Daily Archives: October 7, 2008

As bad as 2004!
This chart shows that the Dow has fallen from almost 14,000 in July to 9,500 today. That’s scary, but we turn out to be back where we were four years ago. If you didn’t buy this year, how bad is that?

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Demolition of 17 Brookside Drive

A reader asked about this so I stopped by to look. Certainly looks as though someone’s planning to tear the place down. I couldn’t find the tax card for 17 Brookside on line (curious) but it would seem to be a circa 1920’s mansion which, these days, isn’t in vogue. The demolition sign posted in front certainly doesn’t comply with our town ordinance, which states (Exhibit B to the permit) that the sign identify the age of the building, contact information, etc. This one just says “Demolition” and calls it a day. It’s not my job, but someone who objects to the destruction of this building can probably delay the inevitable by complaining to the Building Department and having them force the builder to start over again, with a proper sign that complies with the regulation. But there’s no stopping it permanently.

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Relax, Dickie, it’s nothing personal

Scientists say urge to punish is instinctual.

“The urge to take revenge or punish cheaters,” said Michael McCullough, a professor of psychology at the University of Miami and author of the book “Beyond Revenge: The Evolution of the Forgiveness Instinct,” “is not a disease or toxin or sign that something has gone wrong. From the point of view of evolution, it’s not a problem but a solution.
The downside of these instincts, Dr. McCullough added, “is that they often promote behavior that turns out to be spiteful in the long run.”

Darn it, there’s always a downside!

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The voice of experience

California tries to stop federal government from dumping homes.

The concern in parts of Southern California illustrates the risks that could lie ahead for other communities as the Treasury begins a massive churn of assets. Depressed real-estate values in areas across the country could slide further if homes are sold to large financial investors who then flip them to others who want to make a quick profit.

“The U.S. Government is now in the real estate business” one Californian representative said. I say, what happens, even in Greenwich, when fire-sale prices start knocking off our spec house inventory? If your own, slightly dated home is priced at $2.5 million and right down the street a spec house, brand new, suddenly appears at $1.95 million, which is going to sell first and what’s going to happen to your price? Just asking, is all.

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I thought we solved all this last week

Bloomberg reports that the Fed will buy all commercial paper to ease credit crunch. That’s at least $1.6 trillion, over and above the paltry $700 billion we’re spending to save the banks. Thank goodness for printing presses, eh? Let’s just hope we don’t suffer a shortage of wheelbarrows or we won’t be able to carry our paychecks home from the bank.

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This is why we’re in the mess we’re in
Barney Frank says attacks on Community Reinvestment Act are racist
There’s no room for discussion: don’t like fiscal irresponsibility? Then “you’re a racist! Don’t blame me for trying to help the poor.” I suppose that this, coming from a man who let his Senate Page lover run a prostitution ring from the Franks manse in Washington for years and “never noticed” is hardly surprising. The man may really be as clueless as he claims to be. He’s certainly as venal.

Update: From someone who gets it:
Rep. Artur Davis of Alabama, a member of the Congressional Black Caucus:

“Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong.”

Barney, have you met Artur?

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Harbor Point Troubles Continue

I’d thought that, with Antares booted off the site, Stamford’s huge Harbor Point project would get back on track. But a reader just emailed me this article from the Stamford Advocate and apparently the new developer has been forced to stop construction because of flagrant zoning violations. Hmmm. Sounds to me like they need the Hamilton Avenue School Construction Committee to step in and lend a hand. God knows, we in Greenwich would be happy to send them over the border: permanently, if that’s what it takes.

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Fair Market Value?
In my post yesterday about a building lot listed for sale on Thornhill Road I hinted that its asking price of $850,000 precluded a builder from making a profit and hence was too high. A reader then asked what a fair price would be for the lot. I think my answer is that “fair” has nothing to do with it. In a better market, where houses on Thornhill could command $2,000,000, $850,000 for this lot might fly. But, as Mr. Rumsfeld so famously said,you don’t sell your house on the market you’d like to have, you sell it on the market you do have. With that, he marched his troops into Iraq and the rest is history.

The market right now will not support a Thornhill price of $2,000,000. In fact, I’m not sure it will support anything much above $1,250,000 in which case, accounting for building costs, the market value of this lot is … very small. Don’t like that? Don’t sell, and wait for better days.

When I opined that relaxing the mark to market rule for banks might make sense several readers promptly corrected and educated me. The current value of anything, be it toxic loans or real estate, is whatever buyers will pay for it, not what its owner hopes it will be worth in the future. I did reprint a letter I received from a (soon-to-be unemployed) mortgage broker who said it wasn’t “fair” to make banks mark their unwanted loans down to zero because, while the market might consider them worthless now, surely a better time would come and some value would be discovered. When better times come, then those loans might indeed be worth something. But right now, securities with no buyers and real estate that no builder or even end user wants has no market value. Let’s hope that changes soon.

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Going boldly where no editor has dared tread before.

Greenwich Time runs a hard-hitting editorial on property taxes today. It starts off with the usual liberal lament that Greenwich doesn’t pay enough taxes and Waterbury too much then, perhaps sensing that its readers might not agree with that proposition, switches gears and rails againt wasteful spending: that ought to appeal to these damn skinflint Yankees!

I was under the obviously mistaken impression that editorial writers took a position and then defended it. Our local paper differs, and has instead produced another soggy opinion piece that says and concludes nothing. I don’t purchase the Greenwich Time so I suppose I have no cause to complain about the salary paid to its editor, but talk about wasteful spending ….

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Oh great, this we need?

Some nitwit claims that this is the perfect time for stay-at-home moms to become real estate agents. While surely it’s coincidence that the lady is flogging her new book on just this subject, I still question her sense of timing (and that of her publisher, come to think of it). If it works, though, I may finally release my own, long deferred opus, “Mom’s to Bond Traders – How to make billions from your own kitchen table”.

Update: a reader who knows (well, he thinks he knows) that I’m kidding about bond trading from the kitchen table warns me not to laugh: it’s been tried in the past with rather unfortunate results. As proof, he sent me this link to a NYT article on Japanese housewives going bust in currency trading.

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Troubles continue at the soon-to-fail YMCA

Yet another “leader” for the Greenwich YMCA“. The new guy’s out after just a year on the job and has been replaced by Rebecca Fretty, “a longtime town resident and marketing executive with ties to the Junior League of Greenwich.”

All this comes after the Y first imported from California a fellow named John Elkrem who committed, over the vehement objections of older members, to a $36 million reconstruction program that saw the gutting of the building, the eviction of low-income tenants on the third floor (“living on the street promotes hardiness and well being”, claimed Elkrem), the loss of the oldest handball court in the country and the selling-off of Calves Island. The pool is done – nothing else, including the gymnasium that some saw as the raison d’etre for the expansion, is. Despite assurances that the new pool would draw new members who in turn would cover the cost of servicing the huge debt incurred in rebuilding and thus fund the completion of the job, Elkrem was shoved out. He left an organization that was now grossly underfunded and mired in debt, and that liability continues to grow. Ashleigh Rowe, the official spokesman for the Y, asserted yesterday that everything was wonderful and that the pool had attracted many new members. Asked how many, Rowe admitted that “she did not have overall membership figures for the YMCA”. Now, the lawyer in me interprets that as an admission that she knows damn well how few new members the pool attracted and how many existing members have quit in disgust but I suppose, given the Y’s track record in hiring incompetents, Rowe really is as ignorant as she says she is.

But we need not worry about the new Leader. Freety, she with “ties to the Junior League”, is said to be “talented, energetic and a good spirit” by none other than Lynn Lavery, who should know – she said essentially the same thing about her friend, Dickie Fuld.

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Realogy feeling the squeeze

Firms financed by Junk bondsare getting pinched and Realogy, parent company of Sotheby’s and Coldwell Banker, is one of the pinchees. Ow!

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This is a relief, a pity, or just another bit of hysteria

British scientist says human evolution is at an end.

I think it’s the latter, myself, but I’ll wait to hear from the Greens – they’ll know.

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Go ahead, take your mind off all things economic
Prowling the net just now, I stumbled across this Indian blogger. He seems to reprint other’s news stories but he has other links to other Indian bloggers and his own postings appear to present (on an admittedly cursory sampling) an eclectic taste of what’s going on over there. I’ve never visited the country but I’d like to. Until I sell a few more houses, however, this will have to do.

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