Daily Archives: February 5, 2009

Hearst appoints same publisher for Greenwich Citizen, Greenwich Time

Following up Monday’s firing of John Dunster as publisher of Greenwich Time, Hearst has now put the publisher of the Citizen and all other regional editions of the Hearts-owned Brooks Community Papers in charge of Greenwich Time and the Stamford Advocate. Can you say, “Bridgeport Post with local supplement”? I thought you could.

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Stop me if you’ve heard this one before.

Fannie Mae will loosen credit requirements for home mortgages. No, that’s not from a five-year-old paper, that’s today’s Bloomberg news.

Feb. 5 (Bloomberg) — Fannie Mae, the mortgage-finance company under U.S. government control, will loosen rules for homeowners seeking to lower their loan payments by refinancing.

Fannie Mae will drop some credit-score requirements, reduce income-documentation standards and waive the need for appraisals in some cases, according to a notice yesterday to lenders posted on the Washington-based company’s Web site. The changes apply to loans that the company owns or guarantees.

The company, which accounts for more than 40 percent of the $12 trillion in U.S. residential mortgage debt, is seeking to break a “logjam” in refinancing and allow more homeowners to take advantage of near-record low interest rates, according toBrian Faith, a Fannie Mae spokesman. The increased flexibility for consumers isn’t large enough to significantly harm mortgage- bond investors and mortgage insurers, analysts said.


Heck, it worked so well before, why not try it again? Politics, for a change!


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Stimulus for the Blog that ate Chicago

The stimulus bill that must be passed, with no time for nitpicking, includes $2 billion (that’s with a b) for a demonstration power plant in Illinois whose technology is already obsolete. Prime mover for this earmark? Ex-Governor Blog. The man’s gone, his pet project remains. I wonder if there’s any more waste in that bill?

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Realogy stumbles

The news gets no better for Realogy, parent company of Century 21, Sotheby’s, Coldwell Banker and Corcoran. From “The Real Deal” :

Corcoran is owned by NRT — the nation’s largest residential real estate firm, with brands such as Century 21, ERA, Coldwell Banker and Sotheby’s International Realty under its umbrella. NRT, in turn, is a subsidiary of the Parsippany, N.J.-based Realogy Corporation, a real estate and relocation firm which was taken private last year by Apollo Management in a $9 billion leveraged buyout, and which has faltered amid the nationwide housing crisis.
Meanwhile, Apollo’s troubles have been widely publicized, as the companies it purchased during an aggressive buying spree at the height of the market struggle under the weight of debt. One of its acquisitions, Linens ‘n Things, is now in Chapter 11, and guessing which of Apollo’s companies will be next to fail has become something of a parlor game.

Realogy, which was recently downgraded by Standard & Poor’s to a CC/Negative rating, one notch above default, and placed on a list of the Global Bond Market’s “Weakest Links,” is said to be a likely candidate.

How does Realogy’s plight impact Corcoran? That’s a question the real estate community in New York has been abuzz about, as the mammoth company has closed offices, eliminated staff positions, cut its advertising and marketing budgets, upped the fees paid by brokers and canceled the firm’s annual Christmas party. Insiders say Corcoran faces pressure to cut costs and increase profits to help meet debt-service obligations and buoy NRT’s flagging subsidiaries.

“[Corcoran] does all sorts of things to create money to help the parent company to pay debt,” said a Prudential Douglas Elliman executive who asked not to be named. “It’s hard for them to compete when we don’t have debt.” Like many sources interviewed for this article, the Elliman executive declined to go on the record for fear of damaging professional relationships.

The parent company that once had pockets so deep founder Barbara Corcoran claimed it felt “like having Daddy Warbucks come in” now appears to be a liability.

“It’s unfortunate for [Corcoran] that they’re part of that company,” said a former top Corcoran executive who asked to remain anonymous. “They have a huge company with no money backing them. That’s bad.”

Parental woes

One of the biggest question marks is what will happen to Corcoran and its sister companies if Realogy fails.

The outcome is nearly impossible to predict, since it rests largely in the hands of Apollo and its lenders — and if Realogy goes into bankruptcy, possibly the courts.
[E]xperts seem to think that the Corcoran Group isn’t going anywhere. They say that if it came down to it, the likely outcome of a Realogy collapse would be that Corcoran would be sold and would continue operating.

“I can’t imagine for a moment that the company could go out of business,” said Barbara Corcoran. “Their sales staff is too powerful.”

Paul Purcell, a former president of Elliman and now co-founder of the real estate consultancy Braddock + Purcell, said, “They’d absolutely look for a buyer before they’d liquidate it. In the worst-case scenario, someone would want that brand.”

If Apollo allows Realogy to go into bankruptcy, as it did with Linens ‘n Things, Realogy would likely be restructured, which may include some of its companies being sold, rather than liquidated, said Donald Wong, the director of corporate ratings at Standard & Poor’s.

Since much of Realogy’s value is intangible, in market share and brand names, “if you were to liquidate this company, you wouldn’t get a lot back.”

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Mad Monkey’s lair discovered!

19 Lauder Way

19 Lauder Way

My brother Gideon points out that this house may hold the record for longest time on the GMLS: 14 years (with a few years off for good behavior). I think it’s a grand, beautiful house. If there’s any problem, I suppose it’s that it was built (in 1890 or thereabouts) to face Glenville Road, and so you now approach it from the rear via Lauder Way. Big deal, I say, but buyers obviously must disagree. Or they don’t like its price – in the $6s these days. But the seller is certainly in no rush and seems determined to get his price or stay right where he is, and why not? Who’d want to move from here?


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Well this would be a welcome development

From Instapundit, the next return to sanity:

WILL HIGHER EDUCATION BE the next bubble to burst? If people feel that the value of a degree doesn’t justify a lot of debt, then yes. Those that will suffer most will be non-elite private schools, which are often as expensive as the Ivy League but offer poorer credential value for the money.

As the parent of two college grads and one student, I’ll admit to a deep suspicion that my kids got what I paid for.


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Make up your mind, would you?

30 Hettiefred Drive

30 Hettiefred Drive

This is a good looking house built by the owner back in 1996 and on one of the King Merritt acres, so there’s lots of space to accomodate  its 5,000 square feet. It was first offered for sale for $1.195 million in 1998, raised it price to $2.475 five years later in 2003, dropped down to $1.995 in December ’03, stayed off the market for another five years and came back at $2.299 in July, 2008. Now it’s listed at $2.159, which doesn’t seem too crazy – he’s back to 2003 pricing. If, however, we’re heading to 1998 prices, look out below.


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More Open House news

I do not travel with a bodyguard, yet, but this Walter Noel issue is certainly stirring up some passion in town. I was rebuked today by a friend of mine, a man I respect highly and like very much, for spreading gossip about his very good friend Walt. I admire anyone standing up for a friend and I regret offending this man, but it wasn’t much later on the tour that I ran into another friend who admitted that her own retirement plan had been blown out of the water by her decision to entrust Noel with a good portion of her savings. She didn’t seem to think as much of Walt as my other friend does. In fact, the two of them could have a fascinating conversation.

I think Noel is going to prove a huge disappointment to those who believe in him and who feel that he was an innocent victim of Bernie Madoff. The story reported yesterday by Caroline Waxler in Fortune detailing how Noel and Fairfield Greenwich switched auditors three times in three years, moving to ever-more lax inspections each time, shows more, even, than the deliberate wilful blindness I initially suspected. It seems to me that Noel knew something was wrong at least three years ago and began to actively hide the problem. That’s not what good friends do.


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New Construction open houses

62 Ridge Street, $7.450 million, is still available, much to its builder’s disappointment. It’s a really nice house and I like its architecture, inside and out, but Ridge Street? I don’t  get it and, so far, neither do buyers. This was one odd choice of locations to build such a beautiful house. But, as sellers love to point out, “all it takes is one buyer to fall in love with the place.” heck, valantine’s Day is just around the corner (and so is I-95, the car dealer and the rail road, for this house) so maybe we’ll see some action.

I saw another house, address not given here, that has me wondering. Beautiful yard but a squeezed, narrow archictecture that made me wonder why the designer didn’t take advantage of such a large lot. Not to make the house bigger – Lord knows, it’s big enough, but to spread out a little more. And an entire wing devoted to a master bedroom suite, especially when that suite is comprised of what are essentially a number of separate rooms, held no appeal to me. All of which should be taken with a huge grain of salt, though, because I start off from a personal bias against over-large houses and then temper that with whatever my current clients are looking for. If I see a house that’s large for my taste and has a layout that I know won’t satisfy my clients, of course I’m predisposed to dislike the thing. Doesn’t mean you won’t like it so don’t be put off by my comments, ever. Similarly, beware of the houses I do like. I know of several instances where clients of other agents inisted on seeing houses that I’d praised in my old column, even when their own agent who was working with them and knew what they liked told them they’d hate it. Each time, they went, they saw, they hated the place. So there you have it.

But all that said, there are still some awfully big price tags attached to houses that, in my opinion, are going to have a hard time finding buyers.


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The new pricing

Back from the open house tour – mixed results. I really liked the listing I mentioned yesterday, 18 West Way, direct waterfront with terrific views  in Lucas Point. Perfect downsizer, but can “downsizer” and “$4,250,000” co-exist in the same sentence? Beats me. It occurs to me that, these days, Greenwich homeowners can downsize simply by staying in their present house. The house itself won’t get smaller but the price sure will!

I saw another house priced at about $1.5 million and while I know that nearly identical houses on the same street sold for about that much last year, I looked at its split levels, tiny bedrooms, heard the noise from the highway and drove away thinking, “$950”. That’s just a gut reaction, of course, with no data to back it up, but we don’t really have any useful data right now so gut reaction may be as much as we have to value a house. I did try one reader’s suggestion that I use the 70% appraised value the town gave 5 years ago and, using that yardstick, $1.050 million is the right price. $950 is a lot closer to that number than the asking price. So we’ll see. I overheard one agent setting up an appointment to show the place so I may be all wet on this. Nothing would please the owner and his neighbors more, I’m sure. And nothing would surprise me least.


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Madoff’s List

I just posted a list, supplied by a generous reader, of all the Greenwich victims of Bernie Madoff. Direct victims – Walter Noel’s victim list will be even more painful for this town. But, upon reflection, I just deleted that list. It comes with names and home addresses and although that information is now readily available in the NY Post, the Wall Street Journal and a thousand other venues, I decided it was just too rude to put it out here – these people are my neighbors and did nothing wrong other than place trust in the wrong man.

I will note that both the children of Mark Madoff and Andy Madoff himself lost money with the old man so Bernie’s willingness to steal from anyone who crossed his path is about as evil as I can imagine. Ugh.


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How low can we go?

This guy says housing prices are falling to 1997 levels, “adjusted for inflation”. What would that look like, you ask? (Well, I asked, anyway). According to our government’s own Bureau of Labor Statistics inflation calculator, a $1,000,000 house in 1997 would, adjusted for inflation, cost $1,300,000 today. Sounds about right to me.


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Bernie’s list – early report

Over a thousand names in non-alphabetized order, all I can do is a quick scan. I ran down backwards from p. 163 to 100 and came up with Greenwich’s own Met, Tim Teufel (at least, one Timothy S. Teufel, c/o Sterling Equities, FL), another Met, sort of, Jeffrey Wilpon, a Marshall Zieses, Old Greenwich (lost an IRA, poor fellow), and a Doug Brown – a Noel son in law? I think not. The Potamkins of Manhattan Cadillac fame and now of Fisher Island got whacked, too. of interest is the large number of what I guess were feeder funds with literally pages of separate accounts, each entry representing one angry investor. The legal fees spun off from this mess are going to keep lawyers happy for years. More later if time permits. It is open house day today, and there’s at least one new spec house I’m dying to see, even if none of the people on these 163 pages can afford it any longer. Perhaps their lawyer.

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The dawning of reality

6 Ernel Drive

6 Ernel Drive

This small cape (3 bdrms, 2 bths, 0.14 acre) north of the Post Road in Riverside sold for $780,500 in June 2005. The owners put it up for sale again in March ’08 for $850 but had no luck. It’s back on today asking $770,000. I know where I advised one client to start bidding, if he’s interested, and it wasn’t at the full price, but at least this owner has figured out that the market has gone down from 2005, not up. If that same recognition spreads to some of our more expensive inventory, things may start moving again.


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Prepare an extra jail cell for Peter Madoff

Yesterday we noticed that Peter Madoff forced an underling to sign off on a lease for a new Mercedes for Bernie so that the underling, rather than Peter, would be liable for the payments when Madoff Inc blew up. Seemed suspicious to us. Now Bloomberg has noticed another telling bit from the same testimony of Harry Markopolos’ testimony: Only Peter Madoff was allowed to audit Bernie’s books. So he was on to the scam the whole time, wouldn’t you say? I don’t think a jury is going to disagree with this conclusion. All that’s left now is what those fly fishing fools, Mark and Andy knew about Dad’s operations and when they knew it (I figure Mom Ruthie was in on the deal from the beginning and has already reserved the Leona Helmsley Room at Bedford Women’s Prison).

Feb. 4 (Bloomberg) — Bernard Madoff rejected an investment fund demand for an outside audit of his performance, saying only his brother Peter was allowed to do that “for reasons of secrecy,” a certified fraud examiner testified to Congress.

Harry Markopolos, who sought for nine years to persuade U.S. regulators that Bernard Madoff was running a Ponzi scheme, told U.S. lawmakers today that “a fund of funds representing Arab money” had been told by Madoff that it could not have an international accounting firm verify his performance. The tip was contained in documents released as part of Markopolos’s testimony to a House Financial Services Committee panel.

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Bernie’s List – is your neighbor on it?

The Madoff investigators have released and the Wall Street Journal has posted, Bernie’s List of victims.  Check it out – it’s alphabetical so easy to use if you know who you’re looking for. A quick scanning this morning showed why Bernie needed Walt Noel and his Greenwich connections so badly – few names of direct victims are from here. I’m looking forward to the release of Noel’s List so we can see where Madoff’s second source of cash came from. Bythe way, I did check and, sure enough, Fairfield Greenwich Group is listed as a “victim”. How about Walter himself? I forgot to look. Off to see and I’ll be right back.

UPDATE: Oops! This is going to take more time than I have at 6 in the morning. The list is not in alphabetical order unless, like the government, you consider “Mr. John Smith” to belong just before Mr. Joshua Aaaronsen”. I’ll do some digging later. One name that did catch my eye was the Steven Jaffe Trust – a bunch of separate accounts belonging, I’d guess, to Bob Jaffe’s kid. Jaffe was Madoff’s main Palm Beach fund raiser so it does look like he drank the Kool Ade himself. Good for him. Later on Walter and the Fabulous Girls.


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