Major Sell-Off looming

Not if our co-op boards have anything to say about it.

Coming from the guy who said the market was going to be at 11,000 by now . . .

Oh, look who's back!

HimWhoKnows.

You're guy who said "...I call a 15% correction coming in Manhattan real estate before January, 2008..." I also remember writing to you and saying "...I'll bet you $1,000 that according to someone like Miller Samuels (or some other number cruncher to be agreed upon) that general Manhattan residential real estate will down LESS THAN 15% from today until year's end. If it's down 15% OR MORE, you win the bet..." You were so scared that you never replied and bever put your money where your mouth was. Do you still want to bet HimWhoKnows? Or do you not want to put your money where your mouth is?

Then, after that, you back pedaled and chickened out, so I made you an even more attractive offer. I wrote "...I'll make you an even MORE enticing bet. You keep predicting 15%. Why don't we say this - if Manhattan real estate drops by 10% OR MORE between today and 31 December 2007, you win, I lose. $1,000 will be the amount, so you don't feel like you're losing your entire net worth. What do you say to say that? Surely, if you're calling a 15% drop, 10% should be super easy for you to commit to, right?..."
And you still wouldn't put your money where your mouth was.

The absolute WORST and most EMBARRASSING moment for HimWoKnows, however, was when he was stupid enough to post the following "...despite asia being down big, the dow and nasdaq will have large gains today, friday going into the weekend. The financials will do especially well, today august 17..." Notice how he he was so careful to mention the specific date so that he would look like a genius market prognosticator? What actually happened was that HimWhoKnows posted this little factoid just seconds AFTER it had been announced that the Fed had just reduced the discount rate by 1/2%, and the market futures (mainly due to short coverage) suddenly snapped from negative territory into the overwhelmingly positive. Sadly, he didn't think anybody else who reads these boards has Bloomberg and would catch him in the middle of his little trick, I guess. We all would of been just a weeeeeeeeeee bit more impressed had you made this prediction BEFORE the Fed announcement, not AFTER.

All kidding and back&forth bashing aside, Wall St is in for a rough ending this year, and a HORRIBLE beginning next year. They are FINALLY beginning to realize the scope of credit ponzi scheme, and the Tens of Billions they're talking about today is but a mere fraction of the size of the 800 pound gorilla in the room.

What's changed you say? Why are they NOW finally having to come clean with the true size of their irresponsible lending? Well, if you don't know already (and judging by the posts in this forum, many don't), the new US accounting rule SFAS157 will basically force all Financial Institutions to reveal all LEVEL 3 assets which up to now, they've basically been hiding from the balance sheets and from the public.

The change in accounting law, due to take effect in Q1 reporting next year will FINALLY shed to light the TRUE size of problems, and that is when we will see the crisis take off to the next level. I hope that the financial institutions have prepared accordingly because this is the true 'coming home to roost' situation where they are forced to come clean. And we're talking HUNDREDS of Billions. We will see some MAJOR institutions going belly up if they don't manage the situation appropriately. Needless to say, this will negatively affect the local real estate market to a degree much more than it has so far.

The Fed will be forced to come to the rescue again, and it will take much more than just the Fed- the Euro ECB, etc. will be forced to aid by cutting rates to avert a full-out meltdown. Just sit and watch. And pass the popcorn.

MMAfia, interesting. Why would it make a difference if it is public vs. the way it is today? Understand the banks aren't advertising the extent of the problem but the problem, is what it is. Presumably, it is not getting worse (I don't know for sure but I have heard this) and each bank has to deal with their own sh*t storm. Are you saying that once this is public, institutional lending will be more difficult and consumer confidence will erode further? I don't get it, it seems like public or not, the institutional lenders would have an understanding of how big the problem really is, especially with today's tighter risk management controls

Asset boom due to easy cheap money. Less cheap money, higher lending standards = Lower assets prices. Japanese stock market in 1990 hit a peak of almost 40,000, by 2003 it fell to a low of 8000. Now its at 16,300, less than half of where it was 17 years later. The Japanese economy is the 2nd largest in the world. Their real estate market boomed as well, but not even as much as the US market. Their real estate market is still selling at only half of what it did 17 years ago. What caused the Japan's asset boom? Speculation, cheap money, and lax lending standards. Sound familiar?

http://en.wikipedia.org/wiki/Image:EconomistHomePrices20050615.jpg

Hasn't the credit tightening news been out for the past seven months.. Prior to this was the hoopla on higher interest rates. Yep the interest were going up so every renter on this board was touting that this was going to kill Manhattan RE market. Prior to that was the rising oil prices. Prior to that was the sudden drop in the stock market. Prior to that was the overbuilding of Condo's. Now the buzzword du jour -- "Wall Street Bonuses". That's it! That drop in Wall Street Bonuses. We can all put are arm around this one and finally salute our new hero or villain of the Manhattan RE market. MMafia finally has a new movie he can now watch with his buttered popcorn. The name of the movie is no longer the adventures of credit tightening but the # 1 box seller is "Bonuses Drop and so will Manhattan" This too will get old and I am looking forward to the next culprit. Maybe it will be Hilary Clinton.

Spunky you're the man but please explain to me the economics of this example that I just happened to come by this weekend at an open house: 3BR property in a decent location in north tribeca was purchased for $2M in nov 2005. Property is now on the market for $4M. Do you really believe that real estate can appreciate 100% in 2 years? Historical average RE appreciation in NYC over the past 20 years is 4%/yr!

I could be totally wrong and this apartment could cost $5M+ next year but I HIGHLY doubt that. There is simply no basis for why all of a sudden NYC homes should increase 30%/yr. Please explain who is going to buy this unit and all the others like it that are being newly developed in the area? Certainly not wall st dudes anytime soon.

There is bubble written all over the Manhattan RE market and the sad thing is that most buyers or sellers don't have the memory or experience to realize that booms and busts are just a natural part of history in every market whether its stocks, commodities, real estate, tulips, etc. Mean reversion my friend.

First you will have to explain what is North Tribeca. Is that a new section in Manhattan. Or is that the Financial district trying stick a little piece of Tribeca in it's name so it can try to jack up it's asking price. Yes to answer your question there appears to be a bubble in North Tribeca than again there may be a Bubble in the Far Far Far southern section of Soho which touches the Bronx.

Or is the Northern part of Tribeca really part of Chinatown and little Italy?

no stooge, north tribeca is a subsection of tribeca that defines the specific area i am talking about, just like west and east and south. Corner of laight and washington. What would you call that?

I think one would call that "Tribeca North Historic District"

my bad, you're right i was just trying to go shorthand. Anyways, what do you think of the situation?

Well I am not sure just because someone is asking a much higher price than what you are looking to pay a bubble. Tribeca is and has been red hot in Manhattan. If the seller is asking a price that is out of line with other comparables in this building than yes this seller may experience a pop in his own bubble that he has created.
I think you need to take a look at 101 Warren street too if you are looking to buy in this area.

"...3BR property in a decent location in north tribeca was purchased for $2M in nov 2005. Property is now on the market for $4M. Do you really believe that real estate can appreciate 100% in 2 years?..."

Well, the short answer to your quwstion is "yes it can," given the right market exigencies. The better question is can real estate continue to appreciate over a longer term in such an elliptical pattern. The answer would be "of course not." My view would be this - So it was bought for $2MM, and now they're asking $4MM, two years later. Whatever. So it's not selling now, and they have to lower their asking price (which was too high in the first place). So they lower it to $3.8MM, than $3.6MM, and finally to $3.4MM, where they start to get some nibbles. After much back and forth, a qualified buyer finally comes along, offers $3.150M and it's a deal. Mazel tov....

So the original buyer has made what? Well, there's $1.150MM in profit, the first $500,000 of which was tax free, and the rest which was taxed at about 35% (after fed, state, and city are factored in) leaving a grand total profit of $922,500. Of that, I'll figure that the closing costs to buy the place originally were about $50,000 all in, and the closing costs to sell (including 6% broker commission) were around $215,000. Subtracting $265,000 leaves $657,500 profit. I don't figure in the mortgage payments because they had to live somewhere, and that cost would have been what it is, regardless. Because you don't say if it's a condo (10% down) or a coop (20% down) I'll split the difference and say 15% down, or $300,000. So with all the significant reductions factored in, figuring all the buyers and sellers costs, they put down $300,000 and two years later walk away with $657,500. And that's a 20% - 25% reduction from the original ask.

I still don't see what's so bad....

agreed - I am curious to see what it ultimately sells for. I am willing to put real money on some significant price reductions over the next 2 months happening at this particular property.

Even though tribeca is very hot there are a number of new developments coming online in the next 12 months that will add a bunch of inventory to the market. 101 warren is sold out with the exception of some 8M units so thats a no go, at least until closings when I would expect there will be a number of preconstruction buyers that might not be in the same financial position as they were when they first went to contract ...

superquant good luck and I hope you find a nice apt. in Tribeca. It's a great area -Enjoy

Wow - I didn't realize that 101 Warren was so popular. It's really sold out except for those expensive units? Sheeesh...

indeed it is. I would imagine a lot of goldman dudes buying there, as you might now its directly across the street from their new HQ which is under construction.

Plus you have Whole Foods and Barnes and Noble at a push of the elevator button.What's not to like. This is probably Manhattan's biggest RE project since Columbus Circle.

spunky, did you get in?

No but I wish I had.

If the dollar continues tanking, we can say hi in alot more foreign languages! Regardless, if you buy good RE now, you will definitely see some dramatic gains in the future because the dollar may not come back. Tribeca is definitely worth a second look if you can afford it.

NYC prices though ridiculously high are still cheap compared to other cosmopolitan cities globally. Since NYC real estate is heavilly influenced by global investors now, we havt o look at global per sqft prices to make any sense of nyc prices. Manhattan is still cheap compared to other cities around the word and simple flow of investor money will keep boosting the prices till it reaches par with london/HongKong.

I have to agree about 101 Warren. I live across the street in 200 Chambers and have watched the construction from day one -- it is truly solid and a real asset to residential arch. in NYC. If I just could have scraped together that last $1M . .. alas I will be forced crossing the street to get my organic wheat germ!

bansalpr: that assumes that a significant proportion of nyc property will be owned by foreigners. Is this realistic? How much real estate in london is owned by people not actually living there?

Not a significant portion..a quick calc can be done as follows- if the outstanding inventory in nyc at any given time is 10,000-12,000 units/yr, and the foreign money is chasing 10-20% of these units, the prices will rise by 10-20% more than they would have risen if the foreign players were not here ( given the supply demand curve is sloped at 1).. the prices rise based on available inventory and not based on total inventory.

I know quite a few (older) people who own property in Manhattan and barely use it. Must be nice to be rich eh?

Which brings up another micro-trend. People are living longer and the upper mid-class has more disposible income later in life and are more active. That combined with the lower crime rates in many "magnet cities" has created an "empty-nester" migration to certain hubs -- NYC being one of them.

Anecdotally, I have a neighbor who did just that - suburban his whole life, now in early 60's and living in the city for the firsttime. (Funny thing was, he was amazed that there were so many kids in Manhattan (Tribeca) and thought it was worse than the burbs!)

Certainly not enough to support a market on its own, but an interesting factor.

aifamm - you didn't need to be rich to buy a second home in Manhattan during the early to mid-90's. Well-off maybe, but not rich. Second-home ownership is one of the many factors that has fueled home purchasing over the last 20 or so years. Even that is now saturated.

MMAfia - couldn't agree more. Watch the feathers fly. Recognizing the credit issues means, also, that the banks aren't going to be allowed to engage in such risky lending any more. Buildlings will have to be 60% (my guess) owner occupied, incomes will be scrutinized with a fine tooth comb, assets will be verified. Many people who are willing to extend themselves to buy won't be allowed to. How many MORE foreigners are going to want to purchase here? Even with the dollar continuing to tank, this has to be being portrayed as a pretty risky market in the foreign press. Which, along with continuing building, leads to:

Inventory. It's what has affected the rest of the country. Can't you hear the jackhammers? I doubt they will all get built at this point, but the city has been predicting total unit development over a four year period (or so, delays, delays) to be over 90,000 units.

Some elderly are moving into New York, some will be forced out by apartments leaving rent-stabalization.

Anecdotally, I have a neighbor who did something similar, although not quite the same. Grew up in New York, married life in the suburbs, moved back to New York after husband died. After two years, decided it wasn't worth it and moved upstate. Said with the money she'd save she could come to New York every other weekend, stay in a nice hotel, and go see a show.

Anecdotally, MMAfia and Absolutely are renters. One claims he's heavily invested in Commodities and the other claims she's at the 1% top income category. In other words they are both financial geniuses, and we should follow their advice.

Today I'm going to 5th Avenue to watch the feathers fly.

While I am not a genius, I am VERY VERY happy with my GOLD positions- I've been accumulating more and more on dips during the past month or so, and I've told people here to do the same (disclaimer: again, this is based on publicly available info from kitco.com that I linked to).

Those who followed should be very happy- watch what Gold is doing today for example.

Also, as I've mentioned before, I was NOT short Financial Stocks (although people like spunky kept thinking that I was). Well, guess what? The cat will be let out of the bag on Nov. 15 when the accounting rules change and they're forced to expose Level3 assets. In other words, the time has now come for me to short the Financial Stocks.

I wish I was in the 1% top income category, but am not. I'm just playing with my downpayment money I was going to put into a $1-2 mill apt in the city, making double-digit returns on it while I pay my measly rent each month. I'll look into buying in Manhattan again once the smoke clears from the ongoing Wall St. crisis which has clearly spread to the global financial environment.

MMAfia once again you are full of crap. When gold went down big time a few weeks ago you indicated you were no longer in Gold. Now that's it back up you are happy with your gold investments. Give me a break.

MMAFIA
I am a bit confused. How can you not be in the top 1% of income earners, yet seem to be a genius investor?

Somehow I am in that top 1% and I am just a working schmuck with no investment insight who was dumb enough to buy RE in Manhattan this year (and in 1999 and 2005).

Makes ya wonder.

Once again spunky, you are taking me out of context because you have nothing better to say.

Earlier, I said that Gold was ready for a pullback due to the large level of COT short positions. I also said that it would be a great buying opportunity.

I liquidated my positions after that mild pullback, and increased my holdings at that lower price. The name of the game is to INCREASE your holdings by buying on the dips.

Argue with me, call me full of crap, waste your energy. Doesn't really matter to me- all I know is that I'm staring at my Ameritrade account right now and grinning from ear to ear. When I go home tonight, I'll have a nice brewksi and wind down. Cheers!

But MMafia you better drink a lot of beer to keep you warm in two family you're renting. The landlord wants to keep his costs down so he will only be required to keep it heated to 60 degrees. Bundle up because it might be a little nippy tonight.

blue--the japanese did not have access to the foreclosure process in the early 1990s. you probably didnt know that. 2007 US is not 1990 Japan. Get a clue.

oh and the complaint in NYC used to be that the English owned all the real estate, then the japanese, now its the chinese. the fact that foreign money is even ALLOWED to purchase real estate here should be a COMFORT not a burden. Go to a developing country where ownership is restricted to citizens. This has always been a town in which foreigners heavily invested in. That is nothing new. Onyl news is that the dollar is much cheaper historically. But frankly, unless the euro tanks as well, I think we can all sleep at night.

FYI top 1% of income earners for 2006 was AGI over $364,657.

MMafia. Are you worth at least 5 Million liquid. if not, seriously, shut the hell up already. We all watch Squawk Box too.

MMafia I just found out from your landlord that because of the high heating oil prices he needs to take it down a notch. 50 degrees is all you and the Misses get tonight. You'll need a hot totty instead of a brewskie tonight. Please don't complain cause he can always turn off the hot water for an hour or two and theres nothing you can do about it. Why, well because you're a renter and he controls how comfortable he's going to let you be.

WOW, these homedebtors are REALLY getting nervous aren't they?

"MMafia. Are you worth at least 5 Million liquid. if not, seriously, shut the hell up already. We all watch Squawk Box too."

I see, so now, unless you have $5 Million liquid, you must shut the hell up on this forum. WTF? What a retarded statement. I can post whatever I want thank you. If you don't like, DON'T READ. No one is forcing you to read what I write.

spunky, my landlord is a really nice guy, and we have a great relationship. we don't have the sort of heating problems you're keep bringing up.

I'm an owner and have my own HVAC in my untit so I actually 'control the tem'. How many owners out there have any control over the temp in their apts???? Not one of your better arguments.

can you control the crack in your kitchen cabinets, or the red colored carpet that has yellow stains in it. or the stove that most of the time , or the ugly style kitchen design or the counter top that made out of wood.

I know you're not going to believe me, but I actually do have a temp control unit (2nd floor in a 3 floor, 3 family house). Landlord set it up that way (he doesn't live in the house), but as I said, that's why we have that understanding of us not abusing it, and him not getting cheap on us.

Do your neighbors knock on your door when they want the heat turned up or do they just tap the floor three times with a broomstick?

Never heard them, so either they have their own control units, or I'm deaf.

Thanks, totallyanonymous, for listing the figure for the top 1%. The top one-half of 1% is much more interesting. Correct me if I'm wrong, but isn't it somewhere in the neighborhood of $1.5M a year? Hm, big difference.

Where are there 3 floor 3 family houses in Manhattan?

MMafia doens't live in Manhattan I think he lives in a 3 family dwelling in Jersey City. This of course makes him an expert on the direction of Manhattan RE. He can view it more objectively from this location.

Does he live with anon3?

I AM ANON3 you morons!!!! rotflol... sorry anon3. I just had to.

Jersey City Ohio, maybe.

>> I AM ANON3 you morons!!!! rotflol... sorry anon3. I just had to.

Hehe now that was funny.

ha! MMAfia - why do they think you live in Jersey City? We/I live in Scarsdale and apparently love Curbed and renovating! Who needs Manhattan? Less room to renovate! Maybe we/I should move to Jersey City - think of all the space....It is at least on the PATH train connects to Manhattan and we won't have to take that pesky metro north

...still listening to the crickets and waiting for your simple, straightforward answers, anon3....

Fools..When Citibank cuts 20,000 workers and reports 38B in Level 3 debt watch out below. The storm is just starting to brew as the financials sink. Not even chopper Ben can rescue this one although he wishes to de-value the dollar to a level of the peso.

real estate is the largest ponzi scheme of the start of the new century. The hero's are those who shorted housing in 05', predominately powerhouse Goldman Sachs and their prestigious workers/clients.

Level 3 debt does not mean they are faulty mortgages. Some of the big boys will reveal some bad numbers, but I think we'll discover this is hyped up like Y2K with "the sky is falling" attention.

You're funny, because I bet those powerhouse employees are buying Manhattan real estate.

It is SO funny that people in the world that believe real estate is not going to crash, to the tune of at least 20% if you aren't on Park or 5th. If you need a place to live, you should own it. But we can all stop pretending now that real estate is currently a good investment, right? Does anyone really care to challenge that?

everyone who is anyone knows their property value is going down at least 20% in 2007. Probably down another 10% in 2008 than down another 25% in 2009. Then down another 23% in 2010. Than down 30% in 2011, then down 25 % in 2012, then down 45% in 2013 then down 30% in 2014.
In 7 years from now your house is going to totally worthless. In fact the average house will be worth a negative 450,000. 100% of all homeowners will be required by law to file for bankruptcy. Now if you're renting well lucky you. Your landlord will be required to pay you at least $5000.00 per month just so you can live in his house.

dmag2020- listen, these folks are still in the 'denial' stage.... we've seen this is many other secular forums... remember the arizona forum? LOL, they kept denying denying and then guess what? WHAP! where are they now? LOL. same thing is going to happen here... same cycle, different market, different timing. this is the last of the boards (local regions) since Manhattan IS different and will fall LAST.

MMafia, exactly...Manhattan is just waiting for the banking crisis to unravel where ten's of thousands on the street recently pink notices...

dmag, what would you consider a good return for a place to live, and in what timeframe? If you state that real estate is a bad investment, you must have an idea of what that means. Is breakeven in 5 years a bad investment in your opinion? 10% in 7 years? 20% in 15? or are you just bitching because you don’t think a 100% return is possible in the next 2 years?

Oh, and a 20% correction is funny. Not he,he,he funny but HA,HA,HA funny.

Juiceman, I'm not sure I understand your question/performance numbers. But if those are cumulative returns, none of them are considered good, your just paying rent in the form of interest and losing the interest on your down payment. However 10% annualized over 7 years, of course that's a good return. Break even after 5 years, not so good. What really isn't good is a 20% decline over 6 months, but its more about being able to buy a lot more apartment for your money if you are investing or buying your first place right now.

I think you will find that the real smart money out there believes that we are closer to the top and the end than the bottom and the beginning for most asset classes, not just real estate. You can talk about commodities, real estate, or equities. The reason Gold didn't break 800 because everything is fine.

So now what are you going to tell a new home buyer to do? Take their life savings, or a large part of it and put it into a highly leveraged asset in the form of a down payment in a very high priced market that hasn't corrected yet when we KNOW real estate has corrected in a big way in EVERY other geographic region? You are going to tell that person that NY is bullet proof? Were you saying that about the Blue Chips at the beginning of the internet bust? Would you of leveraged someone to the tune of 4 or 5 times in the stock market at that point, knowing they would lose everything? It is irresponsible to get on these boards and opine as though you know something, that we are a Teflon market, when in fact, there is no such thing. Your return over 5, 7 or 15 years isn't the issue, its about whether or not you are going to be able to survive the short term, and paying a huge mortgage for a 1 or two bedroom when you know your family is growing and you need more space, but to sell you will need to at least walk away from that down payment, if not be forced to come to the closing table with an additional 40 grand (that you may not have) to sell, or face foreclosure.

"In the long run, we are all dead." John Maynard Keynes

"In the long run, we are all dead." - dmag, you are way too young (presumably) to be so negative. The world is not ending, the sky is not falling, life will go on. I respect your opinion, but you need to take a step back and breathe.

“It is irresponsible to get on these boards and opine as though you know something, that we are a Teflon market, when in fact, there is no such thing” - What is irresponsible is getting on these boards and “opining” about catastrophic events that will tank the market. Your arguments are little more than feeble prognostications from someone who has watched too much CNN. 20% is not going to happen.

I have never said that NYC market was Teflon or that it prices will never go down. What I have said consistently is that it won’t go down as substantially and as dramatically as people on this board are predicting.

“Your return over 5, 7 or 15 years isn't the issue, its about whether or not you are going to be able to survive the short term, and paying a huge mortgage for a 1 or two bedroom when you know your family is growing and you need more space” - If you are worried about surviving in the short term, have a growing family, and you don’t have a 5+ year horizon, then you should absolutely rent. That is a logical financial and personal argument, which again, I have never disagreed with on this board. If you are pissed that real estate is too expensive and the “little person” can’t get in anymore, well you may want to listen to a number of success stories on this board about buying small and trading up over a period of 10 years. No need to start with a $2M apartment. In other words, be realistic, think relatively long term, buy in a good neighborhood, and you will be fine.

http://www.nysun.com/article/66066?page_no=1

Here's a snip:

"A precipitous rise in the number of condominium owners who are defaulting on their common payments, an important indicator of future foreclosures, is being reported.

Much has been said about Manhattan's perceived real estate invincibility in the aftermath of the subprime meltdown, but lawyers representing dozens of condominium boards in some of the city's wealthiest neighborhoods say they are seeing these default cases increase as much as 25% this year."

hrdnitlr, now that's a FORWARD looking statistic that people should factor instead of relying on instead of backward looking data.

This isn't a NY-specific article (talks about the overall U.S.), but I think it gets at a few points that are really at the crux of how the dynamics (between RE and the overall economy) will unfold:

http://www.msnbc.msn.com/id/21756953/

Some snips that caught my eye in particular:

"The closest analogy is the credit crunch in the early 1990s, when bad commercial real estate loans damaged the banking system. ... At the time, economists disagreed about how badly the bank problems would hurt the U.S. ... In fact, such worries played a role in the 1992 Presidential election, ... [but] after government statisticians finished revising their data years later, the growth rate at
the time of the 1992 vote actually turned out to be well above 4 percent.

"So which will it be this time — strong growth or a plunge off the edge? The first place to look is the housing market, where the lending excesses were most extreme. Don't focus on falling home prices. Instead, watch for whether the pace of sales picks up in response to price declines. It's good news for the economy if more houses get sold. Sales of new homes mean more work for carpenters and plumbers. Even sales of existing homes generate jobs for real estate agents, closing attorneys, furniture salespeople, and others. It's bad news if prices and sales fall in tandem because it could mean potential buyers are fearful of even bigger price declines. ...

"Bad as it is, the outright depression in housing can't kill the economy as long as job growth is healthy. That's the second thing to watch, and so far, so good. The U.S. added a respectable 166,000 payroll jobs in October, according to the Labor Dept.'s preliminary estimate. ... Watch out, though, for hidden weakness. While employers reported more jobs in October, a separate government survey of households showed a 250,000 decline in the number of people who said they had jobs. Some economists argue the household survey is more accurate at economic turning points such as this. ...

"Optimists say debt problems are simply too small of an iceberg to sink a ship as mighty as the $14 trillion U.S. economy. ... But pessimists respond that if lenders were reckless in subprime, it stands to reason that they were at least somewhat careless in other kinds of lending. ...

"The stock market is the economy's best-known weather vane, but it's probably the hardest to interpret. So far this year, stock prices have trended higher, signaling that investors expect corporate profits to keep rising. Lately, though, Wall Street is getting edgy. The Dow Jones industrial average shed 362 points on Nov. 1 and the same on Nov. 7. Falling stock prices can darken the economic outlook by making investors feel poorer and less willing to spend.

"With major firms such as Citigroup and Merrill Lynch seemingly unable to assess the depths of their own troubles, the possibility of the economy slamming into a brick wall is palpable. The U.S. economy is one heck of an irresistible force, but the credit crunch is slowly sapping its strength. Clearly, the risk of recession is growing."

Here's another paragraph you inadvertently left out of the article--Gee I wonder why--Keep searching for the negative stuff that's always fun to read.

A nervous November
So far, the subprime mess is more of a human tragedy than a stopper for the economy. It's being felt most by the lower middle class, which isn't the driving force in economic growth. The bottom 40 percent of the population by income accounts for just 21 percent of consumer expenditures. Julia L. Coronado, a senior U.S. economist at Barclays Capital, says that in terms of spending power, and taking into account stock market gains, "Consumers haven't lost any wealth at all. In fact, consumers are better off than they were a year ago."

MMAfia stated several days ago

While I am not a genius, I am VERY VERY happy with my GOLD positions- I've been accumulating more and more on dips during the past month or so, and I've told people here to do the same (disclaimer: again, this is based on publicly available info from kitco.com that I linked to).

Those who followed should be very happy- watch what Gold is doing today for example.

Spunky says --Now pass me that Brewskie

HAHA nice spunky, but if you recall, I cashed out earlier... and don't try to deny it: want proof?

From 5 Days ago, BEFORE the short term correction
"spunky, my downpayment slush fund is now sitting at $320k after cashing some of my profits from gold and covering some financial shorts."

Here's the link to the post:
http://www.streeteasy.com/nyc/talk/discussion/2332-wall-street-bonuses-on-or-above-target-for-2007

Long term, the outlook is still very Bullish. Just ask yourself the question: will the Fed RAISE rates anytime soon? If you're itching to say, no, then you are Bullish Gold. Of course there will be corrections along the way up, which are excellent buying opportunities to INCREASE your holdings.

Again, don't mislead people with incorrect information Spunkster!!!

but some is not all---Pass me the Brewskie

Gold has drop quite substantially from 5 days ago--bottoms up

Still trying spunkster?

I cashed out enough of Gold AND my financial shorts that day (when the market tanked over 300 points) to have a substantial net gain spunkmeister. LOL, but like I said, nice try. A for effort. =D

In any event, don't you have anything better to do than to try and pick holes in my posts, even though each and every time you do, you fail? and then eventually resort to your 'rent is due' posts which gives me my daily entertainment fix from you?

Look I'm not poking holes at you stock and commodity market trading wizardry. Apparently your long and short strategies in these markets are flourishing wonderfully. I was just concerned about your down payment slush fund that has mushroomed so wonderfully from your market timing strategies. I wanted to make sure your long Gold bullion and short Financial equities positions were both covered and sold. Congrats for absolutely perfect timing--Bravo and yes pass the brewskie for you deserve it.

BTW- way to cover the shorts the day before they spiked up and congrats selling the longs the day before they spiraled down. Everyone on this board should take note and bow to MMAfia the master trader.

If you work at any of the big banks, its probably a big pain in the derrier to trade in and out of positions due to restricted lists. Gee I just put 300k in Gold and now its restricted and I can't trade it. That is why the some people who are not timing the market choose investing some of their assets into real estate for less of a headache.

MMAfia is the man when it comes to Gold trading. Listen to him. Right now he's buying dips in Gold and waiting to pull the trigger on shorting financial stocks. I think he's has a major long position on Goldman Sachs though. I'm waiting for his trading signal on what to do. He's got this market pegged better than anyone on this board.

"Right now he's buying dips in Gold and waiting to pull the trigger on shorting financial stocks."

Hey now, see how easy it is? I didn't tell that to you... you came up with that yourself, and it is in fact what I'm doing!!!

MMAfia --Congratulations on being long Goldman Sachs.

Here a quote from a real estate broker from the urban digs site. This is very bad news for the Manhattan real estate crash

Jacky Teplitzky of Douglas Elliman:

I do see a pick up in demand now from foreign buyers. During the crisis of the credit crunch the foreigners were calling me to find out how this situation was affecting the New York market and I kept saying that it was not affecting the market. They were a bit nervous as they are not that familiar with our specific market and they hear the news from overseas and think of the US as one market. Now that the storm has passed they see that I was right and feel more comfortable. I just finished a 3 day intensive work with a foreign buyer and we could not find the right property because of lack of inventory so that proved my point of a stable market here in the big apple.

And it's coming from such a credible, objective source, being a (superstar) broker and all. Good thing she says the storm has passed, unlike just about every other post on Urban Digs.

"they hear the news from overseas and think of the US as one market"

Sorry Jacky, but I find it hard to believe foreigners don't know the difference between NYC and Florida. I find it even harder to believe that they would call you based on that stupid quote.

"...storm has passed..."

She has zero clue about that which she speaks. God bless her for trying to keep the faith, though.

"...storm has passed..."

no comment. LOL!!!

Anyone know where there the sell off went? I thought it was suppose to happen in July, or August or September or October or November. Anyone see it? Which way did it go?

Hey MMAfia how's you gold bullion down payment slush fund doing? Looks like you'll be renting a little bit longer. Oh well --have another brewskie.

spunky, sorry for you but I already discussed how i cashed out on gold way earlier (don't make me repost the facts again). nice try though... AGAIN. admittedly, you are quite persistent.

right now playing the financial short game after hearing what jim rogers had to say... when he said he's increased his short positions in financials last week, i listened and followed (he's the genius, not me). it's on bloomberg. anyways, sorry, a little busy posting on other sites which have more financial bearing that here... but will be checking for your entertainment factor posts from time to time spunkster. ;-)

MMAfia MMAfia MMAfia how could I be so silly not to think you are short the financials. After all they are down today. You must of been short prior to there downfall right. Why of course you were. I would also be silly to think if they actually were up today you would of been long on Friday. Ah yes and since gold is down you sold out right before the collapse. Let's celebrate on your perfect market timing with a brewskie.
BTW your paper trades are as entertaining as your fictional forecasts.

LOL like i would tell you all my trades.

at the end of the day, we can go back and forth till kingdom come, but only I TRULY know how my slush fund is doing, not you, and that's all that matters when i log off and go to bed at night with a smile on my face. =D

Well you must be doing fantastic. Congrats and have another brewskie.

It's not just about investment bankers per se:

http://news.google.com/news/url?sa=t&ct=:ePkh8BM9EwLbwQq0w4AFyRagQDFEAIs9RgL8v6qjkqYd_-a6wkGCpffAfABkvQ8a/0-0&fp=47430447faa71609&ei=oXlDR-mKMp_k-wHy_9WYBA&url=http%3A//www.bloomberg.com/apps/news%3Fpid%3D20601109%26sid%3Da6Ghxzh498Ik%26refer%3Dhome&cid=1123893845&sig2=qfC-BaQUXUxSodV_VUPNOg

My apologies - bad link. Here's the direct one:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a6Ghxzh498Ik

MMAfia. You have been striking out in your RE analysis in NYC for a long time. You may have hit a single on your temporary gold analysis. But, you have been thrown out at 2nd for Real estate prognostication. For as long as I can remember, you have crawling back to the dugout and striking out when it comes to predicting the rainout of the Manhattan RE market. You keep ignoring the runs being scored against you over the years on double digit rates of return in the NYC RE market. The driving force of the NYC RE market is foreign investment, the foreigners are not buying for spec, they are buying for 2nd and 3rd homes because the market is cheap here compared to the overseas major cities. I was just in London an average brewskie there is equivalent to 6.25 US dollars and $8 a gallon for gas. The London flats are very expensive compared to NYC. Many financial advisors in London stated to me that NYC RE is cheap compared to the London flats. There have been tremendous increases in net worth in individual wealth all over the world. Our $ sucks, China, India and the rest of the world is kicking our ass. Also, Wall street bonuses will be up 2007 per WSJ..Remember, your Gold was $800 per ounce in 1980. In today's dollars that is a negative rate of return. You have struck out with the bases loaded in the bottom of the eighth and you are still behind 10 runs in the NYC RE market.If you keep waiting to buy to Manhattan RE I'm afraid there will be no comeback in the ninth inning. You better make a fortune on your gold, because you have been hittting an oohfah in the NYC RE market.

Ahhh... another n00b poster to this particular discussion (copy & paste double post to boot), and of course, brings up the good ol foreign investment card. let's see... it's gonna be a toss up between the 'foreign investment' or the 'but wall st. bonuses are at records this year' card... which one will win as the poster statement for this board?

why would foreigners want to buy something (real estate) in a country (US) that is pretty much collapsing? so they can get it cheap, only watch it get cheaper and lose value? oh! WAIT!! because it's nyc and in nyc, prices don't decline! why? oh yeah, it's because us foreigners will stupidly buy and sell these apartments to each other, ratcheting up the prices for each other! yAy!

sorry. foreigners are not that stupid. well, maybe some might be, you know, the ones who take blind advice from financial advisors w/o doing due diligence... they do exist (helloooo subprime borrowers).

And please, don't even try play the whole Gold was $800 in 1980 game with me. In 1980, I was still in elementary school and definitely didn't own any. But, let's play a more realistic scenario: 2000-2007 (which is roughly the time I started accumulating some wealth to either put into a downpayment for a house or in personal investments):

Gold: 165% gain
http://www.kitco.com/ind/Kilbach/images/nov232007_5.jpg

Dow: 25% gain
http://www.kitco.com/ind/Kilbach/images/nov232007_6.jpg

and that's not even factoring inflation into the picture which wipes out the Dow's gain but INCREASES Gold's gain.

Hmm.... since we've put that to bed, how about this? Stock market vs. NY Home prices vs. US Home prices?
http://images.forbes.com/images/2005/05/26/0527home_1.jpg

Any questions?

And since you did bring up Gold at $800 in 1980, do you know what that is in terms of todays worthless $$$? Do you understand that that $800 is worth more than $2500 today? Do you see why we still have a LOOOONG way to go?

One thing I MUST STATE: never EVER defy the Power of Santa Claus coming to town on Wall St. This goes back many, many decades, and is always 'money'. The stock market will rally, amidst the turmoil till December. It always is the case, and unless an ALL OUT disaster occurs (the likes of 9/11), Santa Claus will be coming to town this year as well. Shorters, be wary!!! you WILL get burned if you are not patient and wait till after Santa Claus leaves come January.

Bottom line: thank God I didn't buy that apartment last year and instead invested my money into Gold. I made a lot more than that silly, overpriced 1-Bed would have appreciated.

Finally, since I did live in Beantown for over 12 years and consider it my second home, your analogy is quite fitting. We came back down 0-4 to pull the biggest upset in history. Now spunky, pass me the brewskie so I can double-post this response in the other thread.

0-3 not 0-4 you moron!

You are unbelievable MMAfia; your prognostications change more than the temperature. You have been predicting a meltdown since July and then remarkably, you change your tune, "going to happen in Q3", "going to happen after Xmas", blah, blah, and blah. The reality is, you have no friggan idea when, what, or how anything is going to change over the next year - except for what Jim Rogers tells you. It is very convenient that you are now long for December. Man you are friggan brilliant. Eventually you will get something right and I for one will laugh at the celebration, because even the Red Sox can win a world series if you give them a 100 tries.

"in a country (US) that is pretty much collapsing" - This is an idiotic and naive statement. This country has gone through many major downturns, catastrophes, wars, etc. and has bounced back just fine. The resiliency of this country is what makes it great. Stop getting your panties in a bind over the credit crisis. It is bad, and yeah it will hurt, but we will get through it. We always do. Pretty much collapsing? Laughable. Tell that to our forefathers.

Whether it fits your bearish, prognostic bullshit or not, foreigners are buying Manhattan real estate as well as many other cheap US products. That is actually the benefit of a weak dollar in case you missed that on Mr. Rogers’s neighborhood. Maybe the reason foreigners invest in this country is because it is a safe bet? Long term this country always comes through? Oh I forgot, you don’t think longer than the three months ahead of you…..my mistake.

When it turns, and it will, I’m sure you will come up with something else to rant on and on about that will tank the market, the U.S. and the world. Until then, I will continue to read your posts because, quite frankly, foundationless cynicism entertains me. Watching someone swing and miss as many times as you have has been quite a treat.

Mmafia,
Keep drinking those brewskies, because when

Keep drinking your brewskies, because when you finally wake up from your hangover you will realize that you still won't be able to afford to purchase Real Estate. While I still own 4 properties, you will be in your rat infested tenement. Also, when the roof collapses in your sh-tty apt rest assured you move to Boston. Maybe you could rent a trailer next to Michael Dukakis house when the US economy collapses. Your predictions suck, you will never own a place in Manhattan. Your economic analysis is baseless and without merit. I have been noticing that you have been wrong in every prediction about the economy over the last couple of years. The world and the US economy is so strong millionaires increase at a 9% clip in the US and the World. See the CapGemini Merrill Lynch world report. Hopefully, your landlord does not shut your electric off because of your unpaid bills. RE is an essential part of anyone's portfolio. Oh, I forgot you don't have a portfolio. Remember, you can always move back to Boston when the NYC economy collapses. LOL Why do you bother to write in Streeteasy , since you will never be able to afford to own a residence in NYC. Your rental payments are greatly appreciated by your Landlord, because it increases his or her net worth at your expense.