Splitsville – Ruth Madoff lawyers up

Ruthie’s getting her own lawyer. That’s usually a sign that a defendant’s interests just diverged from those of the other defendant. With Bernie set to plead guilty Thursday, does this mean he’s going to rat out his wife? I wouldn’t put it past him.

Next up – a trillion dollars for real estate developers

The John Hancock tower is estimated to have lost half its value since 2006. Why does this obligate taxpayers to bail out commercial real estate developers? Because it just does, that’s why. Once we started down this path, there is no logical reason to deny taxpayer money to any claimant with a perceived need. Some people warned about this.

By April, the federal government expects to have a plan to refinance office towers and shopping centers in danger of defaulting. The scale is likely to be massive: Last week Federal Reserve Chairman Ben Bernanke hinted at providing another $1 trillion in credit.

The goal, he said, is to head off a “looming crisis” that could spread far beyond “For Rent” signs and shuttered mall shops. For now, commercial delinquencies are few. But office vacancy rates are heading toward record levels, according to one estimate, and banks are exposed, with $1.72 trillion in commercial real estate loans outstanding as of Feb. 18.

Just as significant, many insurance companies and pension funds have invested in real estate, putting them at risk, as well.

“The need is urgent,” says Kenneth Rosen, a professor of real estate at the University of California in Berkeley. “It is important to get this done before we have another problem.”

Just in case you thought a depression might bring liberals to reason

Obama to emphasize “social issues” in world trade agreements.  The ” incompetence or malice ?” question is edging closer to malice every day.

A religion of peace and reason

Saudi court sentences 75-year-old woman to 40 lashes and four months in jail for having nephew bring her bread. And Saudis are the moderates in the Arab world.

Oil prices

Yesterday I questioned whether the towel heads could really push oil above $50 a barrel in the face of a world-wide depression. Tonight the Times reports that others are asking the same question. I’m sorry if cheap oil hurts Iraq’s attempts to recover but if it helps keep Chavez and the Iranians from causing mischief, I say bring it on.

Summering in the Hamptons? Bring a tent

Bitsy Manana thought she’d rented a summer shack in the Hamptons for the princely sum of $112,000 plus $14,000 commission to her broker. That was in October. In January, the brokerage firm informed her that there was a slight problem – the house was owned by a builder who’d declared bankruptcy the previous August. Bitsy wants her money back and to demonstrate her resolve she’s sued the builder/landlord and the broker. I think she’ll find the most success with pursuing the broker.

Hat tip: Bovina Bloviator

In the new world of Obama we’ll do away with politics as usual

Obama’s Secretary of Agricultural calls for increased ethanol mandate. He was speaking before an audience of corn farmers, the daring guy – speaking truth to power!

A taste of socialized medicine

I’ve had a long spell of no medical insurance due to some minor (to me, big, apparently to insurance companies) preexisting conditions, so I was glad to sign up for the state’s Charter Oak insurance program when it was offered to all comers. It’s a lousy policy – $100,000 lifetime cap – but I figured it was better than nothing and would cover me for a week at Greenwich Hospital should I need it.

If my experience is typical of what we can expect under government run medical programs, we’re in for a rotten time. You go nowhere in the system without a referral by a “primary care physician” so I went through the handbook looking for a list. Oops, not ready – try on line. Easy for me, I wonder how easy that will be for some other folks. But off I go and discover there are no doctors participating in Greenwich. Not surprising, so how about Stamford? There are a handful, most of whom specialize in pediatrics, not my immediate concern, and a band out of some medical clinic that has an answering machine, gives the names of doctors you aren’t looking for and makes no mention of those you are. Doesn’t sound like exactly what I want, so I try a name of another one (none of these doctors are Board Certified, by the way, in anything) and call the number listed on the on line directory. Oops – that’s her home number, doesn’t accept messages, call a commercial answering service whose number is provided and which I do.

Five days later, with no response, I try Norwalk. Again, it turns out that the doctors are all operating out of a medical clinic at the hospital itself – conjures up hours in a dirty waiting room surrounded by sickly, infectious children – or aren’t accepting new patients.

So that’s it. I don’t know whether I’ll continue paying $250 a month to cover what I hope is the unlikely event of a hospitalization, but I’m not planning on using the Norwalk Hospital Clinic as my primary medical provider. I’m not planning to, but I await with some trepidation the medical program Obama is cooking up for us. This could be worse than recent developments in the real estate market.

Call me stupid but …

The builder/owner of 69 Rockwood Lane paid $2.729 for it in a bidding war (asking price was $2.295) on October 27, 2008. He must have looked at the place in daylight and seen the same rocky, swampy ground that I do because he immediately put it back up for sale (smart) at $3.495 (dumb). I suggested on this blog that that was a ridiculous premium to pay for two month’s ownership, especially in a market that’s falling, not rising. I endear myself to no one with those kind of observations but today the unwilling owner dropped the price to $2.995, indicating that I am not alone in my appraisal of this property. I suspect there is more unhappy news in store for this guy, but let’s spare him that for now, shall we?

Well this ought to make me popular

Our Selectmen have endorsed an ordinance that will ban registered sex offenders from our beaches and parks. I think this is overkill and unnecessary. From my prior practice, I know two people who have had to register as sex offenders, each for questionable rapes that involved a lot of alcohol consumed by both the complaining victims and the perpetrators. The incidents occurred more than 15 years ago and neither involved children, minors or violence. What possible protection are we extending to our children by banning these individuals from our beaches and parks? And if in fact we are doing nothing useful, and I suggest we are not, then why do it? Feel good measures are easy to pass, but create a false sense of security (witness the banning of finger pointing by kindergartners in response to the Columbine shootings) and punish people who have paid whatever debt society deemed owed long ago and are entitled, in my opinion, to lead as normal a life as possible.

2 Meadow Rd (Deer Park)

This 16,000 square foot cottage, nestled serenely alongside Greenwich’s bucolic Lake Avenue, had trouble finding a buyer at $16,250,000, so today its price dropped to $13,250,000. That should do the trick.

What’s this supposed to mean?

The builder of a proposed house at 20 Langhorne Lane has dropped his price again, this time from $10.998 million to $9.998. Original price was $14.998 million, so I guess it shows progress, but is the builder still planning on building the 17,500 square foot (4,500 of which would be basement) monstrosity that no one wanted at $15 million? If so, why? And would corners be cut to reflect the $5,000,000 price drop or is this an indication of how much the builder had hoped to skin off a buyer? Neither choice inspires confidence.

This land is also for sale, by the way, for somewhere in the 2’s. Like 38 Langhorne, these parcels sold for around $2 and were put back up for sale at $4 million. No one bit, surprisingly. If I were interested in either parcel (and 38 looks quite nice) I think I’d negotiate as low as price as I could for the land and design the house to go on it anew.

Enjoying a tryst with an investment banker? Make sure he’s still employed!

Swiss IB’r (no, not our own Retired IB’r, surely) admits to blackmailing ladies with videos of their lovemaking . (Hat tip, Dealbreaker.com)

MUNICH, Germany, March 9 (Reuters) – A former Swiss investment banker admitted in court on Monday that he seduced and blackmailed Germany’s wealthiest woman, heiress to the BMW car empire, with secret films of their hotel trysts.

Helg Sgarbi admitted seducing heiress Susanne Klatten and three other wealthy women and persuading them to pay him almost 10 million euros ($12.64 million) with various tales, including one that he had fallen foul of the Italian mafia. 

Klatten, a member of the Quandt family — the leading shareholders in carmaker BMW — went public last year with the story of how her lover filmed their secret meetings and later demanded 49 million euros not to reveal them.

 The 46-year-old married mother-of-three had first met Sgarbi at a health centre, state prosecutors told a crowded court.

She later handed him a cardboard box containing 7 million euros in 500 euro notes, believing he had paralysed a child in a traffic accident in America and needed the money to pay compensation to avoid being jailed.

 Sgarbi then demanded 49 million euros, threatening to send photos and tapes of their hotel-room rendezvous to colleagues, family and the press. His admission means Klatten may not have to appear in court. 

State prosecutor Thomas Steinkrauss-Koch told the court he would seek a nine-year prison term.

I’m not saying that any of Greenwich’s finest would stoop to such un-gentlemanly behavior but there’s nothing more vicious than a banker fearful of losing his Beemer. Be careful out there!

Monica, Ruth, now Leila – do they have triplexes at Bedford Women’s Prison?

The first female Ponzi has been exposed by the dropping waters. Leila Jenkins, of Newport and Palm Beach (hiya, Bernie! Hiya, Walt!) has been exposed by the SEC – seems she claimed a billion dollar asset base all held in “secret” Swiss bank accounts. So secret were these accounts, it turns out the Swiss never saw them! Atta girl, Lila, score one for the girls.

(hat tip, Zero hedge)

UPDATE: Oh, the British press is going to have a field day with this one. Turns out, Miss Leila was once married to some English Earl and he himself was a bit of a cad.

For more than a decade, former Tory minister the Earl of Caithness has been haunted by the suicide of his wife. She took her own life after learning of her husband’s affair with another woman.

The tragedy marked the apogee of the sleaze and scandal that engulfed the government of John Major. Within hours of Countess Caithness’s death, her husband – a childhood friend of Princess Anne – had resigned from his post as Transport Minister in the House of Lords.

But, at last, it seems the man whose life has been dominated by this heartbreaking episode has found happiness.

But intriguingly it is not with the woman with whom he was conducting an affair at the time of his wife’s suicide.

Yet even as it emerged that, at 55, Malcolm Caithness is to marry a wealthy American banker, the controversy over his private life showed no sign of abating.

Yesterday’s announcement that he has become engaged to Leila Jenkins has shocked close friends and members of his late wife’s family who always blamed the Earl for her death.

On the eve of their 19th wedding anniversary, Lady Diana Caithness – the mother of his two children – put one of her husband’s shotguns to her head and pulled the trigger. At the time, Caithness was having a relationship with divorcee, Jan Fitzalan Howard.

Their affair fizzled out soon afterwards, with Mrs Fitzalan Howard devastated that she, too, was blamed for Lady Caithness’s suicide. Caithness, however, has not been short of female company in the intervening years.

“He has had a number of flings, but has always been tricky to get to the altar,” says one old friend. “He dated one lady for three years and whenever marriage was brought up would say that his family would not allow it.”

Now, say the friends, he has found the perfect match in rich Miss Jenkins, who although in her 50s, has never married.

She is the high-powered president of Locke Capital Management, a global investment firm with offices in Dallas and New York.

A Harvard graduate, she has been an investment manager for nearly 30 years and shares her time shuttling between her New York flat and the Earl’s London home. Miss Jenkins tells me she and the Earl have yet to set a date for their wedding.

“I’m not really in any position to give any comment because that’s my fiance’s department,” she said from her New York apartment.

Meanwhile, Lady Caithness’s brother, Richard Coke, admitted he was surprised at his former brother-in-law’s impending nuptials. “I didn’t know he was engaged,” he says from his home on the family’s 1,000-acre estate in Weasenham, Norfolk. “I don’t know the woman concerned. It would be completely out of place for me to say anything more at all.”

A friend of the Coke family said: “Diana’s parents were very angry, but they are dead and we care little about what Malcolm does.”

This isn’t nice

There’s a house in the Back Country listed for sale for just under $5 million which would be a good price, if the house and its location were better. They aren’t, so I’m not showing it, but I did discover, no thanks to the listing broker, that there’s a $10 million lien on the property, the result of some unfortunate business decisions of the owner. It’s not impossible to sell a house that’s so burdened, but the banks have to cooperate and, since there won’t be any cash coming out of the sale, there’s a real possibility that the buyer’s broker won’t get paid unless an agreement with the liening banks is reached ahead of time.

The Greenwich Board of Realtors is supposed to have a rule requiring listing brokers to show a listing as a “short sale” precisely so as to warn buyers’ agents of this possibility. I could be wrong, but it seems to me this particular broker has violated that rule. If so, nothing would surprise me less.

A bellwether

1038 Lake Ave

This large house way up on Lake Avenue on 4 acres sold for $4.4 million in 2003. So far as the listing shows nothing was done to it between purchase and January, 2005 but the buyers put it back up for sale for $9.7 million. Their estimate of how much the market had gone up was flawed and the listing expired. Today the house is back at a new price of $7.495. I’ll be curious to see, if it sells, how close it comes to the 2003 price.

The owners of 46 Quail Road, on the other hand, have already decided to bite the bullet. They paid $4.875 million for their house in March 2005 and as of today, will part company with it for just $4.3 million.

Good news, bad news

7 Dandy Drive

7 Dandy, a very well built house, is reported under contract. Its last asking price, down from an original $2.579 million, was $2.250 or so and I assume that, in this market, the buyer negotiated a price below that. So that’s good news for the builder and the buyer, who ended up with a good deal. The not so good news is reserved for the guy up the street who bought essentially the same house from the same builder, via bidding war, for $2.577 million (or thereabouts) a year or two ago. I figure that the second 7 Dandy Drive closes, the owner a few doors up will see a half-million dollars of his equity disappear. He’ll still have maybe 77% of the original value (or his bank will) and both are really good houses, but I think I’d prefer to be the second buyer, not the first.

2004, 2009 – that was then, this is now

In 2004, 7 Orchard Drive in Milbrook sold for $3.780 million. The buyers relisted it for $4.895 in May, 2006 and today, several brokers and price changes later, it’s offered at $2.999 million.

New pricing

I had coffee with another realtor this morning and she told me that she and a friend had gone through Friday’s Greenwich Time real estate ads looking for prices that reflected the “new” market vs. those that were still pegged at the old. No surprise to me, she and her friend felt that most houses advertised were still in the old market.

That said, here are two price reductions listed today. Old or new market? Buyers will decide that – I just report.

57 Byram Shore Road

 

This house on a half acre with water views sold for $1.450 in February 2002, was renovated and put back up for sale in January ’05 for $5.775 million. It eventually dropped to $3.950 and expired unsold. The owner tried again in ’06 at $4.495 and again was unsuccessful. It was again returned to the market in November ’08, this time at $4.650 and today was reduced to $4.295.

435 Lake Avenue, a total renovation, was priced at $12.750 million last fall and dropped today to $10.5 million. That’s quite a drop and perhaps reflects the seller’s over-estimate of his house’s worth. He may still be engaged in wishful thinking but it is a very nice house and 18% lower is better than 18% higher.

More on the anti-religion bill

Greenwich Time has picked up the story mentioned here last week – Connecticut’s Judiciary Committee is proposing to strip the Catholic Church of control over its churches.  Love that church or despise it, messing with the United States’ Constitution sets a bad precedent. Unless I’m mistaken (a not-unlikely proposition) this bill is so unconstitutional that one can attribute its success in advancing so far through our legislature as attributable only to (1) abysmal ignorance, (2) a deep antipathy against the Catholic Church and a vote-getter, do-nothing group of politicians, or (3) both. I’m going with (3).