Daily Archives: December 18, 2008

Well we did offer him shares in the Fairfield Greenwich Group

So Walter Noel and his wife employ a Brazilian gardener for a few years until he injures his back, is operated on for a herniated disc and applies for workman’s compensation. They contest the claim (and appeal the first ruling against them) on the ground that the poor sucker was an illegal alien – who knew? They had to pay anyway.

Reached at her home for comment, Monica Noel was contrite, if still combative:

“Okay, we paid him, alright? We had to cut one of the nanny’s pay to do it, but we gave him the money – sheesh!

“But you know,” she continued, “he was lifting friggin’ boxes – he should have been careful. He shoulda used – what’s that word, Honey?”

“Due diligence?” Walt suggested.

“That’s it! If the dummy had exercised a little due diligence, nobody woulda’ gotten hurt.”



Update: Friday’s WSJ doesn’t think as much of Walt as Monica does.


Filed under Uncategorized

Here’s a poser

5-meadow-wood-drive5 Meadow Wood Drive is a relatively new renovation on a back lot in Belle Haven. Unfortunately for its developer, that back lot backs all the way up to I-95 and the backyard is pretty much a green, pressure-treated wall of sound barrier. That no doubt contributed to its failure to reach its asking price of $7.950 million when it came up for sale in September 2006 and in the months since.

It’s been withdrawn as a sale and is now offered for rent, originally $25,000 per month ($300,000 per year, if your calculator isn’t handy) and, as of today, $15,000 ($180,000). That still seems stiff to me.

So here’s the question, or two questions: is it not offered for sale any longer because more is owed on the place than can reasonably be expected to be produced by a sale?; and how large is that building loan, and what does it cost to service it every month? I don’t know the answers but this house does seem to be one of the ill-advised projects begun in the go-go years and now coming back to haunt the participants.


Filed under Belle Haven, spec houses

No, because I had my snow tires mounted today

Bloomberg: 8″ snowstorm predicted to hit NYC tomorrow.

Notes of appreciation may be posted below.

Comments Off on No, because I had my snow tires mounted today

Filed under Uncategorized

Bad news for Realogy

Delaware’s Chancery Court has ruled in favor of Carl Ichan and sustained his objection to Realogy’s attempt to restructure its debt by stiffing its bond holders. This will make things awkward for the company.

1 Comment

Filed under Right wing nut rantings

Drive a bargain home?

It’s starting to look like a good time for it, maybe. There’s a lis pendens filed against 14 South Baldwin for something like $6 million, for instance, and I assume that foreclosure is on the way. This house will never sell for its hoped for $9 and I’m pretty sure the builder would be glad to accept an offer that would allow it to walk away. The complication here is that maybe the house isn’t worth $6 million. The front yard’s a swamp, the back yard’s tiny and the house, while nice enough, isn’t finished. Empty elevator shafts are just awful things to discover late at night, just to cite one example. How do you get the builder and, more important, the lender, to take a haircut? I’m not sure, but it’s probably worth the effort to try, at the right price.

The builder of 11 Lindsay Drive is, so far as I know, under no such financial pressure and certainly he hasn’t dropped his price much since April 2007 when he first offered it for sale at $13,750,000. It’s down to $12.9 million, not a price that will excite many buyers but probably not an unfair one – this is a huge, expensive project. What do you do with the knowledge, though, that the same builder has another project for sale on Ridge Street for $7.450 million? The builder and his agent will disagree vehemently but I don’t see how a view of the Honda dealership’s parking lot, no matter how luxurious the house hosting that view is, will support a price of $7 1/2 million. Do you, can you, use that opinion against the price of the house on Lindsay? I’d certainly try, especially because there is no lender threatening foreclosure. That relieves some of the pressure to sell but it also should make negotiations simpler. Even in this market,  though, you may just tick the seller off and poison the well; then again, it might work. And if it doesn’t, there are going to be a lot of other projects to try your method on.


Filed under Buying/Selling Greenwich Real Estate, current market conditions, Foreclosure

More trouble for Fairfield Greenwich

(I promise to give this a rest; it’s just that the whole scandal, involving Greenwich personalities, came at such an opportune time, with the Greenwich real estate market essentially dormant – not a single contract or sale today, and no new listings or price changes of interest. Bah!)

Guess which funds are notMaddux victims? Those that conducted proper due diligence. When reached for comment, Walt said, “oops! Guess it’s back to Harvard for me!”

Comments Off on More trouble for Fairfield Greenwich

Filed under Uncategorized

CNN : Investors don’t care about Madoff

This article cheerfully states that investors have shrugged off any concerns they might have about what the Madoff scandal reveals about Wall Street. The author’s probably right, or at least he may be right, but really, how stupid is the average investor? It’s not that Bernie Madoff ripped off his friends and acquaintances which, the investors quoted in the article point out, was a circle that didn’t include them, but rather what the scam reveals about the integrity and competency of the people supposedly guiding the public’s investments. Yes, it’s certainly important to try to verify what a stock broker or, as Wall Street would have it, your “investment advisor” tells you, but I am reminded of what one of my clients once told an arbitration panel.

My client was a 90 -year-old widow whose broker had lost $1 million, all of her wealth, trading options, commodities and junk stocks. One of the arbitrators pointed out to my client that her own accountant had warned her against continuing to do business with Kidder Peabody and its agent, a fellow named Ted Saunders, yet she persisted. Why”

“Well,” she said in a quavering voice, “my husband’s gone, I don’t really know too much about all this, although I do try, so at some point I just had to trust someone – I trusted Ted.” 

Kidder Peabody’s lawyers hated that answer but the arbitrators loved it (no, I didn’t coach her, she simply told the truth) and awarded her her losses. 

What Ted Saunders did to the trust of every widow he took advantage of, Madoff and Noel should have done to the trust of all investors. That they seem not to have even dinged that trust speaks to the naivety of the general public and makes me think that we’ll see more Madoff cases in the years to come. That’ll keep my former colleagues happy and prosperous, at any rate.


Filed under Right wing nut rantings

Bernie might have tried this

Wrong Way Corrigan

Wrong Way Corrigan

Pilot declares himself “not qualified” to land in fog, returns to England.

Now that didn’t hurt, did it?

Comments Off on Bernie might have tried this

Filed under Right wing nut rantings

What Drives a Ponzi?

I like this article in The New York Times that examines Ponzi schemers and their motivations.

In a Ponzi scheme, like the one Bernard Madoff is reported to have orchestrated, new investors are brought in to pay back the old investors. There’s never any actual investment; the debt just rolls over.

This means that the scheme requires an endless supply of new investors. The schemer’s debt gets exponentially bigger as time goes on, and there’s no way to end the ploy. Unlike other crimes — murder, rape, jaywalking — this one requires a lifetime commitment, not just an afterlifetime commitment. You can’t just say you’re done, bury the evidence and move on. Ponzi schemes are self-perpetuating, and by their very nature, there is no such thing as “done.” Unless, of course, you go to jail. Or die.

[B]ig Ponzi schemes are almost always based on exploiting the trust of a tightly knit social network. The victims are usually members of ethnic communities, elite country clubs, churches or other social hubs where people are unlikely to do their due diligence because they trust their friend, family member, clubmate or neighbor, and have seen others in the same social circle get rich through the proposed “investment opportunity.” In Mr. Madoff’s case, for example, the victims appear to be primarily rich Jewish investors, whom he met through elite groups like the Palm Beach Country Club. The Foundation for New Era Philanthropy, a notorious Philadelphia-area Ponzi scheme, preyed on Christian religious organizations and charities.

2) Turn (or return) the business into something legitimate. Unlike the schemers in #1, these Ponzi architects likely started out with some hope for legitimacy. They wanted seed money to kick off some brilliant investment idea. But then the “brilliant” idea falls through. They are then in the position of having to pay off initial investors. Rather than declare failure, they recruit new investors to pay off the old ones.

They may be stuck in a rut, but they have confidence (or perhaps, self-delusion) that they’re so clever that they’ll come up with another, better idea and strike it rich that way.

This was more or less Charles Ponzi’s strategy.

“He truly thought he could eventually turn around and go legitimate,” Mr. Zuckoff said.

As in Ponzi’s case, this exit strategy pretty much always fails because the schemers are looking for the big scalp — and there’s never an investment profitable enough to fill that deepening pocket of debt.

There is more overlap than the simple categories I’ve laid out here would imply; Mr. Ponzi, for example, had other run-ins with the law involving financial dishonesty, so it’s not as if he was exactly hell-bent on legitimacy.

It’s also hard to say, based on the limited information available, where within this array of strategies Mr. Madoff fell. He probably was banking on exit strategy #2, the turn (or return) to legitimacy.

Most Ponzi schemes last a year at most, experts say. (Charles Ponzi’s lasted just nine months.) This indicates that Mr. Madoff, who had been investing clients’ funds since at least 1960, probably started out legitimate or semi-legitimate.

“I don’t know the ins and outs of what happened here,” said Stephen P. Zeldes, a professor of finance and economics at Columbia Business School. “He may have initially had a few bad years, or a few bad quarters, and not wanted to tell that to investors,” Mr. Zeldes said. “Maybe he then pretended that returns were better than they were, thinking he could make it up some future years. Maybe he was thinking he could gamble a bit, get a good return, and no one would ever know.”

In other words, Ponzi schemers don’t necessarily start out as such, and as sophisticated as they are, they may not consciously accept the fact that they’re engaging in a Ponzi scheme. They fool themselves into thinking that the Ponzi scheme is merely a stop-gap measure to hide their losses until they (theoretically) come up with something brilliant.

“I don’t think he originally started thinking he was going to scam his investors,” says Utpal Bhattacharya, a finance professor at the Kelley School of Business at Indiana University who studies financial crime. “His original motive was probably to hide his losses.”

I agree with the professor – Madoff just couldn’t bear to give up those front-of-the-restaurant tables reserved especially for him, the hushed whispers when he strolled into the golf club locker room, the genuinely successful people begging him to take their money and rip them off. So he never confessed until everything came down around his ears. And the ears of everyone he must once have loved, perhaps. 

Comments Off on What Drives a Ponzi?

Filed under Uncategorized

Oh, Walt, let’s not be silly

Fairfield Greenwich wants to sue its own auditor – not Bernie Madoff’s auditor, their own – for failing to discover that they were doing business with a Ponzi artist.

The thought of losing that Mustique villa and the house on Round Hill has obviously sent the poor man around the bend.


Filed under Right wing nut rantings

The news isn’t all bad

Eliot Spitzer lost money with Madoff! That will keep me laughing well into the new year.

Comments Off on The news isn’t all bad

Filed under Right wing nut rantings

Maybe he should just wait for Marc Fisher’s place to become available

Russian mobster’s businessman’s plan for 21,000 sf mansion turned down, for now.

"Don't force us to put Nanny in the car, please!"

"Don't force us to put Nanny in the car, please!"

  On a brighter note, Stevie Cohen’s request to add an extra 500 sf to his own 32,000 sf palace was granted, no doubt because of the sympathy engendered by the tearful plea of Mrs. Cohen herself. Nice to see that our P&Z has a heart.

Comments Off on Maybe he should just wait for Marc Fisher’s place to become available

Filed under Uncategorized

Oh, the humanity!

The spa business in Greenwich is suffering

Kathleen Fuld does veggies

Kathleen Fuld does veggies

Forget Dafur, we need a relief fund right here, right now! I did enjoy this bit of optimism from a salon keeper who is probably also a Greenwich home seller:

One other thing encourages Musayev.

“I do see a difference (in business), but I feel it will not last for long, especially with the new president. I have a good feeling.”

I hadn’t realized that Obama does facials but heck, why not? Is there anything he can’t, and won’t do?

Comments Off on Oh, the humanity!

Filed under current market conditions

Waiting for the Greenwich shoes to drop

Try on this shoe, you bastard!
Try on this shoe, you bastard!

I’m out of the loop of the rarified social circle that Bernie Madoff and his henchmen like Walt Noel worked so I don’t yet know who in Greenwich has been hit hard. But it’s interesting to speculate. Jerome Fisher, founder of Nine West, lost $150 million. I don’t believe he lives in town but I’m pretty sure that his son Marc does, and in a 15,606 sf mansion that the town figures is worth $14, 408,000. Nine acres in the two-acre zone will do that for you. Did the son, who has his own company, Marc Fisher Footwear, follow his father’s advice and invest with Bernie? We’ll find out.

And what about Judge Judy? She’s bound to be part of that circle, I would think, and judging from the size of the house she just had built on Round Hill Road, has the type of money to attract Madoff. Did she invest? Can you imagine the defendants’ in her courtroom? That would draw some ratings.
Walter Noel is reported to have attended the Round Hill Club’s Christmas party last Saturday but that brave act apparently won him no fans. especially if, as The NY Post reports, he was helping his pal round up still more money to steal and threatening his friends that they’d be cut off from future Madoff deals if they even dreamed of withdrawing their cash in this time of crisis. He’s lucky he came home without the punch bowl on his head.
So it all gets curiouser and curiouser and deeper and deeper. There should be some interesting developments around town as all this shakes out. We’ll be watching.


Filed under Right wing nut rantings

Dreaming of a bleak Christmas

12 Grigg Street is a 1900 single family house just off Greenwich Avenue on a 1/10 of an acre. It sold for $260,000 in 1994 and, although the owner made no improvements during the next 13 years, she listed it for $3 million in December, 2007 as a potential commercial opportunity (zoning allows it). I thought that was a steep price to pay for something off the Avenue with no parking and said so at the time. No doubt that was the reason it didn’t sell (ha!) as its price dropped down through the 2’s finally coming to rest at $2.349. It expired yesterday, unsold. If the seller tries again, I’d suggest she use a commercial broker and get a better grasp of its value.

1 Comment

Filed under pricing, Real estate agents