Charts of the day

Business gets worse when government gets involved  

This is easily provable with Public Choice Theory, and consistently proven in practice.

Contrary to the absurdly naive belief that monopolizing an industry will produce “efficiencies”, it has the opposite effect.  All the wrong things are incentivized and no one has any clear signal of what creates value. (See “Socialist Calculation Problem“)

Here are two illuminating graphs, one from the linked to article, the other from Forbes. Education ,and health care are just the public sector die of this, but before we turn to the effect on private enterprise,  I’d like to see a similar chart for Greenwich schools or our town administration.





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The English have a lot to learn from our own legal system

Cities and trial lawyers team up to make cash from class action suits.

The 20-attorney legal department in Providence mostly defends the city against lawsuits. But since 2011, it has partnered with outside law firms to file more than two dozen lawsuits alleging a variety of securities and antitrust violations. The outside law firms have funded the litigation in return for a share—a third—of any monetary award.

The “affirmative litigation” model—while not without controversy over potential conflicts—has been growing in popularity among municipal legal departments in recent years amid a slow economic recovery and uneven regulatory enforcement at the state and federal level, say city attorneys, trial lawyers and legal experts. And because plaintiffs’ firms bear the litigation load, cities enjoy only the upside of potential victories and monetary awards.

Municipalities have moved beyond such securities litigation in recent years, filing lawsuits alleging among other things that defendants sold them products at unfair prices, damaged the environment and infrastructure, illegally marketed painkillers and discriminated against minority residents.

Jeff Padwa, Providence’s city attorney from 2011 to 2014, said he devised an affirmative-litigation strategy over dinner with then Mayor-elect Angel Taveras days beforeMr. Taveras’s 2011 swearing-in. At the time, the city’s unemployment rate was 11% and its tax base was shrinking.

Mr. Padwa said he modeled the legal department after the Connecticut attorney general’s office in the 1990s under Richard Blumenthal, who positioned the state as one of the leaders in the tobacco litigation and joined other states in a suit against Microsoft over alleged antitrust violations. [In fact, Blumenthal had nothing to do with the  tobacco litigation for years; when it appeared on the cusp of success, he jumped in front of the cameras and claimed the spotlight.]

Since 2011, Providence has filed 15 cases against corporations and banks alleging securities violations as an institutional investor. Most of the cases are still pending, but judges have dismissed some.

In August, a federal judge in Manhattan rejected a Providence lawsuit alleging Nasdaq and other stock exchanges gave certain traders an unfair advantage, according to court documents. Nasdaq declined to comment.

The city sued Brazilian electric company Eletrobas in August 2015, alleging current and former officers made false and misleading statements to investors in connection with a bribery scheme. The company’s lawyers said the complaint is based on “a wholly unsupported assumption” that the company’s costs were inflated.

The city’s 2015 lawsuit against drug maker Cephalon and other pharmaceutical companies alleges they conspired to delay the introduction of a generic version of narcolepsy drug Provigil. Lawyers for the companies, which deny the allegations, have asked a federal judge in Rhode Island to dismiss the case.

Mr. Padwa said cases filed by Providence have resulted in more than $200 million in recoveries. In class actions, the city sues to recover its own losses as well as the losses of scores of others allegedly harmed by a company’s conduct. As a result, its cut has been small relative to the total.

In three cases that have settled, Providence has been awarded a total of $62,000, according to current city solicitor Jeffrey Dana. A few of the cases have been dismissed, but most are pending.

The relationships between plaintiffs’ firms and public officials have long faced scrutiny and generated controversy, especially when firms donate to the campaigns of state attorneys general and are later hired by those same officials to represent the states in lawsuits.

The U.S. Chamber Institute for Legal Reform, the legal arm of the U.S. Chamber of Commerce, and others have scrutinizedrelationships between plaintiffs’firms and state attorneys general, raising concerns about potential conflicts of interest, favoritism and the use of a public entity for personal gain.

“Cities and counties are very, very ripe for these kinds of sales pitches, because there is the promise of millions of dollars at a time when a lot of them are really very cash-strapped,” said Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform.

Whatever the role of municipal government was intended to be in the daily lives of its citizens, enriching trial lawyers and lining the pockets of politicians was probably not among them.


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The good news here is, so far as I know, Britain is still a “loser pays”jurisdiction, so this bizarre case should cost the lady dearly

Abbie Stocker

Abbie Stocker: “Does this suit make me look stupid?”

Mother who was breast feeding in a public pool sues for £20,000 after it’s suggested she sit in a chair on the deck while the pool’s wave machine was operating.

Abbie Stocker, 27, was feeding eight-month-old Eric while the wave machine was on and a lifeguard became concerned mother and son might be in difficulty.

Mrs Stocker, who describes herself as a ‘vegan lactivist’ and is a breastfeeding support volunteer, was instead asked to use a chair by the swimming pool instead of feeding in the water.

Witnesses at Pendle Wavelengths in Nelson, Lancashire, claim she then had a row with management and rushed off to the changing rooms.

Weeks after the incident Mrs Stocker, who still breastfeeds her three-year-old daughter Abbie, is now suing the leisure centre for £20,000.

A source said: ‘A lifeguard saw a mum feeding her baby inthe pool and thought she might be more comfortable sitting on a chair.

‘The wave machine was on at the time and the waves can get pretty strong when they reach the shore end of the pool.

‘The staff member thought the baby may become upset if hit with a wave, and was only trying to help.’

The source added: ‘Abbie then began saying it was againstthe law to stop a mum breastfeeding her child in public.

One bemused leisure centre member said: ‘It’s is ridiculous to thinkbreastfeeding a child in a swimming pool is a sensible idea.

‘It’s like a child tucking into a burger and chips while splashing about.

Forcing unsuccessful litigants to pay the legal fees of their winning opponent has mostly eliminated these types of frivolous suits in most of the world, which is why American trial lawyers have worked so hard to prevent the rule from showing up here. With luck Mrs. Stocker will be whacked, good and hard.


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It’s just another variation of chutzpah


As God is my witness, you’ll never work again

After vowing to put ” a lot of coal miners out of work”, Hillary heads to coal country to woo   those same folks.

But hey, she has a plan: job retraining. Throw men out of work, put ’em on the government dole, and train them to be solar wind propellers. Notwithstanding the fact that the federal job training initiative has been a woeful failure, wasting billions of dollars since it began in 1961, Hillary’s plan’s gonna work because … well, I don’t know why it will work? Because she has a vagina?

I’m sure she’ll get a warm reception out there in the hills.


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So, how’s the $4.5+ range doing this year?

Not so well. There are 225 homes in Greenwich listed at $4.450 and above right now. So far this year, 29 homes in that price range have sold, and many of those went at a severe discount from their  original purchase price. 26 Mayfair Lane for instance, was purchased for $6.2 million in 2006, renovated, and put back on the market at $7.995. It finally sold this year for $4.8.



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Another beauty on Park Avenue (Greenwich)

Screen Shot 2016-05-02 at 3.51.31 PM123 Park, an 1867 home asking $4.5 million. The late Sally O’Brian, who just seemed to always have the most beautiful old listings in her stable. sold it in 2007 for $4.111, and these owners did quite a bit of updating since. They tried selling it at $4.995 in 2010-2011, without success, but this seems like an attractive price now. We’ll see.



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And after the weekend break, some real estate news

6 North

6 North Street, Cos Cob

6 North Street, Cos Cob, has a content contract. Asking price, $1.175 million.

30 Stepping Stome

27 Stepping Stone Lane

As does 27 Stepping Stone, Greenwich, $2.490. The seller paid $2,000,000 in 2014, seems to have redone the kitchen and repainted the interior, and is, judging from the blazing speed at which it found a buyer: 18 days, going to pick up $490,000 for her efforts.

Nice work, if you can get it and, apparently, she can.

30 Inidan Field

30 Indian Field

And 30  Indian Field, 995,000. Busy road in front, but this house backs up to Milbrook’s golf course, which makes up for that.

15 Cedarwood

15 Cedarwood

15 Cedarwood, $5.995 million, sports a pending contract. Bought new for $5.725 in 2002, the buyer added some stuff and put it back on for $8.2 million in 2014. It took two years, but it seems to have settled back down closer to reality, something I predicted back in 2014:

15 Cedarwood, down to $6.995million after starting off at $8.2. There are a number of these houses on Cedarwood, all built in the early 2000s, all pretty much the same, that sold for $5.2-$5.750 (this one sold for $5.725, in 2002) and all have come up for resale in recent years. They each began in the plus-$8s and ended in the low $6s.  If history is our guide, look for this one to go for around $6.3.

So I was a bit of an optimist.

9 Cotton Tail, asking $1.1 million, is pending. I think I like its neighbor, no. 7, more, but that just came on yesterday at $1.285, so perhaps this buyer didn’t see it. Or it could be apples and oranges: 9 was marketed as land, N0. 7 has a still-useful  house on it, so that’s really two different buyers.

Land or not, by the way, I think the listing agent for No. 9 did the seller no favors by putting crappy photos like these on the Internet. My grandmother used to say,”if you haven’t anything nice to say, don’t say anything at all.” Good advice for real estate agents, too. (My mother, on the other hand, preferred Alice Roosevelt Longworth’s version: “If you haven’t anything nice to say about anyone, come  right here and sit by me.” Mrs. Longworth might have enjoyed this blog).

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