China’s 4th quarter growth drops to just 6.8%. I don’t have the exact figure off the top of my head but I recently read an interview with a Chinese official who said that to keep social unrest low and provide jobs and opportunity for the millions of young people entering the workplace each year, the country’s growth had to be above 10% (12%? much more than 6.8%, anyway). Just as you don’t have to have voted for Obama to wish him and our country well, you don’t have to like China’s form of government to hope that the place doesn’t disintegrate, which would cause huge suffering and couldn’t possibly be good for world stability.
Daily Archives: January 21, 2009
My blogger friend in Tucson, John Schneider, has an interesting post here, in which he compares Zillow estimates of value with the actual sales price. Zillow errs on the low side, usually. Does that apply to Greenwich? Who knows? I envy John because even if Tucson prices are much lower than Greenwich’s, he at least has some sales to work with. Oh! Waaaait a minute, …. much lower prices, more sales – could that mean ….. nah!
A class action bucket shop has issued a press release (treated as a real news article by the Stamford Advocate but that’s what you’re reduced to when you fire all your reporters) announcing an “investigation” into the affairs of Walter Noel and other feeder funds. Walt’s got plenty on his plate to worry about despite winning in court today, and this press release is really nothing but an attempt to dig up clients so that they really can sue him and start ruining his life, but these kind of parasites will eventually bleed him out. I can’t, but his friends may want to start feeling sorry for him.
Keller Rohrback L.L.P. (www.krclassaction.com) today announced that it is investigating the actions of MassMutual’s Tremont Group Holdings, Inc. (“Tremont”); Rye Investment Management; Oppenheimer Funds; Fairfield Greenwich Advisors (“Fairfield”); Access International Advisors; and Maxam Capital Management, on behalf of investors who lost millions in the long-running Ponzi scheme at Bernard Madoff Investment Securities (“Madoff”).
Keller Rohrback’s investigation concerns the legal rights of investors who suffered a loss by entrusting their money to various holding companies and investment funds, such as Tremont’s Rye Select Broad Market Fund (the “Rye Fund”), Fairfield’s Sentry Fund;
Dig that website address – Class with a capital K. And how about the “news” that “the investigation concerns the legal rights of investors who suffered a loss….” that means they’ve assigned a couple of first year associates to blow the dust off their securities law textbooks and start writing memoranda of law suitable for the intelligence and understanding of a doddering senior partner who will have, I promise you, a set of gleaming false white teeth and a very, very expensive suit. I don’t know why, they just do. Always.
This Texas hedge fund operator earned a whopping 67% annual return for his investors all while luxuriating in the swimming pool he installed in his office. It’s true that he now seems to have been a bit optimistic in calculating those returns and the money is missing, but so what? It’s no more gone than the Madoff money and Walt’s friends could have enjoyed a feeling of real wealth until now, instead of making do on Madoff’s piddling 8% (less, of course, Walt’s 2%-20% deductions). And wouldn’t those due diligence exams, conducted in the guy’s swimming pool, have been a blast?
The Post says that Carline Kennedy has withdrawn her name from the NY Senate appointment because she wasn’t going to get picked anyway. I’ll be glad if she’s picked up her toys and returned to her penthouse but The Post is the same paper that reported just a day r two ago that her seat was a done deal, so I’ll hold off celebrating, for now.
Is it too mean to wonder if Governor Patterson decided he could afford to dump her because her uncle doesn’t look like he’s going to be the Senior Senator from Massachusetts much longer?
Portugal’s debt downgraded, joining Spain and Greece. Next, Italy? Eastern Europe? The entire EU? Hang onto your food stamps.
Fareri (sp?) , the developer who owns the old theatre on Greenwich Avenue, was back before P&Z last night trying to eliminate a previous decision of the board that he must use the third floor of the building for residential apartments, period (apparently that’s what our zoning code demands for Greenwich Avenue, no exceptions). He said (his lawyer John Tesei said) that Apple wouldn’t move in if they had to share the space with unwashed tenants and no Apple, say goodbye to retail on the Avenue (or maybe lower Greenwich Avenue – I wasn’t there). Every store owner on the Avenue agreed with this prediction of doom and signed letters saying so but no go, so goodbye, Apple. I’d see them at the mall, if I went to the mall. Of course, I’d miss them on the Avenue if I shopped on the Avenue and I don’t, so….
On a brighter note for fruit cakes, the water company’s plans for an improved, expanded filtration system at its plant on Dairy Road was deep sixed due to neighbors objections that they had bought their beautiful, rustic homes in this bucolic neighborhood completely unaware of the existence of any kind of filter plant and were now horrified that their cows would stop giving milk and their chickens would go off their feed if the plant were allowed to be updated. That was good enough for the P&Z and if it’s not good enough for you, well go buy some Fiji water, while you still can.
The P&Z punted on Olga’s Russian tea house proposed for Simmons Lane this morning at 2:00 AM, deferring until another day the burning issue of how many toilets are enough. It was rumored, falsely no doubt, that Steven Cohen was determined not to lose the title of Toilet King with his own 199 scattered around his 32,000 square feet but neither he nor his legal mouthpiece appeared. Perhaps because he’s already lost the “who’s got the biggest freakin’ chunk of rock, timber and fescue in this town” battle anyway, or he will if Olga prevails. Turns out, Olga’s place will, as designed, contain 733,000 cubic feet of space. Of the five largest existing houses in town, the largest only has 480,000. You’re probably wondering how anyone can make do with such cramped quarters but Greenwich has always attracted modest people with understated taste so apparently, until the Russians showed up, our billionaires just made do. That era is almost over, sadly.
Earlier today I posted an item stating that Sotheby’s refused to permit its listings to be posted on other firms’ websites which I opined might be a competitive advantage to them but did a disservice to those of their clients who wanted to sell their house – in the history of the world, no buyer has ever cared two cents who lists a house, they just want information about it. If your house isn’t out there to be discovered, it’s going to be harder to sell. Welcome to the age of the Internet.
Well that little post produced a call from Sotheby’s manager to my manager (I’m delighted you read my blog, Pat, but feel free to call me direct – no one’s called my mommy about my bad behavior since I was six). According to her, Sotheby’s does release its listings, and has done so since September, so there! So there indeed – we checked, and the only “competitor” of Sotheby’s that gets that information is Coldwell Banker and, presumably, Century 21, both of which, like Sotheby’s are part of the big unhappy family owned and operated by Realogy / Apollo Management. So if you’re content to have Century 21 flogging your house in where are they – Norwalk? – then you’ll be fine, until Apollo defaults on all those junk bonds it has coming due. I still think you’re not getting the service you might otherwise expect and what you’re paying for.
A judge refused today to freeze Noel assets, buying their argument that they’re Madoff victims too. Wow. In the good old days, we lawyers in Connecticut could initiate a suit by freezing a defendant’s assets. Such fun, and so effective in coercing an early settlement but sadly, a tad unconstitutional (lawyers from out of state were astonished by the process) and eventually, our Supreme Court knocked it out. Took all the fun out of suing, darn it.
So what will Noel’s creditors do next? I don’t know, but David Boise Boies will probably figure out something.
First, stop by the Orvis warehouse sale on your way back from Westport (runs through January 25th). Pretend that you’re there to look for another pair of those $98 bluejeans (??!!) selling for $19, but drift over to the folding table where they have Vortex 8-12 wt. reels for sale, 1/2 price from original retail of $395. Hold the reel in your hand, feel its lightweight-strength and appreciate its glossy finish, its smooth action, dream a bit, and calculate that 1/2 off would pay for a guide’s services down in the keys. Well, perhaps not a full day, but if the lovely Miss Hooper were to accompany you, with or without bikini, and share the expense …
Then remember that you’re not planning a trip to the keys this year and that Miss Hooper has shown no sign of interest in inviting you down south. Andy Madoff is busy, Walter’s rented out the Villa Mustique to strangers and who the hell knows if there are fish off Mustique anyway? (There’s no need to remember that you already own a 10 wt. reel – what does that matter?) Place the reel back on the table, turn left and walk out the door. You’ve done it! Go treat yourself to a Starbucks – you’ve earned it, you frugal shopper you. The economy weeps.
Peter Malkin’s house at 21 Bobolink Road, last listed for $6.9 million, has gone to contract. No word on price at this stage but I doubt the listing broker, David Ogilvy, enjoyed a bidding war – he’s had it up for sale since May, 2007 with an original asking price $2 million higher, but a sale’s a sale, so good for all involved.
Between locating assets and fighting intra-investor lawsuits, Madoff’s court-appointed trustee estimates it will be at least five years before Bernie’s remaining assets are distributed to his victims. I doubrt the process will be any quicker for recovering money from all the other potential targets, but if I’d lost money with, say, Fairfield Greenwich Group, I’d start suing Walter and his family now, before they fritter away the funds. And don’t forget to try to attach that jet the Madoff boys are using. Those things depreciate, you know.
Our garbage is now worthless, making recycling a money-losing proposition. Cardboard that sold for $250 a ton just a year ago now sells for $50, according to an NPR article this morning, “if it can be sold at all”. The stuff’s piling up in warehouses, unwanted, all across our fair land, so this State Legislator’s observations struck me as ignorant and misguided – in other words, typical.
(From the Greenwich Post, which doesn’t provide links to its articles – smart, eh?)
State Rep. Alfred Camillo Jr. toured the Connecticut Resources Recovery Authority (CRRA)’s Single Stream Facility in Hartford last week, calling the technology “the way of the future.”
Single-stream recycling is the process in which paper and cardboard may be mixed with bottles and cans in a single recycling bin. Since single-stream recycling permits collection using 64-gallon wheeled barrels rather than the 14-gallon bins currently in use, people may now recycle more material.
Previously, all recyclables delivered to CRRA had to be separated, with newspaper, junk mail, cardboard and other paper products brought to one portion of the facility, and bottles, cans, jars and other containers brought to another portion.
CRRA sells recyclables to companies on the open market and those companies then turn them into new product. The Hartford facility is taking single-stream deliveries from 59 cities and towns, with qualifying municipalities receiving rebates.
“It makes it much easier for citizens to participate, incorporates more materials and has proven to be a huge success in the places it has been implemented around the nation,” Mr. Camillo said of single stream recycling. “If protecting the environment as well as becoming more financially efficient are the goals we are striving for, this concept is a winner.”
“While we are in dire economic times, the $6 million needed to retrofit the Bridgeport facility is an expenditure that will pay big dividends down the road,” he added. “We need to find that money at some point to allow us to go to the next level in recycling.” [emphasis added]
How far down the road does Camillo suggest we look? And why is it that, despite every new expenditure that we’re promised will save money “down the road” like health preventive mandates and the like, health care costs keep soaring? Where are the savings we’ve been promised all these decades?
UPDATE: See the comments for Mr. Camillo’s response.
In an otherwise-sympathetic posting, a commentator suggests that this blog isn’t helping the market because I report actual information, rather than permitting buyers to dream. The reader is out of touch with the realities of today’s marketplace.
There was a time when realtors held the key to all information concerning listings and selling prices and I’m sure they loved that monopoly because if a buyer wanted to know about a house, he was forced to come to an agent. By the time I entered this business 6-7 years ago, the Internet was shoving that business aside and that transformation is now complete (in a plug for my current employer, the main reason I switched to his firm is that he saw this, and began building up a fantastic website years ago – it improves all the time). Today, buyers prowl the internet when they begin their search and by the time they contact an agent they already know what’s for sale (except for Sotheby’s listings – Soetheby’s for competitive reasons, refuses to release its listings to the Internet – if I were a Sotheby’s customer who wanted my house exposed to as broad a pool of potential buyers as possible, I’d fire them, but that’s just me). They know what’s for sale, what’s sold, what the average price per square foot is in any particular neighborhood (and in no neighborhood does it even approach $1,000 – sorry, Monkey) etc. So what can an agent offer today to justify his pay? More information. At the very least, he or she should know at least as much as his customer – many don’t – and ideally, much more, by virtue of staying ontop of the market hourly or daily.
It’s obvious, judging from some comments, that some of what I reveal here is news to sellers – I assure you, buyers aren’t surprised. Here’s the Monkey again, answering his own question, funny enough, in another post explaining his view of the world:
I had my property on the market for 180 days and buyers repeatedly low balled my asking price by $3mm-$5mm! Do I look stupid?!?!?
Imagine, in this market, having a house that actually attracts multiple bids over time your house must be remarkable indeed. But if every single buyer tells you that your house is worth $3-$5 million less than you think it is, you have a choice: you can accept what the market is saying and adjust your price accordingly or you can stubbornly inisist that the market is wrong and that you’re right. Guess which path will result in a sale?
I’ve been advising readers for months that this is not the time to sell their house if they don’t have to or don’t want to. Certainly, the price of anything you might want to buy as a replacement will also be down, but if you’re trading down, rather than up, you’re going to feel pain. What I will never advise is that you list your house at a dreamed-for number and then complain when buyers don’t share your dream. As Monkey admits, that’s just stupid.
So I plead not guilty to causing any part of the drop in prices. The Buyers decide, I report. Period. If your own agent isn’t giving you the same information, perhaps you should ask her to.
46 Quail Road was bought for $4.875 million in March, 2005. The new owner spruced it up a bit and put it back up for sale in April ’08 for $5.2 million. Today he reduced it to $4.3 million. He’s a God damn cancer on the market! Doesn’t he know that if he’d just wait a bit he could receive the Monkey’s specified $1,000 a foot, or $6,818,000? Is he stupid, or something?
I seem to have annoyed at least one anonymous reader who has been posting mean things about me down below (“For Sale by Owner?”). According to this gentleman, if Greenwich homeowners will only stick to their guns and refuse to sell their houses for less than they were worth in 2007 or “a minimum of $1,000 per square foot” (by which, since almost no houses in town have ever sold for that much, I assume he means 2017 prices), buyers who want to live in our fair city will eventually capitulate and pay whatever price we dream up. Great idea, and an excellent illustration of the idiocy that is causing so many of the houses currently for sale to sit untouched.
I’m reminded of a friend of mine in law school who in 1978 used the $5,000 student loan we all were living in to buy gold, instead of food. The son of a gun bought at some ridiculously low price and managed to sell at $800 an oz, making him a small fortune and leaving the rest of us jealous as hell. I think I said something like, “we can only hope that they’ll discover that owning gold causes cancer” but, unlike my unhappy reader, I was just kidding.
But suppose our reader owned gold, instead of a house in Greenwich? If he bought it in 1978 at $800 and had been waiting for it to return to that price, he’d still be sitting on it today – adjusted for inflation, that gold would have to sell for $2, 516 per oz and, damn it, it’s still at $246 (inflation adjusted). But gold is beautiful, shiny and non-tarnishing. Everyone should want it, and our reader just isn’t going to sell his pile until buyers recognize its true worth and pay him exactly that amount. He must be bewildered by the people rushing past his gold – selling booth, going about their lives and ignoring him. The fools! The idiots! He’ll show them!
Enjoy yourself out there on the sidewalk, fella. And enjoy your gold.
UPDATE: This man’s thinking is too valuable to bury in the comments section. You won’t find a better example than this of what happens when a home’s value declines and that decline, in turn, affects someone’s sanity. So here, for your pleasure, is Joe Homeowner, sharing his insight and economic knowledge for the benefit of all:
Sellers will not capitulate the way that buyers would like. Why?
1. This is Greenwich which continues to be the premier town in the tri-state area.
2. Greenwich residents are wealthy and are not pressed to sell in a falling market. More than any other town we can ride this market out for 5 years.
3. Greenwich homeowners must hold the line! No one should list their homes below 2007 prices. We must condition the market. In time buyers will fold and come to understand that if they ever want to live in our great community they will need to pay up.
4. Brokers better wake up and side with sellers and builders. You work for us! We control the inventory and this your fate! Nothing in Greenwich should ever be priced below $1,000/sft.
5. Chris if you ever want to work in this town again I would advise you to terminate this site! Your shameless attempt to be “buyers broker” will fail as it is short sighted. Do you think that the market will not turn? It will and you will be left out in the cold. No seller will work with you – ever!!! You are cancer!!!
76 Long Meadow Road, a nice house with perhaps an awkward location up a steep driveway, expired today, unsold at $1.250 million. Its owners paid $1 million for it in July, 2005, made some improvements and have tried to sell since May, 2007, beginning at $1.595 and slowly dropping its price as the market turned down. It would have sold, I think, in a heartbeat at its last price had it been listed there originally but now, I see a loss coming if it’s returned to the market soon.