behavior. People who violate those norms are judged rude, egotistical, ill-behaved, or in certain cases even criminally negligent.

    When the economist Milton Friedman famously said the one and only responsibility of business is to increase its profits, he added “so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” That’s a very big caveat, and one that is not stressed nearly enough in our business schools.

    Free Competition
    Lobbying to secure a competitive advantage from the government certainly does not represent “open and free competition.” Similarly, preying on customers’ addictions or cognitive limitations constitutes deception, if not outright fraud. Not to mention using clients’ confidential information for personal gain, manipulating a major interest-rate benchmark such as Libor, or selling financial products you know to be flawed.

    The way to teach these ethics is not to set up a separate class in which a typically low-ranking professor preaches to students who would rather be somewhere else. This approach, common at business schools, serves only to perpetuate the idea that ethics are only for those students who aren’t smart enough to avoid getting caught.

    Rather, ethics should become an integral part of the so- called core classes — such as accounting, corporate finance, macroeconomics and microeconomics — that tend to be taught by the most respected professors. These teachers should make their students aware of the reputational (and often legal) costs of violating ethical norms in real business settings, as well as the broader social downsides of acting solely in one’s individual best interest.

    Of course, no amount of instruction can prevent some people from engaging in bad behavior. It can, however, contribute to a social consensus that would discourage diffuse fraud, like the widespread misreporting of Libor rates or the willful self- delusion and dishonest dealing that helped turn the subprime crisis into a global financial disaster. The daily scandals that expose corruption and deception in business are not merely the doing of isolated crooks. They are the result of an amoral culture that we — business-school professors — helped foster. The solution should start in our classrooms.

    (Luigi Zingales is a professor at the University of Chicago Booth School of Business and the author of “A Capitalism for the People: Recapturing the Lost Genius of American Prosperity.” The opinions expressed are his own.)

    Read more opinion online from Bloomberg View. Subscribe to receive a daily e-mail highlighting new View editorials, columns and op-ed articles.

    Today’s highlights: the editors on breaking up too-big-to-fail banks and how to control fires in Colorado; Noah Feldman on Tunisia’s continuing Arab Spring; Jeffrey Goldberg on Romney and Middle East peace; William Pesek on Asia’s slowing growth; Ramesh Ponnuru on Republican fiscal hypocrisy.

    To contact the writer of this article: Luigi Zingales at Luigi.Zingales@chicagobooth.edu

    To contact the editor responsible for this article: Mark Whitehouse at mwhitehouse1@bloomberg.net

  190. chicagofinance says:

    Juice: just to note how much of a different society Norway is; Brevik is up for only a mandatory 21 years;

    Also, to continue my diatribes about West Europeans, and their inherent distaste for all things United States…..it is so transparent….look at this quote from a national whose country is responsible for liquidating 12M people, inlcude 6M Jews….outrageous….but absoutely to stereotype…

    “”You Americans could never handle a trial like this,” a German television reporter sneered at me during a smoke break. Like many Europeans, he looked down at the U.S. justice system for its supposed violence, including the persistence of the death penalty here. ” STFU you Nazi!

    Mass Murder and Evil: From Oslo, Norway to Aurora, Colo.

    At the killer’s trial, a vile smirk would cross Anders Behring Breivik’s face when the camera cut to his profile


    The massacre at an Aurora, Colo., movie theater has left at least a dozen innocents dead. This weekend also happens to mark the one-year anniversary of the Breivik massacre in Norway. As Coloradans, along with the rest of the nation, come to grips with the Aurora killing, there is much to learn from the Norwegians about how to confront evil—and how not to.

    I spent most of a day at the trial of Anders Behring Breivik in May. The Oslo district court that day was surrounded by Norwegian special-forces officers armed with submachine guns. The entrance to the courthouse was blocked by a security cordon, its railings decorated with white flowers and Norwegian flags. Passersby would invariably stop by this make-shift memorial. Some shook their heads in silence; others visibly teared up. Then they moved on.

    Inside, the court was busy identifying some of the 69 youth whose lives Breivik took as he rampaged through Utøya island, about 25 miles northwest of Oslo. (Breivik also detonated a bomb in Oslo’s government quarter, killing another eight.) I watched these proceedings in an adjacent room with a videolink and live English translation for the foreign press. What I witnessed made for one of the most disturbing experiences of my life.

    A forensic investigator, Superintendent Gøran Dyvesveen, would describe the location on the island where each victim was shot and where the body was found. A forensic pathologist would then detail the injuries suffered by the victim, using a mannequin to demonstrate the trajectory and impact of each bullet. Finally a lawyer for the victim’s family would make a short statement about his or her life accompanied by a photo of the victim.

    “Sharidyn Meegan Ngahiwi Svebakk-Boehn was shot near the lover’s path on the island,” Superintendent Dyvesveen summarized in one case. Then his pathologist colleague used a pointer to mark entrance and exit wounds on the gray mannequin representing her body. “The victim suffered two shots,” the pathologist said. “Both entered the left shoulder, then went through the left lung, and penetrated the aorta. One bullet was lodged in the chest, the other passed through the liver.” Then this: “Sharidyn died from these shots, which caused immediate unconsciousness and rapid death.” This victim was 14. She had dreamt of becoming a fashion designer, the court heard from her parents’ statement.

    They added, “We are so proud that she chose us to be her parents.”

    The emotional presentations did not disrupt the court’s decorum. Yet everyone—including the chief judge, the police investigators and pathologists, even the bailiffs and jaded European reporters sharing the room with me—was affected. Everyone, that is, except the killer himself. A vile smirk would occasionally cross Breivik’s lips when the courtroom camera cut to his profile. But otherwise he sat quiet, his arms crossed defiantly. This was markedly different from his behavior on the island, where, as one survivor testified, Breivik could be heard screaming boisterously—”Oh, wow! Oh, wow!”—as he murdered teenagers.

    There was something very dignified about all of this. Breivik’s guilt was established beyond the shadow of a doubt; he readily confessed to his crimes. The point of these proceedings was to officially and in the name of the court memorialize the lives that could have been had Breivik not cut them short.

    The Norwegians are a famously austere people, not prone to emotional outbursts. The trial of their greatest mass murderer reflects the Norwegian national character.

    “Every single person who’s dead needs to be presented,” Shabana Rehman Gaarder, a Pakistani-Norwegian comedian and writer who has been covering the trial, told me. “Norwegians are not giving Breivik one single feeling. They’re not looking at him, they’re not showing even a tiny bit of their anger. It’s a proud way to say to Breivik, ‘You don’t exist.'”

    The Norwegian way of justice has its limits, too. “You Americans could never handle a trial like this,” a German television reporter sneered at me during a smoke break. Like many Europeans, he looked down at the U.S. justice system for its supposed violence, including the persistence of the death penalty here.

    But then it’s worth remembering that the maximum sentence the court can impose on Breivik under Norwegian law is 21 years, with the possibility of renewing his detention if it’s later determined that he remains a public danger.

    Norwegian prisons are often described as the world’s nicest. And as the London Telegraph reported in May, prison officials may even hire outside “friends” to keep Breivik company. Norwegian law holds that no prisoner—not even Breivik—should ever find himself in total isolation. That would be too cruel.

    All this sounds outrageous—and it is. Norwegian society has advanced so far down the path of “humaneness” that it cannot put someone like Breivik to death, let alone jail him for life. It’s a society that can only deal with evil on clinical and judicial terms, not moral ones. That sensibility has never sat well with Americans, but it’s increasingly making inroads among us. The very term “evil” sounds old-fashioned. But that’s exactly what Breivik and the Colorado killer represent.

    Mr. Ahmari is a Robert L. Bartley Fellow at the Journal this summer.

  191. Brian in Seaside says:

    Fabius, where are you from?

  192. A.West says:

    That HBO clip is totally lame. Are you inspired by that whiny speech yearning for some imaginary liberal Camelot? Then go to Denmark.

  193. Brian in Seaside says:

    Chi, I dig your posts and all but your timing sucks. I am in no condition to read them this time on a saturday night.

  194. cobbler says:

    chi [189]
    I don’t want to discuss what “always” means in the context of this particular article – to me, that the retiring generation as a whole is coming short, not each retiree. It is obvious, though, that the majority of the employees who got shifted from the traditional pension plans to 401K (and rarely expressed any dissatisfaction since 401K had been described as the best thing since sliced bread) will be much worse off in retirement than otherwise, and many of them will reach 65 with zero retirement savings.

  195. Anger Management says:

    Chi – you come off very angry in your posts. why?

  196. Brian in Seaside says:

    Nuthin’ beats a sunset over Barnegat Bay.

  197. AG says:

    The right to bear arms shall not be infringed.

    Trying to do so will make Northern Ireland look like a picnic.

    Dont fall for the trap.

  198. Anger Management says:

    199 – shut up you douche. there are a ton of paper tigers on here who bark all the time. after some psycho path terrorized colorado a day ago have the decency to keep your bullsh*t bravado to yourself.

  199. Morpheus says:

    187: meanwhile, back at the ranch, the topic turns to real estate.

    wow: I am kind of torn….who do I root for: the baboons who run most local government or Moose’s clients? Its so hard to limit expressing my emotions about both groups. After all, I do not want to end up on a DHS watchlist.

    However, any chance to stiff the bank does bring a smile to my face.

    What will be interesting is how this plays out in the court of public opinion. If the banks try to red line entire areas that had the gall to disagree with their “betters”,it could be the spark that ignites the violence that Clot predicts will happen.

    Time to prepare the Nompounds. Oh Nom….your preps are a little short: where r the hookers? concubines? If you are going to nompound, go playboy mansion style!

  200. Morpheus says:

    visual of Nom in a smoking jacket chilling with the “bunnies”.

  201. Mikeinwaiting says:

    Visual of Nom’s better half with a meat cleaver.

  202. We’ll be at the ramparts soon enough. Guns, ammo and gold!

  203. Comrade Nom Deplume says:

    [201]. Morph,

    There is precedent. If cities start this, the rating agencies not rate cmos with mortgages from those cities. So the redlining will occur because the banks won’t be able to sell the loans. If they can’t sell, lending stops. Further, banks not in those areas won’t move in so the lending stops altogether, or rates/fees in that city rise precipitously.

    Years ago, Georgia passed a law that would have made third party purchasers of mortgages liable for the originators. The rating agencies threatened to stop rating CMOs with GA loans. Most institutions or investors can’t buy unrated CMOs. Those that could would want a risk discount, which would cause rates to rise. GA quickly unpassed the law.

  204. Essex says:

    201. Concubines are readily available in any roadhouse. Especially in rural America. Just wear your dickies.

  205. Essex says:

    Or if farther west, Carhartt.

  206. An observer of a glass half empty says:

    To #175 Yo –

    That is why – you got to make sure everyone that practices in the same day Surgical Centers are part of the network. The Surgi-Center always use an anesthesiologist – because they general put you out with Propofol (recommended by Michael Jackson), which need airway management.

    When in doubt use the hospital. Most Hospital’s protocol use sedatives (Versed, Demarol) that do not need specialize airway management. So is just the nurses and your physician, residents, etc).

    I learn my lesson years ago when i got stiffed for $1000 and when I do anything, I do it a a local hospital. Most doctors hate it whrn you do it like this and make it inconvenient, because they usualy get a get out of the SurgiCenters vs hospitals. As an example – mine only does hospital on Thursdays afternoon every other week.

    To #188 Cobbler :

    Re – Socialize medicine & VA.

    The VA is starting to suffer. Two years of federal employees’ pay freeze and likely more is starting to drain away talent. The kitchen & housekeepers stay, but anyone with a degree is looking for options.

    The problem years ago was of quality caused by salary pay that was 30% below market rate. That got fixed – but now is reversing. Expect problems about bad VA care in the next few years.

  207. cobbler says:

    Observer [209]
    I clearly stated that I don’t believe VA-like system is a way to go.
    BTW, I don’t understand why we are increasing military pay (when the recruitment quotas are filled in days) and keeping the salaries of VA docs frozen if there is loss of talent as you claim.

  208. NJCoast says:

    Perfect beach day. Is it martini time yet?

  209. Njescapee says:

    Coast, it’s always 5 o’clock somewhere, cheers!

  210. Comrade Nom Deplume says:

    [206] sx,

    Not looking for the lorena bobbitt treatment.

  211. Juice Box says:

    Awesome Beach day, nice breeze from the east, a little rough surf, water was 73 Degrees? Too bad the damm Bennies come and ruin it by smoking a pack of Marlboro by me. GFY Bennies!

  212. Juice Box says:

    Re: 192 – Chi Sammy the Bull was given a deal and walked on allot of murders and then went around terrorizing neighborhoods. The rest of the world thinks we are the crazy ones we have been at war against a bunch of goat herders for the last decade. Who does that besides the dead and buried Soviet Communists? My Norway comparison was about economics. They have less debt to GDP and a higher standard of living than Canada. Even if they paroled Brekivick in 20 years there will be still be a higher percentage of nut jobs walking the streets of the US. The talk about friends and cruelty means the believe in rehabilitation where we don’t which the metrics tell you when you look at recidivism and the enormous amount of people we have locked up.

  213. t c m says:

    #158 – Fab –
    What could you possibly do that is so unique, great, or important, that you could spend so much time on this blog? Is your “specialized skill set” blogging and pontificating on company time? hmmmm???

    ”Fabius Maximus says:
    July 20, 2012 at 11:59 pm
    #142 Chi

    …………Just like Eddie Ray back in the day, you keep making assumptions about me that are just wrong. You would be very surprised at my job. Just for the record I was actually sent over here because they couldn’t find an American to do what I do because I have a very specialized skill set. Today there are around 140 people in the world that do what I do………………..”

  214. Juice Box says:

    Re: 216 – TCM it’s pretty obvious since only 140 people in the world can do it. COBOL!

  215. cobbler says:

    juice box [215]
    Norway is rather special. It had been one of the poorer countries of Western Europe until the North Sea oil discovery; they managed the oil income well and thanks to small population got into excellent financial shape, including the per capita income (unsure if it is the case on a purchasing power parity basis – most everything is at least 2x its price here). Norwegian society while suddenly becoming rich, had been hit by a huge (proportionately to the population) wave of economic migrants that are ethnically, religiously and culturally (from dress code to treatment of women to attitude at work) polar opposite from the Norwegians. I am pretty amazed that Berwick hit had happened only in 2011…

  216. Doom is imminent. No stopping it now. Too late.

  217. Juice Box says:

    Meat Doom should be good for you business, when are you installing the bullet proof plexiglass slider door to exchange cash for liquior?

  218. Essex says:

    Ah heck it aint all that bad … yo.

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