I realize that the fate of a Russian oligarch doesn’t stir up much compassion over here but it sure reveals exactly who Putin is and who we are dealing with. Hillary and Obama think we can negotiate in good faith with this man. Good luck.
Daily Archives: March 5, 2009
This was my experience, too. Hospitals gouge the bejesus from the medically uninsured.
A paradox of medical costs is that people who can least afford them — the uninsured — end up being charged the most. Insurance companies, with large numbers of customers, have the financial muscle to negotiate low rates from health-care providers; individuals do not. Whereas insured patients would have been charged about $900 by the hospital that performed Pat’s biopsy (and pay only a small fraction of that out of their own pocket), Pat’s bill was $7,756. For lab work — and there was a lot of it — he was being charged as much as six times the price an insurance company would pay.
After my story appeared, Monica complained she didn’t like the social criticisms it had made about the family–namely that they had tried to get into the Shinnecock Hills Golf Club, and had been blackballed from the Bathing Corporation of Southampton. These seemed to be her chief concerns. So imagine my dismay when something I’d heard a couple of weeks ago was confirmed two days ago–too late to be included in the original piece, but not too late to state here, or on MSNBC’sMorning Joe yesterday morning.
Thierry de la Villehuchet, the 65-year-old French-born financier who tragically killed himself on the night of December 22 in the New York offices of Access International, had sold–and subsequently lost–a $1.4 billion fund with exposure to Madoff to many of his French and European friends. It was recently explained to me that he had also invested his own money with Fairfield Greenwich. (When an F.G.G. spokesperson was asked about this, he responded, “A senior officer at Fairfield Greenwich has searched its records and found that the company has no shareholder of record in any Fairfield Greenwich funds by his name or his fund’s name.)
Suddenly the Noels’ concern with their social status seemed glaring. Why focus on criticisms of your social life when a man who was a friend and client of the family business is dead and others who invested with you have been financially ruined?
The House has approved the mortgage cram-down bill, empowering bankruptcy judges to reset mortgage interest rates and principal amounts owed. This is supposed to be yet another sop for the irresponsible and I suppose it is but once again, it will punish those borrowers with the ability and intention to repay their loans. Why? because the home mortgage will now be as risky as credit card debt. I doubt banks will be able to raise mortgage rates much in the coming depression but they can sure be pickier about who they lend to. There are already stories circulating of how much more difficult it has become to qualify for a mortgage – just wait until this clears the Senate.
Possibly because he’s spending his time in the state-mandated “swish and spit” fluoride program and now, participating in the “we’re all idiots hour” proposed by school parents and endorsed by selectman Lin Lavery.
Ms. Lavery said this includes programs like the one suggested by Glenville School parents Donna Curtis and Kathleen Simon known as “Earth hour” to encourage all Greenwich residents and businesses to turn off energy and electronic sources for one hour on March 28 from 8:30 to 9:30 p.m. This would be done as part of an overall “Go Green Schools” program, and Ms. Lavery urged the board to sign on, which got the immediate support of First Selectman Peter Tesei and Selectman Peter Crumbine.
I think the kids would be better served if they spent their time researching and reporting on the true cost of various residential recycling programs and their total ineffectiveness. Gee, critical, independent thinking? The schools would fall apart.
Instead, we’re just turbo-charging spending, spurred by Republicans and Democrats alike. The good news? I believe this is exactly what my fellow citizens wanted. So they asked for it and boy are we getting it!
The Senate appeared poised Thursday to send President Barack Obama a huge spending bill that awards big increases to domestic programs and is stuffed with pet projects sought by lawmakers in both parties. After some nervous moments, Democratic leaders seemed increasingly confident they would attract enough GOP votes to clear a critical 60-vote procedural hurdle and pass the sprawling measure Thursday night.
The $410 billion spending bill, spanning 1,122 pages, has an extraordinary reach, wrapping nine spending bills together to fund the annual operating budgets of every Cabinet department except for Defense, Homeland Security and Veterans Affairs.
And, to the embarrassment of Obama — who promised during last year’s campaign to force Congress to curb its pork-barreling ways — the bill contains 7,991 pet projects totaling $5.5 billion, according to calculations by the GOP staff of the House Appropriations Committee.
The earmarks run the gamut. There’s $190,000 for the Buffalo Bill Historical Center in Cody, Wyo., $238,000 to fund a deep-sea voyaging program for native Hawaiian youth, agricultural research projects, and grants to local police departments, among many others.
Several lawmakers took to the floor during the week to defend their projects, including Sen. Tom Harkin, D-Iowa, who backed $1.7 million for pig odor research. Sen. Carl Levin, D-Mich., promised $3.8 million to preserve and redevelop part of old Tiger Stadium to help revitalize a distressed area of Detroit.
By a 52-42 vote, Democrats cleared the way for the Obama administration to reverse rules issued late in the Bush administration reverse that says greenhouse gases cannot be restricted in an effort to protect polar bears from global warming. Another Bush administration rule that reduced the input of federal scientists in endangered species decisions can also be quickly overturned without a lengthy rulemaking process.
The measure also reverses Bush administration policies that tightened rules on Cuba travel and allowed Mexican trucking firms broad access to U.S. highways. A program popular with Republicans that gives $7,500 private school scholarships to District of Columbia students as an alternative to the city’s troubled public schools is in danger of being shut down next year.
The big increases — among them a 21 percent boost for a popular program that feeds infants and poor women and a 10 percent hike for housing vouchers for the poor — represent a clear win for Democrats who spent most of the past decade battling with President George W. Bush over money for domestic programs.
Democrats abandoned the budget process last year, opting against veto battles with Bush and instead gambling that Obama would win the election and sign the massive bill into law.
Generous above-inflation increases are spread throughout, including a $2.4 billion, 13 percent increase for the Agriculture Department and a 10 percent increase for the money-losing Amtrak passenger rail system.
Congress also awarded itself a 10 percent increase in its own budget, bringing it to $4.4 billion. But the House inserted a provision denying lawmakers the automatic cost-of-living pay increase they are due next Jan. 1.
Still, the State Department and foreign aid accounts would receive a 12 percent boost.
Separately, the House on Thursday rejected an effort by Rep. Jeff Flake, R-Ariz., to launch an ethics committee investigation into possible connections between campaign contributions made by the PMA Group and special projects designated in the spending bill that benefit clients of the firm. The vote to table, or kill, Flake’s resolution was 222-181.
Everyone knew it was going to happen just not when. The when is now, according to Jon Pierson president of recruiting company 10X partners as quoted by Hedge Fund Alert. Latest market data indicate that the base salaries for portfolio managers working for medium hedge funds in the $300-$500 million ballpark, have dropped by almost 50% from $300,000-$350,000 to $175,000-$200,000, and even veteran PMs are seeing their base cut.
Additionally, performance pay will be whacked too: while PMs may not make any money at all if their books or funds have lost money (great to know if you are raking in $$$ on those shorts while all your colleagues are perma bulls and about to scuttle your fund), their percentage of the fund’s performance fees (assuming you don’t have a Citadelesque 100% to climb before you hit your high water mark) will be cut drastically and much better performance will be needed to even get back to historical payoff levels. Lastly, if PM’s previously counted on getting 1% on the management-fee of the overall fund, this number will now be 0.50% and even 0.25% in most cases. Oh, and about those guarantees and signing bonuses… history.
(hat tip, Krazy Kat)
A regular reader writes:
Thought this anecdote might interest you — I decided to drive up to Riverside & OG this morning & take another look at the different neighborhoods and streets. I kept getting lost so when I saw the Raveis OG office I stopped in & explained that I was house hunting and would appreciate a local map. A lovely woman at the desk smiled and graciously gave me one (but forgot to ask if I needed a realtor). Another woman scratching lotto tickets looked up and said — “You know they sell those at the drugstore.” I kid you not. Please feel free not to post this comment, but I thought you might appreciate the heads up.
Some potential real estate buyers are afraid to come into a realty office because they fear they’ll be grabbed by an agent, shackled and never released. Not in my office! Why, we won’t even acknowledge your existence!
Just kidding, sort of. I work with some very nice, competent people who, obviously, weren’t in the office when this poor lady stopped in for some assistance. Years ago my law firm had a crackerjack of a tax attorney but we had to keep him locked in a back room because if he ever escaped and made contact with a client we’d lose the client in a heartbeat. I wonder if he too quit the law and has now joined my firm?
Ward Churchill is back and raring to go to court. Backed by Obama’s friend, ex-Weatherman Bill Ayers who avers that Churchill was fired for his daring to speak truth to power. Mr. Churchill, you may remember, came under public scrutiny after September 11 for saying that the folks in the Trade Center got what was coming to him. Until then, he’d slithered rather comfortably under the rock of obscurity, teaching grievance studies at the University of Colorado and swatting his mouth while shrieking Indian war whoops. Once people started looking, they discovered that (a) he was not an Indian; (b) he was a professional plagiarist, publishing others academic work under his own name; (c) he sold others art work claiming it was his work; and (d)he was in general, a whining, sniveling fraud. The University fired him for just (b) but I would have preferred to see him treated as the (real) Indians treated General Braddock’s men after the battle of Monongahela. You never heard from those guys again, did you? Oh well, Churchill’s trial will begin, end, be appealed and end again and perhaps then we’ll be rid of Churchill too. Ayers can always be found partying at the White House.
This new construction was first listed at $9.550 million in July, 2007 around the same time a similar sized house, #10, was listed for $9.495. The owners of #10 accepted an offer in February 2008 of $8.050 million but this one either didn’t get that bid or rejected it. Regardless, it failed to sell, despite eventually being dropped last July to $7.995 and today it was withdrawn. Will it return or will its owners move in and wait out the storm? Inquiring minds want to know.
Citigroup may have fallen from $55 to ninety-seven cents a share, but it’s still just barely smaller than Malaysia’s Bumiputra-Commerce Holdings Bhd and Turkey’s Akbank TAS.
Personally, I was bored with seeing “Shea Stadium” blaring out whenever I drove to the airports and I think a “Bumiputra-Commerce Holdings Stadium” sign will be an improvement, if the stadium walls are large enough to accommodate the name.
This is a nice looking house – in fact, I may send its picture to a client and see if he agrees. It was reduced today to $3.450 million from its original price of $3.850 but in reviewing its history I noticed that the last time it sold it started at $4.175 in December 2003 and didn’t sell until June, 2005, for $3.285.
Here at Raveis the management likes us to mail topical postcards to our client base to remind them that we’re still around. I thought this might be fun to mail out but I doubt Bill Raveis will pay for it.
Makers of children’s products and charities that run second-hand shops are stuck with more than $1 billion of inventory they can’t sell because of a new federal product-safety law, according to surveys by trade groups and the charities.
“We have millions of dollars worth of merchandise sitting in 30 40-foot-long trailers waiting to be hauled out to a landfill somewhere,” says Michael Klein, president of Constructive Playthings Inc., a closely held Missouri toy maker. The banned products include beach balls, inflatable toy guitars and blow-up palm trees.
Local outposts of Goodwill Industries International are also “filling up trailers with the stuff,” says Jim Gibbons, chief executive of the charitable group, which collects and distributes used clothes. The law affects clothing because lead is sometimes used in buttons, zippers, rhinestones and other embellishments.
Goodwill’s Mr. Gibbons says its stores may have to destroy $170 million in merchandise. The Salvation Army say it will have $100 million in lost sales and disposal costs related to used goods.
The trade groups and charities have been lobbying for an exemption to enable them to sell the problem goods, saying the danger to consumers is minimal, but so far they have failed to get much congressional attention.
Less-obvious types of products are also affected. The Motorcycle Industry Council, which includes more than 300 makers of off-road vehicles, estimates the law will force the industry to dispose of about 50,000 motorized bikes and four-wheelers made especially for children aged six to 12. Their value: $125 million.
The vehicles have small amounts of lead in their handlebars and frames to prevent corrosion, says Paul Vitrano, general counsel to the trade group.
Kimberly Owen, who started a children’s clothing business called Moonfly Kids Inc. about two years ago in Las Vegas, says about $4,000 of useless inventory — clothes and storybooks — sits in her garage. Her small-boutique customers canceled orders because she couldn’t produce certificates showing the books and clothes had been tested by an independent laboratory, she says. She recently closed Moonfly and returned to her previous job as a real-estate agent.
Does Geithner really believe that the drop in home prices is a “temporary dislocation”? That’s what his bailout plan seems to suggest – keep homeowners in their underwater houses for a few years and we’ll all be back at last year’s price level soon, happy and wondering what all the fuss was about. I sure hope he’s right but I’m absolutely convinced that he’s dead wrong. We’re falling back to earth and all of my tax dollars can’t prevent that.
Professor Reynolds says, “never attribute to malice what can be explained by incompetence” but reading this article on Credit Suisse, I think what we have here is a hybred – malice on the part of the Swiss, boneheaded stupidity by the buyers.
Resort Loans go belly up from Wyoming to Florida
Dealmakers from the Swiss bank’s Los Angeles office arrived to pitch Boespflug on the unorthodox loan in 2006, just when his Tamarack Resort was lining up financing for its base village beneath newly cut ski trails.
Unlike regular construction loans, which dole out enough money to complete one project at a time, this one would let him build several clusters of homes and condominiums at the resort simultaneously. The loan would cover just a portion of the development cost. The idea was that proceeds from selling units in one building would be used to finish the next, and so on. As long as the homes and condos sold, Boespflug would be fine.
“It was like putting candy in front of a 4-year-old,” Boespflug, 54, says. “It looked like a dream.”
Boespflug signed the documents in May 2006. Credit Suisse collected its fee and sold the loan to a syndicate of investors it had lined up. Mutual funds run by Morgan Stanley’s Van Kampen Funds Inc. unit bought the loan when it was made, or shortly after, according to regulatory filings.
Then the real estate market went south, and sales at Tamarack slowed. In December 2007, just 19 months after taking the Credit Suisse loan, Boespflug missed a $5 million payment.
Tamarack is one of at least eight high-end projects in the U.S. West, Florida and the Caribbean financed by Zurich-based Credit Suisse that are either in default or in bankruptcy.
Those failures reverberate in the financial system because Credit Suisse sold loans to investors who, in turn, put them into mutual funds or packaged them into securities called collateralized-loan obligations.
CLOs are similar to the collateralized-debt obligations that banks crafted out of subprime residential mortgages: bundled securities that are divided into tranches, each of which has a different credit rating and interest rate.
Both CDOs and CLOs paid interest that often exceeded that of conventional bonds. Both were popular when real estate was hot, and both are hurting now as the loans inside them go bad.
Many banks matched borrowers with eager investors during the real estate boom. Credit Suisse, Switzerland’s second- largest bank, was unusual in that it made big loans — $250 million to $675 million each — and because it almost cornered the market on syndicated loans to posh developments such as Tamarack, says Joseph Snider, senior credit officer at Moody’s Investors Service, which rated the projects for a fee so that Credit Suisse could sell the debt.
Many of the loans, which earned the bank millions of dollars in fees, were made out of Credit Suisse’s Los Angeles office and were then sold to investors by a group of Credit Suisse bankers in New York.
In its quest to loan money to the ski- and golf-resort operators, the bank was unusually aggressive.
“Usually, bankers don’t come to you; you go to them,” says Boespflug, a former executive at computer networking company Cisco Systems Inc. who taught skiing at Lake Tahoe on weekends when he worked at technology companies in the San Francisco Bay Area. “They came to us with a very fancy PowerPoint presentation.”
This house on Almira Drive sold for $630,000 in October, 2005. The new buyer must have run into financial difficulties because he tried to sell it in 2006 but priced it at $989,000. He lost it to the bank; today it’s yours for $499,000 and probaby less, if you argue. So the lesson here is, if you have to sell your house, do it. Otherwise, your bank will do it for you.
This isn’t a bad house – nothing special, but I don’t believe it was intended to be. Its builder probably thought he was being conservative when he priced it at $1.695 in November ’07 (when it was still under construction) but he’s found no buyer and today dropped it to $1.495. That’s about where a buyer of mine was considering bidding a few months ago, and perhaps this new price will encourage new bidders.