recovery?

right on UWS...recovery it is!

buy now or be priced out forever!

We have factories?

UWS1313: I hope you're right. In that scenario, my SWAG for Manhattan RE would be stabilization around 2003 levels, an outcome most could live with. Obviously, there would be tremendous pain among underwater owners, and a lot of developers and conversion sponsors would go bust. But a recovering economy would eventually absorb the inventory - either as sales or rentals - at sensible discounts.

Nobody is rooting for Armageddon, and few are predicting it.

BTW, What's going on at 905 WEA? Based on your query about eating my hat, I expected to see a condo declaration by now.

hah.. please you should BUY now an apartment and some stock.. oh and if you really believe the hype I've got a Bridge in Brooklyn you might be interested in.

Yes, perhaps, but...

http://krugman.blogs.nytimes.com/2009/03/31/partying-like-its-1931/

I’m detecting a trend in commentary that I find slightly ominous. Some of the economic news lately has been slightly better than expected, which was bound to happen at some point (on average, after all, half the news should be better than expected). Mostly this is in the form of things getting worse more slowly, but it wouldn’t be surprising if we see, say, an uptick in industrial production in a few months, as the inventory cycle runs its course.

If so, that doesn’t mean the worst is over. There was a pause in the plunge in early 1931, and many people started to breathe easier. They were wrong.

So far, there’s nothing pointing to a fundamental turnaround this year, or next, or for that matter as far as the eye can see.

akallabeth, i agree. my smack upside the head today was the 04/01 entry:

http://pensionpulse.blogspot.com

ht naked capitalism

only reason anyone is selling now is death, divorce or distress.

Moreover, the high end of the market is fucked for the foreseeable future.

the affordable non lux 2 bedroom market which didnt take too much of a hit is positioned really well right now. There are a lot of sidelines sitters who can afford the $800-1.4 range and these will be the first buyers to jump in.

like the guy it IT at Chase who just lost his job? or the fourth year associate at Clifford Chance in NY? still has the job, but FOR HOW LONG (think William Shatner, here).

w81, my understanding is atty gen'l is in final review.

Thanks. I guess that means some insiders did buy, which is probably a good sign for the conversion.

okay perma-bears.

tell me why krugman insists on using his academic credentials and his nobel prize to mislead you re: the potential similarities beween 1931 and 2009?

i won't go on about money supply as i've done on 2 other posts, BUT, the reason i think krugman has joined the perma-bear club is he forgets to tell you and the NYtimes that the FED allowed money supply to contract in the first few years of the great depression say '29-'33. that ain't gonna happen with bernanke, aka, helicopter ben. thus far helicopter ben is growing money supply +20%!!!

if this rally was on macro data and NOT easing of rules of FASB 157e and a 1TRLN PPIP gov't plan, I would be on board. But I just dont see how this cleans up consumer balance sheet, and gets consumers spending again.

But, stocks were oversold, and bear rallies are fierce. I could see this lasting another month or so and suprisingly going above Dow 9K or so. Its the euphoria that comes with it that worries me. I mean, is everything really all better now?

UD--We are definitely NOT "all better now"? Nor do stock prices, even after the latest truly epic rally, suggest that we are all better. Stocks are still down over 40% from the highs.

I think it is possible (not necessarily likely) for stocks to rally another 25% to about 10,000 on the Dow. This level (over 30% down from the highs) would not be inconsistent with poor credit conditions and poor profit prospects.

bear market rally will collapse again -- yes -- eventually we will recover -- but not yet....Let's see where the unemployment figures shake out on Friday. Also, real estate will continue to come down in price with fewer big paying finance jobs and crushed equity.

emphasis on poor profit prospects....

urbandigs, I agree. I've been thinking of dumping a lot of stocks now (and have with some, a little too early it seems, but hey) because I'm just not convinced that this is sustainable. Some tough calls right now.

Economic recovery, yes. The US will bounce back. Absolutely.

Manhattan... we'll, we'll be trailing that by 2-5 years.

I think this is a bear market rally and we have plenty of upside left. However just because the stock market is rising do not expect Wall St as the job/bonus engine to return anytime soon. Therefore RE suffers. Just go back to the '87 crash which sent RE prices on a 5 year tumble. The economy, by every metric but productivity, was better then. In case you want to hang a slim reed on productivity it actually will hinder re-employment as employers are able to do more with fewer staff. I think 2003 pricing as a floor will prove to be a plateau before another leg down.

West81st - I think stabalization around 2003 comps are about right. Give or take a year based upon the hood or building. I think reno jobs will continue to be priced downward due to inventory.

We shall see. But, when the NYTimes finally gets around to reporting it, it will be old news.

UD, you think another month? these rallies have been frightfully to the short side. this one finally has some legs, and FASB will make earnings look somewhat better (in the case of the financials, much better), but the bankruptcies and debt losses only seem to be accelerating. plus, what scares me is how badly the global projections have become so quickly. but you may be right, the market may be able to ignore that for another month or two.

Got nothing in the game, only asking out of curiousity.

cfranch, sadly so true. employment is slowish to cut, and absolutely determined not to hire again until necessary.

west81 - i used to agree with you, although i was in the 2000 or 2002 camp. now i'd go back further.

UD, i really need to find my inner animal spirit. and i know that iras are pumping retail money in. but i wonder what i would do and when if i were a pension fund or endowment administrator, particularly corporate pensions, which oddly have been about 55% equities. when would i recoup some of those massive losses? what a gamble.

zerohedge talks about that alot. I dont know much about it

FASB mk to mkt is about much more than dressing up earnings. Its real importance is not what it means for the crap loans that have already been made (they are what they are), but in freeing up the healthy banks to be more aggressive with their balance sheets.
Under mk to mkt, even if you make what you consider to be a good loan, with sufficient cushion to handle the expected decreased credit risk and underlying asset value, you still have to worry about being forced to raise substantial capital because as those asset values continue to decrease and cash flow ratios decline, the 'forced sale' value of your loan may be lower. Its simply a risk that banks cannot take because the cost of capital (if available at all) is so high. Thus they are reluctant to make any loan at all, no matter how confident they are that it will prove to be a good risk if held to maturity. With mk to mkt rules eased, they can now make those loans. In particular this should be a boon to the Jumbo loan market, and I expect the availability on those loans to increase (and rates to decrease), which would be a big help to activity and prices in NYC.

sorry - meant to say 'sufficient cushion to handle the expected INCREASED credit risk and DECREASED underlying asset value'

http://blogs.ft.com/maverecon/2009/04/how-the-fasb-aids-and-abets-obfuscation-by-wonky-zombie-banks

ht naked capitalism

Recovery? It must be true because Jim Cramer says so:
http://www.businessinsider.com/cramer-the-depression-is-over-2009-4
In other news, unemployment rate spikes to 8.5%, a 25-year high, as 663,000 jobs lost in March. 5.1 million jobs have now been lost since the beginning of 2008.

Jim Cramer longs are usually excellent shorts

We have 9 million high school and college graduates this year so we need around 24 million new jobs created this year alone to sustain our population and economic growth. Where are these jobs going to come from? I'm talking about real sustainable good paying jobs!!!

Unemployment soars to 8.5 pct.; 13 million jobless
Unemployment rate spikes to 8.5 percent as 663,000 jobs axed; 13 million now out of work

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WASHINGTON (AP) -- Unemployment zoomed to 8.5 percent last month, the highest in a quarter-century, as employers axed 663,000 more workers and pushed the nation's jobless ranks past 13 million. The hard times were only expected to get harder -- a painful 10 percent jobless rate before long.
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The current rate would be even higher -- 15.6 percent -- if it included laid-off workers who have given up looking for new jobs or have had to settle for part-time work because they can't do any better. That's the highest on record for that number in figures that go back to 1994.

"Even if the economy continues to show signs of improvement, businesses will cut jobs and trim fats to stay lean and mean," said Sung Won Sohn, economist at the Martin Smith School of Business at California State University, Channel Islands.

So far, the public has shown great hopes for the economic policies of new President Barack Obama. But those could fade quickly with more months of layoffs. In Europe for an economic summit, Obama called Friday's unemployment report a "stark reminder" of a need for action at home and abroad.

The recession may well end later this year -- Federal Reserve Chairman Ben Bernanke and many private analysts see that possibility -- but rehiring historically doesn't get going until after an economic recovery is picking up steam. The jobless rate is expected to reach 10 percent by year's end.

The stock market generally bottoms out before a recovery gets under way, too, and stocks now have risen for four straight weeks.

The Dow Jones industrials rose 39.51 points on Friday after surging 216 points on Thursday and closed above 8,000 for the first time in nearly two months.

Small comfort to millions of laid-off workers. The Labor Department report underscored the recession's toll: a spike in the jobless rate from February's 8.1 percent and a net loss of 5.1 million jobs since December 2007, almost two-thirds of them in just the past five months. And economists say an additional 2.4 million jobs will disappear through the first quarter of next year.

As the downturn eats into companies' sales and profits, they are laying off workers and resorting to other cost-saving survival measures that also hit employees, the report showed. Those include holding down hours and freezing or cutting pay.

"It's an ugly report, and April is going to be equally as bad," said Mark Zandi, chief economist at Moody's Economy.com. "I couldn't see any rays of sunshine. Nothing."

The average work week in March dropped to 33.2 hours, a record low. And nearly a quarter of the unemployed have been out of work for six months or more, the highest proportion since the steep 1981-82 recession.

Margaret Barnett, 55, of Villa Rica, Ga., knows about that. She has been looking for work since she was laid off from a plastics distributor when the recession began in December 2007. She checks job listings every day at an employment agency and thumbs through the classified section of the local newspaper. But no luck.

"It's more people advertising that they need work than people hiring," Barnett said.

And hundreds of thousands of out-of-work Americans soon will exhaust their unemployment benefits in the coming weeks. Congress extended benefits twice last year to a total of 46 to 59 weeks.

Many who have been lucky enough to keep their jobs are seeing their paychecks shrink.

Average weekly earnings declined to $614.20 in March from $615.05 in February. If earnings keep falling, that would give consumers another reason to pull back spending, which would further weaken the economy.

But there have been some positive economic signs recently. Orders placed with U.S. factories actually rose in February, ending six straight months of declines, the government reported Thursday. Earlier in the week, there were better-than-expected reports on construction spending and pending home sales.

And last week a report showed that consumer spending -- an engine of the economy -- rose in February for the second month in a row -- after a half-year of declines.

Still, there was plenty of bad news in the details of the new report. For example, January's job losses were revised much higher, to 741,000 from 655,000, making them the worst in a single month since 1949.

In March, the number of unemployed people climbed to 13.2 million. The number of people forced to work part time for "economic reasons" rose by 423,000 to 9 million. Those are people who would like to work full time but whose hours were cut back or who were unable to find full-time work.

Most economists expect monthly job losses to continue for most if not all of this year.

However, they are expecting that reductions in the current quarter won't be as deep as the roughly 685,000 average monthly job losses in the January-March period.

Job losses were widespread last month. Construction companies cut 126,000. Factories axed 161,000. Retailers cut nearly 50,000. Professional and business services eliminated 133,000. Leisure and hospitality cut 40,000. Even the government cut jobs -- 5,000 of them.

Education and health care were among the few industries showing any job gains.

There was more bad news for workers in service industries -- hotels, retail, health care and such. An index of services activity shrank for a sixth straight month, according to the Institute for Supply Management, a Tempe, Ariz.-based trade group of purchasing executives.

Bernanke said the recession could end later this year, setting the stage for recovery, if the government is successful in bolstering the banking system. Banks have been clobbered by the worst housing, credit and financial crises to hit the country since the 1930s.

The Fed chief said Friday he expects to see a "gradual resumption of sustainable economic growth." But he didn't say when.

To brace the economy, the Fed has slashed a key bank lending rate to an all-time low and has embarked on a series of radical programs to inject billions of dollars into the financial system.

And the Obama administration has launched a multi-pronged strategy to turn the economy around. Its $787 billion stimulus package includes money that will flow to states for public works projects, help them defray budget cuts, extend unemployment benefits and boost food stamp benefits.

Still, skittish employers announced more job layoffs this week.

3M Co., the maker of Scotch tape, Post-It Notes and other products, said it was cutting 1,200 more jobs. Health care products distributor Cardinal Health Inc. said it would eliminate 1,300 positions. Semiconductor equipment maker KLA-Tencor Corp. said it would cut about 600. And Caterpillar said it was speeding up layoffs -- cutting more than 1,000 jobs at an Illinois plant two weeks ahead of schedule.

"The philosophy seems to be cut massively now and ask questions about whether too much has been done later," said Joel Naroff, president of Naroff Economic Advisors.

AP Economics Writer Christopher S. Rugaber contributed to this report.

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The real unemployment rate? Try 15.6%

The official US jobless rate, now 8.5%, excludes millions of people -- among them those who have given up on finding work and those forced into working fewer hours than they'd like.
By Catherine Holahan
MSN Money

An 8.5% unemployment rate is unmistakably bad. It's the highest rate since 1983 -- a year that saw double-digit unemployment, nearly 30 commercial bank failures and more than 15% of Americans living below the poverty line.

But the real national unemployment rate is far worse than the U.S. Department of Labor's March figure, announced today, shows. That's because the official rate doesn't include the 3.7 million-plus people who are reluctantly working only part time because of the poor labor market. And it doesn't include the workers who have given up scouring want ads for seemingly nonexistent jobs.

When those folks are added to the numbers, the unemployment rate rises to 15.6%. In March 2008, that number was 9.3%. The Bureau of Labor Statistics began tracking this alternative measure (.pdf file) in 1995.

"The situation out there is very grim," says Heather Boushey, a senior economist at the Center for American Progress, a left-leaning think tank. "We have seen the mounting of job losses faster than any point since World War II. I have never seen anything escalate this bad."
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Even the Department of Labor's expanded unemployment measure doesn't fully capture how difficult the job market is for American workers. It doesn't include self-employed workers whose incomes have shriveled. It doesn't look at former full-time staff employees who have accepted short-term contracts, without benefits, and at a fraction of their former salaries. And it doesn't count the many would-be workers who are going back to school, taking on more debt, in hopes that an advanced degree will improve their chances of landing a job.

Here's another way to look at the unemployment figures: More than 5 million people have lost their jobs since the start of the recession in December 2007. And more than 13 million people are unemployed. That's the highest number the U.S. has seen since it began tracking unemployment after World War II. For every job out there, more than four people are competing for it, says Boushey.

Mitch Feldman has seen the results of such intense competition firsthand. As president of New York executive placement firm A.E. Feldman Associates, he has watched lawyers accept paralegal jobs after failing to find any companies that are hiring. He has seen Ivy League-educated financial professionals accept lower-paid contract work after searching in vain for banking jobs.

"When some of the big investment banking firms had layoffs a year ago, those people were looking for permanent jobs," but now they're taking six-month and yearlong contracts, says Feldman. "And they're competing with other contractors who were on contract before. More supply, less demand, and the prices go down."

McHale... busted my back squatting... hate that. Gotta lay off a bit.

What's funny is the media talks about the last time it hit 8.5% (1983).... but they forget to mention it was on the way down after a hitting 11% (?)... the correct comparison would be 8.5% when it was going up and what's the end game, 14%, 13%,16%... and I agree w/ u... the "true" numbers are scary.... like build a bunker scary...

Hey buddy...I hear you. Took out my back doing reverse squats crazy weight on plate weighted hammer strength machine a few years back, now my knees are hurting. Are we getting old............. Hey check out my gym

http://www.clubfitnessny.com/

I took out something in my shoulder today, with a wimpy-ass machine, no less.

mchale, good article. i posted something more anecdotal on the unemployment thread, an article from Abovethelaw, that shows how the pipeline for new law school grads is getting totally stopped up. Where did they put the Drain-o???

Squats can be hell on knees and back. I have so many different machines in this gym....
I get load up plates squat machines.....now my knees.......

Hey this is a RE blog.
This economy has been exposed, we sold out our manufacturing base

This article neatly summarizes what happens to us

What the Heck Happened?

History teaches us that no nation can simply borrow its way to sustained prosperity. Nor does long-term prosperity ever come from disconnecting workers' wages from their productivity, or from a government's refusal to protect the right of workers to organize, to achieve decent working conditions and to receive a fair share of their productivity gains.

Yet this is exactly what has happened on and off for the past twenty-five years, as successive administrations gutted the progressive individual income tax in order to benefit high-income Americans; let most productivity gains go to those at the highest income levels, again through preferential tax policies; and ceased in any meaningful way to protect workers' rights.

As a result, our nation is saddled with an economy that for several decades has bounced from one credit-induced bubble to another. Income inequality is at its highest level since 1928; median wages have stagnated for more than a decade; and, significantly, our once vital manufacturing sector is swamped by our largely service-based economy, which moves incomes around the country but does little to improve our balance of trade.

Trade unions, which fostered and heavily sustained both the middle class and the balanced capitalist system in the United States, now represent only 7.6 percent of private-sector employees, down from more than 20 percent as recently as the early '80s. And instead of seeing gains in real wages earned through higher worker productivity, living standards for all but the wealthiest Americans have been artificially sustained for years by outsize mortgages, home equity loans and credit card debt, and by the growth in two-worker family incomes.

This long history of decoupling wages from productivity has also reduced individual savings rates and the aggregate savings needed for capital investment. Many employers have shrunk real wages and benefits while substantially dismantling the employer-based pension system. And in the public sector, excessive tax cuts for the wealthy have left our federal and state governments without the revenues needed to properly fund public education, healthcare and vital infrastructure investments.

And Don't Forget Trade

We also need to address immediately the decades of misguided trade policies that led to the transfer of millions of US workers from export industries into less productive and often lower-paying service jobs. In the 1980s, US-based global corporations, with the complicity of the executive and legislative branches, began to see their overseas operations not just as sources of raw materials but also as cheap production sites, invariably with much weaker environmental standards and fewer rights and protections for workers.

In January 1994 the North American Free Trade Agreement became the first legal embodiment of this major shift, followed a year later by the development of the World Trade Organization and then by the United States granting most-favored-nation status to China in 2000--in each case without securing nearly enough reciprocity and enforcement rights.

These misguided trade policies, combined with other countries' much less expansionary macroeconomic policies, triggered the most massive change in trade numbers in the history of any nation. America's willingness to pursue very expansionary monetary and fiscal policies, by contrast, has allowed many of these countries a "free ride" on our strong consumer demand. The massive $4.7 trillion goods-and-services trade deficit accumulated over just the eight years of the Bush administration--including a $3.6 trillion deficit in the extremely important manufactured goods category--made the US economy about $1.5 trillion smaller than it otherwise would have been. And without any meaningful reciprocal jobs creation here, we lost 4.5 million manufacturing and more than 2 million service jobs, most of them unfairly.

America's cumulative trade deficit since 1980 is an almost unbelievable $7.2 trillion. Those who scoff at the urgent nature of this problem have no real answers when asked how and when America will ever be able to pay off this obligation. And make no mistake, pay it off we must, just as we have to pay off this nearly $13 trillion that is soon to be the aggregate federal debt.

What Needs to Be Done

Working with those who understand the urgency of creating millions of high-value-added jobs--and the higher family incomes and tax revenues that will follow--the Obama administration and Congress need to "slipstream" behind the bailouts and develop long-term plans to support the renewal of manufacturing. These plans must be designed to stimulate business invention and innovation, and to spur productivity growth across the nation. The objective must be to find those 24 million missing jobs, and their centerpiece must be a much stronger nationwide commitment to healthy, well-educated and well-trained workers, especially in the manufacturing sector.

7 Years. It takes 7 years for an economic cycle to complete itself. We're heading into Year 2. 5 more to go.

hey look around Williamsburg, Maspeth, Astoria, Long Island City etc................see all those empty factories and warehouses? Those were booming in the 50's,60's,70's and even 80's, we were an economic manufacturing powerhouse.
So we shipped all those factories jobs overseas because Wall Street wanted to see cost cutting, then those geniuses on the street created credit bubbles thru financial engineering that took down the world's economy............
I guess building high priced Condos in those industrial areas will back us back to full employment and economic prosperity?

7 Years. It takes 7 years for an economic cycle to complete itself. We're heading into Year 2. 5 more to go.

Problem is we are doing it with deficit spending....this is an end game!

I took out something in my shoulder today, with a wimpy-ass machine, no less.

mchale, good article. i posted something more anecdotal on the unemployment thread, an article from Abovethelaw, that shows how the pipeline for new law school grads is getting totally stopped up. Where did they put the Drain-o???

Aboutready yep draino and flush this scum down the toilet. We can su our way back to properity again....what a growth industry....

That was sue our way back to prosperity....damn wireless keyboard!!!!!

McHale

so much noise!!!

I'm sticking with my view - unemployment has traditionally been a lagging indicator. The well known and already discounted problems in unemployment, banks, credit and housing are the reason the market dropped 50% from its peak in 2007!!!

The Fed has unlimited power to print money, the stimulus package is just beginning, and the Treasury plans, as flawed as they are, will result in a more regulated, better capitalized and responsible banking system that will once again provide the credit needed to restore GROWTH in our economy.

Here's what i look for as leading indicators of economic activity/potential growth:

copper futures (rising)
industrial output (looks like a nice green shoot)
inventories (decreasing)
consumer confidence (bottoming???)

that's the last market discussion from me.

and since this is a real estate board, i'm looking at jumbo loans as the leading indicator of the manhattan co-op condo market. until that lending returns, we are in for tough times. i tend to focus on closings rather than listings.

let's see what the next 2-3 months on closing prices look like.

funny, we saw 20 plus % rally in equities, some people here things things are back to normal. These type of bear market rallies will not last forever. My bet is that it will fade once Financials start reporting earnings (mid to late April). And for real estate market, it is gone forever. We will never see the type of pricing and valuation we saw during the last real estate bubble. So stop dreaming. BTW, the commercial real estate market just started collapsing.

UWS1313 you are one truly clueless twit. Evidently you can't handle the truth and you choice to ignore the facts I posted. Print money? As if this has no consequences and that the world will keep financing our deficit spending. You really need a reality check. Stop ignoring the main leading indicator massive employment.

That is massive umemployment

Unemployment is often lagging. Yesterday's unemployment is lagging the decline in residential construction, financial services, credit availability. Today's unemployment is lagging the retrenchment in capital expenditures. Tomorrow's unemployment will probably follow the decline in income and personal expenditures. Further unemployment will lag the collapse of the commercial real estate market. If we're lucky, we won't see the final bout of unemployment lag the further destruction of the financial markets.

I forgot a round for manufacturing and export decline. And state spending and aailability of services.

my $.02. This ain't your ordinary recession/depression. There was a vicious wealth loop in RE in the last 10 years and America has no "real" manufacturing base to speak of. The reason why unemployment rate was a lagging indicator was that there was a tremendous lag between consumption uptick, orders hitting the factory, inability to produce the goods w/ skeletal staff and subsequent hiring.... this recession is just an absolute mess with the RE wealth effect working itself in reverse, no manufacturing base to speak of and the complete deleveraging of the Financial institutions (and subsequent inability to create high ROI w/o leverage).... all of the SEC and Financial regs, while great in the long run, will make sure that this recovery is jobless for a long time to come. And to top it all off, there will be tremendous salary cut (deflationary) pressure on top of "rightsizing" our social services programs, healthcare, pension/401K benefits... it's occurring at GM/F/C and will trickle down to the rest of the economy.

HOLD on tight....

McHale is that the gym right off BQE? I used to work out there once in a while back in 1996-1998.... was a total italian american hangout.... I remember someone told me about a "roid" rage fight between two guys with one guy swinging a EZ curl bar and the other guy with a bat..... a the good old days.. : )

W67 well summarized, this is a total restructuring the likes we have never seen before. After the 29 crash the depression lasted till the second World War. After the war we were the only manufacturing superpower left with Germany, Japan and all the rest left decimated and burning. We were able to become the world's economic manufacturing powerhouse. The 82 recession the main economic productive engine that lifted us out was the IT boom which we dominated. Then after the 87 crash we took off again with the internet boom in the 90's that Al Gore invented :). Then we created bubbles like the .Dot boom then the Real Estate bubble and sebsequent finacial engineered Pozi scheme from the masters of my asshole on Wall street. Now we are left with a phony economy with a national debt of 13 trillion and counting.

No that was called the BQE sports complex off the BQE, mostly Italian/Irish. I worked out there too. I witness a couple of barbell fights from ROID muscle heads, not at the BQE though, scary shit.
This gym Club Fitness was a catering hall for at least 30 years, Greek immigrants. The owner's sons decided the catering business was too much hard work so they decided to transform it. It's right off the foot of the Broadway stop , a whole block long, N line in Astoria Queens.

Should I buy the stock market at 50% discount or manhattan real estate at a 25% discount? Which will generate more upside in a recovery?

Given that...

1) RE is still falling
2) RE was in the biggest bubble of all time
3) Shiller predicted we needed a 50% RE decline just to get back to "sanity"
4) Shiller calculated that the long term real return on RE is basically 0

... well, I think you have your answer...

This is the(ECONOMIC) REALITY ! ...Forget about the Goverment controlled CNN, ABC , NBC, FOX ...etc.

http://www.youtube.com/watch?v=UlDNMB6wYmI

http://www.youtube.com/watch?v=UlDNMB6wYmI

ROID rage - appropriate description for the nonsense being promulgated by the false prophets of destruction.

let's check back in 3Q 2009.

yes, let's, shall we.

UWS1313... well I for one am glad we have a strong gov't with a nice military to back up my $. Contrary to the video, it is OUR gov't and we do elect these people, and have a say in the monetary and fiscal policy (to a degree).

It also has to be that a banking sector exist, bc the gov't does a terrible job of allocating resources (can someone say USSR). So I'm okay with that also. Now to call me a false "prophet" of destruction is stretching it a bit. You'll turn the lights on and there will be electricity, food will be stocked at the shelves (just not at Balducci's, it's closing) and your toilet will flush. What I am saying first and foremost is that NYC RE will decrease by 50% or more to a level where there is 100% probability that high end will hit $1000psf in 6 months, 75% prob it will hit $700psf in 12 months and 50% prob it will hit $500psf in 2 yrs. I don't time equity/debt markets... but NYC RE is about as illiquid as molasses in Alaska in december.

That said, our economy created a tremendous amount of capital goods/human capital into unproductive areas in the last 10 yrs due to a RE BUBBLE. So we have people making an actual living walking dogs for RE Brokers too busy with their schedule, boob implants for said RE Brokers (penile enlargements to b PC), and a host of other terrible businesses (too many restaurants, hotels, airplanes, cars, homes, condo-shares, boats ipods, laptops, masseuses, nailsalons etc...).

Now we are in a period of 5-10 yrs of completely re-allocating resources into healthcare electronic records, alternative energy, manufacturing, and human capital re-deployment... away from RE and into other "more" productive areas. My question to you is do you believe my/McHale/other "fear" posters macro-economic assessment or are you just looking at the stock market's 100/200/500/and 1000 day moving averages? FYI, the macro-economic may have a say in where the equity markets head, no? It may pick up those signals sooner.... but there are still people pricing their NYC RE at $2000psf? So sometimes the market is made up of all those $2000psf idiots smacking each other on the ass, me thinkz...

w67 i happen to agree with the commonly held view that NYC RE was way over priced and will contract in price. to what extenet? that will depend on a variety of common sense factors, location, amenities and services, co-op vs condo, new vs old, etc.

the one thing i feel compelled to do is to expose those who are calling for Manhattan to fall to levels comparable to Queens!

i am not suggesting that prices will re-inflate to peak levels, that's equally ridiculous. i am merely using a more modest sense of hyperbole to present the case that the worst is over and we will begin to see signs of certain key sectors bottoming out.