Morgan Stanley: All clear on the housing front

From HousingWire:

Morgan Stanley declares housing out of the woods

Investment house Morgan Stanley is pretty confident about the housing recovery.

In fact, even with mortgage servicing regulation coming and decisions on qualified mortgages forthcoming, Morgan Stanley believes the housing market will not only withstand this, but come out a more than a little on top.

Here is the bold prediction:

“We expect to see 2012 end with an increase of 7-9% for the year in aggregate home prices after considering seasonality effects for the remainder of the year, with the possibility of a 10-12% increase on the bullish side and a 4-6% increase as the bear case,” write analysts in the latest Housing Markets Insight report. ” We view the bear case outcome to be relatively less likely.”

And let’s not forget the Fed.

“Recent actions by the Federal Reserve, the commitment to keep interest rates lower for longer as well as the launch of an open-ended QE3, convince us that this low mortgage rate environment and the demand response for housing are likely to prevail for an extended period – well into the future,” they conclude.

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156 Responses to Morgan Stanley: All clear on the housing front

  1. Mike says:

    Good Morning New Jersey

  2. Essex says:

    Morgan’s call are always right. And pets.com is a strong buy.

  3. serenity now says:

    Grim may as well pull the plug on this site,
    apparently everything is fine.

  4. grim says:

    Oh, speaking of MS…

    From Law360:

    Morgan Stanley, Wells Fargo Face Clash Over $73B In MBS

    Investors that wrangled a hefty settlement from Bank of America Corp. have turned their sights on Morgan Stanley and Wells Fargo & Co., setting up potential litigation by notifying the two banks Wednesday that they are in default on a combined $73 billion in mortgage-backed securities.

    Gibbs & Bruns LLP said that Wells Fargo failed to service at least $15 billion worth of mortgage-backed securities that the bank had issued and Morgan Stanley did not service $5 billion of similar securities where the Houston-based law firm’s…

  5. Juice Box says:

    I won’t believe it until JJ calls bottom.

  6. grim says:

    From the WSJ:

    J.P. Morgan Sued on Mortgage Bonds

    New York’s top prosecutor opened a new front in efforts to hold banks accountable for the financial crisis by filing a civil lawsuit against J.P. Morgan Chase & Co., alleging widespread fraud by the company’s Bear Stearns unit in the sale of mortgage-backed securities.

    The case is the first to be brought under the aegis of a group of federal and state prosecutors and regulators formed by President Barack Obama in January. If successful, the lawsuit could point the way to significantly more financial pain for the big banks, which face threatened government actions and numerous investor lawsuits tied to mortgage securities that soured in the crisis.

    Since 2008, state and federal regulators have launched dozens of probes to determine whether banks broke securities laws or were simply guilty of errors of judgment. Regulators have achieved some record-breaking penalties and investors have secured some significant victories. Bank of America Corp. agreed Friday to pay $2.43 billion to settle claims it misled investors about the acquisition of Merrill Lynch & Co., in the largest shareholder class-action settlement tied to the meltdown. BofA didn’t admit wrongdoing.

  7. grim says:

    From the Star Ledger:

    Christie says staff added, regulations eased in foreclosure-aid program

    Gov. Chris Christie today admitted the state initially made mistakes in setting up a program intended to help people facing foreclosure, but has since added staff and loosened regulations.

    “Sometimes, I know it’s going to be shocking for everyone to hear, government doesn’t always work the way it’s supposed to,” Christie said at a news conference following a health center tour.

    He said the state has now distributed $41 million of $300 million in federal funds. When asked about the issue last week, Christie said the program was slow to distribute funds because a moratorium on foreclosure brought “less urgency” to the problem.

    Today he added that Richard Constable, commissioner of the Department of Community Affairs, made changes to the program after his predecessor, Lori Grifa, left the department. Christie appointed both Grifa and Constable to the cabinet-level post.

    “Our criteria in (Constable’s) opinion was too stringent under the last commissioner and it caused a lot of people to be rejected who should have been accepted because the last commissioner’s focus was on preventing fraud and so he went back and relooked at those well before this conversation,” Christie said. “He loosened up the criteria a bit and the money has flowed a lot more easily since then.”

  8. Jill says:

    3b yesterday: The split is the one I showed you. The cape IS pretty close to the DMF yard; not sure if it backs up to the rescue squad and police parking lot or not. In a better location, $449 would not be unreasonable, a 4/2 cape with a family room add-on and breezeway on a 100′ lot on Walnut (?) St. recently went for over a half-mil. I’m kind of wondering, though, why Jackson Ave. leads the town in homes for sale. My guess is that people are anticipating work on the Pascack Road/Washington Ave. intersection and people like me using their street instead is part of the reason.

  9. ruggles says:

    Well Morgan Stanley was right on when they bought $8 billion worth of commercial real estate in 2007. lol

  10. Ernest Money says:

    Wake me up when one of these financial terrorists goes to jail.

    It won’t happen.

  11. Ernest Money says:

    It’s war, and the people on whom war has been declared don’t even realize it yet.

  12. 3B Buying says:

    #8 Jill: Thanks. The cape is not far from the municipal complex, but still far enough away. so not a problem.It also does not back up to the DPW yard. I know it is redone with family room and all, but still seems a little high. What can I say thats how I feel. The split over all I think is a better value. What is the road work you are talking about.

  13. JJ's B.S says:

    Two questions needs to be answered before I say Real Estate is a good investment
    When will the inflation adjusted bottom end. remember. Last RE crash bottom was 1992 but inflation adjusted was 1996.
    Also Real Estate is a Binary Event. For instances although inflation adjusted bottom was 1996 still a bad time to buy. Why purchasing a home is a binary event. You are actually making TWO investment choices. For instance one of my friends bought literally the week of the inflation adjusted bottom in 1996 while his friend bought Feb 2000. In this binary event friend one sold some muni funds to make downpayment and then over first four years of homeownership the house sucked up tons of cash flow which cut back on his investing in stocks. Stocks were moving at 4x housing in the late 90s. Friend two wanted to buy in 1996 but backed off, by laste 1999 when he pulled trigger his stocks were up 100% and he bought a house that was way better than the other friend as his downpayment doubled.

    Recently I tried to buy a home an owner is selling as she is near retirement, she already has her retirement place. She is holding out for the extra 30K, house has been listed almost 2 years now. I gave up early in process. I told realtor you have not acted in the homeowners best interest. If she took 30K less 24 months ago, took proceeds and bought investment grade, Munis, MBS, Corporate bonds and mixed in Treasuries FDIC insured CDs and some quality Blue Chip Dividend paying stocks with proceeds two years ago she would be way way way better off. Now she paid to hold house two years and when she gets her 350K free and clear what is she investing in, she missed chance to lock in bonds with a solid income stream. Chasing that last 30K is going to cost her a few hundred grand over time. Did not say in in bad way. But I had another friend who sold in early 2009 in a fire sale as he said I am only going to get back 10-20% by holding on a few more years but stocks and bonds are a sale of a lifetime. He got out, missed another 100K on house and his portfolio is up 600K.

    Investing is always binary. It is even binary for you zero down folks. Remember, zero down gives you no money to invest each month. A zero down person who bought October 2008 with a 3k mortgage could have put 3k a month in stocks or bonds.

    Juice Box says:
    October 2, 2012 at 7:55 am

    I won’t believe it until JJ calls bottom.

  14. 3B Buying says:

    So MS says all clear on housing, and rates will stay low forever, until they don’t. Then rates rise at some point assuming we have a booming economy, but according to Mr. Bernanke rates will stay low until at least the middle of 2015, so now bboming economy for at least another 2.5 years. Or of course my belief we get stagflation, but Mr. Gartman tells me not to worry about that.

  15. grim says:

    From the WSJ:

    Manhattan Choices Narrow

    When Amanda Sawyer, a Corcoran Group broker, put a two-bedroom apartment on the market in Greenwich Village in June for $1.495 million, she said eight would-be buyers submitted written offers within a week.

    The apartment, with a view of the Empire State Building from its sixth-floor windows, went into contract in July for about 20% more than the asking price, she said. The buyer, a French national moving to New York to work in finance, “had lost out on other bidding wars,” she said.

    In a new market report, Corcoran said there were 6,555 listings in the third quarter, the fewest since mid-2005. The listing count fell by 10.9% from the second quarter and 21.4% since the same quarter in 2011.

    The number of apartments listed for sale in Manhattan shrunk to the lowest level in seven years, creating yet another challenge for would-be buyers, market reports say.

    Brokers said the new supply hurdle for buyers could lead to higher sale prices in the months ahead and has already triggered a frenzy of bidding wars in the past few months, as sales surged and few new apartments came on the market.

    The second report by Corcoran and another by Brown Harris Stevens and Halstead Property showed that the number of closings was the highest since 2008. A tally by StreetEasy.com showed that sales increased by 17% compared with the year-earlier third quarter.

    But still another report, prepared by Jonathan Miller, the president of Miller Samuel Inc., for Prudential Douglas Elliman, using a different methodology, found sales significantly up from last quarter but below the year-earlier quarter.

    Mr. Miller’s report put the median price of a Manhattan apartment at $890,000 and the average price at $1.44 million, both off slightly from the same quarter a year ago, as the share of lower-priced studio and one-bedroom apartments rose.

    While the surge in sales reduced inventory somewhat, the number of new listings coming on the market also declined to the lowest level in years.

    Corcoran President Pamela Liebman attributed the drop in new listings to declines in new condominium construction since buyers of new condos often turn around and list their previous apartments on the market.

    “Too many buyers are now chasing too few properties,” she said.

  16. grim says:

    Unless something is awry, 335 Jackson, the yellow split, borders the Municipal property (Lot 49) at the rear. I’m looking at the tax maps now (Block 2415 Lot 11). The brown split that’s in ARIP is on the other side of the road, so no issues there. The cape is on the same side as the brown split (corner of Edison right?).

    http://njrereport.com/blog/wp-content/uploads/2012/10/jackson.jpg

  17. Essex says:

    “Sometimes, I know it’s going to be shocking for everyone to hear, government doesn’t always work the way it’s supposed to,” Christie said.

    …Uh, yeah you tub, but YOU are the one in charge now….

  18. Essex says:

    13. Give him this, JJ is a freakin’ genius. I’ve said it before and I’ll say it again.

  19. grim says:

    BASF moving it’s Pharma HQ from Switzerland to Florham Park? Didn’t they get the memo?

  20. Phoenix says:

    JJ, please send me a business card. I have a three year old that needs your vision. Her father doesn’t have it.

  21. grim says:

    A zero down person who bought October 2008 with a 3k mortgage could have put 3k a month in stocks or bonds.

    Sure, as long as they are living with their parents, because you can’t make the assumption that deferring housing costs away from buying immediately frees them up for investment, what about rent?

    Also Real Estate is a Binary Event. For instances although inflation adjusted bottom was 1996 still a bad time to buy. Why purchasing a home is a binary event. You are actually making TWO investment choices

    Yes, but most home buyers will keep housing downpayment funds in cash, as they feel it is the least risky, and most liquid option. Most home buyers don’t ever “turn off”. If someone was looking in 1992, what do you tell them then? Don’t bother, wait another 8 years? Anyone in cash over that period lost, and if they were intending to stay cash, would have made out better buying the nominal low, not the real low.

    All of the wisdom in your model is based on you knowing what happened, in retrospect.

  22. Essex says:

    20. Looks like an effort to consolidate state-wide employees under one roof. Not sure about the addition of any net new jobs. They make “ingredients” for pharma and animal health products. “Yawn”

  23. Essex says:

    22. Don’t forget to mention Ayn Rand. She is part of the scenario somehow.

  24. grim says:

    24 – Is she the one asking $4,000/mo rent for a ranch in Ridgewood?

  25. JJ's B.S says:

    You cant stay in cash long term. It is the riskest asset of them all long term. You are guaranteed to lose.

    Nobody needs a house it is a luxury item. Even if you have a house, you dont need a trade up home, you dont need a vacation home you dont need an investment property. It is a status symbol.

    Realtors have a weird attachment to realtors. I recently put a bid on a home. I stopped with pre-approvals of mortgages as it hurts credit score so I showed proof of funds. I had to pick account that had at least enough to buy house. So I show them a statement with around 300K more than house bid. Realtor all at once goes I should buy a better home I should pay more. You have the money. I am like Donald Trump wont pay five bucks for a pack of gum just cause he is a billionaire. Somehow realtors equate wealth with housing. They equate home ownership is good.

    grim says:
    October 2, 2012 at 9:33 am

    A zero down person who bought October 2008 with a 3k mortgage could have put 3k a month in stocks or bonds.

    Sure, as long as they are living with their parents, because you can’t make the assumption that deferring housing costs away from buying immediately frees them up for investment, what about rent?

    Also Real Estate is a Binary Event. For instances although inflation adjusted bottom was 1996 still a bad time to buy. Why purchasing a home is a binary event. You are actually making TWO investment choices

    Yes, but most home buyers will keep housing downpayment funds in cash, as they feel it is the least risky, and most liquid option. Most home buyers don’t ever “turn off”. If someone was looking in 1992, what do you tell them then? Don’t bother, wait another 8 years? Anyone in cash over that period lost, and if they were intending to stay cash, would have made out better buying the nominal low, not the real low.

    All of the wisdom in your model is based on you knowing what happened, in retrospect

  26. xolepa says:

    (25)
    No big news. Same thing happened in Hillsborough 20 years ago. The restaurant was also closed down – temporarily. They did not intend to sell the meat. Just didn’t realize they were using a commercial kitchen.

  27. JJ's B.S says:

    What is wrong with living with parents. Think about it, newlywed couple marries Spring 2007 home prices are out of control, inlaws have 100k left on mortgage.
    They move in with inlaws pay low rent to inlaws pay off mortgage with rent, couple them buys house in Spring 2012 cash with money saved and inlaws now own home cash. Sounds great

    grim says:
    October 2, 2012 at 9:33 am

    Sure, as long as they are living with their parents, b

  28. Anon E. Moose says:

    Essex [18];

    Since you whole-heartedly agree with CC on that point, one might think that you should at least >consider< that smaller government might have some advantages — less to screw up. But you're just going to blow that bit of logic off and call me a reactionary instead.

  29. xolepa says:

    (27) JJ thinks the perfect ending to all of this is to be buried in a coffin graced with non-delivered bearer bonds. This way he CAN take it with him.

  30. Brian says:

    OMG Grim, c’mon. Clearly you have not been paying attention. I’ve already presented that argument to JJ in a previous thread.

    You’re supposed to hook up with a different girl every weekend then crash at their place for the week.

    The rest of us really have wasted our youth. All hail jj.

    22.grim says:
    October 2, 2012 at 9:33 am
    A zero down person who bought October 2008 with a 3k mortgage could have put 3k a month in stocks or bonds.

    Sure, as long as they are living with their parents, because you can’t make the assumption that deferring housing costs away from buying immediately frees them up for investment, what about rent?

  31. xolepa says:

    (27) Of course, that’s after wishing on his death bed that he should have spent more hours at the office.

  32. grim says:

    Rents have been pretty wicked over the last few months. If you thought sellers had their heads up their asses, you should see some of the rentals on the market.

    Anything “decent” with 3-4 beds is running around $2500-$3000. Most people are willing to rent something lower quality than they would consider purchasing, but apples to apples, would be closer to that $3k mark.

    Sellers are looking for you to fund their requirements, landlords are looking for you to pay their PITI.

    It’s ugly on both sides.

  33. Essex says:

    30. Please don ‘t try to rope me into your Daily Dose of Stupid. Thanks

  34. JJ's B.S says:

    If you are saying it is an investment then I should call it an investment. My wife and I did look at a big two acre home I could have afforded it. Look recently at a beach house I could afford to buy a few of them cash. But both times the headaches of managing property, the monthly cost or headache of even a trade up home dealing with all the maint and high bills were such a huge turnoff. My little junky house all paid off guess what it snows, I shovel sidewalk in 15 minutes and off to work. Can do all home repairs myself and repairs or big projects people quote me inexpensive to fix. I am still house hunting but decided I want a short sale or bk in good condition under 350K I can pay cash for. Even getting a mortgage etc. is a big headache. I just want to write check and instantly have 50K equity without much work. Realtors are not making my dream come true. I may have to become a realtor myself and work with banks direct, how hard can it be.

    xolepa says:
    October 2, 2012 at 10:04 am

    (27) JJ thinks the perfect ending to all of this is to be buried in a coffin graced with non-delivered bearer bonds. This way he CAN take it with him.

  35. ruggles says:

    22. Don’t forget to mention Ayn Rand. She is part of the scenario somehow.

    24 – Is she the one asking $4,000/mo rent for a ranch in Ridgewood?

    By the looks of her, welfare queen Ayn Rand probably spent most of her social security and medicare on cigarettes and liquor. Attempting to gouge a renter so she could perpetuate her charade of self sufficience wouldn’t suprise me.

  36. JJ's B.S says:

    Once I went on a first date with a hot girl and she stayed two days. Apparantly her MO was live at home in between guys, find one with a good place move in and F8ck him like a milking machine so he does not notice she is not paying nothing she did it till she was 35 and got married.
    My rent controlled apt I got in city from my ex gfs brothers ex finance. And then I got leased signed over to me in a deal that was more complicated than an LBO that only involved my Breaking Bad Saul like abilities to work a deal.

    Brian says:
    October 2, 2012 at 10:05 am

    OMG Grim, c’mon. Clearly you have not been paying attention. I’ve already presented that argument to JJ in a previous thread.

    You’re supposed to hook up with a different girl every weekend then crash at their place for the week.

    The rest of us really have wasted our youth. All hail jj.

  37. Essex says:

    Brian, Jjs had more sweet chicks than you’ve had hot meals.

  38. freedy says:

    http://www.businessinsider.com/bearish-housing-thesis-charts-2012-9

    Comments please as I rush to my Realtors office to make an offer on a bidding war.

  39. grim says:

    August CoreLogic HPI is out:

    New York-White Plains-Wayne, NY-NJ CBSA (NY Metro)
    Single Family – Up 3.4% YOY
    Excluding Distressed – Up 3.6% YOY

    New Jersey State
    Single Family – Down 1.4% YOY
    Excluding Distressed – Down 1.4% YOY

    National
    Single Family – Up 4.6% YOY
    Excluding Distressed – Up 4.9% YOY

  40. Anon E. Moose says:

    Sx [36];

    Should have known. If its not all about the cheap shot, you’re not interested. Speaking of which, how are the KOSacks and the DUers?

  41. grim says:

    From MarketWatch:

    Aug. U.S. home prices see top gain in six years

    U.S. home prices saw their biggest year-on-year jump in August in six years, more evidence that the market recovery has gained traction, a data provider said Tuesday.

    CoreLogic reported a 0.3% gain in prices in August, to take the year-on-year jump to 4.6%.

    The home price data released Tuesday is broadly confirmed by other, less current measures from S&P/Case-Shiller and the Federal Housing Finance Agency that show a slowly recovering picture after a housing bubble burst that left prices 27% below peaks, according to CoreLogic data.

    CoreLogic has reported six straight monthly gains, and all but six states are experiencing gains.

    Excluding distressed sales — in other words, foreclosures and short sales — prices were up 4.9% year-on-year in August and 1% on the month.

    CoreLogic’s pending home price index expects home price gains to stretch to 5% on a year-on-year basis but slip 0.3% monthly as the summer buying season ends.

  42. JJ's B.S says:

    year-on-year jump to 4.6%.

    wow what a jump

  43. The Original NJ ExPat says:

    [13] & [22] grim & JJ – You’re both right, in your own generational way. Guys like JJ, Nom, myself, & others are at the tail end of the baby boom with probably similar experiences and values. We save, invest, put off purchases and watch our investments grow as we put off purchases. Debt avoidance was probably common in our upbringings. We probably all got our first credit cards after we graduated college debt free and we probably all saw a massive spike in income upon graduation which turned us into investors. Grim knows today’s buyers. They grew up with debt, they’ll always be in debt, their lifetime will be spent servicing their ever growing debt. If they know anything about investing it’s from their 7% or less they’re putting in their 401ks. I don’t even know a person in their mid 20’s who has a brokerage account here in MA. I had one when discount brokers charged $60-$80 per trade for commission. Two different mentalities completely:

    1. Save, Invest & Buy.
    2. Buy, Service Debt, & Buy More.

    A zero down person who bought October 2008 with a 3k mortgage could have put 3k a month in stocks or bonds.

    Sure, as long as they are living with their parents, because you can’t make the assumption that deferring housing costs away from buying immediately frees them up for investment, what about rent?

    Also Real Estate is a Binary Event. For instances although inflation adjusted bottom was 1996 still a bad time to buy. Why purchasing a home is a binary event. You are actually making TWO investment choices

    Yes, but most home buyers will keep housing downpayment funds in cash, as they feel it is the least risky, and most liquid option. Most home buyers don’t ever “turn off”. If someone was looking in 1992, what do you tell them then? Don’t bother, wait another 8 years? Anyone in cash over that period lost, and if they were intending to stay cash, would have made out better buying the nominal low, not the real low.

    All of the wisdom in your model is based on you knowing what happened, in retrospect.

  44. grim says:

    I’d say my average client age is about 45 or so. Could be a bit higher, I never asked ages but I’d wager even my youngest clients were in their late 30s.

  45. JJ's B.S says:

    clients? sounds like an escort agency. Re 46 you are right. Todays kids are all born richer and have parents who spent like drunken sailors. In 1980 my mom had an income for 9K a year, four kids a house a car and saved like 15% of salary. Heck I recall the boiler being broken and take ice cold showers in January and no clothes dryer or dishwasher. We eventually got these things but only after you saved up, got a good price, did research

    grim says:
    October 2, 2012 at 11:39 am

    I’d say my average client age is about 45 or so. Could be a bit higher, I never asked ages but I’d wager even my youngest clients were in their late 30s.

  46. Fabius Maximus says:

    Happy Bucky Dent Day!

  47. The Original NJ ExPat says:

    [47] Anybody who missed the late 70’s – early 80’s as at least a teenager comes from a completely different upbringing and mindset. In the 70’s inflation ravaged families pushing moms out into the workforce. This glut of new workers prompted even higher inflation followed my huge recession and high unemployment. If your teenage memories only go back to the mid or late 80’s, you just remember good economic times and everyone’s Mom always worked.

    I’d say my average client age is about 45 or so. Could be a bit higher, I never asked ages but I’d wager even my youngest clients were in their late 30s.

  48. The Original NJ ExPat says:

    My wife is a few years younger than me and grew up in a blue-ribbony BC train town (Glen Rock). She claims her elementary school had no lunch room and everyone was required to walk home for lunch. And they did. Different times?

  49. Fabius Maximus says:

    #6 grim
    My question is if the $20B settlement would come out of the $29B backstop JP got when they took over Bear. Easy to settle if Uncle Sam is picking up the tab.

  50. grim says:

    52 – Nobody wants to give back a pony

  51. JJ's B.S says:

    watch that movie How to Beat the High Cost of Living where you see housewives shopping and clerk with sticker gun is rising prices on meat and stuff while you are trying to put it in your cart and gas station raises prices while you were on line.
    Prices rose weekly and raises came annually and in small amounts. Thing about this a 36K house in 1973 by 1988 was a 360K house, a 1000 percent increase in 15 years.

    The Original NJ ExPat says:
    October 2, 2012 at 11:54 am

    [47] Anybody who missed the late 70′s – early 80′s as at least a teenager comes from a completely different upbringing and mindset. In the 70′s inflation ravaged families pushing moms out into the workforce. This glut of new workers prompted even higher inflation followed my huge recession and high unemployment. If your teenage memories only go back to the mid or late 80′s, you just remember good economic times and everyone’s Mom always worked.

    I’d say my average client age is about 45 or so. Could be a bit higher, I never asked ages but I’d wager even my youngest clients were in their late 30s.

  52. Essex says:

    43. Just livin life baby. No time for idealogic b.s.

  53. grim says:

    51 – All I’m trying to say is that it’s easy to look back at history and plot out the best course of action, 20 years ago, when we know how the stories all ended.

    I want to know how the next 20 years ends, with absolute certainty. Unfortunately, it’ll be 30 before I get the answer.

  54. Comrade Nom Deplume says:

    I’m shocked, shocked, to discover that government contractors are knuckling under to the WH political machinations.

    http://www.aviationweek.com/Article.aspx?id=/article-xml/awx_10_01_2012_p0-501519.xml

    Of course, they were essentially bribed, so why not?

  55. JJ's B.S says:

    We already know that RE only rises at rate of inflation over long period of times. Now tell me what stocks, bonds and commodities are going to do.

    grim says:
    October 2, 2012 at 12:38 pm

    51 – All I’m trying to say is that it’s easy to look back at history and plot out the best course of action, 20 years ago, when we know how the stories all ended.

    I want to know how the next 20 years ends, with absolute certainty. Unfortunately, it’ll be 30 before I get the answer.

  56. Comrade Nom Deplume says:

    [49] fabius

    Go F&%$ yourself.

  57. Comrade Nom Deplume in lower tax, lower cost PA says:

    [5] Juice,

    Don’t ask JJ to call a bottom. It probably won’t be about finance or housing prices.

  58. 3B Buying says:

    #47 grim:Are these first time buyers for the most part?

    I’dsay my average client age is about 45 or so. Could be a bit higher, I never asked ages but I’d wager even my youngest clients were in their late 30s.

  59. yome11 says:

    jj\ Why will you buy GE bonds at 2.58 yield?

    General Electric Co. (GE) is refinancing $5 billion of debt even as it expects to generate $100 billion of cash in the next four years, showing confidence in its ability to invest at returns four times its borrowing costs.

    The biggest maker of power-generation equipment sold $7 billion of bonds yesterday at an average 2.58 percent yield in the parent company’s first issue in almost five years. That compares with a 12 percent return that Chief Executive Officer Jeffrey Immelt said last week the Fairfield, Connecticut-based firm generates on its capital.

  60. 3B Buying says:

    #17 grim: You may be right, in fact from the map you are right. We did not walk the property, as people are living in the house, so I did nto notice from the front at least that it bordered on the municipal property. Big mistake on my part!! The cape is empty, so that property we walked, and it backs up to another house. Thanks for the heads up!!

  61. yome11 says:

    you keep on ignoring the fact that you need to pay to live somewhere.And if you choose rent,that money is lost forever.If you choose to buy(rent from the bank),you have equity to look forward to,either it equals inflation or not.
    You need to buy equals to rent so as time passes your mortgage is less than the cost of rent.Now you are gaining.

    JJ’s B.S says:
    October 2, 2012 at 12:45 pm
    We already know that RE only rises at rate of inflation over long period of times. Now tell me what stocks, bonds and commodities are going to do.

  62. 3B Buying says:

    #8 Jill: do you really think people would move (Jackson Ave) just to get away from temporary road work or is it your belief the whole traffic pattern will change once the work is complete.

  63. Libtard at home says:

    ChiFi (from last night):

    “Casual restaurant with a 39 P/E and $1B market cap is low risk?” A poor man’s steak house! As we climb out of the recession, the common folk might want a steak to treat themselves but aren’t quite ready for the $50 porterhouse at Mcormick or Ruth Crisp. Check out their growth and margins and no debt. Relative value is only 107. 8% held by insiders. Margins increasing consistently and over 7% now. Return on equity increasing. Ten straight quarters of sales and eps growth with little bumpiness. She’s low on her historical P/E bands. The P/E is justifiable in my opinion and was much higher over the past five years. Consensus of analysts project a 20.2% eps growth rate. I project 17.8% With a projected 5 year high P/E of 43 (averaged high P/E over past 5 years was over 48) x a projected EPS of $2.45 gives me a projected 5-year high price of $105.4! On the downside, take current EPS multiply it by my projected low P/E of 24 (ten-year average low P/E was 32) and you get 25.9. Risk to Reward ratio over 3 (our club minimum). Projected annual return over 18%. Wouldn’t buy it over $45.80. At current earnings, would sell it at $85.50 Between the two prices, if earnings, margins and sales maintain historical consistency, we would hold it indefinitely. And who doesn’t like a BJ?

    “I think you need to reevaluate your benchmarks……”

    There are no benchmarks that match our portfolio. Or are there? List is sorted by percentage of our portfolio large to small:
    Apple Inc (AAPL)
    GOOGLE INC CL A (GOOG)
    Canadian National Railway (CNI)
    Accenture Plc (ACN)
    LKQ CP (LKQ)
    FactSet Research Systems Inc (FDS)
    Novo Nordisk A/S (NVO)
    HEICO Corp (HEI)
    Titan Machinery Inc (TITN)
    BJ Restaurants (BJRI)
    Cash America International (CSH)
    Praxair Inc (PX)

    This does not look like a risky list to me.

    “Defense contrator when we are staring down the Fiscal Cliff…….that is homerun or strikeout……low risk?”

    Their bread and butter business is replacement plane parts, both military and commercial. I see less new planes and increased need for continued maintenance of current fleet. They are barely midcap. This is no Northrop, Lockheed or BAE. They also make parachutes.

    Titan is a play on the mega drought. Stock price got overhammered. There has never been a 2-year mega drought since the dust bowl. I like those odds. I also like that their sales have been maintained and their margins barely impacted and mainly on the used equipment. Insurance payments should be coming in soon. Bet those farmers buy some shiny new tractors with the extra dough.

    I know our track record continues to defy all that you know and believe, but how many years of index beating performance must we deliver before you believe it’s more than luck. You could join us, but you would never subscribe to our philosophy. Actually, not sure if you could keep up. :P

  64. yome11 says:

    I bought my house for $126,000 in 1996,today it cost $1600 to $2000 to rent in my area. If I did not cashed out on my equity and bought a second home for cash my mortgage plus property tax is $1200 a month.If rent cost $1600 I have $400 a month I can buy bonds,stocks…If I was renting I have no money to buy the stocks and bonds you are talking about.

    JJ’s B.S says:
    October 2, 2012 at 12:45 pm
    We already know that RE only rises at rate of inflation over long period of times. Now tell me what stocks, bonds and commodities are going to do.

  65. yome11 says:

    #67 and I could be sitting in a big file of cash.No more rent if house is paid.just $600 a month on property tax

    JJ’s B.S says:
    October 2, 2012 at 12:45 pm
    We already know that RE only rises at rate of inflation over long period of times. Now tell me what stocks, bonds and commodities are going to do.

  66. Brian says:

    Nom, so what’s the big deal with this? What would be the penalties if any other company did not issue a WARN notice?

    Do you think if major media outlets ran this story it might scare the poop out of government contractors and maybe swing the election?

    Truthfully, I was wondering if you could dumb it down for a schlub like me. I think I get the gist of it but I wanted to send info on it over to my uncle and his Tea party buddies. They’re really good at stirring up trouble.

    57.Comrade Nom Deplume says:
    October 2, 2012 at 12:45 pm
    I’m shocked, shocked, to discover that government contractors are knuckling under to the WH political machinations.

    http://www.aviationweek.com/Article.aspx?id=/article-xml/awx_10_01_2012_p0-501519.xml

    Of course, they were essentially bribed, so why not?

  67. The Original NJ ExPat says:

    [64] Any money you don’t invest is lost forever. Money spent on property taxes, home insurance, heating oil, gasoline, child care, housing repairs, realtor commissions, Air Jordans, etc. is all “lost forever”. Renting is just “throwing money away” is such a weak-minded lemming rant.

    you keep on ignoring the fact that you need to pay to live somewhere.And if you choose rent,that money is lost forever.

  68. JJ's B.S says:

    You guys assume someone who is a long term renter would be paying market price. Only short term renters pay market price. Usually you find a nice landlord who appreciates a good tenant, offer to do home improvements for free etc. Perhaps be a super or doorman, perhaps get free housing as you are in military, maybe doctor or nurse housing, maybe a rent controlled apt. For instance my aunt lives in Manhattan in a rent controlled unit she got in the 1940s. When I was single I had two apts. One in astoria dirt cheap with a roomate, the second a rent stabilized studio. Nobody rents a 5k a month house for 40 years. Usually renters in those places dont last long. Same for Hamtons or Jersey Short. For instance my buddy owns a house in Hamptons, nice rich older childless couple rents one month each year from him and returns house perfect. He rents below market, no realtor fee, couple only really want a month each year in this case the couple never buys a Hampton home, what is point. They might buy if they did not have access to a nice below market home every July for rest of life.

  69. yome11 says:

    For me,long term, it worked out, buying instead of renting.As I have said,it cost me $400 less to buy than to rent not mentioning the equities I built up through the years. Renters will have their own outlook,at the end;you do what you do that is right for you and your family.

    ” Renting is just “throwing money away” is such a weak-minded lemming rant.”

  70. grim says:

    It is difficult to generalize and come up with a better or worse, situational differences apply.

    There is a cost to rent (with its list of pros and cons), and there is a cost to buy (with its list of pros and cons).

    You pick the one that works best for you, but if you want to stay here, you need to pick one.

    Seven years ago, the buy case was pretty shitty (namely because of two cons that were in the list at the time, prices and outlook). Today, housing is less shitty, but renting is also no longer the shining star it once was.

  71. grim says:

    71 – All interesting, but completely non-actionable information. In fact, almost every case you mention is completely serendipitous as no one could have had advance information about the future. You sure these cases aren’t all highlighting luck over skill?

    You guys assume someone who is a long term renter would be paying market price. Only short term renters pay market price.

    Tell me, how does one become a long-term renter without being a short-term renter first? Can’t, so I get screwed.

    Usually you find a nice landlord who appreciates a good tenant, offer to do home improvements for free etc.

    What field is this in the MLS? Asshole Landlord: No? How do I find a good one without being a serial short-term renter (getting screwed each time).

    Perhaps be a super or doorman, perhaps get free housing as you are in military,

    You mean quit my job and enlist? Right.

    For instance my aunt lives in Manhattan in a rent controlled unit she got in the 1940s.

    Sign me up JJ, where do I get mine?

  72. JJ's B.S says:

    Only if I was extremely risk adverse and plan to hold to maturity. No real default risk but no real yield either. If rates rise bonds are priced to perfection.

    If we get a fiscal cliff sell off in next few weeks you would be better off buying GE stock in a sell off.

    yome11 says:
    October 2, 2012 at 1:11 pm

    jj\ Why will you buy GE bonds at 2.58 yield?

  73. JJ's B.S says:

    Grim your problem is you want to live where you want to live and are not flexible on location, state, style of place etc. In that case it is impossible to find a cheap place. Also I never paid mkt rent in my life. My studio apt I wheeled and dealed and took it sight unseen. Rent was 779 and market price was 1,200. I could of had it forever. Friends father was a super lived in a great apt. Remember, husband and wife thing and son or daughter could cover. He had porters and janitors do work, just really mgt stuff as large building. He lived rent free and utility free whole life. You just have to be flexible. Yep I have a split, I had splits in a town I had no intention of living in. But the deal fell in my lap.I cant be all fancy nancy and want cheap rent. I could get you any of the above deals

    grim says:
    October 2, 2012 at 1:49 pm

  74. Juice Box says:

    JJ – Doomsday Scenario ala 1994 with 2012 leverage? As I have been saying nobody really knows how much UST is levered up.

    http://www.cnbc.com/id/49251889

    “We are getting into bubble territory,” Apoteker told CNBC Asia’s “Squawk Box” on Tuesday, as he flagged the risk factors that potentially await investors. “The U.S. 10-year bond yield could move to 2.5 and 3 percent next year, which would be a big risk for bondholders.”
    Apoteker says worries about the euro zone debt crisis and sluggish economic growth in emerging market economies have kept safe-haven Treasury yields artificially low and the danger, as the outlook for global growth improves and fears about Europe’s bond crisis ease, is a sharp unwinding of money flows into U.S. bond markets that could spark a sharp rise in yields.

  75. Libtard at home says:

    I think mobility is the biggest advantage to renting. If you really can stay in one place for over ten years, financially, it probably makes better sense buying.

  76. The Original NJ ExPat says:

    Hard to believe it was 34 years ago this afternoon that I watched Bucky Dent hit that home run on a black and white portable TV with rabbit ears antenna on the second floor of a Rutgers dorm. I did feel a little bad for poor old Yaz, hitting that final pop-up that landed in Graig Nettles’ glove. But only for a second.

    In Spring of 2002 I was taking my lunch break in Copley Place (a mall here in Boston) and there was this sporting goods store that was playing a tape of that game. They were showing it on one of those old 25 inch console furniture TV’s and it was facing the mall entrance to their small store, but probably 4 feet inside their store. There was a group of about 4 or 5 guys just standing there, in the mall, not in the store, but just standing there glued to the screen, knowing what they were about to see. Like a bad car wreck, they just couldn’t look away. When it happened, I was the only one smiling.

  77. grim says:

    Grim your problem is you want to live where you want to live and are not flexible on location, state, style of place etc. In that case it is impossible to find a cheap place.

    Are you pulling my leg? This place was so deep in green shag I had to call in the marines to chase out the last few VC that had mistaken it for a rice paddy.

  78. The Original NJ ExPat says:

    [79] Not that it matters to the story, but after reconsideration, it was probably 1998, not 2002 in Copley Place.

  79. The Original NJ ExPat says:

    [80] grim – LOL. My place in Wayne was ALL green shag. The kind with two types of green. A really green and a really, really green.

    Are you pulling my leg? This place was so deep in green shag I had to call in the marines to chase out the last few VC that had mistaken it for a rice paddy.

  80. Statler Waldorf says:

    “This does not look like a risky list to me.”

    AAPL at $650 and GOOG at $754 does not look risky?

    AAPL’s chart over the last couple of years is more vertical than Shiller’s real estate chart.

    Long way down.

  81. JJ's B.S says:

    If the green shag is still there you win. btw green shag sounds like a slang term when a englishman bangs a martian

    grim says:
    October 2, 2012 at 2:13 pm

    Grim your problem is you want to live where you want to live and are not flexible on location, state, style of place etc. In that case it is impossible to find a cheap place.

    Are you pulling my leg? This place was so deep in green shag I had to call in the marines to chase out the last few VC that had mistaken it for a rice paddy.

  82. kuangbfj says:

    Adidas shoes a status symbol

    塒NG
    [url=http://www.soccercleatsofficial.com/nike-mercurial-talaria-iv-fg-c-12.html]Nike Mercurial Talaria IV FG[/url]

  83. grim says:

    If the green shag is still there you win.

    No, it’s gone, as is the matching green flock and foil geometric wallpaper. Although it was so retro cool I kept a piece.

  84. Libtard at home says:

    Waldorf…We’ve had Apple since 2005. Google nearly as long. We have sold of many times what we have purchased Apple for. I bet it hits $1,000 before it hits $500. Want to make a wager? For a company that prints money, their P/E is impossibly low.

  85. JJ's B.S says:

    At some point you will need to buy some puts to protect or sell to capture current tax rate and rebuy at same time.

    Libtard at home says:
    October 2, 2012 at 2:30 pm

    Waldorf…We’ve had Apple since 2005. Google nearly as long. We have sold of many times what we have purchased Apple for. I bet it hits $1,000 before it hits $500. Want to make a wager? For a company that prints money, their P/E is impossibly low.

  86. Essex says:

    Italians bought more bicycles than cars in 2011 for the first time in decades, according to local media reports.

    Last year some 1.75 million bicycles were sold, about 2,000 more than the number of new cars registered, La Repubblica newspaper reported.

    It attributed the change to a slump in car sales during the economic crisis and the rising price of petrol, as well as bikes coming back into fashion.

    Car sales have slumped to the level at which they stood in 1964, it said.

    Though bicycling has a strong tradition in Italy, the centres of big cities are largely dominated by cars and scooters.

    Ahead of a cycling conference being held in Italy this weekend, President Giorgio Napolitano appealed to Italians to “catch up” with other European countries by making their roads more cycle-friendly.

  87. Ann says:

    Live with your parents? Oh no no no no. Please no. Let me die poor.

  88. Brian says:

    Fannie Mae: Despite It All, Americans Want to Buy, Not Rent
    Brian O’Connell
    10/02/12 – 11:22 AM EDT
    NEW YORK (BankingMyWay) — Despite barrels of ink spilled over the imminent tsunami in apartment rentals, Americans still want to own their own homes, and they have a lot to say about the new-look U.S. housing market.

    According to the U.S. Census Bureau, 65.5% of adult Americans own their own home, a number that really hasn’t wavered over the past year.

    With housing prices historically soft and mortgage credit hard to get, the conventional wisdom has it that U.S. adults have had it with the housing market and are looking to rent rather than own their own abode.

    As Census data show, that conventional wisdom is wrong. In fact, not only do U.S. consumers continue to pursue the American Dream, just over a quarter of them — 28% to be exact — prefer to rent versus own their own home, according to a separate survey of 1,000 U.S. adults from Fannie Mae.

    In Fannie Mae’s August National Housing Survey, U.S. adults are as optimistic, albeit cautiously so, over the housing market. Fannie Mae says lower household income and declining consumer sentiment could undermine further bullishness on the home ownership front.

    “Consumer attitudes toward the housing market remain modestly positive, despite signs of increased concern over the direction of the economy,” explains Doug Duncan, senior vice president and chief economist at Fannie Mae. “While the latest results showed a pickup in the share of consumers expecting mortgage rates to rise, reflecting the uptrend of long-term interest rates since mid-July, that may soon change. Friday’s disappointing jobs report underpins the gradual nature of this year’s housing recovery and supports our view that the muted economic recovery is still subject to downside risk and that additional Fed easing will soon be forthcoming.”

    How do Americans view the domestic housing market? Fannie Mae reveals five key takeaways in its survey:

    •U.S. adults expect home prices to rise in 2013, but only by 1.6%. Even so, a slightly bullish outlook on home prices is a big departure for homeowners, who have been decidedly downcast over housing prices over the past few years.
    •18% of U.S. adults say it’s a good time to sell their home, the highest level since Fannie Mae launched its annual housing survey in 2010.
    •40% of housing consumers expect mortgage interest rates to rise nest year by an average of 4%. That does not jibe current economic policy from the Federal Reserve, which has said repeatedly it aims to keep interest rates near zero until 2105.
    •73% of U.S. adults say it’s a “good time” to buy a new home. Survey respondents in this category cite low home prices and low interest rates as primary drivers of new home purchases.
    •60% of Americans remain skeptical on the U.S. economy, saying it’s headed in the “wrong direction.” That, Fannie Mae says, is the third consecutive rise in that sentiment from consumers, although only 13% of Americans expect their financial situation to “worsen.”

  89. Fabius Maximus says:

    #73 grim

    As always there are deals to be found even in renting. There is the case were the $4K PITI meets the $2K market rate.

  90. Comrade Nom Deplume in lower tax, lower cost PA says:

    [69] brian,

    WARN Act requires companies (generally) to give notice of impending layoffs or plant closures. The requirement is 60 days.

    In July, DOL issued guidance that told gov contractors that they didn’t have to, and indeed shouldn’t, send out WARN Act notices in anticipation of their contracts being suspended due to the fiscal cliff. I read it, as did other reg attorneys, and took it as a bit of a veiled threat. I also mused that this put the contractors between rock and hard place: If they didn’t warn in time, they get sued for violations and have to pay people wages even though they were laid off. If they do warn, DOL or DOJ could ding them for issuing a “speculative” notice. Most were going to err on the side of the law and issue the notices.

    BTW, the deadline for notices for actions on 1/1/13 is Nov. 1. 5 days before the election.

    The latest guidance from OMB tells agencies that if the contractors don’t give notices and they get sued, the agencies can pick up the legal costs and/or wage costs. So they are indemnifying contractors that follow the DOL guidance and lose in court because they didn’t follow the law.

    Now, as I look at this, the only reason I can see that the DOL and OMB took this unprecedented action is to avoid a spike in layoff notices 5 days prior to the election. The dems will undoubtedly say that the unprecedented nature of the fiscal cliff calls for this, but we have had countless CR showdowns, and a few shutdowns, and I don’t recall this being done for those events, so that argument seems a tad thin (and it hasn’t even been made).

    If you are in labor law, this is big news, but don’t look for MSM to cover it (Fox is, but that’s it). Cost-wise, it could be expensive, but trifling compared to our other boondoggles. And I expect the agencies to shaft the contractors anyway by trying to weasel out of the indemnity; this is SOP for agencies—anyone can has contracted with the feds will tell you that they have more comfort dealing with the Mafia. At least the Mafia keeps its end of the bargain.

  91. Brian says:

    Rents Rise Less Than Inflation By LAURA KUSISTO

    Manhattan’s pricey office rents may actually be a bargain compared with a decade ago.

    New research by Jones Lang LaSalle finds that rents between 2002 and 2012 haven’t kept up with inflation, which is good news for tenants looking to save money on office space, but bad news for landlords trying to keep up with rising taxes and energy prices.

    “The message here is that we’re trained to think that New York is very expensive. We’re not even keeping up with inflation over the last 10 years,” said Tristan Ashby, head of research for the New York office of Jones Lang LaSalle.

    Average asking rents in Manhattan climbed from about $45 a square foot in 2002 to about $55 a square foot in 2012. But that is still less than rents would have climbed if indexed to inflation—from about $45 a square foot to about $60 a square foot.

    The exception was the spike from 2007 to 2009, when rents for some prime spaces climbed well above $100 a square foot. While many landlords and brokers yearn to return to those rents, it may have been more of a blip than a steady upward trend.

    But it is good news for belt-tightening tenants, who have the opportunity to save money, relatively speaking, on office space. “Rents are cheap. Now the time is to strike,” Mr. Ashby said.

    http://online.wsj.com/article/SB10000872396390444914904577621703662158064.html?mod=googlenews_wsj

  92. Comrade Nom Deplume in lower tax, lower cost PA says:

    [93] brian,

    It also gets around congress and existing law by essentially introducing a new “interpretation” for existing gov contracts, even those that have no language in them regarding unusual cost events.

    If there are suits, it will be interesting to see how this plays out in the agencies and the courts. To gov contract wonks, this is exciting stuff.

  93. Brian says:

    93 –
    In your oppinion, what impact would this have on the election?

    (and do you mind if I plagarize some of that in an email :) )

  94. grim says:

    What’s the fall out for the US when the Canadian housing market implodes?

  95. Libtard at home says:

    We don’t do options nor leverage. Fundamentals work just fine, except on the rare occasion where a company cooks its books. We invest like robots. We make a total of 4 assumptions for every equity we consider. 5-year sales growth, 5-year eps growth, 5-year est. high p/e, 5-year est. low p/e. Of these 4 assumptions, sales growth is the hardest to project accurately. We use two different methods to calculate eps growth. One revenue based and the other a combination of analyst research plus a projection based on the last 5-10 years growth with a more recent weighting. The P/E projections are based on historic averages as well as trend.

    We then calculate a buy/hold/sell zone at 25%/50%/25% of the range between our projected high and low price based on those earlier 4 assumptions. This also allows us to calculate a risk to reward ratio and we also account for dividends if any.

    If a stock price climbs into the sell zone (overvalued), and the original fundamentals used to make the purchase haven’t changed, we sell it no matter what. Likewise, if the price falls further into the buy zone, without a fundamental change, we purchase more. We tend to scale into our positions and reinvest in our positions regularly. All dividends are reinvested in the underlying stock they are derived from.

    On the purchase, we also look into relative value, debt to equity, profit margin (pretax profit as a percentage of sales), PEG as well as a close review of the quarterly results for the past ten years. We use software to aid our research and pay for a data feed. We also evaluate competitors.

    Ultimately, we are robots and really don’t focus much on price. With each quarterly earnings report, we check our assumptions and see if company is meeting them. If they are not, we make adjustments and see how the current stock price fits into the buy/hold/sell range. We also closely watch our past sales to see if they were successful as well as stocks we evaluated that didn’t pass the test.

    See? It’s really simple. So to answer the question on Apple…as long as the eps growth rate remains above our 5-year 25% growth rate projection, if it hits $1026, we will sell. If it drops below 545, we will buy more. In the past 5 years alone, Apple’s EPS has grown from $4 to $28 for 2011. Has the stock price increased 7 fold? The fact that Apple chooses to rarely split it’s price means nothing.

    Google is a similar story.

    Assuming it grows 17% annually (10-year growth grew at 58%), we are a buy up to 816. Sell above $1485. Seems crazy right? Watch and learn how simple it is to ignore fiscal cliffs and all these other macro events that never seem to occur.

  96. JJ's B.S says:

    Options and Leverage are two different things.

    You buy a $100,000 brand new Porsche you buy insurance against a crash. You would not dream of driving it around without insurance. Yet same person buys $100,000 worth of stock but wont buy a put on it in case it crashes. Options Puts to protect highly appreciated stocks you dont want to sell yet want protection are ment to expire worthless, like the car insurance, nice to be protected but you dont want to crash.

    Libtard at home says:
    October 2, 2012 at 2:59 pm

    We don’t do options nor leverage.

  97. Comrade Nom Deplume in lower tax, lower cost PA says:

    [96] Brian,

    None. It’s too esoteric for most voters, and MSM is largely ignoring it. WashPo buried it, and MSNBC isn’t touching it.

  98. Richard says:

    JJ Please buy more puts. I write them. is a great earner. Would you rather be an insurance company (like BRK) or some mug who insures everything, just in case they might lose occasionally?

  99. Richard says:

    As for Apple. I just bought a $200 tablet. can’t see why anyone would want to buy an ipad any more. (or any overpriced apple laptop). iphone5 looks boring. so much for sales growth next year.

  100. Libtard at home says:

    I’d rather be the insurance company than the guy driving the Porsche. Likewise, I’d like to be the company selling the put. I’m aware of how they work.

    When I shoot kraps, I never insure against a come-out 2, 3, or 12. No matter how large my pass line bet is. Whether I gamble $10 or $100. By buying insurance, I reduce my return. If I can’t afford to lose $100, I simply won’t bet it. Likewise with Apple. Why pay for insurance against it falling? I can always sell it. And car insurance is not to insure your car nearly as much it is to protect your wealth from a personal injury suit. Remember, I’m the one who removed the rider that covers Gator’s engagement ring. Sure, in the first few years it makes a bit more sense. But after ten years, you nearly bought half the ring back. Especially if you live in Essex County!

  101. Anon E. Moose says:

    Grim [80];

    Are you pulling my leg? This place was so deep in green shag I had to call in the marines to chase out the last few VC that had mistaken it for a rice paddy.

    Speaking of original shag, I wonder if that old lady’s 4BR in Wayne with the original 40-yr shag ever sold? I think it was off Preakness?

  102. Essex says:

    97. Cheaper land and a free Caribou.

  103. Brian says:

    Don’t underestimate the power of their brand. Relatives of mine who I thought would never buy a smartphone just recently bought iphone 4’s and 4s’s. And people are turning in their laptops and blackberries here more and more everyday. They’re swapping them out for iPhones and iPads.

    They don’t even know why they want them. They just know that everyone else has them…..

    102.Richard says:
    October 2, 2012 at 3:17 pm
    As for Apple. I just bought a $200 tablet. can’t see why anyone would want to buy an ipad any more. (or any overpriced apple laptop). iphone5 looks boring. so much for sales growth next year.

  104. Anon E. Moose says:

    Con’t [104];

    Just found it: 15 Patton Ct.

  105. Juice Box says:

    re: # 97 – Fallout for the US is Canada’s housing bubble pops? Doesn’t the Canadian Gov guarantee all mortgages? The can pay off their outstanding debt in exports.

  106. JJ's B.S says:

    Luckily like the Pope I am infallible. Therefore I never have to buy a put to protect a stock.

    Trouble with stocks and RE people dont like to hedge after a big run up. Which is when it actually makes sense as you can buy cheap protection.

    Richard says:
    October 2, 2012 at 3:15 pm

    JJ Please buy more puts. I write them. is a great earner. Would you rather be an insurance company (like BRK) or some mug who insures everything, just in case they might lose occasionally?

  107. Libtard at home says:

    “Trouble with stocks and RE people dont like to hedge after a big run up”

    Which is why you must sell your winners. Wish I had a house to sell during the peak.

  108. JJ's B.S says:

    You did just needed to buy long dated puts on stocks tied to housing. Shorting Pulte, Countrywide, Bear, Wamu
    Libtard at home says:
    October 2, 2012 at 4:39 pm

    “Trouble with stocks and RE people dont like to hedge after a big run up”

    Which is why you must sell your winners. Wish I had a house to sell during the peak.

  109. Essex says:

    Larry Ellison is a freakin’ Rock Star.

  110. grim says:

    107 – Sold for $450k, last ask was $459k.

  111. Libtard at home says:

    I made plenty on SRS. Then lost a bunch of it back shorting China.

  112. yome says:

    Most Canadians are unfamiliar with today’s new mortgage rules
    By macleans.ca – Monday, July 9, 2012 at 2:15 PM – 2 Comments
    Big changes in Canada’s mortgage market came into effect today, but the majority of…

    Big changes in Canada’s mortgage market came into effect today, but the majority of Canadians are unaware of the new, stricter regulations.

    Desperate to cool down the country’s overheated mortgage market, finance minister Jim Flaherty announced a series of new rules to dissuade Canadians from getting into irrevocable debt on June 29th. CBC reports the updated regulations, which come into effect today, prohibit lenders from issuing home equity loans above 80 per cent of a property’s value (down from 85 per cent) and drops the maximum amortization period from 30 years to 25 years.

    According to the Globe and Mail, a survey by Bank of Montreal indicates that 49 per cent aren’t familiar with the new regulations, but that 14 per cent of potential home buyers says they are less likely to buy a new house in the next five years, while 41 per cent of those who still expect to purchase a property in that time period say it’s now more likely that they’ll spend less.

    To those few Canadians who are aware of the new limits on the insured mortgage market, the new numbers may seem a bit familiar. Flaherty has simply returned regulations to where they stood in 2006 before the Harper government extended the mortgage rules to allow more people to qualify.

  113. Ragnar says:

    Libtard,
    I enjoyed my visit with Canadian Natl’s managment when they held their annual investor’s day in New Orleans earlier this year. I’m sure all the material is online, too. I noticed that some analysts thought it was too boring, which I took as a good sign. I also don’t mind Hunter Harrison taking over CP, he’s mostly famous for squeezing costs, not going after market share. I had a sazerac while I was there. Way too strong for me.
    The NS profit warning hit the rail stocks last month. Few businesses are entirely immune to the global economy.

  114. grim says:

    From the Record:

    Two new foreclosure bills head to NJ Senate

    Two bills targeting the state’s foreclosure problem have been approved by the Senate Budget and Appropriations Committee this week and sent to the full Senate.
    One of the bills would require the state Housing and Mortgage Finance Agency (HMFA) to finance the purchase of foreclosed homes from lenders, for re-use as either affordable or market-rate homes. A similar bill was vetoed earlier this year by Governor Christie, who cited potential costs. The bill’s sponsor, Sen. Raymond Lesniak, D-Union, said it’s been amended so that no state dollars would have to be used.
    “Rather than live with abandoned, foreclosed properties as a fact of life, this bill would create a mechanism to transform dilapidated properties into livable homes, and transform decaying communities into thriving ones,” Lesniak said.
    The second bill comes in response to criticism that the HMFA has used just a fraction of the federal funds available for its NJ HomeKeeper program, which makes zero-interest loans to under- and unemployed homeowners so they can avoid foreclosure. The bill would require HMFA to use all of the $300 million in federal funds the state received as part of the federal “Hardest Hit Fund” for states experiencing a high rate of foreclosures.

  115. grim says:

    From the WSJ:

    New York Firm to Buy Fannie Foreclosures.

    A private-equity firm has agreed to buy nearly 100 properties in the Chicago area from Fannie Mae as FNMA part of a federal strategy to find buyers for large numbers of foreclosed properties.

    The Cogsville Group, a New York-based firm led by former professional soccer player Donald Cogsville, reached an agreement to buy the properties from the government-controlled mortgage giant in a joint venture deal worth $11.8 million. The deal, announced Tuesday, is the second completed bulk sale of foreclosures held by the mortgage finance giant.

    In an interview, Mr. Cogsville said the investment offered attractive returns in the form of rental income and the “opportunity to do some real investment in these homes.”

  116. grim says:

    From Mortgage Daily:

    BofA Extinguishing 2nd Liens

    As part of the $25 billion multi-state mortgage servicer settlement, Bank of America is forgiving the entire principal on some second liens.

    Around 150,000 letters are being sent by the Charlotte, N.C.-based company to pre-qualified borrowers with second mortgages, a news release Friday said. Letters began going out in July and will continue through the end of the year.

    Borrowers are being offered automatic extinguishment of their second lien mortgages. They have 30 days to opt out of the relief. The deal is by invitation only.

  117. grim says:

    Merry Xmas

  118. grim says:

    Although I’m sure they are extinguishing those second liens on homes they also hold the first lien on, and are already in foreclosure on that first lien.

    Ha Ha!

  119. chicagofinance says:

    That’s what Kotok said on Bloomberg today….complete non sequitur too….speaks volumes…..

    Ernest Money says:
    October 2, 2012 at 8:35 am
    Wake me up when one of these financial terrorists goes to jail.

    It won’t happen.

  120. chicagofinance says:

    They are Pharma? I thought they just made blank VCR tapes….

    grim says:
    October 2, 2012 at 9:27 am
    BASF moving it’s Pharma HQ from Switzerland to Florham Park? Didn’t they get the memo?

  121. chicagofinance says:

    Finally someone confirms this story……I thought it was Somerville and in 1998….

    xolepa says:
    October 2, 2012 at 9:59 am
    (25)
    No big news. Same thing happened in Hillsborough 20 years ago. The restaurant was also closed down – temporarily. They did not intend to sell the meat. Just didn’t realize they were using a commercial kitchen.

  122. chicagofinance says:

    #1 I’m not allowed to join you guys. I know it sounds like a copout, but I swear on the Constitution of Albania that the SEC, FINRA, and the compliance officer at my Broker-Dealer would have me beaten worse than JJ’s dominatrix; #2 How do you know what I believe? I am just trying to give you constructive feedback. Remember that a 20% growth rate does not occur in perpetuity. Also where are your comps? It is probably the most important thing…..in a slim margin business that is difficult to differentiate in the long run, it is almost impossible to maintain margins…….did you see what McDonald’s does to it’s competitors? You don’t piss them off, because if you do, they cut prices to bleed you dry……just saying……did you see Einhorn blackball CMG yesterday? …… my point is, and always has been, you are underpricing your risk….

    Libtard at home says:
    October 2, 2012 at 1:18 pm
    I know our track record continues to defy all that you know and believe, but how many years of index beating performance must we deliver before you believe it’s more than luck. You could join us, but you would never subscribe to our philosophy.

  123. chicagofinance says:

    I bite my tongue a lot here….and I have certainly enriched myself in a manner that you would certainly approve, but if believe that you are bulletproof (even with this stock), then it is pure hubris….there is a reason for everything….that said, you and your crew are shrewd…..

    Libtard at home says:
    October 2, 2012 at 2:30 pm
    Waldorf…We’ve had Apple since 2005. Google nearly as long. We have sold of many times what we have purchased Apple for. I bet it hits $1,000 before it hits $500. Want to make a wager? For a company that prints money, their P/E is impossibly low.

  124. chicagofinance says:

    Stu: to be honest, sometimes I just bet on a management team and a strategic position……..follow the good assets and then when you see smart people put in positions of authority, you put money on the table…..

    Speaking of comps……to simplify something really complicated, GOOG recovered at FB expense…..and it can be reversed with the right developments……

    Also, your portfolio is very cyclical, so make sure you are aware of the economic cycle at all times…….

  125. The Original NJ ExPat says:

    If you know what you’re doing, writing naked puts is the same as being long the stock using leverage.

    I’d rather be the insurance company than the guy driving the Porsche. Likewise, I’d like to be the company selling the put. I’m aware of how they work.

  126. Libtard at home says:

    Chi…always appreciate your advice and I know you can take whatever I choose to dish. Your direct style is refreshing in the land of balsa wood egos. Yes, we are not as risk averse as I make us out to be, but we are pretty quick on the trigger when we need to be. Got our collective butts handed to us with GS and AFLC when the financial crisis occurred. Am surprised we recovered as well we did. Believe me, I know our performance is ripe for another ripping, but we seem to continue to defy logic so we’ll ride the streak for as long as we can. Reversion to mean should occur, but the longer we defy the odds, the longer that reversion will take, hopefully longer than MY lifetime. :P

    Just keeping it simple.

    Also, from a price standpoint, we sold GILD way to early. But it was overvalued when we sold it and it is that much more overvalued today. This is how Mad Loot rolls. Ask Dink some time. He’s been a member for a while now. Sastry’s company forced him to bail, but not before he made a tidy profit. We have one member who is a TA expert. It’s fun continuing to prove him wrong.

  127. Libtard at home says:

    And speaking of Goog. If they narrowed their focus, they would probably as successful as Apple. Instead, they are trying to take over the world when all of their profits still come for search ad clicks.

  128. grim says:

    When G comes up with a successful model for mobile advertising, FB is done. Frankly, I think the secret sauce lies in forced ads supplementing handset subsidies and beginning to offset contracts through subsidies. Everyone is trying to figure out how to put a tiny ad on a tiny screen, when the answer is to just own the screen.

  129. chicagofinance says:

    I think GOOG turned a corner when they kicked ol’ pockmark face up into the Chairmanship and out of operations…..that said, their killer app is advertising which is very cyclical…..look at how they got killed when the economy tanked……

    Libtard at home says:
    October 2, 2012 at 7:37 pm
    And speaking of Goog. If they narrowed their focus, they would probably as successful as Apple. Instead, they are trying to take over the world when all of their profits still come for search ad clicks.

  130. chicagofinance says:

    The nagging advantage of FB is a database where the participants willingly give up every personal detail down to when they are ovulating……unless you log into google, you are just a well tracked ID that is identifiable, but still ostensibly anonymous…..

    grim says:
    October 2, 2012 at 8:03 pm
    When G comes up with a successful model for mobile advertising, FB is done.

  131. chicagofinance says:

    sh!t….I’m starting to do dip with breath mints…..

  132. Juice box says:

    re: #133 – “well tracked” unless you use Ghostery.

  133. grim says:

    133 – Yes, but the quality and usability of data is vastly different. The type of information you mention is what FB should have, what they do have is largely textual strings of characters that are incredibly difficult to interpret into actionable data. Re: Ovulation – A human reading the wall post knows the girl is on the rag, a computer reading the wall post thinks the girl is sitting on a washcloth. Search and click tracking is much more discrete and less is left to subjective interpretation. Yes yes, text mining is making leaps and strides, and is getting pretty good (I know, we use it extensively to analyze emails and social media, and it does a good job, but it’s 1/100th as accurate as a person doing the same thing).

    Secondly, FB’s early privacy missteps have also left it with a stigma and, surprisingly, is not shared by Goog (probably due to their early “don’t be evil” mission). It wouldn’t take but a state politician with a vendetta to pass legislation that would clamp this down further. (Should messages shared between friends be privy to analysis and visibility by FB, or is their now an implicit assumption of privacy in that conversation?)

  134. Grim says:

    Last on this I promise.

    Why the hell isn’t FB charging companies for pages? They are a real estate holding company giving away leases for free. It’s just silly.

    Pssst, Zuck, these guys will pay you hundreds of thousands a year for presence, easy.

  135. chicagofinance says:

    grim: I note your point, but I was thinking in terms of the stuff other than text…..following through on clicks, relationships, jobs, education, location, birthdays….it is shocking really….the concern in my mind is the young people completely socialized in this environment that has no filter (no withstanding the crap we post here) and becoming adults with a completely manipulated identity (OK – this one is more explicit)…….woman walking down street about to be on the rag…..logs into FB and ad for Tampax at CVS on the corner comes up…..based on prior data and making a guesstimate on timing……

  136. chicagofinance says:

    private market allowed equity stake holders to monetize before IPO, so there was no demand for revenue generation…..insidious really…..very much like a drug dealer…..give the drugs away and then once you are hooked…take advantage…..

    Grim says:
    October 2, 2012 at 9:19 pm
    Why the hell isn’t FB charging companies for pages? They are a real estate holding company giving away leases for free. It’s just silly.

  137. chicagofinance says:

    Our broker-dealer is doing the same thing with us using Salesforce.com…..they are giving away the app for free as CRM, then in the future, they own your contact list, have comprehensive compliance database, they they will charge you through the nose, and through extortion you are forced to stay when you want to pull stakes and leave…..

  138. chicagofinance says:

    they they = then they

  139. Grim says:

    138 – completely agree with your vision there. But imagine a scenario where GPS data on the phone takes it a step further, the user doesn’t need to log in anywhere, the phone rings, (remember the statement about owning the handset), and the user is presented with an on-screen coupon, 5 steps before the entrance to the cvs. No apps, no logins, a native part of the android OS that good pretty much owns.

  140. Grim says:

    Even more insidious, as soon as you walk in the door, the phone transmits your personal info to a sales associate equipped with a wearable crm system. You are greeted by name and guided directly to the product you … need.

  141. Juice box says:

    Grim – good friend of mine was at FB for the last year and is no longer there. They don’t nearly have enough people working on the data mining you mention. They are attempting to go commercial with their data needs too since you really can’t run things on MySQL forever. For a company that had a monster IPO you would think they would be using the cash for a Manhattan Project of data mining for advertising and from what I have heard it is only a few dozen working on the new stuff and they are basically still experimenting with things like ordering birthday gifts. It will be a while before they figure it out. I suspect Zuck with his 20 grey t-shirts and flip flops is still treating it like the family business and talent will be hard to come by if they don’t loosen the strings.

    https://www.facebook.com/datainfra

    The stigma you speak of is not shared by the gen pop since they have no idea how any of it works and never will so don’t let your information tech bias think they all have a brain like yours.

  142. Libtard at home says:

    Zuck is not a businessman. He’s a geek who is happier writing code than a business plan.

  143. chicagofinance says:

    Used the Linked-In e-mail to send you an article related to above crap….the article was posted here last week….I sent it out on a broad distribution, and it was the strongest feedback I have ever received from my client register……most people are interested in what I send but never respond….I got maybe a 25% response, which is stunning……gist…people spend too much money on their PDAs…..fcuking idiots…

    Libtard at home says:
    October 2, 2012 at 10:16 pm
    Zuck is not a businessman. He’s a geek who is happier writing code than a business plan.

  144. Juice Box says:

    Re: 147 – picture late 90s and the product line managers all now rich but still have something to prove.

  145. Fabius Maximus says:

    Goog vs FB is always a tough call to predict the future. But for me this is apples to oranges. Goog is the dominant search engine and the portfolio of services (maps etc) they have built up over the years will feed them long after the advertisers disappear and the engine goes the way off Netscape. FB has that marketing database that even if they mine a fraction of it, will feed them like MJ off the Beatles catalogue.
    The big one is Apple, they need to diversify or die. If they can start into tie-ups with the likes of Siemens or GE, they can own the look and feel of medical and industrial devices. They need to move into to the professional world. That has sustained the likes of Sony over the years. If they stay in iDevice world they will stagnate and fade back.

  146. Juice Box says:

    Fab – Cook should use that cash and buy Blackberry now. It’s a waiting game now for business computing.

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