Anybody who thinks that the prices at the pump will drop to $1.50 where it was in 2001 have another thing comeing. The days of living in the burbs & depending on a car for transport are quickly comeing to an end. People will have to adapt to a new reality & i don’t mean what is on tv.

Now how does this play along real estate lines, lets compare 2 ajoining New Jersey communities in Bergen County.

Ridgewood-has a dence walkable downtown core with apartments & offices above the shops, along with single family homes within walking distence. Supermarkets maybe reached on foot but arent going to eat your gas tank if you drive. Public transit is plentyful with numerous options, a large bus station with a park & ride lot serving the region as well as Manhattan. If you wish you could also take frequent train service on the Main/Bergen lines to either Hoboken or Secaucus & with an easy transfer you can reach New York pritty easily. The rail & bus stations are a block & half away from one another making transfers effertless.

Paramus-the entire town that we see today was based on car dependence & sprawl, as a result walking around is nearly imposible if you need to go shopping or just want to go crosstown. There are 3 divited highways , 4 east/west, 17 & 208 north/south. This design prevents any pedestrian movement between the different sections of the community. On the plus side there is plenty of bus service to New York but not as much service locally as there should be.

Moral of the story: If you don’t agree with the market, just say you can’t determine a price…

From Bloomberg:

Merrill Lynch & Co., Citigroup Inc. and four other U.S. financial companies have used an accounting rule adopted last year to book almost $12 billion of revenue after a decline in prices of their own bonds. The rule, intended to expand the “mark-to- market” accounting that banks use to record profits or losses on trading assets, allows them to report gains when market prices for their liabilities fall.

The new math, while legal, defies common sense. Merrill, the third-biggest U.S. securities firm, added $4 billion of revenue during the past three quarters as the market value of its debt fell. That was the result of higher yields demanded by investors spooked by the New York-based company’s $37 billion of writedowns from assets hurt by the collapse of the subprime mortgage market.

“They can post substantial gains as a result of a decline in their own creditworthiness,” said James Cataldo, a former director of treasury risk management for the Federal Home Loan Bank of Boston and now an assistant professor of accounting at Suffolk University in Boston. “It’s completely legitimate, but it doesn’t make sense by any way we currently have of thinking of net income.”

Here’s how it works, according to Richard Bove, an analyst at New York-based Ladenburg Thalmann & Co. A company decides to designate $100 million of its subordinated bonds as subject to mark-to-market accounting. The price of the bonds drops to 80 cents on the dollar from 100 cents. So the firm books $20 million on the “presumed savings that you have on your liabilities,” Bove said.

“In the real world you didn’t save a dime,” he said. “You still owe the $100 million. It’s another one of these accounting rules that basically takes you further and further away from reality.”

The Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and Office of Thrift Supervision objected to the rule before its passage, saying in a joint 2006 letter to the FASB that it would “have the contrary effect” of increasing a bank’s net worth at the same time its “financial condition is deteriorating.”

If this doesn’t tell you everything you need to know about the shakiness of these comapnies, well, I don’t know what will.

More collapses are on the way. Does anyone else think Lehman doth protest too loudly?