Daily Archives: February 4, 2009

Here’s something cool about global warming

Scientists working a Colombian mine have found the fossilized remains of a 100′ long snake. Neato, says I.

Why are today’s snakes smaller? The report concludes that temperatures at the equator were higher (86-93.2 Fahrenheit) than today (82.4 Fahrenheit) and facilitated the large body sizes of air-breathing animals whose body temperatures are dependent on ambient environmental temperatures.

“The Earth was globally warm then,” Bloch said. “There was no ice at the poles, South or North. The remains of palm trees have been found there.”

The possibility of bringing back something like this makes me want to fire up the ol’ Hummer and start driving to my mailbox every day. Hey, we’ve all got a part to play in giant vertebrate restoration. 

 

Baby it's cold outside

Baby it's cold outside

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Oh come on, surely the Wall Street Journal isn’t this naive

In an opinion piece today the WSJ complains that Republican Governor of Florida Crist is driving hurricane insurers out of the state and setting Florida up for an economic disaster. Crist, it seems, has estblished a state insurance company with just $3 billion in assets and a possible $400 billion in liabilities. 

Mr. Crist has thus guaranteed that Floridians, rather than the global insurance industry, will be on the hook for property damage when the next Katrina hits. 

Some 25% of the coastal property in U.S. hurricane zones is located in Florida, and another storm is inevitable. To pay for those claims when they come, Mr. Crist will either have to raise taxes on Floridians, or beg Congress for a rescue. 

I can assure the Journal that Governor Crist has absolutely no intention of saddling his own state’s taxpayers for their profligacy. When disaster does hit, and it will, the bill for rebuilding is going to the rest of us taxpayers, via a quick trip through Congress where it will be whooped through like poop through a goose, you betcha! Not a chance in hell this one stays home. Period.

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Warning: Morons at work

Our nation’s capital has passed an ordinance requiring motorists to clear their cars of ice and snow thereby making the city’s streets safe for the armed gangs that roam them. The Washington Times says that this makes D.C. the first city to pass such a law and that may be so but here in the land of Mommy Habits our state legislature enacted a similar law a year ago. Unlike D.C., which imposed no fine to its ordinance because the city council felt the rule too nebulous to actually enforce, our state legislatures showed no such hesitation and will whack you $100 bucks or so if you fail to clean your plate and your car.

Fine. I notice that our town school buses careen around town with snow on their roofs and why not? Who is supposed to clamber up on the roof to sweep off snow? The housewife-driver? Unlikely. Some laborer with a step ladder hire just for the occasion? That’s not in the budget. I recently saw one of our town police cars violating the law, a full eight hours after the snow fell and I didn’t have the heart to pull him over and make a citizen’s arrest. Next winter though, watch out, buddy.

Here’s how dumb laws like this come to be enacted, I suspect. Joe Legislator is driving up to Hartford and a chunk of snow flies off the car ahead of him and lands on his windshield, startling him (if there has ever been a fatal accident caused by this seasonal problem, I have never read about it ). “There ought to be a law,” the outraged politician mumbles and then he remembers: this is why he put up with all those boring rubber chicken dinners rubbing elbows with car dealers and PTA presidents. He is the law and can make new ones as he pleases. So he and his friends do, ignoring the obvious objections from truckers who park their 15′ high vehicles outside, school bus fleet operators and even local police forces that don’t garage their cars. They’re solving a problem that doesn’t need to be solved, they feel good and can tell their constituents that they’ve made them safer and isn’t it all grand? They then turn their dimmed wit to other pressing issues, like mandatory swish and spit fluoride programs for elementary school students. New Hampshire used to permit its legislatures to meet only every other year and then only for three months and that fine state was much the better for it. I suggest we go them one better, and close Hartford for all but one week every five years. If something comes up that requires a new law, we’ll have had plenty of time to consider possible solutions.

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Publisher fired at Greenwich Time

As predicted yesterday by Greenwich Round Up, GT publisher John Dunster got the axe, with a replacement to be named later. Word we’re all hearing continues to be that the Connecticut Post will become the mother ship, with a Greenwich supplement for our town, fleshed out on Fridays (don’t want to lose those real estate ad revenues) by Greenwich Citizen. Whatever.

Greenwich Time, by the way, can’t even cover itself and no mention of this story is on its web site. That depth of reporting will only be improved when operations move to Bridgeport. Makes you wonder, doesn’t it, who will bother advertising their house in its pages?

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When we have friends like Hugo and the Saudis, why should we worry?

Obama administration nullifies drilling auctions for oil, gas in Utah. Nope. Don’t want it, don’t need it!

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Leon Panetta raked in $700,000 in speaker’s fees in 2008

That’s more than Obama and Barney Frank will allow investment bankers, but don’t worry: this money came, not from tax payers, but from the industries Leon will be involved with. Whew! That’s a relief. Obama : politics, for a change!

Mr. Panetta also received a $28,000 honorarium from the Carlyle Group, which owns a number of companies that do business with the national-security agencies of the U.S. government.

Mr. Panetta also reported receiving a $60,000 “Governmental Advisor Fee” from the Pacific Maritime Association, which represents the shipping industry. The group lobbies the federal government regarding terrorism laws that affect shipping. A spokesman for the association didn’t respond to a request for comment.

Another big source of income for Mr. Panetta was California State University, Monterey Bay, which hosts his nonprofit foundation, the Leon & Sylvia Panetta Institute for Public Policy. The school paid Mr. Panetta $150,000 in “consulting fees,” he reported. 

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A billion here, a billion there ….

The Trustee overseeing the dissolution of Bernie Madoff’s firms has come across $946 million in assets, which is not bad for a day’s work. But check out this tiny little drama. If Peter Madoff, Bernie’s brother, was kept in the dark about what Bernie was doing, why did he stick some poor underling with liability on a car lease when he could have signed it himself? No fool, he.

Craig Kugel, who worked in human resources at Madoff’s brokerage, said he shouldn’t be stuck with $58,000 in payments for a 2009 Mercedes once used by his ex-boss.

Kugel signed a lease for the car in October because Madoff refused to provide the necessary financial information about his firm to the car dealership, attorneys for Kugel wrote in a court filing. Madoff’s brother Peter, the firm’s chief compliance officer, allegedly designated Kugel as a director and told him to sign the lease on the firm’s behalf; now he’s being held personally liable for the lease, the attorneys wrote.

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$igns of the times?

The Greenwich Board of Realtors has announced that the late fee period – the time you can pay your association dues without penalty has been extended. Just last month they dumped 80 agents for failing to come up with another dues payment, I wonder if they’re seeing a drop off on the dues owed now? Similarly, a club that I won’t identify but is close to my own home has, I’m told, offered members a two year grace period during which they can withdraw from the club, regroup and perhaps find new work and rejoin, all without penalty. I think that’s a very kind gesture and a reasonable accommodation of their friends and neighbors who have fallen on hard times. But taken together, these two developments offer a window into what’s going on in the land of high finance.

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I’m trying to give you a break, Walt, really I am.

But the news just keeps coming. Today Caroline Waxler, lamentedly late of Blodget’s electronic rag and now with Fortune, reports on Fairfield Greenwich Group’s use of low-scrutiny auditors to keep investors fat, dumb and happy.

When Madoff whistleblower Harry Markopolos testified before Congress today, he blasted the Securities and Exchange Commission, gave gripping testimony about his nine-year quest to reveal Bernard Madoff’s alleged $50 billion scheme, and predicted that more of Madoff’s web would be uncovered soon. But one of his most damaging accusations was about the auditing practices of Madoff’s biggest feeder fund, Fairfield Greenwich Group.

Markopolos is the Cassandra-like investigator who tried in vain to get the SEC to pay attention to what he was saying about Bernard Madoff. Few people paid attention, even though he laid the whole thing out with uncanny accuracy over the years. Now people are listening. And buried in his prepared remarks to the House Financial Services subcommittee are telling and potentially damaging accusations – page 20 on the original document – about Fairfield Greenwich and its accounting of its accounting, specifically its choice of auditors and the frequency with which it switched them, which has the appearances of “auditor shopping.”

[In] 2004, Fairfield Greenwich appeared to embark on a three-year auditing shopping spree, according to Markopolos, in which it first entrusted its auditing needs to Berkow, Schecter & Co. of Stamford, Conn. According to its site today, the firm is remarkably small to be handling multibillion-dollar accounting jobs: two partners, four accountants, two paraprofessionals, and two secretarial and support staff. In size, the firm is reminiscent of Madoff’s accounting firm, situated in a strip mall.

Next up for 2005 was PricewaterhouseCoopers in the Netherlands. Then in 2006 it was still PricewaterhouseCoopers, but in Canada. This apparent auditor shopping is not an encouraging sign.

What could possibly be the purpose for this kind of hop-scotching? What customer service was performed?

“To change your auditor like that is highly unusual,” says Pornsit Jiraporn, assistant professor of finance at Pennsylvania State University, who co-wrote the 2004 study, “Causes and Consequences of Audit Shopping.” “Sometimes there is a legitimate reason for switching once, but this is very suspicious.”

Read the whole thing – fascinating. Walt, yesterday I tried diverting attention from you to Bruce McMahan and his daughter/wife, but that can only hold the crowd’s attention for so long. But I was thinking, maybe your Fabulous Girls, Andy and Mark Madoff and McMahan’s daughter could all start a tee shirt company picturing a picture of all three of you financial wizards and the slogan, “I got screwed by my Dad!”. Sure to be a best seller – in fact, put me down for a dozen.

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Spring market? Third contract today

241 Bedford Road, a funky compound of an old (1845?) farmhouse, a (adult-sized) playhouse and a garage with living space above, was just reported as under contract. Asking price was $6.250 and while part of me doubts it sold for anywhere close to that price the sellers never budged since first listing it 18 months ago, so perhaps it did. Either way, a welcome sign of life today. That’s two big contracts and one more modest one. Good.

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Lynch mob forming?

556 Riversville Rd

556 Riversville Rd

As prices fall and sales dwindle I hear repeated rumors that some of my colleagues don’t like my blog and blame me for all their sorrows. Well sorry, guys, but I’m just reporting here, providing a little bit of throw weight against the “everything’s coming up roses” school of real estate description. This house illustrates what I mean. It’s a beautiful house, with an award-winning design, that sold for $3.5 million in 2003. The present owners listed it in May 2008 for $5.295 million and it didn’t sell. Not because of anything I said or wrote about it – I never mentioned it – but because, and here’s what some of you apparently are trying to shield your clients from, the market is slow. Oh! In any event, today it’s been reduced to its 2003 price, or close to it – $3.695. All without a single snide comment from me. Welcome to the new reality.

By the way, this is a great house and at this price I intend to recommend that at least one of my clients take a look at it.

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New Listings

18 West Way, waterfront property in Lucas Point, OG, has come on at $4.250 million, which ought to test the waters, as it were. This place is in one of my favorite neighborhoods in town and comes with its own dock, so it should command a premium. Great location. When it was just a mere 3,000 sf cape in February, 2004 it sold via bidding war for $3.160 million from an asking price of $2.850. Ah, bidding wars.

The new owners may or may not have changed its exterior – the new listing (no photo yet) describes it as a “colonial” now, but some of our colonists lived in capes so I suppose it could be untouched since 2004 and still be accurately described. It’s still 3,000 sf but it claims a new kitchen and baths, which are always nice. Will the market support a $1 million uptick in five years? If any location can, it’s waterfront in Lucas, so I’ll be curious to see how this goes. If money were unlimited and I didn’t need 10,000 sf to live properly, I’d move here in a flash. Someone else out there may feel the same way.

450 North Street
450 North Street

This second house, across from St. Michael on North Street, will also be interesting to watch. It came on today asking $6.9 million which, back in the day, wouldn’t have seemed at all outlandish and perhaps it still isn’t. North Street’s a pretty busy thoroughfare for my taste, though and some buyers may join me in that taste. The builder says it’s 9,000 sf but it’s on only an acre in the RA-1 zone so if our FAR regulations mean anything, almost half this house must be underground (the listing does mention a walk-out basement). Two houses around the corner on Copper Beech may help in pricing this one out and certainly provide an object lesson for spec builders.

Numbers 8 and 10 Copper Beech were both built at the same time, each on 1.8 acres, on land purchased and combined into one big lot. Each started at around $9.5 million in early 2007, each had dropped to around $8.995 by that fall. If memory serves, number 8 was bought directly from its builder but then quickly put back up for resale, so I considered it “new”.  My guess is that each owner received the same offer from a low baller because both houses were just about equal in appeal and quality and, were I representing a buyer, that’s what I’d have done: toss the offer to both and see if either bit. In any event, number 10’s builder accepted an offer and sold his project for $8.050 in February 2008. Number 8 either turned down that bid or never received it but either way, it’s never sold, and it’s now still for sale, asking $7.999 million. So sellers, if someone comes along and wants to buy your place, even at a million less than you’re asking, perhaps you should give the bid some consideration. Pain now, pain later – your choice.

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Two contracts already and not even noon!

114 Overlook Drive

114 Overlook Drive

I liked this house when I saw it and mentioned it here because the sellers, who paid $1.896 million for it in May 2007 had reduced it below that to $1.749 million. It’s now gone to contract demonstrating that houses will sell, if the price is right. Unfortunately for sellers, the right price is probably not what they paid for it a year or even a few years ago. But you can sell them.

Another point: the listing agent, Ray Renslow, is a real professional in many ways, not least of which is that he doesn’t feed other agents a line of bs. Ray told me that there was an offer lurking and I absolutely believed him. Some agents tell you that and look like fools when, a few weeks later, they come slinking back asking if my clients are still interested. Not Ray, ever. But unfortunately for my clients, one of them hadn’t had a chance to view the house when the other buyer was moving in for the kill, so no deal for us. Even in a “dead” market, never assume that you’re the only buyer out there. Chances are, you’re not, especially for a sensibly priced house.

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More follow ups

228 Stanwich Road

228 Stanwich Road

Here’s another house that’s yet to find a buyer. Purchased for $1.7 million in August  ’07 (ouch) it was put back up for sale the following July at $1.895. No improvements had been made during that brief period of ownership so I questioned its price at the time and suggested that it might not fetch what the owners were asking. It did not and today it’s been reduced to $1.649. It’s a nice house, served someone well as their home for many years, but it needs a lot of updating and it’s built quite a bit downhill from Stanwich Road. Houses at the bottom of hills almost always prove difficult to sell.

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Hey – you never know

24 Morningside

24 Morningside

I wrote about this area off of Field Point  Indian Field Road awhile ago and I thought, given the number of spec and almost-new houses for sale in it, that sales would suffer. Wrong. I hear that one house there has an accepted offer and this one, while it was reduced in price today, was reduced from $2.195 million to $2.175. A $20,000 price reduction indicates a confidence that I wouldn’t have shared a few weeks ago but obviously I underestimated this area’s appeal. Live and learn.

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Dog parks and Frisbees – it’s stimulus, my man!

pigsThe Wall Street Journal has thoughtfully compiled a list of everything our municipalities and states are readying for receiving stimulus funds. This will shock you, but not all the projects seem to be quite the emergency their proponents say they are. But the One says we have no time to weed out the bad from the good, the nation’s future depends on the immediate spending of a trillion dollars and who cares how it’s spent? Well I do, but that doesn’t count.

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Who needs Bush to kick around when we have Nancy Pelosi?

“500 million Americans lose their job every month!” Her grasp of numbers and our country’s population may explain why she and her boss are in such a rush to grab our money – there’s suffering out there, and it’s not just people with chlamydia!

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Fun with numbers

We’ve been following the travails of 396 Round Hill Road for years now and those troubles continue. First built and listed in November, 2005 for $8.950 million, it zoomed up to $10.9 million a year later when the lower price failed to stir up a buyer, dropped down to $9.35 as the higher price failed too, was occupied by the family of the builder for a year and then returned to the market at yet another new price, $11.5 million, in February 2008. Still no luck so today, after yet another year, it’s had $2 million lopped off and is offered at $9.450 million. The seller obviously hasn’t found the right price yet but eventually, I’m sure he will.

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Contract

48 Parsonage Road

48 Parsonage Road

This house was built on land purchased for $2.440 million in May, 2007. The house was listed for sale in May 2008 at $7.850 and reduced about a million to $6.895 in January. It’s reported as under contract today by an “out of town broker”. If it’s going for anywhere close to its final asking price, that’s encouraging news for builders. After all, what’s a million dollar shaving from an imaginary list price?

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As heard on NPR!

They played this on the radio this morning: Tom Daschle’s campaign ad extolling his virtue for driving a 10-year-old junker “because Tom knows that a penny saved is a penny earned.” Now, thank’s to Powerline, here’s the video. A heartwarming vignette of the people’s man from the plains.

Guess things change when you don’t have to snooker a bunch of dumb corn farmers in Dakota.

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