Daily Archives: February 13, 2009

Can we please bring copy editors back to the Wall Street Journal?

Because I act as my own copy editor, I know (and Hiram knows) how hard it is to catch errors in one’s own writing. But real newspapers used to have copy editors to do that job and, while I’m sympathetic to the financial woes of that industry, I can’t imagine copy editors are all that expensive. English majors, sadly, come cheap. 

So it’s ironic that in an article on a newspaper reporter becoming a strip club manager as a new career, the Journal prints this:

Soon afterwards, he was visiting Israel when the war with Hezbollah in Lebanon broke out, and to his surprise he found himself disinterested in covering it. “As much as I loved my job and was proud of what I’d done, I didn’t have the urge anymore to run up to the border and explain it all to the American people and then come back and brag about how I’d been shot at,” he says.

A beauty contest judge at a strip joint should be disinterested but not, one hopes, uninterested. In the burned-out reporter’s case, it would be quite the other way around.

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Kettle, meet Mr. Pot

Chris Dodd inserted a retroactive pay limit on bankers into the Stimulus Bill. This phony fraudster, after collecting millions of dollars from those same bankers, after seeking and accepting sweetheart deals for his own mortgages (and would someone please look into how he paid for his Irish house?) is getting flak here in Connecticut for his being a banker’s toady. So he shows us how independent he is by a late night bit of subterfuge that costs him nothing and will make him, he assumes, look like a free, independent watchdog. Fah! He resembles a watchdog deposit, and not a banking deposit. If you want to impress us, Chris, why not release the loan documents you promised us all six months ago? That would be a brave, albeit suicidal act. Dodd would certainly join his father and become the first father son team to both be censured by the Senate but this is a Democrat Congress and if Charlie Rangle skates, I suppose Dodd will too. 

But that doesn’t mean we can’t toss the man out on his fat rear in 2010.

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Is there anyone who didn’t know Madoff was a crook?

Ezra Merkin, a Madoff scam “victim” used former “Yuppie Five” felon as financial advisor while advisor was still in jail. The most amusing part? The crook warned Merkin that Madoff was making up imaginary numbers for his reported profits. But why stop when you’re charging big fees? Walter didn’t, either.

One of the top advisers to the money manager J. Ezra Merkin, who invested $2 billion of his clients’ money with Bernard L. Madoff, is a convicted felon who worked for Mr. Merkin while still in federal prison, according to recently filed court documents.

The adviser, Victor Teicher, who had been convicted of federal securities fraud and was barred from the securities industry, advised Mr. Merkin on the management of his Ariel Fund Ltd. through phone calls made to Mr. Merkin’s Park Avenue office from a New Jersey prison.

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Barbara Streisand’s meeting him in Johannesburg

But Camilla, I am wearing my solar powered beanie!

But Camilla, I am wearing my solar powered beanie!

Prince Charles jets off on an environmental trip, 16,000 miles by private jet. Promises to have a team of wogs plant trees in Ceylon to offset his carbon trail.

Prince Charles was accused of hypocrisy last night for using a private jet on an ‘environmental’ tour of South America.

The prince will travel to the region next month in a visit costing an estimated £300,000 as part of his crusade against global warming.

He will use a luxury airliner to transport himself, the Duchess of Cornwall and a 14-strong entourage to Chile, Brazil and Ecuador on a 16,400-mile round trip.

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Right on!

Michael Lewis author of Liar’s Poker, is my favorite financial writer. He’s penned a column for Bloomberg that he thinks is tongue in cheek but you know what? He’s absolutely right.

Even as I write I am watching the eunuchs now posing as Wall Street CEOs bend over backward before some congressional committee to prove that the operation was a success, and they are now well and truly without testicles.

John Mack swore that he and everyone else at Morgan Stanley have only a secondary interest in money — that the guys at Morgan Stanley love to bank so much that if necessary they’d do it for free. Vikram Pandit went out of his way to apologize for ordering up a single corporate jet. “I get the new reality,” he said.

Get It

No, Vikram, you don’t. You think the new reality is cowering and simpering before elected officials so that they’ll quit being mean to you and maybe even let Tim Geithner give you more money. The new reality is that you need to grow a pair. Here’s how:

– Play the hand you’ve been dealt rather than the hand other people insist that you hold.

Pandit and Mack and the rest have completely swallowed “the people’s” line that because they’ve taken taxpayer money they are somehow now required to care how “the people” feel about them.

Think about this. Some fool comes along and gives you $15 billion, no strings attached. The fool doesn’t own you. You own him. Mack needs to stand up and say, “We at Morgan Stanley are pleased by your investment. Now, if you ever want to see a dime of it back, go away. We’ll call you if we need you.”

While I’d prefer to see corporate chiefs eschew my money, collected from me at figurative gunpoint, and save their companies or let them fail as their skills and market pressures allow, second best is to take the money and still stand up to the slugs who are forking over my dough to claim control over them. NASCAR’s in the dumps because car makers are now owned by the government and what would “the people” (there’s a joke) think if their money was spent on hospitality tents or new tires for Bobby Lee or whoever the hell drives those cars? No jets, except for Congressmen, no junkets, except for Congressmen and Barbara Streisand, no no no! I don’t really care about these wusses giving away their own freedom but I do care that this governmental power grab will extend into all our lives. So ignore Lewis’s sarcasm, boys, and, as he suggests, “grow a pair!”

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I was wrong – it’s not socialism

Micahel Ledeen corrects those, like me, who fret about the country going socialist – it’s fascism, and he explains what he means:

There’s a element of truth to the basic theme (although not to the headline):  the state is getting more and more deeply involved in business, even taking controlling interests in some private companies.  And the state is even trying to “make policy” for private companies they do not control, but merely “help” with “infusions of capital,” as in the recent call for salary caps for certain CEOs.  So state power is growing at the expense of corporations.

But that’s not socialism.  Socialism rests on a firm theoretical bedrock:  the abolition of private property.  I haven’t heard anyone this side of Barney Frank calling for any such thing.  What is happening now–and Newsweek is honest enough to say so down in the body of the article–is an expansion of the state’s role, an increase in public/private joint ventures and partnerships, and much more state regulation of business.  Yes, it’s very “European,” and some of the Europeans even call it “social democracy,” but it isn’t.

It’s fascism.  Nobody calls it by its proper name, for two basic reasons:  first, because “fascism” has long since lost its actual, historical, content;  it’s been a pure epithet for many decades.  Lots of the people writing about current events like what Obama et. al. are doing, and wouldn’t want to stigmatize it with that “f” epithet.

Second, not one person in a thousand knows what fascist political economy was.  Yet during the great economic crisis of the 1930s, fascism was widely regarded as a possible solution, indeed as the only acceptable solution to a spasm that had shaken the entire First World, and beyond.  It was hailed as a “third way” between two failed systems (communism and capitalism), retaining the best of each.  Private property was preserved, as the role of the state was expanded.  This was necessary because the Great Depression was defined as a crisis “of the system,” not just a glitch “in the system.”  And so Mussolini created the “Corporate State,” in which, in theory at least, the big national enterprises were entrusted to state ownership (or substantial state ownership) and of course state management.  Some of the big “Corporations” lasted a very long time;  indeed some have only very recently been privatized, and the state still holds important chunks–so-called “golden shares”–in some of them.

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Workfare – never worked, never will work, liberals love it

Over the years every study of job training programs and workfare programs have shown them to be utter failures, yet they keep getting re-funded and expanded, year after year, just like Head Start. “Sure it’s a failure, but how would it look if we just stopped it?” So a bureaucracy builds of Head Start teachers, job trainers and, of course, administrators, all doing nothing but collecting a federal paycheck. We’re about to get more of the same. “No jobs for white male construction workers or professionals,” promises Robert Reich. No siree, we’re going after the poorest of the poor, the lowest of the low, and we’ll raise them to the mountaintop! We don’t call the One the “Messiah” just for nothing, you know. He can make wine from water, skilled, motivated workers from drug addicts and brain surgeons from sixteen-year-old single mothers. Tall buildings in a single bound? You’re kidding, right?

Some curmudgeons don’t buy this stuff, but we’ve been outvoted. Still, just for the record, here’s one of them:

Of course, you don’t have to be an economist or statistician to recognize that the idea that the government can train and find productive employment for large numbers of its citizens, especially the long-term unemployed, just isn’t grounded in reality. It’s a fraud that leapfrogs socialism and goes directly to communism.

Let’s add it all up. Workfare doesn’t stimulate the economy. It doesn’t give participants new skills or increase their earning power. It doesn’t lift people out of poverty. And it often costs more than welfare. What exactly is the point?

In Roosevelt’s day, it was votes. Not just votes from individuals employed by the workfare programs, but also votes in Congress. WPA projects could be used to reward friendly politicians by directing funds and manpower to their districts.

In the 1990s, when Robert Reich was secretary of labor, workfare became corporate welfare. Instead of working directly for the government, low-income workers could be hired by private-sector employers in exchange for tax credits, in effect working for less than minimum wage. Of course, this helped hold down wages for other employees too.

Still, many liberals are opposed to the idea of workfare, mainly because it does require recipients to work. In their worldview, the poor are victims of the unjust free market system and shouldn’t be punished or have responsibility.

Some of the more astute liberal critics also recognize that workfare poisons the labor market. When companies or government agencies have access to cheap workfare labor, there’s no incentive for them to offer entry-level jobs. Unemployment increases and more people go on workfare. It becomes a never-ending cycle.

But that’s where the pure political genius of the Green Jobs Corps emerges. By presenting it as a welfare-to-work program with the objective of saving the environment, it is designed to appeal to the right, political center, and the left all at once. Then during election season, politicians can boast about the number of people they moved from welfare to work and the number of solar panels they installed on people’s roofs.

If you vote Democratic, maybe you’ll get a solar panel too. Installation and maintenance are always free in the workfare state. That’s because with more failed leftist economic policies in place, poverty and unemployment become the ultimate renewable resources.

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Why walk when you can fly, but why buy when you can rent?

The Wall Street Journal reports luxury rentals take a big hit.

A [Hollywood Hills mansion] view worth millions — that rents for much less. The three-story stucco is on the market for $5 million. But in the meantime Ms. Weinheimer pays $15,000 a month — about $12,000 a month less than the home would cost to own, assuming a 6.5% mortgage, 35% down, taxes, insurance and maintenance. She recently negotiated the rent down from $20,000.

In this recession, perhaps the only market falling as fast as luxury home sales is luxury home rentals. In Seattle, a waterfront home appraised by two agents at $15 million is for rent for $10,000 a month, down from $14,000 a month ago. …

While these rents could hardly be called low, in some cases they wouldn’t even cover the taxes and maintenance cost of the homes. “At least they’re paying the utilities,” says Richard Goodwin, of renters who recently snapped up his newly constructed Aspen home, estimated to be worth $5 million, for $4,000 a month. Mr. Goodwin, who had originally wanted $10,000 a month, says he’s hoping the renters will eventually want to buy the house.

New Canaan, Conn. real estate agent Lawrence Story has “been in the business 30 years and I have never seen anything like this.” He says there are 22 rental listings for $9,000-to-$20,000 a month, more than double the number a year ago.

It kills me to admit it – I’m in business to sell houses, not collect pissant rental commissions – but you can rent a damn fine house in Greenwich right now for far less than it will cost to buy it and if prices are going to keep falling, why don’t you?

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Glad to hear I’m not the only one in the dark

I complained recently that, with almost no sales, it was impossible to figure out what a house was worth these days. A couple of readers suggested using 2001 prices or the assessed value (70% of the supposed “market value”) and both seem to work, with limitations. Now here’s someone in Dallas complaining about the same problem with commercial property: “How can we price something when nothing’s selling?”

Commercial or residential, if there are no comps, there really is no market.

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How about a bailout for Greenwich home owners?

45 Baldwin Farms South

45 Baldwin Farms South

This spec house started life as an Ogilvy listing a year ago priced at $9.750 million. Buyers didn’t like its long driveway to a back lot, I guess, or perhaps its lack of a back yard (but a killer view of a small pond) and it’s price gradually fell. It’s been with Tamar Lurie for awhile now and she, too has been dropping its price so that today it’s down to 61% of its original price, or $5.975 million.

The other South Baldwin spec house, number 14, never sold for its asked price of $7.9 million (or was it $9 ?) and is now available through its lender, I think. Perhaps not, but it’s not looking like an immediate candidate for sale.

We did have 2 contracts reported today, the land on Round Hill and a 2006 spec house on Orchard that dropped over the years from $3.795 to $3.195 and probably fell to a buyer in the 2s. Bet that’s the last time for a long time that a builder will pay $1.5 million for Orchard Street property, eh?

All told, with those two contracts, we’re up to a whopping total of six for the month and we’re half way through. Time was when 18 contracts a week was about normal. Time was.

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Bailout for Madoff Investors?

I keep hearing about plans for taxpayers to repay the people who lost money with Bernie and I hope to hell they’re all still born – the plans, not the victims, of course. Chuck Schumer’s “on it”, I’m told, as are various members of the Senate Banking Comittee, and to listen to some of the people who lost money, we owe it to them.

“[The government] owes the people money, too, because they should have picked this up. This wasn’t like it was last month,” he says. “We’re talking 1999. This is ridiculous that everybody got away with this for so long.”

It’s hard to fault the poor bastard’s logic because these days it seems that everyone with any need, any need whatsoever, has a claim on the rest of us. The Obamaites have achieved the Socialist dream without a shot being fired, but there is some kind of limit, even if that limit is bankruptcy for every American with anything left to steal, beyond which this scheme won’t work.

But we’re paying people’s mortgages, medical insurance, providing them jobs and giving trillions to bankers who claim they didn’t know what a derivative was. Can we deny less to some poor widow who entrusted her life savings to a man without ever understanding or inquiring what he was dealing in? I think not. I think the only fair answer is to say no to all these unfortunates: car makers, bankers, defaulting borrowers and the unemployed – yes, even those who quit their jobs, and start anew. Won’t happen, but that’s what would be fair. Otherwise, Bernie folks, line up over at the treasury window and get yours.

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How funny is this?

480 North Street

480 North Street

480 North Street, the spec house that was priced at $9 million + and sold for $4.5 million this past July, one step ahead of the repo man, has come back on the market today and is asking $5.350 million. Looks like the same place to me, so why the $850,000 increase?

I’d guess that the sellers figure that they got a steal, which, I suppose, they did, and now want to cash in on that bargain. But will this work? If I were a buyer, I think I’d take the attitude that, steal or no steal, distress sale or no distress sale, the market value of this house was fixed at $4.5 million in July and no market improvement has occurred since. But maybe not – it’ll be fun to see what happens. Tamar Lurie has the listing.

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A contract, by golly!

224 Round Hill Road, which has a house on it but is pretty much selling as 4 acres of nice land next door to Sabine Farm, has gone to contract today. Asking price of $3.99 million, it is not true, as rumored, that Walt and Monica are downsizing from 175 and pitching a tent here. Someone else is the buyer. Still, a contract’s a contract – nice to know a buyer was out there.

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Is Obama incapable of standing up to Pelosi or is he just as much in the tank as she?

InstaPundit links as follows:

JUST WORDS? CHANGE.GOV PROMISES:

 End the Practice of Writing Legislation Behind Closed Doors: As president, Barack Obama will restore the American people’s trust in their government by making government more open and transparent. Obama will work to reform congressional rules to require all legislative sessions, including committee mark-ups and conference committees, to be conducted in public. By making these practices public, the American people will be able to hold their leaders accountable for wasteful spending and lawmakers won’t be able to slip favors for lobbyists into bills at the last minute.

 Instead we got a bill that the lobbyists got before the Congressmen, which will pass without being read. Hope and change?

My question: did he mean it when he said it and just got rolled by more sophisticated Washington politicians, or was he lying all along? As recently as Tuesday the House promised to make the bill public and available for review for at least 48 hours before voting on it. Pelosi stomped that promise to death and not a single Democrat, including her president, said boo. I hope we do better standing up to international bogeymen.

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A most detestable herb

The Wall Street Journal reports on a rising tide of cilantro haters . I’m one of them. Just a sprig of this awful stuff is enough to ruin a meal and I’m furious when I discover that a restaurant has thrown it into a dish that no one would expect it in and fails to warn of its presence. You like the stuff? Fine, dig in, but keep it away from me. And whatever you do, don’t toss it in among the rest of a dish’s ingredients and expect it to slip by unnoticed. Cilantro haters do notice and you run the risk of your fine china ending up on the wall.

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Good news for Realogy?

Apollo Management, owner of Realogy and thus Century 21 and Sotheby’s, has hired Henry Silverman as CEO. This is the financial wizard who did very, very well until, in 1997, he bought CUC and was almost brought down by that company’s corruption. He’s back now, and will apparently try to help Apollo out of its own mess. Ironically enough, when CUC brought him down and he was selling off parts of Cendant, he unloaded Realogy on Apollo:

In 2007, Mr. Silverman sold Realogy, a residential real-estate broker spun off from Cendant, for $6.65 billion to Apollo. When the housing market tumbled, Realogy turned into one of Apollo’s most troubled investments. Realogy is the parent to Coldwell Banker, Century 21 and Sotheby’s International Realty.

So what’s he planning to do with those companyies now?

An Apollo spokeswoman declined to comment.

 

 

Will he sell it again or fix Apollo and permit them to hang on to it? We’ll see.

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There may be hope for Greenwich after all

NYC Council speakerwoman wants to soak the rich.

God bless her, if she and her cronies can just find anyone left to tax and whack them hard enough, even Connecticut will look better. But here’s the part that puzzles me: she wants Bernie Madoff’s taxes to drop!

“Right now, New York City taxes everyone making above $90,000 the same,” Ms. Quinn said in what was arguably the most memorable part of her address, in the Council chamber at City Hall. “It’s shameful — Bernie Madoff pays the exact same tax rate as a public school principal. That’s not sharing the burden. It’s a slap in the face.”

While it’s true that we now know that Bernie made nothing and in fact is due a big fat tax refund, dropping his rate to zero while making school principals pay more just strikes me as unfair.

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Hot time at the tax appeals tonight!

228 Stanwich

228 Stanwich

(Or whenever they hold their meetings) Lots of houses out there that aren’t worth what the town says they are, and the gap is growing larger. We’ve discussed this house previously but today its price dropped again, to $1.595million. It was listed by its previous owner, a real estate agent, which tells you that agents aren’t always able to separate emotion from objective advice when it comes to their own home, for $2.125 million in February 2007 and sold that August for $1.7. The new owners put it back up for sale in September 2008 for $1.895 and have been dropping it ever since. I happen to think that they’ll be lucky to escape from their home owning experience for just $100,000 but according to the town, they’re sitting in an $1.8 million home. Maybe they should advertise this in Town Hall?

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Why have a blog if you can’t plug your kid?

John Fountain rocks!

MEANTONE, JOHN FOUNTAIN
Monthly Carnival of Arts
Empire Dine and Dance, Portland, ME
11/19/08
It’s the second monthly Carnival of Arts at Empire Dine and Dance, and there are poets, filmmakers, and musicians galore. However, for this review I want to talk about my two favorite acts of the evening. John Fountain, a twenty-something bartender with long dirty-blonde hair takes the stage with his guitar. He begins to sing, and my arm hairs stand at attention.  The sound and rhythm of his voice is a cross between that of Bob Dylan and Ray LaMontagne. Although he forgets the lyrics to his first song, he cracks a few jokes to keep the audience entertained. After this, he doesn’t miss a beat. His voice is deep, yet soothing. He holds his guitar close to his body, seemingly at home onstage. A girl sitting next to me says, “I could listen to this guy all night long.” The feeling is mutual.
Portland-based blues duo, Meantone is definitely getting the most audience interaction here tonight, with the use of their guitar, harmonica, drums and natural ability to get a crowd riled up. People are cheering, hooting, and yelling out such things as, “Listen to that shit! This is crazy!” The band is made up of two men, Meantone (yes, it‘s his name as well as the band‘s name) on guitar, harmonica, and vocals, and Young Brett on drums and percussion. Not only is Meantone (the man) a deep voiced talent, but he also has some fun and quirky lyrics, such as “I’ll steal your car, I’ll steal your mojo.” The duo performs many original songs, but tonight they’re also covering “Cocaine Blues” by Johnny Cash, (one of my all-time favorites.) Overall, I can’t get over how astonishing their musical and entertaining ability is considering there’s just the two of them.   (Jill Harrigan)

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Lou Caravella a crook? Not on these numbers

A couple of readers wrote yesterday stating that our Tax Collector, Lou Caravella, was benefiting from a super low assessment on his own Orchard Street property while socking it to his neighbors. I was shocked to hear that suggested because the man has always struck me as one of the good guys but I pulled the tax cards to check. What a juicy story, if true.

It isn’t true. Caravella’s place at 96 Orchard Street shows a market value of $1,165,600 (70% assessed value, $815,920). This for a 1921 house on 1.287 acres, 2,108 sq.ft in aluminum siding. 3 bedrooms, 3 baths, garage.

98 Orchard has a market value of $1,117,600 ($782,380) for an 1871 house on 0.5785 acre, 2030 sq.ft., aluminum siding.  4 bedrooms, 2 full baths, greenhouse and garage.

100 Orchard (owned by the late Ada Cantavero, of Riverside’s Ada’s) has a market value of $738,300 ($516,810) for a 1936 house on 0.4236 acres, 684 sq. ft., 2 bedrooms, 1 bath, no garage.

If someone wanted to raise an eyebrow they might look at the land values assigned to each property. The Caravella 1.2 acres is valued at $1,084,200 and the house at only $81,400.

98 Orchard’s numbers are: $843,700 land, $273,900 building.

100 Orchard’s numbers are: $710,100 land, $28,200 building.

All parcels are in the R-12 zone so there may be subdivision possibilities for all or some of the three. I won’t go there because (a) I haven’t seen the land and can’t possibly opine on that and (b) who’s buying land these days? Is the Caravella house worth just $81,400 while the house next door, roughly the same size, worth $273,900? Again, I haven’t seen the places but if their conditions are dramatically different, sure. Neither number shocks me.

So those are my conclusions. I figured that, since I posted the allegations, I had a duty to Mr. Caravella to look into them and, so far as I can tell, they’re unfounded. Those who disagree, fire away – so long as your language is clean and you avoid completely off-the-wall accusations (Caravella may indeed be an alien but I don’t want to know about it) I’ll post them.

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