From Bloomberg:
New Jersey Housing Suffers as Defaults Exceed Nevada: Mortgages
New Jersey’s judicial review of all foreclosures, which delays seizures to help borrowers, threatens to hold down prices for years as properties remain subject to repossession and then may be sold at a discount. That’s buffeting a housing market already hurt by unemployment that’s risen to a 35-year high.
The state passed Nevada in the second quarter in the rate of homeowners with seriously delinquent loans — those 90 days late or in foreclosure — according to the Mortgage Bankers Association. Only Florida had a higher rate of serious delinquencies, and that fell 1.2 percentage points from a year earlier to 17.5 percent of mortgages. In comparison, New Jersey’s rose 1.3 percentage points to 12.7 percent.
While home values increased in July from a year earlier in 42 states, New Jersey prices fell 0.8 percent, according to CoreLogic (CLGX), a real estate services company based in Santa Ana, California.
“Housing is an albatross around New Jersey’s economy, which is one of the weakest in the country,” Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said in an e-mail.
From the Philly Inquirer:
S&P downgrades N.J.’s economic outlook to ‘negative’
Budget analysts and credit rating agencies continue to cast doubt on a “Jersey Comeback.”
On Tuesday, Standard & Poor’s became the third credit agency within days to warn that New Jersey’s $31.7 billion budget, which went into effect July 1, is based on overly optimistic revenue projections. It depends on expected revenue growth of nearly 8 percent, more than twice the rate of the previous year.
The Christie administration itself is presenting a muted economic forecast to investors, a far cry from the governor’s months of touting the state’s economic “comeback,” a slogan he recently abandoned.
While two other rating agencies, Moody’s and Fitch, last week deemed the state’s economic outlook “stable,” S&P downgraded it to “negative.” It cited the revenue assumptions; reliance on one-shot measures, such as the clean energy fund, to plug budget holes; and longer-term economic pressures.
Both Moody’s and Fitch expressed concern that despite the state’s relatively wealthy population and diverse economy, New Jersey has lagged behind the nation in recovery and its budget remains structurally unbalanced.
From the Record:
NY Fed chief cites slow N.J. recovery
The president of the Federal Reserve Bank of New York told an audience of students, corporate executives and college officials at Montclair State University Tuesday that New Jersey’s economy is improving – albeit at a moderate pace.
President Bill Dudley, said the Fed’s move to spend $40 billion a month on mortgage bonds, which he voted for, was necessary given the slow advances in economic growth nationally.
Without further action from the Fed, he said, growth would be too weak to “make big inroads into the spare capacity” of labor and industrial production, and wouldn’t boost employment or business spending.
“I believe that a nudge in the right direction will move us will move us closer to a self-reinforcing cycle of more hiring, more spending, more growth and more investment,” he said.
…
In New Jersey, he said, the economic recovery is struggling from the impact of the continuing housing slump and the excessive debt burden that people are carrying.Although there are signs that housing prices are starting to “firm,” there has been little recovery in the construction industry, and the percentage of mortgage debt in New Jersey that is 90-days delinquent – 9.3 percent in June – is three percentage points higher than the national rate, Dudley said.
“Things are improving, not as fast as we’d like,” he said. “There is still a lot of stress on New Jersey families.” As of the second quarter of 2012, the average debt per person was about $63,000, “roughly unchanged over the past several years,” he said.”Delinquency rates on that debt are high,” he said, adding that “8.4 percent of all debt in the state is seriously delinquent, up from 7.4 percent in 2011.” That’s well above the national rate of 6.7 percent, he said, adding that “many New Jersey households are still struggling with their finances.”
From the WSJ:
N.J. Struggles to Come Back
More fuel was added to a debate over Gov. Chris Christie’s handling of the state budget Tuesday, with Standard & Poor’s Ratings Services lowering its outlook on the state’s debt to negative from stable, and a Federal Reserve official offering a lukewarm assessment of the state’s recovery from the recession.
Neither the S&P rating nor the opinion of Federal Reserve Bank of New York President and CEO William C. Dudley will immediately affect New Jersey’s finances. But their appraisals prompted new questions about the pace of its economic recovery compared with the nation’s.
In an interview, Mr. Dudley said on Tuesday that New Jersey has higher unemployment, more housing market pressures and heavier levels of debt than other states. Asked whether the state was experiencing a “comeback”—a term frequently used by Mr. Christie to describe the state’s progress—Mr. Dudley said: “The economy is clearly recovering.”
But compared to the Greater New York area and the nation, “you wouldn’t say it’s a particularly robust recovery,” he said, in comments ahead of a speech about the state economy before the Morris County Chamber of Commerce. The New York Fed tracks economic activity and household credit conditions for New York and New Jersey.
…
Andy Pratt, a spokesman for the state Department of the Treasury, said S&P’s arguments were “out of step” in the face of growth in New Jersey’s economy. He pointed to other recent reports by Moody’s Investors Services and Fitch Ratings that affirmed the state’s outlook as stable.
From CNBC:
Housing Expected to Show Improvement Even Without Fed Factor
Fresh home sales and housing starts data Wednesday are expected to show continued gains by the sector, which has been steadily improving despite the bumpy economy.
Economists expect to see slight improvement in August’s existing home sales to 4.55 million, up 1.8 percent, and housing starts are expected to come in at 765,000, up from July’s 746,000. The reports are released at 8:30 a.m. ET and come a day after a key sentiment indicator showed home builders confidence rose to the highest level in six years.
“When I look at home prices now, I see evidence across all the important home price series of signs of a turn,” said Deutsche Bank Chief U.S. economist Joseph LaVorgna. LaVorgna said that was apparent in CoreLogic data, which showed a national 3.8 percent price increase year-over-year in July, and a 7.2 percent rise in prices year-to-date.
From Bloomberg:
Housing Starts in U.S. Probably Climbed to Almost Four-Year High
New-home construction in the U.S. probably rose in August to the highest level in almost four years, showing residential real estate is sustaining a recovery even as the broader economy sputters, economists said before a report today.
Builders broke ground on 767,000 houses at an annual rate, up from 746,000 in July and the most since October 2008, according to the median estimate of 85 economists surveyed by Bloomberg News. Another report may show sales of existing homes advanced for a second month.
The starts data are due from the Commerce Department at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from 740,000 to 800,000. Building permits, a proxy for future construction, may have declined 1.9 percent to a 796,000 annual rate after reaching a four-year high in July, according to the survey median.
At 10 a.m., the National Association of Realtors may report sales of previously owned homes climbed 2 percent to a 4.56 million annual rate in August from 4.47 million the prior month, the survey median showed.
…
Demand is improving as a result. Sales of new homes rebounded in July to a two-year high, Commerce Department figures showed Aug. 23. Red Bank, New Jersey-based Hovnanian Enterprises is among builders trying to keep up.
“Our communities are selling out more quickly and literally caught us without being able to replenish as fast as we’d like,” Ara K. Hovnanian, the company’s chairman, president and chief executive officer, said on a Sept. 6 earnings call. “We continue to look for new land opportunities throughout all of our markets.”
Good Morning New Jersey
All you whiners and takers can just suck it. I got mine. You go get yours.
Nasty Rain yesterday.
Tungsten in Gold bars..hate when that happens…
http://www.businessinsider.com/fake-gold-bars-2012-9
Fox’s Ti-Hua Chang is reporting that fake gold has arrived in Manhattan.
Ibrahim Fadl bought the bar from a merchant who has sold him real gold before. But he heard counterfeit gold bars were going around, so he drilled into several of his gold bars worth $100,000 and saw gray tungsten — not gold.
The individual 10 ounce bars would normally be worth around $18,000 each. But bars filled with tungsten, which weighs about the same amount as gold, carry a new value of around $3,600.
“What makes so devious is a real gold bar is purchased with the serial numbers and papers, then it is hollowed out, the gold is sold, the tungsten is put in, then the bar is closed up,” reports Chang.
The Secret Service is reportedly investigating the matter
Read more: http://www.businessinsider.com/fake-gold-bars-2012-9#ixzz26udP3YqT
JJ how’s that rock baby!? Hump Day has a whole new meaning for the “J” man.
Doom is imminent.
7 – I thought this one was interesting… From Forbes:
Is The Diamond Market About To Collapse Over Huge Russian Find?
“Russia is about to start tapping into a huge source of diamonds that could supply the world market for the next 3,000 years.
Scientists estimate there are ‘trillions of carats’ lying beneath a 35million-year-old asteroid crater in Siberia – more than ten times the global stockpile.
The Kremlin has known about the reserves under the 62-mile-wide impact zone since the 1970s.
But it has kept it a secret until now because it was already reaping big profits in what back then was a heavily controlled market.
From CNBC:
US Mortgage Applications Fell Last Week
Applications for U.S. home mortgages dipped last week, though demand for refinancings rose as mortgage rates fell to a record low, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, edged down 0.2 percent in the week ended Sept 14.
The seasonally adjusted index of refinancing applications gained 0.8 percent.
The gauge of loan requests for home purchases, a leading indicator of home sales, tumbled 3.8 percent.
RINO’s—I beg of you, please let the Sarah Palin draft go forth while there’s still time. You stinking RINO’s made a huge mistake nominating Romney. Dammit, can’t you see that he will DESTROY WHAT’S LEFT OF OUR DAMN PARTY?? What the hell is wrong with you damn people? We had a damn good thing going at the mid-term. The damn T-Party was invigorated and Sarah Palin was in the damn news daily with her every tweet being followed and now we don’t hear shlt about her or the damn T-Party. WHY THE HELL IS THAT?? WE HAD SOMETHING THAT WAS WORKING AND YOU DAMN RINOS RUINED IT. You have time to put the pieces back in place so we can win this damn election. I DEMAND THAT YOU ALLOW A DRAFT SARAH MOVEMENT TO GO FORTH IMMEDIATELY and that the hapless RINO wuss Romney be replaced with a real American. PLEASE. I BEG OF YOU.
Fixed 30-year mortgage rates fell 3 basis points to average 3.72 percent, the lowest rate in the history of the survey.
NJ will always be tied to the NYC and Phila economies. Further, it carries stubbornly high costs relative to PA, and an Assembly that isn’t interested in fostering sustainable growth.
Rank on PA all you like but they have been poaching jobs and investment from NJ for years. And that tax agreement means that PA will be the favorite of the cross border crowd.
I toured my daughters new school this week and the building, resources and staffing blow away the Brig. Really makes Westfield look third rate.
14 Love PA. I don’t know what they are doing, but they seem to be something better than NJ. Philly itself is a disaster, but the suburbs have a lot going for them. People are way nicer down there as well (same for South Jersey). If it wasn’t for family, I would be back down there in a second. We own property in Pike County, weekend house/escape hatch from Bergen County for the future.
Barak Obama
Loyola University
10/19/1998
“I actually Believe in Redistribution”
http://www.liveleak.com/view?i=f18_1347999271
Since the lead article today challenges Chris Christie to do more for NJ, I thought it would be fair to post this article about his town hall meeting in Elmwood park yesterday.
http://fairlawn-saddlebrook.patch.com/articles/christie-town-hall
GovernmentChristie Hammers Dems’ Inaction, Prods Romney at Town Hall
Gov. Chris Christie promoted his Middle-Class Reform Agenda and called on Republican presidential nominee Mitt Romney to make a stronger case for his presidency to the American people at a town hall event in Elmwood Park Tuesday.
By Zak Koeske Email the authorSeptember 18, 2012
Gov. Chris Christie came out swinging at the state legislature Tuesday during a town hall in Elmwood Park, criticizing its inaction on a slew of proposals that comprise his “Middle-Class Reform Agenda,”—namely tax cuts, ethics reform, ending sick leave payouts for government employees and closing property tax cap loopholes.
The New Jersey governor’s hardline approach to pushing Democrats toward government and tax reform even extended beyond state borders when, during the event’s question and answer portion, he suggested Republican presidential nominee Mitt Romney’s campaign might benefit from taking a more combative approach toward President Barack Obama’s policies.
As governor, Christie said his top priority is to provide tax relief for families making up to $400,000, and flatly stated that Democratic legislators will “never” cut taxes unless forced to do so, likening their fiscal policies to the cons of the character Wimpy from the “Popeye” cartoons.
“Wimpy would always say ‘I’d be happy to pay you tomorrow for a hamburger today,'” Christie said. “That’s what the Democrats are like. ‘I’d be happy to spend your money today and I’ll give you a tax cut tomorrow.’ Well, the spending happens and the tax cutting never comes.”
Christie said that until New Jersey’s Democratic legislators stop squeezing taxpayers for money, the state won’t be able to compete with neighboring states where taxes are lower.
“How are we going to be competitive to create more jobs and keep people here if we continue to conduct ourselves in that way?” said Christie, whose plan purports to save $775 for the average New Jersey family. “We can’t.”
Christie also touted his support for ethics reform in government, which he called “long overdue.”
“I proposed comprehensive ethics reform 742 days ago and at the time, Sen. [Stephen] Sweeney said, ‘We’re going to give the governor’s package a thorough review and hearing because there’s lots of good ideas in there.’ Seven-hundred-and-forty-two days later, it has not gotten one hearing in the state legislature. Not one.”
In particular, Christie attacked the practice of dual office holding and called for the end of dual employment for all state, county and local officials and employees.
He specifically cited Democratic State Senator Nicholas Sacco, who also serves as the mayor of North Bergen and as its assistant superintendent of schools, and is paid for all three, according to Christie.
“$309,000 a year for Senator Nick Sacco,” Christie said, quipping, “Senator Sacco, Mayor Sacco, Assistant Superintendent Sacco—his business card must be this big to fit all those titles on there.” The governor extended his arms wide to laughter and applause.
Christie also stumped for ending the practice of paying out cash to public employees for their unused sick days.
“People shouldn’t be paid for not being sick,” he said, noting that the accumulated sick leave and vacation payout liability of all municipalities statewide is $880 million. “I think that not being sick is the benefit of not being sick.”
While he acknowledged that it would be unfair and illegal to strip the sick time from employees who have already accrued it, he said that going forward sick time should only be used to cover sick days.
He criticized Democrats’ attempts to cap sick leave payouts, first at $15,000, and then at $7,500—proposals he vetoed.
“I propose zero means zero…you can accumulate as much sick leave as you want, and use it if you’re sick,” he said, adding that extra sick time could even be donated to a chronically or terminally ill co-worker. “But no more cash for the sick days…It’s not a second taxpayer-funded retirement plan.”
The final tenet of Christie’s Middle-Class Reform Agenda calls for closing loopholes in the 2 percent property tax cap that he said some municipal mayors have tried to circumvent by charging residents user fees for garbage collection and other services that were previously included in the budget.
Christie said the bill he supports allows for user fees as long as they fit under the 2 percent cap. While the bill has passed in the Senate, Christie said it’s been stalled in the Assembly because mayors have complained that it makes municipal spending too difficult to control.
He said that whether municipalities like it or not, staying below the tax cap and consolidating services across the state is a must. His proposal, endorsed by Senate President Sweeney, would require towns to enter mutually beneficial shared service agreements with neighboring communities or risk losing state aid.
“You can decide if you want to have one of everything, if that makes you feel better. But guess what,” Christie said. “The folks in [other municipalities] shouldn’t have to pay for it.”
In closing, Christie called on constituents to hold the legislature’s feet to the fire and pressure it to enact his Middle-Class Reform Agenda by the end of the year.
“There is nothing in here, in this agenda for the fall, that doesn’t make sense,” he said. “There’s nothing radical in there, so we need to go fight for it.”
During an extensive question and answer portion that lasted over an hour, Christie fielded questions on school funding, profligate board of education spending and the presidential election.
In response to a question about Mitt Romney’s “failure to aggressively attack Obama’s failed policies,” Christie agreed that the Republican presidential nominee needed to make a stronger case to the American people, but said it was ultimately up to Romney to decide how to proceed.
“I’ve often said, you don’t win a championship on points, you have to knock the champion down to the canvas,” Christie said. “That’s the way it works, I think, in politics, the same way it works most of the time in boxing.”
I know folks who purchased over the border during the boom and they are absolutely miserable. I quote, from a BBQ a few weekends prior, “What the hell were we thinking, this was the worst decision we’ve ever made.” I still prod them for trying to tell me their North Jersey commute was only 45 minutes. Yeah, their house is nice, and their neighborhood is nice, but it’s more rural than Sussex.
Is this really an option for someone that doesn’t work in Philly? And if so, is it really that much less expensive than Jersey? Main line ain’t exactly cheap these days either. I haven’t looked through the Main line listings recently, but I’ll wager a guess that $450k is the entry point for a decent house in a decent neighborhood. Anything comparable to the ‘Brig would be pushing $600k+ too.
As far as the more northern reaches, Lackawanna cutoff might change things a bit, but if you are coming east, why not just live in Sussex?
Call something paradise, kiss it goodbye. In-migration of locusts from Jersey is going to push your taxes up, alter the political situation, and ruin your bucolic landscape, etc. Be careful what you wish for.
If I win Powerball, I’d probably buy myself a little Mansion in Bucks, I gotta admit, it’s pretty out there. Otherwise, if I needed to leave for work, I’d leave the northeast entirely.
I’m gonna take care of New Jersey as soon as I finish this bear claw…oh, wait…and that cruller too…ooh, I see a cannoli there. Why won’t Springsteen love me back?
No more Rock, the Nets are in Brooklyn baby. Me and Jay-z gonna tag team Beoyonce after some big nets wins
Essex says:
September 19, 2012 at 7:08 am
JJ how’s that rock baby!? Hump Day has a whole new meaning for the “J” man.
What’s going on in here?
Editorial from Bloomberg, which doesn’t quite belong to the liberal media.
“”These are people who pay no income tax,” he continued, “47 percent of Americans pay no income tax.”
Let’s do away with the ridiculous myth that 47 percent of Americans are tax-evading moochers. Of the 46 percent of Americans who were expected to pay no federal income tax in 2011, more than 60 percent of them were working and contributing payroll taxes — which means they paid a higher effective tax rate on their income than Romney does — and an additional 20 percent were elderly. So more than 80 percent were either working or past retirement age.
Even Worse
Still, for my money, the worst of Romney’s comments were these: “My job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives.”
When he said this, Romney didn’t just write off half the country behind closed doors. He also confirmed the worst suspicions about who he is: an entitled rich guy with no understanding of how people who aren’t rich actually live.
The thing about not having much money is you have to take much more responsibility for your life. You can’t pay people to watch your kids or clean your house or fix your meals. You can’t necessarily afford a car or a washing machine or a home in a good school district. That’s what money buys you: goods and services that make your life easier.
That’s what money has bought Romney, too. He’s a guy who sold his dad’s stock to pay for college, who built an elevator to ensure easier access to his multiple cars and who was able to support his wife’s decision to be a stay-at-home mom. That’s great! That’s the dream.”
Social Security, Medicare, Unemployment and Disability insurance prems are not taxes. If they were they would be deductable. Social Security and Medicare more than 100% of money is returned to lower income crowd and Disability and Unemployment to lower income crowd is a life saver they can cash in on when they are laid off. These folks are not paying Federal or State taxes. Those are taxes. Money you throw into black hole for greater good where you individually do not benefit. For instance I wrote a $15,000 estimated tax check on Sunday and I mailed it, money is gone for ever. Poor folks cash in on unemployment, Medicare, Social Security and Disability insurance like it is a cookie jar they love to steal from. Putting five cookies in the cookie jar for every ten you eat aint a tax.
can i AX a question? says:
September 19, 2012 at 8:28 am
What’s going on in here?
Editorial from Bloomberg, which doesn’t quite belong to the liberal media.
“”These are people who pay no income tax,” he continued, “47 percent of Americans pay no income tax.”
Let’s do away with the ridiculous myth that 47 percent of Americans are tax-evading moochers. Of the 46 percent of Americans who were expected to pay no federal income tax in 2011, more than 60 percent of them were working and contributing payroll taxes — which means they paid a higher effective tax rate on their income than Romney does — and an additional 20 percent were elderly. So more than 80 percent were either working or past retirement age
JJ
I agree SS,Medicare,Disability Insurance is not a tax.just like it says,it is an insurance.You pay premium in time you need ityou take a claim.People claiming are not smoochers.There is a limit of up to how much you can claim.On SS the limit is when you die.If you die before you claim you forfeit.Many even the supreme court ruled that SS is a tax.That is the reason,media claim it as a tax.There is no going around state taxes.
housing starts consensus 0.768M actual 0.750M
Smoochers? Whose butt are they kissing?
“People claiming are not smoochers”
You want to know who are the smoocher.People on SSI that did not pay into the system and collecting.People that did not work and collects aid on their retirement age.Countries like China,Russia and others that we still give billions in USAid.
moocher
So now the government is giving out free kisses to smoochers. What’s next?
Ax a question:
Romney took a valid theme, and messed it up. Reagan took the same theme, and pretended that virtually no Americans wanted to live off the government. Turning that into all of us Americans versus the bureaucrats that want to enslave them with entitlements. That’s called optimism. Romney turned it into a dividing line.
Now I actually agree substantially with Romney’s assessment. I think increasingly there is a class of people who generation after generation live off the makers, and claim that as their right. Probably less than 20%. But I know a lot of people paying little or no income taxes that want more freedom, less government, lower taxes, because it’s morally right, and because they think there will be more opportunity for themselves and everyone else. People absolutely do not simply vote their pocketbooks, much to the distress of democrats/socialists. They are wringing their hands wondering why “poor, dumb, rednecks” in the South keep voting for Repubs when the Dems have all sorts of yummy government redistribution to offer them.
29
so true, my friend! they vote not just with their pocketbooks…they vote on fear and hate as well…and who better than them to decide what is “morally right!”
Christie needs to stop campaigning and do more political fighting. He hasn’t earned enough laurels to rest upon. He should be stirring up much more controversy in NJ, trying to fix things. He needs to get more unpopular.
I disagree. Whenever I collected unemployment checks I had plenty of time for smooching, even boning.
I agree SS,Medicare,Disability Insurance is not a tax.just like it says,it is an insurance.You pay premium in time you need ityou take a claim.People claiming are not smoochers.
JJ is so amazing he can mail stuff on Sundays.
http://www.reuters.com/article/2012/06/08/us-domusholdings-ipo-idUSBRE8570SD20120608
Realogy deal coming shortly,this week? I know we have some real fans here
USAid expelled in Russia
http://rt.com/politics/russia-usaid-putin-washington-elections-474/
22 ” For instance I wrote a $15,000 estimated tax check ”
Bwahahahaha! Poor sucker. You actually pay taxes???
Unemployment is a tax on me. I have never been laid off. Even if I ever were let go after paying into it since the age of 16 no way am I getting my money back.
Sucks that so many people got to take a nice 52 week vacation in 2008-2011 and I had to pay for it. Hamptons, Miami Beach etc. all on those fat unemployment checks. Dual income couples even got two checks!! Plus massive severance checks from banks paid out with tarp money. If I was not so damm good looking with the body of a greek god and the stamia of a wild mare, I guess it could happen to me too.
moocher-smoocher ;english is the hardest languageo learn t
I pay tons of taxes. AMT kills stuff like RE taxes and dependent deductions and I already max out 401k, Flex Spend and Transit Check, plus did Ibonds and as much muni bonds as I can stomach. Only reason trying to close on the investment property. Only good news is I paid the taxes on everything already. I dont have tons of cash hidden in appreciated assets, stocks, IRAs etc. So when taxes rise and obama care kicks in I will have already paid taxes on nearly everything. Also poor folks with unvested grants are gettting killed in the bull. For instance you get a lousy 50K grant in bank of america stock in feb 201o with three year vesting by the time it vests it is worth 100K and that 100K is taxed as ordinary income at a bonus tax rate which is 40%. So you end up paying 40K tax on a 50K grant. Meanwhile the 47% gets the 40K for doing nothing.
Millard says:
September 19, 2012 at 9:38 am
22 ” For instance I wrote a $15,000 estimated tax check ”
Bwahahahaha! Poor sucker. You actually pay taxes???
jj
You need to hangout more with Romney.Only the poor pay taxes
26 yo:
This is common, wealthy people in Saddle River, Franklin Lakes, bring their parents over from the old country, they get residency, then they go on SSI and Medicaid without ever putting a dime into the system.
From MarketWatch:
Sales of existing homes jump 7.8% in August
Sales of existing homes surged 7.8% in August to the best level in more than a year as low interest rates and a slowly improving jobs market help fuel a rebound in activity. The National Association of Realtors said sales rose to a seasonally adjusted annual rate of 4.82 million from July’s 4.47 million, which was better than the 4.6 million expected in a MarketWatch-compiled economist poll. The level was the highest since May 2010 and the percentage gain was strongest since Aug. 2011. The median existing home price gained 9.5% year-on-year to $187,400, which reflects both the change in the mix of homes but also price gains on similar property. Inventories rose 2.9% to 2.47 million units in August, representing 6.1 months of supply at current sales rate, the lowest since January. The percentage of distressed sales was 22%, the lowest since the NAR began tracking the data in Oct. 2008.
[18] grim
I wouldn’t advocate this for everyone. First, it would suck for those working in NYC although apparently lots of people do it. I don’t know why. But the only reason to live in Jersey is proxmity to NYC and if you don’t need that, I see no reason to be there.
Second, for those of you raised in Jersey, you think differently. It would suck for you in a way it wouldn’t for me. If you’re a lifer, stay in Jersey. We’ll all be happier.
Third, yes, in-migration is a problem. If PA poaches enough business, then people will move here for the jobs. Cannot do anything about that.
As for housing, we found one subdivision that was the schniz, just perfect, and comparable houses there go for half of what I paid. HOA fee is ridiculously low. We found one house we really liked but it was overpriced at 465K and it sits to this day. We can probably get into this dev for 400 to 450, you’re right, but you get quite a lot of what you want, nothing you don’t and taxes are half.
That said, there is much I liked about the Brig, and I have made plenty of friends here. I know that some part of me will miss it. But my wallet won’t.
jj
does your company have 403b too? non profit and others use 401k and 403b at the same time
From CNBC:
US Existing Home Sales Jump to 2-Year High
U.S. sales of previously occupied homes jumped in August to the highest level in more than two years, adding momentum to the housing recovery.
The National Association of Realtors said sales rose 7.8 percent to a seasonally adjusted annual rate of 4.82 million. That’s the most since May 2010, when sales were fueled by a federal home-buying tax credit.
In 2002 I got laid off and received unemployment even though I was still getting paid for the next 4 months from my company. Apparently if your severance is contingent on signing a “release of claims” it doesn’t count as being employed even though you’re still hammering your same paycheck every two weeks. So collecting unemployment was like an immediate $600/week raise with the added benefit of not having to go to work. Not too long after I exhausted my claim in 2003 I got a letter from MA that said I might be eligible for some extension if my job loss was connected to the airline industry. My job was kind of connected to air travel and was impacted by the air travel drop off so I called them up on the phone. They looked into it and told me I wasn’t eligible, but they told me I could open up a new claim because my $40K I received in severance the year before was enough money to start a new claim. I told them that didn’t sound right because I didn’t do any work for that money, but they opened a new claim for me anyway. After they paid out $5K on that new claim they changed their mind and asked for the $5K back. They kept sending me letters that said since I didn’t perpetrate any fraud and it was their error I didn’t have to pay any penalties or fees, just had to pay the $5K back. I ignored those letters for 3 or 4 years and eventually had to pay the money back but no penalties or interest so it was a nice 0% loan from the state.
[40] yo,
Not true. The poor don’t pay taxes. Ain’t you been listening?
That said, engineers and architects will tell you that it is really unwise to put all of the building’s weight on just one column. I submit that revenue dispersion is subject to the same rules.
http://www.cbo.gov/publication/43373
(click on supplemental data spreadsheet, then click on number two).
BTW, two takeaways I want you to look at: first, the percentage paid by the highest quintile by year, and the individual tax burden. I defy anyone to look at these stats and tell me with a straight face that the wealthy aren’t, on the whole, paying a huge part of the nut. That is true even if you disagree as to what is “fair share” which is really what all of this is about.
[44] yo,
JJ work at a nonprofit??????? That is so not JJ.
Or maybe not. JJ is so interesting that there is a special section in the Internal Revenue Code that exempts him from the inurement provisions, making him the only person eligible to own shares in a nonprofit.
[33] joyce,
“JJ is so amazing he can mail stuff on Sundays.”
Classic!
This is common, wealthy people in Saddle River, Franklin Lakes, bring their parents over from the old country, they get residency, then they go on SSI and Medicaid without ever putting a dime into the system.
Take a ride thru Palisades Park,Fairview,W.NY,Passaic , Patterson,S.Plainfield,Clifton,
and many other NJ towns and you will find many ,many are here sucking up the benefits of our system without ever paying one cent into the system. Our senior facilities are loaded with these people
OT (ejumacation bubble) Alert:
A little harsher than my assessment but I have been saying something similar for years:
“Paul Campos, the University of Colorado Law School professor who writes the incendiary Inside the Law School Scam blog, is back at it, with a new book of advice for would-be law students.
Campos said he was inspired to write Don’t Go To Law School (Unless) — an electronic book slated to go on sale on Amazon.com this week — in part because so many prospective law students have asked him for counsel about whether they should enroll.
“I’m trying to make it clear to anybody who is considering going to law school right now that they ought to consider that to be a fairly risky endeavor, and should do that in only a fairly narrow set of circumstances,” he said. … Going to law school because you don’t know what else to do with a liberal arts undergraduate degree was never a good idea, Campos writes, but it’s a particularly poor choice when the average law student graduates with $150,000 in loan debt and a well-paying job is hardly guaranteed. …
Ultimately, Campos suggests, paying full tuition makes sense at only a handful of elite schools, and paying a significantly reduced tuition only makes sense at between seven and 10 “truly national law schools.” Even accepting a free ride makes sense at only about three dozen “good regional schools,” by Campos’ estimate.
“The most important thing for any prospective law student to keep in mind is that, at present, the large majority of law graduates — perhaps 80% — end up worse off after going to law school that they were before they enrolled,” the book reads.”
/snip
h/t taxprofblog
[35] yo,
The more I read things like this, and some of the lesser reported stories, the more I question Obamas foreign policy chops.
Foreigners seem to hate us as much now as before, we have had no discernible successes diplomatically, we take credit for things that we had no meaningful hand in and which are now going south, and Iraq Amd Afghanistan are a mess.
The only area where Obama is making a difference is antiterrorism and he had to walk back all his campaign promises to get that.
52 – even i am sick of hearing you guys constantly distort and whine about what the
O-man “isn’t.” aren’t there ANY good things you can say about me????
Reason I know this,I know families before retirement comes to the US as an immigrant 5 years later a citizen and retires.Applies SSI and medicaid,food stamps.This is what we need to fight.Not the elder tax payer that paid in the system
POS cape says:
September 19, 2012 at 10:05 am
26 yo:
This is common, wealthy people in Saddle River, Franklin Lakes, bring their parents over from the old country, they get residency, then they go on SSI and Medicaid without ever putting a dime into the system.
House buyer (7)
The Federal Reserve is hollowing out our dollars and filling them with foreclosed mortgages.
#47 nom
Was that a result of millions of people going to unemployment? And dont forget who lowered those taxes,who gave the tax credit to families making less than a certain amount.Cut income taxes because there was a surplas instead of paying down the deficit.Doubled the deficit while revenue was at its high
http://www.mesirowfinancial.com/blog/economics/2012/09/19/dswonk/home-sales/
“The only area where Obama is making a difference is antiterrorism”
Can you provide an example?
I worked at a non-profit when I was single for awhile. You get paid peanuts but I could stroll in door after a hard night partying and hug my desk till the coffee cart came and leave at 4:30pm for day. Funny part with work so easy was a never ending cycle of going out. Wake up at 8am get to work before nine, get home by 5:15, chill nap etc and when phone rang at 8-9pm I would go out again. Sadly 3% raises and no bonuses after a few years I was making nothing. Even though I started at full market price. Non profits have to pay same salary as for profit for most jobs. But friends were banging out 8% raises, after a few years you are dead broke. When I am 62 I may try it again. Cause by the time I am 67 and ready to retire it wont matter if my salary is falling.
I remember a few years ago,a scientist worked in the UK for over 10 years closed to retirementon working visa.Applied to become an immigrant and was denied.The reason was he was close to retirement.They will not give him benefits that he did not paid into.
Not in the US.Even tourist use the medical system.They come here about to have the baby.Checks in to a hospital and delivers as charity patient and bang they have a US Citizen baby.And we argue about the 47%
It is a lot easier when on your fathers side you are related to terrosists.
Statler Waldorf says:
September 19, 2012 at 10:57 am
“The only area where Obama is making a difference is antiterrorism”
Can you provide an example?
Essex[5]
You say you got yours, Essex?
O says, he will take it from you and redistribute it.
Just give him four more years.
61 – or when you “pal around with them!”
hey…where has sarah been lately?
Great items from you, man. I have take into accout your stuff prior to and you are simply too fantastic. I actually like what you have got here, really like what you’re stating and the way in which in which you are saying it. You are making it enjoyable and you continue to take care of to keep it sensible. I cant wait to read much more from you. That is really a wonderful website.
[58] statler,
He has continued prior policies of prosecting the was against al quaeda worldwide. Ironically, he takes public credit for only one operation, but has killed enemies all over the region, even stepping on allies to do so.
In that sense, he is every bit the neocon his predecessor was, and it is all the more remarkable because he campaigned on an opposite platform.
[56] yo,
I’m beginning to think Joyce was correct about you.
I’m going.to a mediation later and I can only hope that opposing counsel is as off the mark on our issue as you were with that interpretation.
Doom is imminent. It’s all over, but for the crying.
[51] I know someone who’s daughter is getting a free ride at Drexel’s new law school. She’s in her mid-20’s and worked about 4 years in the HR dept of a Fortune 500 company, quitting that job to go to law school. Her dad told me he was pissed that she can’t get a $15K annual GSL for “you know, eating out, rent, living expenses.” That made scratch my head. Your daughter is getting a free ride and he thinks it would still be good idea for her to go $45K into debt to be comfy cozy?
Ultimately, Campos suggests, paying full tuition makes sense at only a handful of elite schools, and paying a significantly reduced tuition only makes sense at between seven and 10 “truly national law schools.” Even accepting a free ride makes sense at only about three dozen “good regional schools,” by Campos’ estimate.
[52] Nom – they hate us for exporting our inflation by money printing. Oil can only be bought with devaluing dollars which raises the price of all foodstuffs. If the price of wheat doubles that raises the price of a US loaf of bread about 7 cents, so no one here notices much. But since all bread is local, it impacts other economies very differently. In Egypt, for example, the cost of wheat comprises about 50% of the retail price of bread. If you see your food costs doubling and the only thing you really buy is food, you’d be in for some flag burning at least.
Foreigners seem to hate us as much now as before
Sorry but at this point I think I will be voting against Obama, not for you.
53.Millard says:
September 19, 2012 at 10:42 am
52 – even i am sick of hearing you guys constantly distort and whine about what the
O-man “isn’t.” aren’t there ANY good things you can say about me????
53. You seem like a decent chap. But don’t forget that the largest redistribution of wealth in the history of the United States was the Wall Street bailout. Funny what you can do with taxpayers’ dollars if the price is right.
You want the Job,no problem ,we’ll give you a bullet proof vest to go with it.
http://www.nj.com/essex/index.ssf/2012/09/association_calls_for_newark_b.html#incart_river_default
70 – that’s what I like to hear! that is a sound strategy.
73 –
You suck just a little bit less. See there…I said something nice about you.
“The only area where Obama is making a difference in anti-terrorism…”
In that sense, he is every bit the neocon his predecessor was,”
I guess he might be making a difference, but it’s not progress. The FedGov form of anti-terrorism (still) includes shredding the bill of rights.
Poll of the dayhttp://m.washingtonpost.com/business/on-small-business/obama-tops-romney-in-new-poll-of-small-business-owners/2012/09/18/6d430d40-01db-11e2-9367-4e1bafb958db_story.html
Fab: #1 no way. I stand behind my comments. I think what you don’t appreciate is that people have a different perspective from you, and further, your opinions are not self-evident.
First off, this video was taken at a private event. “You didn’t build that” was on an open mic at a public event. While (potentially) very effective, this gaffe is the result of pure Machiavellian sleaze. You know that there are equivalent Medvedev moments for O-man, it’s just that Ronald Reagan’s grandson was not motivated by revenge, not unemployed, and watching Obama You Tube videos all day in-between whacking off…..
That said, Romney’s comments are impolitic, somewhat inaccurate, and could certainly cost him swing voters that would seal the election for O-man. BUT at this juncture you don’t know that……honestly, what he is saying is actually unvarnished truth, and I think a good number of people actually find it somewhat refreshing to hear that type of language from someone who is so hopelessly constipated in a publci forum. The ones who are most disgusted, most repulsed and take the greatest amount of umbrage were never going to voted for him anyway. Sadly, it appears that you need to toss a good amount of the media in that bucket as well.
It may piss a lot of people off, but I think it adds to his credibility, which is lacking…..lets see what the debates hold…….Romney was likely going to lose before the last few days, and I don’t see how this impacts things. Give me credit for my call on 12/31/2011…..
Fabius maimus says:
September 19, 2012 at 12:27 am
#135 Chi
That is a slight walk back, still qualifies as your third dumbest post of the year.
This was a monumental F***UP from Mitt.
The first rule of politics, is” don’t tell them what you think tell them the message!”. And you need to have several versions of the message depending on the audience.
GLOBAL VIEW
Stephens: Muslims, Mormons and Liberals
Why is it OK to mock one religion but not another?
By BRET STEPHENS
‘Hasa Diga Eebowai” is the hit number in Broadway’s hit musical “The Book of Mormon,” which won nine Tony awards last year. What does the phrase mean? I can’t tell you, because it’s unprintable in a family newspaper.
On the other hand, if you can afford to shell out several hundred bucks for a seat, then you can watch a Mormon missionary get his holy book stuffed—well, I can’t tell you about that, either. Let’s just say it has New York City audiences roaring with laughter.
The “Book of Mormon”—a performance of which Hillary Clinton attended last year, without registering a complaint—comes to mind as the administration falls over itself denouncing “Innocence of Muslims.” This is a film that may or may not exist; whose makers are likely not who they say they are; whose actors claim to have known neither the plot nor purpose of the film; and which has never been seen by any member of the public except as a video clip on the Internet.
No matter. The film, the administration says, is “hateful and offensive” (Susan Rice), “reprehensible and disgusting” (Jay Carney) and, in a twist, “disgusting and reprehensible” (Hillary Clinton). Mr. Carney, the White House spokesman, also lays sole blame on the film for inciting the riots that have swept the Muslim world and claimed the lives of Ambassador Chris Stevens and three of his staff in Libya.
So let’s get this straight: In the consensus view of modern American liberalism, it is hilarious to mock Mormons and Mormonism but outrageous to mock Muslims and Islam. Why? Maybe it’s because nobody has ever been harmed, much less killed, making fun of Mormons.
Here’s what else we learned this week about the emerging liberal consensus: That it’s okay to denounce a movie you haven’t seen, which is like trashing a book you haven’t read. That it’s okay to give perp-walk treatment to the alleged—and no doubt terrified—maker of the film on legally flimsy and politically motivated grounds of parole violation. That it’s okay for the federal government publicly to call on Google to pull the video clip from YouTube in an attempt to mollify rampaging Islamists. That it’s okay to concede the fundamentalist premise that religious belief ought to be entitled to the highest possible degree of social deference—except when Mormons and sundry Christian rubes are concerned.
And, finally, this: That the most “progressive” administration in recent U.S. history will make no principled defense of free speech to a Muslim world that could stand hearing such a defense. After the debut of “The Book of Mormon” musical, the Church of Jesus Christ of Latter-day Saints responded with this statement: “The production may attempt to entertain audiences for an evening but the Book of Mormon as a volume of scripture will change people’s lives forever by bringing them closer to Christ.”
That was it. The People’s Front for the Liberation of Provo will not be gunning for a theater near you. Is it asking too much of religious and political leaders in Muslim communities to adopt a similar attitude?
It needn’t be. A principled defense of free speech could start by quoting the Quran: “And it has already come down to you in the Book that when you hear the verses of Allah [recited], they are denied [by them] and ridiculed; so do not sit with them until they enter into another conversation.” In this light, the true test of religious conviction is indifference, not susceptibility, to mockery.
The defense could add that a great religion surely cannot be goaded into frenetic mob violence on the slimmest provocation. Yet to watch the images coming out of Benghazi, Cairo, Tunis and Sana’a is to witness some significant portion of a civilization being transformed into Travis Bickle, the character Robert De Niro made unforgettable in Taxi Driver. “You talkin’ to me?”
A defense would also point out that an Islamic world that insists on a measure of religious respect needs also to offer that respect in turn. When Sheikh Yusuf Qaradawi—the closest thing Sunni Islam has to a pope—praises Hitler for exacting “divine punishment” on the Jews, that respect isn’t exactly apparent. Nor has it been especially apparent in the waves of Islamist-instigated pogroms that have swept Egypt’s Coptic community in recent years.
Finally, it need be said that the whole purpose of free speech is to protect unpopular, heretical, vulgar and stupid views. So far, the Obama administration’s approach to free speech is that it’s fine so long as it’s cheap and exacts no political price. This is free speech as pizza.
President Obama came to office promising that he would start a new conversation with the Muslim world, one that lectured less and listened more. After nearly four years of listening, we can now hear more clearly where the U.S. stands in the estimation of that world: equally despised but considerably less feared. Just imagine what four more years of instinctive deference will do.
On the bright side, dear liberals, you’ll still be able to mock Mormons. They tend not to punch back, which is part of what makes so many of them so successful in life.
Write to bstephens@wsj.com
A version of this article appeared September 18, 2012, on page A15 in the U.S. edition of The Wall Street Journal, with the headline: Muslims, Mormons and Liberals.
It was a redistribution of wealth from Wall Street to the US Govt. The USA made a tone of money on the wall street bailout.
GMAC, GM and Fannie and Freddie the USA investment has poor returns.
Wall Street, Uncle Sam took a gun to the head of places like JP Morgan and said borrow money you dont need at a high interest rate or else.
Essex says:
September 19, 2012 at 12:10 pm
53. You seem like a decent chap. But don’t forget that the largest redistribution of wealth in the history of the United States was the Wall Street bailout. Funny what you can do with taxpayers’ dollars if the price is right.
Right on brotha’ ….essex is a functional retard….the banks repaid all the money and the U.S. just cleared $18B on AIG……on a risk adjusted basis the TARP was a debacle, but we are just accountants around here……..as of today, the GM bailout is so bad that the U.S. refuses to liquidate because it would catch O-man in a boldface anti-semeiic lie. The USG didn’t bailout out the Jew financiers…..he handed $15B in free unrepaid money to Michigan, Indiana, and Ohio UAWs so they could buy KFC and vote for Obamunism…..
JJ’s B.S says:
September 19, 2012 at 2:11 pm
It was a redistribution of wealth from Wall Street to the US Govt. The USA made a tone of money on the wall street bailout.
GMAC, GM and Fannie and Freddie the USA investment has poor returns.
Wall Street, Uncle Sam took a gun to the head of places like JP Morgan and said borrow money you dont need at a high interest rate or else.
Essex says:
September 19, 2012 at 12:10 pm
53. You seem like a decent chap. But don’t forget that the largest redistribution of wealth in the history of the United States was the Wall Street bailout. Funny what you can do with taxpayers’ dollars if the price is right.
Perhaps you’ve heard that General Motors is “alive” and that President Obama is more or less solely responsible. But if his $50 billion federal bailout is why “the American auto industry has come roaring back,” as he put it in Cincinnati Monday, why not formalize the achievement by unwinding the taxpayer stake in GM?
Er, because that would mean exposing the bailout’s ongoing damage. The Journal’s Jeff Bennett and Sharon Terlep reported Monday that the GM brass is importuning the Treasury to offload at least some of its 500 million shares, or 26.5% of the company. Their complaints include the Government Motors stigma and compensation ceilings that make it difficult to recruit talent—and though they don’t mention it, probably the political mediation over business decisions as well.
But the Administration is refusing GM’s stock buyback because it would mean losing billions of dollars on this “investment.” The auto maker’s shares are trading around $24, which is not merely a tumble from the November 2010 IPO price of $33 but means the government would lose $15 billion if it sold today.
GM’s share price needs to hit $53 for the U.S. to break even. Treasury may be waiting until after the election, when losses on any sale won’t affect electoral votes in Michigan or Ohio. Such a sale might be financially wise, because while GM may have come back from bankruptcy with the help of your tax dollars, its future profitability is far from guaranteed. The company’s government-financed bankruptcy failed to rationalize longstanding problems like union liabilities and especially fleet-mileage rules that will force Detroit to make cars it can’t sell profitably for years to come.
Speaking of government help for Detroit, on Monday the U.S. filed a World Trade Organization complaint accusing China of illegally subsidizing exports of automobiles and car parts to the tune of $1 billion between 2009 and 2011. “It is not right, it is against the rules, and we will not let it stand,” said the President, who owns a quarter of an auto maker. The trade action came a couple of days after Mitt Romney began running an ad saying Mr. Obama was soft on China trade.
18 re Main Line….entry level in Lower Merion, which is one of the best school districts in that area, is under 300K now. And property taxes might be only 5K instead of 15.
Now the whole Pocono thing is not a good plan IMO, where people try to commute back to NYC or whatever. That’s not worth it.
The other area where people sometimes do better in terms of value is working in Princeton and living in Bucks.
#82 Ann: Not to mention many of the urban ills are now present in the Pocono’s.
1. In the name of Allah the companionate the merciful
2. My soul is devoted to you Dear Prophet of Allah
3. Dear Muslim youths, Muslims Nations and are noblemen
4. When Arab nations rose against their corrupt regimes (those who support Zionist regime) at the other hand when, Crucify infidels are terrified and they are no more supporting human rights. United States of America with the help of Zionist Regime made a Sacrilegious movie insulting all the religions not only Islam.
5. All the Muslims worldwide must unify and Stand against the action, Muslims must do whatever is necessary to stop spreading this movie. We will attack them for this insult with all we have.
6. All the Muslim youths who are active in the Cyber world will attack to American and Zionist Web bases as much as needed such that they say that they are sorry about that insult.
7. We, Cyber fighters of Izz ad-din Al qassam will attack the Bank of America and New York Stock Exchange for the first step. These Targets are properties of American-Zionist Capitalists. This attack will be started today at 2 pm. GMT. This attack will continue till the Erasing of that nasty movie. Beware this attack can vary in type.
8. Down with modern infidels.
9. Allah is the Greatest. Allah is the Greatest.
Crazy Cyber attack going on now. Wonder if it will effect NJ Realestate Report?
JJ and Chifi… what about the past, present, and continually continuous bailout of Wall Street by the Federal Reserve?
#78 chgo: Having worked with Mormon’s for many years. I can tell you that they are hard working incredibly focused people. They are the wealthiest religious denomination in the U.S. And Utah is one of the best if not best run states in the country. People say Romney needs to get down and dirty, but I can tell you from all the years working with them that they just do not do that. It is not in their nature. No yelling, screaming, off color language. Some people would say that is not human, but that is the way they are wired.
#85 Joyce
I’d expect JJ’s response to be crickets. No one from wall st acknowledges their wealth transfer machine.
“has continued prior policies of prosecting the was against al quaeda worldwide”
OK, when you stated Obama was “making a difference” in this area, I hoped to see some actions unique to him that warranted merit, but there’s no change.
I actually had lunch today with a congressman. He met with a group of us, not just me.
Basically we did talk alot of about financial crisis and bailouts. Basically Wall Street has never been bailed out.
We have Fed with a dual mandate of low unemployment and controlling inflation and congress and the senate represent taxpayers and voters.
Told us a story that back in 1972 the average 50 something blue collar worker head of household did not save for his kids college education as Kid went to factory, did not save for retirement as had a full pension and medical and had most of what savings he had in FDIC CDs and savings accounts. Wall Street was for the rich and as such Wall Street would never get a bailout. He lived in a house he bought in the 1950s or 1960s for a small amount and a low interest rate and never planned on trading up or moving to a retirement home. Pretty much was near end of small mortgage and life was good.
Flash forward to 2002, same worker wants kids to go to college so savings for that. No more pensions or free medial for life replaced with 401k plans invested in company stock, stock market had a huge run as retail investors were plowing in to get 20% returns year after year. Come 2002 the whole thing busted between internet meltdown, 9/11 and Enron/Worldcom. Sox came out as taxpayers voters demanded accountability and perp walks to give them confidence to come back into market and that what they got. Now flash forward to 2002-2007 same folks plowed into RE backed by Fannie/Freddie flipping, trading up, borrowing against equity until that blew up in 2008. Taxpayers and Voters once again demanded that housing and stocks be propped up to save then from their stupidity.
When asked why didn’t congress reign in fannie and freddie we got “you dont shoot the bartender at an open bar” the middle class home buyers and realtors were in a massive bubble and suitability and loan standards were out the window. When this blew up the middle class once again wanted to be bailed out.
Wall street does not have a seat at the table and that means they are getting eaten or being pegged as the whipping boy.
Bottom line retail middle class investors do stupid things that fuel bubbles like internet stocks and real estate that blow up and then demand actions to bail them out.
joyce says:
September 19, 2012 at 2:37 pm
JJ and Chifi… what about the past, present, and continually continuous bailout of Wall Street by the Federal Reserve?
This is fcuking brilliant….
OPINION
September 18, 2012, 6:45 p.m. ET
Kessler: The U.S. Needs More i-Side Economics
The misallocation of capital is one reason the recovery is stuck between lack and luster.
By ANDY KESSLER
No jobs? No wonder, given what passes for economic thought these days.
In his acceptance speech at the Democratic convention in Charlotte, N.C., this month, President Obama said, “We believe that when a CEO pays his auto workers enough to buy the cars that they build, the whole company does better.”
And last month in Leesburg, Va., the president said, “When we’ve got new teachers doing great work with our kids, then you know what, they go to a restaurant and spend that money. And so suddenly businesses are doing well, the economy is doing well, and we get into a virtuous cycle. And we go up.”
This myth—that you can just give money to the middle class and good things happen—is widely shared and is at the basis of a lot of government policy. And it is why the recovery is stuck between lack and luster.
Let’s go back. Henry Ford is popularly credited with inventing the middle class by doubling his workers’ salaries to $5 per day in 1914. A multiplier for the economy, right? Wrong.
The year before, Ford revolutionized manufacturing with the moving assembly line, slashing automobile build times to just 90 minutes from 14 hours. That’s productivity. It allowed Ford to reduce the price over time of his Model T to $290 from $950. Demand took off because it was far cheaper than the cars made by his 88 competitors.
By 1927, 15 million Model Ts were sold to people (most of whom did not work for Ford) and businesses that retired their horses and used these new automobiles productively to lower their own costs, fueling a boom. Raising wages was a byproduct, not a cause. From Ford Motor’s corporate website about the wage increase: “While Henry’s primary objective was to reduce worker attrition—labor turnover from monotonous assembly line work was high—newspapers from all over the world reported the story as an extraordinary gesture of goodwill.”
But 98 years later, the Obama administration still doesn’t get it. According to an Aug. 15 article by Paul Tough in the New York Times Magazine, the administration’s economic team during the financial crisis—Lawrence Summers, Tim Geithner, Jason Furman—”was carrying around this list of multipliers” from Mark Zandi of Moody’s Analytics. A dollar spent to cut corporate taxes would grow the economy 30 cents; make the Bush tax cuts permanent, 29 cents; extend unemployment benefits, $1.64; food stamps, $1.73. “And food stamps was always at the top. That had the largest multiplier.” This is economic malpractice.
Food-stamps recipients are up 70% in four years, to 46.7 million. But, surprise, we haven’t seen that “virtuous cycle.” Jobs build the middle class, not handouts or pay diktats.
There is a huge misunderstanding between spending and investment. Sure, it makes sense that the less well-off will spend whatever they are given, but unfortunately, not on the things to spur a hiring binge.
In a famous exchange, Austrian economist Friedrich Hayek was asked, “Is it your view that if I went out tomorrow [with a government subsidy] and bought a new overcoat, that would increase unemployment?” “Yes,” answered Hayek, “but it would take a very long mathematical argument to explain why.”
Minus the math, Hayek’s argument was that money would be removed from the productive economy, and capital would be wrongly allocated to overcoats based on this false demand. Substitute Chevy Volts and you get the picture.
Yes, the wealthy, most of whom got rich by risking capital and delivering something productive to the economy, tend to save more. But they don’t shove it under the mattress, they invest it in the productive fabric of the economy. The president’s rhetoric harps on the notion that millionaires and billionaires don’t “need” the money from a tax cut. But think of it this way: They, like Henry Ford, have proven that they can invest the money productively—better than any government program—whether directly into companies or into stocks, private equity or venture capital that create long lasting jobs and expand the middle class.
Some would call this supply-side economics. President Obama on the campaign trail calls it “trickle-down snake oil,” even “fairy dust.” I like the term i-side economics—for investment and innovation and individual incentive—rather than g-side economics, as in “what has the government given me lately?”
Perversely, class warfare hurts the group it is alleged to help. For every dollar of stimulus or government spending paid for by the half of the population that pays taxes, you take away a dollar that might have been invested in creating higher-paying jobs. That’s just dumb. Misallocating capital is a formula—a negative multiplier—for stagnation, not growth.
Investor Peter Thiel put $500,000 into Facebook in August 2004, a company now worth $50 billion based on its prospects for transforming the media industry. What multiplier would you put on his investment? This month, after investing billions over the years on R&D, Apple released the iPhone 5. The company is worth $666 billion based on prospects that hundreds of millions of users will lower their cost of doing business with the latest iPhone and iPad mini and whatever else is coming. What is that multiplier?
President Obama says that “rebuilding a strong economy begins with rebuilding our middle class.” He’s got it backward. You can’t grow an economy by paying teachers to eat at Denny’s or overpaying workers on federal projects via the Davis-Bacon Act.
As in Henry Ford’s day, it is workers’ productivity that drives long-term wage gains, not workers’ wages that drive growth. And almost always by selling something—a Model T or a Samsung Galaxy—cheaper than the current way of doing things.
With the right investment-side rather than handout policy, the economy will act like a coiled spring or a super ball—the rebound will be a huge bounce.
Meanwhile, we wait.
Mr. Kessler, a former hedge-fund manager, is the author most recently of “Eat People” (Portfolio, 2011).
A version of this article appeared September 19, 2012, on page A15 in the U.S. edition of The Wall Street Journal, with the headline: The U.S. Needs More i-Side Economics.
Other than mormans are racists, degrade women and think non-mormans are burning in hell they are pretty nice people.
3B Buying says:
September 19, 2012 at 2:40 pm
#78 chgo: Having worked with Mormon’s for many years. I can tell you that they are hard working incredibly focused people. They are the wealthiest religious denomination in the U.S. And Utah is one of the best if not best run states in the country. People say Romney needs to get down and dirty, but I can tell you from all the years working with them that they just do not do that. It is not in their nature. No yelling, screaming, off color language. Some people would say that is not human, but that is the way they are wired.
Romney the fear merchant.
http://uk.news.yahoo.com/obama-v-romney-president-capitalises-gaffes-083930395.html
Ray Dalio on Deleveragings
http://www.cfr.org/united-states/ceo-speaker-series-conversation-ray-dalio/p29012
#91 As opposed to?
[82] Ann,
I clerked for a year in Trenton. In the mornings, huge backups on the PA side. In the evenings, huge backups on the NJ side. Did not see much NJ sourced or bound traffic.
That tells me that all the bureaucrats in Trenton live in Bucks.
[68] expat,
I know Drexel, even explored teaching there, but the only way I would go is if it was free.
I am issuing junk bonds to go to drexel
[88] statler,
If you consider that he did a 180 on his campaign positions, and committed what amount to acts of war against our so-called friends that even Bush didn’t do, I consider that quite remarkable.
[97] JJ,
Limit the repayment source to monies you made as a direct result of your Drexel education.
Then get NJ Division of Investment to buy them.
There’s a well-known expatriation attorney I follow and over the past year, he has been traveling quite a bit to middle eastern and southeast asian countries.
Methinks that is where the money is gonna go.
Going to school with all the single co-eds any raises I get will be eaten up by child support
Comrade Nom Deplume says:
September 19, 2012 at 4:11 pm
[97] JJ,
Limit the repayment source to monies you made as a direct result of your Drexel education.
Then get NJ Division of Investment to buy them.
#89 So a politician and some bankers were discussing the necessity of handing over free billions to Wall Street and the consensus was that the middle class demanded it?
Very credible — and OJ is still searching for the real killers.
(89)
JJ,
Just when I thought you couldn’t possibly be any dumber
nwnj,
cue some not funny response regarding OJ or something completely irrelevant
[82] ann,
Precisely. The folks working in Western NJ and in Philly should live in PA (though not Philly unless you really want to). Big tax savings and not that much farther from NYC.
DE has high income taxes and no tax agreement so if you work in Wilmington, it doesn’t matter where you live unless you have kids (DE schools suck) and/or significant non-DE income (they can’t touch it). Then ChesCo and DelCo are attractive.
FWIW, I would rather live in much of Bucks, Montgomery, Chester or Delaware Counties than most places in NJ. And if money were no object, I do enjoy Philadelphia. True, it has fewer restaurants, bars, etc. but how many can I visit in one night?
Hmmmm, Phil has been spending a lot of time in Dubai.
http://www.lowtax.net/asp/story/front/DIFC_Authority_Restructures_To_Target_Growth____56748.html
One commenter calls Dubai the next Hong Kong.
#105 ironic that de schools are said to suck and yet the univ of de has such a big draw of students from nj and long island. Yet the overwhelming majority of the ud student body is from delaware. Just saying.
Nom [105];
La Famiglia on Front St. is excellent. If you’re lucky they might show you the wine cellar.
The sheer brillance I possess causes others to feel sometimes I am stupid as what I say only makes sense ten years from now.
BTW if you bought all my junk bond tips in 2009 you would be a much more pro TARP gal.
joyce says:
September 19, 2012 at 4:27 pm
(89)
JJ,
Just when I thought you couldn’t possibly be any dumber
Jj has this life licked.
NJ will always be tied to the NYC and Phila economies
Nom – I understand that now that you’ve left, you’re now comfortable with describing NJ as the vast wasteland between NYC and Philly, but are you sure about your economic analysis?
State/2010 GDP Per Capita/Rank
New York – $57,423 – #7
New Jersey – $56,477 – #8
Pennsylvania – $45,323 – #25
NY and NJ are vastly more productive from a per capita perspective. From a state perspective, PA requires 4 million more people and 5 times more land area to generate the same economic activity as NJ.
THIS CAN DESTROY YOUR CAR
EPA to Allow 15 Percent Renewable Fuel in Gasoline/Agency approves first applications for registration of ethanol to make E15
Release Date: 04/02/2012
Contact Information: Cathy Milbourn (News Media Only) Milbourn.cathy@epa.gov 202-564-7849 202-564-4355
WASHINGTON – The U.S. Environmental Protection Agency (EPA) approved the first applications for registration of ethanol for use in making gasoline that contains up to 15 percent ethanol – known as E15. Ethanol is a renewable fuel that can be mixed with gasoline. For over 30 years ethanol has been blended into gasoline, but the law limited it to 10 percent by volume for use in gasoline-fueled vehicles. Registration of ethanol to make E15 is a significant step toward its production, sale, and use in model year 2001 and newer gasoline-fueled cars and light trucks.
To enable widespread use of E15, the Obama Administration has set a goal to help fueling station owners install 10,000 blender pumps over the next 5 years. In addition, both through the Recovery Act and the 2008 Farm Bill, the U.S. Department of Energy (DOE) and U.S. Department of Agriculture have provided grants, loans and loan guarantees to spur American ingenuity on the next generation of biofuels.
Today’s action follows an extensive technical review required by law. Registration is a prerequisite to introducing E15 into the marketplace. Before it can be sold, manufactures must first take additional measures to help ensure retail stations and other gasoline distributors understand and implement labeling rules and other E15-related requirements. EPA is not requiring the use or sale of E15.
Ethanol is considered a renewable fuel because it is generally produced from plant products or wastes and not from fossil fuels. Ethanol is blended with gasoline for use in most areas across the country. After extensive vehicle testing by DOE and other organizations, EPA issued two partial waivers raising the allowable ethanol volume to 15 percent for use in model year 2001 and newer cars and light trucks.
E15 is not permitted for use in motor vehicles built prior to 2001 model year and in off-road vehicles and equipment such as boats and lawn and garden equipment. Gas pumps dispensing E15 will be clearly labeled so consumers can make the right choice.
112 yo
Not only can it damage some cars, it has substantially less energy, so expect less mpg.
The energy content of 1.0 US gallon of ethanol is 76,100 BTU, compared to 114,100 BTU for gasoline.
[107] 3b
I was talking about K-12.
[111] grim
Where do all those jerseyans work?
From the BEA – GDP by Metropolitan Area:
http://www.bea.gov/newsreleases/regional/gdp_metro/gdp_metro_newsrelease.htm
New York-Northern New Jersey-Long Island, NY-NJ-PA – 1,280,517 million – #1
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD – 346,932 million – #7
What is in Lodi? Almost $18,000 property tax for this condo?
http://www.zillow.com/homedetails/12-Lafayette-Pl-Lodi-NJ-07644/71824724_zpid/
No clue…
New Jersey – 3,980k jobs
-North Jersey – 1,879k jobs
–Bergen, Hudson Passaic Counties- 888k jobs
–Essex, Hunterdon, Morris, Sussex, Union – 990k jobs
-Central Jersey – 1,308k jobs
–Middlesex, Monmouth, Ocean, Somerset – 1,066k jobs
–Mercer County – 241k jobs
-South Jersey – 819k jobs
Also worth noting that Philly City area supports approximately 667k jobs, where the Camden area supports 504k.
The wider Philly metro is basically on-par with Northern NJ (not NYC) from a jobs perspective, with approximately 1,829k jobs.
A little iPhone hype humor
http://www.youtube.com/watch?feature=player_embedded&v=nf5-Prx19ZM
Never worked in nyc in my life. Always had jobs in Jersey.
Grim stop it with your silly points supported by silly facts and data.
I liked working in the city. Worked in Chelsea first and later in the Woolworth Bldg.
67.Ernest Money says:
September 19, 2012 at 11:39 am
Doom is imminent. It’s all over, but for the crying
You still have three months left!
122 –
Don’t get me wrong essex, nyc is cool and all, and my company has an office there, I just rarely have to go there and never needed to go there to find a job.
Grim, I have no time or inclination to go thru the data. I concede the economic powerhouse that is New Jersey. The streets will soon be paved with gold. Enjoy them.
And speaking of time, movers start packing us tomorrow. So I will be out of pocket until sometime next week. Think of it as a vacation from snarky tax facts.
Yo,
Ethanol in the US is an economic disaster. Its a money giveaway to farmers, increases fuel costs, is bad for the environment, reduces MPG, and can mess up your car. Typical government regulation and pressure group politics.
Nom – Can we send you a care package filled with good pizza and bagels?
Greetings from GA at Metlife Stadium. Thank you Baby Gator for the actual seats in GA. Are you here Shore?
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looks like YOU take a vacation from the facts when they don’t agree with your narrative.
Comrade Nom Deplume says:
September 19, 2012 at 8:26 pm
Grim, I have no time or inclination to go thru the data. I concede the economic powerhouse that is New Jersey. The streets will soon be paved with gold. Enjoy them.
All hail the stock market… it IS the economy after all.
All hail government regulations… if we only had more, better regulations with more better regulators.
http://market-ticker.org/akcs-www?post=211699
Govt sanctioned fraud… surprising? not in the least
Whether it’s sanction pre or post fraud, it doesn’t make a difference.
My friend’s dad tended bar for many years at the basement bar in the WW building. He had one great career. RIP Jim.
Essex says:
September 19, 2012 at 8:01 pm
I liked working in the city. Worked in Chelsea first and later in the Woolworth Bldg.
http://www.cfr.org/united-states/ceo-speaker-series-conversation-ray-dalio/p29012
Very interesting info!Perfect just what I was searching for!
I’m quite sure my family will end up in Singapore or thereabouts. The only question is whether my 8 & 10 year old daughters will go to school there or here before we all leave. I’m interested to see how Singapore Yale turns out (first class just began their studies).
There’s a well-known expatriation attorney I follow and over the past year, he has been traveling quite a bit to middle eastern and southeast asian countries.
Methinks that is where the money is gonna go.
[131] obviously,
Hey, I conceded. Didn’t you hear me concede?
Sorry, I’d argue with you but I’ve had a day where I had to deal with much more jerseytude than usual and I’m feeling a bit jersey myself.
But if it makes you feel better, Jersey’s da bomb, everyplace else sucks. Yeah, that.
#77 Chi
“clinging to their guns and religion” was also closed door event, so that precedent has already been set. I’m trying hard to see what comment from 12/31/11 you are taking credit for. It can’t be my favorite “ROMNEY’S RESPONSIBILTY IS TO MAKE IT TO THE CONVENTION AS CENTER AS POSSIBLE” Is it the “Keep your money at home”, because that one needs to go have a chat with “ Mrs Diversity” and Mr Fiduciary Responsibility”
To be honest, I think you are channeling the spirit of Andrew Breibart these days.
[128] juice,
Yeah, I’m gonna need those flown in, for sure.
I hear the group has just branched and opened its first PA office!
http://www.youtube.com/watch?v=lANJc_QIXU0
#78 Mkay,
So the The Book of Mormon differs from “The Life of Brian” or my personal favorite.
http://www.youtube.com/watch?v=lI1JJZuopig in what way.
I thought Hilary did a stunning job, in taking the position, that defended the first amendment, but put this up as the religious equivalent of shouting fire in a theatre.
#90 Chi
Wow, youre really on a roll today!
One small question, where does the velocity of money fit into this scenario? And with <1% interest rates, those with risk capital can't be saving? So where is all this risk capital? Has it flowed into the productive fabric of the economy?
80. Ah, to be functional when all around you is in disarray. True Bliss. TTYL
134 relo
Thanks that was a good read. I have exactly the same view