From the WSJ:
Unlocking of Housing Market Gets Going
The house party may just be getting started.
The recovery in housing that began taking hold last year caught most economists by surprise. Even though the overall economy made only middling progress, even though there was still a mess of homeowners underwater on their mortgages and even though banks remained reticent about lending to would-bebuyers, sales and prices picked up.
The welter of housing reports slated forthis week—January new-home sales and December home-price indexes are due on Tuesday, January pending home sales come Wednesday, and January construction spending is out Friday—should reflect further improvement in the sector.
…
Yet just because housing has gotten better doesn’t mean there isn’t a lot of room for improvement. Take Tuesday’s new-home sales report from the Commerce Department. Economists polled by Dow Jones Newswires estimate a seasonally adjusted 380,000 homes were sold last month, at an annual rate. That would be better than December’s 369,000 or the year-earlier level of 339,000, but stillabout half of the average level of the 1990s.One problem for housing is that a lot of people, despite wanting to move, have stayed put because they couldn’t stomach the low price their old house would fetch. That has put a freeze on the market, leading real-estate agents around the country to complain about a lack of inventory.
The recent move higher in prices—economists estimate that the Standard & Poor’s/Case-Shiller 20-city index on Tuesday will show a 6.6% increase in December from a year earlier— should shake some of those homeowners off the fence, says Thomas Lawler, an independent housing economist in Leesburg, Va. The busy spring-selling season that will soon get under way should witness the first significant year-over-year increase in prices since 2006.
From our neighbors to the north:
Housing market prices at standstill in region
Sellers beware: Competition rises in spring
The key strategy for the local home buying and selling market is to realize that prices are fairly flat in Dutchess County.
Brokers say that means sellers who really want or need to sell should not sit idly by hoping for a sudden rally. And would-be buyers sitting on the fence waiting for prices to drop should not rest on those hopes.
Price, for now, has simply worked its way out of strategizing. That’s because this market is basically flat on price and has been since the middle of 2009.
Karla McGuire has seen both ends of this dynamic. She sold her house in Pawling in order to move to Fishkill and buy a townhouse
“The interest rates are great and the price of buying was great,” McGuire said, “but the price of selling was terrible.”
…
Brokers think the market is stable on price.
“I do not see a trend in price,” said Ann Scarano, associate broker at Realty Executives Williams-Sykes Realty in Poughkeepsie. “I do not see the prospect of prices going higher this year.”
…
Scarano advises sellers, “List as soon as you can.”
Come spring, competition picks up. On a recent day, there were six new listings. By spring, that will likely hit 40 or 50 a day, she said.
The keys to a sale are location, condition and price, Scarano said.
Price must be set by market realities and comparison to recent, similar sales nearby.
From the NYT:
What Mortgage Relief?
A year ago, when the nation’s biggest banks settled with state and federal officials over claims of foreclosure abuses, the public was led to believe that the deal would allow millions of hard-pressed borrowers to escape the threat of foreclosure. It still hasn’t happened.
…
In other words, banks are structuring the debt relief in ways designed to tidy up their balance sheets, rather than to keep as many people from losing their homes as possible. Banks often do not own the primary mortgages; they only service them for investors who own them. But they do often hold second liens on their books. In general, the holder of a second lien gets nothing when a home is worth less than the mortgage balance or is sold in foreclosure. But by forgiving the second liens, the bank at least gets credit for “helping” the borrower.
Good Morning New Jersey
The RE industry and media are working the sheep hard to try and keep this pathetic “recovery” moving.
They will fail miserably.
While low mortgage rates, pent-up demand and an improving job market are bringing the buyers out, many homeowners are reluctant to go to market because they’re still hoping for higher prices. Prices in the region have dropped about 25 percent from their peaks in mid-2006, and are back to the levels of late 2003. While values have started to rise recently in much of the nation, they have been flat locally.
Really? Flat with no inventory and 3.x in 30 yr. rates? Hmm…
Sellers who bought during the housing boom are especially reluctant to sell, because many owe more on their mortgages than the property is worth.
In Bergen County? Really?
“A lot of sellers are deciding, ‘I can’t get my number,’ or ‘I don’t want to overextend myself,’ ” said Bill Beckett of McSpirit & Beckett Real Estate in Tenafly and Dumont. “People are still not so confident that they’re ready to move ahead or buy that move-up house.”
In fact, he said, many homeowners these days stay put until — literally — the bitter end.
“A lot of the sellers I have are estates,” Beckett said drily. “They waited as long as they could.”
Tick… tick… tick… tick…
In Bergen County, inventory dropped 25 percent from January 2012 to January 2013, to about 4,100 active listings.
I guess they owe more than what it’s worth. :o
Maureen and Gary Koppele are among the sellers who have decided to move forward. They’re empty-nesters who first put their five-bedroom, 5,300-square-foot Franklin Lakes home on the market for about $1.5 million last spring, without success.
“We just didn’t feel like we got a lot of traffic. Maybe it wasn’t the right time yet,” said Maureen Koppele, 60.
Maureen, it must be an anomoly; people here are bleeding wealth.
Pricing can still be a challenge for sellers. Gomez estimated that only about half of potential sellers really have accepted the new price climate — and those are usually the people who have to sell.
“In my market — Franklin Lakes and Wyckoff — a lot of sellers are staying put for at least a year to see how prices shake out,” said Kate Conover, a Re/Max agent in Saddle River.
“No matter what you tell the sellers, nine out of 10 times they feel they should get more,” joked Ellen Weiner of Weichert in Clfiton. But she added: “During the selling process, they do start to see a more realistic value of their property and act accordingly.”
Any questions so far, kids?
“Sometimes it’s just not the time to sell,” she said. “They bought too high.”
Tick… tick… tick… tick…
“I think we’ll have more inventory once we see the good weather,” Gomez said.
Keep dreaming dude. You’re sellers are fuct, they can’t bring a check to the table.
2 chicken pot pie please
I find that a lot of realtors live in or near the area they are selling, nearly all our homeowners and many dabble in investment properties. Huge conflict of interest.
For instance this weekend I went again firesale shopping at the shore. Realtor told me she is advising clients not to sell cheap, hold up markets, dont ruin comps. Her job is to sell homes, not to block the sale of homes. But she is concerned about prices as her own home she is about to list as her husband is retiring, and she sold a lot of homes that her neighbors live in at peak and does not want all the neighbors out with pitchforks. Told me she sold one neighbor a house at peak, it turned immediately on him, he was able to get out 24 months later at a 150K loss, she sold to new neighbor who now at a 100K loss.
I tired to explain to her you have to clear inventory to have a bottom. I said there are 2 short sales, 5 estate sales, around 10 flooded houses for sale and around 5 extreme fixer uppers for sale. I said you know what would be best if someone came in and said I give you three million for all 22 junk homes, take them all off market in one day, only leave nice dry good condition non fire sales homes on the market. Your market will never recover till these junk houses are gone. She goes I know but low comps cause every buyer I sold to in last ten years to come after me, I did sell like 30% of the homes sold in this town in last ten years.
So what does that have to do with the price of tea in China, can you imagine a stock broker saying, sorry JJ bought GM at 30 I cant sell you any GM stock today at 26 cause JJ might get mad. Commission is commission, and you need a bottom before you can get a new top.
Maybe realtors should look in mirror as they complain about irrational sellers/buyers.
JJ [7];
Told me she sold one neighbor a house at peak, it turned immediately on him, he was able to get out 24 months later at a 150K loss, she sold to new neighbor who now at a 100K loss.
This was a dynamic that I talked about as the slide started. No one owner can afford to swallow the whole loss, so successive owners will share it in bite sizes.
Gary:
Maureen and Gary Koppele better get a clue and sell their American Dream to a family bleeding wealth ASAP cause after the economy blows up again they are going to have their funerals in that house and will be buried in the back yard. They should apply for a easement in a corner of the back yard to allow for 2 graves.
Brian – Want a bed extender for your Frontier? My trans blew up this weekend and I’m not getting the old girl fixed. She is off to the scrap yard in a couple of weeks so let me know.
Eddie [5];
Bazinga!
Surprisingly estates might be even a harder deal to close. More than one sibling/heir? You’re dealing with a committee on the other side of the table — any one of whom can have emotional baggage to ‘give away’ their childhood house, or who may be a budding Donald J. Chump, real estate mogul — and it only takes one to kill the deal, especially if the other siblings want to be ‘nice’. If Granny’s house was free and clear, there is even less compelling motive to sell at market (property taxes notwithstanding) rather than hang on. Meanwhile, the house sits empty and rotting.
Funny but true story I heard from a home owner this weekend.
He said his town property values will also hold up and never go down as they keep the “element out”
I go how do you do that, he goes well two towns to left is the projects and welfare mamas, we all know the sludge moves so we have a firewall in that next town is a mixture of orthodox Jews and Blue Collar Italians. The orthodox and Italians Blue Collar types will take baseball bats out if those types try to move in. Then he says we do no resident parking on the streets, private beach, everything residents only. If they try to drive over here they got to keep moving as we dont let them stop, then he says this town has a heavy jewish presence, so we all stick together to keep undesirables. out. We are also protected as to right of us is a Strong Blue Collar, third generation Irish Cop/Fireman town, they aint letting no one in. They also act as buffer which is why we have the second highest home values.
I go wait why second highest home values? He said well two towns to right that town is all rich catholics. All MBAs, Doctors, Lawyers Wall Street types. They are able to keep out the Project Folks, the Blue Collar Irish and Italian and the Jews. I tired to buy there, but they made it clear no Jews. He then added that is the place to buy, any town that can keep the Jews out is one high class town.
Funny to hear an old Jewish guy with property envy
Beautiful, isn’t it? The stench hovering just below the surface is staggering. The number of Lis Pendens will blow your f.ucking minds. The dam is leaking like a sieve and they’re doing everything possible from having the bottom fall out. What do you get when you cross Paterson with West Saddle River Road? You get Graydon’s mommie turning tricks just to keep the Audi in the driveway.
[5] fast Eddie
When saw the header, I thought of Gary and tuck, tick, tick.
All houses will be sold eventually. Even re101 will have to sell, even if it is by his estate administrator.
Nom,
What does it say when the front cover of the Real Estate section of the Bergen Record is tossing out a dozen subtle hints. It means the industry is restless and starving and will throw the same plebs they duped 7 years ago under the bus AGAIN!
[13] eddie,
I read something a while back about adult hook up sites being taken over by hookers, including hooker wanna bes who need the money. And I remember anecdotal stories of women in war ravaged Europe turning to prostitution to survive. So I think there is something to that view re: Graydons mommy.
[15] eddie,
Between the UW owners, stalled foreclosures, shaky economy, and the coming demographic shift, I see an inventory dump of epic proportions on the horizon. Unless the economy recovers enough to create the demand that will absorb this inventory, I think clot has the right view.
Nom,
Clot definitely has nailed it. This thing is held together by tape, rubber bands, hopes and dreams. There’s no inventory! Hello!! They’re broke! And every day a new one falls into the cracks. Sure, they may be working but it’s for less money and the cost of everything around them has crushed them.
Can someone have Graydon’s mommy pm me with a pic?
I don’t feel like selling.
I also didn’t feel like getting out of bed in the morning either.
What shaky economy? Recession is over for almost three years Demographics are not a big issue in the NYC area as 90% of homes within 30 miles of Manhattan stink. If you are in a good town, great schools, near a great trainline with plenty of parking and under a 45 minute train ride to the city you are what people want. However, that is rare under 650K
Comrade Nom Deplume says:
February 25, 2013 at 9:28 am
[15] eddie,
Between the UW owners, stalled foreclosures, shaky economy, and the coming demographic shift, I see an inventory dump of epic proportions on the horizon. Unless the economy recovers enough to create the demand that will absorb this inventory, I think clot has the right view.
Thanks Pain, I have one. I actually don’t really even use it that much anymore since I put the tonneau cover on. Maybe once a year when I pick up the black mulch for the flowerbeds but thats it.
Are you going to get another truck or do you think you’ll be getting something else?
I hope my truck never dies cuz the wife wants me to drive here Altima so she can get a minivan or suv crossover or whatever to transport the kids around.
10.Painhrtz – The Holy Hand Grenade of Antioch says:
February 25, 2013 at 9:00 am
Brian – Want a bed extender for your Frontier? My trans blew up this weekend and I’m not getting the old girl fixed. She is off to the scrap yard in a couple of weeks so let me know.
Brian, np problem they are pretty handy and not everyone got one. Wife wants us to simplify and go down to two cars. I am loathe to trade in a paid off car that i know the maintenance history on for a used car that I don’t. Probably will get another truck in the 7500 to 10K range, but not until the end of summer. Looking at a full size titan or tundra. 100K miles does not scare me figure they are just getting broken in and if I’m going to get V8 gas mileage may as well actually have a v8. Still sad to see the old girl go, it is just time.
JJ#7
I find that a lot of realtors live in or near the area they are selling, nearly all our homeowners and many dabble in investment properties. Huge conflict of interest.
Here’s my story on the conflict of interest thing JJ
I just made an “all cash” offer on a farm in PA. The house and land has been on the market for 2+ years, it is a estate sale . The home is empty but the owners the children are maintaining it and have even left the utilities on (yes the house is being heated) I had an agent present the selling agent with a contract and down payment for escrow all legit & reviewed by a lawyer offering to close in early April after inspections. My agent & I Printed out all the most recent “sold” comps (approx 10 comps) comparing ask and actual sale prices in the area for the last 12 months & 5 days later The selling agent responded saying they rejected the offer. No counter offer from the owners. Thing is, I’m not even be sure if the offer was ever presented to the owners. They never personally responded or signed off that they had declined the offer, There are several of Real estate agent owned properties in the area, My offer was on the higher end of the actual selling range for properties in the area although it was “substantially less, about 40%” than the present ask. It would not surprise me if the house sells to another party down the line for less than my offer but some how Connected to the selling agent “of course”. If the owners rejected the offer Fine it’s overpriced and will sit till they decide to rent it , move into it or come to their senses if they want to sell it, but I’m not sure if I should pursue this further, My first impression of the Selling agent was neg, Just struck me as shady. Note It also Took the selling agent 4 days to email us the most recent disclosure statement when we requested it. Whats your take???
Losing another tenant and within three days of listing we have a new family dying to move in and willing to pay $200 more per month than the last couple. Happy times are here again…
Pain, the best accessory I ever bought for my truck is the tri fold ramp from cabelas. I think I paid like $150. Makes it a cynch to load anything in the bed. Just roll it right up the ramp. I even drive the motorcycle right up it into the bed.
Makes it easy to transport the lawnmower, snowthrower, generator or anything else you can think of without killing your back.
23.Painhrtz – The Holy Hand Grenade of Antioch says:
February 25, 2013 at 11:08 am
Brian, np problem they are pretty handy and not everyone got one. Wife wants us to simplify and go down to two cars. I am loathe to trade in a paid off car that i know the maintenance history on for a used car that I don’t. Probably will get another truck in the 7500 to 10K range, but not until the end of summer. Looking at a full size titan or tundra. 100K miles does not scare me figure they are just getting broken in and if I’m going to get V8 gas mileage may as well actually have a v8. Still sad to see the old girl go, it is just time.
Brian, those are great but had a bunch of 2 x 8s laying around from shed project and just made my own. 30 bucks = more money for beer : )
Lib,
You said other day you bought new $30k car for $20k. Can you tell me how you did that? In market for wheels but dealers seem to have a good bump in sales with all the demand from cars lost from the hurricane. Thanks,
I searched and searched after Sandy for a car, finally got an amazing deal in upstate NY drove up and paid cash and drove home. I had a great 300 miles in it. Amazing Caddie. Friday night at two am a driver going 60mph in a 30mph zone rearended my car and now I am in a rental smelly POS enterprise car.
Buying Cars suck. This is the fourth car I lost in under four months. BTW I need a car to get around can anyone lend me one. I promise I will park it in the same spot my BMW, Mercedes, GMC and Caddie was totaled, what are odds five cars get taken out in a row. It should be very safe
Nomad says:
February 25, 2013 at 12:00 pm
Lib,
You said other day you bought new $30k car for $20k. Can you tell me how you did that? In market for wheels but dealers seem to have a good bump in sales with all the demand from cars lost from the hurricane. Thanks,
funnelcloud, an offer 40% below ask means both parties are wasting time. Just move on to another house.
JJ [29];
I searched and searched after Sandy for a car, finally got an amazing deal in upstate NY drove up and paid cash and drove home. I had a great 300 miles in it. Amazing Caddie. Friday night at two am a driver going 60mph in a 30mph zone rearended my car and now I am in a rental smelly POS enterprise car.
Look on the bright side, you weren’t seriously hurt (could probably settle w/ his insurer for $50k soft tissue damage), likely make a profit on the car itself.
Speaking of driving with cash to buy a car, you’re lucky you didn’t get tossed by the local constabulary like this guy (http://www.newschannel5.com/story/18241221/man-loses-22000-in-new-policing-for-profit-case).
Nomad,
We were very lucky with this one. Mazda simply manufactured too many CX-9s ahead of a model redesign for 2013. The manufacturer incentives to unload the remaining 2012s were very strong. We wanted a Hyundai Santa Fe, but it was taking too long for their new 7-seater to be released. Then, we were too late to find a leftover Veracruz, which were being majorly unloaded and discontinued in the U.S. ahead of the Santa Fe release.
We bought our Xterra the same way. Went in looking for a Pilot and ended up driving home a souped up Xterra for about 18K.
The best time to buy a new car is post christmas on a model update year. Then you have to negotiate like a bitch. Much was discussed on this topic in early January. Google (advanced find) it. Everything you need to know is in there. A little luck helps too some times.
I wasnt in car. It was in front of house and I was in bed and head the boom as he dragged my car across sidewalk and his car did a roll over. I think he was asleep or something, he was only 80 feet from a stop sign and driving 60mph and no brake marks or skid marks, just plowed my caddie.
What sucks is I dont have rental car coverage so I was told unless he carries it I have to pay out of pocket to rent a car. BS. Also if he is improperly insured or his insurance wont pay up I am out the $500 deductable.
Only good part is if dope did not roll over and deploy all his airbags I am sure he would have hit and run.
Anon E. Moose says:
February 25, 2013 at 12:25 pm
JJ [29];
I searched and searched after Sandy for a car, finally got an amazing deal in upstate NY drove up and paid cash and drove home. I had a great 300 miles in it. Amazing Caddie. Friday night at two am a driver going 60mph in a 30mph zone rearended my car and now I am in a rental smelly POS enterprise car.
Look on the bright side, you weren’t seriously hurt (could probably settle w/ his insurer for $50k soft tissue damage), likely make a profit on the car itself
Mushnick: * After Rex Ryan’s quote Friday on trading Darrelle Revis — “If you got Jim Brown in that trade, you’d look into it” — Atlanta reader Tom Cunningham writes, “Only the Jets would trade the best DB in the league for a 77-year-old RB.”
(31)
Symptoms of the drug war.
truecar.com is good for looking at new car prices.
http://www.theburningplatform.com/?p=49703
New car stuff: Was at a wedding Saturday night. Spoke with a guy who is a rep for the National Car dealer assn., whatever real name they go with. I known him several years. He says that the Sandy new car selloff is over and times are slow again.
32 ‘Tard:
“The best time to buy a new car is post christmas on a model update year. Then you have to negotiate like a bitch. Much was discussed on this topic in early January. Google (advanced find) it. Everything you need to know is in there. A little luck helps too some times.”
Yes I recall the discussions; one of the strategies employed by a poster was his infant son dropped a deuce during the negotiations. Helped speed up the process.
[21] JJ
An academic perspective:
“Another developing problem is that as housing prices slowly recover, there should be a glut of houses on the market as more baby boomers return to their planned retirement dates, along with new entrants into the retirement pool. If this scenario develops, it could create an oversupply of new houses which could further decrease asking prices, posing another challenge to retirement planning.”
Epstein, C., Principal Funds (2009)
New car;
The year declared bankruptcy and announce getting rid of some models, I offered $15, 000 on a $24, 000 solstice cash. The dealer just laugh on my face. I offered my ph number if they change their mind. The guy refused. I seldom see them on the road. They sent them to China or something?
40 nom
Epstein did not get the memo? Boomers are planning to work till they drop dead
41. He might have done you a favor on the Solstice.
http://autos.aol.com/used-list/make1-Pontiac/model1-Solstice/location-New+York+NY/
they are still going on average for above 15k
Bring on the sequester cuts.
I read on the news that they won’t be cutting peoples entitlement checks in NJ. It’s only people with jobs like contractors in Picatinny arsenal that have something to worry about. Brilliant.
That sequester might prove interesting. Congressional Crisis Fatigue anyone??
There is an old real estate adage: “You make money when you buy the house, not when you sell it.”
I am for sequestration…or anything else that brings gubmint to its knees, puts its useless bureaucracy out of work and stops the pointless bleed of money that they have stolen from all of us.
Sequester for 100 years. To hell with all the bastards.
Don’t stop until Timmay and Bernank are hanging from streetlights.
Just us against the zombies, Walking Dead-style.
I am perfectly comfortable with it all coming to that.
Depend on the gubmint? Reap the whirlwind, bitch.
Headcounts and compensation should be slashed across the board, and not just federally.
But don’t lose track of the real culprits. It’s the political class(politicians, lobbyists, bankers, corporate welfare queens) who are doing the most damage. I haven’t heard a whisper about them taking a hit.
Realtors are a mystery to me. So on Sunday on my second trip to find a beach house since Sandy, my wife and I finally find something we agree on. I went directly to listing agent, unit infrastructure got damaged in Sandy so building is still empty. Building should be up and running in a few weeks.
Owners of unit went to their Florida home and already bought a new home up here. They actually listed it originally before Sandy and then cut price post Sandy.
So I tell agent I am pretty interested on Sunday and we should put a bid in. Then this morning the listing disappears from MLS. What up. I sent her an email and she did not respond. I am thinking either owners decided to rent it and wait it out, or realtor figures she has a live one in an exclusive so why not pull listing from MLS>
Who knows. All I asked her to confirm with owner if he has an offering plan info, any minutes from recent meetings or updates on renovations. Then some basic questions on does it have deeded spots. Nothing big. She said she would ask.
Funny how it just dropped off face of earth. I always wonder with realtors. It is like a first date. Most girls know in their heads in first 30 minutes if they are going to bed with you, and then leave you hanging for four hours. Trouble is my wife hates games.
Building has flood insurance and it is all getting paid. Board is disfunctional which is why repairs are so late getting done. The unit I saw got zero water yet no electric, heat or hot water as of yesterday.
53
Hear, hear
It will be interesting to see how many military district gop congressional seats will turn blue. They are under pressure already. The loser on budget talks at the end of march will tell, who the voters blame for this. Buying a 5 gal can of popcorn, seat back and enjoy this. Latest poll 55% blame the red team.
56
Didn’t you say a few times that you were registered Red?
Yes I am. Why? It does not mean I agree with the tea partiers
Clot [49];
There were two parts of the Obamacare ruling: the individual mandate, and the medicaid expansion.
Part I is what everybody talked about — does the federal government have the right to compel individuals to buy health insurance? Answer – yes, if the penalty is a tax for failing to do so.
Part II – Can the federal government cut funding to states who refuse to expand their medicaid rolls? Answer: No.
Basically, the only effective limit on federal government power that came out of that case is to limit the ability of the feds to turn off the money spigot (regardless of what you think of their wisdom or reasons for doing so this time around).
Cause I’ve never heard you advocate for anything that the Republicans actually believe in, claim to believe in, now, in the recent past, or a little further back in time.
The current red team is too far right.The old moderates are getting pushed out by the partiers.
#60
He’s just confirming what we already know, that he’s an idiot. This is someone who is going to sit back and enjoy watching this dysfunctional government get ripped apart by special interest. It’s a shame that he got his card and we can’t lauch him back to the socialist hellhole he came from.
62
look in the mirror , if you really think special interest will disappear with the your tea partier
Is that anything like Gangnam Style?
Scrapple Cannon says:
February 25, 2013 at 3:33 pm
Just us against the zombies, Walking Dead-style.
I am perfectly comfortable with it all coming to that.
62 I am as American as you,not a card holder
Obama needs to be executed, but at least the inauguration was not analogous to Korea’s……
http://www.washingtonpost.com/world/asia_pacific/psy-performs-gangnam-style-at-south-korean-inauguration/2013/02/25/162f13f3-dfee-43b1-b503-7084f0df5bad_video.html
Here is the mark of your man in the White House:
“Most companies include incentives for top employees not to leave, but in this case the contract was written to reward Mr. Lew for treating the bank like a revolving door. Citi says it likes to accommodate employees who do public service or work at nonprofits. But the Lew contract was specific about a senior job in the federal government. There would be no special payout if he left to run the Red Cross or the New York state budget office.”
REVIEW & OUTLOOK
Jack Lew’s Golden Parachute
His Citigroup contract paid him a bonus for returning to government.
Americans can sleep soundly knowing that Max Baucus (D., Mont.) isn’t in charge of interviewing captured al Qaeda fighters. But the enhanced non-interrogation techniques that the Senate Finance Chairman has been applying to Treasury Secretary nominee Jack Lew still deserve more attention. This weekend’s technique was painful to watch—if you’re a taxpayer.
After Mr. Lew repeatedly responded “I do not recall” to key questions about his actions while working at New York University and Citigroup, C -3.83% Mr. Baucus announced Sunday that Mr. Lew had answered the committee’s questions “in a thorough and fully transparent manner.” Therefore, the committee will vote Tuesday on the nomination.
This is a shame because Mr. Lew is well qualified to explain how the Washington-Wall Street axis of access really operates. And while Mr. Lew’s supporters talk about the quantity of paper traded between him and Senate Finance, there are at least two answers that ought to be demanded before Mr. Lew skates to the most powerful job in American finance. They relate to the paychecks he received from his last two employers before returning to government.
We wrote recently about the oddity of New York University paying severance to Mr. Lew in 2006 when he left there voluntarily to work at Citigroup. NYU hasn’t explained why it would pay someone for quitting to take a job on Wall Street.
As for the Citi paycheck, the story is how Wall Street has become a get-rich-turnstile for Democratic political operatives. The terms of Mr. Lew’s original employment contract with Citi included a bonus guarantee if he left the bank for a “high level position with the United States government or regulatory body.”
Most companies include incentives for top employees not to leave, but in this case the contract was written to reward Mr. Lew for treating the bank like a revolving door. Citi says it likes to accommodate employees who do public service or work at nonprofits. But the Lew contract was specific about a senior job in the federal government. There would be no special payout if he left to run the Red Cross or the New York state budget office.
Citi has been an especially nice landing spot for big-shot Democrats. Former White House budget director Peter Orszag is now a Citigroup vice chairman and somehow finds time to write a column for Bloomberg News. And there was former Treasury Secretary Robert Rubin, who was paid more than $115 million while encouraging the risk-taking that would have destroyed Citi if not for a taxpayer rescue.
Mr. Rubin was Mr. Lew’s patron at the bank. Mr. Lew’s contract suggests that Citi knew from the start that Mr. Lew was headed back to a powerful job in Washington, and that it wanted him to remember the bank fondly when he left. We have nothing against people making a living, but when they show up a few years later to do more “public service,” taxpayers have a right to know what their private employers were paying them to do.
All of this matters in particular in a Dodd-Frank world when the biggest banks are public utilities. They have little choice but to do what a Treasury Secretary tells them to do. A too-big-to-fail bank must be pleased to know that in a little more than two years it made the sacrifice of government so much easier for America’s most powerful banking regulator.
A version of this article appeared February 25, 2013, on page A14 in the U.S. edition of The Wall Street Journal, with the headline: Jack Lew’s Golden Parachute.
Please re-read my statement and then respond.
“Cause I’ve never heard you advocate for anything that the Republicans actually believe in, CLAIM to believe in, now, or in the recent PAST, or a little further back in time.”
61.yome says:
February 25, 2013 at 4:34 pm
The current red team is too far right.The old moderates are getting pushed out by the partiers.
Yome 56 probably none. the worst thing that can happen to all these hacks in washington is all the bluster and vitriol, sequester goes through and nothing happens. Then us proles may start asking for more. Sequester makes current spending look like this; 3.55 to 3.53 trillion. Basically like having the average family cut one trip out to dinner over the course of a year.
The screaming isn’t for what is going to happen, it is what is going to happen to the hoi poloi if we start demanding more.
yome,
Of course, I think the republican agenda is horsesh*t cause it’s the same as the democrats. I merely brought this up to prove you’re full of it… in addition to stupid.
Yome’s the perfect drone, willing to play the fool and completely ignorant to the way of career politicians and their self servingness.
yo [61];
The current red team is too far right.The old moderates are getting pushed out by the partiers.
That’s just what my red-diaper baby college friends say. ‘Ala, woe is me/woe is America. My party of centrists that elects some ward of a domestic terrorist clan and Allinsky disciple to the presidency occupies the middle ground — its those wing-nuts like Paul Ryan who want to slow the growth rate of government and other subversive ideas who have gone too far.’
Name calling? You get to a far right red team and call you names if they dont want what you are saying. The democratic way. Buy guns
Think how many registered republicans feeling the same way as I do with this party. What O is offering was on the table on the last budget talk. I just want them to compromise. This is not helping the country
yo [74];
What O is offering was on the table on the last budget talk. I just want them to compromise.
Is it possible don’t even realize you’re spouting the party line? To lefty statists like Dear Leader, compromise == agree with me. How has Obama’s position moved in the time since what you acknowledge was put on the table before? But he’s not the one being obstinate, is he?
Besides, what Luddites we must be to not want to further degrade into a failed command economy like Russia and Europe.
Money is truly the only currency. Next to power. Politicians look to hold on to either one or both. At all times. Shoutout to the ( toothless — per ChiFi ) Kentucky Girl who won the Oscar last night.
I’d like to make a human centipede of Jack Lew and Timmay.
Burn mf’ing DC to the ground.
Then, start tossing WS crooks out their windows.
Bojangles is just Robert Mugabe in a nicer suit.
Clot [79];
I disagree. Mugabe is a MUCH snappier dresser. His O-ness — any suit just hangs on him.
I completely forgot about the deuce dropping!
Moose,
You were doing so well with your responses until you hung your hat on Paul Ryan. He is a fraud. Of all the examples to choose, I’ll just go with his ‘budget’ proposal. When did it balance the budget… in 2030? Yeah, that credible. Plus, all of the cuts were just the fantasy baseline budgeting nonsense and the deficit reduction relied on growth projections.
72.Anon E. Moose says:
February 25, 2013 at 5:07 pm
its those wing-nuts like Paul Ryan who want to slow the growth rate of government and other subversive ideas who have gone too far.’
Grim – please mod 66.
We like ChiFi and don’t want the brownshirts coming for him.
If you hold elected office, a bullet for you.
If you run for elected office, a bullet for you.
Red? Blue? All the same; all corrupt.
Burn the mf’er down, and start over.
joyce (82)-
Any poster here who cheers for either of the false teams deserves the same level of derision as yome.
All US politics is a sucker game. Voting is an indication that you endorse the scam.
Look at this fat turd Larry Summers on CNBC. A bullet for him, too.
Same people who broke it now being allowed to try and fix it. Madness.
It will require effort, but it can be significant, as you could attain the perfect resolution, and the most effective choice could quite possibly often enable you to help save large sums of money.
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