Daily Archives: September 29, 2009

I’ll take the headline, Your Honor

Norman Hsu, Hillary Clinton’s chief fund raiser, has been sentenced to jail for fraud, but Hsu knows for how long? The NY Times headline says 2 years, the article itself claims 24. If he’s smart, Hsu will show that headline to his jailer and try to arrange short term accommodations.

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He was innocent, not a charge was true …

cowWe’re off tomorrow to a super-secret double-probation grievance hearing to answer an angry Greenwich homeowner’s complaint that I made fun of his house and thus prevented its sale. Notwithstanding my profound regret at offending the poor sod, he apparently insists on going forward so I’ll be tied up most of the morning with a bank of white shoe lawyers and paralegals, armed with instant transcription machines and fighting for my professional life. Oh, the horror!

I’ll see about live-blogging the proceedings.

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Them furriners sure do like these condos, eh?

A unit at “Riverstone”, the condo project on the west bank of the Byram River that I consider to be part of Port Chester but the developers refer to as “Glenville” has gone to contract, after just six days,to a “foreign buyer”. That would be anyone from out of town, I guess. If I were a resident of New York state and could escape that jurisdiction’s taxes by buying a fresh new condo in Connecticut without having to get my feet wet, I’d do it. Otherwise, perhaps not.

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Realogy using government accountants

It’s borrowing more money at higher interest to pay back pushy creditors who are owed less money. But this all makes for a stronger, healthier company, just as the FDIC is growing stronger every day. Trust us.

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Dodd’s exquisite sense of timing

While federal investigators are still trying to round up the terrorists who planned to bomb New York City Chris Dodd has introduced legislation repealing the immunity the Senate gave to telephone companies who assisted the government in wiretapping those same people.

“We make our nation safer when we eliminate the false choice between liberty and security. But by granting retroactive immunity to the telecommunications companies who may have participated in warrantless wiretapping of American citizens, the Congress violated the protection of our citizen’s privacy and due process right, and we must not allow that to stand.”

I personally would feel much safer if the citizens of Connecticut would throw this deceitful, awful person out of office on his fat thieving ass and replace him with anyone else – anyone at all.

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But Barney Frank likes it

Back in 2005, pre-crash, a mortgage lender got busted because his employees were engaged in mortgage fraud. He wrote a book about it, warning that no-money-down home purchases guaranteed fraud. Sounds sensible, so yesterday’s announcement that Congress and Fannie Mae are teaming up to toss another $35 billion into new, no money down mortgage loans for dead beats makes me wonder whether we’ll see that money again? I think not.

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Change of plans or mind?

19 Doverton

19 Doverton

This building lot (it does have a tired contemporary on it) is assessed at almost $3 million but its sellers wisely asked less than that: $2.6 million at first, then marked it down to $2.2. Today, they deleted the listing and I don’t know whether that’s because they’ve come up with a better use for the property or have just decided to wait out the market.

I’ve never been wild about this land at any price; its four acres are mostly swamp and steep wooded hillside, so it’s pretty much a building envelope and that’s it – it doesn’t even offer much privacy, despite all that land. So I don’t know how much good waiting out the market will do – the land isn’t going to change until the next glacier resculpts it. Watch this space.

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No public option – tell me again why we’re doing this?

The Senate has voted to kill the “public option” provision of the health care bill. I was no more fond of this option than I was the entire bill, but what, exactly is now going to be accomplished by any medical bill enacted? There will be no systemic changes that stand any chance of cutting costs, so we’re left with a new expanded mandate and soaring costs. And this will help us how?

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I’d like next year’s commissions paid now, please

Not that the FDIC is broke, or anything, but it’s demanding that banks pay next year’s fees now, just to keep things current. Hey, if they aren’t worried, why should I lose sleep over this?

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Well D’uh

Tastes like chicken!

Tastes like chicken!

Pet food sales up “despite” recession.

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In most jurisdictions, this is a hanging offense

Students save lawyer’s life.

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Marc Dreier interviewed by Vanity Fair

The story of Marc Dreier, the lawyer/swindler caught impersonating a client up in Canada when he was trying to steal $100 million, lost media attention when, five days after his own arrest,Bernie Madoff hit the cuffs and eclipsed him. Vanity Fair interviewed him after he’d been sentenced to twenty years but while he was still under house arrest and I, at least, find it offers a fascinating insight into a greedy mind gone bad.

His story is probably much like Madoff’s own. Although Dreier started off more advantaged than Madoff, with a Yale and Harvard education, he didn’t hit the really big time on his own and decided at fifty that he would simply steal what he needed. Which he did, for four years and $220 million until he was caught.

When he knew it was over he still had $100 million in cash and was out of the country. Why didn’t he flee? He gives no good answer but he seems to have just become tired of the whole scam and couldn’t face continuing with more of the same while on the lam. Maybe that’s as good an answer as there is – I suspect it also explains Bernie Madoff’s own refusal to flee when he still could.

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What’s scary is that we always get what we deserve

Egypt, responding to fear-mongering stories about swine flu, ordered the slaughter of all its pigs, thus wiping out the livelihood of 70,000 families and reducing its pig population to zero.

Now the garbage those pigs used to eat is piling up in the streets of Cairo and disease is rampant. Stupidity and pandering to public ignorance is not unknown in our own capital, of course, which is why I find this story so alarming.

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The press – predictable, but at least we know they hate Bush

On February 28th of this year, when Obama’s new crew lifted the ban on photographing coffins bearing our war dead, I suggested that, since the entire matter was really about Bush, not honoring our dead, we’d see one day of coverage and then the heros would come home unmourned by our national media.

On September 6, I pointed out that that’s exactly what happened.

Today, Bryon York has noticed the same thing.

But these days, the press hordes that once descended on Dover are gone, and there’s usually just one organization on hand. The Associated Press, which supplies photos to 1,500 U.S. newspapers and 4,000 Web sites, has had a photographer at every arrival for which permission was granted. “It’s our belief that this is important, that surely somewhere there is a paper, an audience, a readership, a family and a community for whom this homecoming is indeed news,” says Paul Colford, director of media relations for AP. “It’s been agreed internally that this is a responsibility for the AP to be there each and every time it is welcome.”

And what about the media’s boss, the Democrat Party? Well, here’s their number two, speaking then:

“These young men and women are heroes,” Vice President Biden said in 2004, when he was senator from Delaware. “The idea that they are essentially snuck back into the country under the cover of night so no one can see that their casket has arrived, I just think is wrong.”

If Hairplug Joe has visited Dover to console grieving families and show respect for our fallen warriors, he’s done so without benefit of media coverage. And that is as unlikely as Charles Rangel paying his taxes.

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Another impressive contract

17 Meadowcroft

17 Meadowcroft

The upper end (above $5 million) range of our market has been dead as a doornail for months so I’m pleased to see that Martha Jeffrey’s listing on Meadowcroft for $9.950 million has gone to contract. Earlier this year, Martha sold off five acres split from this lot for $5.1 million, $100,000 over its asking price.

It’s a shame that all 8 1/2 acres of this property couldn’t have been preserved intact. The owner tried to do that, originally listing it as one parcel in 2005 for $19.950 million, an improbable sum, and eventually lowering it to around $16. She seems to achieved most of that second figure, but only by dividing it. Good for her, of course, but too bad for the neighbors. On the other hand, they had their chance.

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Moving on?

182 Otter Rock sold as land for $4 million back in 2007 (after asking $5.9 for a year-and-a-half) and the house built on it came up for sale at $10.5 million in 2008. That didn’t work out well so the builder changed the address to 80 Meadow Wood Drive (the streets are parallel and I assume the property straddles both) and dropped the price to $9.750. It’s down now to $8.975 but remains unsold. I’m curious why the builder felt that Otter Rock was an objectionable address and Meadow Wood Drive was better but obviously, a rose by any otter name ….

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11 Lindsay Drive finds a buyer

1 Lindsay Drive

1 Lindsay Drive

This is a magnificent house set on two acres off North Street that has sat unsold for several years, no doubt because its $13.750 price tag collided with the collapse of our real estate market in 2007. It was reduced a little bit, into the high $12’s, and is reported as under contract today. I’ll be curious to see how desperate the builder was (he owns a number of unsold projects around town) versus his financial wherewithal. I figure that anything over $8 million and he comes out a winner. Below that, and it’s time to go toss some lowball bids at that single family on Ridge Street, the one with the sweeping view of the Honda dealer’s carpark.

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UFO’s in the sky? Send out the Marine Police!

Hurry, they'll be gone before we get there!

Hurry, they'll be gone before we get there!

Responding (slowly) to citizen reports of a UFO invasion, our police responding by dispatching our marine patrol division, a branch better known for finding miscreant boaters, not celestial objects. “We checked,” GPD Chief David Ridberg explained, “and they were the only guys we had available who aren’t equipped with tasers. I figured we didn’t want to start an inter-galactic war without reason.”

The Chief’s caution was rewarded when the officers, confronting the aliens, politely warned them that they would need beach cards to invade our town and the beings left, promising to return when the beach pass office was open.

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The John Paul Tudor Jones video is back (briefly)

This almost mythical video of a young (32!) John Paul Tudor Jones at work in 1987 is diligently pulled from the Internet every time it surfaces. I’m not sure why, other than Mr. Jones’ modesty. It doesn’t show him in a bad light at all – rather, it shows a smart young guy betting against the experts and eating their lunch. He clearly is enjoying doing what he’s doing and, as the decades have demonstrated, he was at the top of his game then and stayed there. I find it fascinating. But check it out quickly as it will probably be disappeared soon.

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Walter Noel finds his Mini-Me

A Michigan broker doing business as, I kid you not, “Fast Frank”, has been charged by the SEC with involving his clients in a $250 million Ponzi scheme. Add a few billion and see whether you can find a difference between this man and Greenwich’s own Walter Noel. I can’t. Walt used a more prestigious name, “Fairfield Greenwich Group”, but that’s irrelevant: in my experience, stock frauds can use any damn name they want – Blindem, Rob ‘em and Cheat’um being just one famous example – and investors will still pound on the door demanding to be let in.

Wall Street Journal:

By SARAH N. LYNCH and JOHN KELL

WASHINGTON — The Securities and Exchange Commission on Monday accused a part owner of a now-defunct firm known as Fast Frank Inc. of persuading more than 800 investors — many of them elderly — to refinance their homes and invest millions of dollars in worthless securities.

The agency filed a civil lawsuit in Michigan federal court alleging that stockbroker Frank Bluestein acted as the single largest salesperson in a $250 million Ponzi scheme that the SEC shut down in 2007 after it filed civil charges accusing Edward May and E-M Management Company LLC of fraud.

The Securities and Exchange Commission alleged that Frank Bluestein, shown at his Pontiac, Mich., office in 2007, acted as the single-largest salesperson in a $250 million Ponzi scheme the SEC shut down in 2007.
Would my filly (ie)s lie to you?

Would my filly (ie)s lie to you?

The SEC doesn’t allege that the 59-year-old Mr. Bluestein knowingly solicited older investors to invest in a fraud. But the agency’s complaint says he failed to conduct due diligence before telling seniors that E-M securities were low-risk investments, and did little to investigate the legitimacy of E-M offerings despite being confronted with what the SEC says were numerous red flags.

The agency also alleges that Mr. Bluestein failed to disclose that he received $2.4 million of commissions from May and E-M on top of the $1.4 million in disclosed compensation he got from Fast Frank.

David Foster, an attorney representing Mr. Bluestein, said his client has been trying to help the SEC with its investigation and was personally devastated by the alleged fraud after investing nearly $1 million of his own money. He faces more than 100 pending investor arbitrations through the Financial Industry Regulatory Authority, as well as a class-action lawsuit.

“My client has been providing thousands of pages of documents in a very organized fashion, going back over 12 months, to assist the SEC,” Mr. Foster said. “My client, his wife and his children all personally invested in Ed May deals as late as 90 days before it exploded.”

He added that his client  had no reason to believe anything was amiss with the securities.

Bill Hill, a 60-year-old former General Motors employee, said he and his wife got introduced to Mr. Bluestein through a friend. Mr. Hill said the return he got on his investments through E-M was so great, he was able to retire comfortably from GM. Then the alleged scheme came to light just a few months later. “Rather than having a comfortable retirement like we figured we’d have, we are living pension check to pension check,” he said.

The SEC said Mr. Bluestein raised about $74 million from investors by selling E-M securities between 2002 and 2007. The SEC sued E-M and Mr. May in November 2007, alleging that E-M sold shares of limited-liability companies by telling investors that the companies had lucrative telecommunications contracts with Las Vegas resorts and casinos. Those contracts never existed, the agency said. An SEC enforcement official said the case is still being litigated.

The complaint filed Monday alleges that Mr. Bluestein conducted investment seminars for seniors in Michigan and California. He operated the seminars through a financial-planning company he co-owned called Maximum Financial Group Inc.

According to the complaint, he arranged to have potential new investors attend the seminars along with current E-M investors. After a while, it says, Mr. Bluestein would ask people who already purchased E-M securities if they had “received their Ed May checks,” in an effort to drum up business.

Later, he scheduled one-on-one appointments with potential new clients, according to the complaint. The SEC said he built his seminar invitation lists by purchasing the names of people aged 50 and over from a direct-mail marketing company. To help maximize the amount they could invest, he urged investors to refinance their mortgages, the SEC said.

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