I reported this yesterday or perhaps the day before but when the Hartford Courant says the same thing, why not dust it off and run it again? Dodd was a major benefactor of Ponzi man Allen Stanford. Asked for comment, our Senator said he was too busy stonewalling requests for documents on his sweetheart Countrywide Mortgage deal to attend to pissant gifts from low lifes like Stanford. “I’ve got my reputation to protect, you know,” Dodd claimed. In fact, I’d sayhis reputation is pretty firmly established.
Daily Archives: February 19, 2009
Say what you will about the fellas who brought down the world’s banking system, they’re single-minded, tough and greedy, so why should we expect them to fold their tents and disappear just because things are a little rocky? These are some very well connected dudes – just ask Chris Dodd, – and they may be on their way to grabbing yet another get-rich bailout courtesy, of course, of the schnooks. Take a look at this latest proposal for guaranteeing bad credit card debts. It’s another trillion dollars printed up and passed out via another program, TALF: Term Asset-Backed Securities Loan Facility (that’s cute). That’s right – dead beats do well, taxpayers get reamed, and hedge funds?
Simon Johnson, an economics professor at the Massachusetts Institute of Technology and a former chief economist at the International Monetary Fund, said many people might take a dim view of the TALF program because it provided government subsidies to investors like hedge funds. Investors who borrow from the Fed could enjoy annual returns of 20 percent or more.
“The TALF,” he said, “raises a lot of questions.”
Twenty percent returns? Before the kids start leveraging? We’re talking trillions and trillions here, and it’s all theirs to keep and to spend. No questions here – start polishing those marble floors and call your realtor; the boys are back in town. Sooeee.
Russian billionaire, having lost those billions, wants out of his agreement to buy house on the Riviera. He put up 39 million pounds on a 50 million pound house (you bankers know what that is in real money) and the seller would prefer to keep it, merci beaucoup. Call in the lawyers.
The New York Times stares intently at the belly button lint it has harvested and ponders the question, “What’s wrong with California?” Considering that politicians going back all the way to when Ronald Reagan was Governor have warned about its excessive spending, its high taxes and regulations driving hard working people from the state, its crazy left and its greedy politicians, you might think that the question called for a pages long discussion. Fortunately for the average Times reader, the answer is as simple as it is short: Right wing talk radio. Next question: why don’t Arabs love us?
Some great blowback from the one-two punch of appearing in the NY Post Sunday and ABC NY news on Monday. It’s driven certain members of the Greenwich real estate fraternity absolutely crazy. “How can we stop him?” was, according to a friend of mine at another firm, the most common question making the rounds on Tuesday. So far my wonderful boss at Raveis, Becky Hanley, has stood up to the bullying and the demands that she curb my enthusiasm for printing the truth. Can she hold out? Will this blog be coming from a private home in the weeks ahead? It’s all kind of exciting.
If I am forced to go solo, and I don’t think I will be, it would be fun to be unleashed. The complainers have no idea how restrained I am in what I choose to report though, if they searched their shallow souls, they might be concerned. Have you ever wondered, for instance, why the “Three Sisters” – Greenwich, New Canaan and Darien maintain listing services separate from the Connecticut MLS and whether that helps Greenwich sellers? I have.
It’s not just 250 rich Americans who were UBS tax cheat clients as reported just this morning. There are 52,000 of them. And the IRS wants their names. Indictments in a couple of weeks. Does Mustique have an extradition treaty with the U.S.?
That’s the rumor in Citifile. Conference rooms reserved, security guards brought in from Greenwich, Tesei ready to wield the axe. Not that you care, fellas, but I’ve got some clients who work for you and I’d like to sell a few houses here, okay? So layoff – oops- so keep your hands off them, would ya?
Allen Stanford has been found in Virginia. So much for my praising him just yesterday for availing himself of his fleet of jets and pulling a Vesco. Is there no one among the Ponzis who knows how, and more importantly, when to take a powder? Sheesh. How about you, Walt – still in Mustique?
Biofuels will speed up global warming. We’re doomed! Weeeere dooooomed!
As I was leaving an open house today (boy, those are getting fraught these days) a real estate agent with a huge amount of experience and wisdom said to me, “This thing has has to be priced at X (25% lower than its asking price). I agreed – if anything, she was being too generous, but she, unlike me, doesn’t blog and keeps her opinions to herself. But her words demonstrate what I’ve said here before: agents on top of their game know an over-priced piece of erhumph when we see one – everyone knows it, we just haven’t said so before. But we didn’t sell them to our clients at that price, either. The Greenwich Board has kept an illusion going for years by showing a “sell to ask” ratio of around 96% but wouldn’t disclose that they used the last asking price, not the first. So houses would come on, sit for a good long while, drop down to the realm of what passed for reasonableness and move off the market at 15%-25% below their first price. I complained, in print, about this bit of chicanery many times to no effect – the realtors like it that way.
What’s (almost) funny now is that sellers and their agents are still trying out ridiculous prices, I guess in the hope that some sucker will bite. That’s not happening these days – it’s hard enough to convince a buyer that a certain price is a good one even after four price reductions, so my advice is that this is not the market to continue that practice. But they keep on. I can’t remember how many houses I’ve seen recently that were truly priced to sell, but if I could, I’m sure I wouldn’t need more than the fingers on one hand to count them.
Beats me. Another week is passing without any significant market activity (26 Circle Drive, discussed here a couple of times, was reported as “pending” today but that’s old news and asking price was just $2.1 million). We have essentially no data to use to guide clients on what the current market price for a given property is, or should be. I’m using 2000 prices as agood starting point for buyers, but is that the bottom? I have no idea.
I had been advising readers that if they didn’t have to sell now, they shouldn’t, but in effect, that’s promising that we’ll see a rebound and I have no reasonable expectation that will happen any time soon. If it doesn’t, and prices keep dropping, then holding on to property now may look like a horrible idea nine months from now.
I suppose this all just struck me while reading the post below on what’s happened to financial stocks. They dropped 50% last year and another 40% this year. They could come back – stranger things have happened – or they could get nationalized and wiped out. You tell me which. But I’d have advised (thank God,no one asked me) a bank stock owner to hold on last December rather than realize his losses. Oops.
My brother Gideon, who is more of an optimist than I, thinks, or hopes, that warm weather will bring out buyers who will start buying. When sellers see what the new market value is they will, according to this sunny scenario, gulp hard and whack the bejesus out of their prices, thereby rejuvenating the market, albeit at a much lower “reset” price. I, on the other hand, have a deep, abiding awe at the power of the human being to deny reality no matter how hard it smacks him in the face. In this Eeyore scenario, sellers won’t budge, buyers won’t budge, and we’ll all sit around in a thickening morass of unsold houses that slowly lose their value.
I do hope Gideon’s plan wins out.
Wall Street tanks. Oh, when will I learn? When will I learn?!
The S&P 500 Financials Index retreated 5.2 percent to its lowest level since January 1995. Prudential Financial, the second-largest U.S. life insurer, fell $3.59 to $19.02. Prudential’s short-term debt rating was lowered by Fitch Ratings, rendering the holding company ineligible for the U.S. commercial paper program.
Financial stocks led the S&P 500’s 38 percent decline in 2008, its steepest yearly loss since 1937, as the worst U.S. real-estate slump since the Great Depression produced credit losses of more than $1 trillion globally.
The group, which lost 57 percent of its value last year, has fallen 40 percent this year as rising unemployment casts doubt on the ability of consumers to stay current on other forms of debt. The threat was highlighted today after the Labor Department said the number of Americans collecting jobless benefits jumped to a record 4.99 million two weeks ago, signaling the job market is still deteriorating.
The prospect that the federal government will nationalize some banks, rendering their equity worthless, is dogging Bank of America and Citigroup in particular, said Anton Schutz, president of Mendon Capital Advisors Corp. in Rochester, New York.
Investors are “afraid the government’s going to wipe out everybody that’s got an interest,” Schutz said. “Nobody knows what the rule book is. In the meantime, the stocks are getting destroyed.”
Credit-card defaults are about to surpass a previous high of 7.53 percent as people losing jobs fail to repay debt, according to Fitch Ratings.
Our new Attorney General thinks Americans should engage in frank discussions about race to help resolve unspecified “issues”. I’m sure that’s a fine idea but since we now have a Black U.S. Attorney working for a Black U.S. President, couldn’t we declare, if not “mission accomplished”, at least a short respite from white guilt? Black History month has only two weeks to run. What about we take off until it ends?
Not the way I figure things but he has just lowered the price of his unwanted house on Meeting House by a million dollars (actually, today saw the second of two $500,000 cuts) so that you can now dine where he did for just $4.9 million. Or less – who knows?
Judging from some sellers’ reaction to low bids (and I am not saying Mr. Philbin is one – I’ve never met the man), a price cut is money out of their pocket, rather than an acceptance of reality. To use this house as an example, it was clearly not worth $6 million when it was listed or someone would have bought it. If someone now comes along and offers $3.9 million, that’s not a $2 million haircut – it’s an offer.
Update: it’s also for rent at $8,000. The calculator says that with 85% down, 6.125% interest on the balnce and $25,000 in taxes and 5% appreciation a year you can pay 3% more each year in rent and always come out ahead renting instead of buying. Hmm.
This is a pretty snazzy 2004 mansion on Round Hill that didn’t sell a few years ago even though it was marked down from $13.9 to $9.999 million. But it’s got everything a young executive eager to impress should have: 6.5 acres of great lawns, huge, sweeping staircase, marble everywhere, pool, pool house, etc. etc. As of today, you can rent it for $30,000 a month. Just for a lark, I ran some numbers through the rent vs. buy calculator to the right of this blog and tossed in some top-of-the-head assumptions: selling price, $10 million, taxes, $45,000, mortgage, $1 million at 6.15%, rent, $30,000 per month. The calculator’s conclusion:
If you assume a 5% appreciation in value, buying is a better deal than renting after 6 years. At 4% appreciation, it will take 14 years for buying to make sense and at any rate below that, buying never makes (economic) sense. Never is a long time.
So depending on how you guess the market will perform and what your feelings are towards owning a nice house versus merely occupying it, you can choose as you wish. What I find interesting is that until 2006, I don’t think anyone would conclude that renting was the better deal. Now it could be.
Thanks to a reader I was reminded to check out “Seeking Alpha” and this article by a James Quinn. Fun bedtime reading and if you want to stay up tonight, take a gander at this chart from Shiller. Bummer.
The price of oil has dropped way below what Venezuela needs to support its promise to pay all friends of Hugo a zillion quadrillion pesos each, so what can Hugo do? Well, how about pumping more oil? Yeah, that’s the ticket! There are a couple of problems with this, even overlooking his previous promise to punish us by pumping less. First, he’s fired everyone who knew anything about producing oil and replaced them with party hacks so oil production is plummeting, not increasing. Second, he’s nationalized and confiscated the property of oil companies foolish enough to have remained after his ascension to power, so there’s no one around to increase production. Third, his latest plan calls for new oil companies to come in where others were expropriated and supply $20 billion because Hugo doesn’t have it. Assuming there is someone stupid enough to join Chavez in his delusions (what’s China doing with its cash these days?) they’ll deserve everything they lose when Chavez pulls the football away once again.
Personally, I doubt anyone is that stupid and I think Chavez is going down hard. Too bad he’ll bring Venezuela down with him but they voted him in, so that’s tough. We all get the government we deserve, which is what has me so worried these days.