Things aren’t going swimmingly in India, either
With just about a week to go until Diwali, the mood is decidedly downbeat. The demon of impending economic doom refuses to die, and as tightened liquidity makes people put off larger purchases, the real estate sector is facing the worst attack. “This time last year, I was selling 10 to 12 properties every day,” says Alok Gupta, who runs Advanced Real Estate in the New Delhi suburb of Noida. “This time, I haven’t sold a single property all month!”
There goes my idea of opening a branch office in Bombay.
Greenwich Avenue Blues
Courtesy of a reader, here’s a story from the New York Observer about Greenwich Lean Time(s). Seems that retailers have seen better days, which will no doubt astonish you. I haven’t shopped on the Avenue since Al Oliver’s (? – the record store) was pushed out by a Talbot’s expansion; Given my tastes and what the Avenue stores sell, I’m sure they never missed my patronage. Still, people who buy $100,000 sapphires at Betteridge’s are more likely than I am to buy expensive houses (like yours), so I’m sorry they’re feeling pinched.
Cry for me, Argentina:
Government to nationalize all pension savings .
I have friends in Argentina and I’m sorry that, having seemingly weathered the financial chaos down there and about to emerge whole, they are now faced with this. How did the country get into this sorry mess? Here’s a hint:
Government spending rose 40 percent to 19.8 billion pesos in August from a year earlier. Tax revenue rose 36 percent to 24.2 billion pesos over the same period. Argentina’s borrowing needs will swell to as much as $14 billion next year from $7 billion in 2008, RBC Capital Markets a Toronto-based unit of Canada’s largest bank, said yesterday, spurred in part by the need to refinance maturing debt.
My feeling of pity for my friends is mitigated by the dark suspicion that We’ll be next. The U.S. will reach the tipping point under Obama’s tax proposals next year, and more than 50% of the citizenry will no longer pay income taxes. They will thus have no incentive to restrain spending because the minority will be footing the bill while the majority will receive the benefits. Witness Hartford sucking Greenwich dry, for example.
I remain perplexed by the insane joy of my liberal friends, all purportedly well educated, who greet this man as their savior when he will in fact beggar them. Bertrand Russell said in 1950
When crowds assemble in Trafalgar Square to cheer to the echo an announcement that the government has decided to have them killed, they would not do so if they had all walked twenty-five miles that day.
The old Red would choke on his Nobel to think that his words were used in support of less government, but I do wish my friends would take up strenuous hiking.
As a completely unrelated aside, while hitchhiking across the country one summer I was stopped and my knapsack searched by a Pennsylvania State Trooper. He was looking for drugs but I, being not a complete fool even at 16, had none to show him. He did emerge with my copy of “The Collected Works of Bertrand Russell”. Weighing the tome in his hand, he said something like, “this guy was alright so long as he stuck to metaphysics – he went crazy near the end, though, and became a communist. Watch out for him.” My participation in this discussion of philosophy was a little distracted because I kept ruminating on the thought that I would never again engage in such an unlikely conversation with a state trooper in my life. Forty years on, I never have.
30 Nearwater Lane
This Riverside house, north of the Post Road on Nearwater Lane, is asking $3,195,000 (details can be found here: ML # 69442). With 5,000 sq. ft., a buyer would be paying $639 per foot. I’m not sure how many can take advantage of the disparity, but there are any number of new houses for sale asking around $450 per ft. Of course, these come in units of 15,000, but hey – a bargain’s a bargain.
This guy notes that shipping is slowing to 1931 levels, the economies of most countries suck and, in general, we’re staring at a World-wide Depression. Of course, Googling the man, one Ambrose Evans-Pritcher reveals that he thinks the Oklahoma bombing was an FBI sting operation gone bad. On the plus side, when he returned to England (where he is now the Financial Editor for the Telegraph) Clinton sighed with relief and called him a pain in the ass. So he must have something going for himself. Anyway, interesting read. And when the DOW looks like this:
I don’t have a secure feeling that he’s wrong
Where the market’s heading?
You can make up your own mind, but this new construction was listed for $4,895,000 in June, 2007 and, finding no buyer, slowly dropped to today’s price of $3,750,000. It has 7,743 sq.ft. (no way to tell if that includes the basement) so at its original price the builder was looking for $632 per sq.ft. and now he’s asking $484. So the price has dropped, by my math, a little less than 25% – you math wizards should feel free to correct me.
Interesting, the builder paid $1.4 million for the land in March, 2006 and put it back on as land in November of that year for $1.75 million. I guess he decided to go forward with the house when he couldn’t find anyone willing to take the land off his hands. I wonder if he regrets that decision now or whether he still has enough built into the price to walk away with a profit? At $484 per sq.ft., I wouldn’t think there’s a huge margin remaining.
A reader has sent along this link to an article advocating a state Constitutional Convention wherein Connecticut could declare partial independence from the federal government and get them off our backs. I like the idea – I’m not so sure our national constitution permits it. Then again, I’m neither a constitutional scholar nor do I play one on TV. But many of the arguments the writer asserts for freeing us from the yoke of federal tyranny also apply to Fairfield County. How about seceding from the rest of Connecticut and letting Hartford find a new source of funding for its largess?
550 Round Hill Rd
A reader asked the status of 551 Round Hill Road. No such listing is in the MLS records but 550 is. Asking $22,500,000 with no takers, so far.
In California, “pain just beginning” for affluent neighborhoods. According to this article, people with more assets have been able to fend off foreclosure, until now. Anecdotal evidence (like an appraiser telling me that her firm’s workload here in town is now 50% pre-foreclosure appraisals, up from nearly zero in past years) suggests to me that we’re about to witness the same phenomenon here in Greenwich.
Oh, the humanity!
Illegal immigrants can’t get mortgages. While I suspect that a hard working illegal would be an excellent credit risk (unless he were caught and deported, of course), surely there ought to be a few sanctions against violating our immigration laws. When I lived in Crete after high school, I believe Greece gave out visas good for 3 months that could, with a trip to Heraklion, be renewed, one month at a time, for an additional three. Working was not permitted and although I broke that rule occasionally by picking vegetables for a local farmer, I never felt that I was being discriminated against on the basis of race, religion or creed – I wasn’t a Greek citizen so why should I resent their laws governing how I could visit their country?
I suppose that was the difference – I was visiting, even if I had no idea how long I intended to stay (like my latter-day Mexican counterparts, I hung out far longer than my visa allowed). Today’s invasion of the United States is comprised of people who want to stay, work, raise families and obtain mortgages. With the exception of a few random raids on meat-packing plants, only the latter isn’t allowed. But the howls of outrage continue to swell and, after the flood (that would be November’s election), will only grow louder.
Another interesting day coming up?
European stocks, oil, both fall down.
if it weren’t for the fact that low oil prices will retard the development of energy alternatives I’d be 100% delighted at the effect that, say, $45 per barrel would have on our pals in Venezuela and Russia. But we do need substitutes for oil and their development would be a boon if the politicians can be kept out of the process and the free market given free rein. It was politicians, after all, who struggled mightily to address this problem since the mid-1970s and came up with … ethanol.
What does this story say about mortgage bailouts?
Nothing, that I can see. But it’s in The New York Times so it must be important, right? One striking figure: the cost of bailing out everyone who doesn’t want to or can’t (both classes are being lumped together in federal plans) pay their mortgages: $4 trillion. Now that sum would make even a Democrat sit up and take notice, if only for a moment.
Update: NPR, of all media outlets, just aired an interview with someone from “Inside Mortgage” (I think that’s the name) who expressed the heretical view that not everyone should own a home. He pointed out that someone who loses his house to foreclosure and then moves across the street to a rental for half his previous mortgage payment is probably better off. And, he asked, if someone can’t keep up with his mortgage, is there any reason to believe he can keep his roof and furnace maintained? As I say, heresey.
Good heavens, now it’s racist to describe Obama’s economic policies:
“Socialist” code word for “black”. Right wing whackos predicted that any opposition to Obama’s policies would, were he elected, be denounced as racist. I thought they were being a bit hysterical, once. Now, I see that they were right all along, so I won’t be so niggardly in praising their prescience.