Daily Archives: January 28, 2009

A summary of Madoff/Noel, up to now

Here’s an excellent, pretty detailed overview of Madoff, Noel and the various characters in this Ponzi as of January 29th. From England, of all places.


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Those Fabulous Noel Sons in law

Know anything about them? How they met the girls? Did they have to agree to work for Walt in order to bed a Noel girl or was it the other way around? Toub’s father is a Lebanese shipper? Swiss shipper of Lebanese extraction? If Switzerland can field an America’s Cup challenger does that mean one can become a shipper in that land-locked country, too? These and more questions are coming, sort of from an inquisitive reporter and I, of course, am delighted to get dirt on my favorite Greenwich story. Any and all contributions welcome. Thanks!


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Why don’t we just give the librarians a good dose of clap?

Thanks to reader Paco for pointing out this last bit of absurdity in the article on the Washington Post’s decision to eliminate its book review section.

Douglas Brinkley, the historian, suggested that the book industry and book reviews deserved some kind of public bailout. “I think that just like public television— I think book review sections almost need to get subsidized to keep the intellectual life in America alive,” Mr. Brinkley said. “So if we can do that for radio and we could do it for television, why can’t we do it for the book industry, which is terribly suffering right now?”

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If this doesn’t stir up some stimulus, nothing will

The emergency economic stimulus bill our new president insists absolutely positively must be passed immediately if our country is to avoid catastrophe includes $355 million for the prevention of sexually transmitted diseases. The trouble with me, I guess, is I just don’t comprehend nuances. Or something.


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CitiGroup Private Banking Customer Care

Want your money back? Forget it, chump.  Actually, the poor schnook who received the letter I link to is lucky, in that maybe, someday, if the hedge funds CitiCorp invested with on his behalf ever change their minds, he might get some of his money back. I’m friends with a former banker who said his absolute worst job as a young banker was to write “Dear Customer, please be advised that your trust no longer meets this bank’s minimum financial standards and you’ll have to take your business elsewhere” letters. He would be  assigned this duty after his betters in the Trust Department had mismanaged and frittered away huge sums, all while collecting generous management fees for their oversight. My friend says he didn’t mind writing the letters so much as dreading the unhinged phone calls he’d get upon their receipt.

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The poor dears will just have to come home to their shanty in Milbrook

Marissa Noel Brown and hubby facing financial woes (what, really? How come?) and will have to sell their $9 million NYC Co-Op.  I’ll bet Attorney Boies is ticked that judge wouldn’t let him freeze Noel assets, eh?

UPDATE: More details from NY Observer here. Warning – read only if you have a heart of stone and are indifferent to human suffering.


Chateau Milbrook-Noel, as decorated by Missy McCloy

Chateau Milbrook-Noel, as decorated by Missy McCloy


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Books? We don’ need no stinkin’ books!

Washington Post to dump book review section.

UPDATE: An chew don’ need no stinkin’ mail!


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Good thing there are no UBS stores around here

UBS cuts bonuses 80%. Gosh, if they were in the financial field and we had any UBS employees working near Greenwich, that would hurt. Sort like if Rigid Balloon Ships were building a headquarters in Stamford. Then we’d be sunk!


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Don’t ask, don’t tell

From Volokh via Instapundit:


 These days, we are repeatedly told that we have to pass a massive new infrastructure spending bill in order to fix our “crumbling” roads and bridges. Everyone seems to have forgotten that just three years ago, in August 2005, Congress enacted the biggest federal public works program in American history, spending a massive $286.4 billion on the 2005 highway bill. At that time, President Bush and congressional leaders from both parties told us that the new highway bill was needed to fix our infrastructure problems.

Before passing a new and potentially even bigger infrastructure spending bill, I would just like to know what happened to all that money Congress appropriated for the same purpose back in 2005? If that act succeeded in its purpose, it’s not clear why we need another huge federal infrastructure bill now, less than four years later. If it failed, we need to know why. . . .

I’m not categorically opposed to all federal highway spending. But before we enact a massive new infrastructure bill, we need a clear explanation of why the 2005 highway bill wasn’t enough, and why if it wasn’t we should expect better results this time around. So far, these questions have hardly been asked, much less answered.


It “failed” because it didn’t generate enough graft to satisfy everyone. Future bills, however large, will suffer the same fate because some people are never satisfied . . . .

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Oddest business news of the day (so far)

disgustedStarbucks to quit brewing decaf after noon. I’d rather not drink decaf at any time, but it astonishes me that more people drink it in the morning than the afternoon. I’m sure Starbucks has the sales figures to prove it but common sense, or my variation of it, suggests that you’d want the real stuff in the morning and then, if you were sensitive to caffeine, the pseudo-broth later in the day. Not so, apparently. If they stopped selling coffee of any kind would they save even more money?

UPDATE: How cool is this? I suggest, Starbucks acts!

Starbucks to close 300 stores, fire 7,000 workers.


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Bid in haste, repent at leisure

344 Sound Beach Avenue

344 Sound Beach Avenue

This small (1568 sf), 3-bedroom house in Old Greenwich must have seemed irresistible to several people in April because it was bid up from $1,349,000 and sold in four days for $1,510,000. It closed in July and now it’s back again, marked up an additional $140,000 to $1,650,000. I don’t think the market’s been trending that way, but we’ll see.


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Please, Sir, may we have some gruel?

Reader Stanwich has a complaint:

[C] an’t we discuss lower-end homes without being complete snobs!? The stuff that you turn your nose up at is usually pretty liveable housing stock, maybe not the prettiest.

I can count on my right hand the number of times you have mentioned homes lower than $1m (ONE MILLION DOLLARS) that you haven’t comepltely pooed all over. I understand that you would love to show & sell $5m + homes all day but not everyone can be Herb Ehrlich.

In the spirit of the new economic times I suggest you try to cover some more “down market” homes in your posts.

I plead not guilty to this one – I sold the cheapest house in Greenwich in 2004 or 2005, reported it in my then-column and said, truthfully, that someone had to sell the cheapest home so I was glad I was the one to do it. But okay, Stanwich, let’s go look at some cheap sales and find something interesting to say about them. Maybe not as interesting as an $8.9 million house sitting for two years and finally being whacked down to $5 million because the listing agent so grossly inflated its price, but … interesting – asbestos siding, perhaps. Hang on – I’ll be right back.

UPDATE: Okay, Stan, here we go:

286 Hamilton Ave

286 Hamilton Ave

I blogged about this last year (go search, Stan) but here it is again. $299,000, sold by the Herb Ehrlich of female brokers, Jean Ruggiero. A lovely untouched example of 1921 architecture on a full, paved 0.13 acre, this aluminum-sided beauty is close to (okay, right next to) the train, I-95 and the Arnold Bakery Thrift-Shoppe, where you can save for your mortgage by dining on stale bread crumbs and crisp hot dog rolls. If you were waiting for the bargain of a lifetime, you lost!

20 Nicholas Avenue
20 Nicholas Avenue

Another home convenient to transportation, this 814 sf palace was just renovated in 1970 and offered for sale at $580,000. Buyers hesitated, for some reason, even though it offered mansion-like lawns on 0.10 acre and its vinyl siding, though splintered and missing in parts, was mostly intact. Some lucky homeowner eventually snapped it up for just $450,000, sold his house on Stanwich and is now living happily ever after here in the heart of Byram.

Hope these meet your reading needs, Stan.This has been a fun exercise and I thank you for your suggestion. We’ll do it again, soon.


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Well it’s always gloomy in Scotland

Here’s a take on real estate from the fens, circa 2006. Sour old bastard probably found a bit of gravel in his oatmeal that morning or perhaps a chill wind swept up his kilt. You know what’s funny? He was absolutely spot on in his prediction of impending disaster but, if you read his postscript, he bought a house anyway. That should put him off his haggis, eh?

Buy a house? You’ve got to be joking.

post-post script… just went and bought one against my own best advice -) I still predict it will decline in value over the next 10 years.

I just went looking at houses in Edinburgh today. Two-bedroom flats, mostly in very poor repair – certainly none done up to a modern standard. Mostly second-story walkup tenements, none with parking, let alone a garage, no yard, and about 80m2 in floor plan. Close to the city centre, but in a city of barely 500,000 people.

They ran between £167-320 thousand depending on the street. Median income in the UK is £20,000. hmm.

Of eight I looked at, I liked one: it was £320, and would need about £50k more invested, as it currently had no kitchen and the interior was broken down to the point of needing re-lining. (Rockwall for US readers, Gib for Aussies and NZ).

So… are the prices for property assets crazy? I think so.

As Warren Buffett famously stated:

“In the short term the market is a popularity contest; in the long term it is a weighing machine.”

Property is popular: that much is a fact. But what would the weighing machine read right now? No-one can know.

I cannot see a more reasonable answer than, ceteris paribus (“all things being equal”), about half the current price.

Are all things equal? Well, it is not impossible that we have crossed a threshold of population/lifestyle/earnings/available-land (take your pick or combination of factors) which means that buying a small and basically unpleasant property will now consume most of an employed professional’s life-time earnings. If we lived in the times of the “fifth element”, then prices are cheap.

But, we don’t live then. We live just a decade after a time when property prices had appreciated to the point where a “new settler” (new home buyer) could not buy a 1000-acre farm, but could afford a 2-bedroom house with a yard. Currently, a well-off professional might well not be able to afford that same dwelling.

You see this all the time. A rather plain-faced person, semi- or unskilled, dressed cheaply, taking a young couple around a house. The young couple are dressed well, arrived in a nice car, and are both skilled professionals, well advanced in their careers. But the person showing the house is the owner. Tax-free, their dwelling has reliably “earned” tax-free double or triple their income every year for the last decade. Work is foolish: luck of occupation, everything.

So, either a life-time of earnings is not too much to spend for strata title to 100m2 of land in a comfortable democracy in the 21st Century. Or, on the other hand, there is a massive bubble which will burst in the next few years.

People with houses can play a shell game in which they swap houses for nominal values close to infinity. But new entrants can’t play that game. Prices cannot go up beyond the income of the people purchasing them.

Asset inflation has been permitted by dramatic increases in personal debt. If the property market needs new entrants, then current prices must move back (plummet) when the current debt bubble is unable to expand further.

How close are we too that point? Well, we are now at the point where there are basically zero new home buyers at this point: only kids whose parents pony up the down payment can get in. In addition, many mortgages are interest only, 30 years.

Based on those two facts, I would say we are in a property over-hang not unlike the “diamond overhang”. What’s that?

Well, most beauty diamonds never trade more than once: as they are dug up they enter a direct to retail market where they are sold to couples and become heirlooms. If they ever re-entered the market, their price would plunge. You could not sell the stock of the market at current prices. Property is the same. There is a massive constraint on properties entering the market: almost no-one sells a property, because they’d just need to buy again: so the market consists mostly of swaps and heirloom transfers: the new-entrant market is a fraction of the total market.

People have decided that a house is like a diamond. So, there is no room for more growth? Will it crash, or stay level?

Unlike diamonds, houses get sold when their owners die. Therefore, just as this market rose quickly, it will fall quickly if and when retirees want to get out, and they have no grand-children to get in.

The only way out is for home-debt owners to vote to have their paper debt to be erased by (a big increase in) inflation. Can they? You bet. Most people will want a stack of inflation to increase their earnings, and erase their mortgage. So, don’t buy a house, don’t have money in currencies where house debt is high (UK, USA, Australia).

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If rain/sleet doesn’t have you gloomy enough

Here’s a great question from a reader:

One question for future blog musing: do you think that the vast proliferation of “spec” houses means that all of us with older homes are in trouble now and in perpetuity? If people get used to seeing all “en-suite” bedroom/bathrooms, trimwork on the trimwork, etc. – will it be the case that any house built before 2000 will forever be of lesser value, because so much of Greenwich’s housing stock was rebuilt the past few years? I guess first question is: how many new houses were built from 2000-2008? I think they were a significant percentage of the $2 mil + home base.

Hoo, Boy! Let’s go to the statistics. I threw in search parameters of $2,000,000, built between 2000 and 2008, single families in all of Greenwich (but not out of town) and then requested sold, active and contract.

637 total met those criteria. Five hundred-one have sold during those years, 133 are active (there are, by the way, 350 active single family homes listed at $2 million and up) and, here’s the good news: three are under contract. It may take awhile to work through inventory.

Will so many newer houses hurt the price of older homes? Absolutely. The beauty of older homes: lower ceilings, winding corridors, human-sized rooms, etc. is lost on today’s buyer. If a house has low ceilings, forget it. If the baths are dated and the kitchen looks like something the cook in “Philadelphia Story” might have used, ditto. Greenwich children do not share baths, ever – we mustn’t keep the dears waiting for anything, or, God forbid, they will grow up thinking that a failure to have their wants satisfied instantly is an acceptable condition of life. You won’t get through Harvard’s MBA program with that philosophy. Missy!

The bright side for all this is found on the buyer’s side. If you’re a mere 5’10, don’t believe that you’re 6’9″ and can live with ceilings only 2′ higher than you are, you’re in luck. Same thing if you care to tackle a kitchen or bath renovation. But be aware that, if you put your money into a project like this, you’re doing so for your own pleasure and enjoyment of the house, rather than any kind of investment. When you go to sell, expect to see buyers who, like you, expect a whopping discount from prices for newer homes. Hey – if you’re a sailor, think of it like buying a used yacht. You’re doing it so you and your family can enjoy cruising, not to make a buck – and if you don’t know that, you should be locked up, not off sailing the seven seas.


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Hurry, hurry, hurry! Fire sale!

112 Field Point Circle

112 Field Point Circle

Victor Borge’s old property, minus his house, remains one of Greenwich’s finest pieces of waterfront property. But when the present owner put it up for sale at $35 million last October after paying $25.750 for it the year before I questioned where the added value had come from. It’s true that no one made any new waterfront land on Field Point Circle during that brief period of ownership but I also noticed that the market had declined a wee bit and I wondered whether a buyer would share this seller’s exuberance. Apparently not because today it’s had $7 million lopped off its price and it can now be yours for a mere $28 million. That’s actually not a bad price and with the $7 million you saved you can pick up a  foreclosed ski house out in Montana or Vail. Win win!


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School’s closed!

If you’re a parent this is obviously old news but those were my favorite words as a child and I couldn’t resist putting them in print.


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Greenwich RoundUp, Hearst Newspapers kiss and make up

Fellow blogger Brian Harrod reports that he had a “frank and open discussion” with Hearst newspaper’s legal eagle about Brian’s use of Greenwich Time excerpts and all is resolved. There’s a fine line between fair use of another’s copyrighted material and outright expropriation. The parties have drawn that line, both are happy and Brian can get back to his bashing. I’m sure Greenwich Time is delighted.

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Here’s a shocker: Hamilton Avenue project needs more money

“We’ve been racking up fees”   (Project head Frank) Mazza said. “There were items we never foresaw that ended up in the budget.”

I don’t see how this could happen, when our local amateurs have been doing so well, bringing in the school ahead of schedule and under budget. Yet here’s an even greater disappointment: “Mazza said he also anticipated having to pay for some additional building modifications, known as ‘change orders.’ ”

Couldn’t we apply for FEMA funds to cover this? Stupidity and incompetence on this scale must surely constitute some form of natural disaster.


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Sales down = tax revenue down. Do they know about this relationship in Hartford?

Conveyance tax receipts down, budget takes a hit.

For the first six months of the current fiscal year, which started July 1, the town took in nearly $1.5 million in conveyance taxes, according to the municipal budget director. At that pace, Greenwich would take in less than $3 million for the entire fiscal year, well below the $7.3 million for which town officials budgeted.

Slumping home sales are to blame, as some say it was only a matter of time until the bottom fell out of the housing market.

The number of single-family home sales in Greenwich tumbled 36.6 percent to 460 last year, from 726 in 2007, according to searchGreenwich.net, a Web site that tracks real estate transactions. Total single-family home sales volume fell nearly $900 million, from about $2.2 billion in 2007 to about $1.3 billion in 2008.

“We probably thought it was a reliable source of income. I think we’re now all realizing that was a bad assumption,” said Peter Berg, a Representative Town Meeting member from District 8/Cos Cob.

I don’t often agree with Mr. Berg but he’s spot on here. As Monty Python observed, “No one expects the Spanish Inquisition”. We should, no doubt, but human nature resists.

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See a penny pick it up ….

And return it to its rightful owner or all day long you’ll have bad luck – plus, you’ll be spared the embarrassment of appearing in our local Greenwich Time police blotter:

Leonard Ginise, 50, of 8 Lakeview Drive, was arrested Friday afternoon and charged with sixth-degree larceny, police said.

Police responded to the Old Greenwich Railroad Station south parking lot after a town parking enforcement officer located a stolen parking permit affixed to a car parked in the lot, according to the police report.

Ginese’s car was booted and a parking ticket was issued. Soon after, police said Ginese returned to his car and said he found the parking permit on the ground.

He was released from the scene on a promise to appear and is scheduled to appear in state Superior Court in Stamford on Feb. 6.

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