Christie might be in violation of the tax code, but breaking the law (tax evasion) requires intent, and that's not going to be proven here.

If we get our panties in a bunch over something like that, half of Obama's cabinet couldn't serve in government. Remember, Geitner didn't even pay penalties, just back taxes. Try suggesting that to the IRS next time they come knocking.

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Why shouldn't Christie take credit for an investigation he began? I hardly think the arrests of most of this crowd was subject to too much manipulation since the elections just ended (Hoboken approx 30 days ago) and they probably knew that once they arrested anyone their informant would be burned (hence the mass arrests). At least Christie has done something for this state, and if he uses the governorship to further clean up our politics, I'm all for it.

Corzine got elected (initially to the senate) based on his "experience" at Goldman, and their unprecedented success during the real estate bubble. So you could argue he had little actual effect on GS's results. How is this different?

Jaded, you're absolutely right about the time horizon being critical. Rent appreciation will typically quickly outstrip the interest premium being paid by the buyer, and then through value appreciation and tax benefits a typical breakeven of the NPV's of both scenarios should be 8-10 years (with very conservative estimates).

Tax increases and maintenance should (I emphasize should because this depends on the rental appreciation that can be commanded in the market place) be essentially the same in both scenarios, since the landlord will have to cover these anyway.

Any investment horizon less than 5 years in real estate is pure speculation, anything less than 10 years is risky.

Yet another reason NJ is one of the worst states to do business in.

http://www.chiefexecutive.net/ME2/Aud ... 167534E2FA8CAC760727D0426

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Seriously? Are you advocating that politicians play accounting tricks with taxpayer money? Because their current level of corruption isn't enough in JC? Ask Hoboken how well that has worked out.

Also, as I stated previously, you generally can't use debt or federal money for operating costs, only capital and strategic projects. If you have less money coming in, your choices are either to trim the budget or operate more efficiently. Unions, strict work rules and general managerial incompetence in the state bureaucracy make it nearly impossible to operate more efficiently, so the state has to cut payroll. Many bad and not so bad companies are doing the same thing. Everybody shares the pain.

Thanks T-Bird, I was slow to respond.

ianmac, I agree with you in principal, but despite Keynes' best efforts, you have to get value for the money you're paying the people in government, otherwise you're wasting it same as anyone else. Bloated bureaucracies should shrink during hard times. If the govn't wants to build bridges and roads to try and stimulate the economy, I can understand the argument (though I don't agree with it). Ultimately, those types of projects can be paid for with bonds, etc. The operating budgets need to shrink, however.

+1 to Brewster and T-Bird

However, I find it interesting that this entire thread has been focused on the inputs to the education system (money) but nothing has been said about the output. I daresay that most of us would be happy to accept the school budget if the system was actually educating someone. Other school districts have much higher graduation rates at half the cost. What is being done to improve the result that our money pays for?

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Actually, you have to add to unemployment to get out of a recession. Employment is a lag indicator, which means these jobs should have been trimmed a while ago. Businesses have to grow to get us out of a recession. To do that, with less consumer spending, they need to trim workforce so they have money to grow with. It sucks, but that's the way the cycle works. There are plenty of 3rd world nations (and 1st and second world, for that matter) that try to use government jobs as an unemployment office, and all it does is bankrupt everybody.

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You CAN, but why would you give the IRS an interest free loan for longer than you need to?

Get your refunds in the mail ASAP. Both California and Kansas have issued refund delays of indefinite periods of time due to their fiscal situations. Give NJ's position, that's not out of the realm of possibility.

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This explanation is from the article:
"Under the plan, the I.R.S. will allow investors, including those who are suing Mr. Madoff, to claim a theft-loss deduction equal to 95 percent of their investments, minus any withdrawals, reinvested gains and payouts from Securities Investor Protection Corporation, the government-chartered fund set up to help protect investors of failed brokerage firms."

The article goes on to say the loss would be taken in 2008, meaning the 2008 value of the "investments". I take this to mean that the 100K investment, valued at 150K (for sake of argument) in 2008 would be taken as a loss, and the victim could take that loss as a tax deduction, carried back 5 years or forward 20. This tax deduction is on your total federal income taxes, as is allowed today by law, less any money you made in the form of payouts and dividends, not just the taxes you've paid on those dividends.

Talk about being bailed out, I just read this in the Times:
I.R.S. Plans a Deduction for Madoff Victims
http://www.nytimes.com/2009/03/18/business/18madoff.html?_r=1&hp

It appears that people will be able to deduct the loss of their entire investment (unclear whether this is the whole investment or just principal) as a loss, carried back 5 or forward 20 years. They will be basically made whole minus any disbursements or reinvested dividends or interest. Since these are tax deductions, we (the taxpayers) are helping these schmucks recoup their losses (yes, they are all schmucks. I know a few people who were invested with Madoff and some who were invited but chose not to. To a person, anyone who took the time to investigate Madoff and was an experienced investor, ended up walking away).

Despite my personal feeling, I wonder how retirees with no income or foundations will take advantage of this, since they are non-profit to begin with.

If you have any doubt that corruption is rampant in this state, read this book. Unfortunately, I believe NJ is on a downward spiral that we may not escape.

http://www.amazon.com/Soprano-State-J ... oks&qid=1235602013&sr=8-1

ExUWSguy, take the GS study with a grain of salt. A lot of the data they use from the 1986 to the mid 90's is less applicable to current trends. The city is much more dependent on the financial sector than it was in the mid 80's, leading to higher average incomes (median, not mean). I'm not saying the study in invalid, I just think we're in a much more unpredictable situation than "returning to historic means" would allow for.

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Admittedly, no my analysis does not include this. Nor does it include the costs of financing (closing costs, RE Broker fees, etc.), interest on the debt to purchase the home, etc. I was simplifying the problem and only looking at capital gains and cash income (dividends). Obviously, if you had a particular property in mind, you would look at all of these factors over the estimated life of the investment and discount it back to present. If anyone can show me a chart that demonstrates RE beating the stock market with all these factors considered, over any appreciable length of time, I'd love to see it.

El G - you are right in saying that RE is the most accessible (or at least was the most accessible, until Paulson decided to "fix" the market) way for the average investor to buy into a leveraged investment. However, your commentary assumes a market that is appreciating faster than inflation. The fact that the investment is leveraged means that in a declining market, you could end up owing the bank more than the asset is worth, as we're seeing today. I'll agree, that for the average homebuyer, planning to live there for 20+ years, this is much less of a risk, but it's a riskier than equities precisely because it's leveraged, and nondiversified.

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JSalt,

I agree with general argument, though I think there's a better way to make your point. All markets go up over the long term in general, as long as there is still a positive relationship between demand and supply of whatever the market is selling. However, using the price data supplied for the NY RE market, it shows a 10.58% CAGR from sept 87 to sept 2007. Over roughly that same period of time (I couldn't line up the dates exactly) the S&P500 returned about 9.5%. This only includes prices, not dividends, so realistically, the stock market should be closer to 11-12% in TSR. Also, RE is a leveraged, nondiversifiable asset, meaning its inherent risk is higher than an indexed market fund. Over that period of time, though you might have made money in either market, you would probably have done better in stocks.

JSalt, maybe your explanation was simpler.

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The first Global Bubble? Hardly:
http://en.wikipedia.org/wiki/Economic_bubble

How quickly we forget about the SE Asia liquidity meltdown just a few years ago. While it's good to be skeptical, this one won't be that bad. Hedge funds and PE funds will get hurt, but they only own less than 5% of major companies anyway. Most of corporate America is flush with cash and getting a boost in overseas sales with a weak dollar. More likely, what we're seeing is an end to American primacy in the finance markets, at least for the short term. It will hurt the NYC area, but the overall economy is pretty strong.

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It amounts to project finance decision. I'll preface everything I'm about to say with the fact that I don't know much about this particular property. Abatements essentially lock in the tax rate for property over a period of time. The developer has to make the calculation whether they think the assessment value of the condos, or rental income, multiplied by the tax rate will be more or less in the future than the fixed abatement (discounted for time). In a declining market, it very easily possible that city taxes may be cheaper, if the formula to calculate the abatement isn't adjusted.

Sorry if this is confusing, it's the end of the day.

Soshin,

That is one of the most unintelligible and moronic arguments I have ever read (I'm referring to the op-ed you posted). The author confuses arguments, metaphors and data throughout the piece. I dare say it does more harm to the cause of gun control than to the politicians who front for the NRA.

On another note, the below piece was in the WSJ, and I think comes off well reasoned, even if I don't agree with all of the conclusions.

Cho's Madness
April 18, 2007; Page A16
The mass murder at Virginia Tech is the kind of traumatic event that unleashes a torrent of pop sociology and national psychoanalysis, so allow us to weigh in with a more fundamental explanation: There are evil and psychotic people in this world willing to do great harm to others if they aren't stopped. The dilemma in a free society is how to stop them.

Cho Seung-Hui seems to fit the profile of a social misfit who snapped. Like many other mass killers, the 23-year-old is being described by acquaintances as a "loner," given to bursts of hostility and other antisocial behavior. We will learn more in the coming days, but our guess is that those who knew him will conclude that they saw the warning signs.

The calculation of his murder spree also suggests some deeper evil at work -- if we can use that word in liberal company. Cho used chain locks to bar students from escaping, lined some up against a wall, and emptied his clips with brutal resolve. "There wasn't a shooting victim that didn't have less than three bullet wounds in them," one of the doctors on the scene told CNN. This was a malevolent soul.

How can a society that wants to maintain its own individual freedoms stop such a man? The reflexive answer in some quarters, especially overseas, is to blame any killing on America's "lax" guns laws. Reading a summary of European editorials yesterday, we couldn't help but wonder if they all got the same New York Times memo, so uniform was their cultural disdain and their demand for new gun restrictions.

Yet Virginia Tech had banned guns on campus, using a provision in Virginia law allowing universities to become exceptions to the state's concealed carry pistol permits. Virginia is also known for its strict enforcement of gun violations, having implemented a program known as Project Exile that has imposed stiffer penalties and expedited gun cases.

In any case, there is no connection between recent mass murder events and gun restrictions. As Quebec economist Pierre Lemieux noted yesterday, "Mass killings were rare when guns were easily available, while they have been increasing as guns have become more controlled." The 1996 murders in the Scottish town of Dunblane -- 17 killed -- occurred despite far more restrictive gun laws than America's.

You could more persuasively argue, as David Kopel does nearby, that the presence of more guns on campus might have stopped Cho sooner. But as a general rule we are not among those who think college students, of all people, should be advised to add guns to the books in their backpacks.

Any gun control crusade is doomed to fail anyway in a country like the U.S. with some 200 million weapons already in private hands. While New York Mayor Mike Bloomberg seems ready to stump for gun restrictions, we doubt many Democrats will join him. They did so after Columbine in 1999, only to lose the 2000 election in part because of the cultural backlash in America's rural and hunting counties. We'll concede that this political reality has changed only when New York Senators Chuck Schumer and Hillary Clinton decide once again to pick up the gun control cause.

A better response than gun control would be to restore some of the cultural taboos that once served as restraints on antisocial behavior. These columns long ago noted the collapse of such social and moral restraints in a widely debated editorial called "No Guardrails." Instead, after Columbine, there was a rush to blame violent videogames. But videogames or other larger media influences don't inspire mass murder when there are countervailing restraints and values instilled by families, teachers, coaches and pastors. Two generations ago, colleges felt an obligation to act in loco parentis. Today, the concept is considered as archaic as the Latin -- and would probably inspire a lawsuit.

However, even those benevolent influences -- were it possible to restore them -- might not have made a difference in the case of Cho Seung-Hui, whose madness can't be explained by reason.

Am I missing something? I assume that the measures Steve is promoting simply seize the vehicle that is used in the committance of a crime. I have no problem with that. However, if the police are going to someone's home to take assets just because the person was involved in a crime, that seems like punishment before verdict. Basically, if you drive a car to buy drugs or sex, and are caught doing so, your car is forfeit. If you don't like it, walk to buy your drugs, or get a hotel room.

This may be a stupid question, but doesn't this ordinance simply change the timing of donations from developers to politicians? Instead of "pay to play" it will be "play and pay". If I'm a developer, and I think I can influence a politician with donations, won't I just make a "promise" to support that politician in the next election if I win business. Then, when my work crew is already busy with a multi-year city project (which I suspect most of the city projects are), I can fulfill my promise. All I have to do is make my last donation more than a year before my current work with the city is done.

If this ordinance is supposed to address "the appearance of impropriety", why doesn't it simply require a councilperson to recuse themselves if they have accepted donations from a developer bidding on a project? This holds the politicians accountable, and doesn't infringe on the rights of people to donate to petition their government.

Ranking Average tax bill for local, school and county services
For towns with
at least: 500 homeowners Ranking Town
rank 1 of 20 Millburn (Essex) $16,511
rank 2 of 20 Mountain Lakes (Morris) $16,291
rank 3 of 20 Essex Fells (Essex) $15,315
rank 4 of 20 Rumson (Monmouth) $14,964
rank 5 of 20 Glen Ridge (Essex) $14,867
rank 6 of 20 Tenafly (Bergen) $14,412
rank 7 of 20 Mendham Twp. (Morris) $14,246
rank 8 of 20 Alpine (Bergen) $14,201
rank 9 of 20 Princeton Twp. (Mercer) $13,967
rank 10 of 20 Montclair (Essex) $13,547
rank 11 of 20 Mantoloking (Ocean) $13,440
rank 12 of 20 Demarest (Bergen) $13,286
rank 13 of 20 Franklin Lakes (Bergen) $13,051
rank 14 of 20 Upper Saddle River (Bergen) $13,000
rank 15 of 20 South Orange (Essex) $12,877
rank 16 of 20 Princeton Borough (Mercer) $12,857
rank 17 of 20 Saddle River (Bergen) $12,730
rank 18 of 20 Ridgewood Village (Bergen) $12,567
rank 19 of 20 Summit (Union) $12,566
rank 20 of 20 Haworth (Bergen) $12,471

This was the only per household ranking for 2006 that I could find.
Source: NJ.com

At the risk of offending the populace at large, isn't there an inherent backward logic at work in a law like this?

Now, I'm all for cleaning up government, especially most of the ones in NJ, but an ordinance that punishes contractors for acting in a perfectly legal, moral and constintuionally protected way seems off the mark. Naturally, developers will support candidates that are pro development. Anti-development forces are welcomed to support anti-development cadidates as well. There is nothing unseemly about this. If actual bribery is going on, then we have laws to address that. If developers are being treated differently, based on whether they contributed or not, then a prosecutor should investigate. However, to usurp the rights of citizens because politicians can't make moral judgements seems to me to be the wrong way to make a difference.

Maybe JC is so far gone that this kind of ordinance is necessary. However, I would like to see some of the accountability rest with the politicians that started such a system.

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Dem or Repub, I think it is allright to vote for a single issue candidate at the local level, especially when the single issue has such far reaching consequences.

But, that being said, a better alternative is just to vote out anyone that holds two positions. There have to be alternatives out there somewhere.

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1) It's legal
2) The democratic machine continues to increase the payrolls with unneeded positions in order to hand out the positions as political favors
3) The voters don't punish them for holding two jobs, even if there are conflicts of interest

No one to blame but ourselves.

I agree with CapnJon, it's only the Dems that aren't up for election that are talking about what they would do if they took control, and even then they don't seem to be on the same page (Levin and Dean). I'm not voting for a party, I'm voting for a Senator or Rep. I don't have any influence on the Lady from California or the Gentleman from Mass, but I can have a say in the person NJ sends, and I think personal views and convictions are much more important than party platforms. Afterall, platforms are based on the issues we know now, not what might occur in the future. At least Menendez has a voting record to go on, so I don't think this applies to him too much, but it would be refreshing to hear a candidate clearly articulate his position on ideas on the most important issues.

Does anyone know when the last time the city performed a city-wide property assessment?

I know there is an effort underway in Hoboken to have one done. The theory there is that the politicians that are against it are dependent upon the "old school" Hoboken vote, and that demographic would likely be forced out of Hoboken if their taxes went up. On the upside, the reassessment keeps the total tax level the same, but redistributes the tax burden across the city based on current values. While I don't want to see people kicked out on the street because they can't afford the taxes, I also don't like the idea of property owners getting a free ride on the increased valuations of their property.

Philly reassessed property values city-wide while I was living there, and it did create quite an uproar. It also spuured on the redevelopment of the center-city area, which has really turned around.

Alb, I have to disagree with you. Having worked in a number of "financially challenged" hospitals, and done a couple projects with payer-providers, there are two main problems that a hospital like this face.

The first is utilization. All of these special departments require specialized equipment and personnel, and if they are not fully and economically utilized, the hospital will see huge losses. Some private hospitals have proven that they can be very profitable, successful, and treat charity as well as medicaid cases by specializing in a type of care. The "Heart Hospitals" of the midwest are a great example. The one-stop-shop for all care just doesn't work. JCMC should have picked a couple specialty departments that were in short supply in the area and focused on those (my opinion).

The second problem is doctor acting as managers and trying to run the actual business of the hospital. Doctors have a tendency to get too little for their money when running the departments. I completely agree that doctors need to make 100% of the medical decisions with primarily their patient's care in mind, but some cost/benefit rationalization has to be done in the areas of equipment, supplies and staffing. That's just reality.

As an inner city hospital, I doubt there is much chance of JCMC turning a profit without significant state aid, but in my experience, shortfalls like this only occur through gross mismanagement.

Doesn't it also seem a bit unfair that the state/city should give an advantage to people who need help finding and maintaining employment over those that may otherwise be relatively successful construction workers? By this I mean that relatively successful construction workers, who does not live in assisted housing, have a smaller pool of jobs to compete for because the state/city feels the need to "reserve" a certain number of these jobs for people in its care. If this is part of the state's plan to move people out of assisted housing through worker training, i'd be all for it. However, my guess is the jobs allotted to the NJHA workers will be the most unskilled and menial of tasks.

Seems I missed the comments about liquor stores and wine stores before this thread took a turn onto a tangent, but for those that are interested, and have a car, I have two recommendations:
Riverside Wine Merchants (West NY or Edgewater?) has a good selection of mid-range wines, and monthly wine tastings. They also have presale (read-heavy discounts) opportunities throughout the year. I've never bought a bad presale wine from them. Super nice too.
About 10 minutes south of Newark Airport on the 1&9 is a liquor store. I forget the name, but it is on the northbound side of the road with a big sign that says "WINE". 20% mixed case discounts and a great selection of new world wines.

enjoy