Daily Archives: March 13, 2009

Lead law idiocy

Can’t sell snowmobiles or motorcycles – a kid might suck on a handlebar and die!   (hat tip, Overlawyered.com)

[M]ore than $1 billion of inventory was pulled or in danger of being pulled from shelves, showrooms, display cases or racks for fear of stiff penalties — up to $100,000 in fines and five years in jail.

In Massachusetts, thrift stores stopped selling kids’ clothing. Around the country, some libraries considered pulling children’s books. In Minnesota, among the hardest hit were ATV and motorcycle dealers, who pulled thousands of vehicles from showrooms.

Among the items suddenly not available was the 100cc Kawasaki motorcycle that Jacqueline Riess needs to start training to defend her title this season, beginning in April.

“It’s almost unfathomable how far [the new law] reaches,” said Owen Riess, Jacqueline’s father. “She can’t believe that you think she could get lead poisoning from motorcycles. She thinks they’ve all gone crazy to think that they are going to eat their motorcycles.”

The ban also affects motorcycle parts, so even though Jacqueline will use last year’s motorcycle — an 85cc Suzuki — if it breaks down this year she will not be able to fix it.

“This is endangering my daughter and jeopardizing her season,” Riess said. “If I can’t replace a part that needs to be replaced for safety, then we’re done. The season’s over.”

Although libraries, manufacturers, dealerships, thrift stores, jewelers and others knew the changes were coming, there was hope the commission would grant exemptions for products obviously not meant to be ingested, such as books and motorcycles.

But a strict, near-zero-tolerance interpretation of the new law by the Consumer Product Safety Commission has parents, consumers, manufacturers and politicians angry and frustrated.

 

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Gave proof through the night that our planes weren’t still there

We recently mentioned, thanks to a reader, that Greenwich residents own an incredibly high number of planes. Sales were robust as late as last summer but I posted an article then that predicted that prices would soon start falling from the sky. Now they have, and used planes are a glut on the market (Bernie Madoff’s boys kept their dad’s jet for awhile even though all other assets had been frozen but that was presumably so that they could get out of the country with hot cash – they needed that plane, man!). Unfortunately, that glut is only growing larger, thanks in part to the efforts of men like this guy, an airplane repo man. He almost always gets his plane, even if the owner flies it out of Westchester Airport and tries hiding it in Arkansas. 

 

"What Gulfstream? I don't see no Gulfstream."

"What Gulfstream? I don't see no Gulfstream."

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Trouble paying your mortgage? Take a hike!

It’s not the fatal stigma it used to be, according to this NYT article. Short sales (bank takes title and waives any deficiency judgement), foreclosures, mortgage modification, whatever, in this day of new morality, stiffing the lender isn’t going to ruin your life forever. The affect on your afterlife is a matter best discussed with your priest or rabbi.

In an economic environment like this one, however, the consequences of giving up on your mortgage may not be as painful as they were a few years ago. Yes, it’s almost always preferable to negotiate a better deal on your existing mortgage than to walk away. But if you can’t work things out with your lender, you probably won’t be sued. You shouldn’t receive a major tax bill either. And the damage to your credit will not be permanent or insurmountable.

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But the debate is over!

As recently as last week, Al “hurricanes are caused by global warming” Gore refused to debate a real scientist about global warming because “it was just silly” to question it any longer. Today comes news that global hurricane activity is at its lowest rate ever.  Personally, I don’t believe this fact says anything about global warming one way or the other but I’m not the one who seizes on every weather disturbance as evidence of global warming – Al Gore is. So Al, put this in your fat mouth and clamp down, would ya?

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Madoff and his victims

The Times’ Joe Nocera takes an unsympathetic view of Madoff’s victims. Hard not to agree with him that, sorry stories or not, we taxpayers shouldn’t make them whole.

“These were people with a fair amount of money, and most of them sought no professional advice,” said Bruce C. Greenwald, who teaches value investing at the Graduate School of Business at Columbia University. Mr. Hedges said: “It’s like trying to do your own dentistry. It is a real lesson that people cannot abdicate personal responsibility when it comes to their personal finances.”

And that’s the point. People did abdicate responsibility — and now, rather than face that fact, many of them are blaming the government for not, in effect, saving them from themselves. Indeed, what you discover when you talk to victims is that they harbor an anger toward the S.E.C. that is as deep or deeper than the anger they feel toward Mr. Madoff. There is a powerful sense that because the agency was asleep at the switch, they have been doubly victimized. And they want the government to do something about it.

Even Mr. Wiesel thought the government should help the victims — or at least the charitable institutions among them. “The government should come and say, ‘We bailed out so many others, we can bail you out, and when you will do better, you can give us back the money,’ ” he said at the Portfolio event.

But why? What happened to the victims of Bernard Madoff is terrible. But every day in this country, people lose money due to financial fraud or negligence. Innocent investors who bought stock in Enron lost millions when that company turned out to be a fraud; nobody made them whole. Half a dozen Ponzi schemes have been discovered since Mr. Madoff was arrested in December. People lose it all because they start a company that turns out to be misguided, or because they do something that is risky, hoping to hit the jackpot. Taxpayers don’t bail them out, and they shouldn’t start now. Did the S.E.C. foul up? You bet. But that doesn’t mean the investors themselves are off the hook. Investors blaming the S.E.C. for their decision to give every last penny to Bernie Madoff is like a child blaming his mother for letting him start a fight while she wasn’t looking.

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2009 sales

Barring any last minute reports, today’s a dull day for real estate transactions, so I thought I’d look up what happened with the eight sales we’ve seen so far this year.

48 Parsonage Rd, new construction, sold for $6 million. (They asked almost $8) . Because it’s new there are no useful data on it so we’ll skip it.

4 Waterfall Lane sold for $900,000. It sold for $879,000 in 2004 which, adjusted per the CPI Index, was the equivalent of $982,00 today. And it’s 2002 sale price, pre-renovations, was $730,000, an inflation-adjusted $856,778 today.

14 River Lane also sold for $900,000. It last sold for $1.570 million in 2005.

14 Overlook sold for $1.550 million. Its $1.625 sales price, adjusted for inflation, would be $1.816. And its 2007 sales price of $1.896 needs no adjustment at all to detect a loss.

10 Shelter Drive sold for $1.762 million. There is no past sales history but it did ask for $2,993,000 back in 2006 and stayed unsold through many price cuts.

7 Gisborne Place sold for $2.2 Million. It sold for $2.860 in Jan. ’07 and $1.810 in 1999 ($2,300,000 in ’09 dollars).

2 Jofran sold for $2.850. Again there is no sales history but the selling firm reported a phonied-up “asking price” of $3.2. The house was never listed on the MLS and therefore never really exposed to the market so its selling price could be on the money or way off base one way or the other.

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William Pitt stale data mystery explained

Brother Gid writes:

[Not to defend Pitt but …] Actually, the board (of the Grwch Assoc of Realtors) enacted a policy a few days ago to FORCE participating offices to report sales and “clear out of the system” a lot of lingering reported contracts where the listing broker, amazingly enough, never got around to reporting the actual closing. Hence, the strange sight of that 4-year old Lockwood Drive sale of Dancy Cassell’s a couple of days ago.

So Pitt’s not being duplicitous – just inattentive. Ah well, happens to all of us.

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Well at least we’re not back to 1989 levels – yet

150 Pecksland Road, listed at $6.250 million in May, 2007, was deleted today from our listings and has immediately reappeared at a new price of $4.789. Sellers do this because the Greenwich Multilist is so easily fooled – the listing now makes no mention of the original price or even hints that the house has been lingering. I don’t think I have a problem with this, actually – a stale listing date harms the seller and if a buyer is curious (and he should be) his or her agent can easily dig up the information. I just mention it so that you’re aware of the practice.

In any event, I looked up the sales data on this house and it sold for $1.880 million in 1989. Using the CPI calculator, that’s $3,106,420 in 2007 dollars, and we’re obviously not there yet. Of course, the place hasn’t sold yet, either, so the jury’s still out. And, although it didn’t help 7 Gisborne’s price, like it, this house was extensively renovated in 2006. That used to count for something.

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1999 Levels

Of the four “sales” reported today, three are Wm. Pitt sales from the spring last year (2 are definitely Wm. Pitt the other is, I believe, also Pitt, because really, can there be two agencies trying the same thing on the same day?). Let’s ignore them for the worthless data they are and look at the only genuine sale reported, 7 Gisborne Place, in Old Greenwich.

Gisborne PL

Gisborne PL

This house, built new in 1991, sold for $1.810 million in 1999. The buyers completely renovated and expanded it (1,000 sq. ft.) in 2006 and sold it in January, 2007 for $2.860 million. Those buyers, in turn, listed it for sale in 2008 and finally sold it yesterday for $2.2 million. I suggest to you that, taking into account the costs of the 2006 renovation and the inflation since 1999, this house sold for, at best, its 1999 price. Hoo boy.

UPDATE: I was wrong. Using this inflation calculator pegged to the CPI $1,800,000 in 1999 = $2,233,082.68 in 2007 dollars. And we’re in 2009, so if you added in two more years of inflation and those renovation costs, where are we – 1994?

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Chrissy, we hardly knew ye

9 acres and a wheelbarrow

9 acres and a wheelbarrow

But we certainly had our suspicions. The mainstream media is picking up on Dodd’s phony land deal in Ireland and the temperature’s rising.

Dodd is already the subject of a Senate Ethics Committee probe into possible conflicts of interest stemming from his Countrywide mortgages. Recent polls suggest Dodd is in for a tough re-election battle in 2010, and his representatives are trying to limit any further damage.

Another issue: Dodd’s Senate financial disclosure statements set the property’s value at between $100,001 and $250,000. In 2006 and 2007, Dodd footnoted his disclosure to add that this amount is “based on appraisal at time of purchase.”

Senate ethics rules require valuations to be current. Smaller properties in the Galway area reportedly sold last year for $700,000 and up. But Dodd’s office told Rennie an appraisal is not required for purposes of disclosure.

“It seems that launching these petty attacks is a lot easier for the Republicans than explaining their support for George Bush’s failed policies or offering any real solutions to the serious problems facing the people of this state,” Dodd spokesman Bryan DeAngelis tells the Hartford Courant.

Yeah, that’s the ticket! We don’t have time for petty issues like this when the friggin’ banking industry’s going down the tube! “And where’s my goddamn Countrywide Mortgage, huh?”

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It’s Cooks County, for heaven’s sake – can’t they just use the ones already on file?

Cooks County home sellers will be required to be fingerprinted prior to selling their homes under a new law effective this summer. I think I understand the logic here – it provides a bit of security to home buyers who will know who they’re actually dealing with and, in this part of Illinois, anyone old enough to sell a house is no doubt so used to being fingerprinted that the process will seem as slight as stopping for a red light (which they probably don’t do, but never mind).

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Desperate times call for desperate measures

I was delighted to see two huge sales reported today by William Pitt. Even though they were New Canaan sales the prices, $6.4 and $11 million, respectively, showed real life in the market, especially when the sales were at or close to the original asking prices. I was disappointed then, upon reviewing the reports, to see that the sales were actually completed in March and July of 2008. Huh?

What a novel idea! Not selling anything? Your firm’s in the toilet? Well why not prowl though old sales and report them today? It shows you’re alive, down but not out and it proves that once, in a market long ago and far away, you were a contender!

Say, did I ever tell you about the house I once got for a client back in 1910? Fifty-five acres, right on the water, and you won’t believe what a bargain it was.

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